EX-10.42 NO. 1 TO AMENDED AND RESTATED CREDIT



 





Exhibit 10.42




Execution Version




AMENDMENT NO. 1

TO AMENDED AND RESTATED

CREDIT AGREEMENT




     This
Amendment No. 1 to
Amended and Restated Credit Agreement, dated as of March 13,
2007 (this “Amendment”), is entered into among Technical Olympic USA, Inc., a
Delaware corporation (the “Administrative Borrower”), and each Subsidiary Borrower (as
defined in the Credit Agreement (as defined below) and, together with the Administrative Borrower,
the “Borrowers”) and the Lenders (as defined below) listed on the signature pages hereto,
and amends the Amended and Restated Credit Agreement dated as of January 30, 2007 (as amended to
the date hereof and as the same may be further amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”) entered into among the Borrowers, the institutions
from time to time party thereto as lenders (the “Lenders”), the Issuers (as defined in the
Credit Agreement), Citicorp North America, Inc., as administrative agent (in such
capacity, the “Administrative Agent”), and the other Agents and Arrangers named therein.
Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to
them in the Credit Agreement.



W I T N E S S E T H :




     Whereas, the Borrowers have requested that the Lenders amend the Credit Agreement to
effect the changes described below;



     Now, Therefore, in consideration of the premises and for other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto
hereby agree as follows:



Section 1. Amendments to the Credit Agreement




     (a) The pricing grid set forth in the definition of “Applicable Margin” in the Credit
Agreement is hereby deleted in its entirety and replaced with the following:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 		 	Eurodollar	 	Base Rate	 	Letters of
	Level	 	Leverage Ratio	 	Ratings	 	Rate Loans	 	Loans	 	Credit
	1

	 	Less than or equal
to 1.0 
	 	Ba1/BB+ or higher
	 	 	1.50	%	 	 	-0-	 	 	 	1.05	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	Greater than 1.0
but less than or
equal to 1.25
	 	Ba2/BB
	 	 	1.60	%	 	 	0.10	%	 	 	1.15	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 		 	Eurodollar	 	Base Rate	 	Letters of
	Level	 	Leverage Ratio	 	Ratings	 	Rate Loans	 	Loans	 	Credit
	3

	 	Greater than 1.25
but less than or
equal to 1.50
	 	Ba3/BB-
	 	 	1.70	%	 	 	0.20	%	 	 	1.30	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	Greater than 1.50
but less than or
equal to 1.75
	 	B1/B+
	 	 	1.90	%	 	 	0.40	%	 	 	1.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	Greater than 1.75
	 	B2/B or lower
	 	 	2.25	%	 	 	0.75	%	 	 	1.70	%






     (b) Section 5.3 of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:




The Administrative Borrower shall maintain an Interest Coverage Ratio, measured as of
the last day of each fiscal quarter ending after the Original Effective Date, for the
four fiscal quarter period ending on such day, of greater than or equal to the
applicable ratio set forth in the table below:



	 	 	 
	Fiscal Quarter	 	Minimum Interest Coverage Ratio
	Fiscal quarters ending on or after
December 31, 2006 and prior to September
30, 2007
	 	2.00 to 1
	 
	 	 
	Fiscal quarters ending on or after
September 30, 2007 and prior to March 31,
2008
	 	1.35 to 1
	 
	 	 
	Fiscal quarters ending on or after March
31, 2008
	 	2.00 to 1






     Section 2. Conditions Precedent to the Effectiveness of this Amendment



     This Amendment shall become effective as of the date (the “Effective Date”) when, and
only when, each of the following conditions precedent shall have been satisfied or waived by the
Administrative Agent:



     (a) Executed Counterparts. The Administrative Agent shall have received this Amendment duly
executed by each Borrower and the Requisite Lenders.



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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




     (b) Corporate and Other Proceedings. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions contemplated by this
Amendment shall be reasonably satisfactory in all respects to the Administrative Agent.



     (c) No Default or Event of Default. After giving effect to this Amendment, no Default or
Event of Default shall have occurred and be continuing.



     (d) Amendment Fee Paid. The Borrowers shall have paid a cash fee (the “Amendment
Fee”) to each Lender that executes and delivers a signature page to this Amendment not later
than 5:00 p.m. (New York City time) on March 9, 2007 in an amount equal to 0.25% of the aggregate
amount of the Revolving Credit Commitment of such Lender.



     (e) Costs and Expenses Paid. The Borrowers shall have paid all costs and invoiced
out-of-pocket expenses of the Administrative Agent then due under Section 10.3 of the Credit
Agreement, including invoiced expenses incurred in connection with the preparation, reproduction,
execution and delivery of this Amendment (including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel) and all other costs, expenses and fees then due under any Loan
Document.



     Section 3. Representations and Warranties



     On and as of the Effective Date, after giving effect to this Amendment, each Borrower hereby
represents and warrants to the Administrative Agent and each Lender as follows:




     (a) this Amendment has been duly authorized, executed and delivered by each Borrower
and constitutes the legal, valid and binding obligations of such Borrower enforceable
against such Borrower in accordance with its terms and the Credit Agreement as amended by
this Amendment and constitutes the legal, valid and binding obligation of such Borrower
enforceable against such Borrower in accordance with its terms, in each case, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally and subject to general
principals of equity, regardless of whether considered in a proceeding in equity or at law;




     (b) each of the representations and warranties contained in Article IV of the Credit
Agreement and each other Loan Document is true and correct in all material respects on and
as of the Effective Date, as if made on and as of such date and except to the extent that
such representations and warranties specifically relate to a specific date, in which case
such representations and warranties shall be



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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




true and correct in all material respects as of such specific date; provided, however,
that references therein to the “Credit Agreement” shall be deemed to refer to the
Credit Agreement as amended hereby and after giving effect to the consents and waivers set
forth herein; and




     (c) no Default or Event of Default has occurred and is continuing.



     Section 4. Reference to the Effect on the Loan Documents




     (a) As of the Effective Date, each reference in the Credit Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in
the other Loan Documents to the Credit Agreement (including, without limitation, by means
of words like “thereunder”, “thereof” and words of like import), shall mean and be a
reference to the Credit Agreement as amended hereby, and this Amendment and the Credit
Agreement shall be read together and construed as a single instrument. Each of the table
of contents and lists of Exhibits and Schedules of the Credit Agreement shall be amended to
reflect the changes made in this Amendment as of the Effective Date.




     (b) Except as expressly amended hereby or specifically waived above, all of the terms
and provisions of the Credit Agreement and all other Loan Documents are and shall remain in
full force and effect and are hereby ratified and confirmed.




     (c) The execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of the
Lenders, the Borrowers, Joint Lead Arrangers or the agents under any of the Loan Documents,
nor constitute a waiver or amendment of any other provision of any of the Loan Documents or
for any purpose except as expressly set forth herein.




     (d) This Amendment is a Loan Document.




     (e) Each Subsidiary Borrower hereby reaffirms its obligations as a Guarantor under the
Guaranty in all respects.



     Section 5. Execution in Counterparts



     This Amendment may be executed in any number of counterparts and by different parties in
separate counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature pages may be detached
from multiple separate counterparts and



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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




attached to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed counterpart by telecopy or electronic transmission shall be
effective as delivery of a manually executed counterpart of this Amendment.



     Section 6. Governing Law



     This Amendment and the rights and obligations of the parties shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.



     Section 7. Section Titles



     The section titles contained in this Amendment are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the parties hereto,
except when used to reference a section. Any reference to the number of a clause, sub-clause or
subsection of any Loan Document immediately followed by a reference in parenthesis to the title of
the section of such Loan Document containing such clause, sub-clause or subsection is a reference
to such clause, sub-clause or subsection and not to the entire section; provided, however, that, in
case of direct conflict between the reference to the title and the reference to the number of such
section, the reference to the title shall govern absent manifest error. If any reference to the
number of a section (but not to any clause, sub-clause or subsection thereof) of any Loan Document
is followed immediately by a reference in parenthesis to the title of a section of any Loan
Document, the title reference shall govern in case of direct conflict absent manifest error.



     Section 8. Notices



     All communications and notices hereunder shall be given as provided in the Credit Agreement.



     Section 9. Severability



     The fact that any term or provision of this Agreement is held invalid, illegal or
unenforceable as to any person in any situation in any jurisdiction shall not affect the validity,
enforceability or legality of the remaining terms or provisions hereof or the validity,
enforceability or legality of such offending term or provision in any other situation or
jurisdiction or as applied to any person.



     Section 10. Successors



     The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and permitted assigns.



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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




     Section 11. Waiver of Jury Trial



     Each of the parties hereto irrevocably waives trial by jury in any action or proceeding
with respect to this Amendment or any other Loan Document.



[SIGNATURE PAGES FOLLOW]




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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]





     In Witness Whereof, the parties hereto have caused this Amendment to be executed by
their respective officers, trustees and general partners thereunto duly authorized, as of the date
first written above.



	 	 	 	 	 
	 	TECHNICAL OLYMPIC USA, INC.,

      as the Administrative Borrower

 	 
	 	By:  	/s/ Stephen Wagman
 	 
	 	 	Name:  	Stephen Wagman 	 
	 	 	Title:  	EVP & CFO 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	 Subsidiary Borrowers:



ENGLE HOMES DELAWARE, INC.

ENGLE HOMES RESIDENTIAL CONSTRUCTION, L.L.C.

ENGLE/JAMES LLC

MCKAY LANDING LLC

NEWMARK HOMES PURCHASING, L.P.

NEWMARK HOMES. L.L.C.

NEWMARK HOMES, L.P.

PREFERRED BUILDERS REALTY, INC.

SILVERLAKE INTERESTS, L.C.

TOI, LLC

TOUSA, LLC

TOUSA ASSOCIATES SERVICES COMPANY

TOUSA DELAWARE, INC.

TOUSA FUNDING, LLC

TOUSA HOMES, INC.

TOUSA HOMES, L.P.

TOUSA HOMES INVESTMENT #1, INC.

TOUSA HOMES FLORIDA, L.P.

TOUSA HOMES INVESTMENT #2, INC.

TOUSA HOMES INVESTMENT #2, LLC

TOUSA REALTY, INC.

TOUSA INVESTMENT #2, INC.

TOUSA HOMES ARIZONA, LLC

TOUSA HOMES COLORADO, LLC

TOUSA HOMES NEVADA, LLC

TOUSA HOMES MID-ATLANTIC HOLDING, LLC

TOUSA HOMES MID-ATLANTIC, LLC

TOUSA MID-ATLANTIC INVESTMENT, LLC

TOUSA VENTURES, LLC

TOUSA/WEST HOLDINGS, INC.

LORTON SOUTH CONDOMINIUM, LLC

ENGLE HOMES COMMERCIAL CONSTRUCTION, LLC 

LB/TE #1, LLC

 	 
	 



	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stephen Wagman
 

	 	 
	 

	 	Name:
	 	Stephen Wagman	 	 
	 

	 	Title:
	 	EVP	 	 






 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 
	 	Subsidiary Borrowers (continued):



NEWMARK HOMES BUSINESS TRUST

 	 
	 



	 	 	 	 	 
	 

	 	By:
	 	/s/ Stephen Wagman
	 

	 	 	 	 
	 

	 	Name:
	 	Stephen Wagman
	 

	 	Title:
	 	CO Managing TTEE






 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 
	 	CITICORP NORTH AMERICA, INC.,

as Administrative Agent and a Lender

 	 
	 	By:  	/s/ Marni McManus
 	 
	 	 	Name:  	Marni McManus 	 
	 	 	Title:  	Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender

 	 
	 	By:  	/s/ Christine M. Kanicki
 	 
	 	 	Name:  	Christine M. Kanicki 	 
	 	 	Title:  	Attorney - In - Fact 	 



 









 






[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender 
	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as a Lender

 	 
	 	By:  	/s/ John P. McDonagh
 	 
	 	 	Name:  	John P. McDonagh 	 
	 	 	Title:  	Managing Director 	 



 









 






[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	WACHOVIA BANK, N.A., as a Lender

 	 
	 	By:  	/s/ R. Scott Holtzapple
 	 
	 	 	Name:  	R. Scott Holtzapple 	 
	 	 	Title:  	Senior Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender

 	 
	 	By:  	/s/ Jonathan Barnes
 	 
	 	 	Name:  	Jonathan Barnes 	 
	 	 	Title:  	Vice President 	 



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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	BANK OF THE WEST, a California Banking


Corporation, as a Lender


 	 
	 	By:  	/s/ Jan Manista
 	 
	 	 	Name:  	Jan Manista 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                      /s/ Gary Seferian
 	 
	 	 	Name:  	Gary Seferian 	 
	 	 	Title:  	SVP 	 



 









 




[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	BRANCH BANKING AND TRUST COMPANY, as a Lender


 	 
	 	By:  	/s/ Anne C. Grady
 	 
	 	 	Name:  	Anne C. Grady 	 
	 	 	Title:  	Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	BANK UNITED, FSB, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	COMPASS BANK, an Alabama banking corporation, as a Lender


 	 
	 	By:  	/s/ Johanna Duke Paley
 	 
	 	 	Name:  	Johanna Duke Paley 	 
	 	 	Title:  	Senior Vice President 	 



 









 




[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/ Charles Weddell
 	 
	 	 	Name:  	Charles Weddell 	 
	 	 	Title:  	Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender


 	 
	 	By:  	/s/ Karim Blasetti
 	 
	 	 	Name:  	Karim Blasetti 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                      /s/ Laurence LaPeyre
 	 
	 	 	Name:  	Laurence LaPeyre 	 
	 	 	Title:  	Associate 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	DK ACQUISITION PARTNERS, L.P., as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	FORTIS BANK S.A./N.V., CAYMAN ISLANDS BRANCH, as a Lender


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 




[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]




	 	 	 	 	 



	 	 	 	 	 
	 	GRAND CENTRAL ASSET TRUST SAN SERIES, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	GUARANTY BANK, as a Lender

 	 
	 	By:  	/s/ Randall Reid
 	 
	 	 	Name:  	Randall Reid 	 
	 	 	Title:  	Senior Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Tayven Hike
 	 
	 	 	Name:  	Tayven Hike, CFA 	 
	 	 	Title:  	Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 	 	 
	 	 	NATIXIS (fka NATEXIS BANQUES POPULAIRES), as a Lender
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Marie Edith Dugeny
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Marie Edith Dugeny	 	 
	 	 	Title: Managing Director, Real Estate Finance	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Guillaume De Parscau	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Gullaume De Parscau	 	 
	 	 	Title: Managing Director, Business Development	 	 






 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 
	 	NATIONAL CITY BANK, as a Lender

 	 
	 	By:  	/s/ Timothy M. Brown
 	 
	 	 	Name:  	Timothy M. Brown 	 
	 	 	Title:  	Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Douglas G. Paul
 	 
	 	 	Name:  	Douglas G. Paul 	 
	 	 	Title:  	Senior Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	QUATTRO SPECIAL SITUATIONS, LLC, as a Lender

 	 
	 	By:  	/s/ Patrick Criscillo
 	 
	 	 	Name:  	Patrick Criscillo 	 
	 	 	Title:  	CFO 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	RAYMOND JAMES BANK, FSB, as a Lender

 	 
	 	By:  	/s/ Thomas F. Macina
 	 
	 	 	Name:  	Thomas F. Macina 	 
	 	 	Title:  	Senior Vice President 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	SOVEREIGN BANK, as a Lender

 	 
	 	By:  	/s/ Erin T. Aslakson
 	 
	 	 	Name:  	Erin T. Aslakson 	 
	 	 	Title:  	Assistant Vice President 	 



 









 

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[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	UBS LOAN FINANCE, LLC, as a Lender

 	 
	 	By:  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director Banking Products
Services, US 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                      /s/ Richard L. Tavrow
 	 
	 	 	Name:  	Richard L. Tavrow 	 
	 	 	Title:  	Director Banking Products Services, US 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ David Kopolow
 	 
	 	 	Name:  	David Kopolow 	 
	 	 	Title:  	SVP 	 



 









 





[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]



	 	 	 	 	 



	 	 	 	 	 
	 	WASHINGTON MUTUAL BANK, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: