Exhibit 10.1




 





 


FOURTH
AMENDMENT TO


FIRST
AMENDED AND RESTATED CREDIT AGREEMENT


 


Dated as of July 18,
2008


 


among


 


MERITAGE HOMES CORPORATION,


as the Borrower,


 


GUARANTY
BANK


as Administrative Agent and Swing Line
Lender,


 


BANK OF
AMERICA, N.A. and JPMORGAN CHASE BANK, N.A.,


as Co-Syndication Agents,


 


WACHOVIA
BANK, NATIONAL ASSOCIATION,


as Documentation Agent,


 


COUNTRYWIDE
BANK, FSB,


U. S. BANK NATIONAL ASSOCIATION,


CITICORP NORTH AMERICA, INC.,


DEUTSCHE BANK TRUST COMPANY AMERICAS,


UBS SECURITIES LLC, and BNP PARIBAS


as Managing Agents,


 


SUNTRUST
BANK,


as Co-Agent,


 


and


 


The Other
Lenders Party Hereto




 





 


BANC OF AMERICA SECURITIES LLC,


as Joint Lead Arranger and Joint Book Manager


 


GUARANTY
BANK,


as Joint Lead Arranger and Joint Book Manager


 


J. P.
MORGAN SECURITIES, INC.,


as Joint Lead Arranger and Joint Book Manager


 


and


 


WACHOVIA BANK, NATIONAL ASSOCIATION,


as Joint Lead Arranger and Joint Book Manager


 

















 


FOURTH
AMENDMENT TO

FIRST AMENDED AND RESTATED CREDIT AGREEMENT


 


This Fourth
Amendment to First Amended and Restated Credit Agreement (this “Fourth
Amendment”) dated as of July 18, 2008, is entered into among Meritage
Homes Corporation, a Maryland corporation (the “Borrower”), the lenders
listed on the signature pages hereof as Lenders (the “Lenders”), and
Guaranty Bank, in its capacity as Administrative Agent (the “Administrative
Agent”).


 


BACKGROUND


 


A.            The Borrower, the
Lenders and the Administrative Agent are parties to that certain First Amended
and Restated Credit Agreement dated as of May 16, 2006, as amended by that
certain First Amendment and Commitment Increase Agreement, dated as of June 30,
2006, that certain Second Amendment to First Amended and Restated Credit
Agreement, dated as of May 18, 2007 and that certain Third Amendment to
First Amended and Restated Credit Agreement dated as of September 27, 2007
(as amended, modified, supplemented or restated, the “Credit Agreement”).  Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement (as defined below).


 


B.            The Borrower has
requested certain amendments to the Credit Agreement.


 


C.            The Lenders and the
Administrative Agent hereby agree to amend the Credit Agreement, subject to the
terms and conditions set forth herein.


 


NOW, THEREFORE,
in consideration of the covenants, conditions and agreements hereafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are all hereby acknowledged, the parties hereto agree as follows:


 


1.             AMENDMENTS.


 


(a)           Section 1.01
of the Credit Agreement is hereby amended by adding the following defined terms
thereto in proper alphabetical order to read as follows:


 


“Adjusted Cash Flow From
Operations” means, for any period, the sum of (a) the cash generated
by (or used in) operating activities, as reflected on the financial statements
for the Borrower and its Restricted Subsidiaries, on a consolidated basis for
such period, as determined in accordance with GAAP, such amount being reflected
in the line item designated “Net cash provided by (used in) operating
activities” on the Borrower’s financial statements, plus (b) Consolidated
Interest Incurred of the Borrower and its Restricted Subsidiaries, on a
consolidated basis for such period, as determined in accordance with GAAP.


 


“Adjusted Cash Flow Ratio”
means, for the period ending on the last day of any fiscal quarter, the ratio
of (a) Adjusted Cash Flow From Operations for the four consecutive fiscal
quarters then ended to (b) Consolidated Interest Incurred for the four
consecutive fiscal quarters.


 

















 


“Deferred Tax Valuation
Allowance” means any valuation allowance applied to deferred income tax
assets as a result of the application of FASB Statement No. 109,
Accounting for Income Taxes or otherwise required in accordance with GAAP and
included in the financial statements of the Borrower.


 


“Fourth Amendment Closing
Date” means the date that all conditions precedent set forth in Section 3
of the Fourth Amendment to First Amended and Restated Credit Agreement, dated
as of July 18, 2008, among the Borrower, the Lenders and the
Administrative Agent are satisfied.


 


“Net Leverage Ratio”
means, as of any date of determination, the ratio of (a) an amount equal
to the sum of (i) Consolidated Indebtedness on such date (which, for the
purpose of calculating the Net Leverage Ratio only, shall exclude (x) the
face amount of all undrawn Performance Letters of Credit issued for the account
of, or guaranteed by, the Loan Parties and (y) Attributable Indebtedness
in respect of Synthetic Lease Obligations and other Off-Balance Sheet
Liabilities and Guarantees with respect thereto) minus (ii) if greater
than $0, the sum of (A) the lesser of (x) Unrestricted Cash on such
date or (y) $325,000,000, minus (B) $25,000,000 to (b) Consolidated
Tangible Net Worth on such date.


 


“Unrestricted Cash” of a
Person means Cash and Cash Equivalents of such Person that would not be
identified as “restricted” on a balance sheet of such Person prepared in
accordance with GAAP, and which are not subject to any Lien or restriction on
withdrawal or use.


 


(b)           The definition of “Applicable
Rate” set forth in Section 1.01 of the Credit Agreement is
hereby amended to read as follows:


 


“Applicable Rate” means
the following percentages per annum:


 


	
  Pricing

  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Eurodollar

  Rate; all Letters

  of Credit

  	
   

  	
  Base

  Rate

  	
   

  
	
  1

  	
   

  	
  Greater than
  1.75 to 1

  	
   

  	
  0.400

  	
  %

  	
  3.000

  	
  %

  	
  0.500

  	
  %

  
	
  2

  	
   

  	
  Greater than
  1.50 to 1 but less than or equal to 1.75 to 1

  	
   

  	
  0.375

  	
  %

  	
  2.750

  	
  %

  	
  0.250

  	
  %

  
	
  3

  	
   

  	
  Greater than
  1.25 to 1 but less than or equal to 1.50 to 1

  	
   

  	
  0.350

  	
  %

  	
  2.625

  	
  %

  	
  0.250

  	
  %

  
	
  4

  	
   

  	
  Greater than
  1.00 to 1 but less than or equal to 1.25 to 1

  	
   

  	
  0.350

  	
  %

  	
  2.500

  	
  %

  	
  0.250

  	
  %

  
	
  5

  	
   

  	
  Less than or
  equal to 1.00 to 1

  	
   

  	
  0.325

  	
  %

  	
  2.250

  	
  %

  	
  0.000

  	
  %

  



 


Any increase or decrease in the Applicable
Rate resulting from a change in the Leverage Ratio shall become effective as of
the first Business Day immediately following the date a Compliance Certificate
is delivered pursuant to Section 6.02(b); provided, however,
that (x) if a Compliance Certificate is not delivered when due in
accordance with such Section, or (y) there shall occur an Event of
Default, then Pricing Level 1 shall apply as


 


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of the first Business Day after the date on
which such Compliance Certificate was required to have been delivered or such
Event of Default shall have occurred, as applicable.  Thereafter, as to clause (x) above
only, any decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered.  Notwithstanding the foregoing, the Applicable
Rate in effect from and after the Fourth Amendment Closing Date through and
including the date the Compliance Certificate is delivered pursuant to Section 6.02(b) for
the second fiscal quarter of fiscal year 2008 shall be Pricing Level 4.


 


In the event that any financial
statement delivered pursuant to Section 6.01(a) or 6.01(b) or
any Compliance Certificate delivered pursuant to Section 6.02(b) is
shown to be inaccurate (regardless of whether this Agreement or the Commitments
are in effect when such inaccuracy is discovered), and such inaccuracy, if
corrected, would have led to a higher Applicable Rate for any period (an “Applicable
Period”) than the Applicable Rate applied for such Applicable Period, then (i) the
Borrower shall immediately deliver to the Administrative Agent a correct
Compliance Certificate for such Applicable Period, (ii) the Applicable
Rate shall be determined using the Pricing Level applicable for such Applicable
Period based upon the corrected Compliance Certificate, and (iii) the
Borrower shall immediately pay to the Administrative Agent the accrued
additional interest and fees owing as a result of such increased Applicable
Rate for such Applicable Period, which payment shall be promptly applied by the
Administrative Agent in accordance with the terms hereof.  This paragraph shall not limit the rights of the
Administrative Agent and the Lenders under Section 2.08 and Article VIII
and other provisions of this Agreement. 
The obligations of the Borrower under this paragraph shall survive
termination of the Commitments and the repayment of all other Obligations
hereunder.


 


(c)           The definition of “Borrowing
Base” set forth in Section 1.01 of the Credit Agreement is
hereby amended to read as follows:


 


“Borrowing Base” means,
with respect to an Inventory Valuation Date for which it is to be determined,
an amount equal to the sum (without duplication) of the following assets of
each Loan Party (but only to the extent that such assets set forth in
subparagraphs (a) through (g) below are not subject to any Liens
other than Permitted Liens):


 


(a)           85% of the Net Book
Value of Presold Units;


 


(b)           75% of the Net Book
Value of Eligible Model Units;


 


(c)           75% of the Net Book
Value of Unsold Units Under Construction;


 


(d)           70% of the Net Book
Value of Completed Unsold Units Less Than 18 Months Since Completion;


 


(e)           65% of the Net Book
Value of Finished Lots;


 


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(f)            45% of the Net Book
Value Land/Lots Under Development; and


 


(g)           30% of the Net Book
Value of Unimproved Entitled Land (provided that no Unimproved Entitled Land
shall be included in the Borrowing Base during the Reduction Period);


 


provided, however,
that (i) at no time shall more than 60% of the Borrowing Base be comprised
of the items set forth in subparagraphs (e), (f) and (g) above, (ii) at
no time shall more than 35% (or 25% during the Reduction Period) of the
Borrowing Base be comprised of the items set forth in subparagraphs (f) and
(g) above, and (iii) at no time shall the aggregate amount of
condominiums exceed 15% of the aggregate number of Units comprising the items
set forth in subparagraphs (a), (b), (c) and (d) in the
aggregate.


 


(d)           The definition of “Borrowing
Base Debt” in Section 1.01 of the Credit Agreement is hereby
amended to read as follows:


 


“Borrowing Base Debt”
means, as of any date of determination, the sum of (a) all Consolidated
Indebtedness as of such date of determination, including without limitation the
Obligations and the Senior Notes, but excluding (i) any portion of any
Subordinated Debt of any Loan Party which is due and payable more than one year
from such date of determination, (ii) Indebtedness secured by Liens on
assets that are not part of any of the Borrowing Base Assets, but only to the
extent that the Indebtedness (x) secured by any Lien on such asset does
not exceed the Net Book Value of such asset as determined by GAAP and (y) does
not exceed in aggregate the amount set forth in Section 7.03(f) and
(iii) the face amount of all undrawn Performance Letters of Credit, in
each case issued for the account of, or guaranteed by the Loan Parties, minus (b) if
greater than $0, the sum of (i) Cash and Cash Equivalents and Receivables
of the Loan Parties not subject to any Lien securing Indebtedness in an
aggregate amount in excess of $5,000,000, minus (ii) the aggregate of the
Outstanding Amount of Revolving Loans, Swing Line Loans and L/C Borrowings.


 


(e)           The definition of “Joint
Lead Arranger” set forth in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:


 


“Joint Lead Arranger”
means each of Banc of America Securities LLC, J.P. Morgan Securities, Inc.,
Guaranty Bank and Wachovia Bank, National Association, in its capacity as joint
lead arranger and joint book manager.


 


(f)            The definition of “Liquidity”
set forth in Section 1.01 of the Credit Agreement is hereby amended
to read as follows:


 


“Liquidity” means, as of
any date of determination, the sum of:


 


(a)           the amount by which:


 


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(i)            the lesser of (A) the
Borrowing Base minus all Consolidated Indebtedness (other than the Total
Outstandings) as of such date of determination, including without limitation
the Senior Notes, but excluding (I) any portion of any Subordinated Debt
of any Loan Party which is due and payable more than one year from such date of
determination, (II) Indebtedness secured by Liens on assets that are not
part of any of the Borrowing Base Assets, but only to the extent that the
Indebtedness (x) secured by any Lien on such asset does not exceed the Net
Book Value of such asset as determined by GAAP and (y) does not exceed in
aggregate the amount set forth in Section 7.03(f) and (III) the
face amount of all undrawn Performance Letters of Credit, in each case issued
for the account of, or guaranteed by the Loan Parties, and (B) the
Aggregate Commitments; exceeds


 


(ii)           Total Outstandings;
plus


 


(b)           if greater than $0, (i) Unrestricted
Cash in excess of $5,000,000 minus (ii) the aggregate of the Outstanding
Amount of Revolving Loans, Swing Line Loans and L/C Borrowings, in each case as
of such date of determination.


 


(g)           Section 1.01
of the Credit Agreement is hereby further amended by deleting the defined term “Partial
Suspension Period” therefrom.


 


(h)           The definition of “Reduction
Period” set forth in Section 1.01 of the Credit Agreement is
hereby amended to read as follows:


 


“Reduction Period” means
the one-time period of eleven consecutive fiscal quarters, commencing with the
first quarter of fiscal year 2008.


 


(i)            Section 2.05
of the Credit Agreement is hereby amended by adding the following new
clause (d) to the end  thereof
to read as follows:


 


(d)           In the event that as of
the end of any fiscal quarter Shareholders’ Equity is less than $500,000,000, a
permanent mandatory commitment reduction shall be made to the Aggregate
Commitments in an amount equal to the lesser of (i) if greater than $0, $500,000,000
minus actual Shareholders Equity as of the last day of such fiscal quarter or (ii) $100,000,000.  In the event any mandatory commitment
reduction pursuant to this Section 2.05(d) reduces the
Aggregate Commitments to less than the Total Outstandings, the Borrower shall
on or before the third (3rd) Business Day following Borrower’s receipt of
written notice from Administrative Agent, cause the Total Outstandings to be
prepaid and/or Cash Collateralize the L/C Obligations by such amount as may be
necessary to cause the Total Outstandings to be equal to or less than the
Aggregate Commitments as reduced; provided, however, that the
Borrower shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.05(d) unless after the prepayment
in full of the Revolving Loans and Swing Line Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.


 


(j)            Section 7.11(a) of
the Credit Agreement is hereby amended to read as follows:


 


(a)           Minimum Net Worth.  Permit Consolidated Tangible Net Worth, as of
the end of any fiscal quarter of the Borrower, to be less than the sum of (a) $500,000,000
plus (b) an amount equal to 50% of Consolidated Net Income (excluding the
effect of any


 


5

















 


decrease in
any Deferred Tax Valuation Allowance) earned in each full fiscal quarter ending
after June 30, 2008 (with no deduction for a net loss in any such fiscal
quarter), plus (c) an amount equal to 50% of the aggregate increases in
Consolidated Tangible Net Worth of the Borrower and its Restricted Subsidiaries
after June 30, 2008 by reason of the issuance and sale of Equity Interests
or other equity interest of the Borrower or any Restricted Subsidiary (other
than issuances to the Borrower or a wholly-owned Restricted Subsidiary),
including upon any conversion of debt securities of the Borrower into such
Equity Interests or other equity interests, plus (d) an amount equal to
the net worth of any Person that becomes a Restricted Subsidiary or is merged
into or consolidated with the Borrower or any Restricted Subsidiary or
substantially all of the assets of which are acquired by the Borrower or any
Restricted Subsidiary, in each case after June 30, 2008, minus (e) the
cumulative net amount  of any
Deferred Tax Valuation Allowance as of the date of determination, provided that
such amount of any Deferred Tax Valuation Allowance for purposes of this
calculation shall not exceed $150,000,000.


 


(k)           Section 7.11(b) of
the Credit Agreement is hereby amended to read as follows:


 


(b)           Net Leverage Ratio.  Permit the Net Leverage Ratio at the end of
any fiscal quarter of the Borrower to be greater than:


 


(i)            2.15 to 1.00, if the
Interest Coverage Ratio at the end of such fiscal quarter is greater than or
equal to 2.00 to 1.00;


 


(ii)           1.75 to 1.00, if the
Interest Coverage Ratio at the end of such fiscal quarter is less than 2.00 to
1.00, but greater than or equal to 1.00 to 1.00; or


 


(iii)          1.50 to 1.00, if the
Interest Coverage Ratio at the end of such fiscal quarter is less than 1.00 to
1.00.


 


(l)            Section 7.11(c) of
the Credit Agreement is hereby amended to read as follows:


 


(c)           Interest Coverage
Ratio.  Permit the Interest Coverage
Ratio to be less than:


 


(i)            0.50 to 1.00 at the
end of any fiscal quarter during the period from and including June 30,
2008 through and including June 30, 2009;


 


(ii)           1.00 to 1.00 at the end
of fiscal quarters September 30, 2009 and December 31, 2009;


 


(iii)          1.25 to 1.00 at the end
of fiscal quarter March 31, 2010;


 


(iv)          1.50 to 1.00 at the end
of fiscal quarter June 30, 2010;


 


(v)           1.75 to 1.00 at the end
of fiscal quarter September 30, 2010; or


 


(vi)          2.00 to 1.00 at the end
of any fiscal quarter thereafter.


 


6

















 


Notwithstanding the foregoing,
the Borrower’s failure to comply with the Interest Coverage Ratio requirements
set forth above as of the end of any fiscal quarter shall not constitute a
violation of this Section 7.11(c) as long as Borrower, as of
the end of such fiscal quarter, is in compliance with Section 7.11(i).


 


(m)          Section 7.11(i) of
the Credit Agreement is hereby amended to read as follows:


 


(i)            Liquidity.  If the Borrower fails to comply with the
Interest Coverage Ratio requirements of Section 7.11(c) as of the
end of any fiscal quarter, permit the Adjusted Cash Flow Ratio at the end of
such fiscal quarter to be less than 1.50 to 1.00 unless (a) Liquidity at
the end of such fiscal quarter is at least $125,000,000 if the Interest
Coverage Ratio at the end of such fiscal quarter is less than or equal to 1.00
to 1.00 or (b) Liquidity at the end of such fiscal quarter is at least
$50,000,000 if the Interest Coverage Ratio at the end of such fiscal quarter is
more than 1.00 to 1.00.


 


(n)           The Aggregate
Commitments are hereby reduced to $500,000,000 and the Commitment of each
Lender is hereby reduced to be the amount set forth opposite each Lender’s name
on Schedule 2.01, which is hereby amended to be in the form of Schedule 2.01
attached to this Third Amendment.


 


(o)           Exhibit D,
the Compliance Certificate, is hereby amended to be in the form of Exhibit D
attached to this Fourth Amendment.


 


(p)           Exhibit H,
the Borrowing Base Certificate, is hereby amended to be in the form of Exhibit H
attached to this Fourth Amendment.


 


2.             REPRESENTATIONS
AND WARRANTIES.  By its execution and
delivery hereof, the Borrower represents and warrants that, as of the date
hereof:


 


(a)           the representations and
warranties contained in the Credit Agreement and the other Loan Documents are
true and correct on and as of the date hereof as made on and as of such date,
except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that the representations contained in
subsections (a) and (b) of Section 5.05 of the
Credit Agreement shall be deemed to refer to the most recent statements furnish
pursuant to subsections (a) and (b), respectively, of Section 6.01
of the Credit Agreement;


 


(b)           no event has occurred
and is continuing which constitutes a Default or an Event of Default;


 


(c)           (i) the Borrower
has full power and authority to execute and deliver this Fourth Amendment, (ii) this
Fourth Amendment has been duly executed and delivered by the Borrower and (iii) this
Fourth Amendment and the Credit Agreement, as amended hereby, constitute the
legal, valid and binding obligations of the Borrower, enforceable in accordance
with their respective terms, except as enforceability may be limited by
applicable Debtor Relief Laws and by general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law) and
except as rights to indemnity may be limited by federal or state securities
laws;


 


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(d)           neither the execution,
delivery and performance of this Fourth Amendment or the Credit Agreement, as
amended hereby, nor the consummation of any transactions contemplated herein or
therein, will violate any Law or conflict with any Organization Documents of
the Borrower, or any indenture, agreement or other instrument to which the
Borrower or any of it property is subject; and


 


(e)           no authorization,
approval, consent, or other action by, notice to, or filing with, any
Governmental Authority or other Person not previously obtained is required for (i) the
execution, delivery or performance by the Borrower of this Fourth Amendment or (ii) the
acknowledgement by each Guarantor of this Fourth Amendment.


 


3.             CONDITIONS TO
EFFECTIVENESS.  All provisions of
this Fourth Amendment shall be effective on July 18, 2008, subject to the
satisfaction or completion of the following:


 


(a)           the Administrative
Agent shall have received counterparts of this Fourth Amendment executed by the
Required Lenders, the Borrower and acknowledged by each Guarantor;


 


(b)           the Administrative
Agent shall have received a certified corporate resolution of the Borrower
authorizing the execution, delivery and performance of this Fourth Amendment;


 


(c)           the Administrative
Agent shall have received an opinion of the Borrower’s counsel, in form and
substance satisfactory to the Administrative Agent, with respect to matters set
forth in Sections 2(c), (d), and (e) of this Fourth Amendment;


 


(d)           the Administrative
Agent shall have received immediately available funds from the Borrower, for
the account of each Lender that executes this Fourth Amendment and provides its
signature page to this Amendment to the Administrative Agent by 12:00
noon, New York time, on July 16, 2008, in an amount agreed to by the
Borrower and such Lender;


 


(e)           the Administrative
Agent shall have received immediately available funds from the Borrower, for
the account of each Joint Lead Arranger, the fees payable to Joint Lead
Arrangers pursuant to the separate Fee Letter among Borrower and each Joint
Lead Arranger; and


 


(f)            the Administrative
Agent shall have received, in form and substance satisfactory to the
Administrative Agent and its counsel, such other documents, certificates and
instruments as the Administrative Agent shall require.


 


4.             REFERENCE
TO THE CREDIT AGREEMENT.


 


(a)           Upon the effectiveness
of this Fourth Amendment, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, or words of like import shall mean and be a reference
to the Credit Agreement, as modified hereby. 
This Fourth Amendment shall be a Loan Document.


 


8

















 


(b)           The Credit Agreement,
as modified herein, shall remain in full force and effect and is hereby
ratified and confirmed.


 


5.             COSTS, EXPENSES
AND TAXES.  The Borrower agrees to
pay on demand all costs and expenses of the Administrative Agent and each Joint
Lead Arranger in connection with the preparation, reproduction, execution and
delivery of this Fourth Amendment and the other instruments and documents to be
delivered hereunder (including the reasonable fees and out-of-pocket expenses
of counsel for the Administrative Agent and each Joint Lead Arranger with
respect thereto).


 


6.             GUARANTORS
ACKNOWLEDGMENT.  By signing below, each
Guarantor (a) acknowledges, consents and agrees to the execution, delivery
and performance by the Borrower of this Fourth Amendment, (b) acknowledges
and agrees that its obligations in respect of its Guaranty are not released,
diminished, waived, modified, impaired or affected in any manner by this Fourth
Amendment or any of the provisions contemplated herein, (c) ratifies and
confirms its obligations under its Guaranty, and (d) acknowledges and
agrees that it has no claims or offsets against, or defenses or counterclaims
to, its Guaranty.


 


7.             EXECUTION IN
COUNTERPARTS.  This Fourth Amendment
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same instrument.  For
purposes of this Fourth Amendment, a counterpart hereof (or signature page thereto)
signed and transmitted by any Person party hereto to the Administrative Agent
(or its counsel) by facsimile machine, telecopier or electronic mail is to be
treated as an original.  The signature of
such Person thereon, for purposes hereof, is to be considered as an original
signature, and the counterpart (or signature page thereto) so transmitted
is to be considered to have the same binding effect as an original signature on
an original document.


 


8.             GOVERNING LAW;
BINDING EFFECT.  This Fourth
Amendment shall be deemed to be a contract made under and governed by and continued
in accordance with the internal laws of the State of Texas applicable to
agreements made and to be performed entirely within such state, provided that
each party shall retain all rights arising under federal law.  This Fourth Amendment shall be binding upon
the parties hereto and their respective successors and assigns.


 


9.             HEADINGS.  Section headings in this Fourth
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Fourth Amendment for any other purpose.


 


10.           RELEASE.  BORROWER AND EACH GUARANTOR HEREBY
ACKNOWLEDGE THAT THE OBLIGATIONS UNDER THE CREDIT AGREEMENT AND EACH LOAN
DOCUMENT EXECUTED IN CONNECTION THEREWITH ARE ABSOLUTE AND UNCONDITIONAL
WITHOUT ANY RIGHT OF RESCISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET,


 


9

















 


CROSS-COMPLAINT, CLAIM OR
DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR
ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS UNDER
THE CREDIT AGREEMENT AND EACH LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH OR
TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM ANY CREDIT
PARTY.  BORROWER AND EACH GUARANTOR
HEREBY VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE EACH AGENT-RELATED
PERSON, EACH JOINT LEAD ARRANGER, EACH L/C ISSUER, EACH LENDER AND ITS
PREDECESSORS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS,
ATTORNEYS-IN-FACT, SUCCESSORS, AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES” ), FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH BORROWER OR ANY 
GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES,
IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT,
TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING OUT OF OR IN
CONNECTION WITH OR BY REASON OF THE CREDIT AGREEMENT OR ANY LOAN DOCUMENT
EXECUTED IN CONNECTION THEREWITH, INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE CREDIT AGREEMENT OR ANY LOAN DOCUMENT EXECUTED IN CONNECTION
THEREWITH, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT (BUT EXCLUDING
IN ALL CASES ANY OF THE FOREGOING ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE RELEASED PARTIES).


 


11.           ENTIRE AGREEMENT.  THE CREDIT AGREEMENT, AS AMENDED BY THIS
FOURTH AMENDMENT, AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.


 


REMAINDER OF PAGE LEFT INTENTIONALLY BLANK


 


10

















 


IN WITNESS
WHEREOF, the parties hereto have executed this Fourth Amendment by their duly
authorized officers as of the date first above written.


 


	
   

  	
  MERITAGE HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  



 


 


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  GUARANTY BANK, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ross Evans

  
	
   

  	
   

  	
  Ross Evans

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTY BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ross Evans

  
	
   

  	
   

  	
  Ross Evans

  
	
   

  	
   

  	
  Vice President

  



 


 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Chiu

  
	
   

  	
   

  	
  Name:

  	
  Vanessa Chiu

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eyal Namordi

  
	
   

  	
   

  	
  Name:

  	
  Eyal Namordi

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
					



 


 


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  WACHOVIA BANK, NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Scott Holtzapple

  
	
   

  	
   

  	
  Name:

  	
  R. Scott Holtzapple

  
	
   

  	
   

  	
  Title:

  	
  Director

  
					



 


 


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  U. S. BANK NATIONAL ASSOCIATION, as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adrian R. Montero

  
	
   

  	
   

  	
  Name:

  	
  Adrian
  R. Montero

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


 


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  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Paul Hoefer

  
	
   

  	
   

  	
  Name:

  	
  G. Paul Hoefer

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


 


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  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Evelyn Thierry

  
	
   

  	
   

  	
  Name:

  	
  Evelyn Thierry

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


 


	
   

  	
  By:

  	
  /s/ Erin Morrissey

  
	
   

  	
   

  	
  Name:

  	
  Erin Morrissey

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


 


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  CITICORP NORTH AMERICA, INC., as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marni McManus

  
	
   

  	
   

  	
  Name:

  	
  Marni McManus

  
	
   

  	
   

  	
  Title:

  	
  Vice-President

  
					



 


 


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  UBS LOAN FINANCE LLC, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
  Name:

  	
  Irja R. Otsa

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  
					



 


 


	
   

  	
  By:

  	
  /s/ Mary E. Evans

  
	
   

  	
   

  	
  Name:

  	
  Mary E. Evans

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  
					



 


 


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  PNC BANK, NATIONAL ASSOCIATION, as a

  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 


 


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  SUNTRUST BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel M. Ballesteros

  
	
   

  	
   

  	
  Name:

  	
  Samuel M. Ballesteros

  
	
   

  	
   

  	
  Title:

  	
  Director

  
					



 


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  COMERICA BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 


 


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  COMPASS BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chad Mantei

  
	
   

  	
   

  	
  Name:

  	
  Chad Mantei

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


 


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  REGIONS BANK (successor by merger with

  
	
   

  	
  AmSouth Bank), as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel McClurkin

  
	
   

  	
   

  	
  Name:

  	
  Daniel McClurkin

  
	
   

  	
   

  	
  Title:

  	
   Assistant Vice President

  
					



 


 


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Amendment


 

















 


	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer Pescatore

  
	
   

  	
   

  	
  Name:

  	
  Jennifer Pescatore

  
	
   

  	
   

  	
  Title:

  	
   Senior Vice President

  
					



 


 


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Amendment


 

















 


	
   

  	
  LASALLE BANK, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eyal Namordi

  
	
   

  	
   

  	
  Name:

  	
  Eyal Namordi

  
	
   

  	
   

  	
  Title:

  	
   Senior Vice President

  
					



 


 


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  KEYBANK NATIONAL ASSOCIATION, as a

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay L. Johnson

  
	
   

  	
   

  	
  Name:

  	
  Jay L. Johnson

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


 


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  NORTHERN TRUST COMPANY, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Morgan A. Lyons

  
	
   

  	
   

  	
  Name:

  	
  MORGAN A. LYONS

  
	
   

  	
   

  	
  Title:

  	
   VICE PRESIDENT

  
					



 


 


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  CALIFORNIA BANK & TRUST, a California

  
	
   

  	
  banking corporation, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephanie Lantz

  
	
   

  	
   

  	
  Name:

  	
  Stephanie Lantz

  
	
   

  	
   

  	
  Title:

  	
   Vice President

  
					



 


 


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  BNP PARIBAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


Signature Page to Meritage Fourth Amendment


 

















 


	
   

  	
  COUNTRYWIDE BANK, FSB, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eyal Namordi 

  
	
   

  	
   

  	
  Name:

  	
  Eyal Namordi 

  
	
   

  	
   

  	
  Title:

  	
   Senior Vice President

  
					



 


 


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  ACKNOWLEDGED AND AGREED TO:

  
	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  
	
   

  	
  MERITAGE PASEO CROSSING, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Arizona, Inc., its Sole

  
	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  
	
   

  	
  MERITAGE HOMES CONSTRUCTION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  
	
   

  	
  MERITAGE PASEO CONSTRUCTION, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes Construction, Inc., its Sole

  
	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  



 


 


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  MERITAGE HOMES OF TEXAS HOLDING,

  
	
   

  	
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  
	
   

  	
  MERITAGE HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Texas Holding, Inc., its

  
	
   

  	
   

  	
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF TEXAS JOINT

  
	
   

  	
  VENTURE HOLDING COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Texas, LLC, its Sole

  
	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Texas Holding, Inc., its 

  
	
   

  	
   

  	
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  



 


 


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  MERITAGE HOMES OF NEVADA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  MTH-CAVALIER, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes Construction, Inc., its Sole

  
	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  MTH GOLF, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes Construction, Inc., its Sole

  
	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF COLORADO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF FLORIDA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  



 


 


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  CALIFORNIA URBAN BUILDERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  CALIFORNIA URBAN HOMES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of California, Inc., its Sole 

  Member and Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  GREATER HOMES, INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OPERATING 

  COMPANY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Holdings, L.L.C., its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Texas Holding, Inc., its 

  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  



 


 


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  MERITAGE HOMES OF TEXAS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Texas Holding, Inc., its 

  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Carroll

  
	
   

  	
   

  	
  John B. Carroll

  
	
   

  	
   

  	
  Vice President - Treasurer

  



 


 


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SCHEDULE 2.01


 


COMMITMENTS

AND PRO RATA SHARES


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Guaranty Bank

  	
   

  	
  $

  	
  52,941,177.00

  	
   

  	
  10.5882354

  	
  %

  
	
  JPMorgan Chase Bank, N.A., a national
  banking association

  	
   

  	
  $

  	
  47,058,824.00

  	
   

  	
  9.4117648

  	
  %

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  41,176,471.00

  	
   

  	
  8.2352942

  	
  %

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  35,294,118.00

  	
   

  	
  7.0588236

  	
  %

  
	
  Countrywide Bank, FSB

  	
   

  	
  $

  	
  32,352,941.00

  	
   

  	
  6.4705882

  	
  %

  
	
  U. S. Bank National Association

  	
   

  	
  $

  	
  29,411.765.00

  	
   

  	
  5.8823530

  	
  %

  
	
  Citicorp North America, Inc.

  	
   

  	
  $

  	
  29,411.765.00

  	
   

  	
  5.8823530

  	
  %

  
	
  Deutsche Bank Trust Company Americas

  	
   

  	
  $

  	
  29,411.765.00

  	
   

  	
  5.8823530

  	
  %

  
	
  UBS Loan Finance, LLC

  	
   

  	
  $

  	
  29,411.765.00

  	
   

  	
  5.8823530

  	
  %

  
	
  BNP Paribas

  	
   

  	
  $

  	
  29,411.765.00

  	
   

  	
  5.8823530

  	
  %

  
	
  SunTrust Bank

  	
   

  	
  $

  	
  20,588,235.00

  	
   

  	
  4.1176470

  	
  %

  
	
  Comerica Bank

  	
   

  	
  $

  	
  14,705,882.00

  	
   

  	
  2.9411764

  	
  %

  
	
  Compass Bank

  	
   

  	
  $

  	
  14,705,882.00

  	
   

  	
  2.9411764

  	
  %

  
	
  Regions Bank

  	
   

  	
  $

  	
  14,705,882.00

  	
   

  	
  2.9411764

  	
  %

  
	
  Bank of Oklahoma, N.A.

  	
   

  	
  $

  	
  14,705,882.00

  	
   

  	
  2.9411764

  	
  %

  
	
  LaSalle Bank, N.A.

  	
   

  	
  $

  	
  14,705,882.00

  	
   

  	
  2.9411764

  	
  %

  
	
  PNC Bank, National Association

  	
   

  	
  $

  	
  14,705,882.00

  	
   

  	
  2.9411764

  	
  %

  
	
  KeyBank National Association

  	
   

  	
  $

  	
  11,764,706.00

  	
   

  	
  2.3529412

  	
  %

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  8,823,529.00

  	
   

  	
  1.7647058

  	
  %

  
	
  Northern Trust Company

  	
   

  	
  $

  	
  8,823,529.00

  	
   

  	
  1.7647058

  	
  %

  
	
  California Bank & Trust, a
  California banking corporation

  	
   

  	
  $

  	
  5,882,353.00

  	
   

  	
  1.1764706

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  500,000,000.00

  	
   

  	
  100.000000000

  	
  %

  



 


1

















 


EXHIBIT D


 


FORM OF
COMPLIANCE CERTIFICATE


 


Financial Statement Date:                          


 


To:                              Guaranty
Bank, as Administrative Agent, L/C Issuer and Swing Line Lender


 


Ladies and Gentlemen:


 


Reference is
made to that certain First Amended and Restated Credit Agreement, dated as of May 16,
2006 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein
being used herein as therein defined), among Meritage Homes Corporation (the “Borrower”),
the Lenders from time to time party thereto, and Guaranty Bank, as
Administrative Agent, L/C Issuer and Swing Line Lender.


 


The
undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the
                                            
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:


 


[Use
following for fiscal year-end
financial statements]


 


Attached
hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of the Agreement for the fiscal
year of the Borrower ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.


 


[Use
following for fiscal quarter-end
financial statements]


 


1.             Attached hereto as Schedule 1
are the unaudited financial statements required by Section 6.01(b) of
the Agreement for the fiscal quarter of the Borrower ended as of the above
date. Such financial statements fairly present the financial condition, results
of operations and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP as at such date and for such period, subject only to normal year-end
audit adjustments and the absence of footnotes.


 


2.             The undersigned has reviewed and is
familiar with the terms of the Agreement and has made, or has caused to be made
under his/her supervision, a detailed review of the transactions and condition
(financial or otherwise) of the Borrower during the accounting period covered
by the attached financial statements.


 


3.             A review of the activities of the
Borrower during such fiscal period has been made under the supervision of the
undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents,
and


 


1

















 


[select
one:]


 


[to the
best knowledge of the undersigned as of the date hereof no Default or Event of
Default under the Agreement has occurred and its continuing.]


 


—or—


 


[the
following is a list of each such Default or Event of Default and its nature and
status:]


 


4.             The financial covenant analyses and
information set forth on Schedule 2 attached hereto are true and accurate on
and as of the date of this Certificate.


 


IN WITNESS
WHEREOF, the undersigned has executed this Certificate
as of
                      
        ,                   .


 


 


	
   

  	
  MERITAGE HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


2

















 


For the Month/Quarter/Year ended
                                                
(“Statement Date”)


 


SCHEDULE 2


to the Compliance Certificate


($ in 000’s)


 


	
  I.

  	
  Net Leverage Ratio – For Determination of Covenant Compliance.

  
	
   

  	
   

  
	
   

  	
  A.

  	
   

  	
  Consolidated Indebtedness:

  
	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Indebtedness of the Loan Parties:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
   

  	
  Without duplication, all obligations for borrowed money and all
  obligations evidenced by bonds, debentures, notes, loan agreements or other
  similar instruments:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
   

  	
  Without duplication, all direct or contingent obligations arising
  under letters of credit (including standby and commercial), banker’s
  acceptances, bank guaranties, surety bonds and similar instruments:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (c)

  	
   

  	
  Without duplication, all net obligations under any Swap Contract:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (d)

  	
   

  	
  Without duplication, all obligations to pay the deferred purchase
  price of property or services (except (i) Trade accounts payable that
  are not more 30 days past the date the invoice was approved and entered into
  the computer system by such Loan Party, (ii) accrued expenses incurred
  by such Person in the ordinary course of business, (iii) marketing fees
  payable to developers of master planned communities incurred by such Person
  in the ordinary course of business, (iv) reimbursement obligations for
  impact or development fee credits to be received by such Person incurred in
  the ordinary course of business, (v) deferred lot premium or profit
  participation obligations payable to developers of master planned communities
  incurred in the ordinary course of business and (vi) obligations to
  developers or owners of master planned communities in form of a performance
  encumbrance of such Person incurred in the ordinary course of business):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (e)

  	
   

  	
  Without duplication, indebtedness (excluding prepaid interest
  thereon) secured by a Lien on property owned or being purchased (including
  indebtedness arising under conditional sales or other title retention
  agreements), whether or not such indebtedness shall have been assumed or is
  limited in recourse:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (f)

  	
   

  	
  Without duplication, obligations under Capital Leases:

  	
   

  	
  $

  



 


3

















 


	
   

  	
   

  	
   

  	
   

  	
   

  	
  (g)

  	
   

  	
  Without duplication, Synthetic Lease Obligations and other
  Off-Balance Sheet Liabilities:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (h)

  	
   

  	
  Without duplication, obligations in respect of Redeemable Stock:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
   

  	
  Without duplication, any Receivables Facility Attributed
  Indebtedness:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (j)

  	
   

  	
  Without duplication, any “withdrawal liability” as such term is
  defined under Part I of Subtitle E of Title IV of ERISA:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (k)

  	
   

  	
  Without duplication, all Guarantees in respect of any of the
  foregoing:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (l)

  	
   

  	
  Indebtedness (Lines I.A.1(a) + (b) + (c) + (d) +
  (e) + (f) + (g) + (h) + (i) + (j) + (k)):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Indebtedness of one Loan Party to another Loan Party:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Consolidated Indebtedness (Line I.A.1(l) - Line I.A.2):

  	
   

  	
  $

  
	
   

  	
  B.

  	
   

  	
  Consolidated Tangible Net Worth:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Shareholders’ Equity of the Loan Parties:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Intangible Assets of the Loan Parties:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Consolidated Tangible Net Worth: (Line I.B.1 - Line I.B.2):

  	
   

  	
  $

  
	
   

  	
  C.

  	
   

  	
  Unrestricted Cash

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Unrestricted Cash:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  Less:

  	
   

  	
  $

  	
  25,000,000

  
	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Total (Line I.C.1. minus Line I.C.2.) (Maximum value cannot exceed
  $300,000,000):

  	
   

  	
  $

  
	
   

  	
  D.

  	
   

  	
  Net Leverage Ratio:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated Indebtedness:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  2.

  	
   

  	
  The face amount of all undrawn Performance Letters of Credit issued
  for the account of, or guaranteed by, the Loan Parties:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  3.

  	
   

  	
  Attributable Indebtedness in respect of Synthetic Lease Obligations
  and other Off-Balance Sheet Liabilities and Guarantees with respect thereto:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  4.

  	
   

  	
  Unrestricted Cash (Line I.C.3.):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  5.

  	
   

  	
  Total ((Lines I.D.1 - I.D.2 - I.D.3 – I.D.4.) ÷ Line I.B.3):

  	
   

  	
                to
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  Section 7.02(j) - Limitation on
  other Investments.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
   

  	
  Actual amount of Investments other than those permitted by
  subsections (a) through (i) of Section 7.02:

  	
   

  	
  $

  
	
   

  	
  B.

  	
   

  	
  Maximum in aggregate amount at any one time outstanding (Line I.B.3.
  x 30%):

  	
   

  	
  $

  
												



 


4
















 


	
  III.

  	
  Section 7.03 - Limitation on
  Indebtedness.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Aggregate amount of secured Indebtedness, provided that such Liens
  are on assets other than Borrowing Base Assets:

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Maximum amount at any time outstanding (Line I.B.3. x 10%):

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Aggregate amount of Indebtedness guarantied pursuant to Springing
  Guarantees:

  	
   

  	
  $

  
	
   

  	
  D.

  	
  Maximum amount permitted (50% of Line I.B.3):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  Section 7.11(a) - Minimum Net
  Worth.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Actual Consolidated Tangible Net Worth (Line I.B.3):

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Minimum Net Worth:

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  50% of Consolidated Net Income (excluding the effect of any decrease
  in any Deferred Tax Valuation Allowance) earned in each full fiscal quarter
  ending after June 30, 2008 (with no deduction for a net loss during any
  such period):

  	
   

  	
  $

  
	
   

  	
   

  	
  2.

  	
  50% of aggregate increases in Consolidated Tangible Net Worth of the
  Borrower and its Subsidiaries after June 30, 2008 by reason of the
  issuance and sale of Equity Interests or other equity interests of the
  Borrower or any Subsidiary (other than issuances to the Borrower or a
  wholly-owned Subsidiary), including any conversion of debt securities of the
  Borrower into such Equity Interests or other equity interests:

  	
   

  	
  $

  
	
   

  	
   

  	
  3.

  	
  An amount equal to the net worth of any Person that becomes a
  Subsidiary or is merged into or consolidated with the Borrower or any
  Subsidiary or substantially all of the assets of which are acquired by the
  Borrower or any Subsidiary, in each case after June 30, 2008:

  	
   

  	
  $

  
	
   

  	
   

  	
  4.

  	
  Cumulative net amount of Deferred Tax Valuation Allowance (not to
  exceed $150,000,000):

  	
   

  	
  $

  
	
   

  	
   

  	
  5.

  	
  Required Minimum Net Worth ($500,000,000 + Line IV.B.1. + 2. + 3. –
  4.):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  Section 7.11(b) - Maximum Net
  Leverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Net  Leverage Ratio (Line I.D.5.):

  	
   

  	
          to
  1.00

  
	
   

  	
  B.

  	
  Maximum Net  Leverage
  Ratio (See Section 7.11(b) for Maximum Permitted):

  	
   

  	
          to
  1.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  Section 7.11(c) - Minimum Interest
  Coverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Consolidated EBITDA for the period of four fiscal quarters ending on
  the date of date of determination (the “Subject Period”):

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Consolidated Net Income of the Loan Parties for the Subject Period:

  	
   

  	
  $

  



 


5

















 


	
   

  	
   

  	
  2.

  	
  To the extent deducted from revenues in determining Consolidated Net
  Income, Consolidated Interest Expense for the Subject Period:

  	
   

  	
  $

  
	
   

  	
   

  	
  3.

  	
  To the extent deducted from revenues in determining Consolidated Net
  Income, expense for income taxes paid or accrued for the Subject Period:

  	
   

  	
  $

  
	
   

  	
   

  	
  4.

  	
  To the
  extent deducted from revenues in determining Consolidated Net Income,
  depreciation for the Subject Period:

  	
   

  	
  $

  
	
   

  	
   

  	
  5.

  	
  To the extent deducted from revenues in determining Consolidated Net
  Income, amortization for the Subject Period:

  	
   

  	
  $

  
	
   

  	
   

  	
  6.

  	
  To the extent deducted from revenues in determining Consolidated Net
  Income, all other non-cash items reducing Consolidated Net Income (excluding
  any non-cash charge that results in an accrual of a reserve for cash charges
  in the future) for the Subject Period:

  	
   

  	
  $

  
	
   

  	
   

  	
  7.

  	
  To the extent deducted from revenues in determining Consolidated Net
  Income, the amount of dividends accrued or payable by the Loan Parties in
  respect of Disqualified Equity Interests or any Preferred Stock of any
  Restricted Subsidiary (excluding any amount payable to any Loan Party), which
  amount shall be “grossed up” to include any applicable taxes on income that
  would be used to pay such dividends, provided, however, that
  interest, dividends or other payments or accruals of a consolidated
  Subsidiary that is not wholly owned shall be included only to the extent of
  the interest of such Person in such Subsidiary:

  	
   

  	
  $

  
	
   

  	
   

  	
  8.

  	
  Consolidated EBITDA (Lines VI.A.1. + 2. + 3. + 4. + 5. + 6. + 7.):

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Consolidated Interest Incurred for the Subject Period:

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Interest Coverage Ratio (Line VI.A.8. ÷ VI.B.):

  	
   

  	
          to
  1.00

  
	
   

  	
  D.

  	
  Minimum Interest Coverage Ratio (See Section 7.11(c) for
  Minimum Required

  	
   

  	
          to
  1.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  Section 7.11(d) - Borrowing Base
  Debt.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Borrowing Base as of date of determination (from Borrowing Base
  Report):

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Consolidated Indebtedness as of such date of determination (Line
  I.A.3):

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Any portion of any Subordinated Debt of any Loan Party which is due
  and payable more than one year from such date of determination:

  	
   

  	
  $

  
							



 


6

















 


	
   

  	
  D.

  	
  Indebtedness secured by Liens on assets that are not part of any of
  the Borrowing Base Assets, but only to the extent that the Indebtedness
  secured by Liens on such assets (x) does not exceed the Net Book Value
  of such asset as determined by GAAP and (y) does not exceed in aggregate
  amount the amount set forth in Section 7.03(f):

  	
   

  	
  $

  
	
   

  	
  E.

  	
  The face amount of all undrawn Performance Letters of Credit, in each
  case issued for the account of, or guaranteed by the Loan Parties:

  	
   

  	
  $

  
	
   

  	
  F.

  	
  Cash and
  Cash Equivalents and Receivables of the Loan Parties not subject to any Lien
  securing Indebtedness in an aggregate amount in excess of $5,000,000:

  	
   

  	
  $

  
	
   

  	
  G.

  	
  Aggregate of
  the Outstanding Amount of Revolving Loans, Swing Line Loans and L/C
  Borrowings:

  	
   

  	
  $

  
	
   

  	
  H.

  	
  Borrowing Base Debt (Lines VII.B. - C. – D. - E. – (Line VII.F +
  VII.G, if greater than $0)):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  Section 7.11(e) - Total Land
  Restrictions.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Net Book Value of Unentitled Land:

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Net Book Value of Unimproved Entitled Land:

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Net Book Value of Land/Lots Under Development:

  	
   

  	
  $

  
	
   

  	
  D.

  	
  Net Book Value of Finished Lots:

  	
   

  	
  $

  
	
   

  	
  E.

  	
  Actual (Lines VIII.A. + B. + C. + D.):

  	
   

  	
  $

  
	
   

  	
  F.

  	
  Line I.B.3 x 125%:

  	
   

  	
  $

  
	
   

  	
  G.

  	
  50% of outstanding Subordinated Debt:

  	
   

  	
  $

  
	
   

  	
  H.

  	
  Maximum Total Land Restrictions (Lines VIII.F. + G.):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  Section 7.11(f) - Raw Land
  Restrictions.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Net Book Value of Unentitled Land:

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Net Book Value of Unimproved Entitled Land:

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Actual (Lines IX.A. + B.):

  	
   

  	
  $

  
	
   

  	
  D.

  	
  Maximum Raw Land Restrictions (Line I.B.3 x 20%):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  Section 7.11(g) - Unsold Units.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Actual Number of Unsold Units existing as of the end of the fiscal
  quarter:

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Number of Unit Closings within the four fiscal quarters ending on the
  last day of the fiscal quarter x 30%:

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Number of Units of Closings within two fiscal quarters ending on the
  last day of the fiscal quarter x 60%:

  	
   

  	
  $

  
	
   

  	
  D.

  	
  Maximum Unsold Units (Greater of Line X.B. and Line X.C.):

  	
   

  	
  $

  



 


7

















 


	
  XI.

  	
  Section 7.11(h) - Model Units.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Actual Number of Model Units existing as of the end of the fiscal
  quarter:

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Number of Unit Closings within the four fiscal quarters ending on the
  last day of the fiscal quarter:

  	
   

  	
  $

  
	
   

  	
  C.

  	
  Maximum Model Units (Line XI.B. x 10%):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  Leverage Ratio - For Determination of Applicable Rate.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Consolidated Indebtedness:

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Indebtedness of the Loan Parties:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Without duplication, all obligations for borrowed money and all
  obligations evidenced by bonds, debentures, notes, loan agreements or other
  similar instruments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Without duplication, all direct or contingent obligations arising
  under letters of credit (including standby and commercial), banker’s
  acceptances, bank guaranties, surety bonds and similar instruments:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Without duplication, all net obligations under any Swap Contract:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Without duplication, all obligations to pay the deferred purchase
  price of property or services (except (i) Trade accounts payable that
  are not more 30 days past the date the invoice was approved and entered into
  the computer system by such Loan Party, (ii) accrued expenses incurred
  by such Person in the ordinary course of business, (iii) marketing fees
  payable to developers of master planned communities incurred by such Person
  in the ordinary course of business, (iv) reimbursement obligations for
  impact or development fee credits to be received by such Person incurred in
  the ordinary course of business, (v) deferred lot premium or profit
  participation obligations payable to developers of master planned communities
  incurred in the ordinary course of business and (vi) obligations to
  developers or owners of master planned communities in form of a performance
  encumbrance of such Person incurred in the ordinary course of business):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Without duplication, indebtedness (excluding prepaid interest
  thereon) secured by a Lien on property owned or being purchased (including
  indebtedness arising under conditional sales or other title retention
  agreements), whether or not such indebtedness shall have been assumed or is
  limited in recourse:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Without duplication, obligations under Capital Leases:

  	
   

  	
   

  



 


8

















 


	
   

  	
   

  	
   

  	
  (g)

  	
  Without duplication, Synthetic Lease Obligations and other
  Off-Balance Sheet Liabilities:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Without duplication, obligations in respect of Redeemable Stock:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Without duplication, any Receivables Facility Attributed
  Indebtedness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (j)

  	
  Without duplication, any “withdrawal liability” as such term is
  defined under Part I of Subtitle E of Title IV of ERISA:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (k)

  	
  Without duplication, all Guarantees in respect of any of the
  foregoing:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (l)

  	
  Indebtedness (Lines XII.A.1(a) + (b) + (c) + (d) + (e) + (f) + (g) +
  (h) + (i) + (j) + (k)):

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Indebtedness of one Loan Party to another Loan Party:

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Consolidated Indebtedness (Line XII.A.1(l) - Line XII.A.2):

  	
   

  	
   

  
	
   

  	
  B.

  	
  Consolidated Tangible Net Worth:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
  Shareholders’ Equity of the Loan Parties:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  Intangible Assets of the Loan Parties:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
  2.

  	
  Consolidated Tangible Net Worth: (Line XII.B.1 - Line XII.B.2):

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  Leverage Ratio:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  1.

  	
  Consolidated Indebtedness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  2.

  	
  The face amount of all undrawn Performance Letters of Credit issued
  for the account of, or guaranteed by, the Loan Parties:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  3.

  	
  Attributable Indebtedness in respect of Synthetic Lease Obligations
  and other Off-Balance Sheet Liabilities and Guarantees with respect thereto:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  4.

  	
  Total ((Lines XII.C.1 - XII.C.2 - XII.C.3) ÷ Line XII.B.3):

  	
   

  	
   

  



 


9

















 


EXHIBIT H


 


FORM OF BORROWING BASE CERTIFICATE


 


Date:                            


 


To:          Guaranty Bank, as
Administrative Agent, L/C Issuer and Swing Line Lender


 


Ladies and Gentlemen:


 


Reference is
made to that certain First Amended and Restated Credit Agreement, dated as of May 16,
2006 (as amended, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among Meritage Homes Corporation (the “Borrower”),
the Lenders from time to time party thereto, and Guaranty Bank, as
Administrative Agent, L/C Issuer and Swing Line Lender.


 


This Borrowing
Base Certificate is delivered pursuant to Section 6.02(c) of
the Credit Agreement.  All capitalized
terms used herein and defined in the Credit Agreement shall be used herein as
so defined.


 


	
  I.

  	
  Borrowing Base [to be completed monthly]

  
	
   

  	
   

  	
   

  
	
   

  	
  Borrower hereby represents and warrants that the following Borrowing
  Base Report is true and correct in all respects as of
                          ,
             (the “Reporting
  Date”). The Borrowing Base is determined as follows:

  
	
   

  	
   

  
	
  1.

  	
  Net Book Value of Presold Units:

  	
   

  	
  $

  
	
  2.

  	
  Net Book Value of Eligible Model Units:

  	
   

  	
  $

  
	
  3.

  	
  Net Book Value of Unsold Units Under Constructions:

  	
   

  	
  $

  
	
  4.

  	
  Net Book Value of Completed Unsold Units Less Than 18 Months Since
  Completion:

  	
   

  	
  $

  
	
  5.

  	
  Net Book Value of Finished Lots:

  	
   

  	
  $

  
	
  6.

  	
  Net Book Value of Land/Lots Under Development:

  	
   

  	
  $

  
	
  7.

  	
  Net Book Value of Unimproved Entitled Land:

  	
   

  	
  $

  
	
  8.

  	
  Borrowing Base on Reporting Date ((85% x Line 1.) + (75% x Line 2.) +
  (75% x Line 3.) + (70% x Line 4.) + (65% x Line 5.) + (45% x Line 6.) + (30%
  (0% during the Reduction Period) x Line 7.)):

  	
   

  	
  $

  
	
  9.

  	
  Borrowing Base Debt

  	
   

  	
   

  
	
   

  	
  A.

  	
  Consolidated Indebtedness as of Reporting
  Date (Line I.A.3 of Compliance Certificate):

  	
   

  	
  $

  
	
   

  	
  B.

  	
  Any portion of any Subordinated Debt of any
  Loan Party which is due and payable more than one year from such date of
  determination:

  	
   

  	
  $

  
						



 


1

















 


	
   

  	
  C.

  	
  Indebtedness secured by Liens on assets
  that are not part of any of the Borrowing Base Assets, but only to the extent
  that the Indebtedness secured by Liens on such assets (i) does not
  exceed the Net Book Value of such asset as determined by GAAP and
  (ii) does not exceed in aggregate amount the amount set forth in Section 7.03(f):

  	
   

  	
  $

  
	
   

  	
  D.

  	
  The face amount of all undrawn Performance
  Letters of Credit, in each case issued for the account of, or guaranteed by
  the Borrower or any of its Subsidiaries (other than Unrestricted
  Subsidiaries):

  	
   

  	
  $

  
	
   

  	
  E.

  	
  Cash and Cash Equivalents of the Loan Parties not subject to any Lien
  securing Indebtedness in an aggregate amount in excess of $5,000,000:

  	
   

  	
  $

  
	
   

  	
  F.

  	
  Aggregate of the Outstanding Amount of Revolving Loans of the
  Lenders:

  	
   

  	
  $

  
	
   

  	
  G.

  	
  Borrowing Base Debt (Lines 9.A. - B. - C. - D. – (Line 9.E. + Line
  9.F., if greater than $0)):

  	
   

  	
  $

  
	
  10.

  	
  Availability (Line 8 - Line 9.G.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  Borrowing Base Certifications

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrower hereby represents and warrants that as of the Reporting
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  No more than 60% of the Borrowing Base is comprised of the items set
  forth in lines 5, 6 and 7 above.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  No more than 35% (25% during the Reduction Period) of the Borrowing
  Base is comprised of the items set forth in lines 6 and 7 above.

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  The aggregate amount of condominiums included in the Borrowing Base
  does not exceed 15% of the aggregate number of Units comprising the items set
  forth in lines 1, 2, 3 and 4 in the aggregate.

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  Liquidity [To be completed when required to be maintained pursuant to
  Section 7.11(i)]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Interest Coverage Ratio (from Compliance Certificate Line VI.C.):

  	
   

  	
        to      

  
	
   

  	
  B.

  	
  Adjusted Cash Flow Ratio

  	
   

  	
   

  
	
   

  	
   

  	
  1.        Net Cash Provided By
  (Used In) Operations:

  	
   

  	
  $

  
	
   

  	
   

  	
  2.        Consolidated Interest
  Incurred:

  	
   

  	
  $

  
	
   

  	
   

  	
  3.        Adjusted Cash Flow
  From Operations (III.B.1. + III.B.2.):

  	
   

  	
  $

  
							



 


2

















 


	
   

  	
   

  	
  4.        Adjusted Cash Flow
  Ratio (III.B.3. ÷III.B.2.)

  	
   

  	
        to      

  
	
  Liquidity condition only applicable if Interest Coverage Ratio is
  less than or equal to 1.00 to 1.00 and ratio of Adjusted Cash Flow From
  Operations to Consolidated Interest Incurred is less than 1.50 to 1.00.

  
	
   

  	
  C.

  	
  Liquidity

  	
   

  	
   

  
	
   

  	
  1.

  	
  Borrowing Base (see I.8):

  	
   

  	
  $

  
	
   

  	
  2.

  	
  Consolidated Indebtedness (other than the Total Outstandings)
  excluding (i) any portion of any Subordinated Debt of any Loan Party
  which is due and payable more than one year from such date of determination,
  (ii) Indebtedness secured by Liens on assets that are not part of any of
  the Borrowing Base Assets, but only to the extent that the Indebtedness
  (x) secured by any Lien on such asset does not exceed the Net Book Value
  of such asset as determined by GAAP and (y) does not exceed in aggregate
  the amount set forth in Section 7.03(f) and (iii) the
  face amount of all undrawn Performance Letters of Credit, in each case issued
  for the account of, or guaranteed by the Loan Parties

  	
   

  	
  $

  
	
   

  	
  3.

  	
  Line 1. - Line 2.

  	
   

  	
  $

  
	
   

  	
  4.

  	
  Aggregate Commitments

  	
   

  	
  $

  
	
   

  	
  5.

  	
  Lesser of Line 3. and Line 4.

  	
   

  	
  $

  
	
   

  	
  6.

  	
  Total Outstandings

  	
   

  	
  $

  
	
   

  	
  7.

  	
  Line 5. – Line 6

  	
   

  	
  $

  
	
   

  	
  8.

  	
  Unrestricted Cash:

  	
   

  	
  $

  
	
   

  	
  9.

  	
  Less:

  	
   

  	
  $

  	
  5,000,000

  
	
   

  	
  10.

  	
  Less the Outstanding Amount of Revolving Loans, Swing Line Loans, and
  L/C Borrowings

  	
   

  	
  $

  
	
   

  	
  11.

  	
  Total (Line 8. – Line 9 – Line 10.):

  	
   

  	
  $

  
	
   

  	
  12.

  	
  Liquidity (Line 7. + Line 11.):

  	
   

  	
  $

  
	
   

  	
  13.

  	
  Minimum Required (If Interest Coverage Ratio (from Compliance
  Certificate Line VI.C.) is less than or equal to 1.00 to 1.00):

  	
   

  	
  $

  	
  125,000,000

  
	
   

  	
  14.

  	
  Minimum Required (If Interest Coverage Ratio (from Compliance
  Certificate Line VI.C.) is less than 2.00 to 1.00 but more than 1.00 to 1.00)

  	
   

  	
  $

  	
  50,000,000

  
								



 


3

















 


IN WITNESS
WHEREOF, the undersigned has executed this Certificate
as of
                        ,
            .


 


	
   

  	
  MERITAGE HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


4