Exhibit
10.1.2


 


 




 


 


SECOND AMENDMENT

TO

CREDIT AGREEMENT


 





Dated as of December 3,
2003




among


 


MERITAGE CORPORATION,

as the Borrower


 


GUARANTY BANK,

as Administrative Agent and Swing Line Lender,


 


BANK ONE, NA,

as Syndication Agent


 


FLEET NATIONAL BANK,

as Documentation Agent


 


and




The Other Lenders Party Thereto


 




 





 


GUARANTY BANK,

as Joint Lead Arranger and Joint Book Manager


 


and


 


BANC ONE CAPITAL MARKETS,
INC.,

as Joint Lead Arranger and Joint Bank Manager


 


 

















 


SECOND AMENDMENT TO
CREDIT AGREEMENT


 


THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Second
Amendment”), dated as of December 3, 2003, is entered into among MERITAGE
CORPORATION, a Maryland corporation (the “Borrower”), the lenders listed
on the signature pages hereof as Lenders (the “Lenders”), GUARANTY BANK,
as Administrative Agent and Swing Line Lender, BANK ONE, NA, as Syndication
Agent, and FLEET NATIONAL BANK, as Documentation Agent.


 


BACKGROUND


 


A.             The
Borrower, certain of the Lenders, the Syndication Agent, the Documentation
Agent, the Administrative Agent and the Swing Line Lender are parties to that
certain Credit Agreement, dated as of December 12, 2002, as amended by that
certain First Amendment to Credit Agreement, dated as of September 8, 2003
(said Credit Agreement, as amended, the “Credit Agreement”). The terms
defined in the Credit Agreement and not otherwise defined herein shall be used
herein as defined in the Credit Agreement.


 


B.              The
Borrower has requested certain amendments to the Credit Agreement to, among
other things, (a) increase the Aggregate Commitments and extend the Scheduled
Maturity Date and (b) add Comerica Bank, PNC Bank, National Association and
SouthTrust Bank (collectively, “New Lenders”) as lenders under the
Credit Agreement..


 


C.            The
Lenders, the Syndication Agent, the Documentation Agent, the Administrative
Agent and the Swing Line Lender 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 Borrower, the Lenders, the Syndication Agent, the Documentation Agent, the
Swing Line Lender and the Administrative Agent covenant and agree as follows:


 


1.             AMENDMENTS.


 


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


 


“Documentation Agent”
means Fleet National Bank, in its capacity as documentation agent under any of
the Loan Documents.


 


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


 


“Letter of Credit
Sublimit” means an amount equal to $60,000,000. The Letter of Credit
Sublimit is part of, and not in addition to, the Aggregate Commitments.


 

















 


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


 


“Revolving Note”
or “Revolving Loan Note” means a promissory note made by the Borrower in
favor of a Lender and evidencing Revolving Loans made by such Lender,
substantially in the form of Exhibit C.


 


(d)           The definition of “Scheduled
Maturity Date” set forth in Section 1.01 of the Credit Agreement is
hereby amended to read as follows:


 


“Scheduled Maturity
Date” means May 3, 2007, as the same may be extended pursuant to Section
2.14.


 


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


 


“Swing Line Sublimit”
means an amount equal to the lesser of (a) $35,000,000 and (b) the Aggregate
Commitments. The Swing Line Sublimit is part of, and not in addition to, the
Aggregate Commitments.


 


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


 


“Syndication Agent”
means Bank One, NA, in its capacity as syndication agent under any of the Loan
Documents.


 


(g)           Section
1.01 of the Credit Agreement is hereby amended by adding the defined terms
“Increase Closing Date” and “Second Amendment Closing Date”
thereto in proper alphabetical order to read as follows:


 


“Increase Closing Date” has the meaning
specified in Section 2.15(b). 


 


“Second Amendment Closing Date” means December
3, 2003.


 


(h)           The reference to “Section 2.02(b)”
in the eighth line of Section 2.02(a) of the Credit Agreement is hereby
deleted and “Section 2.02(a)” is inserted in lieu thereof.


 


(i) The reference to “Cash Collateral” in the sixth
line of Section 2.03(d)(i) of the Credit Agreement and in the last
paragraph of Section 8.03 of the Credit Agreement is hereby deleted and
“cash collateral” is inserted in lieu thereof.


 


(j)            Article II of the Credit
Agreement is hereby amended by adding a new Section 2.15 thereto to read
as follows:


 


2.15        Increase in
Commitments.


 


(a)           Provided there exists no Default,
upon notice to the Administrative Agent (which shall promptly notify the
Lenders), the Borrower may from time to time on a one-


 


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time basis, request an increase in the Aggregate
Commitments by an amount (for all such requests) not exceeding $50,000,000. At
the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders). Each Lender shall
notify the Administrative Agent within such time period whether or not it
agrees to increase its Commitment and, if so, whether by an amount equal to,
greater than, or less than its Pro Rata Share of such requested increase. Any
Lender not responding within such time period shall be deemed to have declined
to increase its Commitment. The Administrative Agent shall notify the Borrower
and each Lender of the Lenders’ responses to each request made hereunder. To
achieve the full amount of a requested increase, the Borrower may also invite
additional Eligible Assignees to become Lenders pursuant to a joinder agreement
in form and substance satisfactory to the Administrative Agent and its counsel.


(b)             If the Aggregate Commitments are
increased in accordance with this Section 2.15, the Administrative Agent
and the Borrower shall determine the Closing Date (the “Increase Closing
Date”) and the final allocation of such increase. The Administrative Agent
shall promptly notify the Borrower and the Lenders of the final allocation of
such increase and the Increase Closing Date. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Increase Closing Date (in sufficient copies
for each Lender) signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving
or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article V and the other Loan Documents are
true and correct on and as of such Increase Closing 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 for purposes of this Section 2.15, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to subsections
(a) and (b), respectively, of Section 6.01, and (B) no Default exists.
On the Increase Closing Date, each Lender shall, to the extent necessary, make
a payment to the Administrative Agent in an amount sufficient, upon the
application of such payments by all Lenders to the reduction of outstanding
Revolving Loans held by the Lenders, to cause the principal amount of Revolving
Loans outstanding made by each Lender to be in the amount of its Pro Rate Share
(after giving effect to the increase in the Aggregate Commitments in accordance
with this Section 2.15) of all outstanding Revolving Loans. The Borrower
hereby irrevocably authorizes each Lender to fund to the Administrative Agent
the payment required to be made pursuant to the immediately preceding sentence
for application to the reduction of the outstanding Revolving Loans held by the
other Lenders. If, as a result of the repayment of Revolving Loans provided for
in this Section 2.15, any payment of Eurodollar Rate Loans occurs on a day
which is not the last day of the applicable Interest Period, the Borrower will
pay to the Administrative Agent for the benefit of any Lender holding a
Eurodollar Rate Loan any loss or cost incurred by such Lender resulting
therefrom in accordance with Section 3.05


 


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to the extent a
Eurodollar Rate Loan is paid on other than the last day of an Interest Period
as a result thereof.


(c)           Upon the Increase Closing Date and the
making of the payments described in Section 2.15(b), each new Lender
and/or increasing Lender shall be deemed to have irrevocably and
unconditionally purchased and received, without recourse or warranty, an
undivided participation in all outstanding Swing Line Loans and L/C Obligations
in accordance with its Pro Rata Share.


(d)           This Section shall supersede any
provisions in Sections 2.13, or 10.01 to the contrary.


(k)           The reference to “Existing Credit
Agreement” in Section 4.01(a)(xi) of the Credit Agreement is hereby
deleted and “Existing Credit Facilities” is inserted in lieu thereof.


(1)           The reference to “Section 7.03(g)”
in Section 5.13 of the Credit Agreement is hereby deleted and “Section
7.02” is inserted in lieu thereof.


(m)          Article V of the Credit
Agreement is hereby further amended by adding a new Section 5.21 thereto
in proper numerical order to read as follows:


 


Section 5.21 Tax Shelter Regulations.
The Borrower does
not intend to treat the Loans and/or Letters of Credit and related transactions
as being a “reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4). In the event the Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof. If the Borrower so notifies the Administrative Agent, the
Borrower acknowledges that one or more of the Lenders may treat its Revolving
Loans and/or its interest in Swing Line Loans and/or Letters of Credit as part
of a transaction that is subject to Treasury Regulation Section 301.6112-1, and
such Lender or Lenders, as applicable, will maintain the lists and other
records required by such Treasury Regulation.


(n)           Section 6.02 of the Credit
Agreement is hereby amended by (i) deleting “and” at the end of clause (f)
thereof; (ii) deleting “.” at the end of clause (g) thereof and inserting “;
and” in lieu thereof; and (iii) adding the following new clause (h) thereto to
read as follows:


(h)            promptly after the Borrower has
notified the Administrative Agent of any intention by the Borrower to treat the
Loans and/or Letters of Credit and related transactions as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4), a
duly completed copy of IRS Form 8886 or any successor form.


 


(o)            Section 6.02 of the Credit
Agreement is further amended by deleting the reference to “Section 6.02(c)”
in the last paragraph thereof and inserting “Section 6.02(b)” in lieu
thereof.


 


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


 


3

















 


(a)           Minimum Net Worth. Permit
Consolidated Tangible Net Worth at any time to be less than the sum of (a)
$225,000,000 plus (b) an amount equal to 50% of Consolidated Net Income earned
in each full fiscal quarter ending after the Second Amendment Closing Date
(with no deduction for a net loss in any such fiscal quarter), plus (c) an
amount equal to 75% of the aggregate increases in Consolidated Tangible Net
Worth of the Borrower and its Restricted Subsidiaries after the Second Amendment
Closing Date by reason of the issuance and sale of Equity Interests or other
equity interests 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 the Second Amendment Closing Date.


 


(q)           The reference to “Revolving” in the
fifth line of Section 8.01(e) of the Credit Agreement is hereby deleted
and “committed” is inserted in lieu thereof.


 


(r)            The reference to “Section 9.12”
in the last paragraph of Section 9.11 of the Credit Agreement is hereby
deleted and “Section 9.11” is inserted in lieu thereof.


 


(s)           Subsection (b) of Section
10.01 is hereby amended to read as follows:


 


(b)           extend or increase the Commitment of
any Lender (or reinstate any Commitment terminated pursuant to Section 8.02)
without the written consent of such Lender;


(t)            The reference to “Administrative
Questionnaire” in Section 10.02(a)(ii) of the Credit Agreement is
hereby deleted and “Administrative Reply Form” is inserted in lieu
thereof.


(u)            Section 10.08 of the Credit
Agreement is hereby amended by adding the following sentence to the end thereof
to read as follows:


 


Notwithstanding anything
to the contrary, “Information” shall not include, and the Administrative Agent
and each Lender may disclose without limitation of any kind, any information
with respect to the “tax treatment” and “tax structure” (in each case, within
the meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Administrative Agent or such Lender
relating to such tax treatment and tax structure; provided that with respect to
any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby.


 


(v)           Article X of the Credit
Agreement is hereby amended by adding a new Section 10.20 thereto to
read as follows:


 


4

















 


10.20  USA Patriot Act
Notice. Each Lender and the Administrative Agent (for itself and not
on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act.


(w)            Schedule 2.01 is hereby
amended to be in the form of Schedule 2.01 to this Second Amendment, and
the Commitment and Pro Rata Share of each Lender, after giving effect to this
Second Amendment, is set forth on such Schedule 2.01.


(x)             Schedule 10.02 is hereby
amended to be in the form of Schedule 10.02 to this Second Amendment.


(y)            Exhibit D to the Credit
Agreement is hereby amended to be in the form of Exhibit D to this
Second Amendment.


2.               REPRESENTATIONS AND WARRANTIES
TRUE; NO EVENT OF DEFAULT. 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;


(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 Second Amendment, the Revolving Loan Note
payable to the order of each New Lender (collectively, the “New Notes”),
the replacement Revolving Loan Note payable to the order of each Lender whose
Commitment has been amended pursuant to this Second Amendment (collectively,
the “Replacement Notes”), the replacement Swing Line Note payable to the
order of Swing Line Lender (the “Swing Line Note”), (ii) this Second Amendment,
the New Notes, the Replacement Notes and the Swing Line Note have been duly
executed and delivered by the Borrower, and (iii) this Second Amendment, the
New Notes, the Replacement Notes, the Swing Line Note 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;


(d)           neither the execution, delivery and
performance of this Second Amendment, the New Notes, the Replacement Notes, the
Swing Line Note, the Guaranty or the Credit Agreement, as amended hereby, nor
the consummation of any transactions contemplated herein or therein, will
conflict with any Law or Organization Documents of the Borrower, or any
indenture, agreement or other instrument to which the Borrower or any of its
properties are subject; and


 


5

















 


(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
Second Amendment, the New Notes, the Replacement Notes or the Swing Line Note
or (ii) the acknowledgement by each Guarantor of this Second Amendment.


3.             CONDITIONS TO EFFECTIVENESS.  This Second Amendment shall be effective
upon satisfaction or completion of the following:


(a)           the Administrative Agent shall have
received counterparts of this Second Amendment executed by all of the Lenders;


(b)           the Administrative Agent shall have
received counterparts of this Second Amendment executed by the Borrower and
acknowledged by each Guarantor;


(c)          the Administrative Agent shall have
received a certified resolution of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of this Second Amendment,
the New Notes and the Replacement Notes;


(d)         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 Second Amendment;


(e)          the Administrative Agent shall have
received a duly executed (i) New Note for each New Lender, (ii) Replacement
Note for each Lender whose Commitment is being amended by this Second Amendment
and (iii) Swing Line Note;


(f)          the Administrative Agent shall have
received from the Borrower in immediately available funds for (i) each New
Lender, an amount equal to the product of (A) 0.375% and (B) the amount of each
such New Lender’s Commitment, (ii) for each existing Lender, an amount equal to
the product of (A) 0.150% and (B) the amount of each such Lender’s Commitment
before giving effect to any increase in such Lender’s Commitment pursuant to
this Second Amendment, and (iii) for each existing Lender whose Commitment is
being increased pursuant to this Second Amendment, an amount equal to the
product of (A) 0.375% and (B) the remainder of (1) the amount of such Lender’s
Commitment as increased pursuant to this Second Amendment minus (2) the amount
of such Lender’s Commitment before giving effect to such increase; and


(g)         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.           PAYMENTS BY LENDERS.  Upon the effective date of this Second
Amendment, each Lender shall, to the extent necessary, make a payment to the
Administrative Agent in an amount sufficient, upon the application of such
payments by all Lenders to the reduction of outstanding Revolving Loans held by
the Lenders, to cause the principal amount of Revolving Loans outstanding made
by each Lender to be in the amount of its Pro Rata Share (after giving effect
to this Second Amendment) of all outstanding Revolving Loans. The


 


6

















 


Borrower hereby irrevocably authorizes each Lender to fund to the
Administrative Agent the payment required to be made pursuant to the
immediately preceding sentence for application to the reduction of the
outstanding Revolving Loans held by the other Lenders. If, as a result of the
repayment of Revolving Loans provided for in this Section 4, any payment of
Eurodollar Rate Loans occurs on a day which is not the last day of the
applicable Interest Period, the Borrower will pay to the Administrative Agent
for the benefit of any Lender holding a Eurodollar Rate Loan any loss or cost
incurred by such Lender resulting therefrom in accordance with Section 3.05
to the extent a Eurodollar Rate Loan is paid on other than the last day of an
Interest Period as a result thereof. Upon the effective date of this Second
Amendment, each New Lender and each Lender whose Commitment is increased as a
result of this Second Amendment, shall be deemed to have irrevocably and
unconditionally purchased and received, without recourse or warranty, an
undivided participation in all outstanding Swing Line Loans and L/C Obligations
in accordance with its Pro Rata Share (after giving effect to this Second
Amendment).


5.             ADDITION OF NEW LENDERS.  The parties hereto agree that the provisions
of Section 10.07 of the Credit Agreement shall not be applicable to the
addition of the New Lenders pursuant to this Second Amendment. Each New Lender
represents and warrants to the Administrative Agent as follows:


(a)           such New Lender has received a copy of
the Credit Agreement and all amendments thereto, together with copies of the
most recent financial statements of the Borrower delivered pursuant thereto,
and it is an Eligible Assignee;


(b)           it has the full power and authority
and the legal right to make, deliver and perform, and has taken all necessary
action, to authorize the execution, delivery and performance of this Second
Amendment, and any and all other documents delivered by it in connection
herewith and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Second Amendment and the other Loan Documents,
and no consent or authorization of, filing with, or other act by or in respect
of any Governmental Authority, is required in connection herewith or therewith;


(c)           under applicable Laws no tax will be
required to be withheld by the Administrative Agent or the Borrower with
respect to any payments to be made to such New Lender under any Loan Document,
and no tax forms described in Section 10.15 of the Credit Agreement are
required to be delivered by such New Lender; and


(d)           such New Lender has received and
reviewed such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Second Amendment
and become a party to the Credit Agreement. Such New Lender has independently
and without reliance upon the Administrative Agent or any other Person, and
based on such information as such New Lender has deemed appropriate, made its
own credit analysis and decision to enter into this Second Amendment and become
a party to the Credit Agreement. Such New Lender will, independently and
without reliance upon the Administrative Agent or any other Lender, and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement.


 


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6.             REFERENCE
TO THE CREDIT AGREEMENT.


(a)           Upon the effectiveness of this Second
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 affected and amended hereby.


(b)           The Credit Agreement, as amended by
the amendments referred to above, shall remain in full force and effect and is
hereby ratified and confirmed.


7.             COSTS, EXPENSES AND TAXES.  The Borrower agrees to pay on demand all
costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Second 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 with respect thereto).


8.             GUARANTOR’S ACKNOWLEDGMENT.  By signing below, each Guarantor (a)
acknowledges, consents and agrees to the execution, delivery and performance by
the Borrower of this Second Amendment, (b) acknowledges and agrees that its
obligations in respect of its Guaranty (i) are not released, diminished,
waived, modified, impaired or affected in any manner by this Second Amendment
or any of the provisions contemplated herein and (ii) cover the Aggregate
Commitments as increased by this Second Amendment, (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.


9.             EXECUTION IN COUNTERPARTS.  This Second 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 Second 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.


10.           GOVERNING LAW; BINDING EFFECT.  This Second Amendment shall be governed by
and construed in accordance with the 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, and shall be
binding upon the parties hereto and their respective successors and assigns.


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


12.           ENTIRE AGREEMENT.  THE CREDIT AGREEMENT, AS AMENDED BY THIS
SECOND AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE


 


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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





 


 


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IN WITNESS WHEREOF, this Second Amendment is executed
as of the date first set forth above.


 


 


	
   

  	
  MERITAGE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Name:

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Title:

  	
  VP

  



 


 


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  GUARANTY BANK, as
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sam A. Meade

  
	
   

  	
   

  	
  Name:

  	
  Sam A. Meade

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sam A. Meade

  
	
   

  	
   

  	
  Name:

  	
  Sam A. Meade

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  



 


 


11

















 


	
   

  	
  FLEET NATIONAL BANK, as a Lender
  and Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff V. Avcock

  
	
   

  	
   

  	
  Name:

  	
  Jeff V. Avcock, CFA

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


 


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  BANK ONE, N.A., as a Lender
  and Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Engler

  
	
   

  	
   

  	
  Name:

  	
  Paul Engler

  
	
   

  	
   

  	
  Title:

  	
  First Vice President

  



 


 


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  WELLS FARGO BANK
  ARIZONA NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia A. Richards

  
	
   

  	
   

  	
  Name:

  	
  Patricia A. Richards

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


 


14

















 


	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


15

















 


	
   

  	
  CALIFORNIA
  BANK AND TRUST, as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephanie Lantz

  
	
   

  	
   

  	
  Name:

  	
  Stephanie Lantz

  
	
   

  	
   

  	
  Title:

  	
  VP

  



 


 


16

















 


	
   

  	
  COMPASS
  BANK, as a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Heslep

  
	
   

  	
   

  	
  Name:

  	
  STEVEN J. HESLEP

  
	
   

  	
   

  	
  Title:

  	
  S. V. P.

  



 


 


17

















 


	
   

  	
  COMERICA BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Casey L. Ostrander

  
	
   

  	
   

  	
  Name:

  	
  Casey L. Ostrander

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


 


18

















 


	
   

  	
  PNC BANK, NATIONAL
  ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas G. Paul

  
	
   

  	
   

  	
  Name:

  	
  Douglas G. Paul

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  



 


 


19

















 


	
   

  	
  SOUTHTRUST BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel L. Boroughs

  
	
   

  	
   

  	
  Name:

  	
  Samuel L. Boroughs

  
	
   

  	
   

  	
  Title:

  	
  VICE PRESIDENT

  



 


 


20

















 


	
   

  	
  ACKNOWLEDGED AND AGREED TO:

  
	
   

  	
   

  
	
   

  	
  MONTEREY HOMES ARIZONA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MONTEREY HOMES CONSTRUCTION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF ARIZONA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERITAGE PASEO CROSSING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes of Arizona, Inc., its
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  



 


 


21

















 


	
   

  	
  MERITAGE HOMES CONSTRUCTION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE PASEO CONSTRUCTION, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Homes Construction, Inc., its
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HANCOCK-MTH COMMUNITIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HANCOCK-MTH BUILDERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  



 


 


22

















 


	
   

  	
  MTH-TEXAS GP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MTH-TEXAS LP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LEGACY/MONTEREY HOMES L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MTH-Texas GP, Inc., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE HOLDINGS, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Legacy/Monterey Homes, L.P., its Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MTH-Texas GP, Inc., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  



 


 


23

















 


 


	
   

  	
  LEGACY OPERATING COMPANY, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Holdings, L.L.C., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Legacy/Monterey Homes, L.P., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MTH-Texas GP, Inc., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HULEN PARK VENTURE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Legacy Monterey Homes L.P., its Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MTH-Texas GP, Inc., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MTH-TEXAS GP II, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  



 


 


24

















 


	
   

  	
  MTH-TEXAS LP II, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MTH HOMES-TEXAS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MTH-Texas GP II, Inc., its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MERITAGE HOMES OF NORTHERN CALIFORNIA,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MTH-HOMES NEVADA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  



 


 


25

















 


 


 


 


	
   

  	
  MTH-CAVALIER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Monterey Homes Construction, Inc., its
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MTH GOLF, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Hancock-MTH Builders, Inc., its Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LEGACY-HAMMONDS MATERIALS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Meritage Holdings, L.L.C., its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Legacy/Monterey Homes L.P., its Sole
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MTH-Texas GP, Inc., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry W. Seay

  
	
   

  	
   

  	
  Larry W. Seay

  
	
   

  	
   

  	
  Vice President and Secretary

  



 


26