Document:

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                                                                    EXHIBIT 4.18

                                                                  EXECUTION COPY

                                D.R. HORTON, INC.

                     $250,000,000 8.5% SENIOR NOTES DUE 2012

                          REGISTRATION RIGHTS AGREEMENT

                                                              New York, New York
                                                                  April 11, 2002

Salomon Smith Barney Inc.
Banc of America Securities LLC
Credit Lyonnais Securities (USA) Inc.
Fleet Securities, Inc.
c/o Salomon Smith Barney Inc.
     as Representative of the Initial Purchasers
388 Greenwich Street
New York, New York  10013

Ladies and Gentlemen:

                  D.R. Horton, Inc., a corporation organized under the laws of
the state of Delaware (the "Company"), proposes to issue and sell to you (the
"Initial Purchasers") its 8.5% Senior Notes due 2012 (the "Notes") upon the
terms set forth in a purchase agreement dated as of April 4, 2002 (the "Purchase
Agreement") relating to the initial placement of the Notes (the "Initial
Placement"). The Notes are to be issued under an indenture dated as of April 11,
2002 (the "Base Indenture") and a supplemental indenture dated as of April 11,
2002 (the "Supplemental Indenture" and together with the Base Indenture, the
"Indenture") among the Company, the guarantors listed on the signature pages
hereto (the "Guarantors" and, together with the Company, the "Issuers") and
American Stock Transfer & Trust Company , as trustee (the "Trustee"). The Notes
will have the benefit of the guarantees (the "Guarantees" and, together with the
Notes, the "Securities") provided for in the Indenture. To induce the Initial
Purchasers to purchase the Securities pursuant to the Purchase Agreement and to
satisfy a condition of your obligations thereunder, the Issuers agree with you
for your benefit and the benefit of the holders from time to time of the
Securities and New Securities (as defined below) (including the Initial
Purchasers) (each a "Holder" and, together, the "Holders"), as follows:

                  1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

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                                      -2-

                  "Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.

                  "Affiliate" of any specified Person shall mean any other
Person that, directly or indirectly, is in control of, is controlled by, or is
under common control with, such specified Person. For purposes of this
definition, "control" of a Person shall mean the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise; and the terms "controlling" and "controlled"
shall have meanings correlative to the foregoing.

                  "Broker-Dealer" shall mean any broker or dealer registered as
such under the Exchange Act.

                  "Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.

                  "Commission" shall mean the Securities and Exchange
Commission.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  "Exchange Offer Registration Period" shall mean the earlier of
(i) the 180 day period following the consummation of the Registered Exchange
Offer and (ii) the period following the consummation of the Registered Exchange
Offer and the date upon which all Exchanging Dealers have sold all New
Securities held by them; provided that the period referred to in clause (ii)
above shall be exclusive of any period during which any stop order shall be in
effect suspending the effectiveness of the Exchange Offer Registration
Statement.

                  "Exchange Offer Registration Statement" shall mean a
registration statement of the Issuers on an appropriate form under the Act with
respect to the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments thereto, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                  "Exchanging Dealer" shall mean any Holder (which may include
any Initial Purchaser) that is a Broker-Dealer and elects to exchange for New
Securities any Securities that it acquired for its own account as a result of
market-making activities or other trading activities (but not directly from any
Issuer or any Affiliate of any Issuer ).

                  "Guarantees" shall have the meaning set forth in the preamble
hereto.

                  "Guarantors" shall have the meaning set forth in the preamble
hereto.

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                                      -3-

                  "Holder" shall have the meaning set forth in the preamble
hereto.

                  "Indenture" shall have the meaning set forth in the preamble
hereto.

                  "Initial Placement" shall have the meaning set forth in the
preamble hereto.

                  "Initial Purchasers" shall have the meaning set forth in the
preamble hereto.

                  "Issuers" shall have the meaning set forth in the preamble
hereto.

                  "Losses" shall have the meaning set forth in Section 6(d)
hereof.

                  "Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Securities registered under a Registration
Statement.

                  "Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering.

                  "New Securities" shall mean debt securities of the Issuers
identical in all material respects to the Securities (except that the liquidated
damages provisions and the transfer restrictions shall be modified or
eliminated, as appropriate) and to be issued under the Indenture or the New
Securities Indenture.

                  "New Securities Indenture" shall mean an indenture among the
Issuers and the New Securities Trustee, identical in all material respects to
the Indenture (except that liquidated damages provisions will be modified or
eliminated, as appropriate).

                  "New Securities Trustee" shall mean a bank or trust company
reasonably satisfactory to the Initial Purchasers, as trustee with respect to
the New Securities under the New Securities Indenture.

                  "Notes" shall have the meaning set forth in the preamble
hereto.

                  "Offering Memorandum" shall have the meaning set forth in the
Purchase Agreement.

                  "Person" shall mean an individual, partnership, corporation,
limited liability company, trust or unincorporated organization, or a government
agency or a political subdivision thereof.

                  "Prospectus" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A

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                                      -4-

under the Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Securities or the New
Securities covered by such Registration Statement, and all amendments and
supplements thereto and all material incorporated by reference therein.

                  "Purchase Agreement" shall have the meaning set forth in the
preamble hereto.

                  "Registered Exchange Offer" shall mean the proposed offer of
the Issuers to issue and deliver to the Holders of the Securities that are not
prohibited by any law or policy of the Commission from participating in such
offer, in exchange for the Securities, a like aggregate principal amount of the
New Securities on the terms customary for such an offer.

                  "Registration Statement" shall mean any Exchange Offer
Registration Statement or Shelf Registration Statement that covers any of the
Securities or the New Securities pursuant to the provisions of this Agreement,
any amendments and supplements to such registration statement, including
post-effective amendments (in each case including the Prospectus contained
therein), all exhibits thereto and all material incorporated by reference
therein.

                  "Securities" shall have the meaning set forth in the preamble
hereto.

                  "Shelf Registration" shall mean a registration effected
pursuant to Section 3 hereof.

                  "Shelf Registration Period" shall have the meaning set forth
in Section 3(c) hereof.

                  "Shelf Registration Statement" shall mean a "shelf"
registration statement of the Issuers pursuant to the provisions of Section 3
hereof which covers some or all of the Securities or New Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                  "Trustee" shall have the meaning set forth in the preamble
hereto.

                  "underwriter" shall mean any underwriter of Securities or New
Securities in connection with an offering thereof under a Shelf Registration
Statement.

                  2. Registered Exchange Offer. (a) The Issuers shall prepare
and use their reasonable best efforts to file with the Commission, not later
than 90 days following the date of the original issuance of the Securities (or
if such 90th day is not a Business Day, the next succeeding Business Day), the
Exchange Offer Registration Statement with respect to the

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                                      -5-

Registered Exchange Offer. The Issuers shall use their reasonable best efforts
to cause the Exchange Offer Registration Statement to become effective under the
Act within 150 days of the date of the original issuance of the Securities (or
if such 150th day is not a Business Day, the next succeeding Business Day).

                  (b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Issuers shall promptly commence the Registered Exchange Offer, it
being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Securities for New Securities (assuming that such Holder is
not an Affiliate of any Issuers, acquires the New Securities in the ordinary
course of such Holder's business, has no arrangements with any Person to
participate in the distribution of the New Securities and is not prohibited by
any law or policy of the Commission from participating in the Registered
Exchange Offer) to trade such New Securities from and after their receipt
without any limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.

                  (c) In connection with the Registered Exchange Offer, the
Issuers shall:

                           (i) mail to each Holder a copy of the Prospectus
         forming part of the Exchange Offer Registration Statement, together
         with an appropriate letter of transmittal and related documents;

                           (ii) keep the Registered Exchange Offer open for not
         less than 20 Business Days and not more than 30 Business Days after the
         date notice thereof is mailed to the Holders (or, in each case, longer
         if required by applicable law);

                           (iii) if required by any Exchanging Dealer, use their
         reasonable best efforts to keep the Exchange Offer Registration
         Statement continuously effective under the Act, supplemented and
         amended as required under the Act, in order to permit the Prospectus
         contained in such Exchange Offer Registration Statement to be lawfully
         delivered by such Exchanging Dealer during the Exchange Offer
         Registration Period;

                           (iv) utilize the services of a depositary for the
         Registered Exchange Offer with an address in the Borough of Manhattan
         in New York City, which may be the Trustee, the New Securities Trustee
         or an Affiliate of either of them;

                           (v) permit Holders to withdraw tendered Securities at
         any time prior to the close of business, New York time, on the last
         Business Day on which the Registered Exchange Offer is open;

                           (vi) prior to effectiveness of the Exchange Offer
         Registration Statement, provide a supplemental letter to the Commission
         (A) stating that the Issuers are

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                                      -6-

         conducting the Registered Exchange Offer in reliance on the position of
         the Commission in Exxon Capital Holdings Corporation (pub. avail. May
         13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991);
         and (B) including a representation that the Issuers have not entered
         into any arrangement or understanding with any Person to distribute the
         New Securities to be received in the Registered Exchange Offer and
         that, to the best of the Issuers' information and belief, each Holder
         participating in the Registered Exchange Offer is acquiring the New
         Securities in the ordinary course of business and has no arrangement or
         understanding with any Person to participate in the distribution of the
         New Securities; and

                           (vii) comply in all respects with all applicable
         laws.

                  (d) As soon as practicable after the close of the Registered
Exchange Offer, the Issuers shall:

                           (i) accept for exchange all Securities tendered and
         not validly withdrawn pursuant to the Registered Exchange Offer;

                           (ii) deliver to the Trustee for cancellation in
         accordance with Section 4(s) all Securities so accepted for exchange;
         and

                           (iii) cause the New Securities Trustee promptly to
         authenticate and deliver to each Holder of Securities a principal
         amount of New Securities equal to the principal amount of the
         Securities of such Holder so accepted for exchange.

                  (e) Each Holder is hereby deemed to acknowledge and agree that
any Broker-Dealer and any such Holder using the Registered Exchange Offer to
participate in a distribution of the New Securities (x) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission in Morgan Stanley and Co., Inc. (pub. avail. June 5,
1991) and Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993
and similar no-action letters; and (y) must comply with the registration and
prospectus delivery requirements of the Act in connection with any secondary
resale transaction which must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or 508,
as applicable, of Regulation S-K under the Act if the resales are of New
Securities obtained by such Holder in exchange for Securities acquired by such
Holder directly from any Issuer or one of its Affiliates. Accordingly, each
Holder participating in the Registered Exchange Offer shall be required to
represent to the Issuers that, at the time of the consummation of the Registered
Exchange Offer:

                           (i) any New Securities received by such Holder will
         be acquired in the ordinary course of business;

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                                      -7-

                           (ii) such Holder will have no arrangement or
         understanding with any Person to participate in the distribution of the
         Securities or the New Securities within the meaning of the Act; and

                           (iii) such Holder is not an Affiliate of any Issuer.

                  (f) If any Initial Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment, at the
request of such Initial Purchaser, the Issuers shall issue and deliver to such
Initial Purchaser or the Person purchasing New Securities registered under a
Shelf Registration Statement as contemplated by Section 3 hereof from such
Initial Purchaser, in exchange for such Securities, a like principal amount of
New Securities. The Issuers shall use their reasonable best efforts to cause the
CUSIP Service Bureau to issue the same CUSIP number for such New Securities as
for New Securities issued pursuant to the Registered Exchange Offer.

                  3. Shelf Registration. (a) If (i) due to any change in law or
applicable interpretations thereof by the Commission's staff, the Issuers
determine upon advice of their outside counsel that they are not permitted to
effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii)
for any other reason the Registered Exchange Offer is not consummated within 180
days of the date hereof; (iii) any Initial Purchaser so requests with respect to
Securities that are not eligible to be exchanged for New Securities in the
Registered Exchange Offer and that are held by it following consummation of the
Registered Exchange Offer; (iv) any Holder (other than an Initial Purchaser)
notifies the Company prior to the 20th day following consummation of the
Registered Exchange Offer that it is not eligible to participate in the
Registered Exchange Offer because of applicable law or the applicable
interpretations of the Commission's staff; or (v) in the case of any Initial
Purchaser that participates in the Registered Exchange Offer or acquires New
Securities pursuant to Section 2(f) hereof, such Initial Purchaser does not
receive freely tradable New Securities in exchange for Securities constituting
any portion of an unsold allotment (it being understood that (x) the requirement
that an Initial Purchaser deliver a Prospectus containing the information
required by Item 507 or 508 of Regulation S-K under the Act in connection with
sales of New Securities acquired in exchange for such Securities shall not
result in such New Securities being not "freely tradable"; and (y) the
requirement that an Exchanging Dealer deliver a Prospectus in connection with
sales of New Securities acquired in the Registered Exchange Offer in exchange
for Securities acquired as a result of market-making activities or other trading
activities shall not result in such New Securities being not "freely tradable"),
the Issuers shall effect a Shelf Registration Statement in accordance with
subsection (b) below; provided, however that the Issuers shall only be required
to register Securities under the Shelf Registration Statement for persons who
have identified themselves to the Issuers as Holders thereof. If in the judgment
of the Company's Board of Directors exercised reasonably and in good faith, the
use of the Shelf

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                                      -8-

Registration Statement and the disclosure required to be made therein would
materially interfere with a valid business purpose of the Issuers, the Company
may deliver a notice to such effect to the Holders, and upon receipt of such
notice, the Holders shall cease distribution of the Securities or New Securities
under a Shelf Registration Statement for the period of time (the "Shelf Delay
Period") set forth in such notice (which shall not be greater than 60 days).
Notwithstanding the foregoing, there shall not be more than two Shelf Delay
Periods declared in any one calendar year; provided that such Shelf Delay
Periods shall not exceed 90 days in the aggregate in any one calendar year. The
Company shall use its reasonable best efforts to minimize the length of any
Shelf Delay Period and shall promptly notify the Holders upon the termination
thereof.

                  (b) The Issuers shall as promptly as practicable (but in no
event more than 45 days after so required or requested pursuant to this Section
3) file with the Commission and thereafter shall use their reasonable best
efforts to cause to be declared effective under the Act within 135 days after so
required or requested pursuant to this Section 3 a Shelf Registration Statement
relating to the offer and sale of the Securities or the New Securities, as
applicable, by the Holders thereof from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement; provided, however, that no Holder (other than an Initial
Purchaser) shall be entitled to have the Securities held by it covered by such
Shelf Registration Statement unless such Holder agrees in writing to be bound by
all of the provisions of this Agreement applicable to such Holder; and provided,
further, that with respect to New Securities received by an Initial Purchaser in
exchange for Securities constituting any portion of an unsold allotment, the
Issuers may, if permitted by interpretations by the Commission's staff, file a
post-effective amendment to the Exchange Offer Registration Statement containing
the information required by Item 507 or 508 of Regulation S-K, as applicable, in
satisfaction of their obligations under this subsection with respect thereto,
and any such Exchange Offer Registration Statement, as so amended, shall be
referred to herein as, and governed by the provisions herein applicable to, a
Shelf Registration Statement.

                  (c) The Issuers shall use their reasonable best efforts to
keep the Shelf Registration Statement continuously effective, supplemented and
amended as required by the Act, in order to permit the Prospectus forming part
thereof to be usable by Holders for a period of two years from the date the
Shelf Registration Statement is declared effective by the Commission or such
shorter period that will terminate when all the Securities or New Securities, as
applicable, covered by the Shelf Registration Statement (i) have been sold
pursuant to the Shelf Registration Statement or (ii) are distributed to the
public pursuant to Rule 144 under the Act or are salable pursuant to Rule 144(k)
under the Act (in any such case, such period being called the "Shelf
Registration Period"). The Issuers shall be deemed not to have used their
reasonable best efforts to keep the Shelf Registration Statement effective
during the requisite period if any of them voluntarily takes any action that
would result in Holders of

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                                      -9-

Securities or New Securities covered thereby not being able to offer and sell
such Securities or New Securities during that period, unless (A) such action is
required by applicable law or (B) such action is taken by such Issuer in good
faith and for valid business reasons (not including avoidance of such Issuer's
obligations hereunder), including the acquisition or divestiture of assets, so
long as the Issuers promptly thereafter comply with the requirements of Section
4(k) hereof, if applicable.

                  4. Additional Registration Procedures. In connection with any
Shelf Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:

                  (a) The Issuers shall:

                           (i) furnish to you, not less than five Business Days
         prior to the filing thereof with the Commission, a copy of the Exchange
         Offer Registration Statement or the Shelf Registration Statement, as
         the case may be, and each amendment thereto and each amendment or
         supplement, if any, to the Prospectus included therein (including all
         documents incorporated by reference therein after the initial filing)
         and shall use their reasonable best efforts to reflect in each such
         document, when so filed with the Commission, such comments as you
         reasonably propose;

                           (ii) include the information set forth in Annex A
         hereto on the facing page of the Exchange Offer Registration Statement,
         in Annex B hereto in the forepart of the Exchange Offer Registration
         Statement in a section setting forth details of the Exchange Offer, in
         Annex C hereto in the underwriting or plan of distribution section of
         the Prospectus contained in the Exchange Offer Registration Statement,
         and in Annex D hereto in the letter of transmittal delivered pursuant
         to the Registered Exchange Offer;

                           (iii) if reasonably requested by an Initial
         Purchaser, include the information required by Item 507 or 508 of
         Regulation S-K, as applicable, in the Prospectus contained in the
         Exchange Offer Registration Statement; and

                           (iv) in the case of the Shelf Registration Statement,
         include the names of the Holders that notify the Company of their
         intention to sell Securities or New Securities pursuant to the Shelf
         Registration Statement as selling security holders.

                  (b) The Issuers shall cause such Registration Statement and
the related Prospectus and any amendment or supplement thereto, as of the
effective date of such Registration Statement or such amendment or supplement:

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                                      -10-

                           (i) to comply in all material respects with the Act
         and the rules and regulations of the Commission; and

                           (ii) (other than with respect to information included
         therein in reliance upon or in conformity with information furnished to
         the Company by or on behalf of any Holder specifically for use therein)
         not contain any untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary in order to
         make the statements therein not misleading.

                  (c) The Issuers shall advise you, the Holders of Securities or
New Securities covered by any Shelf Registration Statement and any Exchanging
Dealer under any Exchange Offer Registration Statement that has provided in
writing to the Issuers a telephone or facsimile number and address for notices,
and, if requested by you or any such Holder or Exchanging Dealer, shall confirm
such advice in writing (which notice pursuant to clauses (ii)-(v) of this
Section 4(c) shall be accompanied by an instruction to suspend the use of the
Prospectus until the Issuers shall have remedied the basis for such suspension):

                           (i) when a Registration Statement or any amendment
         thereto has been filed with the Commission and when the Registration
         Statement or any post-effective amendment thereto has become effective;

                           (ii) of any request by the Commission for any
         amendment or supplement to the Registration Statement or the Prospectus
         or for additional information;

                           (iii) of the issuance by the Commission of any stop
         order suspending the effectiveness of the Registration Statement or the
         initiation of any proceedings for that purpose;

                           (iv) of the receipt by any Issuer of any notification
         with respect to the suspension of the qualification of the Securities
         or New Securities included therein for sale in any jurisdiction or the
         initiation of any proceeding for such purpose; and

                           (v) of the happening of any event that requires any
         change in the Registration Statement or the Prospectus so that, as of
         such date, the statements therein are not misleading and do not omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein (in the case of the Prospectus, in the
         light of the circumstances under which they were made) not misleading.

                  (d) The Issuers shall use their reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement or the qualification of the securities included therein
for sale in any jurisdiction at the earliest possible time.

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                                      -11-

                  (e) The Issuers shall furnish to each Holder of Securities or
New Securities covered by any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including all material incorporated therein by reference,
and, if the Holder so requests in writing, all exhibits thereto (including
exhibits incorporated by reference therein).

                  (f) The Issuers shall, during the Shelf Registration Period,
deliver to each Holder of Securities or New Securities covered by any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request. The Issuers consent, subject to the provisions of this Agreement, to
the use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Securities or New Securities in connection with the offering
and sale of the Securities or New Securities covered by the Prospectus, or any
amendment or supplement thereto, included in the Shelf Registration Statement.
                  (g) The Issuers shall furnish to each Exchanging Dealer which
so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including all
material incorporated by reference therein, and, if the Exchanging Dealer so
requests in writing, all exhibits thereto (including exhibits incorporated by
reference therein).

                  (h) The Issuers shall promptly deliver to each Initial
Purchaser, each Exchanging Dealer and each other Person required to deliver a
Prospectus during the Exchange Offer Registration Period, without charge, as
many copies of the Prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as any such Person may
reasonably request. The Issuers consent, subject to the provisions of this
Agreement, to the use of the Prospectus or any amendment or supplement thereto
by any Initial Purchaser, any Exchanging Dealer and any such other Person that
may be required to deliver a Prospectus following the Registered Exchange Offer
in connection with the offering and sale of the New Securities covered by the
Prospectus, or any amendment or supplement thereto, included in the Exchange
Offer Registration Statement.

                  (i) Prior to the Registered Exchange Offer or any other
offering of Securities or New Securities pursuant to any Registration Statement,
the Issuers shall use their reasonable best efforts to arrange, if necessary,
for the qualification of the Securities or the New Securities for sale under the
laws of such U.S. jurisdictions as any Holder shall reasonably request in
writing and will maintain such qualification in effect so long as reasonably
required; provided that in no event shall any Issuer be obligated to qualify to
do business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the Initial Placement, the Registered Exchange

<PAGE>
                                      -12-

Offer or any offering pursuant to a Shelf Registration Statement, or taxation in
any such jurisdiction where it is not then so subject.

                  (j) The Issuers shall cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing New Securities
or Securities to be issued or sold pursuant to any Registration Statement free
of any restrictive legends and in such denominations and registered in such
names as Holders may request.

                  (k) Upon the occurrence of any event contemplated by
subsections (c)(ii) through (v) above, the Issuers shall (unless they shall have
invoked a Shelf Delay Period with respect to such occurrence) promptly prepare a
post-effective amendment to the applicable Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. In such circumstances, the period of
effectiveness of the Exchange Offer Registration Statement provided for in
Section 2 and the Shelf Registration Statement provided for in Section 3(b)
shall each be extended by the number of days from and including the date of the
giving of a notice of suspension pursuant to Section 4(c) to and including the
date when the Initial Purchasers, the Holders and any known Exchanging Dealer
shall have received such amended or supplemented Prospectus pursuant to this
Section 4.

                  (l) Not later than the effective date of any Registration
Statement, the Issuers shall provide a CUSIP number for the Securities or the
New Securities, as the case may be, registered under such Registration Statement
and provide the Trustee with printed certificates for such Securities or New
Securities, in a form eligible for deposit with The Depository Trust Company.

                  (m) The Issuers shall comply with all applicable rules and
regulations of the Commission and shall make generally available to their
security holders as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Act and Rule 158 thereunder.

                  (n) The Issuers shall cause the Indenture or the New
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act in a timely manner.

                  (o) The Issuers may require each Holder of Securities or New
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Issuers such information regarding the Holder and the distribution of such
Securities or New Securities as the Issuers may from time to time reasonably
require for inclusion in such Registration Statement. The Issuers may exclude
from such Shelf Registration Statement the Securities or New Securities

<PAGE>
                                      -13-

of any Holder that unreasonably fails to furnish such information within a
reasonable time after receiving such request.

                  (p) In the case of any Shelf Registration Statement, the
Issuers shall enter into such agreements and take all other appropriate actions
(including if requested an underwriting agreement in customary form) in order to
expedite or facilitate the registration or the disposition of the Securities or
New Securities and in connection therewith, if an underwriting agreement is
entered into, cause the same to contain indemnification provisions and
procedures no less favorable than those set forth in Section 6 (or such other
provisions and procedures acceptable to the Majority Holders and the Managing
Underwriters, if any, with respect to all parties to be indemnified pursuant to
Section 6).

                  (q) In the case of any Shelf Registration Statement, the
Issuers shall:

                           (i) cause the officers, directors and employees of
         any Issuer to (x) supply all relevant information (including all
         financial and other records, pertinent corporate documents of the
         Issuers and their subsidiaries) and (y) make available all relevant
         properties, reasonably requested by the Holders or any such
         underwriter, attorney, accountant or agent in connection with any such
         Shelf Registration Statement as is customary for similar due diligence
         examinations; provided, however, that any information that is
         designated in writing by any Issuer, in good faith, as confidential at
         the time of delivery of such information shall be kept confidential by
         the Holders or any such underwriter, attorney, accountant or agent,
         unless such disclosure is made in connection with a court proceeding or
         required by law, or such information becomes available to the public
         generally or through a third party without an accompanying obligation
         of confidentiality;

                           (ii) make such representations and warranties to the
         Holders of Securities or New Securities registered thereunder and the
         underwriters, if any, in form, substance and scope as are customarily
         made by issuers to underwriters in primary underwritten offerings and
         covering the matters set forth in the Purchase Agreement;

                           (iii) use their reasonable best efforts to obtain
         opinions of counsel to the Issuers and updates thereof (which counsel
         and opinions (in form, scope and substance) shall be reasonably
         satisfactory to the Managing Underwriters, if any) addressed to each
         selling Holder and the underwriters, if any, covering such matters as
         are customarily covered in opinions requested in underwritten offerings
         and such other matters as may be reasonably requested by such Holders
         and underwriters;

                           (iv) use their reasonable best efforts to obtain
         "cold comfort" letters and updates thereof from the independent
         certified public accountants of the Company (and, if necessary, any
         other independent certified public accountants of any Issuer or

<PAGE>
                                      -14-

         any subsidiary of any Issuer or of any business acquired by any Issuer
         for which financial statements and financial data are, or are required
         to be, included in the Registration Statement), addressed to each
         selling Holder registered thereunder and the underwriters, if any, in
         customary form and covering matters of the type customarily covered in
         "cold comfort" letters in connection with primary underwritten
         offerings; and

                           (v) deliver such documents and certificates as may be
         reasonably requested by the Majority Holders and the Managing
         Underwriters, if any, including those to evidence compliance with
         Section 4(k) and with any customary conditions contained in the
         underwriting agreement or other agreement entered into by the Issuers.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section 4(q)
shall be performed at (A) the effectiveness of such Registration Statement and
each post-effective amendment thereto; and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.

                  (r) In the case of any Exchange Offer Registration Statement,
the Issuers shall, upon reasonable request by the Initial Purchasers:

                           (i) cause the officers, directors and employees of
         any Issuer to supply all relevant information (including all financial
         and other records, pertinent corporate documents and properties of the
         Issuers and their subsidiaries) reasonably requested by any Initial
         Purchaser or any such attorney, accountant or agent retained by any
         Initial Purchaser in connection with any such Registration Statement as
         is customary for similar due diligence examinations; provided, however,
         that any information that is designated in writing by any Issuer, in
         good faith, as confidential at the time of delivery of such information
         shall be kept confidential by such Initial Purchaser or any such
         attorney, accountant or agent, unless such disclosure is made in
         connection with a court proceeding or required by law, or such
         information becomes available to the public generally or through a
         third party without an accompanying obligation of confidentiality;

                           (ii) make such representations and warranties to the
         Initial Purchasers, in form, substance and scope as are customarily
         made by issuers to underwriters in primary underwritten offerings and
         covering the matters set forth in the Purchase Agreement;

                           (iii) use their reasonable best efforts to obtain
         opinions of counsel to the Issuers and updates thereof (which counsel
         and opinions (in form, scope and substance) shall be reasonably
         satisfactory to the Initial Purchasers and their counsel), addressed to
         the Initial Purchasers, covering such matters as are customarily
         covered in

<PAGE>
                                      -15-

         opinions requested in underwritten offerings and such other matters as
         may be reasonably requested by the Initial Purchasers or their counsel;

                           (iv) use their reasonable best efforts to obtain
         "cold comfort" letters and updates thereof from the independent
         certified public accountants of the Company (and, if necessary, any
         other independent certified public accountants of any Issuer or any
         subsidiary of any Issuer or of any business acquired by any Issuer for
         which financial statements and financial data are, or are required to
         be, included in the Registration Statement), addressed to the Initial
         Purchasers, in customary form and covering matters of the type
         customarily covered in "cold comfort" letters in connection with
         primary underwritten offerings, or if requested by the Initial
         Purchasers or their counsel in lieu of a "cold comfort" letter, an
         agreed-upon procedures letter under Statement on Auditing Standards No.
         35, covering matters requested by the Initial Purchasers or their
         counsel; and

                           (v) deliver such documents and certificates as may be
         reasonably requested by the Initial Purchasers or their counsel,
         including those to evidence compliance with Section 4(k) and with
         conditions customarily contained in underwriting agreements.

The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this
Section 4(r) shall be performed at the close of the Registered Exchange Offer
and the effective date of any post-effective amendment to the Exchange Offer
Registration Statement.

                  (s) If a Registered Exchange Offer is to be consummated, upon
delivery of the Securities by Holders to the Issuers (or to such other Person as
directed by the Issuers) in exchange for the New Securities, the Issuers shall
mark, or caused to be marked, on the Securities so exchanged that such
Securities are being canceled in exchange for the New Securities. In no event
shall the Securities be marked as paid or otherwise satisfied.

                  (t) The Issuers will use their reasonable best efforts (i) if
the Securities have been rated prior to the initial sale of such Securities, to
confirm such ratings will apply to the Securities or the New Securities, as the
case may be, covered by a Registration Statement; or (ii) if the Securities were
not previously rated, to cause the Securities or New Securities covered by a
Registration Statement to be rated with at least one nationally recognized
statistical rating agency, if so requested by Majority Holders with respect to
the related Registration Statement or by any Managing Underwriters.

                  (u) In the event that any Broker-Dealer shall underwrite any
Securities or New Securities or participate as a member of an underwriting
syndicate or selling group or "assist in the distribution" (within the meaning
of the Conduct Rules of the National Association of Securities Dealers, Inc.)
thereof, whether as a Holder or as an underwriter, a placement

<PAGE>
                                      -16-

or sales agent or a broker or dealer in respect thereof, or otherwise, the
Issuers will assist such Broker-Dealer in complying with the requirements of
such Conduct Rules, including without limitations by:

                    (1) if such Conduct Rules shall so require, engaging a
         "qualified independent underwriter" (as defined in such Conduct Rules),
         at the cost of such Broker-Dealer, to participate in the preparation of
         the Registration Statement, to exercise usual standards of due
         diligence with respect thereto and, if any portion of the offering
         contemplated by such Registration Statement is an underwritten offering
         or is made through a placement or sales agent, to recommend the yield
         of such Securities or New Securities;

                    (2) indemnifying any such qualified independent underwriter
         to the extent of the indemnification of underwriters provided in
         Section 6 hereof; and

                    (3) providing such information to such Broker-Dealer as may
         be required in order for such Broker-Dealer to comply with the
         requirements of such Conduct Rules.

                  (v) Each Holder agrees that, upon receipt of the notice
referred to in paragraphs (iii) through (v) of Section 4(c) hereof (in each
case, a "Suspension Notice"), such Holder will forthwith discontinue disposition
of Securities or New Securities, as applicable, pursuant to the applicable
Registration Statement until (i) such Holder is advised in writing by the
Issuers that the use of the Prospectus included in such Registration Statement
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in such Prospectus or (ii) such
Holder has received copies of the supplemented or amended Prospectus
contemplated by Section 4(k) hereof (in each case, the "Recommencement Date").
Each Holder receiving a Suspension Notice hereby agrees that it will either (i)
discard or destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Issuers with more
recently dated Prospectuses or (ii) deliver to the Issuers all copies, other
than permanent file copies, then in such Holder's possession of the Prospectus
covering such Securities or New Securities that was current at the time of
receipt of the Suspension Notice.

                  (w) The Issuers shall use their reasonable best efforts to
take all other steps necessary to effect the registration of the Securities or
the New Securities, as the case may be, covered by a Registration Statement.

                  5. Registration Expenses. The Issuers shall bear all expenses
incurred in connection with the performance of their obligations under Sections
2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Initial Purchasers for the reasonable fees and

<PAGE>
                                      -17-

disbursements of one firm or counsel designated to act as counsel for the
Initial Purchasers in connection therewith.

                  6. Indemnification and Contribution. (a) Each of the Issuers
jointly and severally agrees to indemnify and hold harmless each Holder of
Securities or New Securities, as the case may be, covered by any Registration
Statement (including each Initial Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder and each Person
who controls any such Holder within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, in the light of the
circumstances under which they were made, or necessary to make the statements
therein not misleading, and jointly and severally agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that (i) the Issuers will
not be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Issuers by or on
behalf of any such Holder specifically for inclusion therein and (ii) with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary Prospectus relating to a Registration
Statement, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Holder from whom the Person asserting any such
losses, claims, damages or liabilities purchased the Securities or New
Securities concerned, to the extent that a Prospectus relating to such
Securities or New Securities was required to be delivered by such Holder under
the Act in connection with such purchase and any such loss, claim, damage or
liability of such Holder results from the fact that there was not sent or given
to such Person at or prior to the written confirmation of the sale of such
Securities or New Securities to such Person, a copy of the final Prospectus if
the Issuers had previously furnished copies thereof to such Holder and if the
final Prospectus would have cured the defect giving rise to such loss, claim or
damage. This indemnity agreement will be in addition to any liability which the
Issuers may otherwise have.

                  Each of the Issuers also jointly and severally agrees to
indemnify or contribute as provided in Section 6(d) to Losses of each
underwriter of Securities or New Securities, as

<PAGE>
                                      -18-

the case may be, registered under a Shelf Registration Statement, their
directors, officers, employees or agents and each Person who controls such
underwriter on substantially the same basis as that of the indemnification of
the Initial Purchasers and the selling Holders provided in this Section 6(a) and
shall, if requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 4(p) hereof.

                  (b) Each Holder of Securities or New Securities covered by a
Registration Statement (including each Initial Purchaser and, with respect to
any Prospectus delivery as contemplated in Section 4(h), each Exchanging Dealer)
severally and not jointly agrees to indemnify and hold harmless the Issuers,
each of their respective directors, each of their respective officers who signs
such Registration Statement and each Person who controls any Issuer within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Issuers to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.

                  (c) Promptly after receipt by an indemnified party under this
Section 6 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified

<PAGE>
                                      -19-

party within a reasonable time after notice of the institution of such action;
or (iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.

                  (d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have a joint and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which such indemnified party may be subject in such proportion as
is appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which resulted in such Losses;
provided, however, that in no case shall any Initial Purchaser or any subsequent
Holder of any Security or New Security be responsible, in the aggregate, for any
amount in excess of the purchase discount or commission applicable to such
Security, or in the case of a New Security, applicable to the Security that was
exchangeable into such New Security, as set forth on the cover page of the
Offering Memorandum, nor shall any underwriter be responsible for any amount in
excess of the underwriting discount or commission applicable to the securities
purchased by such underwriter under the Registration Statement which resulted in
such Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. The benefits received by the Issuers shall be
deemed to be the total net proceeds from the Initial Placement (before deducting
expenses) received by the Company. The benefits received by the Initial
Purchasers shall be deemed to be the issue price discount (equal to the
principal amount of the Securities less their issue price as set forth on the
cover page of the Offering Memorandum). The benefits received by any other
Holders shall be deemed to be equal to the value of receiving Securities or New
Securities, as applicable, registered under the Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. Relative fault shall
be determined by reference to, among other things, whether any alleged untrue
statement or omission relates to information provided by the indemnifying party,
on the one

<PAGE>
                                      -20-

hand, or by the indemnified party, on the other hand, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The parties agree that it would
not be just and equitable if contribution were determined by pro rata allocation
(even if the Holders were treated as one entity for such purpose) or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
Person who controls a Holder within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of such Holder shall
have the same rights to contribution as such Holder, and each Person who
controls any Issuer within the meaning of either the Act or the Exchange Act,
each officer of any Issuer who shall have signed the Registration Statement and
each director of any Issuer shall have the same rights to contribution as the
Issuers, subject in each case to the applicable terms and conditions of this
paragraph (d).

                  (e) The provisions of this Section 6 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder
or the Issuers or any of the officers, directors or controlling Persons referred
to in this Section 6, and will survive the sale by a Holder of securities
covered by a Registration Statement.

                  7. Underwritten Registrations. (a) If any of the Securities or
New Securities, as the case may be, covered by any Shelf Registration Statement
are to be sold in an underwritten offering, the Managing Underwriters shall be
selected by the Majority Holders and approved by the Company, which approval
shall not be unreasonably withheld.

                  (b) No Person may participate in any underwritten offering
pursuant to any Shelf Registration Statement, unless such Person (i) agrees to
sell such Person's Securities or New Securities, as the case may be, on the
basis reasonably provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements; and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

                  8. No Inconsistent Agreements. No Issuer has, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.

                  9. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the

<PAGE>
                                      -21-

Issuers have obtained the written consent of the Majority Holders (or, after the
consummation of any Registered Exchange Offer in accordance with Section 2
hereof, the Holders of a majority of the aggregate principal amount of New
Securities); provided that, with respect to any matter that directly or
indirectly affects the rights of any Initial Purchaser hereunder, the Issuers
shall obtain the written consent of each such Initial Purchaser against which
such amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities or New Securities,
as the case may be, are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders, may be given
by the Majority Holders, determined on the basis of Securities or New
Securities, as the case may be, being sold rather than registered under such
Registration Statement.

                  10. Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier or air courier guaranteeing overnight delivery:

                  (a) if to a Holder, at the most current address given by such
         holder to the Issuers in accordance with the provisions of this Section
         10, which address initially is, with respect to each Holder, the
         address of such Holder maintained by the Registrar under the Indenture,
         with a copy in like manner to Salomon Smith Barney Inc.;

                  (b) if to you, initially at the address set forth in the
         Purchase Agreement; and

                  (c) if to the Issuers, initially at the address of the Company
         set forth in the Purchase Agreement.

                  All such notices and communications shall be deemed to have
been duly given when received. The Initial Purchasers or the Issuers by notice
to the other parties may designate additional or different addresses for
subsequent notices or communications.

                  11. Successors. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Issuers thereto, subsequent Holders of Securities and New Securities. The
Issuers hereby agree to extend the benefits of this Agreement to any Holder of
Securities or New Securities, and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.

                  12. Counterparts. This Agreement may be in signed
counterparts, each of which shall an original and all of which together shall
constitute one and the same agreement.

<PAGE>
                                      -22-

                  13. Headings. The headings used herein are for convenience
only and shall not affect the construction hereof.

                  14. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.

                  15. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

                  16. Securities Held by the Issuers, etc. Whenever the consent
or approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by any Issuer or its Affiliates (other than
subsequent Holders of Securities or New Securities if such subsequent Holders
are deemed to be Affiliates solely by reason of their holdings of such
Securities or New Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

<PAGE>

                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Issuers and the Initial Purchasers.

                                     Very truly yours,

                                     D.R. HORTON, INC.

                                     By: /s/ SAMUEL R. FULLER
                                        ----------------------------------------
                                        Samuel R. Fuller
                                        Executive Vice President, Treasurer and
                                        Chief Financial Officer

Registration Rights Agreement         S-1

<PAGE>

                           GUARANTORS:

                           C. RICHARD DOBSON BUILDERS, INC.
                           CHI CONSTRUCTION COMPANY
                           CHTEX OF TEXAS, INC.
                           CONTINENTAL HOMES, INC.
                           CONTINENTAL HOMES OF FLORIDA, INC.
                           CONTINENTAL RESIDENTIAL, INC.
                           D.R. HORTON, INC. - BIRMINGHAM
                           D.R. HORTON, INC. - CHICAGO
                           D.R. HORTON, INC. - DENVER
                           D.R. HORTON, INC. - DIETZ-CRANE
                           D.R. HORTON, INC. - GREENSBORO
                           D.R. HORTON, INC. - JACKSONVILLE
                           D.R. HORTON, INC. - LOUISVILLE
                           D.R. HORTON, INC. - MINNESOTA
                           D.R. HORTON, INC. - NEW JERSEY
                           D.R. HORTON, INC. - PORTLAND
                           D.R. HORTON, INC. - SACRAMENTO
                           D.R. HORTON, INC. - TORREY
                           D.R. HORTON LOS ANGELES HOLDING COMPANY, INC.
                           D.R. HORTON SAN DIEGO HOLDING COMPANY, INC.
                           DRH CAMBRIDGE HOMES, INC.
                           DRH CONSTRUCTION, INC.
                           DRH REGREM II, INC.
                           DRH REGREM III, INC.
                           DRH REGREM IV, INC.
                           DRH REGREM V, INC.
                           DRH SOUTHWEST CONSTRUCTION, INC.
                           DRH TITLE COMPANY OF COLORADO, INC.
                           DRH TUCSON CONSTRUCTION, INC.
                           DRHI, INC.
                           KDB HOMES, INC.
                           MEADOWS I, LTD.
                           MEADOWS VIII, LTD.
                           MEADOWS IX, INC.
                           MEADOWS X, INC.

                           By: /s/ SAMUEL R. FULLER
                              ----------------------------------------
                              Samuel R. Fuller
                              Treasurer

Registration Rights Agreement         S-2
<PAGE>

                           CH INVESTMENTS OF TEXAS, INC.
                           MEADOWS II, LTD.

                           By:   /s/ WILLIAM PECK
                                --------------------------------------
                                William Peck
                                President

Registration Rights Agreement         S-3
<PAGE>

                           CONTINENTAL HOMES OF TEXAS, L.P.

                           By:     CHTEX of Texas, Inc., its general partner

                                   By:  /s/ SAMUEL R. FULLER
                                       -----------------------------------------
                                       Samuel R. Fuller, Treasurer

                           D.R. HORTON MANAGEMENT COMPANY, LTD.
                           D.R. HORTON - EMERALD, LTD.
                           D.R. HORTON - TEXAS, LTD.
                           DRH REGREM VII, LP

                           By:     Meadows I, Ltd., its general partner

                                   By:  /s/ SAMUEL R. FULLER
                                        ----------------------------------------
                                        Samuel R. Fuller
                                        Treasurer

                           SGS COMMUNITIES AT GRANDE QUAY, LLC

                           By:     Meadows IX, Inc., a member

                                   By:  /s/ SAMUEL R. FULLER
                                        ----------------------------------------
                                        Samuel R. Fuller
                                        Treasurer

                           and

                           By:     Meadows X, Inc., a member

                                   By:  /s/ SAMUEL R. FULLER
                                        ----------------------------------------
                                        Samuel R. Fuller
                                        Treasurer

                           DRH CAMBRIDGE HOMES, LLC
                           DRH REGREM VIII, LLC

                           By:     D.R. Horton, Inc. - Chicago, a member

                                   By:  /s/ SAMUEL R. FULLER
                                        ----------------------------------------
                                        Samuel R. Fuller
                                        Treasurer

Registration Rights Agreement         S-4
<PAGE>

                           ALLEGRA, LLC
                           APLAM, LLC
                           WESTERN PACIFIC HOUSING CO.
                           WESTERN PACIFIC HOUSING-ANTIGUA, LLC
                           WESTERN PACIFIC HOUSING-AVIARA, L.P.
                           WESTERN PACIFIC HOUSING-BOARDWALK, LLC
                           WESTERN PACIFIC HOUSING-BROADWAY, LLC
                           WESTERN PACIFIC HOUSING-CANYON PARK, LLC
                           WESTERN PACIFIC HOUSING-CARMEL, LLC
                           WESTERN PACIFIC HOUSING-CARRILLO, LLC
                           WESTERN PACIFIC HOUSING-COMMUNICATIONS HILL, LLC
                           WESTERN PACIFIC HOUSING-CREEKSIDE, LLC
                           WESTERN PACIFIC HOUSING-CULVER CITY, L.P.
                           WESTERN PACIFIC HOUSING-LOMAS VERDES, LLC
                           WESTERN PACIFIC HOUSING-LOST HILLS PARK, LLC
                           WESTERN PACIFIC HOUSING-MCGONIGLE CANYON, LLC
                           WESTERN PACIFIC HOUSING-MOUNTAINGATE, L.P.
                           WESTERN PACIFIC HOUSING-NORCO ESTATES, LLC
                           WESTERN PACIFIC HOUSING-OSO, L.P.
                           WESTERN PACIFIC HOUSING-PARK AVENUE EAST, LLC
                           WESTERN PACIFIC HOUSING-PARK AVENUE WEST, LLC
                           WESTERN PACIFIC HOUSING-PLAYA VISTA, LLC
                           WESTERN PACIFIC HOUSING-ROBINHOOD RIDGE, LLC
                           WESTERN PACIFIC HOUSING-SANTA FE, LLC
                           WESTERN PACIFIC HOUSING-SCRIPPS II, LLC
                           WESTERN PACIFIC HOUSING-SCRIPPS, L.P.
                           WESTERN PACIFIC HOUSING-SEACOVE, L.P.
                           WESTERN PACIFIC HOUSING-STUDIO 528, LLC
                           WESTERN PACIFIC HOUSING-TERRA BAY DUETS, LLC
                           WESTERN PACIFIC HOUSING-TORRANCE, LLC
                           WESTERN PACIFIC HOUSING-TORREY COMMERCIAL, LLC
                           WESTERN PACIFIC HOUSING-TORREY MEADOWS, LLC
                           WESTERN PACIFIC HOUSING-TORREY MULTI-FAMILY, LLC
                           WESTERN PACIFIC HOUSING-TORREY VILLAGE CENTER, LLC
                           WESTERN PACIFIC HOUSING-VINEYARD TERRACE, LLC
                           WESTERN PACIFIC HOUSING-WINDEMERE, LLC
                           WESTERN PACIFIC HOUSING-WINDFLOWER, L.P.
                           WPH-CAMINO RUIZ, LLC
                           WPH-HPH, LLC

                           By:      LAMCO Housing, Inc.,
                                    its Member or General Partner

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

Registration Rights Agreement         S-5
<PAGE>

                           SCHULER HOMES OF ARIZONA LLC
                           SHA CONSTRUCTION LLC

                           By:      SRHI LLC,
                                    its Member

                                    By:     SLHR of Nevada, Inc.,
                                            its Member

                                            By:       /s/ SAMUEL R. FULLER
                                                     ---------------------------
                                                     Samuel R. Fuller
                                                     Vice President

                           HPH HOMEBUILDERS 2000 L.P.
                                  PORTER GP LLC

                           By:      WPH-HPH, LLC,
                                    its General Partner or Member

                                    By:     LAMCO Housing, Inc.,
                                            its Member

                                            By:       /s/ SAMUEL R. FULLER
                                                     ---------------------------
                                                     Samuel R. Fuller
                                                     Vice President

                           AP LHI, INC.
                           AP WESTERN GP CORPORATION
                           AP WP OPERATING CORPORATION
                           LAMCO HOUSING, INC.
                           MELODY HOMES, INC.
                           MELMORT CO.
                           SCHULER HOMES OF CALIFORNIA, INC.
                           SCHULER HOMES OF OREGON, INC.
                           SCHULER HOMES OF WASHINGTON, INC.
                           SCHULER MORTGAGE, INC.
                           SCHULER REALTY HAWAII, INC.
                           SCHULER REALTY/MAUI, INC.
                           SHLR OF CALIFORNIA, INC.
                           SHLR OF COLORADO, INC.
                           SHLR OF NEVADA, INC.
                           SHLR OF UTAH, INC.
                           SHLR OF WASHINGTON, INC.
                           VERTICAL CONSTRUCTION CORPORATION
                           WESTERN PACIFIC FUNDING, INC.
                           WESTERN PACIFIC HOUSING MANAGEMENT, INC.
                           WESTERN PACIFIC HOUSING, INC.

                           By:    /s/ SAMUEL R. FULLER
                                  --------------------------------------
                                  Samuel R. Fuller
                                  Vice President

Registration Rights Agreement         S-6
<PAGE>

                           D.R. HORTON-SCHULER HOMES, LLC

                           By:      Vertical Construction Corporation,
                                    its Manager

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           SRHI LLC

                           By:      SHLR of Nevada, Inc.,
                                    its Member

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           SSHI LLC

                           By:      SHLR of Washington, Inc.,
                                    its Member

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           WESTERN PACIFIC HOUSING-COPPER CANYON, LLC
                           WESTERN PACIFIC HOUSING-PACIFIC PARK II, LLC
                           WESTERN PACIFIC HOUSING-POINSETTIA, L.P.
                           WESTERN PACIFIC HOUSING-DEL VALLE, LLC

                           By:      AP Western GP Corporation,
                                    its Member or General Partner

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           WESTERN PACIFIC HOUSING-RIVER RIDGE, LLC

                           By:      AP LHI, Inc.,
                                    its Member

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           AP WP PARTNERS, L.P.

                           By:      AP WP Operating Corporation,
                                    its General Partner

                                    By:    /s/ SAMUEL R. FULLER
                                          --------------------------------------
                                          Samuel R. Fuller
                                          Vice President

Registration Rights Agreement         S-7
<PAGE>

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
CREDIT LYONNAIS SECURITIES (USA) INC.
FLEET SECURITIES, INC.

By:  SALOMON SMITH BARNEY INC.,
as Representative of the Initial Purchasers

By:     /s/ MARC E. SCHNEIDER
       ----------------------------------------------
       Name:  Marc E. Schneider
       Title: Director

                                      S-8
<PAGE>

                                                                         ANNEX A

                  Each Broker-Dealer that receives New Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a Broker-Dealer in connection with resales of New
Securities received in exchange for Securities where such Securities were
acquired by such Broker-Dealer as a result of market-making activities or other
trading activities. Each of the Issuers has agreed that, starting on the
Expiration Date (as defined herein) and ending on the earlier of (i) the close
of business on the 180th day after the Expiration Date (extended by the number
of days during such period that any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement (as defined herein))
and (ii) the close of business on the date upon which all such Broker-Dealers
have sold all New Securities held by them, it will make this Prospectus
available, as amended or supplemented, to any Broker-Dealer for use in
connection with any such resale. See "Plan of Distribution."

<PAGE>

                                                                         ANNEX B

                  Each Broker-Dealer that receives New Securities for its own
account in exchange for Securities, where such Securities were acquired by such
Broker-Dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Securities. See "Plan of Distribution."

<PAGE>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

                  Each Broker-Dealer that receives New Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Broker-Dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Issuers have agreed
that, starting on the Expiration Date and ending on the earlier of (i) the close
of business on the 180th day after the Expiration Date (extended by the number
of days during such period that any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement (as defined herein))
and (ii) the close of business on the date upon which all such Broker-Dealers
have sold all New Securities held by them, they will make this Prospectus, as
amended or supplemented, available to any Broker-Dealer for use in connection
with any such resale. In addition, until __________, 200_, all dealers effecting
transactions in the New Securities may be required to deliver a prospectus.

                  The Issuers will not receive any proceeds from any sale of New
Securities by Brokers-Dealers. New Securities received by Broker-Dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Broker-Dealer and/or the purchasers of any such New
Securities. Any Broker-Dealer that resells New Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such New Securities may be deemed to be
an "underwriter" within the meaning of the Act, and any profit of any such
resale of New Securities and any commissions or concessions received by any such
Persons may be deemed to be underwriting compensation under the Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.

                  For a period that is the earlier of (i) the close of business
on the 180th day after the Expiration Date (extended by the number of days
during such period that any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement (as defined herein))
and (ii) the close of business on the date upon which all such Broker-Dealers
have sold all New Securities held by them, the Issuers will promptly send
additional copies of

<PAGE>
                                      -2-

this Prospectus and any amendment or supplement to this Prospectus to any
Broker-Dealer that requests such documents in the Letter of Transmittal. The
Issuers have agreed to pay all expenses incident to the Exchange Offer
(including the expenses of one counsel for the holders of the Securities) other
than commissions or concessions of any brokers or dealers and will indemnify the
holders of the Securities (including any Broker-Dealers) against certain
liabilities, including liabilities under the Act.

                  [If applicable, add information required by Regulation S-K
Items 507 and/or 508.]

<PAGE>

                                                                         ANNEX D

                  CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
                  ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
                  AMENDMENTS OR SUPPLEMENTS THERETO.

                  Name:
                                    ------------------------------
                  Address:
                                    ------------------------------

                                    ------------------------------

If the undersigned is not a Broker-Dealer, the undersigned represents that it
acquired the New Securities in the ordinary course of its business, it is not
engaged in, and does not intend to engage in, a distribution of New Securities
and it has not arrangements or understandings with any Person to participate in
a distribution of the New Securities. If the undersigned is a Broker-Dealer that
will receive New Securities for its own account in exchange for Securities, it
represents that the Securities to be exchanged for New Securities were acquired
by it as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale of
such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Act.<PAGE>
                                                                    EXHIBIT 10.2

                            INDEMNIFICATION AGREEMENT

         This Indemnification Agreement ("Agreement") is made as of the 21st day
of February, 2001, by and between D.R. Horton, Inc., a Delaware corporation (the
"Company"), and James K. Schuler, a director and officer of the Company (the
"Indemnitee").

                                    RECITALS

         A. The Indemnitee has been elected as a director and officer of the
Company and the Company desires the Indemnitee to serve in such capacities. The
Indemnitee is willing, subject to certain conditions including without
limitation the execution and performance of this Agreement by the Company, to
serve in such capacities.

         B. In addition to the indemnification to which the Indemnitee is
entitled under the certificate of incorporation of the Company (the
"Certificate"), the Company may in its discretion obtain at its sole expense
insurance protecting its officers and directors including the Indemnitee against
certain losses arising out of actual or threatened actions, suits or proceedings
to which such persons may be made or threatened to be made parties. If such
insurance is obtained, there can be no assurance that such insurance will not be
cancelled by the insurer or that the Company will elect not to continue or renew
such insurance. Accordingly, and in order to induce the Indemnitee to serve in
his present capacities, the Company and Indemnitee agree as follows:

         1. Continued Service. The Indemnitee will serve as a director of the
Company so long as he is duly elected and qualified in accordance with the
bylaws of the Company (the "Bylaws") or until he resigns in writing in
accordance with applicable law and will continue to serve as an officer of the
Company at the pleasure of its Board of Directors (the "Board") so long as he is
duly appointed or elected by the Board or until he resigns in writing in
accordance with applicable law.

<PAGE>
         2. Initial Indemnity. (a) The Company shall indemnify the Indemnitee
when he was or is a party or is threatened to be made a party to any pending,
threatened or completed action, suit or proceeding, whether civil,
administrative, investigative or criminal (other than an action by or in the
name of the Company), by reason of the fact that he is or was or had agreed to
become a director or officer of the Company, or is or was serving or had agreed
to serve at the written request of the Company as director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, in any such case owned or controlled by the Company, or by reason of
any action alleged to have been taken or omitted in such capacity, against any
and all costs, charges and expenses, including without limitation, attorneys'
and others' fees and expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by the Indemnitee in connection therewith and
any appeal therefrom if the Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the Indemnitee did not satisfy the foregoing standard of
conduct to the extent applicable thereto.

         (b) The Company shall indemnify the Indemnitee when he was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by or in the right of the Company to
procure a judgment in its favor by reason of the fact that he is or was or had
agreed to become a director or officer of the Company, or is or was serving or
had agreed to serve at the written request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint

                                      -2-
<PAGE>

venture, trust or other enterprise, in any such case owned or controlled by the
Company, against costs, charges and expenses (including attorneys' and others'
fees and expenses) actually and reasonably incurred by him in connection with
the defense or settlement thereof or any appeal therefrom if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and except that no indemnification shall be made in
respect of any claim, issue or matter as to which the Indemnitee shall have been
adjudged to be liable to the Company unless and only to the extent that the
Court of Chancery or the court in which such action, suit or proceeding was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

         (c) To the extent that the Indemnitee has been successful on the merits
or otherwise, including without limitation the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in Sections
2(a) or 2(b) hereof or in defense of any claim, issue or matter therein, he
shall be indemnified against costs, charges and expenses (including attorneys'
and others' fees and expenses) actually and reasonably incurred by him in
connection therewith.

         (d) Any indemnification under Sections 2(a) or 2(b) (unless ordered by
a court) shall be made by the Company only as authorized in the specific case
upon a determination in accordance with Section 4 hereof or any applicable
provision of the Certificate, Bylaws, other agreement, resolution or otherwise.
Such determination shall be made (i) by the Board, by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding or (ii) if such a quorum of disinterested directors is not available
or so directs, by independent legal counsel (designated in the manner provided
below in this

                                      -3-
<PAGE>
subsection (d)) in a written opinion or (iii) by the stockholders of the Company
(the "Stockholders"). Independent legal counsel shall be designated by vote of a
majority of the disinterested directors; provided, however, that if the Board is
unable or fails to so designate, such designation shall be made by the
Indemnitee subject to the approval of the Company (which approval shall not be
unreasonably withheld). Independent legal counsel shall not be any person or
firm who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or the Indemnitee in an action to determine the Indemnitee's rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses of such
independent legal counsel and to indemnify fully such counsel against costs,
charges and expenses (including attorneys' and others' fees and expenses)
actually and reasonably incurred by such counsel in connection with this
Agreement or the opinion of such counsel pursuant hereto.

         (e) All expenses (including attorneys' and others' fees and expenses)
incurred by the Indemnitee in his capacity as a director or officer of the
Company in defending a civil or criminal action, suit or proceeding shall be
paid by the Company in advance of the final disposition of such action, suit or
proceeding in the manner prescribed by Section 4(b) hereof.

         (f) The Company shall not adopt any amendment to the Certificate or
Bylaws the effect of which would be to deny, diminish or encumber the
Indemnitee's rights to indemnity pursuant to the Certificate, Bylaws, the
General Corporation Law of the State of Delaware (the "DGCL") or any other
applicable law as applied to any act or failure to act occurring in whole or in
part prior to the date (the "Effective Date") upon which the amendment was
approved by the Board or the Stockholders, as the case may be. In the event that
the Company shall adopt any amendment to the Certificate or Bylaws the effect

                                      -4-
<PAGE>

of which is to so deny, diminish or encumber the Indemnitee's rights to
indemnity, such amendment shall apply only to acts or failures to act occurring
entirely after the Effective Date thereof unless the Indemnitee shall have voted
in favor of such adoption as a director or holder of record of the Company's
voting stock, as the case may be.

         3. Additional Indemnification. (a) Pursuant to Section 145(f) of the
DGCL, without limiting any right which the Indemnitee may have pursuant to
Section 2 hereof, the Certificate, the Bylaws, the DGCL, any policy of insurance
or otherwise, but subject to the limitations on the maximum permissible
indemnity which may exist under applicable law at the time of any request for
indemnity hereunder determined as contemplated by Section 3(a) hereof, the
Company shall indemnify the Indemnitee against any amount which he is or becomes
legally obligated to pay relating to or arising out of any claim made against
him because of any act, failure to act or neglect or breach of duty, including
any actual or alleged error, misstatement or misleading statement, which he
commits, suffers, permits or acquiesces in while acting in his capacity as a
director of the Company, or, at the written request of the Company, as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, in any such case owned or controlled by the
Company. The payments which the Company is obligated to make pursuant to this
Section 3 shall include without limitation damages, judgments, settlements and
charges, costs, expenses, expenses of investigation and expenses of defense of
legal actions, suits, proceedings or claims and appeals therefrom, and expenses
of appeal, attachment or similar bonds; provided, however, that the Company
shall not be obligated under this Section 3(a) to make any payment in connection
with any claim against the Indemnitee:

                                      -5-
<PAGE>

                           (i) to the extent of any fine or similar governmental
                  imposition which the Company is prohibited by applicable law
                  from paying which results in a final, nonappealable order; or

                           (ii) to the extent based upon or attributable to the
                  Indemnitee gaining in fact a personal profit to which he was
                  not legally entitled, including without limitation profits
                  made from the purchase and sale by the Indemnitee of equity
                  securities of the Company which are recoverable by the Company
                  pursuant to Section 16(b) of the Securities Exchange Act of
                  1934, and profits arising from transactions in publicly traded
                  securities of the Company which were effected by the
                  Indemnitee in violation of Section 10(b) of the Securities
                  Exchange Act of 1934, including Rule l0b-5 promulgated
                  thereunder.

The determination of whether the Indemnitee shall be entitled to indemnification
under this Section 3(a) may be, but shall not be required to, be made in
accordance with Section 4(a) hereof. If that determination is so made, it shall
be binding upon the Company and the Indemnitee for all purposes.

         (b) Expenses (including without limitation attorneys' and others' fees
and expenses) incurred by Indemnitee in defending any actual or threatened civil
or criminal action, suit, proceeding or claim shall be paid by the Company in
advance of the final disposition thereof as authorized in accordance with
Section 4(b) hereof.

         4. Certain Procedures Relating to Indemnification and Advancement of
Expenses. (a) Except as otherwise permitted or required by the DGCL, for
purposes of pursuing his rights to indemnification under Sections 2(a), 2(b) or
3(a) hereof, as the case may be, the Indemnitee may, but shall not be required
to, (i) submit to the Board a sworn statement of request for indemnification
substantially

                                      -6-
<PAGE>

in the form of Exhibit 1 attached hereto and made a part hereof (the
"Indemnification Statement") averring that he is entitled to indemnification
hereunder; and (ii) present to the Company reasonable evidence of all
indemnification amounts for which payment is requested. Submission of an
Indemnification Statement to the Board shall create a presumption that the
Indemnitee is entitled to indemnification under Sections 2(a), 2(b) or 3(a)
hereof, as the case may be, and the Board shall be deemed to have determined
that the Indemnitee is entitled to such indemnification unless within 30
calendar days after submission of the Indemnification Statement the Board shall
determine by vote of a majority of the directors at a meeting at which a quorum
is present, based upon clear and convincing evidence (sufficient to rebut the
foregoing presumption) and the Indemnitee shall have received notice within such
period in writing of such determination that the Indemnitee is not so entitled
to indemnification, which notice shall disclose with particularity the evidence
in support of the Board's determination. The foregoing notice shall be sworn to
by all persons who participated in the determination and voted to deny
indemnification. The provisions of this Section 4(a) are intended to be
procedural only and shall not affect the right of the Indemnitee to
indemnification under this Agreement and any determination by the Board that the
Indemnitee is not entitled to indemnification and any failure to make the
payments requested in the Indemnification Statement shall be subject to judicial
review as provided in Section 6 hereof.

         (b) For purposes of determining whether to authorize advancement of
expenses pursuant to Section 2(e) hereof, the Indemnitee shall submit to the
Board a sworn statement of request for advancement of expenses substantially in
the form of Exhibit 2 attached hereto and made a part hereof (the
"Undertaking"), averring that (i) he has reasonably incurred or will reasonably
incur actual expenses in

                                      -7-
<PAGE>

defending an actual civil or criminal action, suit, proceeding or claim and (ii)
he undertakes to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Company under this Agreement or
otherwise. For purposes of requesting advancement of expenses pursuant to
Section 3(b) hereof, the Indemnitee may, but shall not be required to, submit an
Undertaking or such other form of request as he determines to be appropriate (an
"Expense Request"). Upon receipt of an Undertaking or Expense Request, as the
case may be, the Board shall within 10 calendar days authorize immediate payment
of the expenses stated in the Undertaking or Expense Request, as the case may
be, whereupon such payments shall immediately be made by the Company. No
security shall be required in connection with any Undertaking or Expense Request
and any Undertaking or Expense Request shall be accepted without reference to
the Indemnitee's ability to make repayment.

         5. Subrogation; Duplication of Payments. (a) In the event of payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of the Indemnitee, who shall execute
all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.

         (b) The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against the Indemnitee to the extent
the Indemnitee has actually received payment (under any insurance policy, the
Certificate, the Bylaws or otherwise) of the amounts otherwise payable
hereunder.

         6. Enforcement. (a) If a claim for indemnification made to the Company
pursuant to Section 4 hereof is not paid in full by the Company within 30
calendar days after a written claim has been received

                                      -8-
<PAGE>

by the Company, the Indemnitee may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim.

         (b) In any action brought under Section 6(a) hereof, it shall be a
defense to a claim for indemnification pursuant to Sections 2(a) or 2(b) hereof
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
Undertaking, if any is required, has been tendered to the Company) that the
Indemnitee has not met the standards of conduct which make it permissible under
the DGCL for the Company to indemnify the Indemnitee for the amount claimed, but
the burden of proving such defense shall be on the Company. Neither the failure
of the Company (including the Board, independent legal counsel or the
Stockholders) to have made a determination prior to commencement of such action
that indemnification of the Indemnitee is proper in the circumstances because he
has met the applicable standard of conduct set forth in the DGCL, nor an actual
determination by the Company (including the Board, independent legal counsel or
the Stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.

         (c) It is the intent of the Company that the Indemnitee not be required
to incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Indemnitee hereunder. Accordingly, if it should appear to the Indemnitee
that the Company has failed to comply with any of its obligations under the
Agreement or in the event that the Company or any other person takes any action
to declare the Agreement void or unenforceable, or institutes any action, suit
or proceeding designed (or having the effect of being designed) to deny, or to
recover from, the Indemnitee

                                      -9-
<PAGE>

the benefits intended to be provided to the Indemnitee hereunder, the Company
irrevocably authorizes the Indemnitee from time to time to retain counsel of his
choice, at the expense of the Company as hereafter provided, to represent the
Indemnitee in connection with the initiation or defense of any litigation or
other legal action, whether by or against the Company or any director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction.
Regardless of the outcome thereof, the Company shall pay and be solely
responsible for any and all costs, charges and expenses, including without
limitation attorneys' and others' fees and expenses, reasonably incurred by the
Indemnitee (i) as a result of the Company's failure to perform this Agreement or
any provision thereof or (ii) as a result of the Company or any person
contesting the validity or enforceability of this Agreement or any provision
thereof as aforesaid.

         7. Merger or Consolidation. In the event that the Company shall be a
constituent corporation in a consolidation, merger or other reorganization, the
Company, if it shall not be the surviving, resulting or other corporation
therein, shall require as a condition thereto the surviving, resulting or
acquiring corporation to agree to indemnify the Indemnitee to the full extent
provided in Section 3 hereof. Whether or not the Company is the resulting,
surviving or acquiring corporation in any such transaction, the Indemnitee shall
also stand in the same position under this Agreement with respect to the
resulting, surviving or acquiring corporation as he would have with respect to
the Company if its separate existence had continued.

         8. Nonexclusivity and Severability. (a) The right to indemnification
provided by this Agreement shall not be exclusive of any other rights to which
the Indemnitee may be entitled under the Certificate, Bylaws, the DGCL, any
other statute, insurance policy, agreement, vote of Stockholders or of directors
or otherwise, both as to actions in his official capacity and as to actions in
another capacity

                                      -10-
<PAGE>

while holding such office, and shall continue after the Indemnitee has ceased to
be a director, officer, employee or agent and shall inure to the benefit of his
heirs, executors and administrators.

         (b) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.

         9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.

         10. Modification; Survival. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof. This Agreement
may be modified only by an instrument in writing signed by both parties hereto.
The provisions of this Agreement shall survive the death, disability, or
incapacity of the Indemnitee or the termination of the Indemnitee's service as a
director of the Company and shall inure to the benefit of the Indemnitee's
heirs, executors and administrators.

         11. Certain Terms. For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to any employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, the Indemnitee with respect to
an employee benefit
plan, its participants or beneficiaries; references to the masculine shall
include the feminine; references to the singular shall include the plural and
vice versa; and if the Indemnitee acted in good faith and in a manner he
reasonably believed

                                      -11-
<PAGE>

to be in the interest of the participants and beneficiaries of an employee
benefit plan he shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to herein.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.

                                            D.R. HORTON, INC.

                                            By: /s/ Donald R. Horton
                                                --------------------------------
                                                Donald R. Horton, Chairman of
                                                  the Board

                                                /s/ James K. Schuler
                                                --------------------------------
                                                James K. Schuler

                                      -12-
<PAGE>

                                    EXHIBIT 1

                            INDEMNIFICATION STATEMENT

STATE OF                      )
         ----------           )   )
COUNTY OF                     )
          ----------

         I, ______________________________, being first duly sworn, do depose
and say as follows:

         1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement, dated as of ____________________, 200__, between D.R.
Horton, Inc., a Delaware corporation (the "Company"), and the undersigned.

         2. I am requesting indemnification against charges, costs, expenses
(including attorneys' and others' fees and expenses), judgments, fines and
amounts paid in settlement, all of which (collectively, "Liabilities") have been
or will be incurred by me in connection with an actual or threatened action,
suit, proceeding or claim to which I am a party or am threatened to be made a
party.

         3. With respect to all matters related to any such action, suit,
proceeding or claim, I am entitled to be indemnified as herein contemplated
pursuant to the aforesaid Indemnification Agreement.

         4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have or may arise out of
________________________________________________________________________________

________________________________________________________________________________

_______________________________________________________________________________.

                                      -1-
<PAGE>

                                                Name:
                                                     ---------------------------

         Subscribed and sworn to before me, a Notary Public in and for said
County and State, this _____ day of _________________, 200__.

[Seal]
                                                     ---------------------------

         My commission expires the ____ day of ________________, 200___.

                                      -2-
<PAGE>

                                    EXHIBIT 2
                                   UNDERTAKING

STATE OF                      )
         ----------           )   )
COUNTY OF                     )
          ----------

         I, ___________________________, being first duly sworn do depose and
say as follows:

         1. This Undertaking is submitted pursuant to the Indemnification
Agreement, dated as of ____________________, 200___, between D.R. Horton, Inc.,
a Delaware corporation (the "Company"), and the undersigned.

         2. I am requesting advancement of certain costs, charges and expenses
which I have incurred or will incur in defending an actual or pending civil or
criminal action, suit, proceeding or claim.

         3. I hereby undertake to repay this advancement of expenses if it shall
ultimately be determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnification Agreement or otherwise.

         4. The costs, charges and expenses for which advancement is requested
are, in general, all expenses related to _______________________________________

_______________________________________________________________________________.

                                                  Name:
                                                       -------------------------

         Subscribed and sworn to before me, a Notary Public in and for said
County and State, this _____ day of _________________, 200__.

[Seal]
                                                       -------------------------

         My commission expires the ____ day of ________________, 200___.

                                      -1-

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