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                                                                   EXHIBIT 10.34

                             GRANTOR TRUST AGREEMENT

This Grantor Trust Agreement (the "Trust Agreement") is made this 21st day of
June, 2002 by and between D.R. Horton, Inc. a Delaware corporation ("the
Company") and WACHOVIA BANK, NATIONAL ASSOCIATION ("the Trustee"), but to be
effective as of June 15, 2002.

                                    Recitals

(a)    WHEREAS, the Company has adopted the nonqualified deferred compensation
       Plans and Agreements (the "Arrangements") as listed in Attachment A;

(b)    WHEREAS, the Company has incurred or expects to incur liability under the
       terms of such Arrangements with respect to the individuals participating
       in such Arrangements (the "Participants and Beneficiaries");

(c)    WHEREAS, the Company hereby establishes a Trust (the "Trust") and shall
       contribute to the Trust assets that shall be held therein, subject to the
       claims of the Company's creditors in the event of the Company's
       Insolvency, as herein defined, until paid to Participants and their
       Beneficiaries in such manner and at such times as specified in the
       Arrangements and in this Trust Agreement;

(d)    WHEREAS, it is the intention of the parties that this Trust shall
       constitute an unfunded arrangement and shall not affect the status of the
       Arrangements as an unfunded plan maintained for the purpose of providing
       deferred compensation for a select group of management or highly
       compensated employees for purposes of Title I of the Employee Retirement
       Income Security Act of 1974; and

(e)    WHEREAS, it is the intention of the Company to make contributions to the
       Trust to provide itself with a source of funds (the "Fund") to assist it
       in satisfying its liabilities under the Arrangements.

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:

Section 1. Establishment of The Trust

(a)    The Trust is intended to be a Grantor Trust, of which the Company is the
       Grantor, within the meaning of subpart E, part I, subchapter J, chapter
       1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall
       be construed accordingly.

(b)    The Company shall be considered a Grantor for the purposes of the Trust.

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(c)    The Trust hereby established is revocable by the Company; it shall become
       irrevocable upon a Change in Control, as defined herein.

(d)    The Company hereby deposits with the Trustee in the Trust one-thousand
       dollars and zero cents ($1,000.00) which shall become the principal of
       the Trust to be held, administered and disposed of by the Trustee as
       provided in this Trust Agreement.

(e)    The principal of the Trust, and any earnings thereon shall be held
       separate and apart from other funds of the Company and shall be used
       exclusively for the uses and purposes of Participants and general
       creditors as herein set forth. In particular, no part of the Trust shall
       be used for any purpose other than (i) providing benefits to Participants
       and Beneficiaries under the Arrangements, (ii) defraying reasonable
       expenses of administration, and (iii) payments to creditors under Section
       3, until all such payments required by this Trust Agreement have been
       made. Participants and their Beneficiaries shall have no preferred claim
       on, or any beneficial ownership interest in, any assets of the Trust. Any
       rights created under the Arrangements and this Trust Agreement shall be
       unsecured contractual rights of Participants and their Beneficiaries
       against the Company. Any assets held by the Trust will be subject to the
       claims of the general creditors of the Company under federal and state
       law in the event the Company is Insolvent, as defined in Section 3(a)
       herein. Nothing herein shall be deemed to create a fiduciary relationship
       between the Participants and Beneficiaries, on the one hand, and the
       Trustee, Company, or Committee, on the other hand.

(f)    The Company, in its sole discretion, may at any time, or from time to
       time, make additional deposits of cash or other property acceptable to
       the Trustee in the Trust to augment the principal to be held,
       administered and disposed of by the Trustee as provided in this Trust
       Agreement. Prior to a Change in Control, neither the Trustee nor any
       Participant or Beneficiary shall have any right to compel additional
       deposits.

(g)    Upon a Potential Change in Control, as defined herein, the Company shall,
       as soon as possible, but in no event longer than thirty (30) days
       following the occurrence of a Potential Change in Control, make a
       contribution to the Trust in an amount that is sufficient (taking into
       account the Trust assets, if any, resulting from prior contributions) to
       fund the Trust in an amount equal to no less than 100% but no more than
       120% of the amount necessary to pay each Participant or Beneficiary the
       benefits to which Participants or their Beneficiaries would be entitled
       pursuant to the terms of the Arrangements (whether or not immediately
       payable) as of the date on which the Potential Change in Control
       occurred, assuming, for purposes of such computation, the Participants
       were all to retire with 100% vesting as of such date.

(h)    In the event a Change in Control, as defined herein, does not occur
       within two years of a Potential Change in Control, the Company shall have
       the right to recover any amounts contributed to and remaining on hand in
       the Trust pursuant to Section 1(g).

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(i)    Upon a Change in Control, the Company shall, as soon as possible, but in
       no event longer than thirty (30) days following the occurrence of a
       Change in Control, make an irrevocable contribution to the Trust in an
       amount that is sufficient (taking into account the Trust assets, if any,
       resulting from prior contributions) to fund the Trust in an amount equal
       to no less than 100% but no more than 120% of the amount necessary to pay
       each Participant or Beneficiary the benefits to which Participants or
       their Beneficiaries would be entitled pursuant to the terms of the
       Arrangements (whether or not immediately payable) as of the date on which
       the Change in Control occurred, assuming, for purposes of such
       computation, that the Participants were all to retire on that date with
       100% vesting. The Company shall also fund an expense reserve for the
       Trustee in the amount of $125,000.00.

Section 2. Payments to Participants and Their Beneficiaries

(a)    Prior to a Change in Control, distributions from the Trust shall be made
       by the Trustee to Participants and Beneficiaries at the direction of the
       Company. Prior to a Change in Control, the entitlement of a Participant
       or his or her Beneficiaries to benefits under the Arrangements shall be
       determined by the Committee appointed by the Company under the
       Arrangements, and any claim for such benefits shall be considered and
       reviewed under the procedures set out in the Arrangements.

(b)    The Company may make payment of benefits directly to Participants or
       their Beneficiaries as they become due under the terms of the
       Arrangements. The Company shall notify the Trustee of its decision to
       make payment of benefits directly prior to the time amounts are payable
       to Participants or their Beneficiaries. In addition, if the principal of
       the Trust, and any earnings thereon, are not sufficient to make payments
       of benefits in accordance with the terms of the Arrangements, the Company
       shall make the balance of each such payment as it falls due in accordance
       with the Arrangements. The Trustee shall notify the Company where
       principal and earnings are not sufficient. Nothing in this Agreement
       shall relieve the Company of its liabilities to pay benefits due under
       the Arrangements except to the extent such liabilities are met by
       application of assets of the Trust.

(c)    After a Potential Change in Control and before a Change in Control, the
       Company shall deliver to the Trustee a schedule of benefits due under the
       Arrangements. After a Change in Control, the Trustee shall pay benefits
       due in accordance with such schedule. After a Change in Control, the
       Committee appointed by the Company shall continue to make the
       determination of benefits due to Participants or their Beneficiaries and
       shall provide the Trustee with an updated schedule of benefits due;
       provided however, that (i) the amount due cannot be less than the amount
       shown on the pre Change in Control schedule of benefits unless the
       Participant or Beneficiary so consents (unless the decrease in the amount
       due is due to previous payments made to the Participant or Beneficiary,
       or the Participant's or Beneficiary's Plan account balance having
       declined due to a decrease in the investments deemed allocated to his
       account), and (ii) a Participant or their Beneficiaries may make
       application to the Trustee for an independent decision as to the amount
       or form of their benefits due under the Arrangements. In making any
       determination required or permitted to be made by the Trustee under this
       Section, the

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       Trustee shall, in each such case, reach its own independent
       determination, in its absolute and sole discretion, as to the
       Participant's or Beneficiary's entitlement to a payment hereunder. In
       making its determination, the Trustee may consult with and make such
       inquiries of such persons, including the Participant or Beneficiary, the
       Company, legal counsel, actuaries or other persons, as the Trustee may
       reasonably deem necessary. Any reasonable costs incurred by the Trustee
       in arriving at its determination shall be reimbursed by the Company and,
       to the extent not paid by the Company within a reasonable time, shall be
       charged to the Trust. The Company waives any right to contest any amount
       paid over by the Trustee hereunder pursuant to a good faith determination
       made by the Trustee notwithstanding any claim by or on behalf of the
       Company (absent a manifest abuse of discretion by the Trustee) that such
       payments should not be made.

(d)    The Trustee agrees that it will not itself institute any action at law or
       at equity, whether in the nature of an accounting, interpleading action,
       request for a declaratory judgment or otherwise, requesting a court or
       administrative or quasi-judicial body to make the determination required
       to be made by the Trustee under this Section 2 in the place and stead of
       the Trustee. The Trustee may (and, if necessary or appropriate, shall)
       institute an action to collect a contribution due the Trust following a
       Change in Control or in the event that after a Change in Control the
       Trust should ever experience a short-fall in the amount of assets
       necessary to make payments pursuant to the terms of the Arrangements.

(e)    In the event any Participant or his or her Beneficiary is determined to
       be subject to federal income tax on any amount to the credit of his or
       her account under any Arrangement prior to the time of payment hereunder,
       whether or not due to the establishment of or contributions to this
       Trust, a portion of such taxable amount equal to the federal, state and
       local taxes (excluding any interest or penalties) owed on such taxable
       amount, shall be distributed by the Trustee as soon thereafter as
       practicable to such Participant or Beneficiary. After a Change in
       Control, to the extent the Trust would thereby become underfunded, the
       Company shall promptly reimburse the Trust for any such distribution in
       an amount certified by the Trustee to be needed for the Participant's
       benefits. For these purposes, a Participant or Beneficiary shall be
       deemed to pay state and local taxes at the highest marginal rate of
       taxation in the state in which the Participant resides or is employed (or
       both) where a tax is imposed and federal income taxes at the highest
       marginal rate of taxation, net of the maximum reduction in federal income
       taxes which could be obtained from deduction of such state and local
       taxes. Such distributions shall be at the direction of the Company or the
       Trustee, or upon proper application of the Participant or Beneficiary;
       provided that the actual amount of the distribution shall be determined
       by the Company prior to a Change in Control and the Trustee following a
       Change in Control. An amount to the credit of a Participant's Account
       shall be determined to be subject to federal income tax upon the earliest
       of: (a) a final determination by the United States Internal Revenue
       Service addressed to the Participant or his Beneficiary which is not
       appealed to the courts; (b) a final determination by the United States
       Tax Court or any other federal court affirming any such determination by
       the Internal Revenue Service; or (c) an opinion by the Company's tax
       counsel, addressed to the Company and the Trustee, to the effect that by
       reason of Treasury Regulations,

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       amendments to the Internal Revenue Code, published Internal Revenue
       Service rulings, court decisions or other substantial precedent, amounts
       to the credit of Participants hereunderare subject to federal income tax
       prior to payment. The Company shall decide at its sole expense whether or
       not to defend any tax claims described herein which are asserted by the
       Internal Revenue Service against any Participant or Beneficiary,
       including attorney fees and cost of appeal, and shall have the sole
       authority to determine whether or not to appeal any determination made by
       the Service or by a lower court. The Company also agrees to reimburse any
       Participant or Beneficiary for any interest or penalties in respect of
       tax claims hereunder upon receipt of documentation of same, unless due to
       the Participant's or Beneficiary's own gross negligence or willful
       neglect. Any distributions from the Fund to a Participant or Beneficiary
       under this Section 2(e) shall be applied in accordance with the
       provisions of the Arrangement to reduce the Company liabilities to such
       Participant and/or Beneficiary under the Arrangement. Any reduction in
       accordance with the foregoing sentence and the Arrangements shall be
       determined by the Company prior to a Change in Control. Following a
       Change in Control, the Company shall continue to make such determination
       subject to the right of a Participant to petition the Trustee under
       Section 2(c).

(f)    At the direction of the Company, the Trustee shall be responsible for
       withholding federal and state tax required by law from any payment under
       the Arrangements that is made from the Trust to any Participant or
       Beneficiary. Withholding amounts shall be set forth on the payment
       schedule.

Section 3.    Trustee Responsibility Regarding Payments
              To The Trust Beneficiary When The Company Is Insolvent

(a)    The Trustee shall cease payment of benefits to Participants and their
       Beneficiaries if the Company is Insolvent. The Company shall be
       considered "Insolvent" for purposes of this Trust Agreement if (i) the
       Company is unable to pay its debts as they become due, or (ii) the
       Company is subject to a pending proceeding as a debtor under the United
       States Bankruptcy Code.

(b)    At all times during the continuance of this Trust, the principal and
       income of the Trust shall be subject to claims of general creditors of
       the Company under federal and state law as set forth below.

       (1)    The Board of Directors and the Chief Executive Officer of the
              Company shall have the duty to inform the Trustee in writing that
              the Company is Insolvent. If a person claiming to be a creditor of
              the Company alleges in writing to the Trustee that the Company has
              become Insolvent, the Trustee shall determine whether the Company
              is Insolvent and, pending such determination, the Trustee shall
              discontinue payment of benefits to Participants or their
              Beneficiaries.

       (2)    Unless the Trustee has actual knowledge that the Company is
              Insolvent, or has received notice from the Company or a person
              claiming to be a creditor alleging that

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              the Company is Insolvent, the Trustee shall have no duty to
              inquire whether the Company is Insolvent. The Trustee may in all
              events rely on such evidence concerning the Company's solvency as
              may be furnished to the Trustee and that provides the Trustee with
              a reasonable basis for making a determination concerning the
              Company's solvency.

       (3)    If at any time the Trustee has determined that the Company is
              Insolvent, the Trustee shall discontinue payments to Participants
              or their Beneficiaries and shall hold the assets of the Trust for
              the benefit of the Company's general creditors. Nothing in this
              Trust Agreement shall in any way diminish any rights of
              Participants or their Beneficiaries to pursue their rights as
              general creditors of the Company with respect to benefits due
              under the Arrangements or otherwise.

       (4)    The Trustee shall resume the payment of benefits to Participants
              or their Beneficiaries in accordance with Section 2 of this Trust
              Agreement only after the Trustee has determined that the Company
              is not Insolvent (or is no longer Insolvent).

(c)    Provided that there are sufficient assets, if the Trustee discontinues
       the payment of benefits from the Trust pursuant to Section 3(b) hereof
       and subsequently resumes such payments, the first payment following such
       discontinuance shall include the aggregate amount of all payments due to
       Participants or their Beneficiaries under the terms of the Arrangements
       for the period of such discontinuance, less the aggregate amount of any
       payments made to Participants or their Beneficiaries by the Company in
       lieu of the payments provided for hereunder during any such period of
       discontinuance.

Section 4.    Payments When a Short-Fall of The Trust Assets Occurs

(a)    If there are not sufficient assets for the payment of current and
       expected future benefits pursuant to Section 2 or Section 3(c) hereof and
       the Company does not otherwise make such payments within a reasonable
       time after demand from the Trustee, the Trustee shall allocate the Trust
       assets among the Participants or their Beneficiaries in the following
       order of priority:

       (1)    vested Participants (regardless of whether they are actively
              employed) and their Beneficiaries; and

       (2)    non-vested Participants (regardless of whether they are actively
              employed) and their Beneficiaries

(b)    Within each category, assets shall be allocated pro-rata with respect to
       the total present value of benefits expected for each Participant or
       Beneficiary within the category, and payments to each Participant or
       Beneficiary shall be made to the extent of the assets allocated to each
       Participant or Beneficiary.

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(c)    Upon receipt of a contribution from the Company necessary to make up for
       a short-fall in the payments due, the Trustee shall resume payments to
       all the Participants and Beneficiaries under the Arrangements. Following
       a Change in Control, the Trustee shall have the right and duty to compel
       contributions to the Trust from the Company to make-up for any
       short-fall.

Section 5.    Payments to the Company

Except as provided in Section 3 hereof, after the Trust has become irrevocable,
the Company shall have no right or power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Participants and their Beneficiaries pursuant to the
terms of the Arrangements.

Section 6.    Investment Authority

(a)    The Trustee shall not be liable in discharging its duties hereunder,
       including without limitation its duty to invest and reinvest the Fund, if
       it acts for the exclusive benefit of the Participants and their
       Beneficiaries, in good faith and as a prudent person familiar with such
       matters, would act in accomplishing a similar task and in accordance with
       the terms of this Trust Agreement and any applicable federal or state
       laws, rules or regulations, and in accordance with its fiduciary duties
       as Trustee.

(b)    Subject to investment guidelines agreed to in writing from time to time
       by the Company and the Trustee prior to a Change in Control, the Trustee
       shall have the power in investing and reinvesting the Fund in its sole
       discretion:

       (1)    To invest and reinvest in any readily marketable common and
              preferred stocks, bonds, notes, debentures (including convertible
              stocks and securities but not including any stock or security of
              the Trustee or the Company other than a de minimis amount held in
              a collective or mutual fund), certificates of deposit or demand or
              time deposits (including any such deposits with the Trustee),
              shares of investment companies and mutual funds, and publicly
              traded REITs, partnerships, limited liability companies, and
              limited liability partnerships, without being limited to the
              classes or property in which the Trustees are authorized to invest
              by any law or any rule of court of any state and without regard to
              the proportion any such property may bear to the entire amount of
              the Fund;

       (2)    To invest and reinvest all or any portion of the Fund collectively
              through the medium of any proprietary mutual fund that may be
              established and maintained by the Trustee;

       (3)    To commingle for investment purposes all or any portion of the
              Fund with assets of any other similar trust or trusts established
              by the Company with the Trustee for the purpose of safeguarding
              deferred compensation or retirement income benefits of its
              employees and/or directors;

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       (4)    To retain any property at any time received by the Trustee;

       (5)    To sell or exchange any property held by it at public or private
              sale, for cash or on credit, to grant and exercise options for the
              purchase or exchange thereof, to exercise all conversion or
              subscription rights pertaining to any such property and to enter
              into any covenant or agreement to purchase any property in the
              future;

       (6)    To participate in any plan of reorganization, consolidation,
              merger, combination, liquidation or other similar plan relating to
              property held by it and to consent to or oppose any such plan or
              any action thereunder or any contract, lease, mortgage, purchase,
              sale or other action by any person;

       (7)    To deposit any property held by it with any protective,
              reorganization or similar committee, to delegate discretionary
              power thereto, and to pay part of the expenses and compensation
              thereof any assessments levied with respect to any such property
              to deposited;

       (8)    To extend the time of payment of any obligation held by it;

       (9)    To hold uninvested any moneys received by it, without liability
              for interest thereon, but only in anticipation of payments due for
              investments, reinvestments, expenses or disbursements;

       (10)   To exercise all voting or other rights with respect to any
              property held by it and to grant proxies, discretionary or
              otherwise;

       (11)   With the Company's prior consent, for the purposes of the Trust,
              to borrow money from others, to issue its promissory note or notes
              therefor, and to secure the repayment thereof by pledging any
              property held by it;

       (12)   To employ suitable contractors and counsel, who may be counsel to
              the Company or to the Trustee, and to pay their reasonable
              expenses and compensation from the Fund to the extent not paid by
              the Company, provided that the Trustee shall provide prior notice
              to the Company of retention of counsel, and provided further that
              prior to a Change in Control, or Potential Change in Control, the
              Company must consent to any counsel being paid by the Company or
              from the Trust (such consent not to be unreasonably withheld);

       (13)   To register investments in its own name or in the name of a
              nominee; to hold any investment in bearer form; and to combine
              certificates representing securities with certificates of the same
              issue held by it in other fiduciary capacities or to deposit or to
              arrange for the deposit of such securities with any depository,
              even though, when so deposited, such securities may be held in the
              name of the nominee of such depository with other securities
              deposited therewith by other persons, or to

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              deposit or to arrange for the deposit of any securities issued or
              guaranteed by the United States government, or any agency or
              instrumentality thereof, including securities evidenced by book
              entries rather than by certificates, with the United States
              Department of the Treasury or a Federal Reserve Bank, even though,
              when so deposited, such securities may not be held separate from
              securities deposited therein by other persons; provided, however,
              that no securities held in the Fund shall be deposited with the
              United States Department of the Treasury or a Federal Reserve Bank
              or other depository in the same account as any individual property
              of the Trustee, and provided, further, that the books and records
              of the Trustee shall at all times show that all such securities
              are part of the Trust Fund;

       (14)   To settle, compromise or submit to arbitration any claims, debts
              or damages due or owing to or from the Trust, respectively, to
              commence or defend suits or legal proceedings to protect any
              interest of the Trust, and to represent the Trust in all suits or
              legal proceedings in any court or before any other body or
              tribunal, in each case, prior to a Change in Control, with the
              Company's consent; provided, however, that the Trustee shall not
              be required to take any such action unless it shall have been
              indemnified by the Company to its reasonable satisfaction against
              liability or expenses it might incur therefrom;

       (15)   To hold and retain policies of life insurance, annuity contracts,
              and other property of any kind which policies are contributed to
              the Trust by the Company or any subsidiary of the Company or are
              purchased by the Trustee at the Company's or Committee's
              direction;

       (16)   To hold any other class of assets which may be contributed by the
              Company and that is deemed acceptable by the Trustee, unless
              expressly prohibited herein;

       (17)   To loan any securities at any time held by it to brokers or
              dealers upon such security as may be deemed advisable, and during
              the terms of any such loan to permit the loaned securities to be
              transferred into the name of and voted by the borrower or others;
              and

       (18)   Generally, to do all acts, whether or not expressly authorized,
              that the Trustee may deem necessary or desirable for the
              protection of the Fund.

(c)    Prior to a Potential Change in Control or Change in Control, the Company
       shall have the right, subject to this Section, to direct the Trustee with
       respect to investments.

       (1)    The Company may at any time direct the Trustee to segregate all or
              a portion of the Fund in a separate investment account or accounts
              and may appoint one or more investment managers and/or an
              investment committee established by the Company to direct the
              investment and reinvestment of each such investment account or
              accounts. In such event, the Company shall notify the Trustee of
              the appointment of each such investment manager and/or investment
              committee. No

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              such investment manager shall be related, directly or indirectly,
              to the Company, but members of the investment committee may be
              employees of the Company.

       (2)    Thereafter (until a Potential Change in Control or Change in
              Control), the Trustee shall make every sale or investment with
              respect to such investment account as directed in writing by the
              investment manager or investment committee. It shall be the duty
              of the Trustee to act strictly in accordance with each direction.
              The Trustee shall be under no duty to question any such direction
              of the investment manager or investment committee, to review any
              securities or other property held in such investment account or
              accounts acquired by it pursuant to such directions or to make any
              recommendations to the investment managers or investment committee
              with respect to such securities or other property.

       (3)    Notwithstanding the foregoing, the Trustee, without obtaining
              prior approval or direction from an investment manager or
              investment committee, shall invest cash balances held by it from
              time to time in short term cash equivalents including, but not
              limited to, through the medium of any short term common,
              collective or commingled trust fund established and maintained by
              the Trustee subject to the instrument establishing such trust
              fund, U.S. Treasury Bills, commercial paper (including such forms
              of commercial paper as may be available through the Trustee's
              Trust Department), certificates of deposit (including certificates
              issued by the Trustee in its separate corporate capacity), and
              similar type securities, with a maturity not to exceed one year;
              and, furthermore, sell such short term investments as may be
              necessary to carry out the instructions of an investment manager
              or investment committee regarding more permanent type investment
              and directed distributions.

       (4)    The Trustee shall neither be liable nor responsible for any loss
              resulting to the Fund by reason of any sale or purchase of an
              investment directed by an investment manager or investment
              committee nor by reason of the failure to take any action with
              respect to any investment which was acquired pursuant to any such
              direction in the absence of further directions of such investment
              manager or investment committee.

       (5)    Notwithstanding anything in this Agreement to the contrary, the
              Trustee shall be indemnified and saved harmless by the Company
              from and against any and all personal liability to which the
              Trustee may be subjected by carrying out any directions of an
              investment manager or investment committee issued pursuant hereto
              or for failure to act in the absence of directions of the
              investment manager or investment committee including all expenses
              reasonably incurred in its defense in the event the Company fails
              to provide such defense; provided, however, the Trustee shall not
              be so indemnified if it participates knowingly in, or knowingly
              undertakes to conceal, an act or omission of an investment manager
              or investment committee, having actual knowledge that such act or
              omission is a breach of a fiduciary duty; provided further,
              however, that the Trustee shall not be deemed to

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              have knowingly participated in or knowingly undertaken to conceal
              an act or omission of an investment manager or investment
              committee with knowledge that such act or omission was a breach of
              fiduciary duty by merely complying with directions of an
              investment manager or investment committee or for failure to act
              in the absence of directions of an investment manager or
              investment committee. The Trustee may rely upon any order,
              certificate, notice, direction or other documentary confirmation
              purporting to have been issued by the investment manager or
              investment committee which the Trustee believes to be genuine and
              to have been issued by the investment manager or investment
              committee. The Trustee shall not be charged with knowledge of the
              termination of the appointment of any investment manager or
              investment committee until it receives written notice thereof from
              the Company.

(d)    Following a Potential Change in Control or Change in Control, the Trustee
       shall have the sole and absolute discretion in the management of the
       Trust assets and shall have all the powers set forth under Section 6(b).
       In investing the Trust assets, the Trustee shall consider:

       (1)    the needs of the Arrangements;

       (2)    the need for matching of the Trust assets with the liabilities of
              the Arrangements; and

       (3)    the duty of the Trustee to act solely in the best interests of the
              Participants and their Beneficiaries.

(e)    The Trustee shall have the right, in its sole discretion, to delegate its
       investment responsibility to an investment manager who may be an
       affiliate of the Trustee. In the event the Trustee shall exercise this
       right, the Trustee shall remain, at all times responsible for the acts of
       an investment manager. Upon direction by the Company or Committee, the
       Trustee shall have the right to purchase an insurance policy or an
       annuity to fund the benefits of the Arrangements.

(f)    The Company shall have the right at any time, and from time to time in
       its sole discretion, to substitute assets (other than securities issued
       by the Trustee or the Company) of equal fair market value for any asset
       held by the Trust. This right is exercisable by the Company in a
       nonfiduciary capacity without the approval or consent of any person in a
       fiduciary capacity; provided, however, that, following a Potential Change
       in Control or Change in Control, no such substitution shall be permitted
       unless the Trustee determines that the fair market values of the
       substituted assets are equal.

Section 7.    Insurance Contracts

(a)    To the extent that the Trustee is directed by the Company prior to a
       Change in Control to invest part or all of the Trust Fund in insurance
       contracts, the type and amount thereof shall

                                      -11-

<PAGE>

       be specified by the Company. The Trustee shall be under no duty to make
       inquiry as to the propriety of the type or amount so specified.

(b)    Each insurance contract issued shall provide that the Trustee shall be
       the owner thereof with the power to exercise all rights, privileges,
       options and elections granted by or permitted under such contract or
       under the rules of the insurer. The exercise by the Trustee of any
       incidents of ownership under any contract shall, prior to a Change in
       Control, be subject to the direction of the Company. After a Change in
       Control, the Trustee shall have all such rights.

(c)    The Trustee shall have no power to name a beneficiary of the policy other
       than the Trust or the individual Participant to whom it relates, to
       assign the policy (as distinct from conversion of the policy to a
       different form) other than to a successor Trustee, or to loan to any
       person the proceeds of any borrowing against an insurance policy held in
       the Trust Fund.

(d)    No insurer shall be deemed to be a party to the Trust and an insurer's
       obligations shall be measured and determined solely by the terms of
       contracts and other agreements executed by the insurer.

Section 8.    Disposition of Income

(a)    Prior to a Change in Control or Potential Change in Control, all income
       received by the Trust, net of expenses and taxes, may be returned to the
       Company or accumulated and reinvested within the Trust at the direction
       of the Company.

(b)    Following a Change in Control or Potential Change in Control, all income
       received by the Trust, net of expenses and taxes payable by the Trust,
       shall be accumulated and reinvested within the Trust.

Section 9.    Accounting by The Trustee

The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. Within forty-five (45) days following the close of each
calendar year and within forty-five (45) days after the removal or resignation
of the Trustee, the Trustee shall deliver to the Company a written account of
its administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation
setting forth all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year or
as of the date of such removal or resignation, as the case may be. The Company
may approve such account by an instrument in writing delivered to the Trustee.
In the absence of the Company's filing with the Trustee objections to any such
account within eighteen (18) months

                                      -12-

<PAGE>

after its receipt, the Company shall be deemed to have so approved such account.
In such case, or upon the written approval by the Company of any such account,
the Trustee shall, to the extent permitted by law, be discharged from all
liability to the Company for its acts or failures to act described by such
account. The foregoing, however, shall not preclude the Trustee from having its
accounting settled by a court of competent jurisdiction. The Trustee shall be
entitled to hold and to commingle the assets of the Trust in one Fund for
investment purposes but at the direction of the Company prior to a Change in
Control, the Trustee shall create one or more sub-accounts.

Section 10.   Responsibility of The Trustee

(a)    The Trustee shall act with the care, skill, prudence and diligence under
       the circumstances then prevailing that a prudent person acting in like
       capacity and familiar with such matters would use in the conduct of an
       enterprise of a like character and with like aims, provided, however,
       that the Trustee shall incur no liability to any person for any action
       taken pursuant to a direction, request or approval given by the Company
       which is contemplated by, and in conformity with, the terms of the
       Arrangements or this Trust and is given in writing by the Company. In the
       event of a dispute between the Company and a party, the Trustee may apply
       to a court of competent jurisdiction to resolve the dispute, subject,
       however to Section 2(d) hereof.

(b)    The Company shall indemnify the Trustee against and hold the Trustee
       harmless from, any and all loss, damage, penalty, liability, cost and
       expense, including without limitation, reasonable attorneys' fees and
       disbursements, that may be incurred by, imposed upon, or asserted against
       the Trustee by reason of any claim, regulatory proceeding or litigation
       arising out of the Trustee's actions or omissions under this Agreement or
       other applicable law, unless resulting from the negligence, breach of
       duty, violation of law, breach of this Agreement, or misconduct of
       Trustee. The Trustee shall indemnify the Company, Committee, the
       Arrangements, and Trust against and hold those parties harmless from, any
       and all loss, damage, penalty, liability, cost and expense, including
       without limitation, reasonable attorneys' fees and disbursements, that
       may be incurred by, imposed upon, or asserted against any such
       indemnified party by reason of any claim, regulatory proceeding or
       litigation arising out of Trustee's negligence, bad faith, breach of
       duty, failure to perform any of its duties hereunder, or violation of
       applicable law, unless resulting from the negligence, breach of duty,
       violation of law, breach of this Agreement, or misconduct of the Company,
       the Committee, or the Arrangements. After a Change in Control, to the
       extent the Company fails to make any payment on account of an indemnity
       provided in this paragraph 10(b), in a reasonable timely manner, the
       Trustee may obtain payment from the Trust. After a Change in Control, if
       the Trustee undertakes or defends any litigation arising in connection
       with this Trust or to protect a Participant's or Beneficiary's rights
       under the Arrangements, the Company agrees to indemnify the Trustee
       against the Trustee's costs, reasonable expenses and liabilities
       (including, without limitation, attorneys' fees and expenses) relating
       thereto and to be primarily liable for such payments. After a Change in
       Control, if the Company does not pay such costs, expenses and liabilities
       in a reasonable timely manner, the Trustee may obtain payment from the
       Trust. This provision shall survive the termination of the Trust.

                                      -13-

<PAGE>

(c)    Prior to a Change in Control, the Trustee may consult with legal counsel
       (who may also be counsel for the Company generally) with respect to any
       of its duties or obligations hereunder. Following a Change in Control the
       Trustee shall select independent legal counsel and may consult with
       counsel or other persons with respect to its duties and with respect to
       the rights of Participants or their Beneficiaries under the Arrangements.

(d)    The Trustee may hire agents, accountants, actuaries, investment advisors,
       financial consultants or other professionals to assist it in performing
       any of its duties or obligations hereunder and may rely on any
       determinations made by such agents and information provided to it by the
       Company.

(e)    The Trustee shall have, without exclusion, all powers conferred on the
       Trustee by applicable law, unless expressly provided otherwise herein.

(f)    Notwithstanding any powers granted to the Trustee pursuant to this Trust
       Agreement or to applicable law, the Trustee shall not have any power that
       could give this Trust the objective of carrying on a business and
       dividing the gains therefrom, within the meaning of section 301.7701-2 of
       the Procedure and Administrative Regulations promulgated pursuant to the
       Internal Revenue Code.

(g)    At the Company's request, the Trustee shall timely file any federal,
       state or local tax and informational returns, and withhold and pay over
       any taxes, required to be filed and/or withheld and paid with respect to
       the Trust provided that the Company provides the Trustee, in a timely
       manner, with any information necessary for such filings which is not in
       the Trustee's possession.

Section 11.   Compensation and Expenses of The Trustee

The Trustee's compensation shall be as agreed in writing from time to time by
the Company and the Trustee. The Company shall pay all administrative expenses
and the Trustee's fees and shall promptly reimburse the Trustee for any agreed
upon fees and expenses of its agents. If not so paid, the agreed upon fees and
expenses shall be paid from the Trust. A current fee schedule is set forth in
Attachment B.

Section 12.   Resignation and Removal of The Trustee

(a)    Prior to a Change in Control, the Trustee may resign at any time by
       written notice to the Company, which shall be effective sixty (60) days
       after receipt of such notice unless the Company and the Trustee agree
       otherwise. Following a Change in Control, the Trustee may resign only
       after the appointment of a successor Trustee.

(b)    The Trustee may be removed by the Company on sixty days (60) days notice
       or upon shorter notice accepted by the Trustee prior to a Change in
       Control. Subsequent to a Change in Control, the Trustee may only be
       removed by the Company with the consent of a

                                      -14-

<PAGE>

       majority of the Participants (with weighted voting as measured by their
       relative account balances).

(c)    If the Trustee resigns within two years after a Change in Control, as
       defined herein, the Company may appoint a successor Trustee, which
       satisfies the requirements of Section 13, with the consent of a majority
       of the Participants (with weighted voting as measured by their relative
       account balances). Absent such consent, the Company, or if the Company
       fails to act within a reasonable period of time following such
       resignation, the Trustee, shall apply to a court of competent
       jurisdiction for the appointment of a successor Trustee which satisfies
       the requirements of Section 13 or for instructions.

(d)    Upon resignation or removal of the Trustee and appointment of a successor
       Trustee, all assets shall subsequently be transferred to the successor
       Trustee. The transfer shall be completed within sixty (60) days after
       receipt of notice of resignation, removal or transfer, unless the Company
       extends the time limit.

(e)    If the Trustee resigns or is removed, a successor shall be appointed by
       the Company, in accordance with Section 13 hereof, by the effective date
       of resignation or removal under paragraph(s) (a) or (b) of this section.
       If no such appointment has been made, the Trustee may apply to a court of
       competent jurisdiction for appointment of a successor or for
       instructions. All expenses of the Trustee in connection with the
       proceeding shall be allowed as administrative expenses of the Trust.

Section 13.   Appointment of Successor

(a)    If the Trustee resigns or is removed in accordance with Section 12
       hereof, the Company may appoint, subject to Section 12, any third party
       national banking association with a market capitalization exceeding
       $100,000,000 to replace the Trustee upon resignation or removal. The
       successor Trustee shall have all of the rights and powers of the former
       Trustee, including ownership rights in the Trust. The former Trustee
       shall execute any instrument necessary or reasonably requested by the
       Company or the successor Trustee to evidence the transfer.

(b)    The successor Trustee need not examine the records and acts of any prior
       Trustee and may retain or dispose of existing Trust assets, subject to
       Section 8 and 9 hereof. The successor Trustee shall not be responsible
       for and the Company shall indemnify and defend the successor Trustee from
       any claim or liability resulting from any action or inaction of any prior
       Trustee or from any other past event, or any condition existing at the
       time it becomes successor Trustee.

Section 14.   Amendment or Termination

(a)    This Trust Agreement may be amended by a written instrument executed by
       the Trustee and the Company. Notwithstanding the foregoing, no such
       amendment shall conflict with the terms of the Arrangements or shall make
       the Trust revocable after it has become irrevocable

                                      -15-

<PAGE>

       in accordance with Section 1 hereof, or otherwise adversely affect the
       rights of any Participant or Beneficiary.

(b)    Following a Change in Control, the Trust shall not terminate until the
       date on which Participants and their Beneficiaries have received all of
       the benefits due to them under the terms and conditions of the
       Arrangements.

(c)    Upon written approval of all Participants or Beneficiaries entitled to
       payment of benefits pursuant to the terms of the Arrangements, the
       Company may terminate this Trust prior to the time all benefit payments
       under the Arrangements have been made. All assets in the Trust at
       termination shall be returned to the Company.

(d)    This Trust Agreement may not be amended by the Company following a
       Potential Change in Control or Change in Control without the written
       consent of a majority of the Participants (with weighted voting as
       measured by their relative account balances).

Section 15.   Change in Control

(a)    For purposes of this Trust, the following terms shall be defined as set
       forth below:

       (1)    Potential Change in Control shall mean:

                            (i)   the purchase or other acquisition by any
                     person, entity or group of persons, within the meaning of
                     Section 13(d) or 14(d) of the Securities Exchange Act of
                     1934 ("Act"), or any comparable successor provisions, other
                     than the trustee of any other trust or plan maintained for
                     the benefit of employees of the Company, of beneficial
                     ownership (within the meaning of Rule 13d-3 promulgated
                     under the Act) of 20 percent or more of either the
                     outstanding shares of common stock or the combined voting
                     power of the Company's then outstanding voting securities
                     entitled to vote generally;

                            (ii)  the announcement by any person of an intention
                     to take actions which might reasonably result in a business
                     combination between the Company and an entity which has a
                     market capitalization equal to or greater than 80% of the
                     Company;

                            (iii) the issuance of a proxy statement by the
                     Company with respect to an election of directors for which
                     there is proposed one or more directors who are not
                     recommended by the Board of Directors of the Company or its
                     nominating committee, where the election of such proposed
                     director or directors would result in the individuals who,
                     as of the date hereof, constitute the Board (the "Incumbent
                     Board") ceasing for any reason to constitute at least an
                     80% majority of the Board, provided that any person
                     becoming a director subsequent to the date hereof whose
                     election, or

                                      -16-

<PAGE>

                     nomination for election by the Company's shareholders, was
                     approved by a vote of at least a majority of the directors
                     then comprising the Incumbent Board (other than an election
                     or nomination of an individual whose initial assumption of
                     office is in connection with an actual or threatened
                     election contest relating to the election of the directors
                     of the Company, as such terms are used in Rule 14a-11 of
                     Regulation 14A promulgated under the Security Exchange Act
                     of 1934 (the "Act")) shall be considered as though such
                     person were a member of the Incumbent Board; or

                            (iv)  submission to the Incumbent Board of
                     nominations which, if approved, would change the Executive
                     Officer configuration of the Company (at the Executive Vice
                     President level and above) by 50% or more.

       (2)    "Change in Control" means the occurrence of any of the following
              events:

              (i)    A merger, consolidation or reorganization of the Company
                     into or with another corporation or other legal person if
                     the stockholders of the Company, immediately before such
                     merger, consolidation or reorganization, do not,
                     immediately following such merger, consolidation or
                     reorganization, then own directly or indirectly, more than
                     50% of the combined voting power of the then-outstanding
                     voting securities of the corporation or other legal person
                     resulting from such merger, consolidation or reorganization
                     in substantially the same proportion as their ownership of
                     Voting Securities (as hereinafter defined) immediately
                     prior to such merger, consolidation or reorganization;

              (ii)   The Company sells all or substantially all of its assets to
                     another corporation or other legal person, or there is a
                     complete liquidation or dissolution of the Company;

              (iii)  There is a report filed on Schedule 13D or Schedule 14D-1
                     (or any successor schedule, form or report), each as
                     promulgated pursuant to the Securities Exchange Act of
                     1934, as amended (the "Act"), disclosing that any person
                     (as the term "person" is used in Section 13(d)(3) or
                     Section 14(d)(2) of the Act) has become the beneficial
                     owner (as the term "beneficial owner" is defined under Rule
                     13d-3 or any successor rule or regulation promulgated under
                     the Act) of securities representing 20% or more of the
                     combined voting power of the then-outstanding voting
                     securities of the Company ("Voting Securities") (computed
                     in accordance with the standards for the computation of
                     total percentage ownership for the purposes of Schedule 13D
                     or Schedule 14D-1 (or any successor schedule, form or
                     report)); or

              (iv)   The Company files a report or proxy statement with the
                     Securities and Exchange Commission pursuant to the Act
                     disclosing in response to Form

                                      -17-

<PAGE>

                     8-K or Schedule 14A (or any successor schedule, form or
                     report or item therein) that a change in control of the
                     Company has occurred or will occur in the future pursuant
                     to any then-existing contract or transaction.

              Notwithstanding the provisions set forth in (iii) or (iv) above, a
              "Change in Control" shall not be deemed to have occurred for
              purposes hereof solely because (i) the Company, (ii) any business
              entity 80% or more owned or controlled by the Company
              ("Affiliate"), or (iii) any employee stock ownership plan or any
              other employee benefit plan of the Company or any Affiliate either
              files or becomes obligated to file a report or a proxy statement
              under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or
              Schedule 14A (or any successor schedule, form or report or item
              therein) under the Act disclosing beneficial ownership by it of
              Voting Securities, whether in excess of 20% or otherwise, or
              because the Company reports that a change in control of the
              Company has occurred or will occur in the future by reason of such
              beneficial ownership. For purposes of calculating beneficial
              ownership pursuant to this subsection, any Voting Securities held
              by Donald R. Horton as of the date hereof or received by Donald R.
              Horton in connection with any merger involving the Company and any
              affiliate of the Company shall not be included in the calculation
              of beneficial ownership.

              For purposes of this Section 15(a), the Incumbent Board, by a
              majority vote, shall have the power to determine on the basis of
              information known to them (a) the number of shares beneficially
              owned by any person, entity or group; (b) whether there exists an
              agreement, arrangement or understanding with another as to matters
              referred to in this Section 15(a); and (c) such other matters with
              respect to which a determination is necessary under this Section
              15(a).

       (3)    Majority of Participants shall mean participants whose vested
              account balance within the Trust exceed 50% of the Trust Assets.

(b)    The General Counsel of the Company shall have the specific authority to
       determine whether a Potential Change in Control or Change in Control has
       transpired under the guidance of Section 15(a) and shall be required to
       give the Trustee notice of a Change in Control or a Potential Change in
       Control. The Trustee shall be entitled to rely upon such notice, but if
       the Trustee receives notice of a Change in Control or Potential Change in
       Control from another source, the Trustee shall make its own independent
       determination.

Section 16.   Miscellaneous

(a)    Any provision of this Trust Agreement prohibited by law shall be
       ineffective to the extent of any such prohibition, without invalidating
       the remaining provisions hereof.

(b)    The Company hereby represents and warrants that all of the Arrangements
       have been established, maintained and administered in accordance with all
       applicable laws, including without limitation, ERISA. The Company hereby
       indemnifies and agrees to hold the

                                      -18-

<PAGE>

       Trustee harmless from all liabilities, including attorney's fees,
       relating to or arising out of the establishment, maintenance and
       administration of the Arrangements. To the extent the Company does not
       pay any of such liabilities in a reasonably timely manner, the Trustee
       may obtain payment from the Trust.

(c)    Benefits payable to Participants and their Beneficiaries under this Trust
       Agreement may not be anticipated, assigned (either at law or in equity),
       alienated, pledged, encumbered or subjected to attachment, garnishment,
       levy, execution or other legal or equitable process.

(d)    This Trust Agreement shall be governed by and construed in accordance
       with the laws of North Carolina.

(e)    Nothing herein shall effect the employment relationship of Participants
       and the Company, give any Participant a right to employment, or prevent
       the Company from terminating them.

(f)    This Agreement shall be binding upon and inure to the benefit of any
       successor to the Company or its business as the result of merger,
       consolidation, reorganization, transfer of assets or otherwise and any
       subsequent successor thereto. In the event of any such merger,
       consolidation, reorganization, transfer of assets or other similar
       transaction, the successor to the Company or its business or any
       subsequent successor thereto shall promptly notify the Trustee in writing
       of its successorship. In no event shall any such transaction described
       herein suspend or delay the rights of Participants or Beneficiaries to
       receive benefits hereunder.

                                      -19-

<PAGE>

IN WITNESS WHEREOF, this Grantor Trust Agreement has been executed on behalf of
the parties hereto on the day and year first above written.

D.R. HORTON, INC.                           WACHOVIA BANK, NATIONAL ASSOCIATION,
                                            as TRUSTEE

By:  /s/ Samuel R. Fuller                   By:  /s/ John N. Smith
     ------------------------------------        -------------------------------

Its: Executive Vice President, Treasurer &  Its: Senior Vice President
CFO

ATTEST:                                     ATTEST:

By:  /s/ Paul Buchschacher                  By:  /s/ Mary H. Jones
     ------------------------------------        -------------------------------

Its: Vice President and Corporate Counsel   Its: /s/ Vice President

                                      -20-

<PAGE>

                                  Attachment A

The following Arrangements are covered by this Trust: D.R. Horton Deferred
Compensation Plan

                                      -21-

<PAGE>

                                  Attachment B

                              Trustee Fee Schedule

                                      -22-<PAGE>

                                                                   EXHIBIT 10.35

                               FIRST AMENDMENT TO
                                CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment") dated as of
August 14, 2000 between CH Mortgage Company I, Ltd., a Texas limited partnership
("Borrower"), U.S. Bank National Association, as agent ("Agent") and Lenders
referred to below ("Lenders").

         WITNESSETH THAT:

         WHEREAS, the Borrower, the Lenders and the Agent are parties to a
Credit Agreement dated as of August 13, 1999 (the "Credit Agreement"), pursuant
to which the Lenders provide the Borrower with a revolving mortgage warehousing
credit facility;

         WHEREAS, the Borrower and the Lenders have agreed to amend the Credit
Agreement upon the terms and conditions herein set forth;

         NOW, THEREFORE, for value received, the receipt and sufficiency of
which are hereby acknowledged, the Borrower and the Lenders agree as follows:

         1.   Certain Defined Terms. Each capitalized term used herein without
being defined herein that is defined in the Credit Agreement shall have the
meaning given to it therein.

         2.   Amendments to Credit Agreement. The Credit Agreement is hereby
amended as follows:

              (a)   The following definitions in Section 1.01 of the Credit
         Agreement are hereby amended in their entirety to read as follows:

                    "Borrower's Consolidated Tangible Net Worth" means, as of
              any date, the remainder of (a) all assets of Borrower and the
              Restricted Subsidiaries on a Consolidated basis minus (b) the sum
              of (i) all GAAP Indebtedness and all Contingent Indebtedness of
              Borrower and the Restricted Subsidiaries, (ii) all assets of
              Borrower and the Restricted Subsidiaries which would be classified
              as intangible assets under GAAP, including Capitalized Servicing
              Rights, goodwill (whether representing the excess cost over book
              value of assets acquired or otherwise), patents, trademarks, trade
              names, copyrights, franchises, deferred charges and intercompany
              receivables, (iii) investments in and advances to Unrestricted
              Subsidiaries, and (iv) investments in and advances (other than
              loans permitted pursuant to Section 6.05(f)) to JV's plus (c) the
              Market Value of Borrower's servicing rights.

<PAGE>

                            "Drawdown Termination Date" means the earlier of
                     August 14, 2001, or the day on which the Notes first become
                     due and payable in full.

                        "Majority Lenders" means (i) if there are less than
                  three Lenders, Lenders collectively having Percentage Shares
                  totaling in the aggregate one hundred percent (100%); and (ii)
                  if there are three or more Lenders, Lenders collectively
                  having Percentage Shares totaling in the aggregate at least
                  sixty percent (60%).

                  (b)   Section 1.01 of the Credit Agreement is further amended
         to add the following definition in the appropriate alphabetical order:

                        "JV" means a joint venture (whether structured as a
                  corporation, partnership, limited liability company, or other
                  entity or arrangement) between the Borrower and one or more
                  builders, developers, title companies, or other service
                  providers in the residential real estate industry for the
                  purpose of making Mortgage Loans.

                  (c)   Section 6.05 of the Credit Agreement is hereby amended
         in its entirety to read as follows:

                        Section 6.05 Loans, Advances, and Investments. Neither
                  Borrower nor any Restricted Subsidiary shall make any loan
                  (other than Mortgage Loans), advance, or capital contribution
                  to, or investment in (including any investment in any
                  Restricted Subsidiary, joint venture or partnership), or
                  purchase or otherwise acquire any of the capital stock,
                  securities, ownership interests, or evidences of indebtedness
                  of, any Person (collectively, "Investment"), or otherwise
                  acquire any interest in, or control of, another Person, except
                  for the following:

                        (a)    Cash Equivalents;

                        (b)    Any acquisition of securities or evidences of
                  indebtedness of others when acquired by Borrower in settlement
                  of accounts receivable or other debts arising in the ordinary
                  course of its business, so long as the aggregate amount of any
                  such securities or evidences of indebtedness is not material
                  to the business or condition (financial or otherwise) of
                  Borrower;

                        (c)    Mortgage Notes acquired in the ordinary course of
                  Borrower's business;

                        (d)    Investment in any Subsidiary or JV; provided that
                  at the time any such investment is made and immediately
                  thereafter, Borrower and the Restricted Subsidiaries are in
                  compliance with all covenants set forth in the Loan Documents
                  and no Default or Event of Default shall have occurred and be
                  continuing;

                        (e)    Loans to officers or employees in an aggregate
                  amount not to exceed $300,000; and

<PAGE>

                   (f)   Loans made to JV's in an amount not to exceed
              $10,000,000 at any one time outstanding, secured by Mortgage Loans
              originated with the proceeds of such loans and covered by a bona
              fide current, unused and unexpired whole loan commitment issued in
              favor of and held by such JV made by an Approved Investor or the
              Borrower.

              (d)  Schedule 5 to the Credit Agreement is hereby amended in its
         entirety to read as set forth on Schedule 5 hereto.

         3.   Exiting Lender. On the Effective Date, the aggregate unpaid
principal amount of the Loans made by Hibernia Bank ("Hibernia") under the
Credit Agreement and related Note together with all interest, fees and other
amounts, if any, payable to Hibernia hereunder as of the Effective Date (the
"Payoff Amount"), shall be repaid in full from the proceeds of Loans made by the
remaining Lenders, and the Commitment of Hibernia under the Credit Agreement
shall terminate. The Agent shall distribute to Hibernia by not later than 3:00
P.M. (Minneapolis time) on the Effective Date out of the proceeds of the Loans
made for such purpose, the amount required to pay Hibernia's Payoff Amount in
full, whereupon Hibernia shall no longer be a party to the Credit Agreement.

         4.   Conditions to Effectiveness of this Amendment. This Amendment
shall become effective when the Agent shall have received at least eight (8)
counterparts of this Amendment, duly executed by the Borrower and all of the
Lenders, provided the following conditions are satisfied:

              (a)  Before and after giving effect to this Amendment, the
         representations and warranties of the Borrower in Article IV of the
         Credit Agreement and Section 5 of the Pledge and Security Agreement
         shall be true and correct as though made on the date hereof, except for
         changes that are permitted by the terms of the Credit Agreement.

              (b)  Before and after giving effect to this Amendment, no Event of
         Default and no Default shall have occurred and be continuing.

              (c)  No material adverse change in the business, assets, financial
         condition or prospects of the Borrower shall have occurred since May
         31, 1999.

              (d)  The Agent shall have received the following, each duly
         executed or certified, as the case may be, and dated as of the date of
         delivery thereof::

                   (i)   a new Note payable to each Lender holding a Commitment
              from and after the Effective Date, in the amount of such Lender's
              respective Commitment Amount after giving effect to the increase
              thereof pursuant to this Amendment (each, a "New Note"), duly
              executed by the Company;

                                      -3-

<PAGE>

                           (ii)  copy of resolutions of the Board of Directors
                  of the Borrower, certified by its respective Secretary or
                  Assistant Secretary, authorizing or ratifying the execution,
                  delivery and performance of this Amendment;

                           (iii) a certified copy of any amendment or
                  restatement of the Articles of Incorporation or the By-laws
                  of the Borrower made or entered following the date of the most
                  recent certified copies thereof furnished to the Lenders;

                           (iv)  certified copies of all documents evidencing
                  any necessary corporate action, consent or governmental or
                  regulatory approval (if any) with respect to this Amendment;

                           (v)   a certificate of good standing for the Borrower
                  in the jurisdiction of its incorporation, certified by the
                  appropriate governmental official as of a date not more than
                  10 days prior to the Effective Date; and

                           (vi)  such other documents, instruments, opinions and
                  approvals as the Agent may reasonably request.

                  (e)      The Agent shall have received the amendment fee
         required by Section 10.02 of the Credit Agreement.

         5.       Acknowledgments. The Borrower and each Lender acknowledge
that, as amended hereby, the Credit Agreement remains in full force and effect
with respect to the Borrower and the Lenders, and that each reference to the
Credit Agreement in the Loan Documents shall refer to the Credit Agreement as
amended hereby. The Borrower confirms and acknowledges that it will continue to
comply with the covenants set out in the Credit Agreement and the other Loan
Documents, as amended hereby, and that its representations and warranties set
out in the Credit Agreement and the other Loan Documents, as amended hereby, are
true and correct as of the date of this Amendment. The Borrower represents and
warrants that (i) the execution, delivery and performance of this Amendment is
within its corporate powers and has been duly authorized by all necessary
corporate action; (ii) this Amendment has been duly executed and delivered by
the Borrower and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms (subject
to limitations as to enforceability which might result from bankruptcy,
insolvency, or other similar laws affecting creditors' rights generally and
general principles of equity) and (iii) no Events of Default or Unmatured Events
of Default exist.

         6.       General.

                  (a) The Borrower agrees to reimburse the Agent upon demand for
         all reasonable expenses (including reasonable attorneys fees and legal
         expenses) incurred by the Agent in the preparation, negotiation and
         execution of this Amendment and any other document required to be
         furnished herewith, and to pay and save the Lenders harmless from all
         liability for any stamp or other taxes which may be payable with
         respect to the

                                      -4-

<PAGE>

       execution or delivery of this Amendment, which obligations of the
       Borrower shall survive any termination of the Credit Agreement.

             (b)  This Amendment may be executed in as many counterparts as may
       be deemed necessary or convenient, and by the different parties hereto on
       separate counterparts, each of which, when so executed, shall be deemed
       an original but all such counterparts shall constitute but one and the
       same instrument.

             (c)  Any provision of this Amendment which is prohibited or
       unenforceable in any jurisdiction shall, as to such jurisdiction, be
       ineffective to the extent of such prohibition or unenforceability without
       invalidating the remaining portions hereof or affecting the validity or
       enforceability of such provisions in any other jurisdiction.

             (d)  This Amendment shall be governed by, and construed in
       accordance with, the internal law, and not the law of conflicts, of the
       State of Minnesota, but giving effect to federal laws applicable to
       national banks.

             (e)  This Amendment shall be binding upon the Borrower, the
       Lenders, the Agent and their respective successors and assigns, and shall
       inure to the benefit of the Borrower, the Lenders, the Agent and the
       successors and assigns of the Lenders and the Agent.

                                      -5-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.

                                            CH MORTGAGE COMPANY I, LTD.

                                            By: CH Mortgage Company GP, Inc.,
                                                its General Partner

                                                By: /s/ James D. Dolph
                                                    ----------------------------
                                                      James D. Dolph
                                                      Senior Vice President

                                            U.S. BANK NATIONAL ASSOCIATION,
                                            as Agent and Lender

                                            By: /s/ Kathleen M. Connor
                                                --------------------------------
                                                      Kathleen M. Connor
                                                      Vice President

                                            RESIDENTIAL FUNDING CORPORATION

                                            By: /s/ Sam Bryan
                                                --------------------------------
                                                      Sam Bryan
                                                      Director

                                            HIBERNIA BANK

                                            By: /s/ Susan H. Robinson
                                                --------------------------------
                                                      Susan H. Robinson
                                                      Senior Vice President

             Signature Page to First Amendment to Credit Agreement

                                       S-1

<PAGE>

                                                FIRST UNION NATIONAL BANK

                                                By: /s/ Anthony J. Alfieri
                                                    ----------------------------
                                                      Anthony J. Alfieri
                                                      Vice President

                                                NATIONAL CITY BANK OF KENTUCKY

                                                By: /s/ Gary W. Sieveking
                                                    ----------------------------
                                                      Gary W. Sieveking
                                                      Vice President

              Signature Page to First Amendment to Credit Agreement

                                       S-2

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