Document:

EX-4.1

 Exhibit 4.1 

Execution Version 
  

 
  

D.R. HORTON, INC. AND THE GUARANTORS PARTY HERETO 

2.600% Senior Notes due 2025 
  

 
 Supplemental
Indenture 
 Dated as of May 5, 2020 
  

 
 BRANCH
BANKING AND TRUST COMPANY, 
 as Trustee 
  

 
  

 

 TABLE OF CONTENTS 
  

							
	 	 	 	  	Page	 
			
		 	ARTICLE ONE	  			
			
		 	SCOPE OF SUPPLEMENTAL INDENTURE	  			
	 Section 1.01.
	 	 General.
	  	 	1	
	 Section 1.02.
	 	 Specified Modifications in Respect of the Notes.
	  	 	2	
			
		 	ARTICLE TWO	  			
			
		 	CERTAIN DEFINITIONS	  			
			
		 	ARTICLE THREE	  			
			
		 	COVENANTS	  			
	 Section 3.01.
	 	 Limitations on Secured Debt.
	  	 	10	
	 Section 3.02.
	 	 Restrictions on Sale and Leaseback Transactions.
	  	 	11	
	 Section 3.03.
	 	 Offer to Purchase upon Change of Control Triggering Event.
	  	 	12	
			
		 	ARTICLE FOUR	  			
			
		 	MISCELLANEOUS	  			
	 Section 4.01.
	 	 Governing Law.
	  	 	13	
	 Section 4.02.
	 	 No Adverse Interpretation of Other Agreements
	  	 	13	
	 Section 4.03.
	 	 No Recourse Against Others.
	  	 	14	
	 Section 4.04.
	 	 Successors and Assigns.
	  	 	14	
	 Section 4.05.
	 	 Counterparts; Electronic Signature
	  	 	14	
	 Section 4.06.
	 	 Severability
	  	 	14	
			
	 Exhibit A
	 	 Form of Security
	  			
	 Exhibit B
	 	 Form of Notification Security of Guarantee
	  			

  

  
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 Second Supplemental Indenture dated as of May 5, 2020 (“Supplemental
Indenture”), by and among D.R. Horton, Inc., a Delaware corporation (the “Company”), each of the subsidiaries of the Company that are signatories hereto as the initial guarantors (the “Initial Guarantors”)
and Branch Banking and Trust Company, as the trustee (including any successor replacing such person in accordance with the applicable provisions of the Indenture, the “Trustee”), to the Indenture dated as of October 10, 2019,
by and between the Company and the Trustee (as amended, modified or supplemented from time to time in accordance therewith, the “Base Indenture”). 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of Notes (each as defined
herein): 
 WHEREAS, the Company and the Trustee have duly authorized the execution and delivery of the Base Indenture to provide for the
issuance from time to time of senior debt securities (the “Securities”) to be issued in one or more Series as in the Base Indenture provided; 

WHEREAS, the Company and the Initial Guarantors desire and have requested the Trustee to join them in the execution and delivery of this
Supplemental Indenture in order to establish and provide for the issuance by the Company of a Series of Securities designated as its 2.600% Senior Notes due 2025, substantially in the form attached hereto as Exhibit A (including any
Additional Notes, as defined below, the “Notes”), initially guaranteed by the Initial Guarantors, on the terms set forth herein; 

WHEREAS, Section 2.01 of the Base Indenture provides that a supplemental indenture may be entered into by the Company, the Initial
Guarantors and the Trustee for such Notes, provided certain conditions are met; 
 WHEREAS, the conditions set forth in the Base Indenture
for the execution and delivery of this Supplemental Indenture have been complied with; and 
 WHEREAS, all things necessary to make this
Supplemental Indenture a valid agreement of the Company, the Initial Guarantors and the Trustee, in accordance with its terms, and a valid amendment of, and supplement to, the Base Indenture have been done; 

NOW, THEREFORE: 
 In
consideration of the premises and the purchase and acceptance of the Notes by the Holders thereof the Company and the Initial Guarantors mutually covenant and agree with the Trustee, for the equal and ratable benefit of the Holders, that the Base
Indenture is supplemented and amended, to the extent expressed herein, as follows: 
 ARTICLE ONE 

Scope of Supplemental Indenture 

Section 1.01. General. 
 The changes,
modifications and supplements to the Base Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Notes and shall not apply to any other Securities that may have been or may hereafter
be issued under the Base Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements. 

 Pursuant to this Supplemental Indenture, there is hereby created and designated the Notes as
a Series of Securities under the Base Indenture entitled “2.600% Senior Notes due 2025.” The Notes shall be substantially in the form of Exhibit A hereto and will mature and bear interest as provided in such form and have the other
terms and conditions set forth therein, this Supplemental Indenture and the Base Indenture (to the extent not superseded hereby). The Company shall pay interest on overdue principal at 2.600% per annum; it shall pay interest on overdue installments
of interest at 2.600% per annum. The Notes shall be guaranteed by the Guarantors as provided in the form of Exhibit B hereto. The Trustee will initially be the Registrar and Paying Agent for the Notes, and DTC will initially be the Depositary
for the Notes. The covenants provided in Article Three of this Supplemental Indenture are applicable (unless waived or amended as provided in the Base Indenture) so long as the Notes are outstanding or until defeasance or other discharge
pursuant to the Base Indenture. An aggregate principal amount of $500,000,000 of Notes will be issued on the Issue Date. Additional Notes (the “Additional Notes”) in an unlimited amount may be issued in one or more issuances from
time to time on the same terms and conditions, except for issue date, and if applicable, the issue price and the first interest payment, either of which may differ from the respective terms of the previously issued Notes of same Series, and with the
same CUSIP numbers as the Notes offered hereby (to the extent permissible under applicable law) without the consent of Holders of the Notes, except that if any Additional Notes are not fungible with the Notes issued on the Issue Date for U.S.
federal income tax purposes, such Additional Notes will have a separate CUSIP number. The Notes initially issued hereunder and any such Additional Notes shall vote on all matters, and otherwise be treated as, a single Series for all purposes under
the Indenture. 
 Section 1.02. Specified Modifications in Respect of the Notes. 

(1)    Article Six of the Base Indenture shall apply in respect of the Notes; provided that with respect to clause
(3) under the first paragraph and the second paragraph of Section 6.01 of the Base Indenture, Section 3.03 hereof shall be deemed such specified provision which breach thereof shall constitute, together with Article Five of the Base
Indenture, an Event of Default with notice but without passage of time. 
 (2)    Section 7.05 of the Base Indenture
shall apply in respect of the Notes; provided that the Trustee shall not have any discretion to withhold any notice of the Default with respect to any breach of Section 3.03 hereof, irrespective of any determination that withholding of
such notice is in the interest of the Holders of the Notes. 
 (3)    Article Ten of the Base Indenture shall apply in
respect of the Notes; provided that, notwithstanding anything to the contrary in the Base Indenture and this Supplemental Indenture, any amendment or waiver of Section 3.03 hereof (prior to the occurrence of a Change of Control
Triggering Event) will require consent of Holders of a majority of the outstanding principal amount of Notes. 
 ARTICLE TWO 

Certain Definitions 
 The
following terms have the meanings set forth below in this Supplemental Indenture. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Base Indenture. To the extent terms defined herein differ from the Base
Indenture the terms defined herein will govern. 
 “Attributable Debt” means, in respect of a Sale and Leaseback
Transaction, the present value (discounted at the weighted average effective interest cost per annum of the outstanding debt of the Company, compounded semiannually) of the obligation of the lessee for rental payments during the remaining

  
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term of the lease included in such transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended or, if earlier, until the earliest
date on which the lessee may terminate such lease upon payment of a penalty (in which case the obligation of the lessee for rental payments shall include such penalty), after excluding all amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water and utility rates and similar charges. 
 “Change of Control” means: 

(1)    any sale, lease or other transfer (in one transaction or a series of transactions) of all or
substantially all of the consolidated assets of the Company and its Subsidiaries to any Person (other than a Subsidiary of the Company); provided, however, that a transaction where the holders of all classes of Voting Stock of the
Company immediately prior to such transaction own, directly or indirectly, Voting Stock representing more than 50% of the voting power of all Voting Stock of such Person immediately after such transaction shall not be a Change of Control; 

(2)    a “person” or “group” (within the meaning of Section 13(d) of the Exchange
Act (other than (x) the Company or (y) Donald R. Horton, Terrill J. Horton, or their respective wives, children, grandchildren and other descendants, or any trust or other entity formed or controlled by any of such individuals (each an
“Excluded Person”))) publicly discloses, including, without limitation, by filing a Schedule 13D or Schedule TO, or the Company or any of its Subsidiaries publicly discloses, including without limitation, by filing any other
schedule, form or report under the Exchange Act (including, without limitation, a Current Report on Form 8-K), facts indicating that such person or group has become the ultimate “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act) of Voting Stock of the Company representing more than 50% of the voting power of the Voting Stock of the Company; or 

(3)    the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of
the Company; provided, however, that a liquidation or dissolution of the Company that is part of a transaction that does not constitute a Change of Control under the proviso contained in clause (1) above shall not constitute a
Change of Control. 
 Any person or group whose acquisition of beneficial ownership constitutes a Change of Control under clause (2) of
the foregoing definition in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates, constitute an additional Excluded Person. 

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Ratings Downgrade Event. 

“Comparable Treasury Issue” means the United States Treasury security selected by at least two Reference Treasury Dealers as
having a maturity comparable to the remaining term (the “Remaining Life”) of the Notes to be redeemed calculated as if the maturity date of such Notes was the Par Call Date, that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes. 

“Comparable Treasury Price” means, with respect to any redemption date, (a) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such redemption date, as set forth in the daily sta 

  
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tistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities” or
(b) if such release (or any successor release) is not published or does not contain such price on such business day, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 

“Consolidated Adjusted Tangible Assets” of the Company as of any date means the Consolidated Tangible Assets of the Company
and the Guarantors at the end of the fiscal quarter immediately preceding such date less (a) the book value of any assets securing any Non-Recourse Indebtedness, and (b) all short term liabilities of
the Company and the Guarantors, except for liabilities payable by their terms more than one year from the date of determination (or renewable or extendible at the option of the obligor to a maturity date more than one year after such date) and
liabilities in respect of retiree benefits other than persons for which the Company or the Guarantors are required to accrue pursuant to Accounting Standards Codification 715-60 (or any successor provision),
in each case as determined in accordance with GAAP. 
 “Consolidated Tangible Assets” of the Company as of any date means
the book value of the total assets of the Company and the Guarantors (less applicable reserves) on a consolidated basis at the end of the fiscal quarter immediately preceding such date, less: (1) Intangible Assets and (2) appropriate
adjustments on account of minority interests of other Persons holding equity investments in Guarantors, in each case as determined in accordance with GAAP. 

“Fitch” means Fitch Ratings. 

“GAAP” means generally accepted accounting principles set forth in the accounting standards codification of the Financial
Accounting Standards Board or in such other statements by such or any other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Issue Date. 

“Guarantors” means (i) initially, each of: 

C. Richard Dobson Builders, Inc., a Virginia corporation; 

CH Investments of Texas, Inc., a Delaware corporation; 

CHI Construction Company, an Arizona corporation; 

CHTEX of Texas, Inc., a Delaware corporation; 

Continental Homes, Inc., a Delaware corporation; 

Continental Homes of Texas, L.P., a Texas limited partnership; 

Continental Residential, Inc., a California corporation; 

D.R. Horton —CHAustin, LLC, a Delaware limited liability company; 

D.R. Horton—Colorado, LLC, a Delaware limited liability company; 

D.R. Horton - Crown, LLC, a Delaware limited liability company; 

D.R. Horton - Emerald, Ltd., a Texas limited partnership; 

D.R. Horton - Georgia, LLC, a Delaware limited liability company; 

D.R. Horton - Highland, LLC, a Delaware limited liability company; 

D.R. Horton - Indiana, LLC, a Delaware limited liability company; 

D.R. Horton - Iowa, LLC, a Delaware limited liability company; 

D.R. Horton - Permian, LLC, a Delaware limited liability company; 

D.R. Horton - Regent, LLC, a Delaware limited liability company; 

D.R. Horton - Terramor, LLC, a Delaware limited liability company; 

  
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 D.R. Horton - Texas, Ltd., a Texas limited partnership; 

D.R. Horton - WPH, LLC, a Delaware limited liability company; 

D.R. Horton, Inc. - Birmingham, an Alabama corporation; 

D.R. Horton, Inc. -Chicago, a Delaware corporation; 

D.R. Horton, Inc. - Dietz-Crane, a Delaware corporation; 

D.R. Horton, Inc. - Greensboro, a Delaware corporation; 

D.R. Horton, Inc. - Gulf Coast, a Delaware corporation; 

D.R. Horton, Inc. - Huntsville, a Delaware corporation; 

D.R. Horton, Inc. - Jacksonville, a Delaware corporation; 

D.R. Horton, Inc. - Louisville, a Delaware corporation; 

D.R. Horton, Inc. - Midwest, a California corporation; 

D.R. Horton, Inc. - Minnesota, a Delaware corporation; 

D.R. Horton, Inc. - New Jersey, a Delaware corporation; 

D.R. Horton, Inc. - Portland, a Delaware corporation; 

D.R. Horton, Inc. - Torrey, a Delaware corporation; 

D.R. Horton BAY, Inc., a Delaware corporation; 

D.R. Horton CA2, Inc., a California corporation; 

D.R. Horton CA3, Inc., a Delaware corporation; 

D.R. Horton CA4, LLC, a Delaware limited liability company; 

D.R. Horton Cruces Construction, Inc., a Delaware corporation; 

D.R. Horton Hawaii LLC, a Delaware limited liability company; 

D.R. Horton LA North, Inc., a Delaware corporation; 

D.R. Horton Los Angeles Holding Company, Inc., a California corporation; 

D. R. Horton Management Company, Ltd., a Texas limited partnership; 

D.R. Horton Materials, Inc., a Delaware corporation; 

D.R. Horton Serenity Construction, LLC, a Delaware limited liability company; 

D.R. Horton VEN Inc., a California corporation; 

DRH Cambridge Homes, LLC, a Delaware limited liability company; 

DRH Construction, Inc., a Delaware corporation; 

DRH—HWY 114, LLC, a Delaware limited liability company; 

DRH Regrem VII, LP, a Texas limited partnership; 

DRH Regrem XII, LP, a Texas limited partnership; 

DRH Regrem XIV, Inc., a Delaware corporation; 

DRH Regrem XV, Inc., a Delaware corporation; 

DRH Regrem XVI, Inc., a Delaware corporation; 

DRH Regrem XVII, Inc., a Delaware corporation; 

DRH Regrem XVIII, Inc., a Delaware corporation; 

DRH Regrem XIX, Inc., a Delaware corporation; 

DRH Regrem XX, Inc., a Delaware corporation; 

DRH Regrem XXI, Inc., a Delaware corporation; 

DRH Regrem XXII, Inc., a Delaware corporation; 

DRH Regrem XXIII, Inc., a Delaware corporation; 

DRH Regrem XXIV, Inc., a Delaware corporation; 

DRH Regrem XLII, LLC, a Delaware limited liability company; 

DRH Regrem XLIII, LLC, a Delaware limited liability company; 

DRH Regrem XLIV, LLC, a Delaware limited liability company; 

DRH Regrem XLV, LLC, a Delaware limited liability company; 

DRH Regrem XLVI, LLC, a Delaware limited liability company; 

DRH Regrem XLVII, LLC, a Delaware limited liability company; 

DRH Regrem XLVIII, LLC, a Delaware limited liability company; 

  
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 DRH Regrem XLIX, LLC, a Delaware limited liability company; 

DRH Regrem L, LLC, a Delaware limited liability company; 

DRH Regrem LI, LLC, a Delaware limited liability company; 

DRH Regrem LII, LLC, a Delaware limited liability company; 

DRH Regrem LIII, LLC, a Delaware limited liability company; 

DRH Regrem LIV, LLC, a Delaware limited liability company; 

DRH Regrem LV, LLC, a Delaware limited liability company; 

DRH Regrem XXV, Inc., a Delaware corporation; 

DRH Southwest Construction, Inc., a California corporation; 

DRH Tucson Construction, Inc., a Delaware corporation; 

HPH Homebuilders 2000 L.P., a California limited partnership; 

KDB Homes, Inc., a Delaware corporation; 

Lexington Homes—DRH, LLC, a Delaware limited liability company; 

Meadows I, Ltd., a Delaware corporation; 

Meadows II, Ltd., a Delaware corporation; 

Meadows VIII, Ltd., a Delaware corporation; 

Meadows IX, Inc., a New Jersey corporation; 

Meadows X, Inc., a New Jersey corporation; 

Melody Homes, Inc., a Delaware corporation; 

Pacific Ridge - DRH, LLC, a Delaware limited liability company; 

Schuler Homes of Arizona LLC, a Delaware limited liability company; 

Schuler Homes of California, Inc., a California corporation; 

Schuler Homes of Oregon, Inc., an Oregon corporation; 

Schuler Homes of Washington, Inc., a Washington corporation; 

SGS Communities at Grande Quay L.L.C., a New Jersey limited liability company; 

SHA Construction LLC, a Delaware limited liability company; 

SHLR of California, Inc., a California corporation; 

SHLR of Nevada, Inc., a Nevada corporation; 

SHLR of Washington, Inc., a Washington corporation; 

SRHI LLC, a Delaware limited liability company; 

SSHI LLC, a Delaware limited liability company; 

Vertical Construction Corporation, a Delaware corporation; 

Walker Drive, LLC, a Delaware limited liability company; 

Western Pacific Housing-Antigua, LLC, a Delaware limited liability company; 

Western Pacific Housing-Broadway, LLC, a Delaware limited liability company; 

Western Pacific Housing-Canyon Park, LLC, a Delaware limited liability company; 

Western Pacific Housing-Carrillo, LLC, a Delaware limited liability company; 

Western Pacific Housing-Communications Hill, LLC, a Delaware limited liability company; 

Western Pacific Housing-Copper Canyon, LLC, a Delaware limited liability company; 

Western Pacific Housing-Creekside, LLC, a Delaware limited liability company; 

Western Pacific Housing-Lomas Verdes, LLC, a Delaware limited liability company; 

Western Pacific Housing-McGonigle Canyon, LLC, a Delaware limited liability company; 

Western Pacific Housing-Mountaingate, L.P., a California limited partnership; 

Western Pacific Housing-Norco Estates, LLC, a Delaware limited liability company; 

Western Pacific Housing-Pacific Park II, LLC, a Delaware limited liability company; 

Western Pacific Housing-Park Avenue East, LLC, a Delaware limited liability company; 

Western Pacific Housing-Park Avenue West, LLC, a Delaware limited liability company; 

Western Pacific Housing-Playa Vista, LLC, a Delaware limited liability company; 

  
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 Western Pacific Housing-River Ridge, LLC, a Delaware limited liability company; 

Western Pacific Housing-Terra Bay Duets, LLC, a Delaware limited liability company; 

Western Pacific Housing-Torrey Meadows, LLC, a Delaware limited liability company; 

Western Pacific Housing-Torrey Village Center, LLC, a Delaware limited liability company; 

Western Pacific Housing-Windemere, LLC, a Delaware limited liability company; 

Western Pacific Housing, Inc., a Delaware corporation; 

Western Pacific Housing Management, Inc., a California corporation; and 

WPH-Camino Ruiz, LLC, a Delaware limited liability company; 

and (ii) each of the Company’s Subsidiaries that becomes a guarantor of the Notes pursuant to the provisions of the Indenture, in each case until
subsequently released from its Guarantee pursuant to the provisions of the Indenture. 
 “Intangible Assets” means with
respect to the Notes, all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, write-ups of assets over their prior
carrying value (other than write-ups which occurred prior to the Issue Date and other than, in connection with the acquisition of an asset, the write-up of the value of
such asset (within one year of its acquisition) to its fair market value in accordance with GAAP) and all other items which would be treated as intangibles on the consolidated balance sheet of the Company and the Guarantors prepared in accordance
with GAAP. 
 “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor
rating categories of Moody’s); a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch); a rating of BBB- or better by
S&P (or its equivalent under any successor rating categories of S&P); and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies selected by the Company. 

“Issue Date” means May 5, 2020, the date on which the Notes are originally issued under this Supplemental Indenture.

 “Moody’s” means Moody’s Investors Service, Inc. 

“Non-Guarantor Subsidiary” means any Subsidiary that is not a Guarantor. 

“Permitted Liens” means any Lien: 

(1)    incurred or deposits made to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, development obligations, progress payments, government contracts, utility services, developer’s or other obligations to make on-site or
off-site improvements and other obligations of like nature (exclusive of obligations for the payment of borrowed money but including the items referred to in the parenthetical in clause (i)(a) of the
definition of “Indebtedness”), in each case incurred in the ordinary course of business of the Company and the Guarantors, 

(2)    constituting attachment or judgment liens, 

(3)    securing Non-Recourse Indebtedness of the Company or any
Guarantor; provided that it applies only to the Property financed out of the net proceeds of such Non-Recourse Indebtedness (and any accessions thereto and proceeds thereof), 

  
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 (4)    securing Purchase Money Indebtedness;
provided that it applies only to the Property acquired, constructed or improved with the proceeds of such Purchase Money Indebtedness (and any accessions thereto and proceeds thereof), 

(5)    constituting purchase money Liens (including Capitalized Lease Obligations); provided that it
applies only to the Property acquired (and any accessions thereto and proceeds thereof) and the related Indebtedness is incurred within 180 days after the acquisition of such Property, 

(6)    constituting the right of a lender or lenders to which the Company or a Guarantor may be indebted to
offset against, or appropriate and apply to the payment of such, Indebtedness any and all balances, credits, deposits, accounts or money of the Company or a Guarantor with or held by such lender or lenders or its affiliates, 

(7)    constituting the pledge or deposit of cash or other Property in conjunction with obtaining surety,
performance, completion or payment bonds and letters of credit or other similar instruments or providing earnest money obligations, escrows or similar purpose undertakings or indemnifications in the ordinary course of business of the Company and the
Guarantors, 
 (8)    incurred in connection with pollution control, industrial revenue, water, sewage or
other public improvement bonds or any similar bonds, 
 (9)    statutory Liens of landlords and
carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other Liens imposed by law and arising in the ordinary course of business, 

(10)    leases or subleases granted to others not materially interfering with the ordinary course of
business of the Company and the Guarantors taken as a whole, 
 (11)    Liens securing community
development district bonds or similar bonds issued by any governmental authority to accomplish similar purposes, 

(12)    Liens on assets and properties of joint ventures or limited partnerships that are not wholly-owned
Subsidiaries of the Company or any of the Guarantors, and 
 (13)    Liens securing the Company’s or
the Guarantors’ obligations to third parties, in connection with joint development agreements with such third parties, to perform and/or pay for or reimburse the costs of construction and/or development related to or benefiting Company’s
or the Guarantors’ Property and Property belonging to such third parties. 
 “Purchase Money Indebtedness” means
Indebtedness of the Company or any Guarantor incurred for the purpose of financing all or any part of the purchase price, or the cost of construction or improvement, of any Property to be used in the ordinary course of business by the Company and
the Guarantors; provided, however, that (1) the aggregate principal amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness shall be incurred no later than 180 days after the
acquisition of such Property or completion of such construction or improvement. 
 “Rating Agency” means (1) each of
Moody’s, Fitch and S&P; or (2) if any of Moody’s, Fitch or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available (for reasons outside 

  
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of the Company’s control), a “nationally recognized statistical rating organization” as defined under Section 3(a)(62) of the Exchange Act selected by the Company (as
certified by a resolution of the Company’s Board of Directors) as a replacement Rating Agency for Moody’s, Fitch or S&P, or all three, as the case may be. 

“Ratings Downgrade Event” means the rating on the Notes is lowered independently by each of the Rating Agencies and the Notes
are rated below Investment Grade by all three Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period
following public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies); provided that
a Ratings Downgrade Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Ratings Downgrade Event for purposes of the
definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Company’s request
that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at
the time of the Ratings Downgrade Event). 
 “Reference Treasury Dealer Quotations” means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by
such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption date. 
 “Reference Treasury
Dealers” means (a) J.P. Morgan Securities LLC, Mizuho Securities (USA) LLC and a Primary Treasury Dealer selected by U.S. Bancorp Investments, Inc. (or any of their respective affiliates which are Primary Treasury Dealers), and their
respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in the United States of America (a “Primary Treasury Dealer”), the Company will
substitute therefor another Primary Treasury Dealer, and (b) any other Primary Treasury Dealer(s) selected by the Company. 

“Remaining Scheduled Payments” means, with respect to any Note, the remaining scheduled payments of the principal thereof to
be redeemed and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that if such redemption date is not an Interest Payment Date (as defined in such Note) with respect to
such Note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to the date of such redemption. 

“Revolving Credit Facility” means the revolving credit facility entered into by the Company pursuant to that certain Credit
Agreement dated as of September 7, 2012, as amended prior to the Issue Date and as may be further amended or modified from time to time, by and among the Company, Mizuho Bank LTD. (as successor in interest to The Royal Bank of Scotland plc), as
administrative agent, and the lenders and other parties thereto. 
 “S&P” means Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc. 

  
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 “Sale and Leaseback Transaction” means a sale or transfer made by the
Company or a Guarantor of any Property which is either (a) a manufacturing facility, project club house, amenity center and common area, office building, warehouse or distribution facility whose book value equals or exceeds 1% of Consolidated
Adjusted Tangible Assets as of the date of determination or (b) another Property which exceeds 5% of Consolidated Adjusted Tangible Assets as of the date of determination, if such sale or transfer is made with the agreement, commitment or
intention of leasing such Property to the Company or a Guarantor, provided that “Sale and Leaseback Transaction” shall not include (1) a sale-leaseback transaction relating to a Property entered into within 180 days after the
later of (i) the date of acquisition of such Property by the Company or a Guarantor and (ii) the date of the completion of construction or commencement of full operations on such Property, whichever is later, (2) a sale-leaseback
transaction which has a lease of no more than three years in length or (3) a sale or transfer made to the Company or another Guarantor. 

“Secured Debt” means any Indebtedness of the Company or any Guarantor which is secured by (a) a Lien in any Property of
the Company or a Guarantor (other than property excluded in clause (b)) or (b) a Lien on Capital Stock owned directly or indirectly by the Company or a Guarantor in a corporation or other entity (other than a
Non-Guarantor Subsidiary) or in the rights of the Company or a Guarantor in respect of Indebtedness of a corporation or other entity (other than a Non-Guarantor
Subsidiary) in which the Company or a Guarantor owns Capital Stock. The securing in the foregoing manner of any such Indebtedness which immediately prior thereto was not Secured Debt shall be deemed to be the creation of Secured Debt at the time
security is given. For the avoidance of doubt, cash collateralized letters of credit issued under the Revolving Credit Facility shall not constitute Secured Debt. 

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. 

“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of
any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. 

ARTICLE THREE 

Covenants 
 Section 3.01.
Limitations on Secured Debt. 
 The Company will not, and will not cause or permit any Guarantor to, create, incur, assume or
guarantee any Secured Debt unless the Notes are secured equally and ratably with (or prior to) such Secured Debt, provided that the foregoing does not prohibit the creation, incurrence, assumption or guarantee of: 

(1)    Secured Debt which is secured by Liens on model homes, homes held for sale, homes that are under construction or
under contract for sale, contracts for the sale of homes, land (improved or unimproved), contracts for the sale of land, project club houses, amenity centers and common areas, manufacturing plants, warehouses, distribution facilities or office
buildings, and fixtures and equipment located at or on any of the foregoing or leasehold or other interests in any of the foregoing; 

  
 -10- 

 (2)    Secured Debt which is secured by a Lien on Property at the time
of its acquisition by the Company or a Guarantor, which Lien secures obligations assumed by the Company or a Guarantor, or on the Property of a corporation or other entity at the time it is merged into or consolidated with the Company or a Guarantor
or becomes a Guarantor as a result of the acquisition of its Capital Stock by the Company or a Guarantor (other than Secured Debt created in contemplation of the acquisition of such Property or the consummation of such a merger or consolidation or
acquisition where the Lien attaches to or affects the Property of the Company or a Guarantor prior to such transaction); 

(3)    Secured Debt which is secured by Liens arising from conditional sales agreements or title retention agreements with
respect to Property acquired by the Company or a Guarantor; 
 (4)    Secured Debt which is secured by Liens securing
Indebtedness of a Guarantor owing to the Company or to another Guarantor; 
 (5)    Indebtedness secured by a Permitted
Lien; and 
 (6)    any amendment, restatement, supplement, renewal, replacement, extension, refinancing or refunding,
in whole or in part (“Refinanced Debt”), of Secured Debt that was permitted to be created, incurred, assumed or guaranteed pursuant to clauses (1) through (5) above at the time of the original creation, incurrence, assumption
or guarantee thereof, or by this clause (6), provided in each case that the principal amount of the Refinanced Debt does not exceed the principal amount of the Secured Debt being refinanced, extended, renewed or replaced (plus accrued
interest thereon and expenses of refinancing, extension, renewal or replacement) and such Refinanced Debt is not secured by any additional Properties of the Company or any Guarantor (other than accessions and proceeds). 

In addition, the Company and the Guarantors may create, incur, assume or guarantee Secured Debt, without equally or ratably (or on a senior
basis) securing the Notes, if immediately thereafter the sum of (1) the aggregate principal amount (or the accreted value thereof, in the case of any Secured Debt issued with original issue discount) of all Secured Debt outstanding (excluding
Secured Debt permitted under clauses (1) through (6) above and any Secured Debt in relation to which the Notes have been secured equally and ratably (or on a senior basis)) and (2) all Attributable Debt in respect of Sale and Leaseback
Transactions (excluding Attributable Debt in respect of Sale and Leaseback Transactions satisfying the conditions set forth in clauses (1) and (2) and if the 365 day period referenced therein shall have expired, also clause (3) under
Section 3.02) as of the date of determination would not exceed 20% of Consolidated Adjusted Tangible Assets. 
 Section 3.02. Restrictions on
Sale and Leaseback Transactions. 
 The Company will not, and will not cause or permit any Guarantor to, enter into any Sale and
Leaseback Transaction, unless: 
 (1)    notice is promptly given to the Trustee of the Sale and Leaseback Transaction;

 (2)    fair value is received by the Company or a Guarantor for the Property sold (as determined in good faith
pursuant to a resolution of the Board of Directors delivered to the Trustee); and 

  
 -11- 

 (3)    the Company or a Guarantor, within 365 days after the completion
of the Sale and Leaseback Transaction, applies an amount equal to the net proceeds therefrom either: 

(A)    to the redemption, repayment or retirement of (a) the Notes or the Securities of any other
Series under the Base Indenture (other than a Series that, pursuant to the applicable supplemental indenture or Authorizing Resolution, does not have the benefit of this Section or its equivalent), including the cancellation by the Trustee of any
Securities of any such Series delivered by the Company to the Trustee, or (b) any other Indebtedness of the Company or any Guarantor (other than Indebtedness which by its terms or the terms of the instrument by which it was issued is
subordinate in right of payment to the Notes or any such other Series), or 
 (B)    to the purchase by
the Company or a Guarantor of Property substantially similar to the Property sold or transferred. 
 Without regard to the foregoing, the
Company and the Guarantors may enter into a Sale and Leaseback Transaction if immediately thereafter the sum of (1) the aggregate principal amount of all Secured Debt outstanding (excluding Secured Debt permitted under clauses (1) through
(6) of the first paragraph of Section 3.01 above or Secured Debt in relation to which the Notes have been secured equally and ratably (or on a senior basis)) and (2) all Attributable Debt in respect of Sale and Leaseback Transactions
(excluding Attributable Debt in respect of Sale and Leaseback Transactions satisfying the conditions set forth in clauses (1) and (2) and if the 365 day period referenced therein shall have expired, also clause (3) above) as of the date of
determination would not exceed 20% of Consolidated Adjusted Tangible Assets. 
 Section 3.03. Offer to Purchase upon Change of Control Triggering
Event. 
 (1)    In the event that there shall occur a Change of Control Triggering Event, except as otherwise
provided in Section 3.03(6) hereof, the Company shall make an offer to each Holder of the Notes (the “Change of Control Offer”) to purchase all or any part of such Holder’s Notes at 101% of the principal amount thereof
plus accrued and unpaid interest to the date of purchase (the “Change of Control Purchase Price”) in accordance with the procedures set forth in this Section 3.03. 

(2)    On or before the thirtieth day after any Change of Control Triggering Event, or, at the Company’s option,
prior to any Change of Control, but after the public announcement of the Change of Control, the Company shall be obligated to make the Change of Control Offer by mailing, or causing to be mailed, to all Holders of Notes, with a copy to the Trustee,
a notice regarding the Change of Control Triggering Event and the Change of Control Offer. The notice shall state the payment date for the repurchase of the Notes, which date shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed. The notice may, if mailed prior to the date of consummation of the Change of Control, also state that the offer to purchase is conditioned on a Change of Control or Change of Control Triggering Event occurring on or prior to
the payment date specified in the notice. 
 (3)    On the payment date of the Change of Control Purchase Price as
specified in the notice, the Company shall, to the extent lawful: 
 (A)    accept for payment all Notes
or portions of Notes properly tendered and not withdrawn pursuant to the Change of Control Offer; 

(B)    deposit with the Paying Agent an amount equal to the Change of Control Purchase Price in respect of
all Notes or portions of Notes properly tendered and not withdrawn pursuant to the Change of Control Offer; and 

  
 -12- 

 (C)    deliver or cause to be delivered to the Trustee
the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company. 

(4)    The Paying Agent shall promptly mail to each Holder of Notes properly tendered pursuant to the Change of Control
Offer, the Change of Control Purchase Price for such Notes, and the Trustee shall promptly authenticate and mail, or cause to be transferred by book entry, to each such Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided that the new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon
as reasonably practicable after the payment date of the Change of Control Purchase Price. 
 (5)    The Company will
comply with applicable law, including Section 14(e) of the Exchange Act and Rule 14e-1 thereunder, and any other securities laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the purchase of the Notes as a result of a Change of Control or Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with this Section 3.03, the
Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 3.03 by virtue of such conflict. 

(6)    The Company will not be required to make a Change of Control Offer after a Change of Control Triggering Event if
(1) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all Notes properly tendered and not withdrawn under its offer,
(2) the Company has given notice to redeem all Notes in accordance with paragraph 4 of the Notes and Article Three of the Base Indenture, unless and until there is a default in payment of the applicable redemption price or (3) in
connection with or in contemplation of any Change of Control for which a definitive agreement is in place, the Company or a third party has made an offer to purchase (an “Alternate Offer”) any and all Notes properly tendered at a
cash price equal to or higher than the Change of Control Purchase Price and has purchased all Notes properly tendered and not withdrawn in accordance with the terms of such Alternate Offer. 

(7)    None of the provisions relating to a repurchase upon a Change of Control Triggering Event shall be waivable by the
Board of Directors of the Company. 
 ARTICLE FOUR 

Miscellaneous 
 Section 4.01.
Governing Law. 
 THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS SUPPLEMENTAL INDENTURE, THE NOTES AND THE GUARANTEES. 

Section 4.02. No Adverse Interpretation of Other Agreements. 

This Supplemental Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Supplemental Indenture. 

  
 -13- 

 Section 4.03. No Recourse Against Others. 

All liability (i) described in Paragraph 11 of the Notes, of any director, officer, employee or stockholder, as such, of the Company and
(ii) described in the second paragraph of the guarantees of each Guarantor, of any stockholder, officer, director, employee, incorporator, partner, member or manager, as such, of any Guarantor, is waived and released. 

Section 4.04. Successors and Assigns. 

All covenants and agreements of the Company and the Guarantors in this Supplemental Indenture and the Notes shall bind its successors and
assigns. All agreements of the Trustee in this Supplemental Indenture shall bind its successors and assigns. 
 Section 4.05. Counterparts;
Electronic Signature. 
 This Supplemental Indenture may be executed in counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the same instrument. Notwithstanding anything to the contrary in the Base Indenture, any signature to this Supplemental Indenture, the Notes and the Guarantees may be
executed and delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly executed and delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law. Each of the parties hereto represents and warrants to the other parties
that it has the capacity and authority to execute this Supplemental Indenture, the Notes and the Guarantees through electronic means. 
 Section 4.06.
Severability. 
 In case any one or more of the provisions contained in this Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture or of the Notes. 

[Signature Pages Follow] 

  
 -14- 

 SIGNATURES 

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed, all as of the date first above written. 

 

			
	D.R. HORTON, INC.
		
	By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and
		 	Chief Financial Officer

 GUARANTORS: 

 

			
	C. RICHARD DOBSON BUILDERS, INC.	  	CH INVESTMENTS OF TEXAS, INC.
	CHI CONSTRUCTION COMPANY	  	CHTEX OF TEXAS, INC.
	CONTINENTAL HOMES, INC.	  	CONTINENTAL RESIDENTIAL, INC.
	D.R. HORTON, INC. - BIRMINGHAM	  	D.R. HORTON, INC. - CHICAGO
	D.R. HORTON, INC. - DIETZ-CRANE	  	D.R. HORTON, INC. - GREENSBORO
	D.R. HORTON, INC. - GULF COAST	  	D.R. HORTON, INC. - HUNTSVILLE
	D.R. HORTON, INC. - JACKSONVILLE	  	D.R. HORTON, INC. - LOUISVILLE
	D.R. HORTON, INC. - MIDWEST	  	D.R. HORTON, INC. - MINNESOTA
	D.R. HORTON, INC. - NEW JERSEY	  	D.R. HORTON, INC. - PORTLAND
	D.R. HORTON, INC. - TORREY	  	D.R. HORTON BAY, INC.
	D.R. HORTON CA2, INC.	  	D.R. HORTON CA3, INC.
	D.R. HORTON CRUCES CONSTRUCTION, INC.	  	D.R. HORTON LA NORTH, INC.
	D.R. HORTON LOS ANGELES HOLDING COMPANY, INC.	  	D.R. HORTON MATERIALS, INC.
	D.R. HORTON VEN, INC.	  	DRH CONSTRUCTION, INC.
	DRH REGREM XIV, INC.	  	DRH REGREM XV, INC.
	DRH REGREM XVI, INC.	  	DRH REGREM XVII, INC.
	DRH REGREM XVIII, INC.	  	DRH REGREM XIX, INC.
	DRH REGREM XX, INC.	  	DRH REGREM XXI, INC.
	DRH REGREM XXII, INC.	  	DRH REGREM XXIII, INC.
	DRH REGREM XXIV, INC.	  	DRH REGREM XXV, INC.
	DRH SOUTHWEST CONSTRUCTION, INC.	  	DRH TUCSON CONSTRUCTION, INC.
	KDB HOMES, INC.	  	MEADOWS I, LTD.
	MEADOWS II, LTD.	  	MEADOWS VIII, LTD.
	MEADOWS IX, INC.	  	MEADOWS X, INC.
	MELODY HOMES, INC.	  	SCHULER HOMES OF ARIZONA LLC
	SCHULER HOMES OF CALIFORNIA, INC.	  	SCHULER HOMES OF OREGON, INC.
	SCHULER HOMES OF WASHINGTON, INC.	  	SHA CONSTRUCTION LLC
	SHLR OF CALIFORNIA, INC.	  	SHLR OF NEVADA, INC.
	SHLR OF WASHINGTON, INC.	  	SRHI LLC
	SSHI LLC	  	VERTICAL CONSTRUCTION CORPORATION
	WESTERN PACIFIC HOUSING, INC.	  	WESTERN PACIFIC HOUSING MANAGEMENT, INC.

  

			
	By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer

  

			
	CONTINENTAL HOMES OF TEXAS, L.P.
	
	By: CHTEX of Texas, Inc.,
	       as General Partner
		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	D.R. HORTON - EMERALD, LTD.
	D.R. HORTON - TEXAS, LTD.
	D. R. HORTON MANAGEMENT COMPANY, LTD.
	DRH REGREM VII, LP
	DRH REGREM XII, LP 
	
	By: Meadows I, Ltd.,
	       as General Partner
		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	SGS COMMUNITIES AT GRANDE QUAY, L.L.C.
	
	 By: Meadows IX, Inc.,

       as Member

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	and	 	
	
	 By: Meadows X, Inc.,

       as Member

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	DRH CAMBRIDGE HOMES, LLC
	
	 By: D.R. Horton, Inc. -Chicago,

       as Sole Member

		
	        By:	 	 /s/ Bill W. Wheat

		 	 Bill W. Wheat
 Executive Vice President and
Chief Financial Officer

 
	
	HPH HOMEBUILDERS 2000 L.P.
	WESTERN PACIFIC HOUSING-ANTIGUA, LLC
	WESTERN PACIFIC HOUSING-BROADWAY, LLC
	WESTERN PACIFIC HOUSING-CANYON PARK, LLC
	WESTERN PACIFIC HOUSING-CARRILLO, LLC
	WESTERN PACIFIC HOUSING-COMMUNICATIONS HILL, LLC
	WESTERN PACIFIC HOUSING-COPPER CANYON, LLC
	WESTERN PACIFIC HOUSING-CREEKSIDE, LLC
	WESTERN PACIFIC HOUSING-LOMAS VERDES, LLC
	WESTERN PACIFIC HOUSING-MCGONIGLE CANYON, LLC
	WESTERN PACIFIC HOUSING - MOUNTAINGATE, L.P.
	WESTERN PACIFIC HOUSING-NORCO ESTATES, LLC
	WESTERN PACIFIC HOUSING-PACIFIC PARK II, LLC
	WESTERN PACIFIC HOUSING-PARK AVENUE EAST, LLC
	WESTERN PACIFIC HOUSING-PARK AVENUE WEST, LLC
	WESTERN PACIFIC HOUSING-PLAYA VISTA, LLC
	WESTERN PACIFIC HOUSING-RIVER RIDGE, LLC
	WESTERN PACIFIC HOUSING-TERRA BAY DUETS, LLC
	WESTERN PACIFIC HOUSING-TORREY MEADOWS, LLC
	WESTERN PACIFIC HOUSING-TORREY VILLAGE CENTER, LLC
	WESTERN PACIFIC HOUSING-WINDEMERE, LLC
	WPH-CAMINO RUIZ, LLC

  

			
	 By: Western Pacific Housing Management, Inc.,

       as Manager Member or General Partner

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	D.R. HORTON HAWAII LLC
	
	 By: Vertical Construction Corporation,

       as Manager

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	LEXINGTON HOMES - DRH, LLC
	PACIFIC RIDGE - DRH, LLC
	
	 By: SHLR of Washington, Inc.,

       as Sole Member

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer

 
	
	D.R. HORTON - CROWN, LLC 
	D.R. HORTON - GEORGIA, LLC 
	D.R. HORTON - HIGHLAND, LLC
	D.R. HORTON - IOWA, LLC
	D.R. HORTON - REGENT, LLC 
	D.R. HORTON - TERRAMOR, LLC
	D.R. HORTON - WPH, LLC 
	D.R. HORTON SERENITY CONSTRUCTION, LLC 
	DRH REGREM XLII, LLC
	DRH REGREM XLIII, LLC
	DRH REGREM XLIV, LLC
	DRH REGREM XLV, LLC
	DRH REGREM XLVI, LLC
	DRH REGREM XLVII, LLC
	DRH REGREM XLVIII, LLC
	DRH REGREM XLIX, LLC
	DRH REGREM L, LLC
	DRH REGREM LI, LLC
	DRH REGREM LII, LLC
	DRH REGREM LIII, LLC
	DRH REGREM LIV, LLC
	DRH REGREM LV, LLC

  

			
	 By: D.R. Horton, Inc.,

       as Sole Member

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer

 
			
	    D.R. HORTON CA4, LLC
	
	By: Western Pacific Housing, Inc.,
	as Sole Member
		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	    D.R. HORTON - CHAUSTIN, LLC
	
	 By: Continental Homes of Texas, L.P.,

as Sole Member

	
	        By: CHTEX of Texas, Inc., as General Partner
		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	    D.R. HORTON - INDIANA, LLC
	
	By: D.R. Horton, Inc. - Midwest,
	its Member
		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer
	
	    D.R. HORTON - COLORADO, LLC
	
	By: Melody Homes, Inc.,
	its Member
		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer

 
			
	     DRH - HWY 114, LLC
	     D.R. HORTON - PERMIAN, LLC
	
	   By: D.R. Horton - Texas, Ltd.,

  its Member

	
	       By: Meadows I, Ltd.,

      its General Partner

		
	            By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer

  

			
	    WALKER DRIVE, LLC
	
	 By: D.R. Horton BAY, Inc.,
 its
Member

		
	        By:	 	 /s/ Bill W. Wheat

		 	Bill W. Wheat
		 	Executive Vice President and Chief Financial Officer

			
	 BRANCH BANKING AND TRUST COMPANY,

as Trustee 

		
	 By:
	 	 /s/ Greg Yanok

	Name:	 	Greg Yanok
	Title:	 	Vice President

 EXHIBIT A 

[FORM OF FACE OF SECURITY] 

[Global Security Legend] 

THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE HOLDERS OF BENEFICIAL INTERESTS HEREIN, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE ANY SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL
SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06 OF THE BASE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR TO ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF ANY ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN. 

  
 A-1 

			
	No.	  	CUSIP No.: 23331A BN8
		  	ISIN No.: US23331ABN81

 2.600% SENIOR NOTES DUE 2025 

D.R. HORTON, INC. 
 a
Delaware corporation 
 promises to pay to [                 ] or registered
assigns 
 the principal sum of $[                 ]
(                 ) Dollars on October 15, 2025. 
 Interest Payment
Dates: April 15 and October 15, commencing October 15, 2020 
 Record Dates: April 1 and October 1 

Dated: 
  

			
	D.R. HORTON, INC.
		
	By:	 	              

	Title:	 	

  

			
	Authenticated:
	
	Branch Banking and Trust Company, as Trustee, certifies that this is one of the Securities referred to in the within mentioned Indenture.
		
	By:	 	              

	Authorized Signatory

  
 A-2 

 [FORM OF REVERSE SIDE OF SECURITY] 

D.R. HORTON, INC. 

2.600% SENIOR NOTES DUE 2025 

D.R. HORTON, INC., a Delaware corporation (together with its successors and assigns, the “Company”), issued this Security
under an Indenture dated as of October 10, 2019 (as amended, modified or supplemented from time to time in accordance therewith, the “Base Indenture”) by and between the Company and Branch Banking and Trust Company, as the
trustee (the “Trustee”), as supplemented by the Supplemental Indenture dated as of May 5, 2020 (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”), by and
among the Company, the Guarantors party thereto and the Trustee, to which reference is hereby made for a statement of the respective rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders and of the terms
upon which the Securities are, and are to be, authorized and delivered. All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them therein. 

1.    Interest. 
 The
Company promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on April 15 and October 15 of each year (each, an “Interest Payment
Date”), commencing October 15, 2020, until the principal is paid or made available for payment. Interest on the Securities will accrue from the most recent date to which interest has been paid or duly provided for or, if no interest
has been paid, from May 5, 2020, provided that, if there is no existing default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

2.    Method of Payment. 

The Company will pay interest on the Securities (except defaulted interest, if any, which will be paid on such special payment date to Holders
of record on such special record date as may be fixed by the Company) to the persons who are registered Holders of Securities at the close of business on April 1 or October 1, as the case may be, immediately preceding the applicable
interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and
private debts. 
 3.    Paying Agent and Registrar. 

Initially, the Trustee will act as Paying Agent and Registrar. The Company may change or appoint any Paying Agent, Registrar or co-Registrar without notice. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Registrar or co-Registrar. 

4.    Optional Redemption. 

The Company may redeem the Securities at any time or from time to time, in whole or in part. 

  
 A-3 

 The redemption price for Securities redeemed prior to September 15, 2025 (the
“Par Call Date”) will be equal to the greater of the following amounts: (i) 100% of their principal amount; and (ii) the present value of the Remaining Scheduled Payments on the Securities being redeemed that would be due if
the Securities matured on the Par Call Date, discounted to the redemption date, on a semiannual basis, at the Treasury Rate plus 37.5 basis points (0.375%), plus, in each case, accrued and unpaid interest on such Securities to the redemption date.

 The redemption price for Securities redeemed on or after the Par Call Date will be equal to 100% of the principal amount of the
Securities being redeemed, plus accrued and unpaid interest on such Securities to the redemption date. 
 In determining the redemption
price and accrued interest, interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. 

Notice of redemption will be mailed at least 15 days but not more than 60 days before the redemption date to each Holder of Securities to be
redeemed at its registered address. Securities in denominations larger than $2,000 may be redeemed in part. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption, provided that if
the Company shall default in the payment of such Securities at the redemption price together with accrued interest, interest shall continue to accrue at the rate borne by the Securities. 

5.    Denominations, Transfer, Exchange. 

The Securities are in registered form only without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. A
Holder may transfer or exchange Securities by presentation of such Securities to the Registrar or a co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of
Securities of other denominations. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Security selected for redemption or purchase, except the unredeemed or unpurchased part thereof if the Security is redeemed or purchased in part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed or purchased. 
 6.    Persons Deemed Owners. 

The registered Holder of this Security shall be treated as the owner of it for all purposes. 

7.    Unclaimed Money. 

Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon written request any money held
by them for the payment of principal or interest that remains unclaimed for two years, and thereafter, Holders entitled to the money must look to the Company for payment as general creditors. 

8.    Amendment, Supplement, Waiver. 

Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the outstanding Securities of each Series affected by the amendment and any past default or compliance with any provision relating to any Series of the Securities may be waived in a particular instance with the
consent of the Holders of a 

  
 A-4 

 
majority in principal amount of the outstanding Securities of such Series. Without the consent of any Securityholder, the Company and the Trustee may amend or supplement the Indenture or the
Securities in certain respects as specified in the Indenture. 
 9.    Successor. 

When a successor assumes all the obligations of its predecessor under a Series of the Securities and the Indenture, the predecessor will be
released from those obligations. 
 10.    Trustee Dealings With Company. 

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its affiliates, and may otherwise deal with the Company or its affiliates, as if it were not the Trustee, including owning or pledging the Securities. 

11.    No Recourse Against Others. 

A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities. The waiver may not be effective to waive liabilities under the federal securities laws. 

12.    Discharge of Indenture. 

The Indenture contains certain provisions pertaining to defeasance and discharge, which provisions shall for all purposes have the same effect
as if set forth herein. 
 13.    Authentication. 

This Security shall not be valid until an authorized signatory of the Trustee signs the certificate of authentication on this Security. 

14.    Abbreviations. 

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors Act). 

15.    GOVERNING LAW. 

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

16.    CUSIP and ISIN Numbers. 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP and ISIN
numbers to be printed on the Securities and has 

  
 A-5 

 
directed the Trustee to use CUSIP and ISIN numbers in notices of repurchase as a convenience to Holders. No representation is made by the Company or the Trustee as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of repurchase and reliance may be placed only on the other identification numbers placed thereon. 

17.    Copies. 
 The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture and the applicable Authorizing Resolution or supplemental indenture. Requests may be made to: D.R. Horton, Inc., 1341 Horton Circle, Arlington, Texas
76011, Attention: Chief Financial Officer. 
 18.    Change of Control Triggering Event. 

In the event that there shall occur a Change of Control Triggering Event, except as otherwise provided in the Indenture, the Company shall make
an offer to each Holder of the Securities to purchase all or any part of such Holder’s Securities at 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase in accordance with the procedures set forth in
the Indenture. 
 19.    Defaults and Remedies. 

The Events of Default relating to the Securities are defined in Article Six of the Base Indenture as modified by the Supplemental Indenture.
Upon the occurrence of an Event of Default, the rights and obligations of the Company and the Holders shall be as set forth in the Indenture. 

  
 A-6 

 ASSIGNMENT FORM 

If you the Holder want to assign this Security, fill in the form below: 
  

					
		  	I or we assign and transfer this Security to	  	
		  	  
	  	
		  	(Insert assignee’s social security or tax ID number)	  	
		  	  
	  	
		  	  
	  	
		  	  
	  	
		  	  
	  	
		  	 (Print or type assignee’s name, address, and zip code)
	  	

  

	
	 and irrevocably appoint
  

agent to transfer this Security on the books of the Company. The agent may substitute another to act for
him.

	
	 Date:
                                        

	
	 Your signature:
                                         
           

	
	 (Sign exactly as your name appears on the other side of this Security)

	
	 Signature Guarantee:
                                         
               

 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the
Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, all in accordance with the United States Securities Exchange Act of 1934, as amended. 

  
 A-7 

 EXHIBIT B 

[FORM OF NOTATION ON SECURITY OF GUARANTEE] 

GUARANTEE 
 The
undersigned (the “Guarantors”) have unconditionally guaranteed, jointly and severally (such guarantee by each Guarantor being referred to herein as the “Guarantee”) (i) the due and punctual payment of the principal
of and interest on this Security, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal and interest, if any, on this Security, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms set forth in Article Nine of the Base Indenture and (ii) in case of any extension of time of payment or renewal of this Security or
any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. 

No past, present or future stockholder, officer, director, employee, incorporator, partner, member or manager, as such, of any of the
Guarantors shall have any liability under the Guarantee by reason of such person’s status as stockholder, officer, director, employee, incorporator, partner, member or manager. Each Holder of a Security by accepting a Security waives and
releases all such liability. This waiver and release are part of the consideration for the issuance of the Guarantees. 
 Each Holder of
this Security by accepting this Security agrees that any Guarantor named below shall have no further liability with respect to its Guarantee if such Guarantor otherwise ceases to be liable in respect of its Guarantee in accordance with the terms of
the Indenture. 
 THE GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

The Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture by the signature of one of its authorized officers. 
  

			
	[Signature of Guarantor(s)]
		
	By:	 	              

	Name:	 	
	Title	 	
		
	By:	 	              

	Name:	 	
	Title	 	

  
 B-1Exhibit

FORBEARANCE AGREEMENT
This FORBEARANCE AGREEMENT, dated as of May 4, 2020 (this “Agreement”), among ROSEHILL RESOURCES INC. (“RRI”), a Delaware corporation, ROSEHILL OPERATING COMPANY, LLC (the “Borrower”), a Delaware limited liability company, the financial institutions party hereto as Lenders and constituting not less than the Required Lenders (such Lenders, the “Consenting Lenders”) and JPMORGAN CHASE BANK, N.A., as Issuing Bank and Administrative Agent (in such agency capacity, the “Administrative Agent”), is made with respect to the Amended and Restated Credit Agreement, dated as of March 28, 2018 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”), among the Borrower, RRI, the Administrative Agent, the Issuing Bank and the Lenders from time to time party thereto.
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Required Lenders postpone the Scheduled Redetermination of the Borrowing Base scheduled to occur on or about April 1, 2020 to postpone a resulting Borrowing Base Deficiency; 
WHEREAS, the Borrower failed to (i)(A) cause Rosehill Intermediate Holdco, LLC, Rosehill Holdco, LLC, and Rosehill Mergerco, LLC (collectively, the “New Rosehill Entities”) to guarantee the Secured Obligations pursuant to Guaranty Agreements and to grant liens and security interests in all of such New Rosehill Entities’ collateral pursuant to a security agreement, (B) pledge all of the Equity Interests of the New Rosehill Entities and to execute and deliver such other additional closing documents, legal opinions and certificates as reasonably requested by the Administrative Agent, in the case of each of (A) and (B), as required pursuant to Section 8.14(b) of the Credit Agreement, and (ii) deliver or file certain audited financial statements without a “going concern” or like qualification or exception as required pursuant to Section 8.01(a) of the Credit Agreement (the “Existing Designated Events of Defaults”);
WHEREAS, the Borrower anticipates that it may not satisfy certain other of its affirmative covenant obligations under Section 8.01 of the Credit Agreement during the Forbearance Period (collectively, the “Anticipated Designated Defaults” and, together with the Existing Designated Events of Defaults, the “Designated Defaults”);  
WHEREAS, if the Anticipated Designated Defaults occur and thereafter remain unremedied for a period of 30 days, then on the day immediately following such dates, such Anticipated Designated Defaults shall mature into Events of Default under the Credit Agreement, at which time the Lenders may at any time or from time to time exercise any of their rights, powers, privileges or remedies under the Credit Agreement, any other Loan Document or applicable Law;
WHEREAS, the Borrower, RRI, the Administrative Agent and the Majority Lenders entered into a standstill agreement, dated as of April 29, 2020, by which the Lenders agreed to forbear from accelerating the Secured Obligations or otherwise exercising any rights or remedies under the Loan Documents as a result of the Designated Defaults through the date hereof and the Borrower requests that the Consenting Lenders extend the terms of such standstill agreement pursuant to and in accordance with the terms of this Agreement; and
WHEREAS, the Administrative Agent and the Consenting Lenders, agree to accommodate such requests of the Borrower on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:

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SECTION 1.    Amounts Owing.  Each of the Loan Parties acknowledges and agrees that, (i) as of the date hereof, the Borrower is indebted to the Secured Parties in an aggregate amount equal to (a) the aggregate principal amount of Loans outstanding under the Credit Agreement in an amount equal to $340,000,000 plus accrued and unpaid interest thereon plus (b) the obligations, if any, under each Secured Swap Agreement and Secured Cash Management Agreement, plus (c) any other fees, costs and expenses or other amounts payable by the Loan Parties under the Loan Documents and (ii) the Borrower has no right of defense, setoff, deduction, claim or counterclaim with respect to any such amounts or any of the other Secured Obligations, other than customary netting arrangements with respect to Secured Swap Agreements.
SECTION 2.    Defined Terms and Other Definitional Provisions.  Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement. 
SECTION 3.    Borrowing Base.  The Consenting Lenders hereby agree to postpone the Scheduled Redetermination scheduled to occur on April 1, 2020 to the Forbearance Termination Date (as defined below).
SECTION 4.    Forbearance.
(a)    The “Forbearance Period” shall commence on the Forbearance Effective Date (as defined in Section 7 below) and shall terminate immediately and automatically upon the earlier to occur of (such date, the “Forbearance Termination Date”) (i) July 3, 2020, at 11:59 p.m. New York time, or (ii) the occurrence of a Forbearance Termination Event (as defined below).
(b)    Subject to the satisfaction of the conditions precedent set forth in Section 7 hereof, and in reliance upon the representations of the Loan Parties set forth herein, and without waiving the Designated Defaults or any other Default or Event of Default that may now exist or which may occur hereafter during the Forbearance Period, each of the Administrative Agent and the Consenting Lenders agrees during the Forbearance Period not to accelerate the Secured Obligations or enforce any of its respective rights and remedies under the Loan Documents solely in respect of the Designated Defaults against the Loan Parties or their assets (the “Forbearance”); provided, that, during the Forbearance Period the Lenders shall have no obligation to make any further Loans or other extensions of credit, or issue Letters of Credit, to the Borrower or any other Loan Party.  The occurrence of any of the following events or circumstances shall constitute a termination event with respect to the Forbearance (each, a “Forbearance Termination Event”): 
(i)the occurrence of any Event of Default under the Credit Agreement that is not a Designated Default, other than any Event of Default resulting from the acceleration of all or any portion of the Second Lien Obligations; 
(ii)the failure by the Borrower or any other Loan Party to comply with or perform under any provision of this Agreement (including Section 8); 
(iii)any representation, warranty or certification made or deemed made by the Borrower or any other Loan Party herein or in connection with this Agreement (other than with respect to the Designated Default), or which is contained in any certificate, document or financial or other statement furnished by the Borrower at any time under or in connection with this Agreement or otherwise, shall be false or inaccurate in any material respect (or to the extent qualified by materiality, in all respects) on or as of the date as of which made or deemed made; 

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(iv)the commencement of any action, suit, litigation or other proceeding against the Lenders, the Administrative Agent or any of their respective Related Parties by (x) the Borrower or any other Loan Party, or any entity controlled by, affiliated with, related or under common control with the Borrower or any other Loan Party, or (y) any Person asserting claims relating in any way to the Borrower, any other Loan Party, the Credit Agreement or the Loan Documents, in each case, other than an action or proceeding to enforce the terms of this Agreement;
(v)the payment of any principal, interest, or fees to (1) the holders of the Second Lien Obligations (other than reimbursable costs and expenses of legal counsel and other third-party advisors in connection with the Second Lien Documents) or (2) the holders of any other Material Indebtedness (other than any payments with respect to the Secured Obligations) during the Forbearance Period; and
(vi)the exercise by any holders of any Second Lien Obligations or any other Material Indebtedness (other than the Secured Obligations) of any remedy during the Forbearance Period; provided, that, the acceleration of all or any portion of the Second Lien Obligations shall not constitute a Forbearance Termination Event until the 26th day following the receipt by the Borrower or Administrative Agent of notice of such acceleration. 
(c)    The Forbearance is limited in nature to the extent specifically set forth above and no other terms, covenants, provisions, rights or remedies under the Credit Agreement or any other Loan Document or at law or in equity are intended to (or shall) be affected hereby, all of which remain in full force and effect, and nothing contained herein is intended, or shall be deemed or construed (i) to constitute a waiver of any of the Designated Defaults, any defenses thereto, or any other existing or future Defaults or Events of Default or compliance with any term or provision of the Loan Documents or applicable Law, or (ii) to establish a custom or course of dealing between the Borrower or RRI, on the one hand, and the Administrative Agent and/or any Lender, on the other hand. The Loan Parties acknowledge and agree that the agreement of the Administrative Agent and the Consenting Lenders hereunder to forbear from exercising their default-related remedies with respect to the Designated Defaults shall not constitute a waiver of any of the Designated Defaults and that, except as expressly set forth in Section 4(b) of this Agreement, the Lenders expressly reserve all rights and remedies that the Administrative Agent and the Lenders now or may in the future have under any or all of the Loan Documents and applicable Law in connection with all Defaults (including, without limitation, the Designated Defaults) or Events of Default. Any waiver of the Designated Defaults would be subject to, and effective only in accordance with Section 12.02 of the Credit Agreement. 
(d)    Upon the termination or expiration of the Forbearance Period: (i) the Forbearance and all agreements set forth in Section 4(b) of this Agreement shall terminate automatically and immediately and be of no further force or effect without the requirement of any demand, presentment, protest, or notice of any kind, all of which are hereby waived by the Borrower (it being understood, for the avoidance of doubt, that this provision shall not impair the effectiveness of any other provisions of this Agreement, which shall remain in full force and effect); and (ii) subject to the terms of the Loan Documents and applicable Law, the Administrative Agent, each Issuing Bank and each Lender shall be free to proceed to enforce any or all of its rights and remedies set forth in the Credit Agreement, the other Loan Documents and applicable Law. In furtherance of the foregoing, and notwithstanding the occurrence of the Forbearance Effective Date, the Borrower acknowledges and confirms that, subject to the Forbearance, all rights and remedies of the Administrative Agent and the Lenders under the Loan Documents and applicable Law with respect to the Borrower or any other Loan Party shall continue to be available to the Administrative Agent, each Issuing Bank and the Lenders. For the avoidance of doubt, the Borrower acknowledges and confirms that the 

3

agreement of the Administrative Agent and the Lenders temporarily to forbear shall not apply to nor preclude any remedy available to the Administrative Agent or the Lenders in connection with any proceeding commenced voluntarily by the Loan Parties under any bankruptcy or insolvency law, including, without limitation, to any relief in respect of adequate protection or relief from any stay imposed under such law.
(e)    The parties hereto agree that the running of all statutes of limitation and the doctrine of laches applicable to all claims or causes of action that the Administrative Agent or any Lender may be entitled to take or bring in order to enforce its rights and remedies against the Borrower or any other Loan Party are, to the fullest extent permitted by Law, tolled and suspended during the Forbearance Period.
(f)    Execution of this Agreement constitutes a direction by the Consenting Lenders that the Administrative Agent act or forbear from acting in accordance with the terms of this Agreement.  Each Consenting Lender agrees that the Administrative Agent shall not be required to act against the Loan Parties if such action is contrary to the terms of this Agreement. Each Consenting Lender acknowledges and agrees that the direction set forth in this Section 4(f) constitutes a direction from the Required Lenders under the provisions of Section 11.01 of the Credit Agreement, and Article 11 of the Credit Agreement shall apply to any and all actions (and inactions) taken by the Administrative Agent in accordance with such direction.
(g)    The Loan Parties understand and accept the temporary nature of the forbearance provided hereby and that the Administrative Agent and the Consenting Lenders have given no assurances that they will extend such forbearance or provide waivers or amendments to the Credit Agreement or any other Loan Document. None of the Lenders or the Administrative Agent shall have any obligation to extend the Forbearance Period, or enter into any other waiver, forbearance, amendment or agreement, and the Lenders’ and the Administrative Agent’s agreement to permit any such extension, or enter into any other waiver, forbearance, amendment or agreement shall be subject to the sole and absolute discretion of the Consenting Lenders (or, if required by Section 12.02 of the Credit Agreement, each Lender). Any agreement by any Lender or the Administrative Agent to extend the Forbearance Period, or enter into any other waiver, forbearance, amendment or agreement, must be set forth in writing and signed by a duly authorized signatory of each of the Administrative Agent and the Required Lenders (or, if required by Section 12.02 of the Credit Agreement, each Lender).
(h)    Nothing in this Agreement constitutes a legal obligation to participate in any restructuring of the Credit Agreement or to execute any related documents and no such legal obligation shall arise except pursuant to mutually agreeable executed definitive documentation.
SECTION 5.    Confirmation of Loan Documents.  Each of the Borrower, the other Loan Parties, and RRI hereby confirms and ratifies all of its obligations under the Loan Documents to which it is a party and that each of the Loan Documents is valid and enforceable in every respect and that all of the terms and conditions thereof are legally binding upon each of the Borrower, the other Loan Parties, and RRI (as applicable) and are hereby reaffirmed and ratified. By its execution on the respective signature lines provided below, each of the Loan Parties and RRI hereby confirms and ratifies (a) all of its obligations under the Loan Documents, (b) the Liens granted to the Administrative Agent by the Loan Parties under the Security Instruments in respect of the Collateral (including all cash held in a deposit account and/or a securities account held or maintained with Administrative Agent that is subject to a control agreement or Mortgaged Property) as valid, binding and enforceable first-priority Liens (except Liens permitted by Section 9.03 of the Credit Agreement to exist) which secure the Secured Obligations, and (c) that all references in such Security Instruments to the “Credit Agreement” (or words of similar import) refer to the Credit Agreement as amended hereby without impairing any such obligations or Liens in any respect.  

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SECTION 6.    Representations and Warranties.
(a)    The Borrower hereby represents and warrants to the Administrative Agent and the Consenting Lenders (which representations and warranties are continuing and shall survive the execution and delivery hereof) that as of the date hereof:
(i)the execution, delivery, and performance of this Agreement by the Borrower and RRI and each of the Borrower’s and RRI’s obligations hereunder have been duly authorized by all necessary corporate or limited liability company action;
(ii)the execution, delivery and performance of this Agreement by the Borrower or RRI does not (i) contravene the terms of any of such party’s organizational documents, or conflict with or result in any breach or contravention of, the creation of any Lien under, or require any payment to be made under (A) any document evidencing Debt or other obligations to which such party is party or affecting such party or the properties of such party or (B) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such party or its property is subject, or (ii) violate any Law or regulation to which such party or its property is subject;
(iii)this Agreement has been duly executed and delivered by each of the Borrower and RRI and constitutes, when executed and delivered by such Person, a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity, regardless of whether considered in a proceeding in equity or at law;
(iv)no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement, or (b) the exercise by the Administrative Agent or any Lender of its rights under this Agreement except for (i) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect, and (ii) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure to obtain or make which could not reasonably be expected to have a Material Adverse Effect;
(v)no Default or Event of Default has occurred and is continuing, other than the Existing Designated Events of Defaults;
(vi)each of the representations and warranties made by the Borrower or RRI contained in the Credit Agreement or the other Loan Documents are true and correct in all material respects (or, to the extent qualified by materiality, in all respects) on the Forbearance Effective Date, after giving effect to this Agreement, with the same effect as though such representations and warranties had been made on and as of the Forbearance Effective Date (it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specific date);
(vii)during the Forbearance Period, no forbearance or similar agreement is required to be entered into with respect to any material agreement that the Borrower is a party to as a result of the Designated Defaults;

5

(viii)no cash or Cash Equivalents of the Borrower are maintained in any bank account, deposit account, or securities account other than a bank account, deposit account, or securities account that is subject to a control agreement and perfected Lien in favor of the Administrative Agent for the benefit of the Secured Parties; 
(ix)none of the New Rosehill Entities holds any assets or has incurred any Debt; and
(x)no Loan Parties exist other than the Borrower.
(b)    Each of the Loan Parties, RRI, the Administrative Agent, and the Consenting Lenders hereby represents and warrants that each of the following statements is true, accurate and complete as to such party as of the date hereof:
(i)such party has carefully read and fully understands all of the terms and conditions of this Agreement;
(ii)    such party has consulted with, or had a full and fair opportunity to consult with, legal counsel regarding the terms and conditions of this Agreement;
(iii)    such party has had a full and fair opportunity to participate in the drafting of this Agreement (which has been prepared through the joint efforts of all parties hereto);
(iv)    such party is freely, voluntarily and knowingly entering into this Agreement; and
(v)    none of the Lenders or the Administrative Agent has a fiduciary relationship to the Borrower or RRI, and the relationship between the Administrative Agent and the Lenders, on the one hand, and the Borrower and RRI, on the other, is solely that of creditor and debtor.
SECTION 7.    Conditions to Effectiveness of this Agreement.  The effectiveness of this Agreement is subject to the satisfaction or waiver of each of the following conditions (the date on which such conditions are satisfied or waived, the “Forbearance Effective Date”) as determined by the Administrative Agent in its sole discretion:
(a)    the Administrative Agent shall have received a counterpart of this Agreement, executed and delivered by the Borrower, RRI, the Administrative Agent, and the Consenting Lenders;
(b)    the Borrower shall have paid all the fees, expenses and disbursements of White & Case LLP, Bracewell LLP, RPA Advisors, LLC, and any other Lender Financial Advisor for which invoices (subject to redaction to protect privileges or other confidential communications) have been submitted to the Borrower;
(c)    the representations and warranties contained in this Agreement are and will be true, correct and complete in all material respects on and as of the Forbearance Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date;

6

(d)    the Administrative Agent shall have received an initial weekly budget (the “Initial Weekly Budget”) for the 13-week consecutive period commencing with the week ending on May 8, 2020, which shall be approved by the Administrative Agent in its sole discretion, and the delivery of which shall be a representation by the Borrower that such Initial Weekly Budget has been prepared based on upon good faith estimates and assumptions that the Borrower believes are reasonable as of the Forbearance Effective Date;
(e)    the Administrative Agent shall have received a certificate of a Responsible Officer, in form and substance satisfactory to the Administrative Agent, setting forth as of the Forbearance Effective Date, a true and complete list of all Swap Agreements of each Loan Party, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), any new credit support agreements relating thereto (other than Security Instruments) and any margin required or supplied under any credit support document, and the counterparty to each such agreement (the “Existing Swap Agreements”);
(f)    the Borrower shall have paid to the Administrative Agent for the benefit of the Lenders a prepayment of the Loans in an aggregate principal amount equal to $20,000,000;
(g)    the Borrower shall deliver to the Administrative Agent a long-term business plan and coinciding financial model (the “Long-Term Business Plan”), which shall include operating forecasts, forecasted balance sheets and forecasted statements of income, and cash flows of the Borrower through the fiscal years ending 2020 and 2021 including a scenario with no drilling or completion capital expenditures;
(h)    the Administrative Agent shall have received an accounts payable aging report and analysis for the calendar months of January, February and March 2020;
(i)    the Administrative Agent shall have received (i) a capitalization table of RRI and the Borrower reflecting the current corporate, capital, and ownership structure of such Persons, and (ii) the illustrative pro forma capitalization table of RRI and the Borrower prepared for J.P. Morgan by Jefferies LLC, dated May 2020, reflecting potential equitization of the Second Lien Obligations, the Borrower Series B Preferred Units and corresponding Series B Redeemable Preferred Stock of RRI, the Borrower Series A Preferred Units and corresponding Series A Preferred Stock and RRI’s obligations in respect of the Tax Receivables Agreement, depending on alternative valuations (the “Restructuring Capitalization Table”); and
(j)    the Administrative Agent shall have received such other information regarding the operations, business affairs and financial condition of the Borrower and such other certificates, documents, instruments and agreements as the Administrative Agent or any Lender shall request in connection with the transactions contemplated by this Agreement, the Credit Agreement and the other Loan Documents.
SECTION 8.    Supplemental Terms, Conditions and Covenants On and After the Forbearance Effective Date.  The Borrower hereby agrees to comply with the following terms, conditions and covenants from and after the Forbearance Effective Date (which shall supplement the terms, conditions and covenants set forth in the Credit Agreement and the other Loan Documents), in each case notwithstanding any provision to the contrary set forth in this Agreement, the Credit Agreement or any other Loan Document:
(a)    The Borrower shall cooperate reasonably and in good faith with the Administrative Agent, any financial advisor retained by the Administrative Agent (together with any successor or replacement selected by the Administrative Agent or its counsel, the “Lender Financial Advisor”) and such other professional advisors retained from time to time by the Administrative Agent in providing full and complete access to the Borrower’s books and records, to all other requested information relating to its business and financial affairs and its properties, and to its senior management and professional advisory teams;

7

(b)    Within 25 days of the Forbearance Effective Date, the Consenting Lenders, the Borrower, RRI, and any Necessary Party1 shall have agreed in principle upon the material terms of a restructuring as embodied in a term sheet containing the material terms and provisions of a Restructuring (a “Restructuring Term Sheet”); provided, that none of the Consenting Lenders or the Administrative Agent shall be obligated to, or makes any commitment to, negotiate or agree upon any Restructuring Term Sheet;
(c)    Within 40 days of the Forbearance Effective Date, the Consenting Lenders, Borrower, RRI, and any Necessary Party shall complete and sign a binding and effective restructuring support agreement in form and substance acceptable to the Consenting Lenders in their sole discretion (an “RSA”), which agreement shall provide for a restructuring of the Borrower’s financing indebtedness in a case under chapter 11 of Title 11 of the United States Code on the terms set forth in the Restructuring Term Sheet; provided, that, (i) none of the Consenting Lenders or the Administrative Agent shall be obligated to, or makes any commitment to, (A) negotiate or agree upon any restructuring support agreement, or any definitive documentation, or (B) provide any debtor in possession financing to the Borrower or consent to the use of any cash collateral, or (ii) if a restructuring will be effectuated by way of an out-of-court transaction, then the Consenting Lenders, the Borrower, RRI or any Necessary Party shall have signed binding and effective definitive documentation in form and substance acceptable to the Consenting Lenders in their sole discretion;
(d)    The Borrower shall deliver to the Administrative Agent:
(i)    by not later than 6:00 p.m. (New York time) on the penultimate Business Day of each calendar week during the Forbearance Period (beginning on the penultimate Business Day of the first calendar week occurring after the Forbearance Effective Date) an updated weekly budget for the following 13-week consecutive period, in form and substance (A) in the case of updated Controlled Costs2 reflected in the first four calendar weeks of the Initial Weekly Budget, approved by the Administrative Agent in its sole discretion, and (B) in the case of updated Controlled Costs for any other week, approved by the Administrative Agent in its reasonable discretion (an “Updated Weekly Budget” and, together with the Initial Weekly Budget, the “Weekly Budget”), the delivery of which shall be deemed to be a representation by the Borrower that such Updated Weekly Budget has been prepared based upon good faith estimates and assumptions that the Borrower believes were reasonable at the time made;
(i)    concurrently with the delivery of each Updated Weekly Budget, a report, in form and substance reasonably satisfactory to the Administrative Agent showing, on a line-item basis, the percentage and dollar variance of actual cash disbursements and cash receipts for the prior week from the amounts set forth for such week in the prior Weekly Budget and the Initial Weekly Budget, along with an explanation of the variance;
		
	1 
	“Necessary Party” means any person (other than a party hereto) that the Consenting Lenders deem, in their sole discretion, to be a necessary party to any agreement or document necessary to implement a restructuring of the financing indebtedness of the Borrower and the preferred capital structure of RRI consistent with the Restructuring Capitalization Table (a “Restructuring”).

		
	2 
	“Controlled Costs” means all costs and expenses as reflected in the Initial Weekly Budget, as updated by an updated Weekly Budget, other than royalty payments, production and ad valorem taxes, interest, or professional fees.

8

(ii)    within three Business Days of the execution of an RSA, an updated long-term business plan and financial model incorporating the terms of the executed RSA; and
(iii)    by not later than 6:00 p.m. (New York time) on the 15th calendar day of each calendar month during the Forbearance Period (beginning on the 15th day of the first full calendar month occurring after the Forbearance Effective Date), an updated accounts payable aging report.
(e)    The Borrower hereby confirms, acknowledges, and agrees that during the Forbearance Period, the Borrower shall not make any payments or distributions, except for: (i) payments of the Secured Obligations; (ii) payments made in accordance with the terms of the Weekly Budget most recently delivered and approved, subject to any Permitted Variances;3 and (iii) other payments made with the prior written consent of the Administrative Agent in its sole discretion;
(f)    During the Forbearance Period, the Borrower shall not sell, assign, novate, liquidate, unwind or terminate the Existing Swap Agreements without the prior written consent of the Consenting Lenders;
(g)    Promptly, but in any event within three Business Days after the furnishing or receipt thereof (provided that any material amendments or written modifications contemplated in clause (ii) below shall be provided one Business Day before their execution), copies of (i) any notice of default or any notice related to the exercise of remedies, in each case pursuant to the Second Lien Documents, (ii) any amendment or other written modification of the Second Lien Note Purchase Agreement or any other Second Lien Document, and (iii) copies of any material notices, reports or other written information provided under the terms of the Second Lien Note Purchase Agreement, in each case not otherwise required to be furnished to the Administrative Agent or the Lenders pursuant to any other provisions of the Loan Documents; 
(h)    The Borrower shall transfer, and thereafter maintain, all cash held in any bank account, deposit account, or securities account (including the Excluded Accounts) to a bank account, deposit account, and/or securities account that is subject to a control agreement and perfected Lien in favor of the Administrative Agent for the benefit of the Secured Parties; 
(i)    Within 30 days of the Forbearance Effective Date, the Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to at least 85% of the PV-9 of the Borrowing Base Properties evaluated in the most recent Reserve Report;
(j)    Within five Business Days of the Forbearance Effective Date, the Administrative Agent shall have received Security Instruments (including reaffirmations) as the Administrative Agent may require and be satisfied that such Security Instruments, upon filing thereof, create first priority perfected Liens on substantially all of the Oil and Gas Properties and Midstream Properties of the Borrower; 
(k)    Within five Business Days of the Forbearance Effective Date, the Administrative Agent shall have received reasonably satisfactory evidence that each of the New Rosehill Entities have been dissolved; and
		
	3 
	“Permitted Variances” means in the case of Controlled Costs, any disbursements, expenditures, or payments by the Borrower that are not greater than 15%, on a line-item basis, of the disbursements, expenditures, or payments provided in the then-applicable Weekly Budget.

9

(l)    The Borrower hereby agrees to make no Investments in or with respect to the New Rosehill Entities.
SECTION 9.    Notices.  
(a)    The Borrower shall provide prompt notice to the Administrative Agent, as soon as possible but in any event within one Business Day after a Responsible Officer or other officer or employee of the Borrower obtains actual knowledge thereof, of the occurrence of any Forbearance Termination Event, which notice shall state that such event occurred and set forth, in reasonable detail, the facts and circumstances that gave rise to such event. Such notice shall be delivered by electronic mail to:
JPMorgan Chase Bank, N.A.
712 Main St., Floor 5
Houston, Texas 77002
Attention: Darren Vanek
Email: Darren.M.Vanek@jpmorgan.com
with a copy to (which copy shall not constitute notice):
White & Case LLP
609 Main Street, Suite 2900
Houston, Texas 77002
Attention: Mark Holmes
Email: Mark.Holmes@whitecase.com
(b)    Any notice and other communications provided for herein that must be provided to the Borrower shall be in writing and shall be delivered by electronic mail to:
Rosehill Resources, Inc.
16200 Park Row, Suite 300 
Houston, TX 77084
Attention: Jennifer Johnson
Email: jjohnson@rosehillres.com                                 
with a copy to (which copy shall not constitute notice            
Gibson, Dunn & Crutcher LLP
811 Main Street
Houston, TX 77002
Attn: Shalla Prichard
Email: sprichard@gibsondunn.com

All notices given in accordance with the provisions of this Section 9 shall be deemed to have been given on the date of receipt.
SECTION 10.    Effects on Loan Documents.
(a)    Except as specifically waived hereby and provided herein, all terms, conditions, covenants, representations and warranties contained in the Credit Agreement and other Loan Documents, and all rights of the Lenders and the Administrative Agent, shall remain in full force and effect, and are hereby in all respects ratified and confirmed.

10

(b)    Except as specifically stated herein, the execution, delivery, and effectiveness of this Agreement shall not (i) operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of the Loan Documents, (ii) create any obligation to continue to defer any enforcement action with respect to the Designated Defaults after the occurrence of any Forbearance Termination Event (or with respect to an Event of Default not constituting a Designated Default after the date hereof), (iii) constitute a consent or waiver of any past, present or future violations, including the Designated Defaults or any other Defaults and Events of Default, of any provisions of the Credit Agreement or any other Loan Documents, (iv) amend, modify, prejudice or operate as a waiver of any provision of the Credit Agreement or any other Loan Documents or, except as expressly set forth herein, any right, remedy, power or privilege of the Lenders and/or the Administrative Agent, (v) constitute a consent to any merger or other transaction or to any sale, restructuring or refinancing transaction, or (vi) constitute a course of dealing or other basis for altering any Secured Obligations or any other contract or instrument. Each of the Administrative Agent and each Lender reserves all of its rights, remedies, powers, and privileges under the Credit Agreement, the other Loan Documents, applicable Law and/or equity.
(c)    Nothing in this Agreement shall alter, amend, modify, or extinguish the obligation of any the Borrower to repay the Secured Obligations under the Credit Agreement and the other Loan Documents, and neither this Agreement nor any other document, agreement, or instrument executed or delivered in connection herewith or related hereto constitutes a novation, satisfaction, release, or a modification of the Credit Agreement and the other Loan Documents, which Secured Obligations shall, to the extent not paid on or prior to the Forbearance Effective Date, continue to be owing under the Credit Agreement or such other Loan Documents until paid in accordance therewith.
(d)    The Borrower and the other parties hereto acknowledge and agree that this Agreement shall constitute a Loan Document.
SECTION 11.    Releases.  Each of the Borrower and RRI, on behalf of themselves and each of their successors, assigns, and agents (collectively, the “Releasing Parties”), in consideration of the Administrative Agent’s and Lenders’ execution and delivery of this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, unconditionally, freely, voluntarily and, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, hereby expressly forever releases, waives and forever discharges (and further agrees not to allege, claim or pursue) any and all claims (including, without limitation, cross-claims, counterclaims, and rights of setoff and recoupment), rights, causes of action (whether direct or derivative in nature), demands, suits, costs, expenses, and damages or defense, of any nature, description, or kind whatsoever, whether arising in contract, in tort, in law, in equity or otherwise, based in whole or in part on facts or otherwise, whether known, unknown or subsequently discovered, fixed or contingent, direct or indirect, joint and/or several, secured or unsecured, due or not due, liquidated or unliquidated, asserted or unasserted, or foreseen or unforeseen, which any of the Releasing Parties might otherwise have or may have against the Administrative Agent or the Lenders, or each of the foregoing’s respective past, present, or future affiliates, agents, principals, managers, managing members, members, stockholders, controlling persons (within the meaning of the United States federal securities or bankruptcy laws), directors, officers, employees, attorneys, consultants, advisors, trusts, trustors, beneficiaries, heirs, executors, administrators or other representatives (collectively, the “Releasees”), in each case on account of any conduct, condition, act, omission, event, contract, liability, obligation, demand, covenant, promise, indebtedness, claim, right, cause of action, suit, damage, defense, judgment, circumstance or matter of any kind whatsoever which existed, arose or occurred at any time prior to the date of this Agreement relating to the Loan Documents, this Agreement and/or the transactions contemplated thereby or hereby (any of the foregoing, a “Claim” and 

11

collectively, the “Claims”). Each of the Releasing Parties hereby expressly acknowledges and agrees that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Claims, and that with respect to the Claims, that it waives, to the fullest extent permitted by applicable Law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of U.S. common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 11.  Furthermore, each of the Releasing Parties hereby absolutely, unconditionally and irrevocably covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released and/or discharged by the Releasing Parties pursuant to this Section 11.  In entering into this Agreement, the Borrower and RRI expressly disclaim any reliance on any representations, acts, or omissions by any of the Releasees and hereby agrees and acknowledges that the validity and effectiveness of the releases set forth in this Section 11 does not depend in any way on any such representation, acts and/or omissions or the accuracy, completeness, or validity thereof. Notwithstanding anything to the contrary, the provisions of this paragraph, including the foregoing release, covenant and waivers, shall survive and remain in full force and effect regardless of the termination or expiration of the Forbearance Period, the consummation or non-consummation of transactions contemplated hereby, the repayment or prepayment of any of the Loans or Secured Obligations, or the termination of the Credit Agreement, this Agreement, any other Loan Document or any provision hereof or thereof.
SECTION 12.    More Favorable Terms.  To the extent that any other forbearance, standstill or other similar agreement entered into by the Borrower (any such agreement, a “Third Party Forbearance Agreement”), or any amendment to any Third Party Forbearance Agreement, in each case, entered into or agreed on or after the date of this Agreement and during the Forbearance Period, provides any benefit or right (including, without limitation, the benefit of a forbearance period of shorter duration than the Forbearance Period) to any creditor party thereto that is more favorable than the benefits and rights provided to the Administrative Agent and the Lenders under this Agreement, taking into account the terms and conditions of the underlying debt financing documents in effect with such creditor party, this Agreement shall be deemed to be amended so as to cause any such benefit or right to be incorporated into this Agreement concurrently with making any such benefit or right available, and on comparable terms as it is made available, to any such other creditor.
SECTION 13.    Amendments; Execution in Counterparts.  
(a)    This Agreement shall not constitute an amendment of any other provision of the Credit Agreement not referred to herein and, except as expressly stated herein, shall not be construed as a waiver or consent to any further or future action on the part of the Borrower that would require a waiver or consent of the Lenders or the Administrative Agent. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect.
(b)    The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless amended, modified or supplemented, or waived or consented to, in accordance with Section 12.02 of the Credit Agreement. This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement or any other Loan Document by fax or any other electronic means (including emailed .pdf) approved by the Administrative Agent in writing (which may be via email) that reproduces an image of the actual executed signature page shall be as effective as the delivery of a manually executed counterpart of this Agreement or such Loan Document, as applicable. The Administrative Agent may also require that any 

12

such documents and signatures delivered by fax or other electronic transmission be confirmed by a manually signed original thereof; provided, that, the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by fax or other electronic transmission.
SECTION 14.    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns; provided, that, neither the Borrower nor RRI shall be entitled to delegate any of their duties hereunder and shall not assign any of their rights or remedies set forth in this Agreement without the prior written consent of the Administrative Agent in its sole and absolute discretion (and any attempted assignment or delegation without such consent shall be null and void).
SECTION 15.    No Third-Party Beneficiaries.  No Person other than the Borrower, the other Loan Parties, the Administrative Agent, the Releasees and the Lenders shall have any rights hereunder or be entitled to rely on this Agreement and all third-party beneficiary rights are hereby expressly disclaimed.
SECTION 16.    Severability.  The invalidity, illegality or unenforceability of any provision in or obligation under this Agreement in any jurisdiction shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Agreement or of such provision or obligation in any other jurisdiction.
SECTION 17.    Time of Essence.  Time is of the essence in the performance of each of the obligations of the Borrower, the other Loan Parties, and RRI hereunder and with respect to all conditions to be satisfied by such parties.
SECTION 18.    Further Assurances.  Each of the Loan Parties hereby agrees to execute and deliver from time to time such other documents as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Agreement and take such other actions as may be reasonably necessary in order to effectuate the terms hereof.
SECTION 19.    Prior Negotiations; Entire Agreement.  This Agreement, the Credit Agreement, and the other Loan Documents constitute the entire agreement of the parties with respect to the subject matter hereof and thereof, and supersede all other prior negotiations, understandings or agreements with respect to the subject matter hereof.
SECTION 20.    Interpretation.  This Agreement is the product of negotiations of the parties and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any party by reason of that party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.
SECTION 21.    GOVERNING LAW; WAIVER OF JURY TRIAL.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  EACH PARTY HERETO HEREBY AGREES TO THE TERMS AND PROVISIONS SET FORTH FURTHER IN SECTION 12.09 OF THE CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL HEREIN MUTATIS MUTANDIS.
SECTION 22.    Notice of Designated Defaults.  This Agreement and the matters set forth herein shall constitute written notice of the Existing Designated Events of Defaults for purposes of satisfaction of any disclosure requirement in the Credit Agreement, any Compliance Certificate, or any other Loan Document requiring that the Loan Parties give notice of, certify as to the absence of, or otherwise disclose in writing the occurrence and/or continuance of any Default or Event of Default and the failure of any Loan 

13

Party prior to, on or after the date hereof to deliver any such notice, certification or other disclosure of the Existing Designated Events of Defaults shall not constitute a Default or Event of Default under the Credit Agreement.
SECTION 23.    Incorporation of Recitals.  Each of the Loan Parties acknowledges that the recitals set forth herein are true and correct in all respects.
SECTION 24.    Fees and Expenses; Indemnities.  Without limiting any of the Administrative Agent’s or Lenders’ rights, or any of the Borrower’s obligations, under Section 12.03 of the Credit Agreement (which the Borrower hereby reconfirms), the Borrower shall be liable for and shall pay the Administrative Agent and the Lenders the amount of all costs and expenses (including but not limited to legal and financial advisory fees, of White & Case LLP, Bracewell LLP, and RPA Advisors, LLC) incurred by the Administrative Agent and the Lenders in connection with (i) the negotiation and preparation of, entry into, delivery of, and exercise of its rights under this Agreement and all other documents and instruments delivered in connection with this Agreement, and (ii) the enforcement of, or preservation of their rights under, this Agreement. Any costs and expenses payable pursuant to this Section 24 shall be payable within 10 days after demand.
SECTION 25.    Section Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute part of this Agreement for any other purpose.

[Remainder of page intentionally left blank; signatures follow.]

14

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
	
		
	ROSEHILL OPERATING COMPANY, LLC, as Borrower

	By:
	/s/ R. Craig Owen

	Name:
	R. Craig Owen

	Title:
	SVP and Chief Financial Officer

[Signature Page to Forbearance Agreement]

	
		
	ROSEHILL RESOURCES INC.,  
as RRI

	By:
	/s/ R. Craig Owen

	Name:
	R. Craig Owen

	Title:
	SVP and Chief Financial Officer

[Signature Page to Forbearance Agreement]

	
		
	JPMORGAN CHASE BANK, N.A.,  
as Administrative Agent, Lender and Issuing Bank

	By:
	/s/ Darren Vanek

	Name:
	Darren Vanek

	Title:
	Authorized Officer

[Signature Page to Forbearance Agreement]

	
		
	BBVA USA,  
as Lender

	By:
	/s/ Gabriela Azcarate

	Name:
	Gabriela Azcarate

	Title:
	Senior Vice President

[Signature Page to Forbearance Agreement]

	
		
	TRUST BANK,  
as Lender

	By:
	/s/ Benjamin L. Brown

	Name:
	Benjamin L. Brown

	Title:
	Director

[Signature Page to Forbearance Agreement]

	
		
	CITIBANK, N.A.,  
as Lender

	By:
	/s/ Thomas Skipper

	Name:
	Thomas Skipper

	Title:
	Vice President

[Signature Page to Forbearance Agreement]

	
		
	BMO HARRIS BANK N.A.,  
as Lender

	By:
	/s/ Hill Taylor

	Name:
	Hill Taylor

	Title:
	Vice President

[Signature Page to Forbearance Agreement]

	
		
	FIFTH THIRD BANK, NATIONAL ASSOCIATION,  
as Lender

	By:
	/s/ Dan Condley

	Name:
	Dan Condley

	Title:
	Managing Director

[Signature Page to Forbearance Agreement]

	
		
	ING Capital LLC,  
as Lender

	By:
	/s/ Juli Bieser

	Name:
	Juli Bieser

	Title:
	Managing Director

	 
	 

	By:
	/s/ Scott Lamoreaux

	Name:
	Scott Lamoreaux

	Title:
	Director

[Signature Page to Forbearance Agreement]

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