8-K
HORTON D R INC /DE/ false 0000882184 0000882184 2020-05-01 2020-05-01 0000882184 us-gaap:CommonStockMember 2020-05-01 2020-05-01 0000882184 us-gaap:SeniorNotesMember 2020-05-01 2020-05-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 1, 2020

 

D.R. Horton, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

1-14122

 

75-2386963

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

1341 Horton Circle, Arlington, Texas 76011

(Address of principal executive offices)

Registrant’s telephone number, including area code: (817) 390-8200

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

 

Trading

Symbol

 

Name of Each Exchange

on Which Registered

Common Stock, par value $.01 per share

 

DHI

 

New York Stock Exchange

5.750% Senior Notes due 2023

 

DHI 23A

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 8.01. Other Events.

On May 1, 2020, D.R. Horton, Inc. (the “Company”) and the Guarantors (as defined below) entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC, Mizuho Securities USA LLC and U.S. Bancorp Investments, Inc. as representatives of the several underwriters named therein, with respect to the offering and sale in an underwritten public offering (the “Offering”) by the Company of $500 million aggregate principal amount of its 2.600% Senior Notes due 2025 (the “Notes”).

The Offering has been registered under the Securities Act pursuant to a registration statement on Form S-3, File No. 333-226644 of the Company and certain direct and indirect wholly-owned subsidiaries of the Company listed as co-registrants thereto (the “Guarantors”) and the prospectus supplement dated May 1, 2020 and filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended, on May 4, 2020. The Offering is expected to close on May 5, 2020, subject to customary closing conditions. Certain legal opinions relating to the Notes are also filed herewith as Exhibits 5.1 and 5.2.

The Notes will be issued pursuant to an Indenture between the Company and Branch Banking and Trust Company (the “Trustee”), as trustee, dated as of October 10, 2019, as supplemented by the Second Supplemental Indenture with respect to the Notes (the “Second Supplemental Indenture”), to be dated as of May 5, 2020, among the Company, the Guarantors and the Trustee. The Notes will be represented by a global security, which is included as an exhibit to the Second Supplemental Indenture. The form of the Second Supplemental Indenture and the form of the Notes are filed as Exhibits to this Current Report on Form 8-K and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
 

  1.1

   

Underwriting Agreement, dated as of May 1, 2020, among D.R. Horton, Inc., the Guarantors named therein and J.P. Morgan Securities LLC, Mizuho Securities USA LLC and U.S. Bancorp Investments, Inc. as representatives of the underwriters named therein.

         
 

  4.1

   

Form of Second Supplemental Indenture, to be dated May 5, 2020, among D.R. Horton, Inc., the Guarantors named therein and Branch Banking and Trust Company, as trustee.

         
 

  4.2

   

Form of 2.600% Senior Notes due 2025 (included in Exhibit 4.1).

         
 

  5.1

   

Opinion of Thomas B. Montano, Esquire.

         
 

  5.2

   

Opinion of Gibson, Dunn & Crutcher LLP.

         
 

23.1

   

Consent of Thomas B. Montano, Esquire (included in Exhibit 5.1)

         
 

23.2

   

Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.2)

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    May 5, 2020

D.R. Horton, Inc.

     

By:

 

/s/ Thomas B. Montano

 

Thomas B. Montano

 

Vice President – Corporate Securities Counsel and Corporate Secretary

EX-1.1

Exhibit 1.1

Execution Version

D.R. HORTON, INC.

$500,000,000 2.600 % Senior Notes due 2025

UNDERWRITING AGREEMENT

May 1, 2020

J.P. Morgan Securities LLC

Mizuho Securities USA LLC

U.S. Bancorp Investments, Inc.

As Representatives of the several Underwriters

listed in Schedule A hereto

Ladies and Gentlemen:

D.R. Horton, Inc., a Delaware corporation (the “Company”), proposes to issue and sell $500,000,000 aggregate principal amount of its 2.600% Senior Notes due 2025 (the “Notes”) to J.P. Morgan Securities LLC, Mizuho Securities USA LLC and U.S. Bancorp Investments, Inc. (the “Representatives”) and the other underwriters listed on Schedule A hereto (each, an “Underwriter” and collectively, the “Underwriters”). The Notes are to be issued pursuant to the provisions of (i) an Indenture dated as of October 10, 2019 (the “Base Indenture”) between the Company and Branch Banking and Trust Company, as trustee (the “Trustee”) and (ii) a supplemental indenture to be dated as of the Closing Date (the “Supplemental Indenture,” and together with the Base Indenture, the “Indenture”) among the Company, the Guarantors (as defined below) and the Trustee. The Company’s obligations under the Indenture and the Notes will be unconditionally guaranteed (the “Guarantees”), jointly and severally, by each of the subsidiaries of the Company listed on the signature pages hereof (the “Guarantors”). The Company and the Guarantors are collectively referred to herein as the “Issuers,” and the Notes and the Guarantees are collectively referred to herein as the “Securities.”

1. Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) in accordance with the provisions of the Securities Act of 1933, as amended, and the published rules and regulations of the Commission thereunder (collectively, the “Act”), a registration statement on Form S-3 (No. 333-226644), including a base prospectus relating to the Securities. The registration statement at the time it became effective on August 7, 2018, including information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430B under the Act, is hereinafter referred to as the “Registration Statement.” The base prospectus dated August 7, 2018 (the “Base Prospectus”), as supplemented by the prospectus supplement dated the date hereof relating to the Securities in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Act) in connection with confirmation of sales of the Securities (the “Prospectus Supplement”) is hereinafter referred to as the “Prospectus.” The Base


Prospectus, as supplemented by the preliminary prospectus supplement dated May 1, 2020 relating to the Securities and used prior to the filing of the Prospectus (the “Preliminary Prospectus Supplement”) is hereinafter referred to as the “Preliminary Prospectus.” Any reference herein to the Registration Statement, the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the effective date of the Registration Statement or the date of the Preliminary Prospectus or the Prospectus (the “Incorporated Documents”), and, except as otherwise indicated, when reference is made to information “in” (including by use of the terms “set forth in,” “described in” and similar terms) the Preliminary Prospectus, the Prospectus or the Registration Statement, such reference shall be deemed to include information incorporated by reference in the Preliminary Prospectus, the Prospectus or the Registration Statement, as the case may be.

At or prior to 3:50 p.m. (Eastern time) on May 1, 2020, the time you have informed us as the time when sales of the Securities may be first made by the Underwriters in the offering (the “Time of Sale”), the following information (collectively with the information referred to in the next succeeding sentence, the “Time of Sale Information”) was delivered in connection with such sales or was filed with the Commission: the Preliminary Prospectus and each “free writing prospectus” (as defined pursuant to Rule 405 under the Act) listed on Exhibit A hereto.

2. Agreements To Sell and Purchase. The Company agrees to issue and sell, and, on the basis of the representations and warranties contained in this Underwriting Agreement (the “Agreement”) and subject to its terms and conditions, each Underwriter agrees, severally and not jointly, to purchase from the Company the aggregate principal amount of the Notes set forth opposite such Underwriter’s name on Schedule A hereto at an aggregate purchase price of 99.285 % of the principal amount thereof ($496,425,000), plus accrued interest, if any, from May 5, 2020 to the date of payment and delivery (collectively, the “Purchase Price”).

3. Terms of Public Offering. The Company is advised by the Underwriters that the Underwriters propose to make a public offering of the Securities as soon after the execution and delivery of this Agreement as in the judgment of the Underwriters is advisable on the basis set forth in the Time of Sale Information and the Prospectus. The Company acknowledges and agrees that the Underwriters may offer and sell Securities to or through any affiliate of an Underwriter for the purpose of any offers and sales of Securities outside the United States.

4. Delivery and Payment. Delivery to the Underwriters of and payment for the Securities shall be made at 10:00 A.M., New York City time, on May 5, 2020 (the “Closing Date”), at such place as you shall designate. The Closing Date and the location of delivery of and the form of payment for the Securities may be varied by agreement between you and the Company.

Certificates for the Securities shall be registered in such names and issued in such denominations as you shall request in writing not later than two full business days prior to the Closing Date. Such certificates shall be made available to you for inspection not later than 9:30 A.M., New York City time, on the business day next preceding the Closing Date. Certificates in definitive form evidencing the Securities shall be delivered to you on the Closing Date with any transfer taxes thereon duly paid by the Company, for the account of the Underwriters, against

 

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payment of the Purchase Price therefor by wire or certified or official bank checks payable in Federal funds to the order of the Company. If the Securities will be issued in book-entry form, the Company shall deposit the global certificate(s) representing the Securities with The Depository Trust Company (“DTC”), or its designated custodian, on the Closing Date, and the Company will deliver such global certificate(s) to the Underwriters by causing DTC to credit the Securities to the accounts of the Underwriters at DTC against payment therefor as set forth above.

5. Agreements of the Issuers. The Issuers, jointly and severally, agree with each Underwriter as follows:

(a) The Company will comply fully and in a timely manner with the applicable provisions of Rule 424 and Rule 430B under the Act and will file any Issuer Free Writing Prospectus (as defined in Section 6(c)) to the extent required by Rule 433 under the Act.

(b) The Issuers will advise you promptly and, if requested by you, will confirm such advice in writing: (i) of the effectiveness of any amendment to the Registration Statement; (ii) of the transmission to the Commission for filing of any supplement to the Prospectus (including any document that would as a result of such filing become an Incorporated Document) or of any Issuer Free Writing Prospectus and to furnish you with copies thereof; (iii) of the receipt of any comments from the Commission that relate to the Registration Statement or of any request by the Commission for amendment of or a supplement to the Registration Statement, the Preliminary Prospectus or the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the Preliminary Prospectus or the Prospectus or of the suspension of qualification of the Securities for offering or sale in any jurisdiction or the initiation or the threatening of any proceeding for such purpose or of the Company’s becoming the subject of a proceeding pursuant to Section 8A of the Act; and (v) within the period of time referred to in paragraph (e) below, of any change in the Company’s condition (financial or other), business, prospects, properties, net worth or results of operations, or of the happening of any event, which makes any statement of a material fact made in the Registration Statement, the Time of Sale Information or the Prospectus (as then amended or supplemented) untrue or which requires the making of any additions to or changes in the Registration Statement, the Time of Sale Information or the Prospectus (as then amended or supplemented) in order to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or of the necessity to amend or supplement the Time of Sale Information or the Prospectus (as then amended or supplemented) to comply with the Act or any other law. If at any time any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or suspending any such qualification shall be issued, the Issuers will promptly use their best efforts to obtain the withdrawal of such order at the earliest possible time.

 

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(c) The Issuers will furnish to you, without charge, (i) five copies of the registration statement as originally filed with the Commission and of each amendment thereto, including all exhibits thereto, (ii) such number of copies of the Preliminary Prospectus, each Issuer Free Writing Prospectus, the Prospectus and any amendment or supplement thereto as you may reasonably request, (iii) such number of copies of the registration statement as originally filed and of each amendment thereto, but without exhibits, as you may request, (iv) such number of copies of the Incorporated Documents, without exhibits, as you may request, and (v) five copies of the exhibits to the Incorporated Documents.

(d) The Issuers will not use or file any Issuer Free Writing Prospectus not included in the Time of Sale Information, file any amendment to the Registration Statement or make any amendment or supplement to the Prospectus or, prior to the end of the period of time referred to in paragraph (e) below, file any document which upon filing becomes an Incorporated Document, of which you shall not previously have been advised or to which, after you shall have received a copy of the document proposed to be used or filed, you shall reasonably object.

(e) As soon as possible after the execution and delivery of this Agreement and thereafter from time to time for such period as in the opinion of counsel for the Underwriters a prospectus is required by the Act to be delivered in connection with sales by any Underwriter or any dealer, the Issuers will expeditiously deliver to the Underwriters and each dealer, without charge, as many copies of the Preliminary Prospectus and the Prospectus (and of any amendment or supplement thereto) and each Issuer Free Writing Prospectus as you may reasonably request. The Issuers consent to the use of the Preliminary Prospectus, any Issuer Free Writing Prospectus, the use of which is permitted hereby, and the Prospectus (and of any amendment or supplement thereto) in accordance with the provisions of the Act and with the securities or blue sky laws of the jurisdictions in which the Securities are offered by any Underwriter and by all dealers to whom Securities may be sold, both in connection with the offering and sale of the Securities and, in the case of the Prospectus, for such period of time thereafter as the Prospectus is required by the Act to be delivered in connection with sales by any Underwriter or any dealer.

(f) (1) If during the period of time referred to in paragraph (e) above any event shall occur as a result of which, in the judgment of the Issuers or the Underwriters, it becomes necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with the Act or any other law, the Issuers will forthwith prepare and, subject to the provisions of paragraph (d) above, file with the Commission an appropriate amendment or supplement to the Prospectus so that the statements in the Prospectus, as so amended or supplemented, will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Prospectus will comply with law, and to furnish to the Underwriters and to such dealers as you shall specify such number of copies thereof as the Underwriters or such dealers may reasonably request and (2) if at any time prior to the Time of Sale (i) any event shall occur or condition shall exist as a result of which, in the judgment of the Issuers or the Underwriters, the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances, not misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to comply with the Act or any other law, the Issuers will forthwith

 

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prepare and, subject to the provisions of paragraph (d) above, file with the Commission (to the extent required) an appropriate amendment or supplement to the Time of Sale Information so that the statements in the Time of Sale Information, as so amended or supplemented, will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Time of Sale Information will comply with law, and to furnish to the Underwriters and to such dealers as you shall specify such number of copies thereof as the Underwriters or such dealers may reasonably request.

(g) The Issuers will cooperate with you and with counsel for the Underwriters in connection with the registration or qualification of the Securities for offering and sale by the Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as you may designate and will file such consents to service of process or other documents necessary or appropriate in order to effect such registration or qualification; provided, however, that in no event shall any Issuer be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.

(h) The Issuers will make generally available to its security holders a consolidated earnings statement, which need not be audited, covering a twelve-month period commencing after the date of the Prospectus and ending not later than 15 months thereafter, as soon as practicable after the end of such period, which consolidated earnings statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder, and will advise you in writing when such statement has been made available.

(i) During the period of five years hereafter, the Issuers will furnish to you as soon as available, to the extent not otherwise available on the Commission’s website, a copy of all public materials furnished by the Company to its stockholders and all public reports and financial statements furnished by the Company to the principal national securities exchange upon which the common stock of the Company may be listed pursuant to requirements of or agreements with such exchange or to the Commission.

(j) The Company will apply the net proceeds from the sale of the Securities in accordance with the description set forth in the Time of Sale Information and the Prospectus under the caption “Use of Proceeds.”

(k) Neither the Company nor any of its subsidiaries has taken, or will take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Securities to facilitate the sale or resale of the Securities.

(l) The Issuers, jointly and severally, will pay all costs, expenses, fees and taxes incident to (i) the preparation, printing, filing and distribution under the Act of the Registration Statement (including financial statements and exhibits), and all amendments and supplements thereto prior to or during the period specified in paragraph (e) above, (ii) the preparation of the Indenture, the issuance of the Notes and the fees of the Trustee, (iii) the printing and delivery (including postage, air freight charges and charges for

 

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counting and packaging) of such copies of the Preliminary Prospectus, each Issuer Free Writing Prospectus, the Prospectus and all amendments or supplements thereto during the period specified in paragraph (e) above, (iv) the printing and delivery of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all other agreements, memoranda, correspondence and other documents printed and delivered in connection with the offering of the Securities (including in each case any disbursements of counsel for the Underwriters relating to such printing and delivery), (v) the registration or qualification of the Securities for offer and sale under the securities or Blue Sky laws of the several states and Canada (including in each case the reasonable fees and disbursements of counsel for the Underwriters relating to such registration or qualification and memoranda relating thereto), (vi) filings and clearance with the Financial Industry Regulatory Authority in connection with the offering (including the reasonable fees and disbursements of counsel for the Underwriters relating thereto), (vii) the listing, if any, of the Securities on any national securities exchange and (viii) furnishing such copies of the Registration Statement, the Preliminary Prospectus, each Issuer Free Writing Prospectus, the Prospectus and all amendments and supplements thereto as may be requested for use in connection with the offering or sale of the Securities by the Underwriters or by dealers to whom Securities may be sold.

(m) The Issuers will not during the period beginning on the date hereof and continuing to and including the date which is the first business day after the Closing Date, offer, sell, contract to sell or otherwise dispose of any debt securities of any of the Issuers or any warrants, options or other rights to purchase or acquire debt securities of any of the Issuers or any securities convertible into or exchangeable for debt securities of any of the Issuers (other than the Securities), without the prior written consent of the Representatives.

(n) The Issuers will use their best efforts to do and perform all things required or necessary to be done and performed under this Agreement by the Issuers prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Securities.

(o) The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Act.

6. Representations and Warranties of the Issuers. The Issuers, jointly and severally, represent and warrant to each Underwriter that:

(a) Each preliminary prospectus included as part of the registration statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the provisions of the Act. The Commission has not issued any order preventing or suspending the use of any preliminary prospectus.

 

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(b) The Time of Sale Information at the Time of Sale did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that no representation or warranty is made as to information relating to an Underwriter contained in or omitted from the Time of Sale Information in reliance upon and in conformity with written information furnished to the Issuers by or on behalf of such Underwriter specifically for inclusion therein.

(c) The Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities, other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Act or Rule 134 under the Act, (ii) the Preliminary Prospectus, (iii) the Prospectus, (iv) the documents listed on Exhibit A hereto as constituting the Time of Sale Information and (v) any electronic roadshow or other written communications, in each case approved in writing in advance by the Representatives. Each communication by the Company or its agents and representatives referred to in clauses (iv) and (v) is referred to herein as an “Issuer Free Writing Prospectus.” Each such Issuer Free Writing Prospectus complied in all material respects with the Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Act (to the extent required thereby) and, when taken together with the Time of Sale Information accompanying, or delivered prior to delivery of, such Issuer Free Writing Prospectus, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.

(d) The Company was at the time of initial filing of the Registration Statement and at the time of the most recent amendment thereto for purposes of complying with Section 10(a)(3) of the Act, a “well-known seasoned issuer” (as defined in Rule 405 under the Act) eligible to use Form S-3 for the offering of the Securities, including not having been an “ineligible issuer” (as defined in Rule 405 under the Act) at any such time or date. The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405 under the Act) and was filed not earlier than the date that is three years prior to the Closing Date (as defined in Section 4). The Registration Statement has become effective and at the date of the Prospectus (if different), including at the date of any post-effective amendment or supplement, the Registration Statement will comply in all material respects with the provisions of the Act, and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; the Prospectus (and any supplements or amendments thereto) will at all such times comply in all material respects with the provisions of the Act and will not at any such time contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in

 

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the light of the circumstances under which they were made, not misleading; provided, however, that no representation or warranty is made as to information relating to an Underwriter contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Issuers by or on behalf of such Underwriter specifically for inclusion therein.

(e) The Incorporated Documents, at the time they were filed with the Commission complied, or, to the extent such documents were subsequently amended prior to the date hereof, at the time so amended complied, in all material respects with the requirements of the Act or the Securities Exchange Act of 1934, as amended, and the published rules and regulations of the Commission thereunder (collectively, the “Exchange Act”), as applicable, and such documents do not on the date hereof, and will not at the Closing Date, contain an untrue statement of a material fact and do not on the date hereof, and will not at the Time of Sale or on any Closing Date, omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(f) The financial statements (including the related notes and supporting schedules) in the Registration Statement, the Time of Sale Information and the Prospectus present fairly in all material respects the consolidated financial position and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except for changes in accounting principles described therein.

(g) PricewaterhouseCoopers LLP, who reported on the financial statements of the Company through its fiscal year ended September 30, 2018, was a registered independent public accounting firm with respect to the Company and its subsidiaries as required by the Act during all relevant periods and, to the Company’s knowledge, was not, during all relevant periods, in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”). Ernst & Young LLP is a registered independent public accounting firm with respect to the Company and its subsidiaries as required by the Act and, to the Company’s knowledge, is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act. Ernst & Young LLP has been serving as the Company’s independent accountant since the quarter ended December 31, 2018.

(h) The Company and each of its subsidiaries have been duly formed and are validly existing in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification except where the failure to so qualify, singly or in the aggregate, would not have a Material Adverse Effect, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged. A “Material Adverse Effect” means any material adverse effect on the financial condition, results of operations, business or prospects of the Company and its subsidiaries taken as a whole.

 

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(i) The Company has an authorized capitalization as set forth in the Time of Sale Information and the Prospectus; and all of the issued equity interests of each subsidiary of the Company have been duly authorized and validly issued and, as to shares of capital stock of any corporation constituting a subsidiary, are fully paid and non-assessable and (except for directors’ qualifying shares as disclosed in the Registration Statement and the Time of Sale Information or minority interests in non-Guarantor subsidiaries) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, security interests, equities or any other claim of any third party other than restrictions on transfer imposed by applicable securities laws.

(j) The execution, delivery and performance of this Agreement, the Indenture and the Securities by the Issuers, compliance by the Issuers of all the provisions hereof and thereof and the consummation of the transactions contemplated hereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the organizational documents of the Company or any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their property or assets; and except for such consents, approvals, authorizations, registrations or qualifications as may be required under the Act or applicable state or foreign securities laws in connection with the purchase and distribution of the Securities by any Underwriter, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution, delivery and performance of this Agreement, the Indenture and the Securities by the Issuers, compliance by the Issuers of all the provisions hereof and thereof and the consummation of the transactions contemplated hereby.

(k) This Agreement has been duly authorized, executed and delivered by the Issuers.

(l) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, and, on the Closing Date, will be duly authorized, executed and delivered by the Issuers and will be a valid and binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.

 

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(m) The Notes have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to each Underwriter against payment therefor as provided by this Agreement, will be entitled to the benefits of the Indenture, and will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.

(n) The Guarantees have been duly authorized and, upon endorsement on the Notes by the Guarantors, execution and authentication of the Notes in accordance with the provisions of the Indenture and delivery of the Notes to each Underwriter against payment therefor as provided by this Agreement, will be entitled to the benefits of the Indenture, and will be valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.

(o) The Securities and the Indenture conform in all material respects to the description thereof in the Time of Sale Information and the Prospectus.

(p) Neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements in the Time of Sale Information and the Prospectus, any loss or interference with the business of the Company and its subsidiaries taken as a whole from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus, resulting in a Material Adverse Effect; and, since such date, there has not been any change in the capital stock (other than (i) the issuance of shares of Common Stock upon exercise of options, rights and awards described as outstanding in, (ii) the grant of options, rights and awards under existing equity incentive plans described in, and (iii) the issuance of shares of Common Stock under our employee stock purchase plan described in the Time of Sale Information and the Prospectus) or material change in the long term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus.

(q) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act.

 

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(r) The Company and its subsidiaries own the items of real property and personal property purported to be owned by them which are material to the conduct of the business of the Company and its subsidiaries taken as a whole, free and clear of all liens, encumbrances and defects, except such as are described in the Time of Sale Information and the Prospectus or such as would not have a Material Adverse Effect. All real property held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions as are described in the Time of Sale Information and the Prospectus or such as would not have a Material Adverse Effect.

(s) Except as described in the Time of Sale Information and the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which are reasonably likely to have a Material Adverse Effect; and to the Issuers’ knowledge, no such proceedings are threatened by governmental authorities or by others.

(t) The conditions for use of Form S-3, as set forth in the General Instructions thereto, have been satisfied. The Company is not an “ineligible issuer” as defined under Rule 405 of the Act.

(u) To the Issuers’ knowledge, all real property owned (either presently or at any time in the past) or presently leased by the Company and its subsidiaries in connection with the operation of their business, including, without limitation, any subsurface soils and ground water (collectively, the “Realty”), is free of contamination from any substance or material presently known to be toxic or hazardous, including, without limitation, any radioactive substance, methane, volatile hydrocarbons or industrial solvents (each, a “Hazardous Substance”), which could reasonably be expected to materially impair the beneficial use thereof by the Company and its subsidiaries or constitute or cause a significant health, safety or other environmental hazard to occupants or users (except for contaminations which would not have a Material Adverse Effect); and to the Issuers’ knowledge, the Realty does not contain any underground storage or treatment tanks, active or abandoned water, gas or oil wells, or any other underground improvements or structures, other than the foundations, footings or other supports for the improvements located thereon, the presence of which would have a Material Adverse Effect. Notwithstanding the foregoing, Hazardous Substances shall be deemed not to include any supplies or substances maintained, used, stored or held on the Realty which are (i) naturally occurring, (ii) installed by public utilities or (iii) used in the ordinary course of the Company’s or its subsidiaries’ business, provided that such supplies or substances are stored, used, maintained and held in all material respects in accordance with any applicable governmental requirements and with restrictions, conditions and standards suggested by the manufacturer and the Company’s insurance carriers.

(v) The Company and its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses.

 

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(w) The Company and its subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses necessary for the conduct of their respective businesses the absence of which would have a Material Adverse Effect, and have no reason to believe that the conduct of their respective businesses will conflict with, and have not received any notice of any claim of conflict with, any such rights of others which could reasonably be expected to have a Material Adverse Effect.

(x) There are no contracts or other documents which are required to be described in the Time of Sale Information and the Prospectus or filed as exhibits to the Registration Statement by the Act which have not been described in the Time of Sale Information and the Prospectus or filed as exhibits to the Registration Statement or incorporated therein by reference as permitted by the Act.

(y) No labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the Issuers’ knowledge, is imminent which could reasonably be expected to have a Material Adverse Effect.

(z) The Company and its subsidiaries have filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and have paid all taxes due thereon, except where the failure to do so has not had and would not reasonably be expected to have a Material Adverse Effect, and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does any Issuer have any knowledge of any tax deficiency which would reasonably be likely to have) a Material Adverse Effect.

(aa) Since the date as of which information is given in the Time of Sale Information and the Prospectus, and except as may otherwise be disclosed or contemplated in the Time of Sale Information and the Prospectus, neither the Company nor any of its subsidiaries has (i) entered into any material transaction not in the ordinary course of business or (ii) declared or paid any dividend on its capital stock (other than payment of dividends whose declaration was so disclosed), and, from the date of the Prospectus, neither the Company nor any of its subsidiaries has incurred any liability other than in the ordinary course of business that is material to the Company and its subsidiaries taken as a whole.

(bb) The Company is in compliance with Section 13(b)(2) of the Exchange Act and Rule 13a-15 under the Exchange Act. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement and the Prospectus fairly present the information called for in all material respects and have been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(cc) The Company is not in violation of, and none of its subsidiaries is in a material violation of, their respective organizational documents. Neither the Company nor any of its subsidiaries (i) is in default and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject as a result of

 

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which default there would be a Material Adverse Effect or (ii) is in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain any license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business which violation or failure would have a Material Adverse Effect.

(dd) Neither the Company nor any of its subsidiaries is or, after giving effect to the offering and sale of the Securities, will be an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

(ee) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-bribery or anti-corruption laws; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other payment, in each case under this clause (iv), to the extent unlawful. The Company and its subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.

(ff) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any of its subsidiaries, threatened.

(gg) None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently the subject of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State (collectively, “Sanctions”); nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, Cuba, Crimea, Iran, North Korea and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or

 

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entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or the target of any Sanctions, (ii) to fund or facilitate any activities of or any business in any Sanctioned Country or (iii) in any other manner that could result in a violation by any person (including any person participating in the transaction, whether as underwriter, initial purchaser, advisor, investor or otherwise) of any Sanctions. For the past five years, the Company and its subsidiaries have not knowingly engaged in, and are not now knowingly engaged in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of any Sanctions or with any Sanctioned Country.

(hh) The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

(ii) The Company is not and will not be (1) an employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (2) a plan or account subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”); (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA or the Code; or (4) a “governmental plan” within the meaning of ERISA.

(jj) The Company and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their businesses, and to the Company’s knowledge, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same. The Company and its subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, except where such non-compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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7. Indemnification.

(a) The Issuers, jointly and severally, agree to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the directors, officers, employees, affiliates and agents of each of the foregoing (collectively, the “Underwriter Indemnified Parties”), from and against any and all losses, claims, damages, liabilities and judgments caused by (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale Information, or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages, judgments or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein. The foregoing indemnity agreement shall be in addition to any liability that the Issuers may otherwise have.

(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Issuers, their directors, their officers who sign the Registration Statement and any person controlling the Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (collectively, the “Issuer Indemnified Parties”), to the same extent as the foregoing indemnity from the Issuers to the Underwriter Indemnified Parties but only with reference to information relating to an Underwriter furnished in writing by or on behalf of such Underwriter expressly for use in the Registration Statement, the Prospectus, the Preliminary Prospectus, any Issuer Free Writing Prospectus or any Time of Sale Information.

(c) In case any action shall be brought against any indemnified party, based upon the Preliminary Prospectus, the Registration Statement, any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus or any amendment or supplement thereto and with respect to which indemnity may be sought against an indemnifying party, the indemnified party shall promptly notify the indemnifying party in writing and the indemnifying party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses. Such indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense and employ counsel or (iii) the named parties to any such action (including any impleaded parties) include both such indemnified party and the indemnifying party and such indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party, it being understood, however, that the indemnifying party shall not, in connection

 

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with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all such indemnified parties, which firm shall be designated in writing by Mizuho Securities USA LLC (in the case of the Underwriter Indemnified Parties) and the Company (in the case of the Issuer Indemnified Parties) and that all such fees and expenses shall be reimbursed as they are incurred). No indemnifying party shall be liable for any settlement of any such action effected without the written consent of the Company (if the Issuers are the indemnifying parties) or the Representatives (if the Underwriters are the indemnifying parties) but if settled with such written consent, the indemnifying parties agree to indemnify and hold harmless the indemnified parties from and against any loss or liability by reason of such settlement. An indemnifying party shall not, without the prior written consent of the indemnified parties, effect any settlement of any pending or threatened proceeding in respect of which the indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and does not contain any admission of guilt in respect of any indemnified party.

(d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuers on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuers and the Underwriters in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative benefits received by the Issuers and the Underwriters shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company, and the compensation received by the Underwriters (based on discount to investors on resale), bear to the sum of such total net proceeds and such compensation. The relative fault of the Issuers and the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Issuers or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Issuers and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating

 

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or defending any such action or claim. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 7 are several in proportion to their respective purchase obligations hereunder and not joint.

The Underwriters confirm and the Issuers acknowledge that the statements with respect to the public offering of the Securities by the Underwriters set forth in the third and eighth (with caption “Short Positions”) paragraphs of the section entitled “Underwriting” in the Preliminary Prospectus Supplement and the Prospectus Supplement constitute the only information concerning such Underwriter furnished in writing to the Issuers by or on behalf of such Underwriter specifically for inclusion in the Registration Statement, the Prospectus, Preliminary Prospectus, Issuer Free Writing Prospectus and the Time of Sale Information for all purposes under this Agreement.

8. Conditions of Underwriters’ Obligation. The obligation of the Underwriters to purchase the Securities under this Agreement is subject to the satisfaction of each of the following conditions:

(a) All the representations and warranties of the Issuers contained in this Agreement shall be true and correct as of the Time of Sale and on the Closing Date with the same force and effect as if made on and as of the Time of Sale and on and as of the Closing Date. The Issuers shall have performed or complied with all of their agreements herein contained and required to be performed or complied with by them at or prior to the Closing Date.

(b) (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose or pursuant to Section 8A of the Act against the Company in connection with the offering of the Securities shall have been commenced or shall be pending before or threatened by the Commission, (ii) every request for additional information on the part of the Commission shall have been complied with in all material respects and (iii) no stop order suspending the sale of the Securities in any jurisdiction referred to in Section 6(h) shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened which would, in your reasonable judgment, make it impracticable or inadvisable to proceed with the public offering or delivery of the Securities or to enforce contracts for the sale of the Securities.

(c) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have been any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any Issuer’s debt by any “nationally recognized statistical rating organization,” as such term is defined in Section (3)(a)(62) of the Exchange Act.

 

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(d) (i) Since the date of the latest balance sheet included in the Registration Statement, the Time of Sale Information and the Prospectus there shall not have been any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, affairs or business prospects, whether or not arising in the ordinary course of business, of the Company and its subsidiaries taken as a whole, (ii) since the date of the latest balance sheet included in the Registration Statement, the Time of Sale Information and the Prospectus there shall not have been any material change in the capital stock or in the long-term debt of the Company or any of its subsidiaries from that set forth or contemplated in the Registration Statement, the Time of Sale Information and the Prospectus and (iii) the Company and its subsidiaries shall have no liability or obligation, direct or contingent, which is material to the Company and its subsidiaries, taken as a whole, other than those set forth or contemplated in the Registration Statement, the Time of Sale Information and the Prospectus.

(e) The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date, signed by (i) Donald R. Horton or David Auld and (ii) Bill W. Wheat or William Jeffrey Tebeaux in their capacities as (A) the Chairman of the Board or Chief Executive Officer and President and (B) Chief Financial Officer or Treasurer of the Company, respectively, confirming the matters set forth in paragraphs (a), (b), (c) and (d) of this Section 8.

(f) The Underwriters shall have received on the Closing Date letters (satisfactory to you and counsel for the Underwriters), dated the Closing Date, of Gibson, Dunn & Crutcher LLP, counsel for the Company, in the form previously agreed between such counsel and counsel for the Underwriters.

(g) The Underwriters shall have received on the Closing Date letters, dated the Closing Date, of Cahill Gordon & Reindel LLP, counsel for the Underwriters, in form and substance satisfactory to the Underwriters.

(h) The Underwriters shall have received letters on and as of the date of this Agreement and the Closing Date, in form and substance satisfactory to you, from each of PricewaterhouseCoopers LLP and Ernst & Young LLP, each an independent registered public accounting firm, with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Information (including the Preliminary Prospectus) and the Prospectus.

(i) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements in the Time of Sale Information and the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus or (ii) since such date there shall not have been any change in the capital stock, net revenues, per share or total amounts of income

 

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before extraordinary items or of net income or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered on the Closing Date on the terms and in the manner contemplated in the Time of Sale Information and the Prospectus.

(j) The Issuers shall have furnished to you such other documents and certificates as to the accuracy and completeness of any statement in the Registration Statement, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus as you reasonably may request.

(k) You shall have been furnished with such additional documents and certificates as you or counsel for the Underwriters may reasonably request.

All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to you and your counsel.

Any certificate or document signed by any officer of the Issuers and delivered to you or to your counsel shall be deemed a representation and warranty by the Issuers to the Underwriters as to the statements made therein.

9. Default by an Underwriter. If any one Underwriter shall fail to purchase and pay for any of the Notes agreed to be purchased by such Underwriter hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of the Notes set forth opposite their names in Schedule A hereto bears to the aggregate principal amount of the Notes set forth opposite the names of all the remaining Underwriters) the Notes which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Notes which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Notes set forth in Schedule A hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Notes, and if such non-defaulting Underwriters do not purchase all of the Notes, this Agreement will terminate without liability to any non-defaulting Underwriter or the Company except that the provisions of Sections 5(l) and 7 shall at all times be effective and shall survive such termination. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five business days, as the Representatives shall determine in order that the required changes in the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company or any non-defaulting Underwriter for damages occasioned by its default hereunder.

 

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10. Representations and Warranties by and Agreements of the Underwriters. Each Underwriter hereby severally represents and warrants to and agrees with the Issuers that:

(a) it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any “free writing prospectus,” as defined in Rule 405 under the Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) a free writing prospectus that, solely as a result of use by such underwriter, would not trigger an obligation to file such free writing prospectus with the Commission pursuant to Rule 433 (other than a free writing prospectus under clause (b) below), (ii) any Issuer Free Writing Prospectus listed on Exhibit A or prepared pursuant to Section 5(d) or Section 6(c) above or (iii) any free writing prospectus prepared by such Underwriter and approved by the Company in advance in writing (the approval thereof not being intended in itself to make such free writing prospectus an Issuer Free Writing Prospectus). Notwithstanding the foregoing, the Underwriters may use a term sheet substantially in the form of Exhibit B hereto without the consent of the Company;

(b) it will, pursuant to reasonable procedures developed in good faith, retain copies of each free writing prospectus used or referred to by it, in accordance with Rule 433 under the Act; and

(c) it is not subject to any pending proceeding under Section 8A of the Act with respect to the offering (and will promptly notify the Company if any such proceeding against it is initiated during the period referred to in Section 5(e) above).

11. Termination. This Agreement may be terminated at any time prior to the Closing Date by the Representatives by written notice to the Issuers if any of the following has occurred: (i) since the respective dates as of which information is given in the Registration Statement, the Time of Sale Information and the Prospectus, any material adverse change or development involving a prospective material adverse change in the condition, financial or otherwise, of the Company and its subsidiaries or the earnings, affairs, or business prospects of the Company and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, (ii) any outbreak or escalation of hostilities or other national or international calamity or crisis or change in economic conditions or in the financial markets of the United States or elsewhere that, in your judgment, is material and adverse, (iii)(a) the suspension or limitation of trading in securities of any Issuer by the Commission or on the New York Stock Exchange, or (b) the suspension or material limitation of trading in securities on the New York Stock Exchange or the Nasdaq Stock Market, Inc. or limitation on prices for securities on any such exchange, (iv) the enactment, publication, decree or other promulgation of any federal or state statute, regulation, rule or order of any court or other governmental authority which in your opinion materially and adversely affects, or will materially and adversely affect, the business or operations of the Company and its subsidiaries taken as a whole, (v) the declaration of a banking moratorium by either federal or New York State authorities, or (vi) the taking of any action by any federal, state or local government or agency in respect of its monetary or fiscal affairs which in your opinion has a material adverse effect on the financial markets in the United States and, in the case of clause (i),

 

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(ii), (iv) or (vi), that would, in the judgment of the Representatives, make it impracticable or inadvisable to proceed with the public offering or delivery of the Securities on the terms and in the manner contemplated in the Time of Sale Information and the Prospectus, exclusive of any amendment or supplement thereto.

12. No Fiduciary Duty. The Issuers acknowledge and agree that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Issuers with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, any Issuer or any other person. Additionally, neither any Representative nor any other Underwriter is advising any Issuer or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. Each Issuer shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to any Issuer with respect thereto. Any review by the Underwriters of any Issuer, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of any Issuer.

13. Miscellaneous. Notices given pursuant to any provision of this Agreement shall be addressed as follows: (a) if to the Issuers, to D.R. Horton, Inc., 1341 Horton Circle, Arlington, Texas 76011, Attention: Chief Financial Officer, and (b) if to the Underwriters, c/o Mizuho Securities USA LLC, 1271 Avenue of the Americas, New York, NY 10020, Attn: Debt Capital Markets (Fax: 212-205-7812), with a copy to Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005-1702 (fax number: (212) 269-5420), Attention: Daniel Zubkoff, or in any case to such other address as the person to be notified may have requested in writing.

The respective indemnities, contribution agreements, representations, warranties and other statements of the Company, its officers and directors (in their capacities as such) and of the Underwriters set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive delivery of and payment for the Securities, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of an Underwriter or Underwriter Indemnified Party or by or on behalf of the Company, the officers or directors of the Company or any controlling person of the Company (in their capacities as such), (ii) acceptance of the Securities and payment for them hereunder and (iii) termination of this Agreement.

If this Agreement shall be terminated pursuant to Section 11(iii)(a) of this Agreement or by the Underwriters because of any failure or refusal on the part of any Issuer to perform any of its agreements in this Agreement or to fulfill any of the conditions of Section 8 of this Agreement the Issuers, jointly and severally, agree to reimburse the Underwriters for all out-of-pocket expenses (including the fees and disbursements of counsel) reasonably incurred by them.

Except as otherwise provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Issuers, the Underwriters, any controlling persons referred to herein, the other indemnitees referred to herein and their respective successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include a purchaser of any of the Securities from any Underwriter merely because of such purchase.

 

-21-


This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed and construed in accordance with the laws of the State of New York.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

This Agreement 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. Any signature to this Agreement may be 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 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 Agreement through electronic means.

References herein to “your judgment” or “your opinion” shall be deemed to be the judgment or opinion, as the case may be, of the Representatives only.

14. Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) and the requirements of 31.C.F.R. §1010.230, the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.

15. Recognition of the U.S. Special Resolution Regimes.

(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

-22-


(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 15:

BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

Covered Entity” means any of the following:

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

[Signature Pages Follow]

 

-23-


Please confirm that the foregoing correctly sets forth the agreement between the Issuers and the Underwriters.

 

Sincerely,
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, Managing 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


Agreed and accepted as of the

date first written above:

By:   J.P. MORGAN SECURITIES LLC,
for itself and as a Representative of the several underwriters set forth on Schedule A
By:  

/s/ Robert Bottamedi

Name: Robert Bottamedi

Title: Executive Director

By:   MIZUHO SECURITIES USA LLC,
for itself and as a Representative of the several underwriters set forth on Schedule A
By:  

/s/ Andrew S. Rothstein

 

Name: Andrew S. Rothstein

Title: Managing Director

By:   U.S. BANCORP INVESTMENTS, INC.
for itself and as a Representative of the several underwriters set forth on Schedule A
By:  

/s/ Charles P. Carpenter

Name: Charles P. Carpenter

Title: Senior Vice President


SCHEDULE A

 

Underwriter

   Principal Amount of Notes  

J.P. Morgan Securities LLC

   $ 93,334,000  

Mizuho Securities USA LLC

     93,334,000  

U.S. Bancorp Investments, Inc.

     93,334,000  

Citigroup Global Markets Inc.

     43,334,000  

Wells Fargo Securities, LLC

     43,334,000  

BofA Securities, Inc.

     20,833,000  

PNC Capital Markets LLC

     20,833,000  

SunTrust Robinson Humphrey, Inc.

     20,833,000  

TD Securities (USA) LLC

     20,833,000  

BNP Paribas Securities Corp.

     8,333,000  

Citizens Capital Markets, Inc.

     8,333,000  

Comerica Securities, Inc.

     8,333,000  

Regions Securities LLC

     8,333,000  

Samuel A. Ramirez & Company, Inc.

     8,333,000  

WoodRock Securities, L.P.

     8,333,000  
  

 

 

 

Total

   $ 500,000,000  
  

 

 

 


EXHIBIT A

Time of Sale Information

Final pricing term sheet in form of Exhibit B


EXHIBIT B

[Final Pricing Term Sheet – See attachment]


Filed pursuant to Rule 433 under the Securities Act of 1933

Issuer Free Writing Prospectus, dated May 1, 2020

Supplementing the Preliminary Prospectus Supplement, dated May 1, 2020

Registration No. 333-226644

D.R. Horton, Inc.

$500,000,000 2.600% Senior Notes due 2025

Pricing Supplement

The information in this Pricing Supplement supplements the Preliminary Prospectus Supplement and supersedes the information in the Preliminary Prospectus Supplement to the extent it is inconsistent with the information in the Preliminary Prospectus Supplement.

 

Issuer    D.R. Horton, Inc.
Title of Securities    2.600% Senior Notes due 2025
Aggregate Principal Amount    $500,000,000
Maturity Date    October 15, 2025
Coupon    2.600%
Public Offering Price    99.885% of the principal amount
Benchmark Treasury    0.500% due March 31, 2025
Benchmark Treasury Price / Yield    100-1934 / 0.373%
Spread to Benchmark Treasury    T+225 basis points
Yield to Maturity    2.623%
Interest Payment Dates    April 15 and October 15 of each year, beginning on October 15, 2020
Record Dates    April 1 and October 1 of each year
Optional Redemption    Make-whole call at T+37.5 basis points prior to September 15, 2025; 100% of principal amount on or after September 15, 2025, in either case, plus accrued and unpaid interest on the principal amount of the notes being redeemed.
Change of Control Triggering Event    101% of principal plus accrued and unpaid interest
Underwriting Discount    0.600%
Trade Date    May 1, 2020
Settlement Date    May 5, 2020 (T+2)
CUSIP/ISIN Numbers    CUSIP: 23331A BN8        ISIN: US23331ABN81
Denominations/Multiple    $2,000 / $1,000


Joint Book-Running Managers   

J.P. Morgan Securities LLC

Mizuho Securities USA LLC

U.S. Bancorp Investments, Inc.

Citigroup Global Markets Inc.

Wells Fargo Securities, LLC

Co-Managers   

BofA Securities, Inc.

PNC Capital Markets LLC

SunTrust Robinson Humphrey, Inc.

TD Securities (USA) LLC

BNP Paribas Securities Corp.

Citizens Capital Markets, Inc.

Comerica Securities, Inc.

Regions Securities LLC

Samuel A. Ramirez & Company, Inc.

WoodRock Securities, L.P.

Additional Disclosure under

“Underwriting –Other Relationships”

   One of the underwriters, SunTrust Robinson Humphrey, Inc., is an affiliate of the trustee for the notes, Branch Banking and Trust Company.

The issuer has filed a registration statement (including a prospectus and a related prospectus supplement) with the United States Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents D.R. Horton, Inc. has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, copies of the prospectus supplement and accompanying prospectus may be obtained by calling any of the representatives of the underwriters:

 

J.P. Morgan Securities LLC    212-834-4533 (collect)
Mizuho Securities USA LLC    866-271-7403 (toll free)
U.S. Bancorp Investments, Inc.    877-558-2607 (toll free)

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.

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

  

 

 

-i-


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;

 

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(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

 

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(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:  

             

  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:  

                 

  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:  

         

  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:  

         

  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:  

         

  Bill W. Wheat
  Executive Vice President and Chief Financial Officer
and  

By: Meadows X, Inc.,

       as Member

        By:  

         

  Bill W. Wheat
  Executive Vice President and Chief Financial Officer
DRH CAMBRIDGE HOMES, LLC

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

       as Sole Member

        By:  

         

 

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:  

         

  Bill W. Wheat
  Executive Vice President and Chief Financial Officer
D.R. HORTON HAWAII LLC

By: Vertical Construction Corporation,

       as Manager

        By:  

         

  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:  

         

  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:  

         

  Bill W. Wheat
  Executive Vice President and Chief Financial Officer


    D.R. HORTON CA4, LLC
By: Western Pacific Housing, Inc.,
as Sole Member
        By:  

 

  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:  

 

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

 

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

 

  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:  

             

  Bill W. Wheat
  Executive Vice President and Chief Financial Officer

 

    WALKER DRIVE, LLC

By: D.R. Horton BAY, Inc.,

its Member

        By:  

             

  Bill W. Wheat
  Executive Vice President and Chief Financial Officer


BRANCH BANKING AND TRUST COMPANY,

as Trustee

By:

 

             

Name:  
Title:  


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-1

EX-5.1

Exhibit 5.1

May 5, 2020    

D.R. Horton, Inc.

1341 Horton Circle

Arlington, TX 76011

 

Re:

D.R. Horton, Inc. Public Offering of $500,000,000 Principal Amount of its 2.600% Senior Notes due 2025

Ladies and Gentlemen:

I am Vice President – Corporate Securities Counsel and Corporate Secretary of D.R. Horton, Inc., a Delaware corporation (the “Company”). The Company and certain direct and indirect wholly-owned subsidiaries of the Company (collectively, the “Guarantors”) have filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), a Registration Statement on Form S-3, File No. 333-226644 (the “Registration Statement”), the prospectus included therein and the prospectus supplement with respect thereto, dated May 1, 2020, filed with the Commission on May 4, 2020 pursuant to Rule 424(b) of the Securities Act (the “Prospectus Supplement”), in connection with the offering by the Company pursuant thereto of $500,000,000 principal amount of the Company’s 2.600% Senior Notes due 2025 (the “Notes”).

The Notes will be issued pursuant to the Indenture, dated as of October 10, 2019 (the “Base Indenture”), between the Company and Branch Banking and Trust Company, as trustee (the “Trustee”), as modified in respect of the Notes by the Second Supplemental Indenture, to be dated as of May 5, 2020 (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”), among the Company, the Guarantors and the Trustee, and are guaranteed pursuant to the terms of the Indenture and the notation endorsed on the Notes by the Guarantors (the “Guarantees”). The Indenture, the certificates evidencing the notes and the Guarantees are referred to collectively herein as the “Note Documents”.

In arriving at the opinions expressed below, I have examined originals, or copies certified or otherwise identified to my satisfaction as being true and complete copies of the originals, of the Base Indenture, the Supplemental Indenture, the Notes and the Guarantees and such other documents, corporate records, certificates of officers of public officials and other instruments as I have deemed necessary or advisable to enable me to render these opinions. In my examination, I have assumed, without independent investigation, the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to me as originals and the conformity to original documents of all documents submitted to me as copies. As to any facts material to these opinions, I have relied to the extent I have deemed appropriate and without independent investigation upon

 


May 5, 2020

Page 2

 

statements and representations of officers and other representatives of the Company, the guarantors listed on Exhibit A hereto (the “Specified Guarantors”) and others.

Based upon the foregoing, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, I am of the opinion that:

1.    Each of the Specified Guarantors is a validly existing corporation or limited liability company in good standing under the laws of its jurisdiction of formation, with all requisite corporate or limited liability company power to execute and deliver the Note Documents to which it is a party and to perform its obligations thereunder.

2.    The execution and delivery by the Specified Guarantors of the Note Documents to which it is a party and the performance of its obligations thereunder have been duly authorized by all necessary corporate or limited liability company action.

3.    The authorization, execution, delivery and performance of the Note Documents do not and will not violate (a) the charter or bylaws or other constitutive documents of any of the Specified Guarantors, (b) any order, judgment or decree of any court or other agency of government that is binding on any of the Specified Guarantors or (c) any law or regulation currently in effect in the Specified Guarantors’ respective jurisdiction or organization applicable to any of the Specified Guarantors.

4.     Each of the Note Documents has been duly executed and delivered by each of the Specified Guarantors.

The opinions expressed above are subject to the following additional exceptions, qualifications, limitations and assumptions:

A.    I am licensed to practice law in the State of Texas, and I render no opinion herein as to matters involving the laws of any jurisdiction other than the States of Alabama, Arizona, Nevada, New Jersey, Oregon, Virginia and Washington. This opinion is limited to the effect of the current state of the laws of the States of Alabama, Arizona, Nevada, New Jersey, Oregon, Virginia and Washington and the facts as they currently exist. I assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts.

B.    The opinions above are subject to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the rights and remedies of creditors generally, including without limitation the effect of statutory or other laws regarding fraudulent transfers or preferential transfers and (ii) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless of whether enforceability is considered in a proceeding in equity or at law.


May 5, 2020

Page 3

 

I express no opinion regarding the effectiveness of (i) any waiver of stay, extension or usury laws or of unknown future rights, (ii) provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary to public policy or federal or state securities laws, or (iii) any purported fraudulent transfer “savings” clause.

I consent to the filing of this opinion as an exhibit to the Registration Statement, and further consent to the use of my name under the caption “Legal Matters” in the Registration Statement and the Prospectus Supplement. In giving these consents, I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.


May 5, 2020

Page 4

 

Respectfully,
D.R. Horton, Inc.

/s/ Thomas B. Montano

Thomas B. Montano Vice President – Corporate Securities Counsel and Corporate Secretary

 


ANNEX A

Specified Guarantors

 

Name

  

Form of Entity

  

Jurisdiction of Formation

D.R. Horton, Inc.—Birmingham

   Corporation    Alabama

CHI Construction Company

   Corporation    Arizona

SHLR of Nevada, Inc.

   Corporation    Nevada

Meadows IX, Inc.

   Corporation    New Jersey

Meadows X, Inc.

   Corporation    New Jersey

SGS Communities at Grande Quay L.L.C.

   Limited Liability Company    New Jersey

Schuler Homes of Oregon, Inc.

   Corporation    Oregon

C. Richard Dobson Builders, Inc.

   Corporation    Virginia

Schuler Homes of Washington, Inc.

   Corporation    Washington

SHLR of Washington, Inc.

   Corporation    Washington
EX-5.2

Exhibit 5.2

May 5, 2020

D.R. Horton, Inc.

1341 Horton Circle

Arlington, TX 76011

 

Re:

D.R. Horton, Inc. Public Offering of $500,000,000 Principal Amount of its 2.600% Senior Notes due 2025

Registration Statement on Form S-3 (File No. 333-226644)

Ladies and Gentlemen:

We have acted as counsel to D.R. Horton, Inc., a Delaware corporation (the “Company”), and certain of its subsidiaries and affiliates listed on Annex A hereto (the “Guarantors”) in connection with the preparation and filing with the Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form S-3, file no. 333-226644 (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities Act”), the prospectus included therein, the prospectus supplement, dated May 1, 2020, filed with the Commission on May 4, 2020 pursuant to Rule 424(b) of the Securities Act (the “Prospectus Supplement”), and the offering by the Company pursuant thereto of $500,000,000 principal amount of the Company’s 2.600% Senior Notes due 2025 (the “Notes”).

The Notes will be issued pursuant to the Indenture, dated as of October 10, 2019 (the “Base Indenture”), between the Company and Branch Banking and Trust Company, as trustee (the “Trustee”), as modified in respect of the Notes by the Second Supplemental Indenture, to be dated as of May 5, 2020 (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”) among the Company, the Guarantors and the Trustee, and are guaranteed pursuant to the terms of the Indenture and the notation endorsed on the Notes by the Guarantors (the “Guarantees”). The Notes have been offered pursuant to an Underwriting Agreement dated as of May 1, 2020 (the “Underwriting Agreement”) among the Company, the Guarantors and the Underwriters named therein (the “Underwriters”).

In arriving at the opinions expressed below, we have examined originals, or copies certified or otherwise identified to our satisfaction as being true and complete copies of the originals, of the Base Indenture, the Supplemental Indenture, the Notes and the Guarantees (collectively, the “Note Documents”) and such other documents, corporate records, certificates of officers of the Company, the Guarantors and of public officials and other instruments as we have deemed necessary or advisable to enable us to render these opinions. In our examination, we have assumed, without independent investigation, the genuineness of


D.R. Horton, Inc.

May 5, 2020

Page 2

 

all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. To the extent that our opinions may be dependent upon such matters, we have assumed, without independent investigation, that each of the Guarantors identified on Annex A that is not a Specified Guarantor is validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate or other entity power to execute, deliver and perform its obligations under the Note Documents to which it is a party; that the execution and delivery of such documents by each such party and the performance of its obligations thereunder have been duly authorized by all necessary corporate or other action and do not violate any law, regulation, order, judgment or decree applicable to each such party; and that such documents have been duly executed and delivered by each such party. As to any facts material to these opinions, we have relied to the extent we deemed appropriate and without independent investigation upon statements and representations of officers and other representatives of the Company and the Guarantors and on certificates and representations obtained from public officials and others.

Based upon the foregoing, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that the Notes, when authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, will be legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, and when the Notes with the Guarantees endorsed thereon have been duly authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, the Guarantees of the Notes will be legal, valid and binding obligations of the Guarantors obligated thereon, enforceable against such Guarantors in accordance with their respective terms.

The opinions expressed above are subject to the following additional exceptions, qualifications, limitations and assumptions:

A.    We render no opinion herein as to matters involving the laws of any jurisdiction other than the State of New York and, to the extent relevant for our opinions herein, the laws of the States of California and Texas and the Delaware General Corporation Law and the Delaware Limited Liability Company Act. This opinion is limited to the effect of the current state of the laws of the States of New York, California and Texas and the Delaware General Corporation Law and the Delaware Limited Liability Company Act and the facts as they currently exist. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts.


D.R. Horton, Inc.

May 5, 2020

Page 3

 

B.    The opinions above are each subject to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the rights and remedies of creditors generally, including without limitation the effect of statutory or other laws regarding fraudulent transfers or preferential transfers, (ii) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless of whether enforceability is considered in a proceeding in equity or at law and (iii) the provisions of: (1) Article Eight of the Certificate of Incorporation of CH Investments of Texas, Inc.; (2) Article Eight of the Certificate of Incorporation of CHTEX of Texas, Inc.; (3) Paragraph Eight of the Certificate of Incorporation of D.R. Horton, Inc. -Chicago (excluding the first three sentences thereof); and (4) Article Ten of the Certificate of Incorporation of Western Pacific Housing, Inc.

C.    We express no opinion regarding the effectiveness of (i) any waiver of stay, extension or usury laws or of unknown future rights, (ii) provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary to public policy or federal or state securities laws, or (iii) any purported fraudulent transfer “savings” clause.

We consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name under the caption “Legal Matters” in the Registration Statement and the Prospectus Supplement. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/ Gibson, Dunn & Crutcher LLP


ANNEX A

Guarantors

 

Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

C. Richard Dobson Builders, Inc.    Corporation    Virginia    No
CH Investments of Texas, Inc. (f/k/a CH Investments of Texas II, Inc.)    Corporation    Delaware    Yes
CHI Construction Company    Corporation    Arizona    No
CHTEX of Texas, Inc.    Corporation    Delaware    Yes
Continental Homes, Inc.    Corporation    Delaware    Yes
Continental Homes of Texas, L.P.    Limited Partnership    Texas    Yes
Continental Residential, Inc. (f/k/a L&W Investments, Inc.)    Corporation    California    Yes
D.R. Horton - CHAustin, LLC (f/k/a DRH Regrem XXXII, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Colorado, LLC (f/k/a DRH Regrem XXXV, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Crown, LLC (f/k/a DRH Regrem XXVII, LLC)    Limited Liability Company    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

D.R. Horton - Emerald, Ltd. (f/k/a DRH Regrem VI, LP)    Limited Partnership    Texas    Yes
D.R. Horton - Georgia, LLC (f/k/a DRH Regrem XXX, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Highland, LLC (f/k/a DRH Regrem XXXIX, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Indiana, LLC (f/k/a DRH Regrem XXXVI, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Iowa, LLC (f/k/a DRH Regrem XXXVIII, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Permian, LLC (f/k/a DRH Regrem XXXIII, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Regent, LLC (f/k/a DRH Regrem XXVI, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Terramor, LLC (f/k/a DRH Regrem XL, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton - Texas, Ltd.    Limited Partnership    Texas    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

D.R. Horton - WPH, LLC (f/k/a (i) D.R. Horton - Atlanta, LLC and (ii) DRH Regrem XXIX, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton, Inc. - Birmingham    Corporation    Alabama    No
D.R. Horton, Inc. -Chicago    Corporation    Delaware    Yes
D.R. Horton, Inc. - Dietz-Crane (f/k/a DRH Regrem I, Inc.)    Corporation    Delaware    Yes
D.R. Horton, Inc. - Greensboro    Corporation    Delaware    Yes
D.R. Horton, Inc. - Gulf Coast (f/k/a DRH Regrem V, Inc.)    Corporation    Delaware    Yes
D.R. Horton, Inc. - Huntsville (f/k/a DRH Regrem XIII, Inc.)    Corporation    Delaware    Yes
D.R. Horton, Inc. - Jacksonville (f/k/a D.R. Horton, Inc. - San Diego)    Corporation    Delaware    Yes
D.R. Horton, Inc. - Louisville (f/k/a D.R. Horton, Inc. - Albuquerque)    Corporation    Delaware    Yes
D.R. Horton, Inc. - Midwest (f/k/a (i) DRH Cambridge Homes, Inc. and (ii) D.R. Horton Sacramento Management Company, Inc.)    Corporation    California    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

D.R. Horton, Inc. - Minnesota    Corporation    Delaware    Yes
D.R. Horton, Inc. - New Jersey    Corporation    Delaware    Yes
D.R. Horton, Inc. - Portland    Corporation    Delaware    Yes
D.R. Horton, Inc. - Torrey    Corporation    Delaware    Yes
D.R. Horton BAY, Inc. (f/k/a (i) D.R. Horton OCI, Inc., (ii) D.R. Horton Orange County, Inc. and (iii) DRH Regrem IX, Inc.)    Corporation    Delaware    Yes
D.R. Horton CA2, Inc. (f/k/a D.R. Horton, Inc. - Sacramento)    Corporation    California    Yes
D.R. Horton CA3, Inc. (f/k/a (i) DRH Regrem IV, Inc. and (ii) D.R. Horton, Inc. - Fresno)    Corporation    Delaware    Yes
D.R. Horton CA4, LLC (f/k/a DRH Regrem XXXI, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton Cruces Construction, Inc. (f/k/a DRH Regrem XI, Inc.)    Corporation    Delaware    Yes
D.R. Horton Hawaii LLC (f/k/a D.R. Horton - Schuler Homes, LLC)    Limited Liability Company    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

D.R. Horton LA North, Inc. (f/k/a DRH Regrem X, Inc.)    Corporation    Delaware    Yes
D.R. Horton Los Angeles Holding Company, Inc.    Corporation    California    Yes
D. R. Horton Management Company, Ltd. (f/k/a Meadows Management Company, Ltd.)    Limited Partnership    Texas    Yes
D.R. Horton Materials, Inc. (f/k/a DRH Regrem III, Inc.)    Corporation    Delaware    Yes
D.R. Horton Serenity Construction, LLC (f/k/a DRH Regrem VIII, LLC)    Limited Liability Company    Delaware    Yes
D.R. Horton VEN, Inc. (f/k/a (i) D.R. Horton LAV, Inc. and (ii) D.R. Horton San Diego Holding Company, Inc.)    Corporation    California    Yes
DRH - HWY 114, LLC (f/k/a DRH Regrem XLI, LLC)    Limited Liability Company    Delaware    Yes
DRH Cambridge Homes, LLC    Limited Liability Company    Delaware    Yes
DRH Construction, Inc.    Corporation    Delaware    Yes
DRH Regrem VII, LP    Limited Partnership    Texas    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

DRH Regrem XII, LP    Limited Partnership    Texas    Yes
DRH Regrem XIV, Inc.    Corporation    Delaware    Yes
DRH Regrem XV, Inc.    Corporation    Delaware    Yes
DRH Regrem XVI, Inc.    Corporation    Delaware    Yes
DRH Regrem XVII, Inc.    Corporation    Delaware    Yes
DRH Regrem XVIII, Inc.    Corporation    Delaware    Yes
DRH Regrem XIX, Inc.    Corporation    Delaware    Yes
DRH Regrem XX, Inc.    Corporation    Delaware    Yes
DRH Regrem XXI, Inc.    Corporation    Delaware    Yes
DRH Regrem XXII, Inc.    Corporation    Delaware    Yes
DRH Regrem XXIII, Inc.    Corporation    Delaware    Yes
DRH Regrem XXIV, Inc.    Corporation    Delaware    Yes
DRH Regrem XXV, Inc. (f/k/a (i) D.R. Horton VEN, Inc., (ii) D.R. Horton, Inc. - Los Angeles and (iii) D.R. Horton, Inc. -Chicago)    Corporation    Delaware    Yes
DRH Regrem XLII, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem XLIII, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem XLIV, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem XLV, LLC    Limited Liability Company    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

DRH Regrem XLVI, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem XLVII, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem XLVIII, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem XLIX, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem L, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem LI, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem LII, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem LIII, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem LIV, LLC    Limited Liability Company    Delaware    Yes
DRH Regrem LV, LLC    Limited Liability Company    Delaware    Yes
DRH Southwest Construction, Inc. (f/k/a DRH Land Company, Inc.)    Corporation    California    Yes
DRH Tucson Construction, Inc. (f/k/a DRH - California, Inc.)    Corporation    Delaware    Yes
HPH Homebuilders 2000 L.P.    Limited Partnership    California    Yes
KDB Homes, Inc.    Corporation    Delaware    Yes
Lexington Homes - DRH, LLC (f/k/a DRH Regrem XXXIV, LLC)    Limited Liability Company    Delaware    Yes
Meadows I, Ltd.    Corporation    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

Meadows II, Ltd.    Corporation    Delaware    Yes
Meadows VIII, Ltd.    Corporation    Delaware    Yes
Meadows IX, Inc.    Corporation    New Jersey    No
Meadows X, Inc.    Corporation    New Jersey    No
Melody Homes, Inc.    Corporation    Delaware    Yes
Pacific Ridge - DRH, LLC (f/k/a (i) D.R. Horton - Seattle North, LLC and (ii) DRH Regrem XXVIII, LLC)    Limited Liability Company    Delaware    Yes
Schuler Homes of Arizona LLC    Limited Liability Company    Delaware    Yes
Schuler Homes of California, Inc.    Corporation    California    Yes
Schuler Homes of Oregon, Inc.    Corporation    Oregon    No
Schuler Homes of Washington, Inc.    Corporation    Washington    No
SGS Communities at Grande Quay L.L.C.    Limited Liability Company    New Jersey    No
SHA Construction LLC    Limited Liability Company    Delaware    Yes
SHLR of California, Inc.    Corporation    California    Yes
SHLR of Nevada, Inc.    Corporation    Nevada    No
SHLR of Washington, Inc.    Corporation    Washington    No
SRHI LLC    Limited Liability Company    Delaware    Yes
SSHI LLC    Limited Liability Company    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

Vertical Construction Corporation (f/k/a Lokelani Construction Corporation)    Corporation    Delaware    Yes
Walker Drive, LLC (f/k/a DRH Regrem XXXVII, LLC)    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Antigua, LLC (f/k/a Western Pacific Housing - Eastlake, LLC)    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Broadway, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Canyon Park, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Carrillo, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Communications Hill, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Copper Canyon, LLC (f/k/a Agoura II, LLC)    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Creekside, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Lomas Verdes, LLC    Limited Liability Company    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

Western Pacific Housing-McGonigle Canyon, LLC (f/k/a Western Pacific Housing-Carlsbad II, LLC)    Limited Liability Company    Delaware    Yes
Western Pacific Housing - Mountaingate, L.P.    Limited Partnership    California    Yes
Western Pacific Housing-Norco Estates, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Pacific Park II, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Park Avenue East, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Park Avenue West, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Playa Vista, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-River Ridge, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Terra Bay Duets, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Torrey Meadows, LLC    Limited Liability Company    Delaware    Yes
Western Pacific Housing-Torrey Village Center, LLC    Limited Liability Company    Delaware    Yes


Name

  

Form of Entity

  

Jurisdiction of

Formation

  

Specified

Guarantor

Western Pacific Housing-Windemere, LLC (f/k/a Western Pacific Housing-Glacier, LLC)    Limited Liability Company    Delaware    Yes
Western Pacific Housing, Inc. (f/k/a Schuler Homes Holdco, Inc.)    Corporation    Delaware    Yes
Western Pacific Housing Management, Inc. (f/k/a Western Pacific Housing, Inc. (CA))    Corporation    California    Yes
WPH-Camino Ruiz, LLC    Limited Liability Company    Delaware    Yes
v3.20.1
Document and Entity Information
May 01, 2020
Document And Entity Information [Line Items]  
Entity Registrant Name HORTON D R INC /DE/
Amendment Flag false
Entity Central Index Key 0000882184
Document Type 8-K
Document Period End Date May 01, 2020
Entity Incorporation State Country Code DE
Entity File Number 1-14122
Entity Tax Identification Number 75-2386963
Entity Address, Address Line One 1341 Horton Circle
Entity Address, City or Town Arlington
Entity Address, State or Province TX
Entity Address, Postal Zip Code 76011
City Area Code (817)
Local Phone Number 390-8200
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Stock [Member]  
Document And Entity Information [Line Items]  
Security 12b Title Common Stock, par value $.01 per share
Trading Symbol DHI
Security Exchange Name NYSE
Senior Notes [Member]  
Document And Entity Information [Line Items]  
Security 12b Title 5.750% Senior Notes due 2023
Trading Symbol DHI 23A
Security Exchange Name NYSE