AGREEMENT OF LIMITED PARTNERSHIP

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EXHIBIT 10.5

EXECUTION COPY

AGREEMENT OF LIMITED PARTNERSHIP

FOR

CL ASHTON WOODS, L.P.

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TABLE OF CONTENTS

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ARTICLE I DEFINITIONS 1

Section 1.1 Definitions 1

Section 1.2 Terms Generally 10

Section 1.3 Other Definitions 10

Section 1.4 Exhibits and Schedules 10

ARTICLE II GENERAL PROVISIONS 11

Section 2.1 Formation of Partnership 11

Section 2.2 Certificates 11

Section 2.3 Name 11

Section 2.4 Place; Registered Agent 11

Section 2.5 Term 11

Section 2.6 Purposes of Partnership 11

Section 2.7 Nature of Partnership Interests 12

Section 2.8 Form of Entity; Limited Authority 12

Section 2.9 Other Activities 13

ARTICLE III CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS 13

Section 3.1 Initial Capital Contributions 13

Section 3.2 Additional Capital Contributions 13

Section 3.3 Optional Loans 15

Section 3.4 Capital Calls 16

Section 3.5 Capital Accounts 18

Section 3.6 Rights of Creditors 18

Section 3.7 Percentage Interests and Residual Interests 19

Section 3.8 Additions to and Withdrawal of Capital 19

Section 3.9 Financing 19

Section 3.10 Power of Attorney 19

ARTICLE IV DISTRIBUTIONS AND ALLOCATIONS 19

Section 4.1 Allocation of Net Profit 19

Section 4.2 Allocation of Net Loss 20

Section 4.3 Net Loss Limitation 21

Section 4.4 Intentions and Construction of Allocations 21

Section 4.5 Special Allocations 21

Section 4.6 Curative Allocations 22

Section 4.7 Other Allocation Rules 22

Section 4.8 Tax Allocations 23

Section 4.9 Distributions of Net Receipts 23

Section 4.10 Manner of Distribution 24

ARTICLE V BOOKS OF ACCOUNT, ACCOUNTING AND REPORTS 24

Section 5.1 Books and Records; Fiscal Year 24

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Section 5.2 Financial Statements and Reports 25

Section 5.3 Tax Status and Returns 25

Section 5.4 Bank Accounts 25

Section 5.5 Accounting, Bookkeeping, Personnel 25

Section 5.6 Designation of Tax Matters Partner 25

Section 5.7 Tax Elections 26

Section 5.8 Custody of Partnership Funds 26

ARTICLE VI MANAGEMENT OF THE PARTNERSHIP 26

Section 6.1 Management 26

Section 6.2 Powers and Duties of the Managing Partner 26

Section 6.3 Insurance 28

Section 6.4 Employment of Others 28

Section 6.5 Project Development Budget Updates 29

Section 6.6 Management Fee 29

Section 6.7 Licenses 29

Section 6.8 Indemnification 29

Section 6.9 Limitations on Power and Authority of the

Managing Partner 30

Section 6.10 Annual Business Plan 33

Section 6.11 Management by Limited Partners Prohibited 35

Section 6.12 Inspection 35

Section 6.13 Consultations 35

Section 6.14 Compensation 35

Section 6.15 Removal of Managing Partner 36

Section 6.16 Partner Meetings 36

ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS 38

Section 7.1 Representations, Warranties and Covenants 38

Section 7.2 Indemnity for Breach of Warranty 39

Section 7.3 Scope of Authority 39

ARTICLE VIII CONTRACTS WITH RELATED PARTIES; ACQUISITION

AND DEVELOPMENT OF THE PROPERTY 40

Section 8.1 Related Party Contracts 40

Section 8.2 Acquisition of the Real Property 40

ARTICLE IX BUY-SELL 40

Section 9.1 Buy-Sell 40

ARTICLE X TRANSFER OF PARTNERSHIP INTEREST(S) 43

Section 10.1 Transfer of Partnership Interest(s)s Held by the

General Partner 43

Section 10.2 Acquisition of Partnership hiterest(s) for

Investment 43

Section 10.3 Transfer of Partnership Interest(s) Held by any

Limited Partner 44

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Section 10.4 Incapacity of a Partner 44

Section 10.5 Assignees 45

Section 10.6 Substituted Partner 45

Section 10.7 Indirect Transfers 45

ARTICLE XI DEFAULT 46

Section 11.1 Events of Default 46

Section 11.2 Elections of Non-Defaulting Partner 47

ARTICLE XII TERM; LIQUIDATION AND DISSOLUTION 49

Section 12.1 Term 49

Section 12.2 Dissolution 49

Section 12.3 Liquidation and Distribution Procedure 49

ARTICLE XIII ARBITRATION 51

Section 13.1 Initiation 51

Section 13.2 Court Enforcement of Arbitration Award 52

Section 13.3 Consolidation Proceedings 52

ARTICLE XIV GENERAL PROVISIONS 52

Section 14.1 Independent Parties 52

Section 14.2 Counterparts 52

Section 14.3 Notices 53

Section 14.4 Effect and Interpretation 54

Section 14.5 Severability 54

Section 14.6 Binding Upon Successors 54

Section 14.7 Gender 54

Section 14.8 Headings 54

Section 14.9 Entire Agreement 54

Section 14.10 Force Majeure 54

Section 14.11 Time 55

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Exhibits

Exhibit A Property

Exhibit B Development Budget

Exhibit C Development Plan

Exhibit D Lot Sale Contract

Exhibit E Initial Annual Business Plan

Exhibit F Initial Annual Budget

Exhibit G Purchase Agreement

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Schedules

Schedule 3.1 - Initial Capital Contributions

Schedule 3.2(a) - Partners' Total Project Cost Commitments

Schedule 6.15 - Minimum Sales Requirements

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AGREEMENT OF LIMITED PARTNERSHIP FOR

CL ASHTON WOODS, L.P.

THIS AGREEMENT OF LIMITED PARTNERSHIP FOR CL ASHTON WOODS, L.P. (the

"Agreement") is made and entered into to be effective as of March 10, 2005, by

and among CL TEXAS I, GP, LLC, a Georgia limited liability company, as a General

Partner ("CLGP"); CL TEXAS, L.P., a Texas limited partnership ("CL"), as a

Limited Partner; AW SOUTHERN TRAILS, INC., a Texas corporation ("Ashton Woods

GP"), as a General Partner; and ASHTON HOUSTON RESIDENTIAL L.L.C., a Texas

limited liability company ("Ashton Woods LP"), as a Limited Partner.

The parties hereto desire to form a limited partnership under the laws of

the State of Texas, for the purposes and on the terms provided herein.

NOW, THEREFORE, for and in consideration of the mutual covenants and

agreements herein contained, the General Partner and Limited Partners do hereby

agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 DEFINITIONS. The following terms, explanations and definitions

of words, phrases and clauses shall govern when the terms are used in this

Agreement unless the context thereof specifically indicates a different meaning:

ACT means the Texas Revised Limited Partnership Act, as the same from time

to time has been or may be amended.

ADDITIONAL CAPITAL CONTRIBUTIONS means the contributions to the capital of

the Partnership to be made by each of the Partners, as applicable, in accordance

with the provisions of Sections 3.2 and 3.4 of this Agreement.

ADJUSTED CAPITAL ACCOUNT DEFICIT means, with respect to a Partner, the

deficit balance, if any, in that Partner's Capital Account as of the end of the

relevant Fiscal Year or other applicable period, after giving effect to the

following adjustments:

(a)The Capital Account will be increased by any amount that

the Partner is obligated to restore, if any, including any amount such Partner

is deemed to be obligated to restore under the penultimate sentence of

Regulations Sections 1.704-2(g) (1) and 1.704-2(i)(5); and

(b)The Capital Account will be decreased by the items

described in Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5) and (6).

This definition of Adjusted Capital Account Deficit is intended to comply with

the provisions of Regulations Section 1.704-l(b)(2)(ii)(d) and shall be

interpreted consistently with those provisions.

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AFFILIATE means, with respect to any Person, (a) any officer, director,

trustee, partner, employee or current holder of ten percent (10%) or more of any

class of the voting securities of or equity or profits interest in such Person;

(b) any corporation, partnership, trust, estate or other entity controlling,

controlled by or under common control with such Person; (c) any officer,

director, trustee, partner, employee or current holder of ten percent (10%) or

more of the outstanding voting securities of or equity or profits interest in

any corporation, partnership, trust or other entity controlling, controlled by

or under common control with such Person; and (d) any relative (within the third

degree of consanguinity) or spouse (or any relative within the third degree of

consanguinity of any such spouse) of any natural person included in clauses (a),

(b) or (c) above, or any trusts for the benefit of or entities controlled by or

under common control with any such relative or spouse. With regard to CL, for

purposes of clause (b) of the immediately preceding sentence, "Affiliate" shall

include Cousins Real Estate Corporation, a Georgia corporation, and Lumbermen's

Investment Corporation, a Texas corporation, or an Affiliate of either

corporation.

AGREEMENT means this Agreement of Limited Partnership, as the same may be

amended from time to time.

ANNUAL BUDGET means the annual budget for the Partnership prepared and

approved as part of the Annual Business Plan pursuant to Section 6.10 herein

which shall be comprised of: (A) an estimate of all receipts from and

expenditures for the ownership, management, development and sale of Lots for

each Fiscal Year (that are not detailed in the Development Budget) and (B) an

estimate of all capital expenditures with respect to the Project for any Fiscal

Year (that are not detailed in the Development Budget).

ANNUAL BUSINESS PLAN means the annual business plan prepared by the

Managing Partner and Approved by the Partners in accordance with the provisions

of Section 6.10 of this Agreement. Each Annual Business Plan shall include the

Minimum Sales Requirements for such period.

APPROVED BY THE PARTNERS or APPROVAL OF THE PARTNERS shall mean approved

by or approval of the General Partners and the holders of at least two-thirds

(66.67%) of the Percentage Interests, provided, however, except for the specific

matters described in Section 6.9(a), a Defaulting Partner shall not have a right

to approve any matter hereunder.

ASHTON WOODS shall mean Ashton Houston Residential L.L.C., a Texas limited

liability company.

ASHTON WOODS GP shall mean AW Southern Trails, Inc., a Texas corporation.

Ashton Woods GP's principal place of business is located at 11375 West Sam

Houston Parkway South, Suite 100, Houston, Texas 77031.

ASHTON WOODS LP shall mean Ashton Houston Residential L.L.C. Ashton Woods

LP's principal place of business is located at 11375 West Sam Houston Parkway

South, Suite 100, Houston, Texas 77031.

BANKRUPTCY or BANKRUPT means and/or refers to bankruptcy or insolvency, or

a bankruptcy or insolvency, reorganization, arrangement, liquidation or similar

proceeding under

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the laws of any jurisdiction, Federal or state, including, but not limited to, a

voluntary or involuntary petition under any bankruptcy or insolvency laws or

under the reorganization provisions of any law, the voluntary or involuntary

appointment of a receiver, the voluntary or involuntary assignment for the

benefit of creditors generally, or an admission in writing of the inability to

pay debts as they become due; provided, however, that, in the case of any

involuntary petition, appointment, assignment or similar involuntary proceeding,

such action shall not constitute a Bankruptcy and the party which is the object

of such action shall not be considered Bankrupt until ninety (90) days has

elapsed from the initiation of such action without the dismissal of such

involuntary proceeding.

BUSINESS DAY shall mean any day except a Saturday, Sunday or any other day

in which commercial banks in Atlanta, Georgia are authorized or required by law

to close.

CAPITAL ACCOUNT shall mean one of the individual capital accounts

maintained for each Partner in accordance with the terms of Section 3.5 of this

Agreement.

CAPITAL CONTRIBUTION means, with respect to any Partner, the amount of

cash and the initial Gross Asset Value of any property (other than money)

contributed to the Partnership with respect to the interest in the Partnership

held by that Partner, net of liabilities encumbering such contributed property

that the Partnership is considered to assume or take subject to under Section

752 of the Code, including all Initial Capital Contributions and Additional

Capital Contributions. Any reference in this Agreement to the Capital

Contribution of a particular Partner will include a Capital Contribution made by

any prior Partner with respect to the Partnership Interest(s) of the applicable

Partner.

CL shall mean CL Texas, L.P., a Texas limited partnership and a Limited

Partner in the Partnership. CL's principal office is located at 5495 Beltline

Road, Suite 225, Dallas, Texas 75254.

CLGP shall mean CL Texas I GP, LLC, a Georgia limited liability company

and a General Partner in the Partnership. CLGP's principal office is located at

2500 Windy Ridge Parkway, Suite 1600, Atlanta, Georgia 30339

CODE shall mean the Internal Revenue Code of 1986, as from time to time

amended, together with all regulations thereunder from time to time in effect.

CONTRIBUTION LOAN shall have the meaning set forth in Section 3.4(c)

herein.

DEFAULTING PARTNER shall have the meaning set forth in Section 11.1.

DEPRECIATION means, for each Fiscal Year or other period, an amount equal

to the depreciation, amortization or other cost recovery deduction allowable

with respect to an asset for the year or other period, except that if the Gross

Asset Value of an asset differs from its adjusted basis for federal income tax

purposes at the beginning of the year or other period Depreciation will be an

amount which bears the same ratio to the initial Gross Asset Value as the

federal income tax depreciation, amortization or other cost recovery deduction

for the year or other period bears to the beginning adjusted tax basis (except

as required by Regulations Section 1.704-3(d)), provided that if the federal

income tax depreciation, amortization, or other cost

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recovery deduction for the year or other period is zero, Depreciation will be

determined with reference to the initial Gross Asset Value using any reasonable

method selected by the General Partners.

DESIGNATED REPRESENTATIVE(s) shall mean Tom Krobot and Bob Salomon with

respect to Ashton Woods GP, and Bruce Smith, Michael Quinley and Craig Knight

with respect to CLGP. Any Designated Representative may be replaced or

additional Designated Representatives may be appointed by the applicable Partner

upon notice to the other Partners. In the event any Partner has more than one

(1) Designated Representative, the decision of any Designated Representative of

such Partner that is in writing signed by a Designated Representative of such

Partner or is reflected in the approved minutes of a meeting shall be binding on

the applicable Partner and the other Designated Representative(s) of such

Partner and may be relied on by the other Partners hereunder.

DEVELOPER shall mean the "Development Manager" designated in the

Development Agreement.

DEVELOPMENT AGREEMENT shall mean that certain Development Agreement made

and entered into by and between Aurous Development Services, Ltd., a Texas

limited partnership, and Ashton Southern Trails Joint Venture, a Texas joint

venture, as assigned by Ashton Southern Trails Joint Venture to the Partnership,

or otherwise as approved by the Partners.

DEVELOPMENT BUDGET shall mean the budget of the anticipated Development

Costs for the Project attached hereto as Exhibit B and incorporated herein by

reference, as the same may be amended from time to time with the Approval of the

Partners.

DEVELOPMENT COSTS shall mean all costs which have been or are estimated to

be incurred by the Partnership with respect to the acquisition, design,

development, construction, financing, and completion of the Project and the

marketing and sale of Lots, as set forth in the Development Budget.

DEVELOPMENT PLAN shall mean Development Plan for the Project attached

hereto as Exhibit C and incorporated herein by reference, including the Plans

and Specifications and the Development Budget, as the same may be amended from

time to time with the Approval of the Partners.

DUE DILIGENCE MATERIALS shall mean all studies, reports, tests, plans,

investigations, entitlements, surveys, permit and zoning applications and/or

approvals, and other due diligence and predevelopment documents, materials and

applications which relate to the Project.

FINANCING(s) shall mean one or more, as the context shall so indicate, of

those certain loan(s) made by the respective Lender(s) to the Partnership to

finance and/or refinance the acquisition and/or development of the Project, as

Approved by the Partners.

FINANCING ENHANCEMENTS shall have the meaning set forth in Section 3.2(a).

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FISCAL YEAR shall mean the fiscal year of the Partnership established

pursuant to Section 5.1, except that the first fiscal year of the Partnership

shall commence on the date hereof and shall terminate on the last day of 2005.

FORCE MAJEURE EVENT shall mean strikes, embargoes, national emergencies,

acts of God, affirmative acts of governmental agencies relating to the

population in general (as opposed to acts of governmental agencies relating to

the Project or the Property) and other events beyond the reasonable control of

the parties (except for the inability of a party to pay money).

GENERAL PARTNER(s) shall initially mean CL and Ashton Woods, and any

successors acting in such capacity.

GROSS ASSET VALUE means, with respect to any asset, the adjusted basis

of the asset for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed (or

deemed contributed under Regulations Section 1.704-l(b)(l)(iv)) by a Partner to

the Partnership will be the fair market value of the asset on the date of the

contribution, as Approved by the Partners.

(b) The General Partners may adjust the Gross Asset Values of all

Partnership assets to equal the respective fair market values of the assets as

of (i) the acquisition of an additional interest in the Partnership by any new

or existing Partner in exchange for more than a de minimus capital contribution;

(ii) the distribution by the Partnership to a Partner of more than a de minimus

amount of Partnership assets as consideration for an interest in the

Partnership; (iii) the grant of an interest in the Partnership (other than a de

minimums interest) as consideration for the provision of services to or for the

benefit of the Partnership by any new or existing Partner, and (iv) the

liquidation of the Partnership within the meaning of Regulations Section 1.704-

1(b)(2)(ii)(g); provided, however, that the adjustments pursuant to clauses (i),

(ii) and (iii) above shall be made only if the General Partners reasonably

determine an adjustment is necessary or appropriate to reflect the relative

economic interests of the Partners in the Partnership.

(c) The Gross Asset Value of any Partnership asset distributed to

any Partner shall be adjusted to equal its then gross fair market value on the

date of distribution as reasonably determined by the General Partners.

(d) The Gross Asset Values of Partnership assets will be increased

(or decreased) to reflect any adjustment to the adjusted basis of the assets

under Code Section 734(b) or 743(b), but only to the extent that the adjustment

is taken into account in determining Capital Accounts under Regulations Section

1.704-l(b)(2)(iv)(m); provided, however, Gross Asset Values will not be adjusted

under this paragraph to the extent that the General Partners reasonably

determine that an adjustment under paragraph (b) above is necessary or

appropriate in connection with a transaction that would otherwise result in an

adjustment under this paragraph (d).

(e) If the Gross Asset Value of any asset has been determined or

adjusted under paragraphs (a), (b) or (d) above, the Gross Asset Value will

thereafter be adjusted by the Depreciation taken into account with respect to

the asset for purposes of computing Net Profit and Net Loss.

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GROSS RECEIPTS shall mean revenues and receipts (other than funds received

as Capital Contributions), calculated on an accrual basis, from the conduct of

the business of the Partnership from all sources, including but not limited to

(a) the gross cash proceeds from any sale, ground lease, exchange, condemnation

or other disposition of Lots or the Project or any portion thereof, including

but not limited to all principal and interest payments received with respect to

any note or other obligation received by the Partnership in connection with a

sale or other disposition of the Project or any portion thereof, plus (b) the

principal amount of all funds borrowed by the Partnership from time to time,

plus (c) the amount of any recovery of title, hazard or casualty insurance

proceeds from time to time (other than rental interruption insurance) in excess

of amounts expended in the restoration or repair of the Project, and the

recovery from any voluntary or involuntary condemnation of the Project or any

portion thereof in excess of amounts expended in the restoration of the Project,

plus (d) infrastructure reimbursements from third parties, including but not

limited to, utility reimbursements.

IMPROVEMENTS shall mean any and all improvements developed or to be

developed upon or for the benefit of the Project in accordance with the

Development Plan.

INITIAL CAPITAL CONTRIBUTIONS shall mean the contributions to the capital

of the Partnership to be made by each of the Partners, as applicable, in

accordance with the provisions of Section 3.1 of this Agreement.

LENDER(s) shall mean the financial institution(s) making the Financing

available to the Partnership, as the context shall so indicate.

LIMITED PARTNER(s) shall initially mean Ashton Woods and CL, and any

respective permitted successors thereto or assigns thereof.

LOT shall mean any subdivided lot developed or to be developed as a single

family residential lot in the Project.

LOT SALE CONTRACT(s) shall mean the contract(s) of sale, substantially in

the form attached hereto as Exhibit D, to be entered into by the Partnership and

[Ashton Woods] providing for the sale of Lots to Ashton Woods or an Affiliate of

Ashton Woods and such other contracts of sale Approved by the Partners for the

sale of Lots to third-party builders.

MAJOR DECISIONS shall mean those actions which are not to be taken by

either Partner unless and until Approved by the Partners as set forth in Section

6.9 of this Agreement or as required elsewhere in this Agreement.

MINIMUM SALES REQUIREMENTS shall be include in each Annual Business Plan.

The Minimum Sales Requirements for the period of the first Annual Business Plan

are shown on Schedule 6.15 to this Agreement. Schedule 6.15 also sets forth the

projected Minimum Sales Requirements for periods beyond the period covered by

the first Annual Business Plan, but such projected Minimum Sales Requirements

are not binding on the Managing Partner and are subject to change each time the

Managing Partner prepares an Annual Business Plan and submits such Annual

Business Plan to be Approved by the Partners in accordance with the provisions

of Section 6.10 of this Agreement; provided, however, in no event shall the

Minimum Sales Requirements for any annual period exceed the projected Minimum

Sales Requirements set forth

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on Schedule 6.15 unless Approved by the Partners. The Minimum Sales Requirements

included within an Annual Business Plan Approved by the Partners shall become

the Minimum Sales Requirements for such period. In determining the Minimum Sales

Requirements to be included within an Annual Business Plan, for a particular

period as the Partners shall consider, among other things, (i) the general

economic conditions of the Houston Metropolitan Area and the specific economic

conditions of the City of Pearland, (iii) the performance or non-performance of

homebuilders (other than Ashton Woods or any Affiliate thereof) under lot sales

contract executed by the Partnership for the sale of lots in the Project, and

(iii) the extent that the lot sales and gross revenues in the periods covered by

previous Annual Business Plans exceed the lot sales or gross revenues set forth

in the Minimum Sales Requirements for such periods. In other words, should the

Managing Partner exceed the Minimum Sales Requirements for a particular period

or periods then the Minimum Sales Requirements included in the next Annual

Business Plan or Plans should reflect such fact and not penalize the Managing

Partner for executing the Minimum Sales Requirements for such period.

MANAGING PARTNER shall mean Ashton Woods or any successor Managing

Partner.

NET PROFIT or NET LOSS shall mean, for each Fiscal Year, the Partnership's

taxable income or taxable loss for such Fiscal Year, as determined under Section

703(a) of the Code (including all items required to be separately stated under

Section 703(a)(l) of the Code) and Regulations Section 1.703-1, but with the

following adjustments:

(a)Any tax-exempt income, as described in Section 705(a)(l)(B) of

the Code, realized by the Partnership during such Fiscal Year shall be added

to such taxable income or taxable loss;

(b)Any expenditures of the Partnership described in Section

705(a)(2)(B) of the Code for such Fiscal Year or treated as being so described

in Regulations Section 1.704-l(b)(2)(iv)(i) and not otherwise taken into

account in this subsection shall be subtracted from such taxable income or

taxable loss;

(c)In the event the Gross Asset Value of any Partnership asset is

adjusted pursuant to clauses (b) or (c) of the definition of "Gross Asset

Value," the amount of such adjustment shall be taken into account as gain or

loss from the disposition of such asset for purposes of computing Net Profit

or Net Loss;

(d)Any item of income, gain, loss or deduction that is required to

be specially allocated to a Partner under this Agreement, including without

limitation Sections 4.5, 4.6, 4.7 and 4.8(b) hereof, shall not be taken into

account in computing such taxable income or taxable loss;

(e) The amount of any gain or loss required to be recognized by the

Partnership during such Fiscal Year by reason of a sale or other disposition

of the Project, or any part thereof or any other asset of the Partnership,

shall be computed as if the Partnership's adjusted basis in such property for

income tax purposes were equal to the Gross Asset Value of the property

disposed of, notwithstanding that the adjusted tax basis of such property

differs from its Gross Asset Value; and

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(f) In lieu of depreciation, amortization, and other cost recovery

deductions taken into account in computing such taxable income or loss, there

shall be taken into account Depreciation for the Fiscal Year or other

applicable period.

If the Partnership's taxable income or taxable loss for such Fiscal Year, as

adjusted in the manner provided above in clauses (a) through (f) above, is (i) a

positive amount, such amount shall be the Partnership's Net Profit for such

Fiscal Year, and (ii) a negative amount, such amount shall be the Partnership's

Net Loss for such Fiscal Year.

NET RECEIPTS shall mean for the applicable period the Gross Receipts of

the Partnership for such period plus any reserves not needed for operations as

reasonably determined by the General Partners, less Operating Expenses for such

period and less a reasonable reserve for the conduct of the business of the

Partnership reasonably established by the General Partners.

NON-DEFAULTING PARTNER shall have the meaning set forth in Section 11.1.

OPERATING DEFICIT means, for any particular period of time, the amount (if

any) by which Operating Expenses for such particular period of time exceed, or

are projected to exceed, Gross Receipts for such period of time.

OPERATING EXPENSES shall mean, all expenses of any kind made with respect

to the operations of the Partnership in the normal course of business determined

on an accrual basis, including, but not limited to: (a) the actual, reasonable

and customary expenses and costs relating to any sale, financing or refinancing

of the Project, including any partial release payment made pursuant to the terms

of any applicable financing encumbering the Property or the portion thereof so

sold, any reserves for warranty items, and/or any prepayment charges or mortgage

broker fees (paid to third parties which are not an Affiliate of any Partners)

or incurred in connection with any financing or refinancing, (b) currently due

and payable principal, interest and extension fees, if any, payable pursuant to

any loans obtained by the Partnership, (c) expenditures for capital

improvements, (d) reasonable working capital reserves for payment of all

obligations of the Partnership for which loan proceeds are not available, as

reasonably established by the General Partners, (e) amounts paid from

condemnation and/or insurance proceeds for restoration and/or repair of the

Project or any portion thereof, (f) any amounts paid for taxes, assessments,

fees, governmental charges, insurance, maintenance costs, and utilities, (g) any

fees paid to consultants and other advisors hired by the Partnership in

conjunction with the Project, (h) any costs and expenses paid by the Partnership

to maintain any agricultural, open space use or other exemption or qualified use

for tax purposes, and (i) any other similar costs and expenses.

OPTIONAL LOAN shall have the meaning set forth in Section 3.3 herein.

PARTNER means any partner of the Partnership, including any General

Partner or any Limited Partner, and "Partners" means the General Partners and

the Limited Partners, collectively.

PARTNERSHIP means CL ASHTON WOODS, L.P., a Texas limited partnership, as

such Partnership may from time to time be constituted.

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PARTNERSHIP INTEREST means, as to any Partner at any time, such Partner's

Capital Account, Percentage Interest, Residual Interest, and right to

distributions, profits and losses of the Partnership in accordance with the

provisions of this Agreement, and any other rights which such Partner has in the

Partnership in accordance with the provisions of this Agreement or under

applicable law.

PERCENTAGE INTEREST(s) means the respective percentage interests of the

Partners and their respective permitted successors and assigns in the

Partnership, as set forth in Section 3.7(a) of this Agreement.

PERSON means an individual or an entity such as, but not limited to, a

corporation, general partnership, joint venture, limited partnership, limited

liability partnership, trust or business association. When a Person is an

entity, the words "he," "him" and "his" and similar words shall include or refer

to "it" and "its" and similar words.

PHASES means one or more sections, phases, portions, parcels or segments

of the Property as reflected or to be reflected in the Development Plan.

PLANS AND SPECIFICATIONS means the plans, drawings and specifications for

development of the Improvements prepared at the direction of the Managing

Partner for the Partnership and Approved by the Partners.

PREFERRED RETURN shall mean, with respect to a Partner (and any permitted

transferee), a return on the average daily balance of such partner's (and any

permitted transferee's) Unreturned Contribution Account, commencing on the date

such Partner (and any permitted transferee) first makes (or is deemed to have

made) a Capital Contribution pursuant to this Agreement, during the period to

which such return relates, at a rate equal to eighteen percent (18%) per annum.

The return shall be determined on the basis of the actual number of days in the

period for which the return is being determined, cumulative and compounded

annually to the extent not distributed pursuant to Section 4.9(b).

PREFERRED RETURN ACCOUNT shall mean, with respect to a Partner (and any

permitted transferee), the excess, if any, of (i) aggregate Preferred Return of

such Partner (and any permitted transferee) over (ii) the aggregate

distributions to such Partner (and any permitted transferee) pursuant to Section

4.9(b), in each case since the inception of the Partnership. In the event of the

sale, transfer, assignment or other disposition of the Partnership Interest in

the Partnership initially issued to such Partner, the transferee of such

Partnership Interest shall succeed to the Preferred Return Account balance, if

any, attributable to the transferred Partnership Interest.

PRIME RATE means the prime lending rate for large U.S. money center

commercial banks, as published in the Money Rates section of the Wall Street

Journal, as the same may vary from time to time during the applicable period;

provided, however, in the event such method of determining the Prime Rate is no

longer available, then a comparable rate shall be used in lieu thereof as

Approved by the Partners.

PRO FORMA SALES BUDGET shall have the meaning set forth in Section

6.10(a).

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PROJECT shall mean, collectively, the Property and the Improvements to be

developed thereon as Approved by the Partners.

PROJECT COST COMMITMENT shall have the meaning set forth in Section 3.2(a)

hereof.

PROPERTY shall mean that certain tract of real property to be acquired by

the Partnership from Ashton Southern Trails Joint Venture, a Texas joint

venture, as of even date herewith and more particularly described on Exhibit A

attached hereto and incorporated herein by reference.

PURCHASE AGREEMENT shall mean the Contract for the Sale of Real Estate

between the Partnership and Ashton Southern Trails Joint Venture, as approved by

CLGP on behalf of the Partnership and attached hereto as Exhibit G and

incorporated herein.

REGULATIONS shall mean the Treasury Regulations promulgated under the

Code, as such regulations may be amended from time to time.

RESIDUAL INTEREST(s) means the respective residual interests of the

Partners (and their respective permitted successors and assigns) in

distributions, if any, pursuant to Section 4.9(d) of this Agreement, as set

forth in Section 3.7(b).

TOTAL PROJECT COST COMMITMENT shall have the meaning set forth in Section

3.2(a).

TRANSFER shall mean any transfer, sale, pledge, hypothecation, encumbrance

or assignment of all or any portion of an interest in the Partnership, whether

voluntarily or by operation of law.

UNRETURNED CONTRIBUTION ACCOUNT shall mean an account maintained for each

Partner equal to, as of any particular date, the excess, if any, of (i) the

aggregate amount of Capital Contributions of such Partner pursuant to this

Agreement, minus (ii) the aggregate amount of distributions to such Partner

pursuant to Section 4.9(c) herein, in each case since the inception of the

Partnership. In the event of the sale, transfer, assignment or other disposition

of the Partnership Interest in the Partnership initially issued to such Partner,

the transferee of such Partnership Interest shall succeed to the Unreturned

Contribution Account balance, if any, attributable to the transferred

Partnership Interest.

SECTION 1.2 TERMS GENERALLY. The definitions in Section 1.1 above shall

apply equally to both the singular and plural forms of the terms defined herein.

Whenever the context may require, any pronoun shall include the corresponding

masculine, feminine and neuter forms. The term "person" or "Party" includes

individuals, partnerships, corporations, trusts and other associations. The

words "include", "includes", and "including" shall be deemed to be followed by

the phrase "without limitation".

SECTION 1.3 OTHER DEFINITIONS. In addition to the terms defined in Section

1.1, other terms will have the definitions provided elsewhere in this Agreement.

SECTION 1.4 EXHIBITS AND SCHEDULES. The Exhibits and Schedules attached

hereto and listed in the Table of Contents are hereby incorporated into this

Agreement as if fully set forth herein.

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ARTICLE II

GENERAL PROVISIONS

SECTION 2.1 FORMATION OF PARTNERSHIP. The parties hereto hereby create a

limited partnership pursuant to the Act. The rights and liabilities of the

Partners shall be as provided in the Act, except as otherwise set forth herein.

In the event that any provision in this Agreement conflicts with the Act, such

provision in this Agreement shall control and govern to the extent permitted by

applicable law.

SECTION 2.2 CERTIFICATES. Immediately prior to or contemporaneously with

the execution of this Agreement, the Managing Partner shall cause an appropriate

certificate of limited partnership to be filed with the Secretary of State of

the State of Texas. The Managing Partner shall also forthwith execute all other

certificates required by law, and the Managing Partner shall cause the same to

be filed in accordance with applicable law.

SECTION 2.3 NAME. The name of the Partnership shall be CL ASHTON WOODS,

L.P. The General Partners may from time to time change the name of the

Partnership if Approved by the Partners.

SECTION 2.4 PLACE; REGISTERED AGENT. The location of the principal place

of business of the Partnership shall be c/o Ashton Woods GP, 11375 West Sam

Houston Parkway South, Suite 100, Houston, Texas 77031, and shall continue at

such address unless changed by the General Partners. The registered agent for

service of process on the Partnership shall be Tim Hagen, whose address is Hagen

& Parsons, P.C., 14643 Dallas Parkway, Suite 570, Dallas, Texas 75254, unless

and until a new registered agent is designated by the General Partners. The

registered agent shall promptly send copies of all notices, pleadings, and

reports served on or delivered to him to each of the General Partners.

SECTION 2.5 TERM. The Partnership shall commence on the effective date

hereof and shall terminate upon the earlier of (a) December 31, 2025, (b) such

time as the Partners, by mutual agreement, shall elect to terminate the

Partnership, or (c) as otherwise provided in this Agreement; provided, however,

with respect to subparagraphs (a) and (b) above, if, as of either of such dates,

the Project is not substantially completed (i.e., substantially all the Lots

sold), then the Partnership shall not so terminate until the Project is

substantially completed.

SECTION 2.6 PURPOSES OF PARTNERSHIP. The purposes of the Partnership are:

(a) To acquire the Property from an affiliate of Ashton Woods in

accordance with the terms and conditions of the Purchase Agreement.

(b) To arrange for, obtain, negotiate, and close the Financing(s) on

terms Approved by the Partners, and to utilize the proceeds thereof to acquire,

develop and/or refinance the acquisition and development of the Project, or, in

the alternative, to arrange for, obtain, negotiate, and close such other

financing as may be Approved by the Partners;

(c) To develop the Project in accordance with the Development Plan,

Development Budget, the provisions of the Development Agreement and the Plans

and Specifications, each as Approved by the Partners;

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(d) To own, finance, develop, market, manage, sell and operate the

Project, and any other property acquired by the Partnership in accordance with

this Agreement, for investment and production of income and profit and, without

limiting the foregoing, to enter into the Lot Sale Contracts;

(e) To subdivide, market and sell portions of the Project in

accordance with the Development Plan, the Lot Sale Contracts and this Agreement,

each as Approved by the Partners;

(f) To negotiate and enter into such partnerships, ventures,

entities and other relationships relating to the acquisition, development, sale

and operation of the Property as may be Approved by the Partners from time to

time;

(g) To engage in any one or more other business transactions

necessary or desirable to effect the purposes of this Agreement described in (a)

through (f) above, including, without limitation, to borrow funds in accordance

with the terms of this Agreement and to execute evidence of such indebtedness

and security instruments in connection therewith, subject to the Approval of the

Partners;

(h) To take other actions necessary or appropriate in furtherance of

the foregoing purposes in accordance with the provisions of this Agreement; and

(i) To act as principal, agent, joint venturer or in any other

capacity which may be authorized hereby or Approved by the Partners.

SECTION 2.7 NATURE OF PARTNERSHIP INTERESTS. The Partnership Interests of

the Partners in the Partnership shall be personal property for all purposes.

Legal title to the Project and all other property and assets of the Partnership

shall be held in the name of the Partnership. Neither any Partner individually,

nor any partners or permitted successors or assigns of any Partner, shall have

any right, title or interest in or to the Project or any other property or

assets of the Partnership; rather the Project and all such property and assets

of the Partnership shall be subject to the terms of this Agreement. Further, the

Partners acknowledge and agree that the Project is not suitable for partition,

and thus all of the Partners hereby irrevocably waive any and all rights to

maintain any action for partition of the Project.

SECTION 2.8 FORM OF ENTITY; LIMITED AUTHORITY. The entity created hereby

is a limited partnership formed under Texas law. Notwithstanding the foregoing,

except with respect to actions in furtherance of the business and purpose of the

Partnership in a manner consistent with and limited by specific agreements,

covenants, rights, privileges, duties and obligations arising under this

Agreement, neither the creation of the Partnership nor the execution and

delivery by the Partners of this Agreement inter se is intended to create a

general agency relationship or authority, nor shall the same be construed as to

authorize or entitle any Partner to act as a general agent for and on behalf of

the other Partners with respect to any business or activity other than in

furtherance of the specific purposes of the Partnership as described in this

Agreement. Without limiting the generality of the foregoing, neither the

Partnership nor any Partner shall be responsible or liable for any indebtedness

or obligation of a Partner incurred or arising before or after the formation of

the Partnership, except for those joint responsibilities,

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liabilities, indebtedness or obligations incurred after the date of formation of

the Partnership pursuant to and in accordance with the terms of this Agreement

or for any such obligations expressly and intentionally assumed pursuant to this

Agreement or any other written agreement duly executed and delivered by all of

the Partners.

SECTION 2.9 OTHER ACTIVITIES. Each Partner may engage or invest in any

other activity or venture or possess any interest therein independently or with

others, whether or not competitive with the business of the Partnership or the

Property, and whether existing as of the date of this Agreement or hereafter

coming into existence. None of the Partners, the Partnership or any other Person

employed by, related to or in any way affiliated with any Partner or the

Partnership shall have any duty or obligation to disclose to or offer to the

Partnership or the Partners, or obtain for the benefit of the Partnership or the

Partners, any other activity or venture or interest therein. None of the

Partnership, the Partners, the creditors of the Partnership or any other Person

having an interest in the Partnership shall have (i) any claim, right or cause

of action against any Partner or any other Person employed by, related to or in

any way affiliated with, any Partner by reason of any direct or indirect

investment or other participation, whether active or passive, in any such

activity or interest therein, or (ii) any right to any such activity or interest

therein or the income or profits derived therefrom.

ARTICLE III

CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

SECTION 3.1 INITIAL CAPITAL CONTRIBUTIONS. Upon execution hereof, the

Partners shall contribute in cash to the capital of the Partnership as their

Initial Capital Contributions the respective amounts set forth opposite their

names on Schedule 3.1 attached hereto and incorporated herein.

SECTION 3.2 ADDITIONAL CAPITAL CONTRIBUTIONS.

(a) The Partners hereby agree to provide Additional Capital

Contributions (in cash or immediately available funds) to the Partnership pro

rata in proportion to their respective Percentage Interests to pay Development

Costs in an aggregate amount for each Partner as set forth on Schedule 3.2(a)

attached hereto and incorporated herein (each Partner's share of the aggregate

Additional Capital Contributions required to pay Development Costs is referred

to herein as such Partner's "Project Cost Commitment"), plus any amounts

guaranteed by such Partner or secured by letters of credit provided by such

Partner (or an Affiliate thereof) ("Financing Enhancements") as set forth on

Schedule 3.2 and pursuant to Section 3.2(e) below. Project Cost Commitment plus

funded Financing Enhancements with respect to the Project shall be sometimes

referred to as the "Total Project Cost Commitment". Such Additional Capital

Contributions shall be made to the Partnership pursuant to the procedures set

forth in Section 3.4 below. Notwithstanding anything to the contrary herein

(except to the extent set forth in Section 3.2(e) hereof), no Partner shall be

required to make any further Additional Capital Contributions with respect to

the Project once such Partner's aggregate Capital Contributions since the

inception of the Partnership equals (i) such Partner's Project Cost Commitment

unless and except to the extent a Financing Enhancement with respect to the

Project has been demanded in writing or drawn upon by the Lender, or (ii) such

Partner's Total Project Cost Commitment if a

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Financing Enhancement is reduced by the amount of a draw against or funding

under such Financing Enhancement.

(b) As of the date of the funding of the Financing for the Project,

each Partner shall be reimbursed by the Partnership for all pre-development

expenses paid by such Partner with respect to the Project provided that such

expenses are set forth in the Development Budget.

(c) Each Partner hereby transfers and conveys to the Partnership all

of such Partner's right, title and interest in and to the Project (including,

without limitation, all Due Diligence Materials in the possession of such

Partner). Such transfers of Due Diligence Materials shall not be treated as

having any value for purposes of determining the Partners' Capital Accounts.

(d) If, at any time and from time to time, a General Partner

determines in its reasonable business judgment that additional funds are needed

with respect to the Project due to unforeseen circumstances regarding the

ownership, development, engineering and/or construction of the Project which are

not the obligation or responsibility of the Developer (for example, and not in

limitation, there shall occur events at force majeure, unexpected or unscheduled

price increases in materials, labor or equipment, or unexpected or unscheduled

increases in governmentally-imposed development fees which increase the costs of

any particular item in the Development Budget and/or Annual Budget beyond the

budgeted amount(s) plus contingency therefore), and such additional funds to

cover any increased costs are not on hand and available for use from available

funds of the Partnership after reasonable reserves and holdbacks required by the

Lender and/or Approved by the Partners or cannot be obtained through third party

financing Approved by the Partners, then (without limiting any provisions of

this Agreement regarding Approval by the Partners of amendments or modifications

to the Development Budget and/or Annual Budget), either such General Partner may

make a capital call in accordance with Section 3.4 hereof. However, except to

the extent set forth in Section 3.2(e) below, no Partner shall be required to

make an Additional Capital Contribution to the extent such Partner has already

made aggregate Capital Contributions equal to its Project Cost Commitment with

respect to the Project. If any Partner does not elect to make the voluntary

Additional Capital Contribution requested by a General Partner then such General

Partner may make an Additional Capital Contribution to cover any shortfall of

needed capital. Alternatively, the General Partner may make an Optional Loan,

subject to Section 3.3 below, to fund the needs of the Partnership described in

this Section 3.2(d).

(e) Any amounts funded or drawn under any Financing Enhancements

provided by a Partner or its Affiliate securing or guaranteeing all or any

portion of any Financing(s) shall be deemed to be an Additional Capital

Contribution to the Partnership by such Partner (but only one Partner shall

receive credit for any Financing Enhancements from any of its Affiliates),

unless such Partner(s) elect(s) in writing to treat such funded amount as an

Optional Loan to the Partnership (with such election being made within five (5)

Business Days of making such funding or draw under such Financing Enhancement).

A General Partner shall make a Capital Call in accordance with Section 3.4 below

within ten (10) days after receipt by such General Partner of notice of the

funding, or a request or demand for funding under any Financing Enhancements,

and each of the Partners shall make an Additional Capital Contribution to the

Partnership in whatever proportions and amounts as are necessary so that, unless

otherwise

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set forth on Schedule 3.2(a) or agreed by the Partners, the amounts funded or

drawn under the Financing Enhancements are shared by the Partners pro rata in

accordance with their respective Percentage Interests. Upon the Partnership's

receipt of any Additional Capital Contributions made pursuant to this Section

3.2(e), the Partner whose Financing Enhancement was funded or drawn upon shall

be repaid an amount sufficient to reduce such Partner's Additional Capital

Contribution pursuant to this Section 3.2(e) to the amount which would have been

paid by such Partner on a pro rata basis of the total Additional Capital

Contribution, as applicable, in accordance with its Percentage Interest.

Notwithstanding anything to the contrary herein, this Section 3.2(e) shall not

apply to any letter of credit or guaranty or other contractual obligation

provided by Ashton Woods or any Affiliate thereof as earnest money under any Lot

Sale Contracts.

(f) It is expressly understood and agreed by the Partners that each

Partner and its respective Affiliates are not required to advance or re-advance

Additional Capital Contributions or make loans to the Partnership once the Total

Project Cost Commitment for such Partner has been made to the Partnership,

notwithstanding subsequent distributions and reductions in such Partner's

Unreturned Contribution Account

SECTION 3.3 OPTIONAL LOANS. Notwithstanding the foregoing, in the event

either General Partner shall determine in good faith that the Partnership

requires any amounts described in Section 3.2(d) or to pay Operating Deficits,

then such General Partner shall have the right to advance to the Partnership a

loan (in lieu of an Additional Capital Contribution(s) or in combination with

such Additional Capital Contribution(s)) that does not carry personal liability

to the Partners (hereinafter referred to as an "Optional Loan"), in an amount

sufficient to provide the needed funds. Prior to making any Optional Loan, a

General Partner shall notify the other Partners of its intent to make such

advance at least ten (10) Business Days prior to the date of such advance (an

"Optional Loan Notice"), and at any time within such period, the other

Partner(s) may elect to participate in making the Optional Loan. Each Partner at

its sole option may elect to loan to the Partnership its pro rata share (based

on its then respective Percentage Interest) of the amount described in such

Optional Loan Notice by delivering such amount into the Partnership operating

account on the date specified in such Optional Loan Notice. If a Partner does

not wish to loan its share of a requested loan pursuant to an Optional Loan

Notice, it shall not be required to do so, but it shall give the other

Partner(s) written notice of its decision not to make such loan (a "Refusal

Notice") within five (5) Business Days after the delivery of such Optional Loan

Notice. If a Refusal Notice is delivered in connection with an Optional Loan

Notice or if a Partner otherwise fails for any reason to make its full pro rata

share of such loan on the date requested, then any other Partner may advance the

amount of such shortfall as an Optional Loan. Any Optional Loan shall bear

interest at a fixed rate determined as of the date of the Optional Loan equal to

eighteen percent (18%) per annum, but shall not exceed the maximum rate allowed

by law, and shall be payable only out of the Net Receipts of the Partnership as

provided in Section 4.9(a) below or out of the Partnership's assets upon

liquidation of the Partnership. In the event there is more than one Optional

Loan outstanding at any time in which there is a distribution made pursuant to

Sections 4.9(a) or 12.3(c) hereof, then amounts distributed under such Sections

shall first be applied to repay the most recent Optional Loan, and if more than

one Partner has made an Optional Loan at the same time (or otherwise pursuant to

the same Optional Loan Notice) then as between the Partners such Optional Loans

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shall be repaid pro rata in proportion to the outstanding balance of such

Optional Loans (but still giving priority to the most recent Optional Loan(s)).

SECTION 3.4 CAPITAL CALLS.

(a) When the Partners are required to contribute Additional Capital

Contributions under this Agreement, the Partners shall make such Additional

Capital Contributions in accordance with the provisions herein ("Capital Call")

and in such amounts that are sufficient to provide such funds. Each Partner and

any permitted transferee(s) under Article X hereof shall be jointly and

severally liable for making any of their respective required contributions to

the Partnership under Section 3.2 or this Section 3.4. Notwithstanding anything

to the contrary herein, no Partner shall be required to make any Additional

Capital Contributions that would cause such Partner's (or its predecessors in

interest) aggregate Capital Contributions since inception of the Partnership

with respect to the Project to exceed such Partner's Total Project Cost

Commitment.

(b) When Additional Capital Contributions are needed by the

Partnership, the Managing Partner (or if he fails to do so, any other General

Partner) shall give a notice (a "Capital Call Notice") to each Partner in the

manner provided in Section 14.3 hereof. Each Capital Call Notice shall specify

in reasonable detail the amount and purpose of any such Additional Capital

Contributions and that it is or is not pursuant to the Development Budget.

Capital Call Notices, other than pursuant to the Development Budget, shall also

include (A) a statement of the anticipated cash receipts and obligations for the

immediately following calendar quarter with the reasons, if ascertainable, that

the available funds of the Partnership will be insufficient to meet the

obligations for which the additional funds have been requested as they come due,

and (B) a representation from such General Partner that it has made a draw

request under the Financing for the Project to pay a portion of the expenditures

identified in the Capital Call Notice to the maximum extent permitted thereunder

or that the line item in the budget therefore has been exhausted, that no

uncured default under the Financing then exists, that the Lender under the

Financing has not declined to advance funds to pay all or any portion of any

costs identified in any Capital Call Notice to be paid pursuant to the draw

request. With respect to a Capital Call Notice, the following provisions shall

apply:

(i) Each Partner shall, within ten (10) Business Days (time

being of the essence) after the receipt of such Capital Call Notice,

deposit, by wire transfer of immediately available federal funds into the

Partnership's bank account, the Additional Capital Contribution specified

in the Capital Call Notice, to be credited to the contributing Partner's

Capital Account.

(ii) If a Partner does not pay its share of any

required Additional Capital Contribution (recognizing that no

contributions are required once a Partner has made aggregate Capital

Contributions to the Partnership with respect to the Project in the

aggregate amount equal to its Total Project Cost Commitment) in accordance

with any Capital Call Notice, the other Partner shall have the option, in

addition to other rights and remedies set forth herein, (A) to make a

Contribution Loan as provided in Section 3.4(c) hereof, or (B) to withdraw

its Additional Capital Contribution, because the other Partner

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failed to pay its share of the Additional Capital Contribution, or (C)

bring suit against the other Partner for a breach of this Agreement.

(iii) If a Partner disputes whether any Additional

Capital Contributions are due hereunder, the dispute shall be resolved

pursuant to arbitration in accordance with Article XIII herein.

(c) In addition to the rights set forth in Section 3.4(b)(ii) and

Article XI hereof, if a Partner fails to make any Additional Capital

Contribution within the time specified in Section 3.4(b) hereof, (a

"Non-Contributing Partner"), the other Partner who makes the requested

contribution of additional capital (the "Contributing Partner") shall have the

right but not the obligation to advance directly to the Partnership the funds

required from the Non-Contributing Partner as a loan ("Contribution Loan") to

the Non-Contributing Partner. If and when a Contribution Loan is made, the

Non-Contributing Partner shall not become a Defaulting Partner (as provided in

Article XI) but the Non-Contributing Partner shall be deemed to have waived the

right to make the requested capital contribution as of the date of such

Contribution Loan. Such Contribution Loan shall bear interest at a rate equal to

eighteen percent (18%) per annum, compounded annually, but in no event more than

the maximum rate permitted by law. The Non-Contributing Partner may prepay the

Contribution Loan at any time, but in any event the Contribution Loan shall be

due and payable on demand at any time upon written notice to the

Non-Contributing Partner. Failure of the Non-Contributing Partner to pay the

Contribution Loan within three (3) Business Days following demand shall

constitute a default hereunder. If the Contributing Partner does not elect to

advance the full amount of the additional funds required from the

Non-Contributing Partner, the Contributing Partner may withdraw its Additional

Capital Contribution or treat the failure of the Non-Contributing Partner to

make the Additional Capital Contribution as an Event of Default under Article XI

hereof.

(d) A Contribution Loan shall be repaid on a first priority basis

out of any subsequent distributions to which the Non-Contributing Partner for

whose account the Contribution Loan was made would otherwise be entitled in

accordance with this Agreement, which amounts shall be applied first to accrued

interest and then to principal, until the Contribution Loan is paid in full.

Each Non-Contributing Partner irrevocably assigns its rights to distributions

from the Partnership to the Contributing Partner for the purpose of effectuating

this repayment until the Contribution Loan is repaid. Repayment of any Partner's

Contribution Loan shall also be secured by the Non-Contributing Partner's

Interest in the Partnership, and the Non-Contributing Partner hereby grants a

security interest in such Partnership Interest to the Contributing Partner who

has advanced such Contribution Loan and hereby irrevocably appoints the

Contributing Partner, and any of its agents, officers or employees, as its

attorney-in-fact, such appointment being coupled with an interest, to execute,

acknowledge and deliver any documents, instruments and agreements including, but

not limited to, any note evidencing the Contribution Loan, and such Uniform

Commercial Code financing statements, continuation statements, and other

security instruments as may be appropriate to perfect and continue such security

interest in favor of the Contributing Partner.

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SECTION 3.5 CAPITAL ACCOUNTS. A Capital Account shall be established and

maintained for each Partner in accordance with the rules set forth in this

Section 3.5 and Regulations Section 1.704-1(b)(2)(iv).

(a) Each Partner's Capital Account shall be (i) increased by

(A) the aggregate amount of cash contributed by or on behalf of such Partner

to the Partnership, (B) the agreed upon Gross Asset Value (as of the date of

contribution) of any property other than cash contributed by such Partner to

the Partnership (net of liabilities encumbering such contributed property

that the Partnership is considered to assume or take subject to under Section

752 of the Code), (C) the aggregate amount of allocations of the

Partnership's Net Profit to such Partner for income tax purposes in

accordance with Section 4.1 hereof and the amount of items of income or gain

which are specially allocated to such Partner, and (D) any other positive

adjustments required by the Regulations which have not been previously taken

into account in determining Capital Accounts, and shall be (ii) decreased by

(A) the aggregate amount of cash distributed to or on behalf of such Partner

by the Partnership, (B) the Gross Asset Value (as of the date of

distribution) of all other property distributed to such Partner by the

Partnership (net of liabilities encumbering such distributed property that

such Partner is considered to assume or take subject to under Section 752 of

the Code), (C) the aggregate amount of the Partnership's Net Loss that has

been allocated to such Partner as of such date pursuant to Sections 4.2 and

4.3 and the amount of any item of expense, deduction or loss which is

specially allocated to such Partner, and (D) any other negative adjustments

required by Regulations and which have not been previously taken into account

in determining Capital Accounts, and (iii) otherwise adjusted in accordance

with the rules of this Section 3.5 and Regulations Section 1.704-1(b)(2)(iv).

(b) Upon the permitted transfer of all or any portion of a

Partner's Partnership Interest(s), the Capital Account of the transferor that

is attributable to the transferred Partnership Interest(s) shall carry over

to the transferee.

(c) The Capital Accounts shall be adjusted as and to the

extent required by Regulations Section 1.704-1(b)(2)(iv)(m) in connection

with the adjustment to the tax basis of any Partnership asset pursuant to

Section 734(b) or Section 743(b) of the Code.

(d) The foregoing provisions and the other provisions of this

Agreement relating to the maintenance of Capital Accounts are intended to

comply with Regulations Section 1.704-1(b), and shall be interpreted and

applied in a manner consistent with such Regulations. In the event the

General Partners shall determine that it is prudent to modify the manner in

which the Capital Accounts, or any debits or credits thereto are computed in

order to comply with such Regulations, the General Partners may make such

modification.

SECTION 3.6 RIGHTS OF CREDITORS. The provisions of this Article III are

not intended to be for the benefit of any creditor or other Person (other than a

Partner in its capacity as a Partner herein) to whom any debts, liabilities or

obligations are owed or who otherwise has a claim against the Partnership or any

of the Partners, and no such creditor or other person shall obtain any right

under any of the foregoing provisions against the Partnership or any Partner by

reason of any such debt, liability or obligation, or otherwise.

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SECTION 3.7 PERCENTAGE INTERESTS AND RESIDUAL INTERESTS.

(a) The Partners shall have the following Percentage Interests:

(i) Ashton Woods GP -- 0.5%

Ashton Woods LP -- 19.5%

(ii) CLGP -- 0.5%

CL -- 79.5%

(b) The Partners shall have the following Residual Interests:

(i) Ashton Woods GP -- 0.5%

Ashton Woods LP -- 29.5%

(ii) CLGP -- 0.5%

CL -- 69.5%

SECTION 3.8 ADDITIONS TO AND WITHDRAWAL OF CAPITAL. Other than as provided

in Sections 3.1, 3.2 and 3.4 above, no Partner shall be required or permitted to

contribute capital to the Partnership. In addition and except as provided in

Section 3.4 hereof, no Partner shall have the right to withdraw from the

Partnership, and no Partner shall be entitled to a return of, its contributions

to the capital of the Partnership hereunder, except by way of the distribution

to it under the terms of this Agreement or by way of the distribution to it of

assets of the Partnership upon the winding up of the Partnership pursuant to the

provisions of this Agreement.

SECTION 3.9 FINANCING. The General Partners will proceed with reasonable

diligence and in good faith to obtain the Financing(s) in the name of the

Partnership for the Project in accordance with the Development Budget.

Notwithstanding anything to the contrary set forth herein, any Financing and the

terms and conditions thereof shall be subject to the Approval of the Partners.

The Partners shall execute such documents, instruments and agreements as may be

required to effectuate the Financing as Approved by the Partners.

SECTION 3.10 POWER OF ATTORNEY. Each Defaulting Partner hereby irrevocably

appoints the Non-Defaulting General Partner as its attorney-in-fact following

default to execute all documents reasonably necessary to accomplish the remedies

specified in Section 3.4(d) hereof, such appointment being coupled with an

interest (and being intended to survive the dissolution or incapacitation of any

Defaulting Partner, to the fullest extent permitted by law), and including,

without limitation, the power to execute UCC-1 Financing Statements,

assignments, bills of sale and amendments to this Agreement to effect any of

such remedies.

ARTICLE IV

DISTRIBUTIONS AND ALLOCATIONS

SECTION 4.1 ALLOCATION OF NET PROFIT. After giving effect to the special

allocations as provided in Sections 4.5, 4.6 and 4.7 and subject to the overall

directions of Section 4.4 (and

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giving effect to Section 4.7(c)), all Net Profit of the Partnership for each

Fiscal Year shall be allocated to the Partners as follows:

(a) First, to the Partners, in proportion to and to the extent of

the negative balances, if any, in the Partners' respective Capital Accounts (as

of the last day of such Fiscal Year, but adjusted to reflect any allocations to

the Partners pursuant to Sections 4.5, 4.6 and 4.7);

(b) Second, to the Partners, in proportion to and to the extent of

the amounts necessary to cause their respective Capital Accounts (as of the last

day of such Fiscal Year, but adjusted to reflect any allocations pursuant to

Sections 4.1 (a), 4.5, 4.6 and 4.7) to equal their respective Unreturned

Contribution Account balances (it being acknowledged that an allocation to a

Partner pursuant to this subparagraph may be zero because such Partner's Capital

Account balance already equals or exceeds the amount referred to in this

sentence);

(c) Third, to the Partners in proportion to and to the extent of the

amounts necessary to cause their respective Capital Accounts (as of the last day

of such Fiscal Year, but adjusted to reflect any allocations pursuant to

Sections 4.1 (a), 4.1(b), 4.5, 4.6 and 4.7) to equal the sum of the balances in

their respective Unreturned Contribution Accounts and Preferred Return Accounts

(it being acknowledged that an allocation to a Partner pursuant to this

subparagraph may be zero because such Partner's Capital Account balance already

equals or exceeds the amount referred to in this sentence);

(d) Fourth, to the Partners in proportion to and to the extent

necessary to cause the amounts by which their respective Capital Accounts (as of

the last day of such Fiscal Year, but adjusted to reflect allocations pursuant

to Sections 4.1(a)-(c), 4.5, 4.6 and 4.7) exceed the sum of the balances in

their respective Unreturned Contribution Accounts and Preferred Return Accounts

to be in the same proportions as their then respective Residual Interests (it

being acknowledged that an allocation to the Partners pursuant to this

subparagraph may be zero because the Partners' respective Capital Account

balances are already in such proportions); and

(e) The balance of Net Profits, if any, shall be allocated among the

Partners pro rata in proportion to their then respective Residual Interests.

SECTION 4.2 ALLOCATION OF NET LOSS. Except as provided in Section 4.3,

after giving effect to the special allocations as provided in Sections 4.5, 4.6

and 4.7 and subject to the overall directions of Section 4.4 (and giving effect

to Section 4.7(c)), all Net Loss of the Partnership for each Fiscal Year shall

be allocated to the Partners as follows:

(a) First, to the Partners in proportion to and to the extent of the

amounts necessary to cause the amounts by which their respective Capital

Accounts (as of the last day of such Fiscal Year, but adjusted to reflect

allocations pursuant to Sections 4.5, 4.6 and 4.7) exceed the sum of the

balances in their respective Unreturned Contribution Accounts and Preferred

Return Accounts to be in the same proportion as their then respective Residual

Interests (it being acknowledged that an allocation to the Partners pursuant to

this subparagraph may be zero because the Partners' respective Capital Account

balances are already in such proportions);

(b) Second, to the Partners in proportion to and to the extent of

the amounts necessary to cause their respective Capital Accounts (as of the last

day of such Fiscal Year, but

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adjusted to reflect allocations pursuant to Sections 4.2(a), 4.5, 4.6 and 4.7)

to equal the sum of the balances in their respective Unreturned Contribution

Accounts and Preferred Return Accounts (it being acknowledged that an allocation

to a Partner pursuant to this subparagraph may be zero because such Partner's

Capital Account balance already equals or is less than the amount referred to in

this sentence);

(c) Third, to the Partners in proportion to and to the extent of the

amounts necessary to cause their respective Capital Accounts (as of the last day

of such Fiscal Year, but adjusted to reflect allocations pursuant to Sections

4.2(a), 4.2(b), 4.5, 4.6 and 4.7) to equal their respective Unreturned

Contribution Account balances (it being acknowledged that an allocation to a

Partner pursuant to this subparagraph may be zero because such Partner's Capital

Account balance already equals or is less than the amount referred to in this

sentence);

(d) Fourth, to the Partners in proportion to and to the extent of

the amounts necessary to cause their respective Capital Accounts (as of the last

day of such Fiscal Year, but adjusted to reflect allocations pursuant to

Sections 4.2(a)-(c), 4.5, 4.6 and 4.7) to equal zero (it being acknowledged that

an allocation to a Partner pursuant to this subparagraph may be zero because

such Partner's Capital Account balance already equals or is less than the amount

referred to in this sentence); and

(e) The balance of Net Loss, if any, shall be allocated among the

Partners pro rata in proportion to their then respective Percentage Interests.

SECTION 4.3 NET LOSS LIMITATION. Notwithstanding any provision of this

Agreement to the contrary, except as otherwise specifically provided in this

Section 4.3, in no event shall Net Loss be allocated to a Partner if such

allocation would result in such Partner's having an Adjusted Capital Account

Deficit at the end of any Fiscal Year. All Net Loss in excess of the limitation

set forth in this Section 4.3 shall be allocated to any remaining Partner

without an Adjusted Capital Account Deficit, and if all Partners have an

Adjusted Capital Account Deficit, then to the Partners pursuant to Section

4.2(e) above.

SECTION 4.4 INTENTIONS AND CONSTRUCTION OF ALLOCATIONS. It is the

intention of the Partners to allocate Net Profit and Net Loss in such a manner

as to cause each Partner's Capital Account as of the last day of each Fiscal

Year to always equal the amount of cash such Partner would be entitled to

receive if the Partnership sold its assets for their adjusted Gross Asset Values

and, after satisfying all Partnership liabilities (limited to the Gross Asset

Value of any asset that the Lender's sole recourse with respect to such

liability is such asset), the proceeds from such sale, as well as all other

funds of the Partnership, were then distributed to the Partners pursuant to

Section 4.9. This Article 4 shall be interpreted as necessary to accomplish such

result.

SE