FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.1 FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT      THIS FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") is made as of the 13 day of January, 2009 (the "Closing Date"), by and among ASHTON WOODS USA L.L.C. ("Borrower"), the LENDERS party hereto, WACHOVIA BANK, NATIONAL ASSOCIATION, as agent ("Agent"), and the GUARANTORS party hereto. R E C I T A L S      WHEREAS, Borrower, Agent and the Lenders have entered into a certain First Amended and Restated Credit Agreement dated as of December 16, 2005 (as amended by that certain First Amendment to First Amended and Restated Credit Agreement dated as of January 11, 2007, that certain Second Amendment to First Amended and Restated Credit Agreement dated as of June 15, 2007, and that certain Third Amendment to First Amended and Restated Credit Agreement dated as of December 20, 2007, the "Credit Agreement"). Capitalized terms used in this Amendment which are not otherwise defined in this Amendment shall have the respective meanings assigned to them in the Credit Agreement;      WHEREAS, the Guarantors consist of Owner Guarantors that have executed or otherwise become a party to the Owner Guaranty Agreement and Subsidiary Guarantors that have executed or otherwise become a party to the Subsidiary Guaranty Agreement;      WHEREAS, Borrower and the Guarantors have requested Agent and the Lenders to amend the Credit Agreement to modify certain provisions and to make other such changes as the parties hereunder deem appropriate upon the terms and conditions hereinafter set forth;      WHEREAS, certain Specified Defaults (as hereinafter defined) are currently existing as a result of which the Lenders are under no obligation to continue to make Loans or issue Facility L/Cs under the Credit Agreement; and      WHEREAS, Borrower has requested that the Lenders waive the Specified Defaults and make certain Loans and/or issue Facility L/Cs to Borrower and the Lenders have agreed to do so only if the Credit Agreement is amended as set forth herein and Borrower fulfills the conditions to effectiveness of this Amendment including, but not limited to (i) granting the Lenders a first priority, senior secured lien on substantially all assets of Borrower and the Subsidiary Guarantors which liens shall secure all Obligations (as defined in the Credit Agreement), (ii) granting the Lenders a first priority, senior secured lien on any ownership interests in Borrower owned by the Owner Guarantors and (iii) the acceptance of the Noteholders representing at least 90% of the Senior Subordinated Notes (as described below) of the Exchanged Notes, the Offering Memorandum and the Exchange Indenture (each as hereinafter defined);      NOW, THEREFORE, in consideration of the Recitals and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, Agent, the Lenders and the Guarantors, intending to be legally bound hereby, agree as follows:      SECTION 1. Recitals . The Recitals are incorporated herein by reference and shall be deemed to be a part of this Amendment.

     SECTION 2. Amendments to the Credit Agreement .           2.1 As of the Closing Date, the Aggregate Commitment under the Credit Agreement shall hereby be reduced to $95,000,000.           2.2 The amendments to the Credit Agreement described in Section 2.3 below will become effective if, prior to February 20, 2009 (the "Effectiveness Termination Date"), the following conditions are satisfied (unless waived by the Required Lenders, in writing, in their sole discretion) (the date on or prior to the Effectiveness Termination Date that such conditions are satisfied shall be the "Fourth Amendment Effective Date"). If the following conditions are not satisfied on or prior to the Effectiveness Termination Date, the amendments described in Section 2.3 below shall not be effective at any time:                (a) The Bond Resolution (as hereinafter defined) shall have been completed;                (b) Borrower shall have received at least $20,000,000 in new cash equity from Borrower’s owners or third-party investors since the Closing Date (the "New Equity");                (c) The Bridge Loan (as hereinafter defined) shall be repaid and the commitments thereunder terminated prior to or concurrently with the Fourth Amendment Effective Date and the Bridge Collateral shall be released by the Bridge Creditor (as hereinafter defined);                (d) Borrower shall have entered into the Security Documents (as defined in the amendments set forth in Schedule 1) which shall be satisfactory in all respects to Agent and the Required Lenders and which provide a first priority, senior secured lien on all homebuilding assets and all other personal property, cash, and intangible assets and other assets (subject to such exceptions as may be approved by Agent), owned at such time or thereafter acquired, of Borrower and its Subsidiaries in favor of Agent for the benefit of the Lenders to secure the Obligations (the "Security"); provided that each Lender shall be assumed to have agreed that such forms of Security Documents are satisfactory if they do not advise Agent otherwise prior to February 1, 2009;                (e) Borrower shall have delivered to the Agent due diligence related to the Security which satisfies the Mortgage Requirements (subject to such exceptions as may be approved by Agent) (other than the Appraisals) (each as defined in Schedule 1) for all real property assets of Borrower and its Subsidiaries;                (f) The Security Agreement, the Pledge Agreements, the Mortgages and the Control Agreements (each as defined in Schedule 1) shall have been properly executed by Borrower, the Subsidiary Guarantors, the Owner Guarantors and Agent, as appropriate;                (g) Each document (including each Uniform Commercial Code financing statement) required by law or reasonably requested by Agent to be filed,

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registered or recorded in order to create in favor of Agent for the benefit of Lenders a valid, legal and perfected first-priority security interest in and lien on the Security (subject to Permitted Liens) shall have been filed, registered or recorded and evidence thereof shall have been delivered to Agent;                (h) Borrower shall have paid all fees, expenses and costs (including reasonable attorneys’ fees and expenses but excluding the allocated costs of internal counsel) incurred by Agent, Lenders or their Affiliates or agents in connection with the Credit Agreement, this Amendment and the Security, including the remaining 60% of the Consent Fee (as hereinafter defined);                (i) Borrower shall have delivered to Agent opinions of counsel addressing due authorization, execution and enforceability of the Security Documents and such other matters relating to this Amendment and the transactions contemplated hereby as Agent may reasonably request;                (j) Borrower shall provide a supplement to Schedule 2 and Schedule 4.16 to the Credit Agreement if Borrower determines necessary, and such Schedules, as supplemented, shall be satisfactory in all respects to Agent;                (k) The fact that the representations and warranties of Borrower and each Guarantor contained in Article 4 of the Credit Agreement and Section 8 of this Amendment shall be true, correct and complete in all material respects on and as of the Fourth Amendment Effective Date as if made on and as of such date unless stated to relate to a specific earlier date (in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date);                (l) No Default or Event of Default shall (i) have occurred or be continuing under the Credit Agreement or (ii) occur or exist upon effectiveness of this Agreement and the amendments to the Credit Agreement contemplated hereby;                (m) No default or event of default shall exist under (i) the Amended Notes, (ii) the Exchanged Notes, or (iii) the Exchange Indenture; and                (n) Borrower and all Guarantors shall have delivered to Agent a certificate certifying, as of the Fourth Amendment Effective Date, as follows:      EACH OF BORROWER AND THE GUARANTORS ACKNOWLEDGES THAT EACH OF THE AGENT AND THE LENDERS HAS ACTED IN GOOD FAITH AND HAS CONDUCTED ITSELF IN A COMMERCIALLY REASONABLE MANNER IN ITS RELATIONSHIPS WITH BORROWER AND THE GUARANTORS IN CONNECTION WITH THE FOURTH AMENDMENT AND IN CONNECTION WITH THE OBLIGATIONS AND THE CREDIT AGREEMENT, BORROWER AND THE GUARANTORS HEREBY WAIVING AND RELEASING ANY CLAIMS TO THE CONTRARY. EACH OF BORROWER AND THE GUARANTORS ON ITS OWN BEHALF AND ON BEHALF OF EACH OF ITS AFFILIATES, RELEASES AND DISCHARGES THE AGENT AND THE LENDERS, ALL AFFILIATES OF THE

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AGENT AND THE LENDERS, ALL OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS OF THE AGENT AND THE LENDERS OR ANY OF THEIR AFFILIATES, AND ALL OF THEIR PREDECESSORS IN INTEREST, FROM ANY AND ALL CLAIMS, DEFENSES AND CAUSES OF ACTION, WHETHER KNOWN OR UNKNOWN AND WHETHER NOW EXISTING OR HEREAFTER ARISING, INCLUDING WITHOUT LIMITATION, ANY USURY CLAIMS, THAT HAVE AT ANY TIME BEEN OWNED, OR THAT ARE HEREAFTER OWNED, IN TORT OR IN CONTRACT BY BORROWER, ANY GUARANTOR OR ANY AFFILIATE OF BORROWER OR ANY GUARANTOR AND THAT ARISE OUT OF ANY ONE OR MORE CIRCUMSTANCES OR EVENTS THAT OCCURRED PRIOR TO THE FOURTH AMENDMENT EFFECTIVE DATE. MOREOVER, EACH OF BORROWER AND THE GUARANTORS, JOINTLY AND SEVERALLY, ON ITS OWN BEHALF AND ON BEHALF OF EACH OF ITS AFFILIATES, WAIVES ANY AND ALL CLAIMS NOW OR HEREAFTER ARISING FROM OR RELATED TO ANY DELAY BY THE AGENT AND THE LENDERS IN EXERCISING ANY RIGHTS OR REMEDIES UNDER THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.           2.3 On the Fourth Amendment Effective Date, the following amendments to the Credit Agreement shall be effective:                (a) The definitions set forth in Part A of Schedule 1, attached hereto and made a part hereof, shall be deleted from Section 1.1 of the Credit Agreement and such definitions shall be restated in their entirety as set forth in Part A of Schedule 1;                (b) The definitions set forth in Part B of Schedule 1, attached hereto and made a part hereof, shall be added to Section 1.1 of the Credit Agreement in alphabetical order;                (c) The definitions set forth in Part C of Schedule 1, attached hereto and made a part hereof, shall be deleted from Section 1.1 of the Credit Agreement in their entirety;                (d) The sections in the Credit Agreement as set forth in Part D of Schedule 1, attached hereto and made a part hereof, shall be deleted from the Credit Agreement and such sections shall be restated in their entirety as set forth in Part D of Schedule 1;                (e) The sections to the Credit Agreement set forth in Part E of Schedule 1, attached hereto and made a part hereof, shall be added to the Credit Agreement in the numerical order set forth in Part E of Schedule 1;                (f) Exhibit A to the Credit Agreement shall hereby be amended by deleting such Exhibit A in its entirety and inserting in lieu thereof the Exhibit A attached hereto and made a part hereof;

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               (g) Exhibits J-1, J-2, J-3, K, L-1, L-2 and M, each as attached hereto and made a part hereof, shall be added to, and become Exhibits to, the Credit Agreement; and                (h) Schedule 4.16, delivered as required pursuant to Section 8.17 hereof, shall be added to, and become a Schedule to, the Credit Agreement.           2.4 If the conditions set forth in Section 2.2 are not satisfied on or prior to the Effectiveness Termination Date, the amendments and supplements to the Credit Agreement and Exhibits and Schedules to the Credit Agreement as set forth in Section 2.3 shall not be effective at any time.      SECTION 3. Bond Resolution . On or before the Effectiveness Termination Date (the "Bond Resolution Date"), Borrower shall have caused to be effective a consent solicitation and exchange offer for the 9.5% Senior Subordinated Notes (the "Senior Subordinated Notes") pursuant to which such Senior Subordinated Notes shall be surrendered and exchanged for new subordinated notes to be issued by Borrower (the "Exchanged Notes") and the indenture governing any remaining Senior Subordinated Notes will be amended (the "Bond Amendment"). Such exchange offer and consent solicitation shall be evidenced by an offering memorandum and letter of transmittal (collectively, the "Offering Memorandum"). The Exchanged Notes shall be evidenced by a new indenture (the "Exchange Indenture"). The Offering Memorandum, the Bond Amendment, the Exchanged Notes and the Exchange Indenture shall be satisfactory in all respects to Agent and the Required Lenders, and shall be subject to the conditions listed below. The effective exchange of at least 90% of the Senior Subordinated Notes pursuant to the terms set forth in the Offering Memorandum on or before the Bond Resolution Date and satisfaction of the conditions listed below will be termed the "Bond Resolution".           3.1 Noteholders representing at least 90% of the Senior Subordinated Notes must have validly tendered and not withdrawn their Senior Subordinated Notes pursuant to the Offering Memorandum.           3.2 The Offering Memorandum and Exchange Indenture and all related documentation must be satisfactory to Agent and Required Lenders and shall include, without limitation, subordination and intercreditor terms satisfactory to Agent and Required Lenders providing that (among other things), in the event of a default under the Exchanged Notes or upon the occurrence of an Event of Default under the Credit Agreement, the noteholders shall be precluded from exercising any remedies under the Exchanged Notes (other than in the event of (i) a default in the payment of principal under the Credit Agreement which is not waived or remedied within 180 days or (ii) an acceleration of the Credit Agreement), and no payments shall be made or accepted under the Exchanged Notes for at least 180 days following a default under the Exchanged Notes or an Event of Default under the Credit Agreement; provided that each Lender shall be assumed to have agreed that such subordination and intercreditor terms are satisfactory if it does not advise Agent otherwise in writing prior to the Bond Resolution Date.           3.3 No default or event of default shall exist under (a) the Senior Subordinated Notes (as amended pursuant to the Bond Amendment on or prior to the effectiveness of the

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Exchange Indenture, the "Amended Notes"), (b) the Exchanged Notes, or (c) the Exchange Indenture.           3.4 The terms of the Exchanged Notes shall be based on the provisions set forth in the terms and conditions attached hereto as Schedule 2. The Lenders hereby (i) consent to the amendment and exchange of the Senior Subordinated Notes on or prior to the Effectiveness Termination Date subject to the satisfaction of the conditions listed in this Section 3, and (ii) agree that an amendment and exchange of the Senior Subordinated Notes on or prior to the Effectiveness Termination Date subject to the satisfaction of the conditions listed in this Section 3 shall not constitute a Default under the Credit Agreement.      SECTION 4. Defaults; Waiver . Borrower is in default under the terms of the Credit Agreement. In particular, (i) for the fiscal period ending May 31, 2008, Borrower is in noncompliance with Section 6.10 [Maintenance of Minimum Tangible Net Worth], Section 6.11 [Maintenance of Leverage Ratio] and Section 7.5 [Land Components] of the Credit Agreement, (ii) for the fiscal period ended August 31, 2008, Borrower is in noncompliance with Section 6.10 [Maintenance of Minimum Tangible Net Worth], Section 6.11 [Maintenance of Leverage Ratio], Section 7.4 [Limitation on Unimproved Entitled Land] and Section 7.5 [Land Components] of the Credit Agreement and (iii) as of October 1, 2008, Borrower is in noncompliance with Section 9.6(a) [Default in Payment of any Indebtedness] for the payments due on October 1, 2008 (collectively, the "Specified Defaults"). Subject to the terms and conditions set forth herein, Agent and the Lenders hereby agree to waive compliance with the Credit Agreement for the Specified Defaults; provided however that such waiver shall only be effective on and as of the Fourth Amendment Effective Date. If the conditions set forth in Section 2.2 are not satisfied on or prior to the Effectiveness Termination Date, the waiver set forth in this Section 4 shall have no force and effect and the Lenders hereby reserve all of their rights and remedies with respect to the Specified Defaults. Other defaults may exist under the terms of the Credit Agreement and the Lenders reserve the right to assert all other defaults under the Credit Agreement, whether such defaults exist now or may hereafter occur.      SECTION 5. No Fundings . No Revolving Credit Loan or Swingline Loan shall be made, nor shall any Facility L/C be issued, until the Fourth Amendment Effective Date.      SECTION 6. Bridge Loan .           6.1 The Lenders hereby consent to the borrowing by Borrower and guaranty by the Borrower Subsidiaries of a loan which loan shall (a) not exceed $7,000,000, (b) be provided by Parkmount Land Development Inc. (an entity owned and controlled by existing direct or indirect equity holders of Borrower) (the "Bridge Creditor"), (c) be secured by assets of Borrower and its Subsidiaries with an aggregate book value not to exceed the lesser of (i) two times the principal amount of such loan and (ii) $14,000,000 (the "Bridge Collateral"), (d) contain no covenants, (e) contain no cross default to the Credit Agreement, (f) have a maturity date not later than one (1) year from the date the loan is made, (h) provide for interest payments not in excess of the greater of (i) the Alternate Base Rate plus 6.00% and (ii) the LIBOR Rate plus 6.00%, (h) not require principal payments on such loan prior to maturity, (i) permit

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prepayment, without penalty or premium, of such loan, and (j) otherwise contain terms and conditions subject to Agent’s approval (the "Bridge Loan").           6.2 Subject to the terms and conditions set forth in Section 6.1 above, the Lenders hereby waive compliance with the Credit Agreement for (a) the failure of the Borrower to comply or to cause compliance with Section 7.2 of the Credit Agreement by placing a Lien on the Bridge Collateral pursuant to the terms of the Bridge Loan, and (b) the failure of the Borrower to comply or cause compliance with Section 7.9 of the Credit Agreement by incurring additional Indebtedness under the Bridge Loan.      SECTION 7. Conditions Precedent to Closing . The Closing Date of this Amendment is subject to the following conditions:           7.1 this Amendment shall have been properly executed by the Required Lenders, Agent, the Guarantors and Borrower;           7.2 Borrower shall be diligently pursuing the Bond Resolution, pursuant to the terms set forth in Schedule 2;           7.3 Borrower shall have paid all fees and expenses to be paid by Borrower to Agent and the Lenders in connection with the Credit Agreement and this Amendment, all fees, expenses and costs (including reasonable attorneys’ fees and expenses but excluding the allocated costs of internal counsel) incurred by Agent, Lenders or their Affiliates or agents in connection with the Credit Agreement and this Amendment, including a fee to Agent, for the account of each Lender (including Wachovia Bank, National Association) approving this Amendment, a consent fee (the "Consent Fee") equal to 50 basis points multiplied by each such Lender’s Commitment; provided , however that only 40% of the Consent Fee shall be due and payable on the Closing Date, and the remaining 60% of the Consent Fee shall be due and payable on the Fourth Amendment Effective Date; provided further , however , if the Fourth Amendment Effective Date does not occur prior to the Effectiveness Termination Date, or such later date as may be agreed to by the Lenders, the remaining 60% of the Consent Fee shall no longer be due and payable;           7.4 receipt by Agent, unless otherwise agreed to by Agent, of resolutions of Borrower’s and each Guarantor’s board of directors or similar governing body approving this Amendment and the amendments to the Credit Agreement contained herein, authorizing, among other things, the execution and delivery by the appropriate officers on behalf of Borrower, and the performance by Borrower, of this Amendment, the Credit Agreement and the other Loan Documents and certificates related to such resolutions;           7.5 receipt by Agent of opinions of counsel to Borrower and Guarantors, Paul, Hastings, Janofsky & Walker LLP, addressing due authorization, execution and enforceability of this Amendment, no conflicts with any law or any other agreements, and such other matters relating to this Amendment and the transactions contemplated hereby as Agent may reasonably request; and           7.6 the fact that the representations and warranties of Borrower and each Guarantor contained in Article 5 of the Credit Agreement and Section 8 of this Amendment shall

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be true, correct and complete in all material respects on and as of the Closing Date as if made on and as of such date unless stated to relate to a specific earlier date (in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date).      SECTION 8. Representations, Covenants and Agreements . In order to induce the Lenders to enter into this Amendment, Borrower and the Guarantors each represents, warrants, covenants and agrees that:           8.1 Credit Agreement . The Credit Agreement, as amended hereby, constitutes the valid, legal and binding obligation of Borrower and such Credit Agreement, as amended hereby, is fully enforceable in accordance with its terms and conditions.           8.2 Guaranty Agreements . The Guaranty Agreements constitute the valid, legal and binding obligation of the Guarantors and such Guaranty Agreements are fully enforceable in accordance with their terms and conditions.           8.3 Security Agreement . On and as of the Fourth Amendment Effective Date, the Security Agreement is effective to create in favor of Agent, for the ratable benefit of the Secured Parties (as defined in Schedule 1), a legal, valid and enforceable security interest in the Collateral identified therein owned by Borrower and Subsidiary Guarantors, and, when financing statements in appropriate form are filed in the appropriate offices for the locations specified in the schedules to the Security Agreement, the Security Agreement shall constitute a fully perfected Lien (subject to Permitted Liens) on, and security interest in, all right, title and interest of the grantors thereunder in such Collateral that may be perfected by filing, recording or registering a financing statement under the UCC as in effect, in each case prior and superior in right to any other Lien (other than Permitted Liens) on any Collateral.           8.4 Control Agreements . On and as of the Fourth Amendment Effective Date, the Control Agreements constitute the valid, legal and binding obligation of Borrower and the Subsidiary Guarantors party thereto and are fully enforceable in accordance with their terms and conditions.           8.5 Pledge Agreement . On and as of the Fourth Amendment Effective Date, each Pledge Agreement is effective to create in favor of Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral identified therein, and, when such Collateral is delivered to Agent, each Pledge Agreement shall constitute a fully perfected first priority Lien (subject to Permitted Liens) on, and security interest in, all right, title and interest of the pledgors thereunder in such Collateral, in each case subject to no other Lien (other than Permitted Liens).           8.6 Mortgages . On and as of the Fourth Amendment Effective Date, the Mortgages granted pursuant to the terms of this Amendment are effective to create in favor of Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien and security interest in the Property identified therein owned by Borrower and/or one or more Subsidiary Guarantors who are a party thereto, and, when such Mortgages are filed in the appropriate offices for the locations specified in such Mortgages, the Mortgages shall constitute a

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fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in such Property, in each case prior and superior in right to any other Lien (other than Permitted Liens).           8.7 Security . Borrower and the Guarantors are entering into the Security Agreement, Control Agreements, Pledge Agreements and Mortgages as consideration for the Lenders entering into this Amendment and agreeing to make Loans and issue Facility L/Cs up to the Borrowing Cap and to secure such Loans and Facility L/Cs up to the Borrowing Cap and all other Obligations under the Loan Documents.           8.8 Subordinated Notes . On and as of the Closing Date, the Senior Subordinated Notes are the only Subordinated Notes issued and outstanding. On and as of the Fourth Amendment Effectiveness Date, the Amended Notes and the Exchanged Notes are the only Subordinated Notes issued and outstanding.           8.9 Bond Resolution . On or before the Effectiveness Termination Date, Borrower shall cause (i) the Bond Resolution Date to occur or (ii) the Offering Memorandum and Exchange Indenture to be executed and effective.           8.10 Continued Payment and Performance . Except as expressly modified by this Amendment, Borrower and the Guarantors shall continue to pay and perform their obligations herein and under the Credit Agreement and the Guaranty Agreements in accordance with the terms hereof and thereof and shall comply with each and every term, provision and agreement contained herein and in the Credit Agreement and the Guaranty Agreements.           8.11 No Default . Other than the Specified Defaults, no default or event of default, nor any act, event, condition or circumstance which with the passage of time or the giving of notice, or both, would constitute a default or an event of default, under the Credit Agreement, the Guaranty Agreements or any other Loan Document has occurred and is continuing on the date hereof.           8.12 Power and Authority . Borrower and the Guarantors each has the power and authority to enter into this Amendment and the other Loan Documents and to do all acts and things as are required or contemplated hereunder or thereunder to be done, observed and performed by it.           8.13 Enforceable Obligations . This Amendment has been duly authorized, validly executed and delivered by one or more authorized officers of Borrower and Guarantors and constitutes a legal, valid and binding obligation of Borrower and each Subsidiary Guarantor, enforceable against it in accordance with its terms, subject to the effect, if any, of bankruptcy, insolvency, reorganization, arrangement or other similar laws relating to or affecting the rights of creditors generally and the limitations, if any, imposed by the general principles of equity and public policy.           8.14 Approvals; No Conflict . The execution and delivery of this Amendment and the performance of Borrower and the Guarantors hereunder does not and will not require the consent or approval of any regulatory authority or governmental authority or agency having jurisdiction over Borrower or the Guarantors, nor be in contravention of or in conflict with the

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articles of incorporation or bylaws of Borrower or the Guarantors, as applicable, or the provision of any statute, or any judgment, order or indenture, instrument, agreement or undertaking, to which any of Borrower or the Guarantors is party or by which the assets or properties of Borrower and the Guarantors are or may become bound.           8.15 Resolutions . Within five (5) Business Days of the Closing Date, the Agent shall receive any certificates and resolutions of Borrower and each Guarantor described in Section 7.4 which Agent did not require to be delivered on or prior to the Closing Date in accordance with Section 7.4.           8.16 Legal Opinions . Within five (5) Business Days of the Closing Date, Borrower shall cause to be delivered to Agent opinions of counsel addressing due authorization, execution and enforceability of this Amendment and such other matters relating to this Amendment and the transactions contemplated hereby as Agent may reasonably request by counsel to Borrower and Guarantors from each jurisdiction in which such parties are organized.           8.17 Schedule 4.16 . On or before January 16, 2009, Borrower shall cause to be delivered to Agent, each in form and substance satisfactory to Agent, (a) Schedule 4.16 to the Credit Agreement (as to be amended on the Fourth Amendment Effective Date in accordance with Schedule 1 hereto) and (b) a certificate executed by the Borrower which certifies that such Schedule 4.16 includes a complete and accurate list, as of the date of delivery, of the location, by state, county and street address (if such street address is available) of all items described in Section 4.16(b) (as set forth on Schedule 1 hereto).      SECTION 9. Reaffirmation . Borrower confirms, reaffirms and ratifies its obligations contained in the Credit Agreement and any other agreement or document relating to the Obligations. Borrower, on its own behalf and on behalf of each of its affiliates, warrants and represents to Agent and the Lenders that the Facility and the Obligations and any and all other Obligations of Borrower or any affiliate of Borrower to Agent and the Lenders, any affiliate of Agent and the Lenders, or any predecessors in interest of Agent and the Lenders or any affiliate of Agent and the Lenders, are not subject to any credits, charges, claims, counterclaims, defenses, or rights of offset or deduction of any kind or character whatsoever. Each of the Guarantors hereby (a) consents to the transactions contemplated by this Amendment and (b) acknowledges and agrees that (i) the guarantees made by such party contained in the Guaranty Agreements are, and shall remain, in full force and effect after giving effect to this Amendment and the amendments to the Credit Agreement contained herein, and (ii) the obligations of each Guarantor pursuant to the Guaranty Agreements are not subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations guaranteed thereunder, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations guaranteed thereunder or otherwise.      SECTION 10. WAIVER OF CLAIMS . EACH OF BORROWER AND THE GUARANTORS ACKNOWLEDGES THAT EACH OF THE AGENT AND THE LENDERS HAS ACTED IN GOOD FAITH AND HAS CONDUCTED ITSELF IN A COMMERCIALLY REASONABLE MANNER IN ITS RELATIONSHIPS WITH

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BORROWER AND THE GUARANTORS IN CONNECTION WITH THIS AMENDMENT AND IN CONNECTION WITH THE OBLIGATIONS AND THE CREDIT AGREEMENT, BORROWER AND THE GUARANTORS HEREBY WAIVING AND RELEASING ANY CLAIMS TO THE CONTRARY. EACH OF BORROWER AND THE GUARANTORS ON ITS OWN BEHALF AND ON BEHALF OF EACH OF ITS AFFILIATES, RELEASES AND DISCHARGES THE AGENT AND THE LENDERS, ALL AFFILIATES OF THE AGENT AND THE LENDERS, ALL OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS OF THE AGENT AND THE LENDERS OR ANY OF THEIR AFFILIATES, AND ALL OF THEIR PREDECESSORS IN INTEREST, FROM ANY AND ALL CLAIMS, DEFENSES AND CAUSES OF ACTION, WHETHER KNOWN OR UNKNOWN AND WHETHER NOW EXISTING OR HEREAFTER ARISING, INCLUDING WITHOUT LIMITATION, ANY USURY CLAIMS, THAT HAVE AT ANY TIME BEEN OWNED, OR THAT ARE HEREAFTER OWNED, IN TORT OR IN CONTRACT BY BORROWER, ANY GUARANTOR OR ANY AFFILIATE OF BORROWER OR ANY GUARANTOR AND THAT ARISE OUT OF ANY ONE OR MORE CIRCUMSTANCES OR EVENTS THAT OCCURRED PRIOR TO THE DATE OF THIS AMENDMENT. MOREOVER, EACH OF BORROWER AND THE GUARANTORS, JOINTLY AND SEVERALLY, ON ITS OWN BEHALF AND ON BEHALF OF EACH OF ITS AFFILIATES, WAIVES ANY AND ALL CLAIMS NOW OR HEREAFTER ARISING FROM OR RELATED TO ANY DELAY BY THE AGENT AND THE LENDERS IN EXERCISING ANY RIGHTS OR REMEDIES UNDER THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.      SECTION 11. Expenses and Indemnification . Borrower agrees to pay upon demand, all reasonable out-of-pocket costs and expenses of Agent and the Lenders (including the reasonable fees and disbursements of counsel) in connection with the preparation, execution and delivery of this Amendment and in connection with the enforcement of the Credit Agreement, this Amendment or any of the other Loan Documents. Borrower, on its own behalf and on behalf of each of its affiliates, agrees to indemnify Agent and the Lenders, their officers, directors, employees, attorneys and agents, and all affiliates of Agent and the Lenders and predecessors in interest of Agent and the Lenders or any affiliate of Agent and the Lenders (each an "Indemnified Party") and hold each Indemnified Party harmless against all claims, losses, liabilities and expenses (including reasonable fees and disbursements of counsel but excluding the allocated costs of internal counsel) arising from or relating to the Facility, the Credit Agreement, the other Loan Documents, this Amendment and any and all loans and other transactions between Borrower or any affiliate of Borrower and any Indemnified Party. The Guarantors each agree that the foregoing obligations of Borrower shall be included in and shall constitute part of the "Obligations" as defined in the Guaranty Agreements.      SECTION 12. Default; Cross-Default . It shall be a default under this Amendment, and an Event of Default under the Credit Agreement, the Guaranty Agreements, all other Loan Documents and under any and all other obligations of Borrower or the Guarantors, if: (a) any one or more of them shall fail to comply with any of the terms of this Amendment; (b) any one or more of them shall default under any provision of the Credit Agreement, after giving effect to any applicable notice or cure periods or materiality standards; (c) any one or more of them shall default under any other obligation to Agent or to any Lender, after giving effect to any applicable

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notice or cure periods or materiality standards; (d) any entity either affiliated or under common control with Borrower or the Guarantors shall be in default under any other agreement or obligation to Agent or to any Lender or (e) the conditions set forth in Section 2.2 are not satisfied by the Effectiveness Termination Date.      SECTION 13. Waiver, Rights and Remedies . This Amendment shall not prejudice any right or remedy of Agent or the Lenders and shall not be deemed a waiver of any right or remedy, except with respect to the Specified Defaults specifically described herein. Agent and the Lenders expressly reserve all of the rights and remedies with respect to any other present or future default or event of default arising under the Credit Agreement, including, without limitation, any failure to make any payment on the Obligations from and after the date hereof, or failure to perform any other obligation of Borrower or any other entity affiliated or under common control with Borrower to Agent or the Lenders. This Amendment shall be binding on, and inure to the benefit of, the parties and their respective successors, heirs and assigns.      SECTION 14. Notice . Any notice required to be given under this Amendment shall be given in accordance with Section 11.1 of the Credit Agreement. Borrower hereby notifies all parties hereto that all notices to Borrower or any Guarantor should be mailed transmitted or delivered to the following address and not the address set forth in Section 11.1 of the Credit Agreement: 1405 Old Alabama Road, Suite 200, Roswell, Georgia 30076, Attention of Kevin Abelson, Vice President Finance (Telecopier No. (770) 642-1775; Telephone No. (770) 998-9663 ext. 222), with a copy to 3751 Victoria Park Avenue, Toronto, Ontario, M1W3Z4 Canada, Attention of Seymour Joffe (Telecopier No. (416) 449-1073; Telephone No. (416) 449-1340) and a copy to 3751 Victoria Park Avenue, Toronto, Ontario M1W 3Z4 Canada, Attention of Harry Rosenbaum (Telecopier No. (416) 449-6438; Telephone No. (416) 449-1340).      SECTION 15. Interpretation . This Amendment shall be construed to liberally effectuate the rights and remedies of the parties hereto as expressed herein, and neither such principle of interpretation nor the express language of this Amendment shall be impaired or adversely affected by any instruments and documents executed in connection herewith. The deletion of any provision from a prior draft of this Amendment shall not and shall not be deemed to constitute (and shall not be used as) evidence of any fact or interpretation, since the parties may disagree as to the meaning and effect of such a deletion, and no prior draft of this Amendment shall be admissible as evidence of the meaning of this Amendment. Should any provision of this Amendment, the Credit Agreement or the other Loan Documents require judicial interpretation, it is agreed that a court interpreting or construing same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent prepared the same, it being agreed that all parties hereto have participated in the preparation hereof and of the Credit Agreement and the other Loan Documents.      SECTION 16. No Other Amendment . Except for the amendments set forth above, the text of the Credit Agreement shall remain unchanged and in full force and effect. This Amendment is not intended to effect, nor shall it be construed as, a novation. The Credit Agreement and this Amendment shall be construed together as a single agreement. Nothing herein contained shall waive, annul, vary or affect any provision, condition, covenant or

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agreement contained in the Credit Agreement, except as herein amended or specifically waived with respect to the Specified Defaults, nor affect nor impair any rights, powers or remedies under the Credit Agreement as hereby amended. The Lenders and Agent do hereby reserve all of their rights and remedies against all parties who may be or may hereafter become secondarily liable for the repayment of the Obligations. Borrower promises and agrees to perform all of the requirements, conditions, agreements and obligations under the terms of the Credit Agreement, as heretofore and hereby amended. The Credit Agreement, as so amended, is hereby ratified and affirmed. Borrower hereby expressly agrees that the Credit Agreement, as amended, is in full force and effect.      SECTION 17. No Course of Conduct . At no time shall the prior or subsequent course of conduct by Borrower or Agent and the Lenders directly or indirectly limit, impair or otherwise adversely affect any of the parties’ rights or remedies in connection with this or any of the instruments and documents executed in connection herewith, since the parties hereto agree that this Amendment and the Credit Agreement shall only be amended by written instruments executed by the parties, as provided herein. To the extent that Agent and the Lenders may have previously permitted Borrower to deviate from the terms and provisions of the Credit Agreement, Borrower and the Guarantors hereby acknowledge and agree that from the date of this Amendment, Borrower shall be required and expected to strictly comply with all terms and provisions of this Amendment and the Credit Agreement and Agent and the Lenders intend to enforce the terms and provisions of this Amendment and the Credit Agreement as in effect on the date hereof as amended hereby.      SECTION 18. Limited Relationships . Neither Agent, the Lenders nor any representative of Agent or the Lenders at any time has agreed or consented to being an agent, principal, business associate or participant, joint venturer, partner or alter ego of any of Borrower, the Guarantors or any of their affiliates, and no such relationship is contemplated. No person except employees of Agent, the Lenders and Agent’s and Lenders’ counsel has at any time been directly or indirectly authorized by Agent or the Lenders to directly or indirectly represent, speak or act for or on behalf of Agent or the Lenders with respect to any matter whatsoever related to, arising out of or connected with this Amendment or any other matter or contract.      SECTION 19. ARM’S LENGTH AGREEMENT . BORROWER AND EACH GUARANTOR EACH HEREBY ACKNOWLEDGES THAT IT HAS FREELY AND VOLUNTARILY ENTERED INTO THIS AMENDMENT AFTER AN ADEQUATE OPPORTUNITY AND SUFFICIENT PERIOD OF TIME TO REVIEW, ANALYZE, AND DISCUSS: (I) ALL TERMS AND CONDITIONS OF THIS AMENDMENT; (II) ANY AND ALL OTHER DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT; AND (III) ALL FACTUAL AND LEGAL MATTERS RELEVANT TO THIS AMENDMENT AND/OR ANY AND ALL SUCH OTHER DOCUMENTS, WITH COUNSEL FREELY AND INDEPENDENTLY SELECTED BY BORROWER AND THE GUARANTORS. BORROWER AND THE GUARANTORS EACH FURTHER ACKNOWLEDGES AND AGREES THAT IT HAS ACTIVELY AND WITH FULL UNDERSTANDING PARTICIPATED IN THE NEGOTIATION OF THIS AMENDMENT AND ALL OTHER DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT AFTER CONSULTATION AND REVIEW WITH ITS COUNSEL, THAT ALL OF THE TERMS AND

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CONDITIONS OF THIS AMENDMENT AND THE OTHER DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT HAVE BEEN NEGOTIATED AT ARM’S-LENGTH, AND THAT THIS AMENDMENT AND ANY AND ALL SUCH OTHER DOCUMENTS HAVE BEEN NEGOTIATED, PREPARED, AND EXECUTED WITHOUT FRAUD, DURESS, UNDUE INFLUENCE, OR COERCION OF ANY KIND OR NATURE WHATSOEVER HAVING BEEN EXERTED BY OR IMPOSED UPON ANY PARTY.      SECTION 20. Miscellaneous . Except as expressly amended by this Amendment or some other instrument in writing, the Credit Agreement, the Guaranty Agreements, the other Loan Documents and any other agreement or document relating to the Obligations evidenced by the Credit Agreement shall continue, unmodified and unchanged. This Amendment constitutes the entire agreement of the parties concerning the matters set forth herein and supersedes all prior and contemporaneous agreements, written or oral, concerning such matters. This Amendment may not be modified orally, and any modification must be in writing, signed by the party to be bound. The captions are inserted only for the convenience of the reader and shall not be construed to interpret or modify the terms of the Agreement. Time shall be of the essence with respect to all obligations of Borrower and the Guarantors under the terms and provisions of this Amendment. This Amendment shall be governed by the laws of the State of North Carolina without regard to its conflicts of law principles and may be executed in multiple counterparts but all of which shall constitute one agreement.

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

[SIGNATURE PAGE TO FOURTH AMENDMENT TO FIRST AMENDED AND
RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

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RESTATED CREDIT AGREEMENT]

Schedule 1 (Amendments to Credit Agreement ) and Schedule 2 (Proposed Restructuring Term Sheet – Material Terms) [See separate documents for Schedules] Exhibits J-1, J-2, J-3, K, L-1, L-2 and M (Security Documents) [See separate documents for Exhibits]

Schedule 1 On and as of the Fourth Amendment Effective Date, the Credit
Agreement shall be amended as follows: Part A of Schedule 1 The following definitions in Section 1.1 of the Credit Agreement shall be amended and restated in their entirety as follows:                " Aggregate Commitment " shall mean the aggregate Commitments of all the Lenders, as reduced or increased from time to time pursuant to the terms of this Agreement. As of the date of the Fourth Amendment Closing Date, the Aggregate Commitment is $95,000,000.                " Applicable ABR Margin " shall mean, as at any date of determination, six percent (6.00%).                " Applicable Facility L/C Rate " shall mean, as at any date of determination, six percent (6.00%).                " Applicable LIBOR Margin " shall mean, as at any date of determination, six percent (6.00%).                " Borrowing Base " shall mean as at any date of determination after the Interim Borrowing Period, an amount equal to the sum of the following assets of Borrower and each Subsidiary Guarantor (but only to the extent (v) such assets included in clauses (i), (ii), (iii), (iv), (v) or (vi) of this definition, are subject to an enforceable recorded Mortgage and the Mortgage Requirements have been satisfied with respect to such assets, (w) such assets are not subject to any Liens other than Permitted Liens, (x) such assets are located within the continental United States, (y) with respect to such assets, no payment or other material default by Borrower or a Subsidiary Guarantor in the payment or performance of any assessment district obligations, special facility obligations or other similar obligations has occurred and is continuing with respect to such assets and (z) with respect to real estate assets, if any such assets are subject to a purchase money mortgage otherwise permitted in accordance with this Agreement in favor of a third party other than Agent and such purchase money mortgage (A) is subordinate to the Lien in favor of Agent with respect to such Collateral or (B) is in effect prior to the Fourth Amendment Closing Date): (i) the lesser of (a) twenty-five percent (25%) of the Actual Costs for Unimproved Entitled Land and (b) twenty-five percent (25%) of the Appraised Value for Unimproved Entitled Land, plus (ii) the lesser of (a) forty-five percent (45%) of the Actual Costs for Lots Under Development and (b) forty-five percent (45%) of the Appraised Value for Lots Under

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Development; provided , however , that any Lots Under Development not sold or converted to Finished Lots within twenty-four (24) months following the date that such Lots Under Development were first included in the Borrowing Base as "Lots Under Development" shall be excluded from the Borrowing Base; provided , further , that any Lots Under Development, which were not included in the Borrowing Base as Lots Under Development on or prior to the Fourth Amendment Closing Date, shall be excluded from this clause (ii) if either (1) no development activity has occurred on such Lot Under Development for nine (9) months or (2) such Lot Under Development is Unimproved Entitled Land and is not being actively developed into a Finished Lot within nine (9) months following the date that such Unimproved Entitled Land was first included in the Borrowing Base as a "Lot Under Development"; plus (iii) the lesser of (a) fifty-five percent (55%) of the Actual Costs for Finished Lots and (b) fifty-five percent (55%) of the Appraised Value for Finished Lots, plus (iv) the least of (a) the Presold Housing Unit Borrowing Base Percentage multiplied by the Actual Costs for Presold Housing Units, (b) the Presold Housing Unit Borrowing Base Percentage multiplied by the Appraised Value for Presold Housing Units and (c) the Presold Housing Unit Borrowing Base Percentage multiplied by the Contract Sale Price for Presold Housing Units, plus (v) the lesser of (a) the Model-Speculative Housing Unit Borrowing Base Percentage multiplied by the Actual Costs for Speculative Housing Units and (b) the Model-Speculative Housing Unit Borrowing Base Percentage multiplied by the Appraised Value for Speculative Housing Units, plus (vi) the lesser of (a) the Model-Speculative Housing Unit Borrowing Base Percentage multiplied by the Actual Costs for Model Housing Units and (b) the Model-Speculative Housing Unit Borrowing Base Percentage multiplied by the Appraised Value for Model Housing Units, plus (vii) one hundred percent (100%) of Unrestricted Cash of Borrower or a Subsidiary Guarantor pledged to Agent pursuant to the Security Agreement and held in a deposit account subject to a Control Agreement.                Notwithstanding the foregoing, (a) the amount calculated pursuant to clause (i) of this definition shall not exceed at any time twenty percent (20%) of the Borrowing Base, (b) the aggregate of amounts calculated pursuant to clauses (i), (ii) and (iii) of this definition shall not exceed at any time forty-five percent (45%) of the Borrowing Base, (c) the aggregate amounts calculated pursuant to clauses (v) and (vi) of this definition shall not exceed at any time forty percent (40%) of the aggregate of the amounts calculated pursuant to clauses (iv), (v) and (vi) of this definition, (d) the amount calculated under this definition with respect to Condo Units shall not exceed at any time twenty percent (20%) of the Borrowing Base, (e) the amount of any Lien in favor of the holders of a purchase money mortgage (other than Agent) shall be deducted from the Borrowing Base, (f) not more than ten percent (10%) of the individual Lots included in the Borrowing Base shall have a purchase money mortgage in favor of a holder other than Agent and (g) the contribution to the Borrowing Base of real estate assets subject to a purchase money

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mortgage in favor of a holder other than Agent shall not exceed at any time five percent (5%) of the aggregate Borrowing Base.                Notwithstanding anything herein to the contrary, no calculation of the Borrowing Base nor requirements related to the Borrowing Base shall be necessary prior to the end of the Interim Borrowing Period.                " Finished Lot " means Entitled Land comprised of a fully developed single-family residential lot with respect to which all development and construction work has been completed (including completion of all public or private roadways necessary to provide sufficient access to such lot and completion of all water, sanitary and storm sewer facilities in capacities sufficient for single-family residential use) so that such lot is ready and of sufficient size for a residence or condominium project to be constructed thereon. The term "Finished Lot" shall not include any land upon which the construction of a residential unit has commenced or lots that fall under the definition of a Presold Housing Unit and have all permitting necessary to commence construction in place.                " Loan Documents " shall mean this Agreement, the Notes, the Guaranty Agreements, the Security Documents, the Facility L/C Applications, all other documents (if any) from time to time executed and delivered by Borrower or a Guarantor that evidence, secure or guarantee any of the Obligations, and any other document or instrument delivered from time to time in connection with this Agreement, the Notes, the Guaranty Agreements, the Security Documents, the Swingline Loans, the Revolving Credit Loans or the Facility L/Cs, as such documents and instruments may be amended or supplemented from time to time.                " Lots Under Development " means all Unimproved Entitled Land with respect to which Borrower or any Subsidiary Guarantor has obtained all necessary approvals for its subdivision for residential housing units (including condominium units), and which Borrower or any Subsidiary Guarantor is actively developing into Finished Lots, or which Borrower or any Subsidiary Guarantor reasonably expects to begin development activity within a nine (9) month period; provided, however, that the term "Lots Under Development" shall not include any land upon which the construction of a residential housing unit has commenced; provided, further that, the term "Lots Under Development" shall not include any land which is not actively being developed into Finished Lots within nine (9) months after such land was included in the Borrowing Base as "Lots Under Development".                " Maximum Swingline Amount " shall mean Five Million Dollars ($5,000,000).                " Permitted Liens " shall mean the following: (i) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action; (ii) Liens in connection with worker’s compensation, unemployment insurance or other social security, old age pension or public liability obligations (other than any Lien imposed by ERISA); (iii) Liens in favor of property owners’ associations securing payment of assessments or other charges; (iv) easements, rights-of-way, restrictions, plats, declarations of covenants, conditions and restrictions, condominium declarations, or similar encumbrances on the use of real property which do not interfere with the ordinary conduct of business of Borrower or any Subsidiary Guarantor or materially detract from the value of such real property; (v) Liens

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in favor of a seller of Unimproved Entitled Land, Lots Under Development or Finished Lots requiring Borrower or any Subsidiary Guarantor to make a payment upon the future sale of such Unimproved Entitled Land, Lots Under Development or Finished Lots in an amount not to exceed five percent (5%) of the gross sales price or in the case of profit sharing agreements an amount that is reasonable and customary in the industry and market; (vi) Liens securing the Obligations pursuant to the Security Documents; and (vii) any Liens of mechanics, materialmen or material suppliers incurred in the ordinary course of business if, with respect to any such Liens securing Indebtedness that is past due, (A) such Liens are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established and as to which the property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof or (B) a corresponding deduction is made to the Borrowing Base Availability so as to deduct from the Borrowing Base Availability the amount secured by any such Lien on any asset included in the current Borrowing Base calculation.                " Required Lenders " shall mean, at any particular time, Lenders having at least 66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders having at least 66-2/3% of the aggregate amount of the Revolving Credit Loans then outstanding; provided that the Commitment of, and the portion of the Loans held by, any Defaulting Lender shall be excluded for purposes of determining Required Lenders.                " Secured Indebtedness " shall mean all Indebtedness of Borrower or any of its Subsidiaries (excluding Indebtedness owing to Borrower or any of its Subsidiaries and excluding Indebtedness created under this Agreement and owed to Agent or the Lenders hereunder) that is (a) secured by a Lien on assets of Borrower or any of its Subsidiaries or (b) supported by a guarantee of Borrower or any Subsidiary (including without limitation purchase money Indebtedness, Non-Recourse Indebtedness, obligations under sale/leaseback transactions and obligations under Capital Leases) and in either case is Indebtedness permitted under Section 7.9 hereof; provided, however, that Indebtedness under the Subordinated Notes shall not be Secured Indebtedness solely by reason of clause (b) of this definition.                " Subordinated Notes " means the (i) 9.5% Senior Subordinated Notes due 2015 issued pursuant to the Indenture, (ii) the Amended Notes, (iii) the Exchanged Notes and (iv) any other notes, debentures or other similar instruments issued by Borrower or any Subsidiary after the date of this Agreement pursuant to either (x) a registered public offering or (y) a private placement of such instruments in accordance with an exemption from registration under the Securities Act of 1933 and/or the Securities Exchange Act of 1934 or similar law, and which other notes, debentures or similar instruments meet the following requirements:                (a) the maturity date of such instruments must be a date which is the later of (i) five (5) years from the date of issuance and (ii) two (2) years after the Maturity Date;                (b) such instruments must contain subordination and other provisions and be subject to a subordination agreement, each satisfactory to Agent in its sole discretion (including without limitation standstill provisions and provisions requiring blockage of all payments thereunder for a period of at least one hundred seventy nine (179) days upon the occurrence of an Event of Default;

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               (c) such instruments are unsecured;                (d) such instruments shall not permit any cash interest or principal payments prior to the indefeasible payment in full of the Obligations and termination of the Commitments;                (e) such instruments shall not contain any covenants;                (f) such instruments shall not contain any cross default to a Default under any of the Loan Documents;                (g) any other terms, provisions and events of default contained in such instruments (or in any agreement or indenture under which such instruments are issued) must be less restrictive, taken as a whole, than the covenants, terms, provisions and events of default in this Agreement, as determined by Agent in its sole discretion;                (h) the aggregate outstanding principal amount of all Subordinated Notes pursuant to this clause (iv) shall not exceed $50,000,000.00 at any time; and                (i) all terms and conditions shall be reasonably satisfactory to the prior review and approval of Agent.                " Unimproved Entitled Land " means Entitled Land which is zoned to permit single-family residential development (attached or detached) as a use by right (or comparable classification under local law).

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Part B of Schedule 1 The following definitions shall be added to Section 1.1 of the Credit Agreement in alphabetical order:      " Amended Notes " shall have the meaning set forth in the Fourth Amendment.      " Appraisal " shall mean a FIRREA-conforming appraisal, in form and substance satisfactory to Agent, prepared by an MAI appraiser satisfactory to Agent which reflects a valuation for the real property in question in accordance with the following requirement:      (a) with respect to Unimproved Entitled Land, such appraisal shall value such Unimproved Entitled Land on an "as is" basis;      (b) with respect to Lots, such appraisal shall be based on an "as is" basis;      (c) with respect to any Model Housing Unit, such appraisal shall be based on the fair market value of individual Housing Units as offered for sale; and      (d) with respect to any Speculative Housing Unit or any Presold Housing Unit, such appraisal shall be based on (i) the fair market value of Model Housing Units in the related project, if available, with adjustment for all Improvements included in such Speculative Housing Unit or Presold Housing Unit but which are not included in the applicable Model Housing Units, or, (ii) if the fair market value of Model Housing Units in the related project is not available to be calculated in clause (i), the fair market value of such Speculative Housing Unit or any Presold Housing Unit including all Improvements.      " Appraised Value " shall mean with respect to any Entitled Land, any Lots, any Model Housing Unit, any Speculative Housing Unit or any Presold Housing Unit, the sum of (a) the appraised value of such Entitled Land, Lots, Model Housing Unit, Speculative Housing Unit or Presold Housing Unit as determined by an Appraisal meeting the requirements for an Appraisal set forth in the definition of the term "Appraisal", plus (b) the amount that Borrower or any Subsidiary Guarantor has actually expended (to the extent such expenditures shall ultimately constitute costs of sales in accordance with GAAP) for the development and construction of such Lots, Model Housing Units, Speculative Housing Units and Presold Housing Units since the date of the applicable Appraisal referred to in clause (a) hereof.      " Bond Resolution " shall have the meaning set forth in Section 3 of the Fourth Amendment.      " Borrower and Subsidiary Pledge Agreement " shall mean the Borrower and Subsidiary Pledge Agreement dated as of the Fourth Amendment Effective Date executed by Borrower and each Subsidiary Guarantor in favor of Agent, for the ratable benefit of Lenders, substantially in the form attached hereto as Exhibit L-1, as modified, amended, supplemented or restated from time to time.      " Borrowing Cap " shall mean $62,100,000.

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     " Collateral " shall mean, collectively, all of the real, personal and mixed property (including capital stock) in which Liens are purported to be granted pursuant to the Security Documents as security for the Obligations.      " Control Agreement " shall mean any control agreement executed by Borrower or any Subsidiary Guarantor, Agent and the depository institution in which cash or Cash Equivalents of Borrower or any Subsidiary Guarantor are being held in a deposit account which control agreement is substantially in the form attached hereto as Exhibit M, as modified, amended, supplemented or restated from time to time, all in form and substance satisfactory to Agent.      " Contract Sale Price " means the sales price reflected in any agreement of sale satisfying the requirements for an agreement of sale described in the definition of "Presold Housing Unit", as such sales price may be adjusted in accordance with the terms of such agreement of sale.      " Defaulting Lender " means, as of any date, any Lender that has (a) failed to make a Loan required to be made by it hereunder, (b) given notice to Agent or Borrower that it will not make, or that it has disaffirmed or repudiated any obligation to make, any Loan hereunder (unless such notice is given by all Lenders) or (c) been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.      " Entitled Land " shall mean Land owned 100% by Borrower or by any Subsidiary Guarantor in fee simple with respect to which (i) all requisite zoning requirements and land use requirements for such Land’s then current use and state of development have been satisfied and (ii) Borrower has sole control and management rights. "Entitled Land" shall include all Unimproved Entitled Land, Lots Under Development and Finished Lots.      " Exchange Indenture " shall have the meaning set forth in the Fourth Amendment.      " Exchanged Notes " shall have the meaning set forth in the Fourth Amendment.      " FIRREA " means the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended from time to time.      " Fourth Amendment " shall mean the Fourth Amendment to First Amended and Restated Credit Agreement, dated as of January 13, 2009, by and among Borrower, Lenders party thereto and Agent.      " Fourth Amendment Closing Date " shall mean January 13, 2009.      " Fourth Amendment Effective Date " shall have the meaning set forth in Section 2.2 of the Fourth Amendment.      " Interim Borrowing Period " shall mean the period from the Fourth Amendment Effective Date until such time as all Mortgage Requirements have been satisfied with respect to substantially all of the real property assets of Borrower and the Subsidiary Guarantors.

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     " Model-Speculative Housing Unit Borrowing Base Percentage " shall mean sixty-five percent (65%), unless (i) Presold Housing Unit Borrowing Base Percentage is being calculated as set forth herein as eighty percent (80%) and (ii) the Borrowing Base (calculated with the Presold Housing Unit Borrowing Base Percentage as 80% and the Model-Speculative Housing Unit Borrowing Base Percentage as 65%) is less than $95,000,000, in which case "Model-Speculative Housing Unit Borrowing Base Percentage shall mean seventy percent (70%).      " Mortgage Requirements " shall have the meaning ascribed thereto in Section 6.17(e).      " Mortgages " shall mean, collectively, the mortgages securing the Obligations executed from time to time by Borrower and any Subsidiary Guarantor in favor of Agent, which shall be substantially in the form attached hereto as Exhibit J-1, Exhibit J-2 or J-3, as applicable, with such changes as shall be required to conform each such Mortgage to the applicable laws and customary practices of any other state in which each such Mortgage is to be recorded, all in form and substance satisfactory to Agent, and as the same may be modified, amended, supplemented or restated from time to time.      " New Equity " shall have the meaning set forth in Section 2.2 of the Fourth Amendment.      " New Subsidiary " means (i) each new Subsidiary (which is not a Subsidiary of Borrower on the date of this Agreement) of Borrower, (ii) any Subsidiary of Borrower formed or acquired after the date of this Agreement and (iii) any Subsidiary of Borrower existing on the Closing Date but which is not a Guarantor if such Subsidiary at any time owns assets having an aggregate value in excess of $250,000.      " Owner Guarantor Pledge Agreement " shall mean the Owner Guarantor Pledge Agreement dated as of the Fourth Amendment Effective Date executed by Little Shots, which has approximately an 80% ownership interest in Borrower, in favor of Agent, for the ratable benefit of Lenders, substantially in the form attached hereto as Exhibit L-2, as modified, amended, supplemented or restated from time to time.      " Permitted Holders " shall mean (1)(a) Elly Nevada, Inc., (b) Norman Nevada, Inc., (c) Larry Nevada, Inc., (d) Little Shots Nevada, L.L.C., (e) Elly Colorado, Inc., (f) Norman Colorado, Inc. (g) Larry Colorado, Inc. and (h) Little Shots Holdings LLC; (2) any equityholder, general partner or managing member of any of the Persons referenced above in clause (1); (3) any officer, director, employee, member, partner or equityholder of the manager or general partner of any of the Persons referenced above in clauses (1) and (2); (4) the spouses and descendants of the Persons referenced in clause (2); (5) in the event of the incompetence or death of any of the Persons referred to in clause (2) and (3) above, such Person’s estate, executor, administrator, committee or other personal representative, in each case who at a particular date shall be the beneficial owner of or have the right to acquire, directly or indirectly, capital stock of Borrower (or any other direct or indirect parent company of Borrower); and (6) any trust created for the benefit of, or any entity or entities wholly-owned by, the Persons referenced above in clauses (1) through (5).

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     " Plans and Specifications " shall mean the final architectural and civil plans and specifications, including without limitation all maps, sketches, diagrams, surveys, drawings and lists of materials, for the development of the Land.      " Pledge Agreements " shall mean the Borrower and Subsidiary Pledge Agreement and the Owner Guarantor Pledge Agreement.      " Presold Housing Unit Borrowing Base Percentage " shall mean seventy percent (70%), unless the Borrowing Base (calculated with the Presold Housing Unit Borrowing Base Percentage as 70% and the Model-Speculative Housing Unit Borrowing Base Percentage as 65%) is less than $95,000,000, in which case "Presold Housing Unit Borrowing Base Percentage" shall mean eighty percent (80%).      " Release Consideration " shall have the meaning ascribed thereto in Section 6.18(f).      " Restructuring Owners " shall mean the holders of the 9.5% Senior Subordinated Notes due 2015 issued pursuant to the Indenture as of the Fourth Amendment Closing Date obtaining a direct ownership or equity interest in Borrower in connection with the Bond Resolution which such aggregate direct ownership or equity interests in Borrower do not exceed 20% of the ownership or equity interests in Borrower.      " Secured Parties " shall mean the Lenders, Agent and any affiliate of a Lender which affiliate of such Lender enters into a Interest Rate Contract with Borrower or any Guarantor.      " Security Agreement " shall mean the Security Agreement among Borrower, the Subsidiary Guarantors and Agent, substantially in the form attached hereto as Exhibit K, as modified, amended, supplemented or restated from time to time.      " Security Documents " shall mean the Security Agreement, Pledge Agreements, the Mortgages, any Control Agreements, any UCC financing statements, and any other documents pursuant to which Borrower or any Subsidiary Guarantor shall grant a Lien to Agent to secure the Obligations, as the same may be modified, amended, supplemented or restated from time to time.

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Part C of Schedule 1 The following definitions shall be deleted from Section 1.1 of the Credit Agreement:

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Part D of Schedule 1 The following Sections of the Credit Agreement shall be amended and restated in their entirety:      2.1 Commitments.      (a) Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Credit Loans to Borrower from time to time during the Commitment Period, and to purchase undivided interests and participations in Facility L/Cs in accordance with Section 2.16 hereof, in an aggregate principal amount of Revolving Credit Loans made by such Lender and of such Lender’s Ratable Share of the Facility L/C Obligations not to exceed at any time outstanding the amount set forth in Schedule 1 hereto (such Lender’s obligations to make Revolving Credit Loans and to purchase undivided interests and participations in Facility L/Cs in accordance with Section 2.16 hereof in such amounts, as reduced, increased or otherwise modified from time to time pursuant to the terms of this Agreement, being herein referred to as such Lender’s "Commitment"), subject to the limitations set forth in Section 2.1(b), Section 2.1(c) and Section 2.1(d) hereof.      (b) After the Interim Borrowing Period, no Revolving Credit Loan or Swingline Loan shall be made, nor shall any Facility L/C be issued, that would have the effect of increasing the then outstanding amount of the Borrowing Base Indebtedness to an amount exceeding the Borrowing Base as of the most recent Inventory Valuation Date, provided that a Revolving Credit Loan shall not be deemed to have increased the amount of the Borrowing Base Indebtedness if, and only to the extent that, the proceeds of such Revolving Credit Loan are immediately used to repay a Swingline Loan.      (c) No Revolving Credit Loan or Swingline Loan shall be made, nor shall any Facility L/C be issued if, prior to or after giving effect to such requested Loan or Facility L/C, the Unrestricted Cash of Borrower exceeds $5,000,000 for more than three (3) consecutive Business Days.      (d) No Revolving Credit Loan or Swingline Loan shall be made, nor shall any Facility L/C be issued during the Interim Borrowing Period if, prior to or after giving effect to such requested Loan or Facility L/C, the Aggregate Outstanding Credit Exposure exceeds the Borrowing Cap.      (e) No Revolving Credit Loans shall be made at any time that any Swingline Loan is outstanding, except for Revolving Credit Loans that are used, in whole or in part, on the day on which made, to repay in full the outstanding principal balance of the Swingline Loans. During the Commitment Period and as long as no Default or Event of Default exists, Borrower may borrow, prepay in whole or in part and reborrow Revolving Credit Loans, all in accordance with the terms and conditions hereof.      (f) Subject to the terms and conditions of this Agreement (including the limitations on the availability of LIBOR Rate Loans and including the termination of the Aggregate Commitment as set forth in Article 9 hereof), the Revolving Credit Loans may from time to time

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be (i) LIBOR Rate Loans, (ii) ABR Loans, or (iii) a combination thereof, as determined by Borrower and notified to Agent in accordance with Section 2.3 hereof, provided that no Revolving Credit Loan shall be made as a LIBOR Rate Loan after the day that is one month prior to the last day of the Commitment Period.      2.3 Procedure for Borrowing .      (a) Borrower may borrow under the Commitments (subject to the limitations on the availability of LIBOR Rate Loans), during the Commitment Period, provided Borrower shall give Agent written notice (the "Notice of Borrowing"), which Notice of Borrowing must be received (i) prior to 11:00 a.m., Charlotte, North Carolina time, at least three (3) Business Days prior to the requested Borrowing Date for any borrowing of LIBOR Rate Loans, or (ii) prior to 10:00 a.m., Charlotte, North Carolina time on or before the requested Borrowing Date for any borrowing of ABR Loans, which Notice of Borrowing shall be irrevocable. Each Notice of Borrowing shall specify (A) the Borrowing Date (which shall be a Business Day), (B) the amount of the requested borrowing and(C) whether the borrowing is to be of LIBOR Rate Loans or ABR Loans. Each borrowing pursuant to the Commitments shall be in the principal amount (1) in the case of ABR Loans, of $1,000,000 or any larger amount which is an even multiple of $100,000, and (2) in the case of LIBOR Rate Loans, of $10,000,000 or any larger amount which is an even multiple of $1,000,000.      (b) Subject to satisfaction of the terms and conditions of this Agreement, each Lender shall deposit funds with Agent for the account of Borrower by 2:00 p.m. Charlotte, North Carolina time on the Borrowing Date by wire transfer or other immediately available funds equal to its Ratable Share of the Revolving Credit Loans to be made on the Borrowing Date. The Loan(s) will then promptly be made available to Borrower by Agent crediting the account of Borrower on the books of Agent with the aggregate amounts made available to Agent by Lenders, and in like funds as received by Agent.      (c) Each Lender may book its Loans and its participations in Facility L/Cs at any Lending Office selected by such Lender and may change its Lending Office from time to time. All terms of this Agreement shall apply to any such Lending Office and the Loans and the Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending Office. Each Lender and LC Issuer may, by written notice to Agent and Borrower in accordance with Section 11.2 hereof, designate replacement or additional Lending Offices through which Loans will be made by it or Facility L/Cs will be issued by it and for whose account Loan payments or a payment with respect to Facility L/Cs are to be made.      (d) Each ABR Loan shall continue as an ABR Loan unless and until such ABR Loan is converted into a LIBOR Rate Loan pursuant to Section 3.1 hereof or is repaid in accordance with Section 2.11 hereof. Each LIBOR Rate Loan shall continue as a LIBOR Rate Loan until the end of the then applicable Interest Period therefor, at which time such LIBOR Rate Loan shall be automatically converted into an ABR Loan unless (x) such LIBOR Loan is or was repaid in accordance with Section 2.11 hereof or (y) such LIBOR Rate Loan is continued as a LIBOR Rate Loan in accordance with Section 3.1 hereof.

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     (e) Notwithstanding anything to the contrary in this Agreement, Borrower may submit no more than one (1) Notice of Borrowing in any one business week.      2.4 Unused Fee . Borrower agrees to pay to Agent for the benefit of each Lender an unused fee (the "Unused Fee") for the Commitment Period, computed at 0.55% per annum on the average daily unused amount of each Lender’s Commitment during the Commitment Period, payable quarterly in arrears and due on each Quarterly Payment Date and on the last day of the Commitment Period, commencing on the first of such dates to occur after the date of this Agreement. For purposes of determining the unused portion of the Aggregate Commitment and the unused portion of a Lender’s Commitment hereunder, the Aggregate Commitment shall be deemed used to the extent of the aggregate face amount of the outstanding Facility L/Cs and Revolving Credit Loans and such Lender’s Commitment shall be deemed used to the extent of such Lender’s Ratable Share of the aggregate face amount of the outstanding Facility L/Cs and Revolving Credit Loans made by such Lender. For purposes of determining the Unused Fee payable to a Swingline Lender, its Swingline Loans shall be treated as usage of its Commitment.      2.5 Interest; Default Interest .      (a) Except as provided in Section 2.5(b) hereof, (i) the Revolving Credit Loans shall bear interest on the unpaid principal amount thereof at a rate per annum equal to (y) in the case of ABR Loans, the Alternate Base Rate in effect from time to time, plus the Applicable ABR Margin in effect for such day, and (z) in the case of LIBOR Rate Loans, the LIBOR Rate determined for the Interest Period applicable thereto, plus the Applicable LIBOR Margin in effect on the first day of such Interest Period, and (ii) the Swingline Loans shall bear interest on the unpaid principal amount thereof at a rate per annum equal to the Alternate Base Rate in effect from time to time, plus the Applicable ABR Margin in effect for such day, plus 0.25%.      (b) If all or a portion of the principal amount of any of the Revolving Credit Loans made hereunder (whether as ABR Loans or LIBOR Rate Loans or a combination thereof) or the Swingline Loans or any installment of interest on any Revolving Credit Loan or Swingline Loan or any Unused Fee or Facility L/C Fee shall not be paid when due (whether at the stated maturity, by acceleration or otherwise and after any applicable opportunity to cure), any such overdue principal amount and, to the extent permitted by applicable law, any overdue installment of interest on any Revolving Credit Loan or Swingline Loan or any overdue payment of Unused Fee or Facility L/C Fee hereunder shall, without limiting any other rights of Lenders, bear interest at a rate per annum which is the sum of the Alternate Base Rate in effect from time to time, plus the Applicable ABR Margin, plus four percent (4%), from the date of such non-payment until paid in full (before, as well as after, judgment); provided, however, if all or any portion of any principal on any Revolving Credit Loan made as a LIBOR Rate Loan hereunder shall not be paid when due and the then current Interest Period for such LIBOR Rate Loan has not yet expired, the entire principal amount of such LIBOR Rate Loan and, to the extent permitted by applicable law, any overdue installment of interest on such LIBOR Rate Loan shall, without limiting any other rights of Lenders, bear interest at a rate per annum which is the sum of four percent (4%) plus the applicable non-default interest rate (which is the sum of the applicable LIBOR Rate and the Applicable LIBOR Margin) on such LIBOR Rate Loan then in effect from the date of such non-payment until the expiration of the then current Interest Period with respect to such LIBOR Rate Loan (before, as well as after, judgment); thereafter, the entire principal

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amount of such LIBOR Rate Loan and, to the extent permitted by applicable law, any overdue installment of interest on such LIBOR Rate Loan