**Exhibit4.1(b)**

**FIRST SUPPLEMENTALINDENTURE**

This First Supplemental Indenture, dated as of June15, 2006 (this “Supplemental Indenture”), among Kimball Hill UrbanCenters Special Purposes, LLC (the “New Guarantor”), Kimball Hill, Inc.(together with its successors and assigns, the “Company”), each otherexisting Guarantor under the Indenture referred to below (the “Guarantors”),and U.S. Bank National Association, Trustee under the Indenture referred tobelow. Capitalized terms used and not defined herein shall have the samemeanings given in the Indenture unless otherwise indicated.

W I T N E S S E T H:

WHEREAS, the Company and the Trustee have heretoforeexecuted and delivered an Indenture, dated as of December 19, 2005 (as amended,restated, supplemented and otherwise modified from time to time, the “Indenture”),providing for the issuance of 10 1⁄2% Senior Subordinated Notes due 2012 of theCompany (the “Notes”);

WHEREAS, pursuant to Section 4.13 of the Indenture, ifthe Company acquires or creates any additional Subsidiary which is a RestrictedSubsidiary, each such Subsidiary shall execute and deliver a supplementalindenture pursuant to which such Subsidiary shall unconditionally guarantee theCompany’s obligations under the Notes and the Indenture;

WHEREAS, the New Guarantor is a Restricted Subsidiaryof the Company;

WHEREAS, the Company and the Trustee desire to havethe New Guarantor enter into this Supplemental Indenture and agree to guaranteethe obligations of the Company under the Indenture and the Notes and the NewGuarantor desires to enter into this Supplemental Indenture and to guaranteethe obligations of the Company under the Indenture and the Notes as of suchdate;

WHEREAS, Section 8.01 of the Indenture provides thatthe Company, the Guarantors and the Trustee may, without the written consent ofthe Holders of the outstanding Notes, amend the Indenture as provided herein;

WHEREAS, by entering into this Supplemental Indenture,the Company and the Trustee have consented to amend the Indenture in accordancewith the terms and conditions herein;

WHEREAS, each Guarantor hereby acknowledges andconsents to amend the Indenture in accordance with the terms and conditionsherein; and

WHEREAS, all acts and things prescribed by theoperating agreement of the New Guarantor (as now in effect) necessary to makethis Supplemental Indenture a valid instrument legally binding on the NewGuarantor for the purposes herein expressed, in accordance with its terms, havebeen duly done and performed.

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NOW, THEREFORE, in consideration of the foregoing andfor other good and valuable consideration, the receipt of which is herebyacknowledged, the New Guarantor, the Company and the Trustee mutually covenantand agree for the equal and ratable benefit of the Holders of the Notes asfollows:

Section 1.                                            Agreementto be Bound.  The New Guarantorhereby becomes a party to the Indenture as a Guarantor and as such will haveall of the rights and be subject to all of the obligations and agreements of aGuarantor under the Indenture.  The NewGuarantor agrees to be bound by all of the provisions of the Indentureapplicable to a Guarantor and to perform all of the obligations and agreementsof a Guarantor under the Indenture.

Section 2.                                            Compliancewith and Fulfillment of Condition of Section 4.13.  The execution and delivery of thisSupplemental Indenture and the Notation of Guarantee by the New Guarantor(along with such documentation relating thereto as the Trustee shall require)fulfills the obligations of the Company under Section 4.13 of the Indenture.

Section 3.                                            Ratificationof Indenture; Supplemental Indenture Part of Indenture; Trustee’s Disclaimer.  Except as expressly amended hereby, theIndenture is in all respects ratified and confirmed and all the terms,conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a partof the Indenture for all purposes, and every Holder of Notes heretofore orhereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation orwarranty as to the validity or sufficiency of this Supplemental Indenture.

Section 4.                                            GoverningLaw.  **ThisSupplemental Indenture and the Notes shall be governed by and construed in accordancewith the laws of the State of New York, as applied to contracts made andperformed within the State of New York.**

Section 5.                                            NoAdverse Interpretation of Other Agreements. This Supplemental Indenture may not be used to interpret any otherindenture, loan or debt agreement of the Company or its Subsidiaries (otherthan the Indenture).  No such indenture,loan or debt agreement may be used to interpret this Supplemental Indenture orthe Indenture.

Section 6.                                            Successors.  This Supplemental Indenture shall be bindingupon and inure to the benefit of the parties hereto and their respectivesuccessors and assigns.

Section 7.                                            Separability.  Each provision of this Supplemental Indentureshall be considered separable and if for any reason any provision which is notessential to the effectuation of the basic purpose of this SupplementalIndenture or the Notes shall be invalid, illegal or unenforceable, thevalidity, legality and enforceability of the remaining provisions shall not inany way be affected or impaired thereby.

Section 8.                                            CounterpartOriginals.  The parties may signmultiple counterparts of this Supplemental Indenture.  Each signed counterpart shall be deemed anoriginal, but all of them together represent one and the same agreement.

Section 9.                                            Headings,etc.  The headings of the Sections ofthis Supplemental Indenture have been inserted for convenience of referenceonly, are not to be considered a part of

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this Supplemental Indentureand shall in no way modify or restrict any of the terms or provisions hereof.

* * * * *

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IN WITNESSWHEREOF, the parties hereto have caused this Supplemental Indenture to be dulyexecuted as of the date first above written.

Kimball Hill Urban Centers Special Purposes, LLC, as aGuarantor
|        | By:    | /s/ H. Douglas  Guthrie |   |
|--------|--------|-------------------------|--------|
|   | Name:  | H. Douglas Guthrie      |
|   | Title: | President               |
|        |        |                         |        |  |

 

KIMBALL HILL, INC.
|        | By:    | /s/ David K.  Hill                             |   |
|--------|--------|------------------------------------------------|--------|
|   | Name:  | David K. Hill                                  |
|   | Title: | Chairman, Chief Executive Officer and Director |
|        |        |                                                |        |  |

 

CACTUS HILLS, LLC

KIMBALL HILL HOMES AUSTININVESTMENTS, L.L.C.

KIMBALL HILL HOMES AUSTINOPERATIONS, L.L.C.

KIMBALL HILL HOMES DALLASINVESTMENTS, L.L.C.

KIMBALL HILL HOMES DALLASOPERATIONS, L.L.C.

KIMBALL HILL HOMESHOUSTON INVESTMENTS, L.L.C.

KIMBALL HILL HOMESHOUSTON OPERATIONS, L.L.C.

KIMBALL HILL TEXAS INVESTMENT COMPANY, L.L.C.
|        | By:    | /s/ David K.  Hill |   |
|--------|--------|--------------------|--------|
|   | Name:  | David K. Hill      |
|   | Title: | Manager            |
|        |        |                    |        |  |

 

EAST LAKE PARK, INC.

KIMBALL HILL FAR EASTDETROIT, LLC

KIMBALL HILL STATEWAY, INC.
|        | By:    | /s/ Hal H.  Barber           |   |
|--------|--------|------------------------------|--------|
|   | Name:  | Hal H. Barber                |
|   | Title: | Vice President and Treasurer |
|        |        |                              |        |  |

 

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KH FINANCIAL HOLDINGCOMPANY

KHH TEXAS TRADING COMPANYL.P.

KIMBALL HILL HOMESAUSTIN, L.P.

KIMBALL HILL HOMESCALIFORNIA, INC.

KIMBALL HILL HOMESDALLAS, L.P.

KIMBALL HILL HOMESFLORIDA, INC.

KIMBALL HILL HOMESHOUSTON, L.P.

KIMBALL HILL HOMESILLINOIS, LLC

KIMBALL HILL HOMES NEVADA,INC.

KIMBALL HILL HOMES OHIO,INC.

KIMBALL HILL HOMESOREGON, INC.

KIMBALL HILL HOMES REALTYFLORIDA, INC.

KIMBALL HILL HOMES SANANTONIO, L.P.

KIMBALL HILL HOMES TEXAS,INC.

KIMBALL HILL HOMESWASHINGTON, INC.

KIMBALL HILL HOMESWISCONSIN, INC.

NATIONAL CREDIT ANDGUARANTY CORPORATION

RIVER OAKS REALTY, L.P.
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

18TH AND PEORIA, LLC

By:                            KimballHill Suburban Centers, L.L.C., its manager

By:                            KimballHill, Inc., its manager
|        | By:    | /s/ Hal H.  Barber             |   |
|--------|--------|--------------------------------|--------|
|   | Name:  | Hal H. Barber                  |
|   | Title: | Senior Vice President, Finance |
|        |        |                                |        |  |

 

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KIMBALL HILL SUBURBANCENTERS, L.L.C.

KIMBALL HILL URBANCENTERS, L.L.C.

THE GLENS AT WESTLAKE, L.L.C.

By:                            KimballHill, Inc., its manager
|        | By:    | /s/ Hal H.  Barber             |   |
|--------|--------|--------------------------------|--------|
|   | Name:  | Hal H. Barber                  |
|   | Title: | Senior Vice President, Finance |
|        |        |                                |        |  |

 

KIMBALL HILL URBANCENTERS CHICAGO ONE, L.L.C.

KIMBALL HILL URBAN CENTERS CHICAGO TWO, L.L.C.

By:                            KimballHill Urban Centers, L.L.C*.*, itsmanager

By:                            KimballHill, Inc., its manager
|        | By:    | /s/ Hal H.  Barber             |   |
|--------|--------|--------------------------------|--------|
|   | Name:  | Hal H. Barber                  |
|   | Title: | Senior Vice President, Finance |
|        |        |                                |        |  |

 

BRIDLE RIDGE LIMITEDPARTNERSHIP

PARKVIEW LIMITEDPARTNERSHIP

RIVER POINTE LIMITEDPARTNERSHIP

SONATA AT MORADA RANCHLIMITED PARTNERSHIP

WINDMILL PARK LIMITED PARTNERSHIP

By:                            KimballHill Homes California, Inc., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

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KIMBALL HILL BELLEVUERANCH, LLC

KIMBALL HILL REFLECTIONS,LLC

KIMBALL HILL SHELDONLAKES, LLC

KIMBALL HILL VILLAGES, LLC

By:                            KimballHill Homes California, Inc., its manager
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

KIMBALL HILL CHADWICKFARMS LIMITED PARTNERSHIP

KIMBALL WEST FRISCO LIMITED PARTNERSHIP

By:                            KimballHill Homes Dallas, L.P., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

KIMBALL HILL CALUSA PALMSLIMITED PARTNERSHIP

KIMBALL HILL MARBELLA ESTATES LIMITED PARTNERSHIP

By:                            KimballHill Homes Florida, Inc., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

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INDIAN TRAILS LIMITED PARTNERSHIP

By:                            KimballHill Homes Houston, L.P., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

KIMBALL HILL TX PROPERTIES, LLC

By:                            KimballHill Homes Houston, L.P., its manager
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

ASTOR PLACE LIMITEDPARTNERSHIP

BOLINGBROOK LIMITEDPARTNERSHIP

EDGEWATER LIMITEDPARTNERSHIP

HUNTINGTON CHASE LIMITEDPARTNERSHIP

LEGEND LAKES LIMITEDPARTNERSHIP

THE GLEN TOWNHOMESLIMITED PARTNERSHIP

THE HAMILTON PLACEPARTNERSHIP

WATERFORD LIMITEDPARTNERSHIP

WHISPERING MEADOW LIMITEDPARTNERSHIP

WHITE OAK LIMITED PARTNERSHIP

By:                            KimballHill Homes Illinois, LLC, its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

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KH INGHAM PARK SOUTH, LLC

KH SRAV II, LLC

By:                            KimballHill Homes Illinois, LLC, its manager
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

KIMBALL HILL CENTENNIALHEIGHTS LIMITED PARTNERSHIP

KIMBALL HILLHEATHERS/CAPAROLA LIMITED PARTNERSHIP

KIMBALL MOUNTAIN FIRST LIMITED                 PARTNERSHIP

By:                            KimballHill Homes Nevada, Inc., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

KIMBALL COVE LIMITED PARTNERSHIP

By:                            KimballHill Homes Texas, Inc., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

RIVER OAKS HOMES, L.L.P.

By:                            KimballHill Homes Texas, Inc., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

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GABLES AT HIDDENBROOK LIMITED PARTNERSHIP

By:                            KimballHill Homes Washington, Inc., its general partner
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

PARK SHORE, L.L.C.

By:                            KimballHill Homes Wisconsin, Inc., its manager
|        | By:    | /s/ Hal H.  Barber |   |
|--------|--------|--------------------|--------|
|   | Name:  | Hal H. Barber      |
|   | Title: | Vice President     |
|        |        |                    |        |  |

 

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U.S. BANK NATIONAL ASSOCIATION, as Trustee
|        | By:    | /s/ Richard  Prokosch |   |
|--------|--------|-----------------------|--------|
|   | Name:  | Richard Prokosch      |
|   | Title: | Vice President        |
|        |        |                       |        |  |

 

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