Document:

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                                                                    Exhibit 10.3

                      SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made as of
the 21st day of September, 2005, by and among ASHTON WOODS USA L.L.C. (the
"Borrower"), the LENDERS party hereto, WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent, BANK OF AMERICA, N.A., as Syndication Agent, KEY BANK,
NATIONAL ASSOCIATION, as Documentation Agent, and the GUARANTORS party hereto.

                                    RECITALS:

          The Borrower, the Administrative Agent and the Lenders have entered
into a certain Credit Agreement dated as of January 20, 2005 (as amended by the
First Amendment to Credit Agreement dated as of April 27, 2005, 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.

          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.

          The Borrower and Guarantors have requested the Administrative Agent
and the Lenders to amend the Credit Agreement upon the terms and conditions
hereinafter set forth.

          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, the Borrower, the
Administrative Agent and the Lenders, 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. Amendment. The Credit Agreement is hereby amended as
follows:

     2.1 Section 1.1 of the Credit Agreement is hereby amended by adding the
following definitions:

               "Distribution" means any dividend or other distribution (whether
     in cash or other tangible property) with respect to any capital stock or
     other equity interest of any Person or any Subsidiary, or any payment
     (whether in cash or other tangible property) to any Person or Persons other
     than the Borrower, including any redemption, retirement, acquisition,
     cancellation or termination of any such capital stock or other equity
     interest or of any option, warrant or other right to acquire any such
     capital stock or other equity interest.

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               "Cash Equivalents" means:

               (a) marketable obligations with a maturity of 360 days or less
     issued or directly and fully guaranteed or insured by the United States of
     America or any agency or instrumentality thereof (provided that the full
     faith and credit of the United States of America is pledged in support
     thereof);

               (b) demand and time deposits and certificates of deposit or
     acceptances with a maturity of 180 days or less of any financial
     institution that is a member of the Federal Reserve System having combined
     capital and surplus and undivided profits not less that $500 million and is
     assigned at least a "B" rating by Thomson Financial BankWatch;

               (c) commercial paper maturing no more than 180 days from the date
     of creation thereof issued by a corporation that is not the Borrower or an
     Affiliate of the Borrower, and is organized under the laws of any State of
     United States of America or the District of Columbia and rated at least A-1
     by S&P or at lease P-1 by Moody's;

               (d) repurchase obligations with a term of not more than ten days
     for underlying securities of the types described in clause (a) above
     entered into with any commercial bank meeting the specifications of clause
     (b) above; and

               (e) investments in money market or other mutual funds
     substantially all of whose assets comprise securities of the types
     described in clauses (a) through (d) above.

     2.2 Section 7.7 of the Credit Agreement is hereby amended and restated in
its entirety as follows;

               7.7 Transactions With Affiliates. Engage in any transaction with
     any Affiliate of Borrower or any Subsidiary on terms less favorable to
     Borrower or such Subsidiary than would be obtainable at the time in
     comparable transactions with Persons not Affiliates of the Borrower or any
     Subsidiary, provided that nothing herein shall be deemed to restrict any
     capital contribution or equity purchase by any Affiliate of the Borrower to
     or from the Borrower or any Distribution made by the Borrower in accordance
     with Section 7.11 hereof.

     2.3 Section 7.11 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:

               7.11. Limitation on Distributions. Declare or make, directly or
     indirectly, any Distribution, or incur any obligation (contingent or
     otherwise) to do so, except that, so long as no Default shall have occurred
     and be continuing at the time of any Distribution or would result
     therefrom, Borrower may make Distributions on any date in an amount not to
     exceed

                                        2

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               (i) fifty percent (50%) of Consolidated Earnings earned between
     June 1, 2004 and the date of such Distribution, plus

               (ii) one hundred percent (100%) of the aggregate amount of cash
     or Cash Equivalents received by the Borrower either (x) as contributions to
     common equity of the Borrower after June 1, 2005 or (y) from the issuance
     and sale of equity interests after such date, other than any such amounts
     received from a Subsidiary of the Borrower, minus

               (iii) the amount of any Distributions previously made between
     June 1, 2004 and the date of such Distribution.

               Further, notwithstanding the foregoing, so long as no Default
     shall have occurred and be continuing at the time of any Distribution or
     would result therefrom, Borrower may make Distributions in addition to
     Distributions made pursuant to the foregoing limitations, to its direct
     parents in amounts required to pay federal, state and local income taxes
     payable by such direct parent that are solely attributable to the income of
     the Borrower and its Subsidiaries by virtue of the Borrower being a
     pass-through entity for federal or state income tax purposes; provided,
     however, that (a) the amount of Distributions paid with respect to such tax
     obligations at any time will not exceed the amount of such federal, state
     and local income taxes actually owing by any such direct parent at such
     time for the respective period (excluding any tax liability of any such
     direct parent not attributable to the Borrower or its Subsidiaries)
     (provided that the Borrower may make periodic Distributions based on an
     estimate of such tax liability with an annual reconciliation at the end of
     each tax year) and (b) any refunds received by or on behalf of, or any
     overpayment based on the annual reconciliation to, any of the Borrower's
     direct parents attributable to the Borrower and its Subsidiaries shall
     promptly be returned by such direct parent to the Borrower or credited
     against the Borrower's ability to make additional Distributions pursuant to
     the foregoing provisions of this Section 7.11.

          2.4 Section 7.16 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

               7.16 Increase in Capital. Increase the capital of Borrower or any
     Guarantor by transferring assets among Borrower and Guarantors or
     Borrower's Affiliates to Borrower and Guarantor, provided that nothing
     herein shall prohibit the purchase of additional equity interests from, or
     the making of a capital contribution to, Borrower by any parent of Borrower
     that is also a Guarantor.

          SECTION 3. Conditions to Effectiveness. The effectiveness of this
Amendment and the obligations of the Lenders hereunder are subject to the
following conditions:

          (a) receipt by the Administrative Agent of a duly executed counterpart
of this Amendment signed by the Borrower, the Guarantors, and the Required
Lenders;

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          (b) receipt by the Administrative Agent from the Borrower of any and
all fees and expenses to be paid by the Borrower to the Administrative Agent in
connection with this Amendment; and

          (c) the fact that the representations and warranties of the Borrower
contained in Article 4 of the Credit Agreement and in Section 5 of this
Amendment shall be true on and as of the date hereof.

          SECTION 4. 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 agreement contained in the
Credit Agreement, except as herein amended, nor affect nor impair any rights,
powers or remedies under the Credit Agreement as hereby amended. The Lenders and
the Administrative 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. The 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. The Borrower hereby expressly
agrees that the Credit Agreement, as amended, is in full force and effect.

          SECTION 5. Representations and Warranties. The Borrower hereby
represents and warrants to each of the Lenders as follows:

          (a) No Default under the Credit Agreement has occurred and is
continuing on the date hereof.

          (b) The Borrower and Guarantors have the power and authority to enter
into this Amendment and to do all acts and things as are required or
contemplated hereunder to be done, observed and performed by them.

          (c) This Amendment has been duly authorized, validly executed and
delivered by one or more authorized officers of the Borrower and Guarantors and
constitutes a legal, valid and binding obligation of the Borrower, and each
Guarantor enforceable against it in accordance with its terms, provided that
such enforceability is subject to general principles of equity.

          (d) The execution and delivery of this Amendment and the performance
of the Borrower and Guarantors hereunder do not and will not require the consent
or approval of any regulatory authority or governmental authority or agency
having jurisdiction over the Borrower or any Guarantor, nor be in contravention
of or in conflict with the articles of incorporation or bylaws or other
applicable organizational documents of the Borrower, or any Guarantor, or the
provision of any statute, or any judgment, order or indenture, instrument,
agreement or undertaking, to which the Borrower, or any Guarantor is party or by
which the assets or properties of the Borrower or Guarantors are or may become
bound.

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          SECTION 6. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.

          SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the law of the State of North Carolina.

          SECTION 8. Consent by Guarantors. The Guarantors consent to the
foregoing amendments. Each Guarantor promises and agrees to perform all of the
requirements, conditions, agreements and obligations under the terms of the
Guaranty Agreement to which it is a party, said Guaranty Agreement being hereby
ratified and affirmed. Each Guarantor hereby expressly agrees that the Guaranty
Agreement to which it is a party is in full force and effect.

             [The remainder of this page intentionally left blank.]

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     IN WITNESS WHEREOF, the parties hereto have executed and delivered, or have
caused their respective duly authorized officers or representatives to execute
and deliver, under seal, this Amendment as of the day and year first above
written.

                                        BORROWER:

                                        ASHTON WOODS USA L.L.C.,
                                        a Nevada limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 1 of 13

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                                        WACHOVIA BANK, NATIONAL ASSOCIATION,
                                        as Administrative Agent and a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 2 of 13

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                                        BANK OF AMERICA, N.A., as Syndication
                                        Agent and a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 3 of 13

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                                        KEY BANK, NATIONAL ASSOCIATION, as
                                        Documentation Agent and a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 4 of 13

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                                        FIRST AMERICAN BANK, as a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 5 of 13

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                                        GUARANTY BANK, as a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 6 of 13

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                                        COMERICA BANK, as a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 7 of 13

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                                        NATIONAL CITY BANK, as a Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 8 of 13

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                                        U.S. BANK NATIONAL ASSOCIATION, as a
                                        Lender

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 9 of 13

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                                        OWNER GUARANTORS:

                                        Elly Nevada, Inc., a Nevada corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Vice President

                                        NORMAN NEVADA, INC., a Nevada
                                        corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Vice President

                                        LARRY NEVADA, INC., a Nevada corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Vice President

                                        BRUCE NEVADA, INC., a Nevada corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Vice President

                                        HARRY NEVADA, INC., a Nevada corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: President

                                        SEYMOUR NEVADA, INC., a Nevada
                                        corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Vice President

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 10 of 13

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                                        HAYDN NEVADA, INC., a Nevada corporation

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Vice President

                                        LITTLE SHOTS NEVADA L.L.C., a Nevada
                                        limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 11 of 13

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                                        SUBSIDIARY GUARANTORS:

                                        ASHTON ATLANTA RESIDENTIAL, L.L.C.,
                                        a Georgia limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        ASHTON DALLAS RESIDENTIAL L.L.C.,
                                        a Texas limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        ASHTON HOUSTON RESIDENTIAL L.L.C.,
                                        a Texas limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        ASHTON WOODS ARIZONA L.L.C.,
                                        a Nevada limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        ASHTON ORLANDO RESIDENTIAL L.L.C.,
                                        a Nevada limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 12 of 13

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                                        ASHTON BURDEN, LLC,
                                        a Florida limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        ASHTON TAMPA RESIDENTIAL LLC,
                                        a Nevada limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        ASHTON DENVER RESIDENTIAL, LLC,
                                        a Nevada limited liability company

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Manager

                                        PINERY JOINT VENTURE, a Colorado joint
                                        venture

                                        By:
                                            ------------------------------------
                                        Name: Harry Rosenbaum
                                        Title: Authorized Representative

                                Signature Page of
                          Amendment to Credit Agreement
                                  Page 13 of 13<PAGE>

                                                                    EXHIBIT 10.4

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                      NAVO SOUTH DEVELOPMENT PARTNERS, LTD.

                          (A TEXAS LIMITED PARTNERSHIP)

              THESE PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED
                UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
             PURSUANT TO THE PROVISIONS OF ANY STATE SECURITIES ACT

                 CERTAIN RESTRICTIONS ON TRANSFERS OF INTERESTS
                              ARE SET FORTH HEREIN

<PAGE>

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                      NAVO SOUTH DEVELOPMENT PARTNERS, LTD.

     This Limited Partnership Agreement of Navo South Development Partners, Ltd.
(the "Partnership") dated as of the 18th day of December,2003, is made and
entered into by and among G.P. Navo South, L.L.C., a Texas limited liability
company, as General Partner, and ASHTON DALLAS RESIDENTIAL L.L.C., a Texas
limited liability company (sometimes referred to as "Ashton Woods Homes"),
HORIZON HOMES, LTD., a Texas limited partnership (sometimes referred to as
"Horizon Homes"), and PRIORITY DEVELOPMENT, L.P., a Delaware limited partnership
(sometimes referred to as "Priority Development"), collectively as Limited
Partners, whether one or more.

      WHEREAS, the General Partner and the Limited Partners wish to form a
limited partnership under the Texas Revised Limited Partnership Act for the
purpose of acquiring certain real property, holding such property for investment
and appreciation, and selling or leasing such property.

      NOW, THEREFORE, in consideration of the mutual promises made herein, the
parties, intending to be legally bound, hereby agree as follows:

                                    ARTICLE 1

                                   Definitions

      The capitalized terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified in this Article.

      1. "Act" means the Texas"Revised Limited Partnership Act, as amended from
time to time.

      2. "Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's capital account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

      (a)Credit to such capital account any amounts which such Partner is deemed
to be obligated to restore pursuant to Treasury Regulations Sections
1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); and

      (b) Debit to such capital account the items described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

      The foregoing definition of "Adjusted Capital Account Deficit" is intended
to comply with the provisions of the Treasury Regulations Sections
1.704-1(b)(2)(ii) (d) and 1.704-2, and shall be interpreted consistently
therewith.

                                      -2-

<PAGE>

      3. "Affiliate" means any person who directly or indirectly through one or
more intermediaries controls or is controlled by or is under common control
with the person to whom reference is made. The term "control" as used herein
(including the terms "controlling," "controlled by," and "under common control
with") means the Possession, direct or indirect, of the power (i) to vote 50% or
more of the outstanding Voting securities of a person, or (ii) otherwise to
direct the management policies of such person by contract or otherwise.

      4. "Agreement" means this Limited Partnership Agreement of Navo South
Development Partners, Ltd.

      5. "Budget" means the cash budget prepared by the General Partner setting
forth the estimated Project costs and expenses and other expenditures, projected
revenues and capital and operating expenditures, as well as reasonable reserves
for future cash needs, all as approved from time by a Majority Interest of the
Partners.

      6. "Capital Contributions" means the total of all capital contributions
made by the Partners hereunder.

      7. "Capital Profits" means any Profits to the extent such Profits arise
from the sale or disposition of all or any portion of the Property.

      8. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

      9. "Distributable Cash Flow" means the amount, if any, of Partnership cash
on hand, as of the date of calculation, which is not necessary to meet the
immediate and reasonably foreseeable cash needs of the Partnership such that the
same is available for distribution to the Partners, as determined from time to
time by the General Partner with the approval of a Majority Interest of the
Limited Partners.

      10. "General Partner" means G.P. Navo South, L.L.C., a Texas limited
liability company, or any successor in such capacity.

      11. "Land" means the approximately 259.55 acre tract of land in Denton
County, Texas described in Schedule B hereto which is to be purchased by the
Partnership and developed into single family residential lots.

      12. "Limited Partner" means any of the parties identified as such on
Schedule A attached hereto, acting in his or its capacity as a limited partner
of the Partnership, or any successor in such capacity.

      13. "Majority Interest of the Limited Partners" means one (1) or more
Limited Partners who own in the aggregate more than fifty percent (50%) of the
total Partnership Interests of the Limited Partners, exclusive of the
Partnership Interest owned by any Limited Partner who is not entitled to vote
pursuant to Section 4.1(d) hereof, after receipt by the Limited Partners
entitled to vote of notice of such item requiring a vote and/or approval of the
Limited Partners.

                                      -3-

<PAGE>

      14. "Majority Interest of the Partners" means one (1) or more Partners who
own in the aggregate more than fifty percent (50%) of the total Partnership
Interests of all of the Partners, exclusive of the Partnership Interest owned by
any Partner who is not entitled to vote pursuant to Section 4.1(d) hereof, after
receipt by the Partners entitled to vote of notice of such item requiring a vote
and/or approval of the Partners.

      15. "Minimum Gain" means, with respect to all norecourse liabilities of
the Partnership, the minimum amount of gain that would be realized by the
Partnership if the Partnership disposed of the Partnership Property subject to
such liability in full satisfaction thereof computed in accordance with Treasury
Regulations Section 1.704-2(d).

      16. "Minimum Gain Share" means, for such Partner, such Partner's share of
Minimum Gain for the fiscal year (after taking into account any decrease in
Minimum Gain for such year), such share to be determined under Treasury
Regulations Section 1.704-2(g).

      17. "Net Capital Contributions" means the aggregate of Capital
Contributions made by the Partners reduced (but not below zero) by the aggregate
distributions to such Partners under Section 6.1(a) hereof.

      18. "Optional Loans" means the loans made by the Partners in accordance
with Section 4.1 below.

      19. "Partner" means the General Partner or any Limited Partner.

      20. "Partnership" means the Texas limited partnership formed pursuant to
this Agreement.

      21. "Partnership Interest" means the percentage of ownership interest of a
Partner in the Partnership at any particular time.

      22. "Profits and Losses" means, for each fiscal year or other period, an
amount equal to the Partnership's income or loss for such year or period
determined in accordance with Code Section 703(a) (for this purposes, all items
of income, gain, loss, or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

      (a) Any income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be added to such taxable income or loss;

      (b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulations Section 1.7041(b)(2)(iv)(i) and not otherwise taken into
account in computing Profits or Losses pursuant to this definition, shall be
subtracted from such taxable income or loss;

      (c) Gain or loss resulting from any disposition of Partnership property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the fair

                                      -4-
<PAGE>

market value of the property disposed of, notwithstanding that the adjusted tax
basis of such property differs from such fair market value;

      (d) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account for computing such taxable income or loss there
shall be taken into account depreciation, amortization and other deductions for
such fiscal year or period, computed in accordance with the fair market value of
the property to which such deductions relate.

      23. "Treasury Regulations" means the income tax regulations promulgated
under the Code, as amended from time to time.

                                    ARTICLE 2

                                  ORGANIZATION

      SECTION 2.1. FORMATION AND CONTINUATION OF BUSINESS

      The Partnership has been formed under and pursuant to the provisions of
the Act. The parties hereto hereby agree to continue the business of the
Partnership pursuant to this Agreement.

      SECTION 2.2. NAME, PLACE OF BUSINESS AND OFFICE

      (a) The Partnership shall be conducted under the name and style of Navo
South Development Partners Ltd., The Partnership shall maintain its principal
office at the following address: 12890 Hillcrest Road, Suite 103, Dallas, Texas
75230. The General Partner may at any time change the location of the
Partnership's office and may establish additional offices, if it deems it
advisable. The General Partner shall promptly give the Partners written notice
of any change in location of the principal office of the Partnership.

      (b) The General Partner shall serve as agent for service of process on the
Partnership. The General Partner shall timely record an appropriate certificate
of limited partnership in the proper records in the State of Texas and shall
take such steps as are necessary to qualify the Partnership to conduct business
in other states, as required by local law.

      SECTION 2.3. PURPOSES AND CHARACTERS OF BUSINESS; POWERS

      (a) The purposes and character of the business of the Partnership are as
follows:

            (1)   to acquire the Land;

            (2)   to obtain debt financing for the acquisition of the Land and
                  to mortgage or grant liens on Partnership assets as security
                  therefore;

            (3)   to subdivide and develop the Land into residential lots with
                  roads and underground utility facilities;

            (4)   to own, manage, operate, lease and sell the Land; and

                                      -5-

<PAGE>

            (5)   to do any and all things necessary or desirable to carry out
                  the foregoing activities and any other activity contemplated
                  by this Agreement.

      (b) The Partnership shall have any and all powers which are necessary or
desirable to carry out the purposes and business of the Partnership. The
Partnership shall carry out the foregoing activities pursuant to the
arrangements set forth in this Agreement. The Partnership shall not engage in
any other business or activity without the unanimous consent of the Partners.

      SECTION 2.4. ACQUISITION OF THE LAND

      The Land is owned by Denton 380 Associates, L.P., an unrelated third
party. The Partners shall cause the Partnership to purchase the Land in
accordance with the provisions of a contract of sale entered into by J. Baker
Acquisition Corporation Which will be assigned to the Partnership.

      SECTION 2.5. DEVELOPMENT AGREEMENT

      The Partnership shall enter into a contract with J. Baker Corporation
(the "Development Manager") to supervise the development of the Land. The
Development Manager shall be entitled to receive such fees as may be specified
in a development agreement with the Partnership which has been approved by a
Majority Interest of the Limited & Partners.

      SECTION 2.6. TERM

      The Partnership term commenced on the effective date of the Original
Agreement and shall continue in full force and effect until December 31,2015,
unless dissolved earlier pursuant to the provisions hereof.

                                    ARTICLE 3

                               PARTNERSHIP CAPITAL

      SECTION 3.1. CAPITAL CONTRIBUTIONS

      Upon the formation of the Partnership the partners shall contribute to the
capital of the Partnership the respective amounts specified on Schedule A. No
Partner shall have an obligation to make any further Capital Contributions to
the Partnership.

      SECTION 3.2. PARTNERSHIP CAPITAL

      (a) No Partner shall be paid interest on any Capital Contribution to the
Partnership.

      (b) No Partner shall have the right to withdraw all or any part of its
Capital Contribution or to receive any return of any portion of its Capital
Contribution, except as may be otherwise specifically provided in this
Agreement. The obligations of the Partners to contribute Capital Contributions
are personal to the Partners and may not be enforced by any third party.

                                      -6-

<PAGE>

      (c) Under circumstances involving a return of any Capital Contribution, no
Partner shall have the right to receive property other than cash.

      SECTION 3.3. LIABILITY OF PARTNERS

      (a) The Limited Partners shall not be liable for the debts, liabilities,
contracts or any other obligation of the partnership, except to the extent
provided in the Act. No Partner shall be liable for the debts or liabilities of
any other Partner.

      (b) No Partner shall be required to contribute to the capital of, or loan,
the Partnership any funds other than those amounts required to be made under
this Agreement.

      (c) The General Partner shall not be liable for the return of all or any
portion of the Capital Contributions of the Limited Partners.

      SECTION 3.4. CAPITAL ACCOUNTS

      (a)   (1) A capital account shall be established and maintained for each
Partner.

            (2) A Partner's capital account shall be credited with (A) the
amount of cash and the fair market value of any property contributed by such
Partner to the Partnership; (B) such Partner's allocable share of Profit, income
and gain; and (C) the amount of any partnership liabilities that are expressly
assumed by the Partner or that are secured any Partnership property distributed
to such Partner.

            (3) A Partner's capital account shall be debited with (A) the
amount of cash and the fair market Value of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement; (B) such Partner's
allocable share of losses, deductions and other losses; and (C) the amount of
any liabilities of such Partner's that are expressly assumed by the Partnership
or that are secured by any Property contributed by such Partner to the
Partnership.

            (4) Upon the occurrence of certain events (as described in Treasury
Regulations Section 1.704-1 (b) (2) (iv) (f), a Majority Interest of the
Partners may agree to increase or decrease the capital accounts of the Partners
to reflect a revaluation of Partnership property on the Partnership's books.

            (5) From time to time the General Partner (with the consent of a
Majority Interest of the Partners) may make such modifications to the manner in
which the capital accounts are computed to comply with Treasury Regulations
Sections 1.704-1(b) and 1.704-2, provided that such modifications are not
likely to have a material effect on the amounts distributable to any Partner
pursuant to this Agreement or on the taxable income or loss allocated to any
Partner.

            (6) The capital account of each Partner shall be determined after
giving effect to all transactions which have been effected prior to the time
when such determination is made giving rise to the allocation of Profits and
Losses and to all of the Partner's contributions and distributions theretofore
made.

                                      -7-

<PAGE>

            (7) In the event that any Partner makes a loan to the Partnership
(which may only be made with the consent of a Majority Interest of the
Partners), such loan shall not be considered a contribution to the capital of
the Partnership and shall not increase the capital account of the lending
Partner. Repayment of such loans shall not be deemed withdrawals from the
capital of the Partnership.

            (8) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of capital accounts are intended to comply
with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be
interpreted and applied in a manner consistent with these regulations.

      (b)Any fees, salary, or other compensation paid to a Partner pursuant to
this Agreement and any returns on capital provided herein shall be treated as
guaranteed payments under Code Section 707(c). The guaranteed payments shall
not be treated as distributions to such Partner for federal income tax purposes.
Such payments to a Partner shall not reduce the Partner's capital account,
except to the extent of its distributive share of any Partnership Losses or
other downward capital adjustments resulting from the guaranteed payment.

      (c) Any person who acquires a Partnership Interest directly from a
Partner, or whose Partnership Interest is increased by means of a transfer or
deemed transfer of all or part of the interest of another Partner, shall have a
single capital account which includes the capital account balance of the
Partnership Interest so acquired or transferred.

      (d) No Partner shall have any obligation to restore a deficit balance in
its capital account. Furthermore, a deficit capital account balance of a Partner
shall not be deemed a liability of such Partner or an asset of the Partnership.

      SECTION 3.5. PARTNERSHIP INTERESTS

      The Partnership Interest of each Partner is set forth opposite its
respective name on Schedule A, attached hereto.

                                    ARTICLE 4

                                 OPTIONAL LOANS

      SECTION 4.1. OPTIONAL LOANS

      (a) If at any time additional funds are required by the Partnership to
cover operating deficits or other cash needs of the Partnership, the General
Partner shall notify the Partners in writing of the need for the Partners to
loan funds to the Partnership (any loans made pursuant to this Section 4.1 are
hereinafter singularly called an "Optional Loan" and collectively called the
"Optional Loans". Such notice shall set forth the reason for such needed funds,
the total amount of money needed, each Partner's prorate share of the Optional
Loan and the due date thereof, which shall be within ten (10) business days of
the written notice.

                                      -8-

<PAGE>

      (b) In addition, if a Partner or Affiliate of a Partner makes payment
directly to a creditor or another Partner in satisfaction of any indebtedness of
the Partnership pursuant to a guaranty, indemnity or otherwise, or if any
collateral interest given by a Partner or Affiliate of a Partner to such
creditor to secure the Partnership debt shall be foreclosed and the proceeds
applied to such debt, then in any such case, the Partner making such payment or
suffering such foreclosure (or whose Affiliate made payment or suffered the
foreclosure) shall be deemed to have made an Optional Loan to the Partnership in
the amount of the debt paid or value of the property foreclosed.

      (c) Each Optional Loan shall bear interest at the rate of ten percent
(10%) per annum, shall only be payable from the gross revenues received by the
Partnership from the ownership, operation and sale of the Land, and shall be so
repaid before any distribution of Distributable Cash Flow.

      (d) Each Partner shall be obligated to loan to the Partnership its share
(which shall be prorata, based on Partnership Interests) of Optional Loan within
ten (10) business days of the date the General Partner gives notice of the need
therefor or the date on which a Partner is deemed to have made an Optional Loan
pursuant to subparagraph (b) hereof, as applicable. No Partner shall be
personally liable to the Partnership or the other Partners for any failure to
make its share of any Optional Loan. However, any Partner (a "Defaulting
Partner") who fails to loan its share of the Optional Loan shall be deemed in
default hereunder and the other Partners (the "Contributing Partners") shall
make a loan, prorata, on behalf of the Defaulting Partner and shall have the
rights set forth in this Section 4.1 as a consequence thereof. Upon the
occurrence of such default, the Defaulting Party shall no longer be entitled to
cast any vote or otherwise participate in the management or operation of the
Partnership until the amount of the such Defaulting Partner's share of the
Optional Loan, together with interest thereon at the rate of ten percent (10%)
per annum, has been repaid to the Contributing Partners or the Contributing
Partners may exercise the Option, as set forth in Section 7.4(b). Further, until
such time as such Defaulting Partner's share of the Optional Loan has been so
repaid, all distributions of Distributable Cash Flow or other sums which would
otherwise be made to the Defaulting Partner under this Agreement shall instead
be distributed to the Contributing Partners in repayment of the amount of the
Defaulting Partner's share of the Optional Loan plus interest thereon has been
fully paid to the Contributing Partners.

                                    ARTICLE 5

                RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER

             SECTION 5.1. MANAGEMENT AND CONTROL OF THE PARTNERSHIP

      (a) The General Partner shall have all the rights, powers and obligations
of a general partner of a limited partnership under the Act. Except as otherwise
provided in subsections (b) and (c) of this Section, the General Partner shall
have the full and exclusive right to manage and control the business and affairs
of the Partnership and to make all decisions on behalf of the Partnership
(without the joinder or consent of any Limited Partner), including (but not
limited to) the following:

            (1) to acquire the Land and make improvements thereto;

                                     -9-

<PAGE>

            (2) to sell, exchange, lease, sublease or otherwise transfer assets
of the Partnership in the ordinary course of business;

            (3) to hire and terminate Partnership employees, if any, and engage
the services of attorneys, consultants, accountants and other independent
contractors;

            (4) to collect all payments due and owing to the Partnership;

            (5) to incur and pay all expenses, debts and obligations of the
Partnership at such time or times; and from any source of funds of the
Partnership as the General Partner deem necessary or desirable;

            (6) to execute and deliver from time to time such documents on
behalf of the Partnership as the General Partner may deem necessary or desirable
in the conduct of Partnership business;

            (7)to perform, or cause to be performed, all the Partnership's
obligations under any agreement to which the Partnership or any nominee of the
Partnership is a party;

            (8)to obtain and maintain any and all types of insurance coverage
on the assets and business of the Partnership and to protect the General Partner
and the Partnership against liability from third parties in such amounts as the
General Partner may deem necessary or desirable;

            (9) to institute, prosecute, defend and settle any legal,
arbitration or administrative actions or proceedings on behalf of or against the
Partnership;

            (10) to pay all taxes, assessments, and other impositions applicable
to Partnership assets and undertake when appropriate any action or proceeding
seeking to reduce such taxes, assessments or other impositions;

            (11) to open and maintain bank accounts for the deposit of
Partnership funds, with withdrawals to be made upon the signature of the Manager
of the General Partner and one representative of one of the members of the
General Partner;

            (12) to make such elections as are necessary or desirable pursuant
to the Code;

            (13) to act as "tax matters partner" for the Partnership in any
Internal Revenue Service administrative proceeding in accordance with and to the
extent allowable by the applicable provisions of the Code; and

            (14) to perform any and all acts, deemed by the General Partner as
necessary or desirable to conduct the business and affairs of the Partnership.

      Except as provided hereinabove, the General Partner shall not be entitled
to any fee or compensation for its services hereunder. The General Partner may
be removed, with or without cause, at any time by the unanimous vote of the
Limited Partners. Upon removal of the General Partner, the former General
Partner shall hold its Partnership Interest as and become a Limited

                                     -10-

<PAGE>

Partner and a successor General Partner shall be selected by a Majority Interest
of the Limited Partners.

      (b) Without the consent of a Majority Interest of the Partners, the
General Partner shall not have the power or authority to take any action on
behalf of the Partnership with respect to the following:

            (1) the sale, exchange or other disposition of all or substantially
all of the Property, except in accordance with the approved Budget;

            (2) to make any expenditure or incur any obligation on behalf of the
Partnership except for expenditures and obligations incurred in accordance with
the Budget;

            (3) to borrow money on behalf of the Partnership other than the
Optional Loans and ordinary trade debt or obligations reflected in the Budget;

            (4) to mortgage, pledge, assign, encumber or grant security
interests in Partnership assets, revenues or incomes;

            (5) to dissolve and wind up the Partnership;

            (6) to permit any Partner to make a loan to the Partnership other
than the Optional Loans (for purposes hereof, funds expended by the General
Partner for which it is entitled to reimbursement under Section 5.3 here of
shall not be considered a loan to the Partnership);

            (7) to admit any new Partner to the Partnership;

            (8) to do any act in contravention of this Agreement;

            (9) to do any act that would make it impossible to carry out the
purposes and business of the Partnership, as set forth in Section 2.3;

            (10) to confess a judgment against the Partnership, except in
connection with the execution of mortgages and other security instruments;

            (11 to possess Partnership property, or assign, pledge or
hypothecate Partnership property, for other than a Partnership purpose;

            (12) as "Tax Matters Partner", (or its equivalent under state law),
to conclude a settlement or agreements extending the Statute of limitations
binding on the Partnership or any Partner with the Internal Revenue Service (or
any state taxing authority); or

            (13) subject to the provision of Section 6.1 hereof, determine the
amount of Distributable Cash Flow and the timing of a distribution thereof to
the Partners.

                                      -11-

<PAGE>

      SECTION 5.2. AUTHORITY OF THE GENERAL PARTNER

      Any person dealing with the Partnership or the General Partner may rely
upon a certificate signed by the General Partner concerning:

            (a) the identity of the General Partner or any other Partner;

            (b) the existence or nonexistence any fact that may constitute
conditions precedent to acts by the General Partner or in any other manner
germane to the affairs of the Partnership;

            (c) any person who is authorized to execute and deliver any
instrument or document of the Partnership; or

            (d) any act or failure to act by the Partnership or concerning any
other matter whatsoever involving the Partnership or any Partner.

      SECTION 5.3. FEES AND OTHER COMPENSATION

      The General Partner shall not be entitled to receive any fees, salary or
other compensation for services rendered in managing the business and affairs of
the Partnership. The General Partner shall be entitled to reimbursement by the
Partnership from time to time for all reasonable and necessary out of
pocket-expenses (as determined by the Limited Partners) incurred by the General
Partner in connection with the management and supervision of the business and
affairs of the Partnership.

      SECTION 5.4. DEVOTION OF TIME

      The General Partner shall devote such time, services and efforts as may
be necessary for the proper furtherance, management, operation, maintenance and
care of the Partnership business and properties. The General Partner shall not
be required to devote its entire time to the business of the Partnership.

      SECTION 5.5. INDEMNIFICATION OF THE GENERAL PARTNER AND AFFILIATES

     (a)To the fullest extent allowed by the Act and other applicable law, the
General Partner shall not be liable, responsible or accountable in damages or
otherwise to the Limited Partners for, and the Partnership shall indemnify,
defend against and save harmless the General Partner, its officers, directors
and shareholders from, any expenses (including reasonable attorneys' fees and
court costs), liabilities, claims, causes of action, losses or damages incurred
by reason of any act or omission performed or omitted by the General Partner in
good faith on behalf of the Partnership or the Limited partners and within the
scope of the authority granted to the General Partner by this Agreement;
provided, however, that the indemnified party is not proven guilty of gross
negligence, fraud or willful misconduct with respect to such acts Or omissions.

     (b)The scope of the indemnification provided in this Section shall be
co-extensive with the provisions of Article 11 of the Act, and such provisions
of the Act are incorporated herein in their entirety. The satisfaction of any
indemnification under this Section shall be from and limited to

                                      -12-

<PAGE>

Partnership assets, including insurance proceeds, if any, and the Limited
Partners shall not have any personal liability on account thereof.

      SECTION 5.6. NO MANAGEMENT BY LIMITED PARTNERS

      No Limited Partner shall participate in the management or business of the
Partnership, use its name in the Partnership's business or perform any actions
prohibited to limited partners under the laws of the State of Texas or the laws
of any other jurisdiction where the Partnership is qualified to conduct
business. The Limited Partners shall not have the power to represent, act for,
sign for or bind the General Partner or the Partnership.

      SECTION 5.7. TRANSACTIONS WITH RELATED PARTIES

      Except as otherwise set forth in this Agreement, the General Partner may
agree, contract or arrange with any of its respective Affiliates in the name and
on behalf of the Partnership, for the performance of services for the,
Partnership, and the payment of compensation therefore, in carrying out the
business of the Partnership as if such parties were independent contractors,
provided that the compensation for such services shall be (a) at rates
Comparable to the charges made to third parties for rendering comparable
services in the geographical area where such services are performed, (b) paid
only for actual services rendered to the Partnership, (c) otherwise normal or
justifiable, and (d) within the Budget.

      SECTION 5.8. RIGHTS OF COMPETITION

      Each Partner, in its individual capacity or otherwise, and its officers,
directors and shareholders shall be free to engage in, conduct or participate
in any business or activity whatsoever, including, without limitation, the
acquisition, development, management, and exploitation of real property, without
any accountability, liability, or obligation whatsoever to the Partnership or to
any other Partner, even if such business or activity competes with, directly or
indirectly, or is enhanced in any way by the business or affairs of the
Partnership. In furtherance thereof, the Partners hereby agree that any business
or activity in which a Partner engages, conducts or participates outside the
Partnership shall be conclusively deemed not to be a business or activity in
competition with or an opportunity of the Partnership. Any such business or
activity of a Partner may be undertaken with or without notice to or
participation therein by the other Partners. Each Partner and the Partnership
hereby waive any right or claim he or it may have against the other Partners
with respect to any such business or activity or the income or Profits
therefrom.

      SECTION 5.9. BUDGET

     On or prior to November 1 of each calendar year during the term hereof, the
General Partner shall prepare and submit to the other Partners a proposed budget
for the then upcoming calendar year, which proposed budget shall set forth the
expected expenditures and revenues for the Partnership for the upcoming calendar
year. When approved by a Majority Interest of the Partners, if ever, the same
shall constitute the Budget for the year to which it relates. The Partners shall
meet after receipt of such proposed budget and approve or disapprove the same
before December 1 of each calendar year. Pending approval of a budget for any
calendar year, the Budget from the preceding

                                      -13-
<PAGE>

calendar year shall control; provided, however, line items for such matters such
as ad valorem taxes, utilities and debt service shall automatically be adjusted
to meet the actual cost of such items.

                                    ARTICLE 6

                         ALLOCATIONS AND DISTRIBUTIONS

      SECTION 6.1. DISTRIBUTIONS

      Except as otherwise provided in Section 9.2 regarding liquidation
proceeds, Distributable Cash Flow, to the extent distributed (which in no case
shall be made until all Optional Loans, if any, have been fully paid and
satisfied), shall be distributed to the Partners as follows:

      (a) First, to all Partners, prorata based upon the positive balances in
their respective capital accounts, until such time as each Partner has received
a return in full of its Net Capital Contributions; and

      (b) Second, any remaining balance shall be distributed to the Partners,
prorata, in accordance with their respective Partnership Interests.

      SECTION 6.2. PROFITS, LOSSES AND ALLOCATION RULES

      (a) The following rules will apply to the calculation and allocation of
Profits, Losses and other items:

            (1) Except as otherwise provided in the Agreement, all Profits,
Losses and other items allocated to the Partners will be allocated among them in
proportion to their Partnership Interests.

            (2) For purposes of determining the Profits, Losses or any other
item allocable to any period, Profits, Losses and other items will be determined
on a daily, monthly or other basis, as determined by the General Partner using
any permissible method under Code Section 706 and the related Treasury
Regulations.

            (3) Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss, deduction, credit and other allocations note
provided for in this Agreement will be divided among the Partners in the same
proportions as they share Profits and Losses.

      (b) The Partners agree to be bound by the provisions of this Section in
reporting their shares of Partnership income and loss for income tax purposes.

      SECTION 6.3. COMPLIANCE WITH CODE

      The foregoing provisions of this Article relating to the allocation of
Profits, Losses and other items for federal income tax purposes are intended to
comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be
interpreted and applied in a manner consistent with such

                                      - 14 -

<PAGE>

Treasury Regulations. Notwithstanding anything to the contrary, nothing in this
Article shall apply if it lacks "economic effect."

      SECTION 6.4. ALLOCATIONS UPON TRANSFER OF PARTNERSHIP INTEREST

      Profits or Losses attributable to any partnership Interest which has been
transferred during any Partnership fiscal year shall be allocated between the
transferor and the transferee as follows:

      (a) To the transferor for the months of the fiscal year prior to the
transfer.

      (b) To the transferee for the months of the fiscal year subsequent to the
transfer.

      (c) To the transferee for the month of the transfer if the transfer occurs
on or before the 15th day of such month and to the transferor if occurring after
the 15th day.

                                    ARTICLE 7

                               CHANGES IN PARTNERS

      SECTION 7.1. TRANSFER OF PARTNERSHIP INTEREST

      (a) Without the consent of all of the other Partners, no Partner shall
voluntarily retire or withdraw from the Partnership or voluntarily sell, assign,
transfer, give, pledge, encumber or otherwise dispose of all or any Part of its
record or beneficial interest in the Partnership to any person. Any transfer
prohibited hereunder shall be null and void and of no force or effect, and such
transfer shall not be recognized by the Partnership.

      (b) In the event that any permitted transfer or assignment of a
Partnership Interest is made pursuant to this Article, the Partner making such
transfer making such transfer or assignment shall be and remain personally
liable to the Partnership and the other Partners for its share of the debts of
the Partnership and the performance of all its obligations under this Agreement
accrued as of the date of transfer.

      (c) Upon the death, dissolution legal incapacity capacity or bankruptcy of
a Limited Partner, its personal representative shall have all the rights of
Limited Partner for the purpose of settling or managing its estate and such
power as the Limited Partner possessed to assign all or any part of its
Partnership Interest. The death, dissolution, legal incapacity or bankruptcy of
a Limited Partner shall not dissolve the Partnership. No assignee of the
interest of a Partner may become a substituted Partner except as otherwise
provided herein.

      SECTION 7.2. GENERAL CONDITIONS

      (a) All costs and expenses incurred by the Partnership in connection with
any permitted disposition of a Partnership Interest pursuant to this Article and
the admission or substitution of another person as a Partner in respect of such
Partnership Interest, including any filing, recording and publishing costs and
fees and disbursements of counsel, shall be paid by the Partner disposing of
such Partnership Interest.

                                     - 15 -
<PAGE>

      (b) No Partner shall have the right to substitute in its place a
purchaser, assignee, transferee, donee, heir, legatee, or other recipient of all
or any portion of the Partnership Interest of such Partner. Any such purchaser,
assignee, transferee, donee, legatee, distributee or other recipient of an
interest shall be admitted to the Partnership as a substituted Partner only with
the consent of the General Partner and a Majority Interest of the Limited
Partners, which consent may be granted or withheld by any Partner.

      (c) No person shall become a substituted Partner until such person has
satisfied the requirements of this Article 7; provided, however, that for the
purpose of allocating Profits, Losses and other items and distributing cash
available for distribution, a person a person shall be treated as having become,
and as appearing in the records of the Partnership as, a Partner, as the case
may be, on such date as the sale, assignment or transfer to such person was
recognized by the Partnership pursuant to Section 7.3.

      (d) At the request of a substituted Partner, the General Partner may, at
its option, file on behalf of the Partnership an election under Code Section 754
permitting adjustments to tax basis as provided in Code Sections 734 and 743.

      SECTION 7.3. ASSIGNEES

      (a) The Partnership shall not recognize for any purpose any purported
sale, assignment or transfer of all or any fraction of the interest of a Partner
unless the provisions of this Article 7 have been satisfied, all costs of such
assignment have been paid by the assigning Partner, such sale, assignment or
transfer is exempt from registration under the Securities Act of 1933, as
amended, the Texas Securities Act, as amended, and the securities act of any
other state and there is delivered to the General Partner an opinion of counsel
reasonably satisfactory to the General Partner with respect thereto, and there
is filed with the Partnership a written and dated notification of such sale,
assignment or transfer, in form satisfactory to the General Partner, executed
and acknowledged by both the seller, assignor or transferor and the purchaser,
assignee or transferee and such notification (1) contains the acceptance by the
purchaser assignee or transferee of and agreement to be bound by all the terms
and provisions of this Agreement and (2) represents that such sale, assignment
or transfer was made in accordance with all applicable securities laws and
regulations (including suitability standards). Any sale, assignment or transfer
shall be recognized by the Partnership as effective on the date of such
notification if the date of such notification is within fifteen (15) days of the
date on which such notification is filed with the Partnership, and otherwise
shall be recognized as effective on the date such notification is filed with the
Partnership.

      (b) Any Partner who assigns all its interest in the Partnership shall
cease to be a Partner, except that, unless and until a substituted Partner has
been admitted into the Partnership, such assigning Partner shall retain the
statutory rights of the assignor of a partner's interest under the Act.

      (c) A person who is the assignee of all or any fraction of the interest of
a Partner, but does not become a substituted Partner, and desires to make a
further assignment of such interest, shall be subject to all the provisions of
this Article to the same extent and in the same manner as any Partner desiring
to make an assignment of its interest.

                                     - 16 -
<PAGE>

      SECTION 7.4. MUTUAL BUY-OUT PROVISIONS

      Notwithstanding anything contained in this Agreement to the contrary, the
following provisions shall be applicable to the Partners:

      (a) Right of First Refusal. (1) In the event a Partner shall desire to
sell all of its Partnership Interest to any third party, it must receive a bona
fide written offer therefor which is acceptable to it and which offer complies
with the provisions below, and such Partner shall, within five(5) days of
receipt of the proposed offer, give the written Notice of Sale to the
non-selling Partners; The Notice of Sale shall state that a bona fide offer has
been received by the selling Partner from such third party, shall contain the
price, terms and conditions of sale and the name and address of the third party
to whom such property is proposed to be sold, and shall be accompanied by a copy
of the written offer from the third party and a written offer by the selling
partner to sell such Partner's Partnership Interest to the non-selling Partners
for the same consideration and upon the same terms and conditions as are set
forth in the third party offer.

            (2) The non-selling Partners shall have the option ("Right of First
Refusal"), on a pro-rata basis for a period of fifteen (15) days from the date
such Notice of Sale is provided to them (the "Right of First Refusal Periods"),
within which to exercise the Right of First Refusal to purchase the Partnership
Interest of the selling Partner by notifying of such election in writing prior
to the expiration of the Right of Refusal Period. If the non-selling Partners
exercise such Right of First Refusal, the proposed purchase price shall be
payable at the scheduled closing date in the same manner as is set forth in the
third party offer.

            (3) If some but not all of the non-selling Partners timely exercise
the-Right of First Refusal, the non-selling Partner(s) so initially exercising
shall have an additional period of ten (10) days within which to exercise the
Right of First Refusal to purchase the balance of the Partnership Interest of
the selling Partner.

            (4) In the event the non-selling Partner(s) reject or do not
exercise the Right of First Refusal to purchase all of the selling partner's
Partnership Interest which is the subject of the third party offer on the same
terms as such third party offer, the none-selling Partner(s) shall not have the
right-to purchase such portion of the selling Partner's Partnership Interest,
and the selling Partner  shall have the right to sell its Partnership Interest
strictly in accordance with the terms of the Notice of Sale provided, however,
the selling Partner and the third party making the third party offer must
first comply with all other provisions of this Agreement as to transfers,
including the unanimous consent of all Partners to the sale (and admission of
transferee as a Partner, if requested), the Partnership Interest sold shall
continue to be subject to the terms and provisions of this Agreement and the
purchasing third party shall be required prior to closing, to acknowledge the
same in writing.

            (5) If no such sale is made within one hundred twenty (120) days
following expiration of the Right of First Refusal Period, the Right of First
Refusal provided herein shall be reinstated with respect to such Partner's
Partnership Interest and a new Notice of Sale shall be required in the manner
provided hereinbefore.

            (6) It is expressly agreed that the remedy at law for breach of any
of the obligations set forth in this Section 7.4(a) is inadequate in view of (i)
the complexities and

                                     - 17 -

<PAGE>

uncertainties in measuring the actual damages that would be sustained by reason
of the failure of a Partner to comply fully with each of the obligations
contained herein, and (ii) the uniqueness of the Partnership Interests and the
development relationship created hereby. Accordingly, each of the aforesaid
obligations shall be, and is hereby expressly made, enforceable by specific
performance or injunction in addition to any other remedy available at law or in
equity.

            (7) Any third party offer shall comply with the following
requirements:

               (i) The proposed offer shall include an offer to buy the entire
      selling Partner's Partnership Interest, including all of the rights of
      Partner, under this Agreement and the Development Agreement, including the
      right and obligation to purchase Lots pursuant to any Lot Purchase
      Contract executed by and between that Partner and the Partnership.

               (ii) The proposed purchase price for the Partnership Interest
      shall be payable solely in lawful money of the United States and shall be
      payable in its entirety in cash.

               (iii) The offer shall contain provisions whereby the proposed
      purchaser is obligated to comply with the provisions of this Agreement and
      the Development Agreement, at and after closing.

               (iv) The offer shall be by a principal, identified in the offer,
      and not an agent acting on behalf of an undisclosed principal, and such
      principal shall not be an Affiliate of the selling Partner.

               (v) The offer shall be accompanied by a certified check of the
      prospective purchaser for a sum equal to at least five percent (5%) of the
      proposed purchase price.

               (vi) The prospective purchaser shall be of good business
      character and reputation and shall be financially capable of carrying out
      all obligations of the selling Partner under this Agreement and all
      related agreements.

            (8) Notwithstanding anything to the contrary contained in this
Section 7.4(a), a non-selling Partner who has committed an event of default
under this Agreement which is still continuing shall not be entitled to exercise
its right to purchase any portion of the selling Partner's Partnership Interest
offered for sale hereunder.

            (9) There shall be no sale concluded to a third party of less than
100% of a Partner's Partnership Interest.

      (b) Option. Each Partner hereby grants each of the other Partners the
right (the "Option") to acquire such Partner's entire Partnership Interest on a
pro-rata basis, whenever this Agreement specifically references the availability
of the Option, as set forth in Section 4.1(d) hereof, upon the following terms
and conditions.

                                     - 18 -

<PAGE>

            (1) The electing Partner may exercise the Option at any time by
delivering written notice to the other Partner(s) or its/their legal
representatives setting forth the electing Partner's intention to effectuate the
Option. The closing of the transaction provided in this Section 7.4(b) shall
occur on the date which is the later of (i) ninety (90) days after delivery of
the electing Partner's written notice, or (ii) thirty (30) days after the
determination of the purchase price.

            (2) The Option shall be available only to Partners who have not
committed an event of default, uncured at the time of attempted exercise, under
this Agreement and who are current in their obligations for Lot take downs under
their Lot Purchase Contracts with the Partnership, if any.

            (3) If the non - electing Partner is in default hereunder, then the
purchase price for said Partner's Partnership Interest shall be the product of
(i) the defaulting Partner's Capital Account, multiplied by (ii) eighty five
percent (85%). The purchase price shall be paid at the closing of the
acquisition of the non-electing Partner's Partnership interest.

            (4) If the non - electing Partner is not in default hereunder, then
the electing Partner shall specify in its notice a closing date and purchase
price which the electing Partner is willing to pay for the non-electing
Partner's Partnership Interest. The non-electing Partner shall have thirty (30)
days (the "Option Period") within which to elect in writing either to (i) sell
its Partnership Interest to the electing Partner for the purchase price and on
the closing date contained in the electing Partner's notice, or (ii) purchase
the electing Partners partnership in the Partnership on the closing date and for
the purchase price (adjusted on a pro rata basis as applicable, to reflect the
size of the electing Partner's Partnership Interest), contained in the electing
Partner's notice. If no election is delivered to or received by the electing
Partner within the Option Period, then the non-electing Partner shall be deemed
to have elected to sell its Partnership Interest to the electing Partner.

            (5) At the closing, each of the Partners shall execute and deliver
all documents necessary or appropriate to effectuate and evidence the transfers
described herein. Without limiting the foregoing, each Partner grants to the
other partners an irrevocable power of attorney, coupled with an interest, to
execute and deliver such documents to consummate the transactions described
herein.

            (6) The purchase of any Partnership Interest sold pursuant to the
exercise of the Option contained in this Section 7.4 (b) shall include the sale
of all of the selling Partner's rights under this Agreement and the Development
Agreement, specifically including an assignment of the right to purchase any
Lots to which the non-electing Partner is then entitled under any Lot Purchase
Contract executed by and between that Partner and the Partnership.

                                     - 19 -
<PAGE>

                                    ARTICLE 8

                          BOOKS AND RECORDS: ACCOUNTING

      SECTION 8.1. BOOKS AND RECORDS

      The books and records of the Partnership shall be maintained by the
General Partner at the principal office of the Partnership and shall be
available for examination at such office by any Partner or its duly authorized
representatives during regular business hours. Any Partner, at its own expense,
may cause audit of the books and records of the Partnership during regular
business hours and shall furnish a written report thereof to the other Partners.

      SECTION 8.2. ACCOUNTING BASIS FOR TAX REPORTING PURPOSES; FISCAL YEAR

      The books and records of the Partnership shall be kept on a cash basis
acceptable for income tax reporting purposes. The fiscal year of the Partnership
shall be the calendar year.

      SECTION 8.3. REPORTS

      (a) Within 10 days after the end of each month, the General Partner shall
cause the Partnership to send to each Partner a balance sheet and a profit and
loss statement for the month then ended (which financial statements need not be
audited), and a comparison of expenditures and revenues to date compared with
the amount budgeted therefor in the Budget.

      (b) Within 90 days after the end of each fiscal year, the General Partner
shall cause the Partnership to send to each Partner (a) a balance sheet and
profit and loss statement (including a statement of sources and uses of cash)
for the fiscal year that ended (which financial statements need not be audited);
(b) such tax information as shall be necessary for the preparation by each
partner of his federal and state income tax return, together with a copy of the
Partnership tax return; and (c) a report of the activities of the Partnership
during the fiscal year then ended and such other matters as the General Partner
may deem material to the operations of the Partnership.

      (c)Within ten (10) days after the end of each month, the General Partner
shall send to each Partner a sales report reflecting the sales of lots and/or
reserves during that particular calendar month.

                                    ARTICLE 9

                          DISSOLUTION, LIQUIDATION AND
                         TERMINATION OF THE PARTNERSHIP

      SECTION 9.1. EVENTS CAUSING DISSOLUTION

      (a) Except as otherwise permitted by this Agreement, each Partner hereby
waives any right it may have to cause a dissolution of the Partnership. The
Partnership shall be dissolved upon the happening of any of the following
events:

                                      -20-
<PAGE>

            (1) the expiration of its term;

            (2) the withdrawal, dissolution, bankruptcy, or legal incapacity of
the General Partner or other event of withdrawal of the General Partner under
Section 4.02(a) of the Act, subject, however, to the right of the Limited
Partners to designate a new General Partner and continues the business of the
Partnership in accordance with the Act;

            (3) the bankruptcy of the Partnership;

            (4) the sale or other disposition for cash of all or substantially
all the assets of the Partnership;

            (5) the election to dissolve the Partnership by a Majority Interest
of the Partners; or

            (6) any other event causing a dissolution of the Partnership under
this Agreement.

      (b) Dissolution of the Partnership shall be effective as of the day on
which the event occurs giving rise to the dissolution, but the Partnership shall
not terminate until there has been a winding up of the Partnership's business
and affairs, and the assets of the Partnership have been distributed as provided
in Section 9.2.

      SECTION 9.2. LIQUIDATION

      (a) Upon dissolution of the Partnership, unless the Limited Partners elect
to continue the business of the Partnership as specified in Section 9.1(a)(2)
above, the General Partner shall have the sole power and authority to wind up
and terminate the business and affairs of the Partnership, but its authority
shall be limited as set forth in Section 5.1(b) above. In the event that the
General Partner has dissolved, withdrawn or become bankrupt or legally
incapacitated, a Majority Interest of the Limited Partners may select, within 30
days after any such occurrence, a person to perform the functions of the General
Partner in liquidating the assets of me Partnership and winding up its affairs.

      (b) In the course of winding up and terminating the business and affairs
of the Partnership, the General Partner (or liquidator, as the case may be) may
cause any part or all of the Partnership assets to be sold in such manner as it
may determine, in its sole discretion, in an effort to obtain the best prices
for such assets (provided, however that the General Partner or liquidator, as
the case may be, may distribute Partnership assets in kind to the Partners to
the extent practicable). During the liquidation period, the General Partner (or
liquidator, as the case may be) shall have the right to continue to operate and
otherwise to deal with Partnership Property.

      (c) The General Partner or liquidator, as the case may be, shall use all
reasonable efforts to complete the liquidation of the Partnership as soon as
Practical. After making payment, or provision for payment, of all debts and
liabilities of the Partnership and all expenses of liquidation, the General
Partner or the liquidator, as the case may be, may create a cash reserve in an
amount it deems reasonably necessary or advisable for any contingent or
unforeseen liabilities of the Partnership.

      (d) Upon completion of the liquidation of the Partnership and the
distribution of all Partnership funds, the Partnership shall terminate and the
General Partner (or liquidator, as the case

                                      -21-
<PAGE>

may be) shall have the authority to execute and record all documents required to
dissolve and terminate the Partnership. Within a reasonable time following the
completion of the liquidation, the General Partner (or liquidator, as the case
may be)shall deliver to each Partner a final statement (which need not be
audited) setting forth(1) any remaining assets and liabilities of the
Partnership as of the date of the complete liquidation, (2) each Partner's share
of the distributions made pursuant to this Section and (3) the amount, if any,
retained as reserve for any contingent or unforeseen liabilities of the
Partnership. Each Partner shall look solely to the assets of the Partnership for
any distributions to which it may be entitled and shall have no recourse upon
dissolution or otherwise against the Partnership, the General Partner or the
liquidator.

      (e) In settling accounts after dissolution, the assets of the Partnership
shall be paid or distributed in the following order:

            (1) To the third party creditors, in order of priority as provided
by law;

            (2) then, to the Partners for any unreimbursed costs and expenses
owing to the Partners pursuant to this Agreement;

            (3) then, to the repayment of any loans, with interest, made by any
Partner to the Partnership, and if more than one Partner has any outstanding
loans owing from the Partnership, such repayment shall be made prorata in
accordance with the total amount outstanding to each Partner;

            (4) then, an amount equal to the then remaining positive balances in
the capital accounts of the Partners shall be distributed to the Partners in
proportion to the amount of such balance;

            (5) then, any remainder shall be distributed to the Partners
prorata, in accordance with their respective Partnership Interests.

      SECTION 9.3. DISTRIBUTIONS IN KIND

      If any assets of the Partnership are distributed in kind pursuant to this
Agreement, such assets shall be distributed to the Partners entitled thereto as
tenants-in-common in the same proportions as the Partners would have been
entitled to cash distributions if such Property had been sold for cash and the
net proceeds thereof distributed to the Partners. In the event that
distributions in kind are made to the Partners upon dissolution and liquidation
of the Partnership, the capital account balances of such Partners shall be
adjusted to reflect the Partners allocable share of gain or loss which would
have resulted if the distributed Property had been sold at its fair market
value.

                                      -22-
<PAGE>

                                   ARTICLE 10

                   REPRESENTATIONS AND WARRANTIES OF PARTNERS

      SECTION 10.1. AEQUISITION OF INTEREST FOR INVESTMENT

      Each Partner hereby represents and warrants to the Partnership and the
other Partner that the acquisition of its Partnership Interest is made for its
own account for investment purposes only and not with a view toward the resale
or distribution of such Partnership Interest. Each Partner represents that it is
not acquiring its Partnership Interest with the present intention of reselling,
transferring or otherwise subdividing all or any portion of its Partnership
Interest and presently intends to hold its Partnership Interest during the
stated term of the Partnership.

      SECTION 10.2. TRANSFER OF PARTNERSHIP INTEREST

      Each Partner hereby represents and warrants to the Partnership and the
other Partner that it will not sell, assign or otherwise transfer its
Partnership Interest or any fraction thereof unless the Partnership Interest has
been registered under the Securities Act of 1933, as amended, or under any
applicable state securities laws, or such sale, assignment or transfer is exempt
from such registration and, in any event, it will not so sell, assign or
otherwise transfer its Partnership Interest or any fraction thereof to any
person who does not similarly represents, warrant and agree.

      SECTION 10.3. ACCESS TO INFORMATION

      Each Partner hereby represents and warrants to the Partnership and the
other Partner that it has been afforded access to all books, records and
premises of the Partnership and has examined the same or caused the same to be
examined by its reprehensive to the extent it deems necessary or appropriate.
Each Partner warrants and represents that it does not desire any further
information concerning the Partnership or its contemplated purposes and
business.

      SECTION 10.4. INVESTMENT EXPERIENCE

      Each Partner hereby represents and warrants to the Partnership and the
other Partner that it is experienced and knowledgeable in business and financial
matters in general and in real estate investments in particular and it is
capable of evaluating the merits and risk of the activities contemplated by the
Partnership. Each Partner further represents and warrants that it can afford to
bear the economic risk of its investment in the Partnership.

                                   ARTICLE 11

                            MISCELLANEOUS PROVISIONS

      SECTION 11.1. ADDRESS FOR NOTICES.

      All notices, demands, consents and reports provided for in this Agreement
shall be in writing and shall be given to the parties at the addresses set forth
herein or at such other addresses as the

                                      -23-
<PAGE>
Partner may hereafter specify in writing. Such notices may be delivered by
hand, by telecopy or telegram or may be mailed, postage prepaid, by certified or
registered mail, by a deposit in a depository for the receipt of mail regularly
maintained by the United States Postal Service. All notices which are hand
delivered in the manner provided above shall be deemed received on the date of
delivery at the address of the addressee. All notices which are mailed in the
manner provided above shall be deemed effective five days after being mailed.

            If to General Partner:

                  G. P. Navo South, L.L.C.
                  12890 Hillcrest Road, Suite 103
                  Dallas, Texas 75230
                  Attention: John. A. Baker
                  Telephone: (972) 387-9200
                  Facsimile: (972) 387-9313

            If to Ashton Woods Homes:

                  Ashton Dallas Residential, L.L.C.
                  13800 Montfort Drive
                  Suite 100
                  Dallas, Texas 75240
                  Attention: David Rexroat
                  Telephone: (972) 490-3255 Ext. 104
                  Facsimile: (972) 991-4949

            With a copy to:

                  Ashton Woods Homes
                  1080 Holcomb Bridge Road,
                  Building 200, Suite 350
                  Roswell, Georgia 30076
                  Attention: Tom Krobot
                  Telephone: (770) 998-9663
                  Facsimile: (770) 998-7494

            And to:

                  Tim Hagen, Esq.
                  14643 Dallas Parkway, Suite 570
                  Dallas, Texas 75254
                  Telephone: (972) 386-0041
                  Facsimile: (972) 386-0443

                                      -24-
<PAGE>

            If to Horizon Homes:

                  Horizon Homes, Ltd.
                  l2850 Hillcrest Road, Suite 200
                  Dallas, Texas 75230
                  Attention: L.F. Van Landingham
                  Telephone: (972) 387-7905
                  Facsimile: (972) 385-0403

            With a copy to:

                  Richardson K. Anderson, Esq.
                  12850 Hillcrest Road, Suite 200
                  Dallas, Texas 75230
                  Telephone: (972) 789-3551
                  Facsimile: (972) 385-0403

            If to Priority Development:

                  Priority Development, L.P.
                  1111 North Post Oak Road
                  Houston, Texas 77055
                  Attention: James C. Alexander
                  Telephone: (713) 316-3344
                  Facsimile: (713) 621-4053

      SECTION 11.2. ADDITIONAL DOCUMENTS AND ACTS

      In connection with this Agreement, as well as all transactions
contemplated by this Agreement, the Partners agree to execute such additional
documents and papers, and to perform and do such additional acts as may be
necessary and proper to effectuate and carry out all of the provisions of this
Agreement.

      SECTION 11.3. ASSUMED NAME

      The General Partner shall execute and file all assumed name certificates
required by applicable law.

      SECTION 11.4. QUALIFICATION IN FOREIGN JURISDICTIONS

      The General Partner shall take such steps as are necessary or desirable to
allow the Partnership to conduct business in any jurisdiction where the Partners
desire for the Partnership to conduct its business.

                                      -25-
<PAGE>

      SECTION 11.5. APPLICABLE LAW

      This Agreement and the rights of the Partners shall be governed by and
construed in accordance with the laws of the State of Texas. With respect to all
matters not expressly provided for in this Agreement, the Act and other
applicable partnership laws of the State of Texas shall apply and control. In
the event that any provision in this Agreement conflicts with the Act, such
provision in this Agreement shall control and govern to the extent permitted by
applicable law.

      SECTION 11.6. WAIVER OF ACTION FOR PARTITION BY PARTNERS

      Each Partner irrevocably waives during the term of the Partnership any
right which it may have to maintain any action for partition with respect to any
asset of the Partnership.

      SECTION 11.7. NUMBERS AND GENDER

      Where the context so indicates, the masculine shall include feminine and
neuter, and the neuter shall include the masculine and feminine, the singular
shall include the plural and any reference to a "person" shall mean a natural
person or a corporation, association, partnership, joint venture, estate, trust
or any other entity.

      SECTION 11.8. BINDING EFFECT

      Except as herein otherwise provided to the contrary, this agreement shall
be binding upon and inure to the benefit of the Partners, their distributee,
heirs, legal representatives, executors, administrators, successors and assigns.

      SECTION 11.09. ENTIRE AGREEMENT

      This Agreement constitutes all of the understandings and agreements of
whatsoever kind and nature existing between the Partners with respect to the
subject matter contained herein and supersedes all prior agreements and
undertakings with respect thereto.

      SECTION 11.10. PLACE OF PERFORMANCE

      The obligations of the parties hereto are performable in Denton County,
Texas.

      SECTION 11.11. AMENDMENT

      Except as otherwise expressly set forth in this Agreement, this Agreement
may be amended, supplemented or restated only upon the unanimous consent of the
Partners.

      SECTION 11.12. SEVERABILITY

      If any term or provision of this Agreement or the application thereof to
any person or circumstances shall, to any extent, be deemed invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those

                                      -26-
<PAGE>

as to which it is held invalid or unenforceable, shall not be affected thereby
and shall be valid and enforced to the fullest extent permitted by applicable
law.

      SECTION 11.13. SECTIONS

      Unless the context requires otherwise, all references in this Agreement to
Sections or Articles shall be deemed to mean and refer to Sections or Articles
of this Agreement.

      SECTION 11.14. CAPTIONS

      The titles and captions contained herein are for convenience only and
shall not be deemed part of the context of this Agreement.

      SECTION 11.15. NO WAIVER

      No waiver, express or implied, by any Partner of any breach or default by
any other Partner in the performance by the other Partner of its obligations
hereunder shall be deemed or construed to be a waiver of any other breach or
default under this Agreement. Failure on the part of any Partner to complain of
any act or omission of any other Partner, or to declare such other Partner in
default irrespective of how long such failure continues, shall not constitute a
waiver hereunder. No notice to or demand on a defaulting Partner shall entitle
such defaulting Partner to any other or further notice or demand in similar or
other circumstances.

      SECTION 11.16. ADDITIONAL REMEDIES

      Unless the context requires otherwise, the rights and remedies of the
Partners hereunder shall not be mutually exclusive so that the exercise of one
or more of the provisions hereof shall not preclude the exercise of any other
provision hereof.

      SECTION 11.17. U.S. DOLLARS

      All references in this Agreement to dollar amounts shall refer to United
States currency.

      SECTION 11.18. COUNTERPARTS

      This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and shall be binding upon the Partner who executed the
same, but all of such counterparts shall constitute one and the same agreement.

      SECTION 11.19. APPROVALS

      Except where otherwise indicated, all approval, consent and other similar
rights of the Partners or a Majority Interest of the Limited Partners or a
Majority Interest of the Partners pursuant to this Agreement may be exercised by
such parties, and such approvals and consents may be granted or denied by such
parties, provided however, that such approvals and consents are not to be
unreasonably withheld.

                                      -27-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                   GENERAL PARTNER:

                                   G.P. NAVO SOUTH, L.L.C.,
                                   a Texas limited liability company

                                   By: /s/ John A. Baker
                                       ---------------------------
                                       John A. Baker, Manager

                                   LIMITED PARTNERS:

                                   ASHTON DALLAS RESIDENTIAL, L.L.C.,
                                   a Texas  limited liability company

                                   By: /s/ ILLEGIBLE
                                       -----------------------
                                   Printed Name: ILLEGIBLE
                                   Title: ILLEGIBLE

                                   HORIZON HOMES, LTD.,
                                   a Texas limited partnership

                                   By: Horizon Homes Management, Inc.,
                                       a Texas corporation
                                   Its: General Partner

                                        By: /s/ L.F. VanLandingham
                                            ----------------------
                                            L.F. VanLandingham,
                                            Vice-President

                                   PRIORITY DEVELOPMENT, L.P.,
                                   a Delaware limited partnership

                                   By: /s/ JAMES C. ALEXANDER
                                       -----------------------
                                   Printed Name: JAMES C. ALEXANDER
                                   Title: CFO

                                      -28-

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