Century Communities, Inc. (Form: S-1/A, Received: 05/30/2014 06:01:45)

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

As filed with the U.S. Securities and Exchange Commission on May 30, 2014

Registration No. 333-195678

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 2

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

C ENTURY C OMMUNITIES , I NC .

(Exact Name of Registrant as Specified in Its Charter)

Delaware

1531

68-0521411

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

(303) 770-8300

(Address, including zip code, and telephone number, including area code of Registrant’s principal executive offices)

Dale Francescon

Chairman of the Board of Directors and Co-Chief Executive Officer

Century Communities, Inc.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

(303) 770-8300

(Address, including zip code, and telephone number, including area code of agent for service)

Copies to:


Mark J. Kelson, Esq.		Howard B. Adler, Esq.
Greenberg Traurig, LLP		Gibson, Dunn & Crutcher LLP
1840 Century Park East, Suite 1900		1050 Connecticut Avenue, N.W.
Los Angeles, California 90067		Washington, DC 20036
Tel: (310) 586-3856		Tel: (202) 955-8500
Fax: (310) 586-0556		Fax: (202) 530-9526

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x (Do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price ⁽¹⁾⁽²⁾	Amount of Registration Fee ⁽³⁾
Common Stock, $0.01 par value per share	$102,000,000	$13,138

⁽¹⁾	Estimated solely for purposes of determining the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

⁽²⁾	Includes shares of common stock that may be purchased by the underwriters pursuant to their over-allotment option and shares of common stock offered by the selling stockholders under the IPO Prospectus and the Selling Stockholders Resale Prospectus contained in this Registration Statement.

⁽³⁾	Calculated pursuant to Rule 457(o) of the Securities Act of 1933, as amended.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant files a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectuses:

(1)

IPO Prospectus. A prospectus (which we refer to as the “IPO Prospectus”) to be used in connection with the initial public offering of our common stock. We are offering shares of our common stock ( shares if the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock), and the selling stockholders named in this prospectus are offering shares of our common stock, through the underwriters named on the cover page of the IPO Prospectus.

(2)

Selling Stockholders Resale Prospectus. A prospectus (which we refer to as the “Selling Stockholders Resale Prospectus”) to be used by selling stockholders for the resale of shares of our common stock.

The Selling Stockholders Resale Prospectus is substantively identical to the IPO Prospectus, except for the following principal differences:

(a)

the Selling Stockholders Resale Prospectus has different front and back covers than the IPO Prospectus;

(b)

all references in the IPO Prospectus to “this offering” will be changed to “the IPO,” defined as the underwritten initial public offering of our common stock, in the Selling Stockholders Resale Prospectus;

(c)

all references in the IPO Prospectus to “underwriters” will be changed to “underwriters of the IPO” in the Selling Stockholders Resale Prospectus;

(d)

all references in the IPO Prospectus to “$ per share, which is the midpoint of the price range set forth on the cover page of this prospectus” will be changed to “$ per share, which is the midpoint of the price range set forth on the cover page of the IPO Prospectus” in the Selling Stockholders Resale Prospectus;

(e)

the following sections in the Selling Stockholders Resale Prospectus are different than the corresponding sections in the IPO Prospectus:

•

“Summary—The Offering”;

•

“Use of Proceeds”;

•

“Description of Capital Stock—Registration Rights Agreement”;

•

“Selling Stockholders”; and

•

“Shares Eligible for Future Sale—General”;

(f)

the following sections in the IPO Prospectus are deleted from the Selling Stockholders Resale Prospectus:

•

“Summary—Selling Stockholders”;

•

“Risk Factors—Risks Related to this Offering and Ownership of our Common Stock—If you purchase common stock in this offering, you will experience immediate dilution”;

•

“Capitalization”; and

•

“Dilution”;

(g)

the Selling Stockholders Resale Prospectus contains the following sections which are not in the IPO Prospectus:

•

“Summary—Recent Developments—Initial Public Offering”; and

•

“Our Business—Recent Developments—Initial Public Offering”;

(h)

the “Underwriting” section in the IPO Prospectus is deleted from the Selling Stockholders Resale Prospectus and a “Plan of Distribution” section is inserted in its place;

(i)

all references in the IPO Prospectus to the “Underwriting” section will be changed to refer to the “Plan of Distribution” section in the Selling Stockholders Resale Prospectus; and

(j)

the reference to counsel for the underwriters is deleted from the “Legal Matters” section in the Selling Stockholders Resale Prospectus.

We have included in this Registration Statement, after the financial statements and the outside back cover of the IPO Prospectus, a set of alternate pages and sections reflecting items (a), (e), (g), (h), and (j) above. We will include the Selling Stockholders Resale Prospectus in its entirety in a subsequent amendment to this Registration Statement.

The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 30, 2014

PRELIMINARY PROSPECTUS

LOGO

Shares

C ENTURY C OMMUNITIES , I NC .

Common Stock

$ per share

This is the initial public offering of our common stock, $0.01 par value per share. We are offering shares of our common stock, and the selling stockholders named in this prospectus are offering shares of our common stock. We will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders. We currently expect the initial public offering price to be between $ and $ per share of our common stock.

We have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS.”

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, under the federal securities laws and are eligible for reduced reporting requirements. See “Summary—Implications of Being an Emerging Growth Company.”

Investing in our common stock involves risks. See “ Risk Factors ” beginning on page 21.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions ⁽¹⁾	$	$
Proceeds to us (before expenses)	$	$
Proceeds to the Selling Stockholders (before expenses)	$	$

⁽¹⁾

See “Underwriting.”

We have granted the underwriters the right to purchase up to additional shares of our common stock to cover over-allotments, if any.

The underwriters expect to deliver the shares to purchasers on or about , 2014 through the book-entry facilities of The Depository Trust Company.


	Joint Book-Running Managers

FBR	J.P. Morgan	Deutsche Bank Securities

	Co-Managers

Zelman Partners LLC		Builder Advisor Group, LLC

	, 2014.

LOGO

CENTURY COMMUNITIES
Our Story Century Communities was founded with one simple objective: build a home with lasting value, integrity, quality and service. Century Communities has become one of the country’s fastest growing homebuilders.

We are responsible for the information contained in this prospectus, and you should rely only on the information contained in this prospectus or in any free writing prospectus prepared by us. We, the selling stockholders and the underwriters have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We, the selling stockholders and the underwriters are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information appearing in this prospectus and any free writing prospectus prepared by us is accurate as of any date other than the respective dates of such documents. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.

TABLE OF CONTENTS


Summary			1
Risk Factors			21
Cautionary Note Concerning Forward-Looking Statements			51
Use of Proceeds			52
Capitalization			53
Dilution			54
Dividend Policy			56
Selected Financial Data			57
Management’s Discussion and Analysis of Financial Condition and Results of Operations			61
Market Opportunity			83
Our Business			114
Management			130
Executive and Director Compensation			136
Certain Relationships and Related Party Transactions			145
Conflicts of Interest			148
Principal Stockholders			149
Selling Stockholders			152
Description of Capital Stock			153
Shares Eligible For Future Sale			160
Certain Material Federal Income Tax Considerations			162
Underwriting			167
Legal Matters			172
Change in Accountants			173
Experts			173
Where You Can Find More Information			174
Index to Consolidated Financial Statements			F-1

- i -

STATEMENT REGARDING MARKET DATA

We use market data and industry forecasts and projections throughout this prospectus, and in particular in the sections entitled “Summary,” “Market Opportunity” and “Our Business.” We have obtained substantially all of this information from a market study prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC (which we refer to as “JBREC”), an independent research provider and consulting firm, based on the most recent data available as of February 2014. We have paid JBREC a fee of $46,500 for its services, plus an amount charged at an hourly rate for additional information we may require from JBREC from time to time in connection with its services. Such information is included in this prospectus in reliance on JBREC’s authority as an expert on such matters. Any forecasts prepared by JBREC are based on data (including third party data), models and the experience of various professionals, and are based on various assumptions (including the completeness and accuracy of third-party data), all of which are subject to change without notice. See “Market Opportunity” and “Experts.”

Some of the market data included in this prospectus is derived from the CoreLogic Case-Shiller Index, the Burns Home Value Index ^™ , and the Burns Affordability Index ^™ . The CoreLogic Case-Shiller Index is the most widely recognized measure of home price appreciation and depreciation, and is frequently used by investors; it is released to the public monthly and quarterly via the CoreLogic website at http://www.corelogic.com/products/case-shiller.aspx. The Burns Home Value Index ^™ is a proprietary index developed by JBREC to materially reduce the impact of shifts in the mix of homes sold during a period by using multiple data sources to measure home price appreciation or depreciation across all homes, rather than just those that have been purchased or sold during a given quarter. The Burns Affordability Index ^™ is a proprietary index which compares a metropolitan area’s affordability against its own historic affordability dating back to 1981, using income and home price data purchased from third party sources plus mortgage rate data from the Federal Home Loan Mortgage Corporation (which we refer to as “Freddie Mac”). The Burns Home Value Index ^™ and the Burns Affordability Index ^™ are updated monthly for distribution to research clients of JBREC. The public may purchase research reports from JBREC to gain access to these proprietary indices at a price of $1,500 per month per metropolitan area with a minimum three-month trial commitment. In addition, JBREC occasionally shares portions of the information and analyses from its proprietary indices through its free newsletters, which are posted on JBREC’s website and may be viewed by the public without charge.

In addition, certain market and industry data has been obtained from publicly available industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. We have not independently verified the data obtained from these sources. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus.

- ii -

SUMMARY

This summary highlights information contained elsewhere in this prospectus, but it does not contain all of the information that you may consider important in making your investment decision. Therefore, you should read this entire prospectus carefully, including, in particular, the “Risk Factors” section beginning on page 21 of this prospectus. As used in this prospectus, unless the context otherwise requires or indicates, references to “the Company,” “we,” “our” and “us” refer to Century Communities, Inc. and its subsidiaries and affiliates, including our predecessor Century Communities Colorado, LLC; and references to “Century LLC” or “our predecessor” refer to Century Communities Colorado, LLC and (except for financial statement information, except as otherwise noted) its predecessors and affiliates.

Unless otherwise indicated, all market data included in this prospectus is derived from a market study, based on the most recent data available as of February 2014, prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC (which we refer to as “JBREC”), an independent research provider and consulting firm focused on the housing industry.

Unless the context otherwise requires, the information in this prospectus assumes that: (i) we will issue shares of our common stock in this offering; (ii) the shares of our common stock to be sold in this offering are sold at $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and (iii) the underwriters’ over-allotment option to purchase additional shares of our common stock in this offering is not exercised.

Our Company

We are engaged in all aspects of homebuilding, including land acquisition and development, entitlements, and the acquisition, development, construction, marketing, sale and management of various residential projects in major metropolitan markets in Colorado, and, more recently, in the greater Austin and San Antonio, Texas and Las Vegas, Nevada metropolitan areas.

Our business strategy is focused on the design, construction and sale of single-family detached and attached homes in major metropolitan markets, including in Colorado, Texas, and Nevada, and our planned entry into other markets in the Western United States. We offer a wide variety of product lines that enable us to meet the specific needs of each of our core markets (Denver, Fort Collins, and Colorado Springs, Colorado, Austin and San Antonio, Texas, and Las Vegas, Nevada), which we believe provides us with a balanced portfolio and an opportunity to increase market share. Since our formation, we have delivered over 2,700 homes for total revenues of approximately $750 million. In 2013, we were one of the top 50 largest homebuilders in the United States by total revenue (as ranked among public and private companies by Builder Magazine) and one of the top 5 fastest growing homebuilders by total revenue.

We have been profitable every year since our founding, including throughout the recent economic downturn. Since 2008, our home sales revenue has more than tripled even as some homebuilders experienced significant revenue contraction. During that same period, many of our competitors were forced to exit the business or undergo significant restructuring. For the three months ended March 31, 2014, we delivered 128 homes for total home sales revenue of $49.7 million, up 101% from $24.7 million over the three months ended March 31, 2013, and for the year ended December 31, 2013, we delivered 448 homes for total home sales revenue of $171.1 million, up 78.2% from $96.0 million over the year ended December 31, 2012. The dollar amount of our backlog of homes sold but not closed as of March 31, 2014, December 31, 2013 and December 31, 2012 was approximately $122.3 million, $103.3 million and $51.6 million, respectively.

36 months from the beginning of construction of the first home to close out of the community, plus an additional one to two years if necessary for the entitlement and development of land, based upon projected volumes.

The core of our business plan is to acquire and develop land strategically, based on our understanding of population growth patterns, entitlement restrictions and infrastructure development. We focus on locations within our markets with convenient access to metropolitan areas that are generally characterized by diverse economic and employment bases and demographics and increasing populations. We believe these conditions create strong demand for new housing, and these locations represent what we believe to be attractive opportunities for long-term growth. We also seek assets that have desirable characteristics, such as good access to major job centers, schools, shopping, recreation and transportation facilities, and we strive to offer a broad spectrum of product types in these locations. Cutting edge product development and exemplary customer service are key components of the lifestyle connection we seek to establish with each individual homebuyer. Our construction expertise across an extensive product offering allows us flexibility to pursue a wide array of land acquisition opportunities and appeal to a broad range of potential homebuyers, from entry-level to first- and second-time move-up buyers and even some move-down homebuyers. Additionally, we believe our diversified product strategy enables us to adapt quickly to changing market conditions and to optimize returns while strategically reducing portfolio risk.

Our predecessor entity was formed as a Colorado limited liability company in August 2002, and we converted into a Delaware corporation pursuant to the General Corporation Law of the State of Delaware (which we refer to as the “DGCL”) on April 30, 2013. In May 2013, we completed a private offering and a private placement of 12,075,000 shares of our common stock, in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended (which we refer to as the “Securities Act”), and pursuant to the exemption from registration provided in Rule 506 of Regulation D under the Securities Act, where we received net proceeds of approximately $223.8 million (which we refer to as the “May 2013 private offering and private placement”). We used the net proceeds from the May 2013 private offering and private placement for the acquisition and development of land, home construction and other related purposes, including $38 million for debt repayment, $62 million for the acquisition of lots, approximately $19 million for development costs, $16 million for the acquisition of Jimmy Jacobs Homes, L.P. (which we refer to as “Jimmy Jacobs”) and to partially fund the LVLH Acquisition (described below).

We have been operating in the Denver metropolitan area since our founding in 2002.

We entered the greater Austin, Texas market in June 2013 when we hired a Division President for Texas, obtained office space there, and began sourcing land positions. In September 2013, we began our operations in the Austin metropolitan area as a result of our acquisition of real property and certain in-place contracts and assumed certain liabilities of Jimmy Jacobs, a homebuilder with operations in the greater Austin, Texas metropolitan area, for cash consideration of $15.7 million (which we refer to as the “Jimmy Jacobs Acquisition”). The assets acquired from Jimmy Jacobs were primarily real property, including 50 land lots available for construction of single-family homes and 95 single-family residences and home construction contracts in various stages of construction. We also acquired in-place contracts for the sale of homes currently under construction, a purchase commitment to acquire 116 additional land lots upon Jimmy Jacobs meeting certain development milestones (obligations we assumed in connection with the Jimmy Jacobs Acquisition), and certain other assets, including office-related personal property and intangible assets, such as trade names and non-competition agreements. In total, as a result of the Jimmy Jacobs Acquisition, we obtained control of 166 lots and 95 homes under construction and home construction contracts in the greater Austin and San Antonio, Texas metropolitan areas. We intend to continue our expansion into the Austin area and to expand into other major metropolitan areas in Texas during 2014.

On April 1, 2014, we purchased substantially all of the assets of Las Vegas Land Holdings, LLC and its subsidiaries (which we refer to collectively as “LVLH”) for a purchase price of approximately $165 million (which we refer to as the “LVLH Acquisition”). LVLH targeted first-time, second-time move-up, second home

and active adult buyers, with home prices typically ranging from $215,000 to $500,000. The acquired assets consisted of 1,761 lots within five single-family communities in the greater Las Vegas, Nevada metropolitan area: Rhodes Ranch, Tuscany Village, Westmont, Sunset/Grand Canyon and Freeway 50. The 1,761 lots include 57 homes in backlog, 17 model homes and three custom lots. In addition, we acquired two fully operational golf courses, three custom home lots, and two 1-acre commercial plots.

As of April 1, 2014, we owned and controlled 99 communities containing 10,095 lots in various stages of development located throughout Austin and San Antonio, Texas, Denver, Colorado Springs and Fort Collins, Colorado and Las Vegas, Nevada. We seek to maximize our return on capital and reduce our risk exposure associated with holding land inventories by developing projects with targeted life cycles of approximately 24 to 36 months from the beginning of construction of the first home to close out of the community, plus an additional one to two years if necessary for the entitlement and development of land, based upon projected volumes.

In May 2014, we completed a private offering of $200 million in aggregate principal amount of senior unsecured notes due 2022, which carry a coupon of 6.875%, where we received net proceeds of approximately $195 million (which we refer to as our “May 2014 senior notes offering”). Our ability to access the capital markets has been instrumental to our growth trajectory, and we intend to continue to selectively take advantage of our low cost of capital in order to fund our growth.

Market Opportunity

National Housing Market

The U.S. housing market continues to improve from the cyclical low points reached during the 2008-2009 national recession. Between the 2005 market peak and 2011, single-family housing sales declined 76%, according to data compiled by the U.S. Census Bureau (which we refer to as the “Census Bureau”), and median home prices declined 34%, as measured by the CoreLogic Case-Shiller Index. In 2012, some U.S. markets showed early indications of recovery as a result of an improving macroeconomic backdrop and strong housing affordability. According to the Census Bureau, single-family homebuilding permits reached a cyclical low at approximately 419,000 units in 2011 before increasing by 24% to approximately 519,000 in 2012. Single-family permits rose by another 18% to approximately 610,000 in 2013. The single-family median resale home price decreased 5% year-over-year in 2011 followed by a 7% increase in 2012 and 11% increase in 2013, according to data compiled by the National Association of Realtors, which is influenced by the mix of homes sold. Growth in new home sales outpaced growth in existing home sales from 2011 through 2013, increasing 40% versus 19% for existing homes.

Despite recent momentum, the U.S. housing market has not fully recovered from the 2008-2009 recession as consumer confidence remains below average levels, mortgage underwriting standards have tightened and the number of delinquent mortgages remains elevated relative to historical averages. Additionally, real estate is a local industry and not all markets exhibit the same trends.

JBREC believes the outlook for the overall national housing market is favorable as a result of several factors. Demand is strong; the number of adults finding employment is exceeding new home supply by a ratio of 2.4 to 1. Supply is low; resale inventory is below the historical average months of supply, new home inventory is

near an all-time low and new construction is below historical averages. Affordability is favorable nationally; with historically low interest rates, and home prices in many markets are back to levels last seen in 2003. JBREC forecasts that the excesses of the recent downturn will clear and that home prices and construction will increase for the foreseeable future.

Denver, Colorado

The housing fundamentals in the Denver Metropolitan Statistical Area (which we refer to as an “MSA”) continue to improve from extremely weak levels experienced in 2008 and 2009. Improvement in the fundamentals is often a precursor for home price appreciation. The improvement is due to the combination of significantly improved demand fundamentals, as a result of improving job growth and rising sales activity, and improved supply fundamentals as a result of low homebuilding permit and listings levels. As housing prices and mortgage rates have increased in relation to average household income since the market downturn of 2008 and 2009, by June 2013, affordability (according to JBREC’s Affordability Index ^™ , which compares the monthly costs of owning the median-priced home with the median household income for the area) returned to Denver’s long-term average dating back to 1981, although affordability is expected to weaken from 2014 to 2016 due to rising home prices and mortgage rates.

Denver’s job growth resumed in 2011 and continued through 2013. Homebuilding permits in the Denver MSA are forecasted to more than quadruple by 2016 from their trough level in 2009. Existing home sales activity increased by 21% in 2013 and is expected to remain steady through 2016. New home sales activity also improved in 2012 and 2013 and JBREC expects further gains during 2014. Denver builders are benefitting from the very limited existing home sales and new home inventory, which is driving traffic to new home communities and presenting builders with some pricing power, although affordability is expected to worsen through 2016 as rising mortgage rates and home prices take their toll.

Austin, Texas and Other Texas Metropolitan Areas

The Texas region fared better than others during the recession and housing correction. The region offers an affordable cost of living and doing business, which is supported by a desirable tax environment. Population growth, boosted by migration, is expected to support housing demand as residents come to pursue economic opportunities.

Specifically, the housing fundamentals in the Austin MSA are strong; job growth is better than the national average; resale and new home inventory are low; and sales activity has risen, even as affordability fundamentals weakened in 2013 as a result of rising home prices and mortgage rates.

Las Vegas, Nevada

The housing fundamentals in the Las Vegas MSA are much improved from extremely weak levels from 2006 through 2011 due to significantly better demand as a result of improving job growth and rising sales activity, and improved supply fundamentals as a result of low homebuilding permit and listings levels. Affordability remains very good compared to Las Vegas’ historical median dating back to 1981. JBREC forecasts that homebuilding permit activity in the Las Vegas metropolitan area will triple by 2016 from its trough level in 2009, spurred by solid household growth. Although Las Vegas’ economy remains largely dependent on the leisure & hospitality industry, the Las Vegas economy is becoming more diversified with the largest year-over-year job growth coming from the Trade, Transportation & Utilities industry. New home sales activity grew by 34% and 37% in 2012 and 2013, respectively, and JBREC expects further new home sales activity gains through 2016. The Burns Home Value Index ^™ indicates a 26.9% year-over-year increase in Las Vegas home values in the 12 months ending December 2013, and home values are expected to increase at more moderate rates

through 2016. Overall, Las Vegas builders are benefitting from much healthier resale and new home inventory, renewed employment growth, and historically great affordability.

For a more detailed review of each of our markets, see “Market Opportunity.”

Our Competitive Strengths

We believe the following strengths will provide us with a significant competitive advantage in implementing our business strategy:

Cycle-Tested Management Team

We have a successful track record of managing and growing the Company through various economic cycles and have achieved profitability every year since our inception, even in down markets. Our senior management team, comprised of Dale Francescon, Robert Francescon, David Messenger, Kenneth Rabel, Steven Hayes and Don Boettcher, has experience in all aspects of homebuilding. This experience includes land acquisition and development, entitlements, the acquisition, development, construction, marketing, sale and management of an array of residential projects, such as single-family homes, townhomes, condominiums and apartments, and the acquisition and integration of homebuilding companies, in a variety of markets at both public and private companies. Our Co-Chief Executive Officers, Dale Francescon and Robert Francescon, have successfully managed the Company through 11 consecutive profitable years in various economic cycles, including down cycles when certain of our competitors struggled or exited the business.

Proven and Profitable Business Model

We have a profitable and efficient operating platform that positions us to take advantage of opportunities in the housing industry in both thriving and down markets. We consider our homebuilding peers in the United States to be TRI Pointe Homes, Inc., William Lyon Homes, M/I Homes, Inc., Standard Pacific Corp., M.D.C. Holdings, Inc., Hovnanian Enterprises, Inc. and Beazer Homes USA, Inc., and we are among a select few of these homebuilding peers to be profitable in every year since our founding in 2002, including during the 2008-2009 recession and the distressed economic period that followed. In addition, since 2008, our revenues have approximately tripled. We believe that our management approach, which balances a decentralized local market expertise with a centralized executive management focusing on maximizing efficiencies, supports our strong margins and profitability. To maintain our consistent profitability over the long term, we employ a well-developed land acquisition strategy and strive to control costs through a stringent process of setting realistic budgets and expectations, monitoring and evaluating them throughout the lifecycle of each project, and making any necessary adjustments to correct deviations going forward. This strategy has resulted in 2013 gross margins at the top quartile of our public homebuilding peer group.

Attractive Land Positions in Core Markets

We continue to benefit from a sizeable and well-located existing land inventory. We believe that we have strong land positions strategically located within each of our six core markets with a heavy emphasis on in-fill locations, which are new developments on vacant or undeveloped land within existing communities and cities, and master planned communities. We select communities with convenient access to metropolitan areas that are generally characterized by diverse economic and employment bases and demographics and increasing populations. We believe these conditions create strong demand for new housing, and these homebuilding locations represent what we believe to be attractive opportunities for long-term growth. We believe our land

assets also have desirable characteristics, such as good access to major job centers, schools, shopping, recreation and transportation facilities. Given that we expect an increase in our sales pace, we project that our currently owned and controlled land supply will generate closings through 2018.

Land Sourcing and Evaluation Capabilities

We believe our key personnel’s extensive experience and relationships and strong reputation with other market participants provide us with a significant competitive advantage in being able to efficiently source, entitle and close on land. Our key personnel have developed significant collaborative relationships with land sellers, developers, contractors, lenders, brokers and investors throughout the Western United States over the last 25 years. As illustrated by our recent entry into Austin, Texas, and Las Vegas, Nevada, these relationships provide us with opportunities to obtain the “first look” at, or early access to, quality land opportunities in our target markets as well as better understand the markets we plan to enter in the future.

In addition, our land evaluation process is meant to reduce development and market cycle risk and involves reviewing the status of entitlements and other governmental processing, preparing detailed budgets for all cost categories, completing environmental reviews and third-party market studies, and engaging architects and consultants to review our proposed acquisitions and design our homes and communities. In addition, because we efficiently perform preliminary due diligence on land parcels prior to committing to an acquisition, we believe we have developed a reputation as a buyer who can act quickly and decisively, which has created significant opportunities for us in our core markets. We believe that this reputation will carry over as we expand our business into additional markets.

Disciplined Investment Approach

We have been able to maximize value over the long-term and therefore operate our business to mitigate risks from downturns in the market and to position ourselves to capitalize on upturns in the market by controlling costs, maintaining a solid balance sheet and ensuring an overall strategic focus that is informed by national, regional and local market trends. Our management team has gained significant operating expertise, including managing components of much larger public homebuilders, through many varied economic cycles. The perspective gained from these experiences has helped shape the strict discipline and hands-on approach with which the Company is managed. Our management team has learned to effectively evaluate the market, and we believe that we react quickly, calmly and rationally to changes.

Superior Product Design

We are a builder with a wide variety of product lines that enable us to meet the specific needs of each of our targeted buyer profiles, which we believe provides us with a balanced portfolio and an opportunity to increase market share and maximize profitability. We have demonstrated expertise in effectively building homes across product offerings from entry-level through first-time and second-time move-up and even move-down housing. We devote significant time to researching and designing our homes to better meet the needs of our buyers through the use of architects, consultants and homeowner focus groups for all levels and price points in our target markets. We believe our diversified product strategy enables us to better serve a wide range of buyers, adapt quickly to changing market conditions, and optimize performance and returns while strategically reducing portfolio risk. By providing a more customized product mix of varying lot sizes, product types, and amenities in our communities, and addressing underserved segments, we believe we can accelerate the absorption of our subdivisions, maximize profitability and earn attractive returns for our stockholders.

See “Our Business—Our Competitive Strengths” for a more detailed discussion of our competitive strengths.

Our Business Strategy

Our business strategy is focused on land acquisition and development, entitlements, and the acquisition, development, construction, marketing, sale and management of single-family detached and attached homes in major metropolitan markets, including in Colorado, Texas, Nevada, and our planned entry into other markets in the Western United States.

Our business strategy is driven by the following:

Acquire Land Opportunistically and Leverage Development Expertise

Our ability to identify, acquire and, if necessary, develop land in desirable locations and on favorable terms is the hallmark of our success. The core of our business plan is to secure land strategically, based on our understanding of population growth patterns, entitlement restrictions and infrastructure development. We do not speculate with respect to our land acquisitions, and we usually acquire land at various stages of development to place into our production cycle. Our land acquisition strategy focuses on finished lots as well as the development of entitled parcels that we can build homes on within approximately 24 to 36 months from the beginning of construction of the first home to close out of the community, plus an additional one to two years, if necessary, for the entitlement and development of land, in order to reduce development and market cycle risk while maintaining an inventory of owned lots and lots under land option contracts sufficient for the construction of homes in our business plan. While we focus on purchasing finished lots that generate an acceptable level of return, we will enter into land purchase contracts for undeveloped and, on occasion, unentitled land, which purchase contracts would include contingencies conditioning our obligation to purchase the land on our successful entitlement of such property. In so doing, we believe we are able to obtain better pricing on such unfinished and, on occasion, unentitled land, while mitigating risks associated with the entitlement process by including applicable contingencies in the land purchase contract.

Disciplined Management of Land Supply

Our approach to land supply management has historically been to acquire land that has attractive characteristics, including good access to schools, shopping, recreation and transportation facilities. In connection with our overall land inventory management process, our management team reviews those considerations, as well as other financial metrics, in order to decide the highest and best use of our current and prospective land assets. Historically, land dispositions have not had a material effect on our overall results of operations, but may impact overall margins. In an effort to minimize our exposure to market cycle risk, our strategy is to focus on developed lots or the development of entitled parcels that can be sold out within 24 to 36 months after the start of home construction. Assuming that the number of homes we sold in 2013 on a pro forma basis, giving effect to the LVLH Acquisition, is representative of our closing rates generally, we believe we have over 12 years of land supply.

Provide Superior Quality and Homeowner Experience and Service

Our core operating philosophy is to provide a positive, memorable experience to our homeowners through active engagement in the building process, and providing our customers with customization options to suit their lifestyle needs, and enhancing communication, knowledge and satisfaction. We engineer our homes for energy-efficiency, which is aimed at reducing the impact on the environment and lowering energy costs to our homebuyers; as part of these efforts, we offer homebuyers environmentally friendly alternatives, such as the ability to utilize solar power to supplement a home’s energy needs.

premium locations. Our competitive edge in the selling process focuses on the home’s features, design and available customizing options. We believe that our homes generally offer higher quality and more distinctive designs within a defined price range or category than those built by our competitors.

Expand into New and Complementary Markets

We intend to explore expansion opportunities in other parts of the Western United States. Our strategy in this regard will be to expand first into similar market niches in areas where we perceive an ability to exploit a competitive advantage. The expansion may be effected through either organic growth or acquisitions of homebuilders operating in those new markets. We recently completed the Jimmy Jacobs Acquisition in Austin, Texas, and the LVLH Acquisition in Las Vegas, Nevada, and we have further expansion planned into these and other major metropolitan areas in the Western United States. We initially chose to focus on the Denver, Colorado Springs and Fort Collins markets in Colorado because we viewed such metropolitan areas as having unique demographic features, including higher than average anticipated growth in population and income. Likewise, we believe that Texas was less severely affected than other U.S. states by the recent economic downturn and that Texas, Nevada and California will experience above average population and personal income growth in the future.

Utilize Prudent Leverage

We intend to employ both debt and equity as part of our ongoing financing strategy, coupled with redeployment of cash flow from continuing operations, to provide us with the financial flexibility to access capital on the best terms available. In that regard, we have employed and expect to employ prudent leverage levels to finance the acquisition and development of our lots and construction of our homes. Our existing indebtedness is recourse to us and we anticipate that future indebtedness will likewise be recourse. As a means of sustaining our long-term financial health and limiting our exposure to unforeseen dislocations in the debt and financing markets, we are and expect to remain conservatively capitalized.

Focus on Efficient Operations

In connection with all of our projects, we strive to control costs through a stringent budget plan. We start by preparing a detailed budget for all cost categories as part of our due diligence. We closely monitor the budget throughout the process by continuing to revisit and update the budget on an ongoing basis. Virtually all components of our homes are provided by subcontractors. Much effort is expended to assure that scopes of work are complete and inclusive. Contract variances and extras are closely scrutinized for appropriateness. At the sale and closing of each home in a project, we compare the estimated and final margin of that house with the most recent budget to determine any negative variances so that we can adjust in order to better control costs on future homes in the project. We believe our disciplined process of setting realistic budgets and expectations, monitoring and evaluating them, and making any necessary adjustments to correct deviations going forward enables us to prudently control our costs.

Drive Revenue by Opening New Communities From Existing Land Supply

2014. Additionally, as of April 1, 2014, we owned and controlled approximately 10,095 lots in various stages of development. 3,707 of these lots were finished or partially developed and another 2,364 were already entitled for residential construction. Assuming that the number of homes we sold in 2013 on a pro forma basis, giving effect to the LVLH Acquisition, is representative of our closing rates generally, we believe we have over 12 years of land supply.

Adhere to Our Core Operating Principles to Drive Consistent Long-Term Performance

We seek to maximize shareholder value over the long-term, and therefore operate our business to mitigate risks from market downturns and position ourselves to capitalize on market upturns. This management approach includes the following elements:

•

leveraging our management team’s significant experience, extensive relationships and strong reputation with local market participants to operate and grow our business;

•

balancing decentralized, local, day-to-day decision-making responsibility with centralized corporate oversight;

•

centralizing management approval of all land acquisitions and dispositions through an asset management committee that operates under stringent underwriting requirements;

•

ensuring all team members understand the organization’s strategy and the goals of the business and have the tools to contribute to our success;

•

attracting and retaining top talent through a culture in which team members are encouraged to contribute to our success and are given the opportunity to recognize their full potential; and

•

maintaining a performance-based corporate culture committed to the highest standards of integrity, ethics and professionalism.

Our Products

We offer a wide range of high-quality homes to consumers in our markets, ranging from entry-level and move-down homes (typically single-family attached homes from 1,000 to 2,500 square feet) to first- and second move-up homes (typically single-family detached homes from 2,000 to in excess of 4,000 square feet). We strive to maintain appropriate consumer product and price level diversification. We target what we believe to be the most profitable consumer groups for each of our locations while attempting to diversify so that our land portfolio is not overly concentrated in any one group. Our ability to build at multiple price points enables us to adjust readily to changing consumer preferences and affordability. We generally market our homes to entry-level and first- and second-time move-up buyers through targeted product offerings in each of the communities in which we operate.

We have developed and integrated into our communities a number of home designs with features such as outdoor living spaces, one-story living and first floor master bedroom suites to appeal to universal design needs, as well as recreational amenities such as golf courses, pool complexes, country clubs and recreation centers. See “Our Business—Our Products” for a more detailed discussion of our products.

Description of Owned and Controlled Communities

but do not currently own (including 726 lots under non-binding letters of intent). In total, as of April 1, 2014, we owned and controlled 99 communities containing 10,095 lots. Of these, the controlled communities consisted of total contracts outstanding to acquire 4,714 lots in 28 communities for aggregate acquisition consideration of $153.2 million. In addition, as of April 1, 2014, we had outstanding option contracts for 435 lots, totaling $27.8 million. Our obligations with respect to the option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. As of April 1, 2014, we had $4.3 million of non-refundable cash deposits pertaining to land option contracts.

Summary of Owned and Controlled Communities

As of April 1, 2014


Market	Communities		Lots Owned		Lots Controlled ⁽¹⁾		Total Lots Owned/ Controlled ⁽¹⁾		Product Type ⁽²⁾
Austin, TX		20		161		1,544		1,705	SFD
Colorado Springs, CO		9		305		182		487	SFA/SFD
Denver, CO		49		2,443		1,713		4,156	SFA/SFD
Las Vegas, NV		9		1,849		—		1,849	SFD
Northern Colorado		6		142		507		649	SFD
San Antonio, TX		6		6		1,243		1,249	SFD

Total		99		4,906		5,189		10,095

⁽¹⁾	Includes 726 lots that are under non-binding letters of intent.

⁽²⁾	Product type SFA and SFD denote Single Family Attached and Single Family Detached, respectively.

LOGO

Selling Stockholders

Pursuant to, and subject to the terms and conditions of, the registration rights agreement we entered into in connection with our May 2013 private offering and private placement, investors who purchased shares of our common stock in our May 2013 private offering and private placement and their respective transferees have the right to sell their shares of common stock in this offering, subject to customary terms and conditions, including underwriter cutback rights. We are including shares of our common stock in this offering to be sold by the selling stockholders.

Summary Risk Factors

An investment in the shares of our common stock involves risks. You should consider carefully the risks discussed below and described more fully along with other risks under “Risk Factors” in this prospectus before investing in our common stock.

•

Adverse changes in general economic conditions could reduce the demand for homes and, as a result, could have a material adverse effect on us.

•

Our long-term growth depends upon our ability to successfully identify and acquire desirable land parcels for residential build-out.

•

If homebuyers are not able to obtain suitable financing, our results of operations may decline.

•

Difficulty in obtaining sufficient capital could result in an inability to acquire land for our developments or increased costs and delays in the completion of development projects.

•

Our operating performance is subject to risks associated with the real estate industry.

•

Failure to manage land acquisitions and development and construction processes could result in significant cost overruns or errors in valuing sites.

•

We expect to use leverage in executing our business strategy, which may adversely affect the return on our assets.

•

We are an “emerging growth company” and, as a result of the reduced disclosure and governance requirements available to emerging growth companies, our common stock may be less attractive to investors.

•

There is currently no public market for shares of our common stock, a trading market for our common stock may never develop following this offering, and our common stock prices may be volatile and could decline substantially following this offering.

Corporate Information

Our predecessor entity was formed as a Colorado limited liability company in August 2002, and we converted into a Delaware corporation pursuant to the DGCL on April 30, 2013. Our principal executive offices are located at 8390 East Crescent Parkway, Suite 650, Greenwood Village, Colorado 80111. Our main telephone number is (303) 770-8300. Our internet website is www.centurycommunities.com. The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of this prospectus.

Implications of Being an Emerging Growth Company

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (which we refer to as the “JOBS Act”), and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These provisions include, among other matters:

•

an exemption to provide fewer years of financial statements and other financial data in an initial public offering registration statement;

•

an exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting;

•

an exemption from new or revised financial accounting standards until they would apply to private companies and from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation;

•

reduced disclosure about the emerging growth company’s executive compensation arrangements; and

•

no requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements.

We have determined to opt out of the exemption from compliance with new or revised financial accounting standards. Our decision to opt out of this exemption is irrevocable.

We have elected to adopt the reduced disclosure requirements available to emerging growth companies. As a result of these elections, the information that we provide in this prospectus may be different than the information you may receive from other public companies in which you hold equity interests.

We will remain an “emerging growth company” until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30 ^th , and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Recent Developments

LVLH Acquisition

On April 1, 2014, we completed the LVLH Acquisition, in which one of our wholly-owned subsidiaries, Century Communities of Nevada, LLC, purchased substantially all of the assets of LVLH for a purchase price of approximately $165 million. LVLH targeted first-time, second-time move-up, second home and active adult buyers, with home prices typically ranging from $215,000 to $500,000. The acquired assets consisted of 1,761 lots within five single-family communities in the greater Las Vegas, Nevada metropolitan area: Rhodes Ranch, Tuscany Village, Westmont, Sunset/Grand Canyon and Freeway 50. The 1,761 lots include 57 homes in backlog, 17 model homes and three custom lots. In addition, we acquired two fully operational golf courses, three custom home lots, and two 1-acre commercial plots. At the time of the LVLH acquisition, LVLH was actively selling homes in three of these communities, as described below:

Rhodes Ranch. Rhodes Ranch is a single-family master planned residential golf course community in Southwest Las Vegas. It is a phased development with estimated completion in the first half of 2018. Rhodes Ranch targets first-time and second-time move-up buyers as well as second home and active adult buyers. Community amenities include landscaped open areas, a recreation center, a water park, walking trails, parks, private streets and guard-gated entries. It also includes Rhodes Ranch Golf Club, an 18-hole Championship public golf course located within the community.

Tuscany Village. Tuscany Village is a single-family master planned residential golf course community in Henderson, Nevada that targets first-time and second-time move-up buyers as well as second home and active adult buyers. The community includes amenities such as landscaped open areas, walking trails, parks, a recreation center, private streets and guard-gated entry. It also includes Tuscany Village Golf Club, an 18-hole Championship public golf course located within the community.

Westmont. Westmont is a single-family residential community in Southwest Las Vegas. Westmont targets first-time buyers and is located one block from an elementary school, adjacent to Red Ridge Park, near a water park, retail areas and hospitals, and has easy access to Fort Apache Road, a main arterial road running through West Las Vegas.

For the year ended December 31, 2013, LVLH completed 256 closings with an average selling price of $290,049, earning revenue from home sales of $74.3 million and gross profit from home and land sales of $29.0 million.

Issuance of $200 Million in Aggregate Principal Amount of Senior Unsecured Notes

In May 2014, we completed a private offering of $200 million in aggregate principal amount of senior unsecured notes due 2022 in reliance on Rule 144A and Regulation S under the Securities Act, where we received net proceeds of approximately $195 million (which we refer to as our “May 2014 senior notes offering”). The notes carry a coupon of 6.875% per annum and were issued at a price equal to 99.239% of their principal amount. We used a portion of the net proceeds from the May 2014 senior notes offering for the repayment of the outstanding balance including accrued interest of $99.2 million under our revolving credit facility, and we intend to use the remainder of the net proceeds for the acquisition and development of land and, to the extent not used for the acquisition and development of land, for general corporate purposes, including development, home construction and other related purposes.

Potential New Senior Unsecured Revolving Credit Facility

Homebuilding is capital intensive and we are mindful of potential short-term, or seasonal, requirements for enhanced liquidity that may arise in connection with our business. To meet our liquidity needs, in May 2014, we entered into a non-binding term sheet for a new senior unsecured revolving credit facility, which is expected to provide for up to $125 million of borrowing capacity, subject to borrowing base availability. Although we are in negotiations regarding such a credit facility, there can be no assurances that we will enter into such facility on the terms described herein or at all.

The Offering

Common Stock Offered by Us

Common Stock Offered by the Selling Stockholders

Common Stock to be Outstanding Immediately After this Offering

shares ⁽¹⁾

Over-Allotment Option

We have granted to the underwriters an option to purchase up to additional shares of our common stock from us at the initial public offering price less the underwriting discounts and commissions to cover over-allotments, if any, for a period of 30 days from the date of this prospectus.

Use of Proceeds

We expect to receive net proceeds from this offering of approximately $ million (assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus), or approximately $ million if the underwriters exercise in full their over-allotment option to purchase up to additional shares of our common stock, after deducting the underwriting discounts and commissions and the estimated offering expenses of approximately $ million payable by us.

We intend to use the net proceeds of this offering primarily for the acquisition and development of land, including $ million for lots currently under contract, $ million for lots under non-binding letters of intent, and approximately $ million for estimated development costs. Additionally, to the extent not used for the acquisition of land, we may also use net proceeds for development, home construction and other related purposes. Should the underwriters exercise their over-allotment option to purchase up to additional shares of our common stock, all of the resulting net proceeds to us will be used as described above in this paragraph. See “Use of Proceeds.”

We will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders.

Dividend Policy

New York Stock Exchange Symbol

We have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS.”

Risk Factors

Investing in our common stock involves a high degree of risk . For a discussion of factors you should consider in making an investment, see “Risk Factors” beginning on page 21.

Except as otherwise indicated, all information in this prospectus assumes no exercise of the underwriters’ over-allotment option to purchase additional shares of our common stock.

⁽¹⁾

The number of shares of common stock to be outstanding immediately after this offering (i) includes 377,587 shares of restricted stock granted under our First Amended & Restated 2013 Long-Term Incentive Plan (which we refer to as our “2013 Long-Term Incentive Plan”); and (ii) excludes (a) 1,468,413 shares of our common stock reserved for future issuance in connection with awards under our 2013 Long-Term Incentive Plan immediately following the completion of this offering; and (b) up to shares of our common stock issuable upon the exercise in full by the underwriters of their over-allotment option.

Summary of Selected Financial Data

The following sets forth our summary of selected financial and operating data on a historical and pro forma basis. You should read the following summary of selected financial data in conjunction with our consolidated historical financial statements, our unaudited pro forma condensed consolidated financial statements, and the related notes, and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.

As more fully discussed under “Our Business—Our Company—Recent Developments,” we recently completed the LVLH Acquisition, whereby we purchased substantially all of the assets of Las Vegas Land Holdings, LLC and its subsidiaries (which we refer to collectively as, “LVLH”). The unaudited pro forma condensed consolidated financial information set forth below has been prepared to reflect adjustments to our historical financial information that are (1) directly attributable to the LVLH Acquisition, (2) factually supportable, and (3) with respect to the unaudited pro forma condensed consolidated statements of operations information, expected to have a continuing impact on our results. The unaudited pro forma condensed consolidated statements of operations information does not include non-recurring items, including, but not limited to, acquisition-related legal and advisory fees. The unaudited pro forma condensed consolidated financial information reflects the impact of:

•

the LVLH Acquisition; and

•

other adjustments described in the explanatory notes to the unaudited pro forma condensed consolidated financial information.

The unaudited pro forma condensed consolidated statements of operations information gives effect to the LVLH Acquisition as if it had occurred as of January 1, 2013. The unaudited pro forma condensed consolidated balance sheet information gives effect to the LVLH Acquisition as if it had occurred on March 31, 2014.

Our historical consolidated balance sheet information as of December 31, 2013 and consolidated statement of operations information for the year ended December 31, 2013 have been derived from the historical consolidated financial statements audited by Ernst & Young, LLP, independent registered public accounting firm, whose report with respect thereto is included elsewhere in this prospectus.

Our historical consolidated balance sheet information as of December 31, 2012 and consolidated statement of operations information for the year ended December 31, 2012 have been derived from the historical consolidated financial statements audited by BKD, LLP, independent registered public accounting firm, whose report with respect thereto is included elsewhere in this prospectus.

The historical consolidated balance sheet information of Las Vegas Land Holdings, LLC as of December 31, 2013 and consolidated statement of operations information and consolidated statement of members’ equity information for the year ended December 31, 2013 used in the preparation of the unaudited pro forma condensed consolidated statements of operations information and unaudited pro forma condensed consolidated balance sheet information have been derived from the historical consolidated financial statements of Las Vegas Land Holdings, LLC audited by BDO USA, LLP, independent certified public accountants, whose report with respect thereto is included elsewhere in this prospectus.

The historical condensed consolidated interim balance sheet information of Las Vegas Land Holdings, LLC as of March 31, 2014 and condensed consolidated interim statement of operations information for the three months ended March 31, 2014 used in the preparation of the unaudited pro forma condensed consolidated statements of operations information and unaudited pro forma condensed consolidated balance sheet information have been derived from the historical condensed consolidated interim financial statements of Las Vegas Land Holdings, LLC.


	Three Months Ended March 31,									Year Ended December 31,
(dollars in thousands, except as noted under Other Operating Information)	Pro Forma ⁽¹⁾ 2014			2014			2013			Pro Forma ⁽¹⁾ 2013			2013			2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Consolidated Statement of Operations Data :
Home sales revenues	$	64,643		$	49,671		$	24,717		$	245,386		$	171,133		$	96,030
Land sale revenues		233			—			—			1,272			—			—

Total home and land sale revenues		64,876			49,671			24,717			246,658			171,133			96,030
Cost of home sale revenues		48,086			37,274			18,499			186,896			129,651			75,448
Cost of land sale revenues		117			—			—			593			—			—

Total cost of home and land sale revenues		48,203			37,274			18,499			187,489			129,651			75,448

Gross margin from home and land sales		16,673			12,397			6,218			59,169			41,482			20,582
Golf course and other revenue		2,404			—			—			8,172			—			—
Cost of golf course and other revenue		1,690			—			—			8,271			—			—

Gross margin from golf course and other revenue		714			—			—			(99	)		—			—

Selling general and administrative		9,815			7,003			3,276			33,951			23,622			13,496

Operating income		7,572			5,394			2,942			25,119			17,860			7,086

Other income (expense)		(318	)		(198	)		85			(203	)		213			353

Income before tax expense		7,254			5,196			3,027			24,916			18,073			7,439

Income tax expense		2,539			1,828			—			7,410			5,015			—
Deferred taxes on conversion to a corporation		—			—			—			627			627			—

Consolidated net income		4,715			3,368			3,027			16,879			12,431			7,439

Net income attributable to the noncontrolling interests		—			—			52			52			52			1,301

Income attributable to common stockholders	$	4,715		$	3,368		$	2,975		$	16,827		$	12,379		$	6,138

Basic and diluted earnings per share	$	0.27		$	0.20					$	1.30		$	0.95

Select Balance Sheet Data (end of period) :
Cash and cash equivalents	$	20,134		$	185,134		$	7,165		$	43,998		$	109,998		$	7,897
Inventories		335,273			197,104			87,039			343,169			184,072			77,305
Total assets		415,557			410,073			100,242			418,319			312,639			90,673
Total debt		102,000			100,500			52,051			102,195			1,500			33,206
Total liabilities		140,337			134,853			73,828			146,763			41,083			66,112
Total equity		275,220			275,220			26,414			271,556			271,556			24,561

Other Financial Data :
EBITDA ⁽²⁾	$	8,292		$	5,755		$	3,387		$	29,321		$	20,531		$	9,064
EBITDA margin		12.8	%		11.6	%		13.7	%		11.9	%		12.0	%		9.4	%
Adjusted EBITDA ⁽²⁾	$	9,599		$	6,446		$	3,387		$	31,231		$	21,639		$	9,064


	Three Months Ended March 31,									Year Ended December 31,
(dollars in thousands, except as noted under Other Operating Information)	Pro Forma ⁽¹⁾ 2014			2014			2013			Pro Forma ⁽¹⁾ 2013			2013			2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)

Other Operating Information :
Number of homes delivered		177			128			79			704			448			336
Average sales price of homes delivered (actual; not in thousands)	$	365,215		$	388,055		$	312,873		$	345,560		$	381,994		$	285,802
Cancellation rates		14	%		15	%		21	%		15	%		20	%		17	%
Backlog at end of period, number of homes		313			256			190			278			222			148
Backlog at end of period, aggregate sales value (in thousands)	$	139,769		$	122,321		$	72,027		$	120,009		$	103,250		$	51,562
Net new home orders		211			161			121			778			517			415
Average selling communities		26			23			15			22			19			13

⁽¹⁾	For information regarding the unaudited pro forma information reflecting the LVLH Acquisition, see the unaudited pro forma financial statements beginning on Page F-58.

⁽²⁾

EBITDA represents net income attributable to Century Communities, Inc. before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance. These adjustments are itemized below. We believe that the presentation of EBITDA and Adjusted EBITDA included in this offering memorandum provides useful information to investors with which to analyze our operating trends and performance. In addition, we believe that EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present EBITDA and Adjusted EBITDA measures when reporting their results. EBITDA and Adjusted EBITDA are not measurements of financial performance under United States generally accepted accounting principles (which we refer to as “GAAP”) and should not be considered as an alternative to net income as a measure of performance or to net cash flows provided by (used in) operations as a measure of liquidity.

A reconciliation of net income to EBITDA and Adjusted EBITDA for the periods presented is as follows:


	Three Months Ended March 31,						Year Ended December 31,
(dollars in thousands)	Pro Forma 2014		2014		2013		Pro Forma 2013		2013		2012
Net income	$	4,715	$	3,368	$	3,027	$	16,827	$	12,431	$	7,439
Income tax expense		2,539		1,828		—		7,410		5,015		—
Deferred taxes on conversion to a corporation		—		—		—		627		627		—
Interest amortized to cost of homes closing		164		76		288		1,906		1,521		1,429
Interest expense		34		—		—		158		—		—
Depreciation and amortization		840		483		72		2,393		937		196

EBITDA	$	8,292	$	5,755	$	3,387	$	29,321	$	20,531	$	9,064
Non-cash compensation expenses		296		296		—		735		735		—
Non-recurring expenses		1,011		395		—		1,175		373		—

Adjusted EBITDA	$	9,599	$	6,446	$	3,387	$	31,231	$	21,639	$	9,064

In addition, other companies may define EBITDA and Adjusted EBITDA differently and, as a result, our measures of EBITDA and Adjusted EBITDA may not be directly comparable to EBITDA or Adjusted EBITDA of other companies. Furthermore, each of EBITDA and Adjusted EBITDA has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

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EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

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EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

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EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

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EBITDA and Adjusted EBITDA do not reflect our provision for income taxes, which may vary significantly from period to period;

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non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating ongoing operating performance for a particular period;

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although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

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other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

RISK FACTORS

An investment in our common stock involves a high degree of risk and should be considered highly speculative. Before making an investment decision, you should carefully consider the following risk factors, which address the material risks concerning our business and an investment in our common stock, together with the other information contained in this prospectus. If any of the risks discussed in this prospectus occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline significantly and you could lose all or part of your investment. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Note Concerning Forward-Looking Statements.”

Risks Related to Our Business

Adverse changes in general economic conditions could reduce the demand for homes and, as a result, could have a material adverse effect on us.

The residential homebuilding industry is cyclical and is highly sensitive to changes in local and general economic conditions that are outside our control, including:

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the availability of financing for acquisitions;

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the availability of construction and permanent mortgages;

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the supply of developable land in our markets;

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consumer confidence and income generally and the confidence and income of potential homebuyers in particular;

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levels of employment, job and personal income growth and household debt-to-income levels;

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the availability of financing for homebuyers;

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private and federal mortgage financing programs and federal, state, and provincial regulation of lending practices;

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short- and long-term interest rates;

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federal and state income tax provisions, including provisions for the deduction of mortgage interest payments;

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real estate taxes;

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inflation;

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the ability of existing homeowners to sell their existing homes at prices that are acceptable to them;

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housing demand from population growth and demographic changes (including immigration levels and trends in urban and suburban migration);

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the supply of new or existing homes and other housing alternatives, such as apartments and other residential rental property; and

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U.S. and global financial system and credit markets, including stock market and credit market volatility.

Economic conditions in the U.S. housing market continue to be characterized by levels of uncertainty. Since early 2006, the U.S. housing market has been negatively impacted by declining consumer confidence, restrictive mortgage standards and large supplies of foreclosures, resales and new homes, among other factors. When

combined with a prolonged economic downturn, high unemployment levels, increases in the rate of inflation and uncertainty in the U.S. economy, these conditions have contributed to decreased demand for housing, declining sales prices and increasing pricing pressure. In the event that these economic and business trends continue or decline further, we could experience declines in the market value of our inventory and demand for our homes, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

The health of the residential homebuilding industry may also be significantly affected by “shadow inventory” levels. “Shadow inventory” refers to the number of homes with a mortgage that are in some form of distress but that have not yet been listed for sale. Shadow inventory can occur when lenders put properties that have been foreclosed or forfeited to lenders on the market gradually, rather than all at once, or delay the foreclosure process. They may choose to do so because of regulations and foreclosure moratoriums, because of the additional costs and resources required to process and sell foreclosed properties, or because they want to avoid depressing housing prices further by putting many distressed properties up for sale at the same time. A significant shadow inventory in our markets could, were it to be released into our markets, adversely impact home prices and demand for our homes, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

In addition, an important segment of our customer base consists of first-time and second-time move-up buyers, who often purchase homes subject to contingencies related to the sale of their existing homes. The difficulties facing these buyers in selling their homes during recessionary periods may adversely affect our sales. Moreover, during such periods, we may need to reduce our sales prices and offer greater incentives to buyers to compete for sales that may result in reduced margins.

Our long-term growth depends upon our ability to successfully identify and acquire desirable land parcels for residential build-out.

Our future growth depends upon our ability to successfully identify and acquire attractive land parcels for development of our single-family homes at reasonable prices and with terms that meet our underwriting criteria. Our ability to acquire land parcels for new single-family homes may be adversely affected by changes in the general availability of land parcels, the willingness of land sellers to sell land parcels at reasonable prices, competition for available land parcels, availability of financing to acquire land parcels, zoning and other market conditions. If the supply of land parcels appropriate for development of single-family homes is limited because of these factors, or for any other reason, our ability to grow could be significantly limited, and the number of homes that we build and sell could decline. Additionally, our ability to begin new projects could be impacted if we elect not to purchase land parcels under option contracts. To the extent that we are unable to purchase land parcels timely or enter into new contracts for the purchase of land parcels at reasonable prices, our home sales revenue and results of operations could be negatively impacted.

Our geographic concentration could materially and adversely affect us if the homebuilding industry in our current markets should decline.

Our business strategy is focused on the design, construction and sale of single-family detached and attached homes in the major metropolitan markets of Denver, Colorado Springs, and Fort Collins in Colorado, as well as our continued expansion into Texas and Nevada and planned entry into other markets in the Western United States. Because our operations are concentrated in these areas, a prolonged economic downturn in one or more of these areas, particularly within Colorado, Nevada or Texas, could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations, and a disproportionately greater impact on us than other homebuilders with more diversified operations. For the fiscal year ended December 31, 2012, we generated all of our revenues from our real estate inventory in Colorado, and for the year ended December 31, 2013, we generated 88% and 12% of our revenues from our real estate inventory in Colorado and Texas, respectively. For the three months ended March 31, 2014, we generated 72% and 28% of our revenue from our real estate inventory in Colorado and Texas, respectively.

Any increase in unemployment or underemployment may lead to an increase in the number of loan delinquencies and property repossessions and have an adverse impact on us.

In the United States, the unemployment rate was 6.7% as of the end of March 2014, according to the U.S. Bureau of Labor Statistics (which we refer to as the “BLS”). People who are not employed, are underemployed or are concerned about the loss of their jobs are less likely to purchase new homes, may be forced to try to sell the homes they own and may face difficulties in making required mortgage payments. Therefore, any increase in unemployment or underemployment may lead to an increase in the number of loan delinquencies and property repossessions and have an adverse impact on us both by reducing demand for the homes we build and by increasing the supply of homes for sale.

If homebuyers are not able to obtain suitable financing, our results of operations may decline.

A substantial majority of our homebuyers finance their home purchases through lenders that provide mortgage financing. The availability of mortgage credit remains constrained in the United States, due in part to lower mortgage valuations on properties, various regulatory changes, and lower risk appetite by lenders, with many lenders requiring increased levels of financial qualification, lending lower multiples of income and requiring greater deposits. First-time homebuyers are generally more affected by the availability of financing than other potential homebuyers. These buyers are an important source of our demand. A limited availability of home mortgage financing may adversely affect the volume of our home sales and the sales prices we achieve in the United States.

During the recent past, the mortgage lending industry in the United States has experienced significant instability, beginning with increased defaults on subprime loans and other nonconforming loans and compounded by expectations of increasing interest payment requirements and further defaults. This in turn resulted in a decline in the market value of many mortgage loans and related securities. In response, lenders, regulators and others questioned the adequacy of lending standards and other credit requirements for several loan products and programs offered in recent years. Credit requirements have tightened, and investor demand for mortgage loans and mortgage-backed securities has declined. The deterioration in credit quality during the downturn had caused almost all lenders to stop offering subprime mortgages and most other loan products that were not eligible for sale to the Federal National Mortgage Association (which we refer to as “Fannie Mae”) or Freddie Mac, or loans that did not conform to Fannie Mae, Freddie Mac, Federal Housing Administration (which we refer to as the “FHA”) or Veterans Administration (which we refer to as the “VA”) requirements. Fewer loan products, tighter loan qualifications and a reduced willingness of lenders to make loans may continue to make it more difficult for certain buyers to finance the purchase of our homes. These factors may reduce the pool of qualified homebuyers and make it more difficult to sell to first-time and move-up buyers who have historically made up a substantial part of our customers. Reductions in demand adversely affected our business and financial results during the downturn, and the duration and severity of some of their effects remain uncertain. The liquidity provided by Fannie Mae and Freddie Mac to the mortgage industry has been very important to the housing market. These entities have required substantial injections of capital from the federal government and may require additional government support in the future. Several federal government officials have proposed changing the nature of the relationship between Fannie Mae and Freddie Mac and the federal government and even nationalizing or eliminating these entities entirely. If Fannie Mae and Freddie Mac were dissolved or if the federal government determined to stop providing liquidity support to the mortgage market, there would be a reduction in the availability of the financing provided by these institutions. Any such reduction would likely have an adverse effect on interest rates, mortgage availability and our sales of new homes. The FHA insures mortgage loans that generally have lower loan payment requirements and qualification standards compared to conventional guidelines, and as a result, continue to be a particularly important source for financing the sale of our homes. In recent years, lenders have taken a more conservative view of FHA guidelines causing significant tightening of borrower eligibility for approval. Availability of condominium financing and minimum credit score benchmarks has reduced opportunity for those purchasers. In the near future, further restrictions are expected on FHA-insured loans, including limitations on seller-paid closing costs and concessions. This or any other restriction may

negatively affect the availability or affordability of FHA financing, which could adversely affect our potential homebuyers’ ability to secure adequate financing and, accordingly, our ability to sell homes in the United States. In addition, changes in federal and provincial regulatory and fiscal policies aimed at aiding the homebuying market (including a repeal of the home mortgage interest tax deduction) may also negatively affect potential homebuyers’ ability to purchase homes.

In January 2013, the Consumer Financial Protection Bureau (which we refer to as the “CFPB”) issued a final rule, effective January 10, 2014, to implement laws requiring mortgage lenders to consider the ability of consumers to repay home loans before extending them credit and imposing minimum qualifications for mortgage borrowers. Also in January 2013, the CFPB sought comments on related proposed rules that could modify the rules for certain narrowly-defined categories of lending programs. These regulations could make it more difficult for some potential buyers to finance home purchases.

Decreases in the availability of credit and increases in the cost of credit adversely affect the ability of homebuyers to obtain or service mortgage debt. Even if potential homebuyers do not themselves need mortgage financing, where potential homebuyers must sell their existing homes in order to buy a new home, increases in mortgage costs, lack of availability of mortgages and/or regulatory changes could prevent the buyers of potential homebuyers’ existing homes from obtaining a mortgage, which would result in our potential customers’ inability to buy a new home. Similar risks apply to those buyers who are awaiting delivery of their homes and are currently in backlog. The success of homebuilders depends on the ability of potential homebuyers to obtain mortgages for the purchase of homes. If our customers (or potential buyers of our customers’ existing homes) cannot obtain suitable financing, our sales and results of operations could be adversely affected, the price of our common stock may decline and you could lose a portion of your investment.

Interest rate increases or changes in federal lending programs or other regulations could lower demand for our homes, which could materially and adversely affect us.

Most of the purchasers of our homes finance their acquisitions with mortgage financing. Rising interest rates, decreased availability of mortgage financing or of certain mortgage programs, higher down payment requirements or increased monthly mortgage costs may lead to reduced demand for our homes and mortgage loans. Increased interest rates can also hinder our ability to realize our backlog because our home purchase contracts provide customers with a financing contingency. Financing contingencies allow customers to cancel their home purchase contracts in the event that they cannot arrange for adequate financing. As a result, rising interest rates can decrease our home sales and mortgage originations. Any of these factors could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

In addition, as a result of the turbulence in the credit markets and mortgage finance industry, the federal government has taken on a significant role in supporting mortgage lending through its conservatorship of Fannie Mae and Freddie Mac, both of which purchase home mortgages and mortgage-backed securities originated by mortgage lenders, and its insurance of mortgages originated by lenders through the FHA and the VA. The availability and affordability of mortgage loans, including consumer interest rates for such loans, could be adversely affected by a curtailment or cessation of the federal government’s mortgage-related programs or policies. The FHA may continue to impose stricter loan qualification standards, raise minimum down payment requirements, impose higher mortgage insurance premiums and other costs, and/or limit the number of mortgages it insures. Due to growing federal budget deficits, the U.S. Treasury may not be able to continue supporting the mortgage-related activities of Fannie Mae, Freddie Mac, the FHA and the VA at present levels, or it may revise significantly the federal government’s participation in and support of the residential mortgage market. Because the availability of Fannie Mae, Freddie Mac, FHA- and VA-backed mortgage financing is an important factor in marketing and selling many of our homes, any limitations, restrictions or changes in the availability of such government-backed financing could reduce our home sales, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

Furthermore, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. This legislation provides for a number of new requirements relating to residential mortgages and mortgage lending practices, many of which are to be developed further by implementing rules. These include, among others, minimum standards for mortgages and lender practices in making mortgages, limitations on certain fees and incentive arrangements, retention of credit risk, and remedies for borrowers in foreclosure proceedings. The effect of such provisions on lending institutions will depend on the rules that are ultimately enacted. However, these requirements, as and when implemented, are expected to reduce the availability of loans to borrowers and/or increase the costs to borrowers to obtain such loans. Any such reduction could result in a decline of our home sales, which could materially and adversely affect us.

Any limitation on, or reduction or elimination of, tax benefits associated with owning a home would have an adverse effect upon the demand for our home products, which could be material to our business.

Significant expenses of owning a home, including mortgage interest and real estate taxes, generally are deductible expenses for an individual’s U.S. federal, and in some cases, state income taxes, subject to various limitations under current tax law and policy. If the U.S. federal government or a state government changes its income tax laws, as has been discussed from time to time, to eliminate, limit or substantially modify these income tax deductions, the after-tax cost of owning a new home would increase for many of our potential customers. The resulting loss or reduction of homeowner tax deductions, if such tax law changes were enacted without offsetting provisions, or any other increase in any taxes affecting homeowners, would adversely impact demand for and sales prices of new homes.

Increases in taxes could prevent potential customers from buying our homes and adversely affect our business or financial results.

Increases in property tax rates by local governmental authorities, as experienced in response to reduced federal and state funding, can adversely affect the ability of potential customers to obtain financing or their desire to purchase new homes. Fees imposed on developers to fund schools, open spaces, road improvements and/or provide low and moderate income housing, could increase our costs and have an adverse effect on our operations. In addition, increases in sales taxes could adversely affect our potential customers who may consider those costs in determining whether to make a new home purchase and decide, as a result, not to purchase one of our homes.

Changes to the population growth rates in certain of the markets in which we operate or plan to operate could affect the demand for homes in these regions.

Slower rates of population growth or population declines in Colorado, Nevada, Texas, or other key markets in the Western United States we plan to enter, especially as compared to the high population growth rates in prior years, could affect the demand for housing, causing home prices in these markets to fall, and adversely affect our plans for growth, business, financial condition and operating results.

Difficulty in obtaining sufficient capital could result in an inability to acquire land for our developments or increased costs and delays in the completion of development projects.

The homebuilding industry is capital-intensive and requires significant up-front expenditures to acquire land parcels and begin development. If internally generated funds are not sufficient, we may seek additional capital in the form of equity or debt financing from a variety of potential sources, including additional bank financings and/or securities offerings. The availability of borrowed funds, especially for land acquisition and construction financing, may be greatly reduced nationally, and the lending community may require increased amounts of equity to be invested in a project by borrowers in connection with both new loans and the extension of existing loans. The credit and capital markets have recently experienced significant volatility. If we are required to seek additional financing to fund our operations, continued volatility in these markets may restrict our flexibility to access such financing. If we are not successful in obtaining sufficient capital to fund our planned capital and

other expenditures, we may be unable to acquire land for our housing developments and/or to develop the housing. Additionally, if we cannot obtain additional financing to fund the purchase of land under our option contracts or purchase contracts, we may incur contractual penalties and fees. Any difficulty in obtaining sufficient capital for planned development expenditures could also cause project delays and any such delay could result in cost increases. Any one or more of the foregoing events could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

We face potentially substantial risk with respect to our land and lot inventory arising from significant changes in economic or market conditions.

We intend to acquire land parcels for replacement and expansion of land inventory within our current and any new markets. The risks inherent in purchasing and developing land parcels increase as consumer demand for housing decreases. As a result, we may buy and develop land parcels on which homes cannot be profitably built and sold. The market value of land parcels, building lots and housing inventories can fluctuate significantly as a result of changing market conditions, and the measures we employ to manage inventory risk may not be adequate to insulate our operations from a severe drop in inventory values. When market conditions are such that land values are not appreciating, previously entered into option agreements may become less desirable, at which time we may elect to forego deposits and pre-acquisition costs and terminate the agreements. In addition, inventory carrying costs can be significant and can result in losses in a poorly performing project or market. In the event of significant changes in economic or market conditions, we may have to sell homes at significantly lower margins or at a loss, if we are able to sell them at all.

If we are unable to develop our communities successfully or within expected timeframes, our results of operations could be adversely affected.

Before a community generates any revenues, time and material expenditures are required to acquire land, obtain development approvals and construct significant portions of project infrastructure, amenities, model homes and sales facilities. A decline in our ability to develop and market our communities successfully and to generate positive cash flow from these operations in a timely manner could have a material adverse effect on our business and results of operations and on our ability to service our debt and to meet our working capital requirements.

Adverse weather and geological conditions may increase costs, cause project delays and reduce consumer demand for housing, all of which could materially and adversely affect us.

As a homebuilder, we are subject to numerous risks, many of which are beyond our management’s control, such as droughts, floods, wildfires, landslides, soil subsidence, earthquakes and other weather-related and geologic events which could damage projects, cause delays in completion of projects, or reduce consumer demand for housing, and shortages in labor or materials, which could delay project completion and cause increases in the prices for labor or materials, thereby affecting our sales and profitability. Many of our core markets are in Colorado, an area which has historically experienced seasonal wildfires and soil subsidence. Texas, a market into which we continue to expand, has historically experienced tornadoes, coastal flooding and hurricanes. Nevada, a market into which we recently expanded, has historically experienced extreme temperatures and water shortages. Southern California, a market into which we plan to expand, has historically experienced earthquakes, mudslides and seasonal wildfires. In addition to directly damaging our projects, earthquakes, wildfires, mudslides or other geologic events could damage roads and highways providing access to those projects, thereby adversely affecting our ability to market homes in those areas and possibly increasing the costs of completion.

There are some risks of loss for which we may be unable to purchase insurance coverage. For example, losses associated with landslides, earthquakes and other geologic events may not be insurable and other losses, such as those arising from terrorism, may not be economically insurable. A sizeable uninsured loss could materially and adversely affect our business, prospects, liquidity, financial condition and results of operations.

Failure to recruit, retain and develop highly skilled, competent personnel may have a material adverse effect on our standards of service.

Key employees, including management team members, are fundamental to our ability to obtain, generate and manage opportunities. Key employees working in the homebuilding and construction industries are highly sought after. Failure to attract and retain such personnel or to ensure that their experience and knowledge is not lost when they leave the business through retirement, redundancy or otherwise may adversely affect the standards of our service and may have an adverse impact on our business, financial conditions and operating results. In addition, we do not maintain key person insurance in respect of any member of our senior management team. The loss of any of our management members or key personnel could adversely impact our business, financial condition and operating results. See “Management.”

Failure to find suitable subcontractors may have a material adverse effect on our standards of service.

Substantially all of our construction work is done by third-party subcontractors with us acting as the general contractor. Accordingly, the timing and quality of our construction depend on the availability and skill of our subcontractors. The difficult operating environment over the last seven years in the United States has resulted in the failure of some subcontractors’ businesses and may result in further failures. In addition, reduced levels of homebuilding in the United States have led to some skilled tradesmen leaving the industry to take jobs in other sectors. While we anticipate being able to obtain sufficient materials and reliable subcontractors during times of material shortages and believe that our relationships with subcontractors are good, we do not have long-term contractual commitments with any subcontractors, and there can be no assurance that skilled subcontractors will continue to be available at reasonable rates and in the areas in which we conduct our operations.

In the future, certain of the subcontractors engaged by us may be represented by labor unions or subject to collective bargaining arrangements. A strike or other work stoppage involving any of our subcontractors could also make it difficult for us to retain subcontractors for our construction work. In addition, union activity could result in higher costs to retain our subcontractors. The inability to contract with skilled subcontractors at reasonable costs on a timely basis could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

Our reliance on contractors can expose us to various liability risks.

We rely on contractors in order to perform the construction of our homes, and in many cases, to select and obtain raw materials. We are exposed to various risks as a result of our reliance on these contractors and their respective subcontractors and suppliers, including the possibility of defects in our homes due to improper practices or materials used by contractors, which may require us to comply with our warranty obligations and/or bring a claim under an insurance policy. For example, despite our quality control efforts, we may discover that our subcontractors were engaging in improper construction practices or installing defective materials in our homes. When we discover these issues, we repair the homes in accordance with our new home warranty and as required by law. We establish warranty and other reserves for the homes we sell based on market practices, our historical experiences, and our judgment of the qualitative risks associated with the types of homes built. However, the cost of satisfying our warranty and other legal obligations in these instances may be significantly higher than our warranty reserves, and we may be unable to recover the cost of repair from such subcontractors. Regardless of the steps we take, we can in some instances be subject to fines or other penalties, and our reputation may be injured.

In addition, several other homebuilders have received inquiries from regulatory agencies concerning whether homebuilders using contractors are deemed to be employers of the employees of such contractors under certain circumstances. Although contractors are independent of the homebuilders that contract with them under normal management practices and the terms of trade contracts and subcontracts within the homebuilding industry, if regulatory agencies reclassify the employees of contractors as employees of homebuilders, homebuilders using contractors could be responsible for wage, hour and other employment-related liabilities of their contractors, which could adversely affect our results of operations.

If we experience shortages in labor supply, increased labor costs or labor disruptions, there could be delays or increased costs in developing our communities or building homes, which could adversely affect our operating results.

We require a qualified labor force to develop our communities. Access to qualified labor may be affected by circumstances beyond our control, including:

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work stoppages resulting from labor disputes;

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shortages of qualified trades people, such as carpenters, roofers, electricians and plumbers, especially in our key markets in the Western United States;

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changes in laws relating to union organizing activity;

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changes in immigration laws and trends in labor force migration; and

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increases in subcontractor and professional services costs.

Any of these circumstances could give rise to delays in the start or completion of, or could increase the cost of, developing one or more of our communities and building homes. We may not be able to recover these increased costs by raising our home prices because the price for each home is typically set months prior to its delivery pursuant to sales contracts with our homebuyers. In such circumstances, our operating results could be adversely affected. Additionally, market and competitive forces may also limit our ability to raise the sales prices of our homes.

Utility and resource shortages or rate fluctuations could have an adverse effect on our operations.

Several of the markets in which we operate and in which we may operate in the future have historically been subject to utility and resource shortages, including significant changes to the availability of electricity and water and seasonal fluctuation in the ability of certain commodities, particularly lumber. Denver in particular has at times been affected by such shortages. Shortages of natural resources in our markets, particularly of water, may make it more difficult for us to obtain regulatory approval of new developments. We have also experienced material fluctuations in utility and resource costs across our markets, and we may incur additional costs and may not be able to complete construction on a timely basis if such fluctuations arise. In particular, as the housing market has improved and the number of new homes being constructed has increased, we have experienced increased construction costs due to additional competition for labor and materials. Furthermore, these shortages and rate fluctuations may adversely affect the regional economies in which we operate, which may reduce demand for our homes and negatively affect our business and results of operations.

Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses or limit our homebuilding or other activities, which could have a negative impact on our results of operations.

The approval of numerous governmental authorities must be obtained in connection with our development activities, and these governmental authorities often have broad discretion in exercising their approval authority. We incur substantial costs related to compliance with legal and regulatory requirements. Any increase in legal and regulatory requirements may cause us to incur substantial additional costs, or in some cases cause us to determine that the property is not feasible for development. Various local, provincial, state and federal statutes, ordinances, rules and regulations concerning building, health and safety, environment, zoning, sales and similar matters apply to and/or affect the housing industry.

Municipalities may restrict or place moratoriums on the availability of utilities, such as water and sewer taps. If municipalities in which we operate take such actions, it could have an adverse effect on our business by causing delays, increasing our costs or limiting our ability to operate in those municipalities.

We may become subject to various state and local “slow growth” or “no growth” initiatives and other ballot measures that could negatively impact the availability of land and building opportunities within those localities.

Governmental regulation affects not only construction activities but also sales activities, mortgage lending activities and other dealings with consumers. In addition, it is possible that some form of expanded energy efficiency legislation may be passed by the U.S. Congress or federal agencies and certain state and provincial legislatures, which may, despite being phased in over time, significantly increase our costs of building homes and the sale price to our buyers, and adversely affect our sales volumes. We may be required to apply for additional approvals or modify our existing approvals because of changes in local circumstances or applicable law. Further, we may experience delays and increased expenses as a result of legal challenges to our proposed communities, whether brought by governmental authorities or private parties.

An inability to obtain additional performance, payment and completion surety bonds and letters of credit could limit our future growth.

We are often required to provide performance, payment and completion surety bonds or letters of credit to secure the completion of our construction contracts, development agreements and other arrangements. We have obtained facilities to provide the required volume of performance, payment and completion surety bonds and letters of credit for our expected growth in the medium term; however, unexpected growth may require additional facilities. We may also be required to renew or amend our existing facilities. Our ability to obtain additional performance, payment and completion surety bonds and letters of credit primarily depends on our credit rating, capitalization, working capital, past performance, management expertise and certain external factors, including the capacity of the markets for such bonds. Performance, payment and completion surety bond and letter of credit providers consider these factors in addition to our performance and claims record and provider-specific underwriting standards, which may change from time to time.

If our performance record or our providers’ requirements or policies change, if we cannot obtain the necessary consent from our lenders, or if the market’s capacity to provide performance, payment and completion bonds or letters of credit is not sufficient for any unexpected growth and we are unable to renew or amend our existing facilities on favorable terms or at all, we could be unable to obtain additional performance, payment and completion surety bonds or letters of credit from other sources when required, which could have a material adverse effect on our business, financial condition and results of operations.

A major health and safety incident relating to our business could be costly in terms of potential liabilities and reputational damage.

Building sites are inherently dangerous, and operating in the homebuilding industry poses certain inherent health and safety risks. Due to health and safety regulatory requirements and the number of projects we work on, health and safety performance is critical to the success of all areas of our business. Any failure in health and safety performance may result in penalties for non-compliance with relevant regulatory requirements, and a failure that results in a major or significant health and safety incident is likely to be costly in terms of potential liabilities incurred as a result. Such a failure could generate significant negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or governmental authorities, and our ability to win new business, which in turn could have a material adverse effect on our business, financial condition and operating results.

We are subject to environmental laws and regulations, which may increase our costs, limit the areas in which we can build homes and delay completion of our projects.

We are subject to a variety of local, state and federal statutes, rules and regulations concerning land use and the protection of health and the environment, including those governing discharge of pollutants to water and air, including asbestos, the handling of hazardous materials and the cleanup of contaminated sites. We may be liable for the costs of removal, investigation or remediation of hazardous or toxic substances located on, under or in a

property currently or formerly owned, leased or occupied by us, whether or not we caused or knew of the pollution. The costs of any required removal, investigation or remediation of such substances or the costs of defending against environmental claims may be substantial. The presence of such substances, or the failure to remediate such substances properly, may also adversely affect our ability to sell the land or to borrow using the land as security. Environmental impacts from historical activities have been identified at some of the projects we have developed in the past and additional projects may be located on land that may have been contaminated by previous use. Although we are not aware of any projects requiring material remediation activities by us as a result of historical contamination, no assurances can be given that material claims or liabilities relating to such developments will not arise in the future.

The particular impact and requirements of environmental laws that apply to any given community vary greatly according to the community site, the site’s environmental conditions and the present and former use of the site. We expect that increasingly stringent requirements may be imposed on homebuilders in the future. Environmental laws may result in delays, cause us to implement time consuming and expensive compliance programs and prohibit or severely restrict development in certain environmentally sensitive regions or areas, such as wetlands. We also may not identify all of these concerns during any pre-development review of project sites. Environmental regulations can also have an adverse impact on the availability and price of certain raw materials, such as lumber. Furthermore, we could incur substantial costs, including cleanup costs, fines, penalties and other sanctions and damages from third-party claims for property damage or personal injury, as a result of our failure to comply with, or liabilities under, applicable environmental laws and regulations. In addition, we are subject to third-party challenges, such as by environmental groups, under environmental laws and regulations to the permits and other approvals required for our projects and operations. These matters could adversely affect our business, financial condition and operating results.

We may be liable for claims for damages as a result of use of hazardous materials.

As a homebuilding business with a wide variety of historic homebuilding and construction activities, we could be liable for future claims for damages as a result of the past or present use of hazardous materials, including building materials which in the future become known or are suspected to be hazardous. Any such claims may adversely affect our business, financial condition and operating results. Insurance coverage for such claims may be limited or non-existent.

Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

Litigation and concern about indoor exposure to certain types of toxic molds have been increasing as the public becomes increasingly aware that exposure to mold can cause a variety of health effects and symptoms, including allergic reactions. Toxic molds can be found almost anywhere; they can grow on virtually any organic substance, as long as moisture and oxygen are present. There are molds that can grow on wood, paper, carpet, foods and insulation. When excessive moisture accumulates in buildings or on building materials, mold growth will often occur, particularly if the moisture problem remains undiscovered or unaddressed. It is impossible to eliminate all mold and mold spores in the indoor environment. If mold or other airborne contaminants exist or appear at our properties, we may have to undertake a costly remediation program to contain or remove the contaminants or increase indoor ventilation. If indoor air quality were impaired, we could be liable to our homebuyers or others for property damage or personal injury.

We may not be able to compete effectively against competitors in the homebuilding industry, especially in the new markets we plan to enter.

Competition in the homebuilding industry is intense, and there are relatively low barriers to entry into our business. Homebuilders compete for, among other things, home buying customers, desirable land parcels, financing, raw materials and skilled labor. Increased competition could hurt our business, as it could prevent us from acquiring attractive land parcels on which to build homes or make such acquisitions more expensive, hinder

our market share expansion and lead to pricing pressures on our homes that may adversely impact our margins and revenues. If we are unable to successfully compete, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected. We compete with large national and regional homebuilding companies and with smaller local homebuilders for land, financing, raw materials and skilled management and labor resources. Furthermore, a number of our primary competitors are significantly larger, have a longer operating history and may have greater resources or lower cost of capital than ours; accordingly, they may be able to compete more effectively in one or more of the markets in which we operate. Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. As we expand our operations into Nevada, Texas and other areas of the Western United States, we face new competition from many established homebuilders in those markets, and we will not have the benefit of the extensive relationships and strong reputations with subcontractors, suppliers and homebuyers that we enjoy in our Colorado markets. We also compete with the resale, or “previously owned,” home market, which has increased significantly due to the large number of homes that have been foreclosed on or could be foreclosed on due to the recent economic downturn, and with available rental housing.

Raw materials and building supply shortages and price fluctuations could delay or increase the cost of home construction and adversely affect our operating results.

The homebuilding industry has, from time to time, experienced raw material shortages and been adversely affected by volatility in global commodity prices. In particular, shortages and fluctuations in the price of concrete, drywall, lumber or other important raw materials could result in delays in the start or completion of, or increase the cost of, developing one or more of our residential communities.

In addition, the cost of petroleum products, which are used both to deliver our materials and to transport workers to our job sites, fluctuates and may be subject to increased volatility as a result of geopolitical events or accidents such as the Deepwater Horizon accident in the Gulf of Mexico. Changes in such costs could also result in higher prices for any product utilizing petrochemicals. These cost increases may have an adverse effect on our operating margin and results of operations and may result in a decline in the price of our common stock. Furthermore, any such cost increase may adversely affect the regional economies in which we operate and reduce demand for our homes.

Increases in our cancellation rate could have a negative impact on our home sales revenue and homebuilding margins.

Our backlog reflects sales contracts with our homebuyers for homes that have not yet been delivered. We have received a deposit from a homebuyer for each home reflected in our backlog, and generally we have the right to retain the deposit if the homebuyer fails to comply with his or her obligations under the sales contract, subject to certain exceptions, including as a result of state and local law, the homebuyer’s inability to sell his or her current home or, in certain circumstances, the homebuyer’s inability to obtain suitable financing. Home order cancellations negatively impact the number of closed homes, net new home orders, home sales revenue and results of operations, as well as the number of homes in backlog. Home order cancellations can result from a number of factors, including declines or slow appreciation in the market value of homes, increases in the supply of homes available to be purchased, increased competition, higher mortgage interest rates, homebuyers’ inability to sell their existing homes, homebuyers’ inability to obtain suitable financing, including providing sufficient down payments, and adverse changes in economic conditions. An increase in the level of our home order cancellations could have a negative impact on our business, prospects, liquidity, financial condition and results of operations.

Homebuilding is subject to product liability and warranty claims arising in the ordinary course of business that can be significant.

As a homebuilder, we are subject to home warranty and construction defect claims arising in the ordinary course of business. There can be no assurance that any developments we undertake will be free from defects once

completed. Construction defects may occur on projects and developments and may arise during a significant period of time after completion. Defects arising on a development attributable to us may lead to significant contractual or other liabilities.

As a consequence, we maintain products and completed operations excess liability insurance, obtain indemnities and certificates of insurance from subcontractors generally covering claims related to damages resulting from faulty workmanship and materials, and create warranty and other reserves for the homes we sell based on historical experience in our markets and our judgment of the risks associated with the types of homes built. Although we actively monitor our insurance reserves and coverage, because of the uncertainties inherent to these matters, we cannot provide assurance that our insurance coverage, our subcontractor arrangements and our reserves will be adequate to address all of our warranty and construction defect claims in the future. In addition, contractual indemnities can be difficult to enforce. We may also be responsible for applicable self-insured retentions, and some types of claims may not be covered by insurance or may exceed applicable coverage limits. Additionally, the coverage offered by and the availability of products and completed operations excess liability insurance for construction defects is currently limited and costly. This coverage may be further restricted or become more costly in the future.

In addition, we have plans to conduct, in the future, a portion of our business in California, one of the most highly regulated and litigious jurisdictions in the United States, which imposes a ten-year, strict liability tail on most construction liability claims. As a result, we may be exposed to potential losses and expenses due to litigation, new laws and regulations related to our planned California operations.

Unexpected expenditures attributable to defects or previously unknown sub-surface conditions arising on a development project may have a material adverse effect on our business, financial condition and operating results. In addition, severe or widespread incidents of defects giving rise to unexpected levels of expenditure, to the extent not covered by insurance or redress against subcontractors, may adversely affect our business, financial condition and operating results.

We may suffer uninsured losses or suffer material losses in excess of insurance limits.

We could suffer physical damage to property and liabilities resulting in losses that may not be fully compensated by insurance. In addition, certain types of risks, such as personal injury claims, may be, or may become in the future, either uninsurable or not economically insurable, or may not be currently or in the future covered by our insurance policies. Should an uninsured loss or a loss in excess of insured limits occur, we could sustain financial loss or lose capital invested in the affected property as well as anticipated future income from that property. In addition, we could be liable to repair damage or meet liabilities caused by uninsured risks. We may be liable for any debt or other financial obligations related to affected property. Material losses or liabilities in excess of insurance proceeds may occur in the future.

In the United States, the coverage offered and the availability of general liability insurance for construction defects is currently limited and is costly. As a result, an increasing number of our subcontractors in the United States may be unable to obtain insurance. If we cannot effectively recover construction defect liabilities and costs of defense from our subcontractors or their insurers, or if we have self-insured, we may suffer losses. Coverage may be further restricted and become even more costly. Such circumstances could adversely affect our business, financial condition and operating results.

Our operating performance is subject to risks associated with the real estate industry.

Real estate investments are subject to various risks and fluctuations and cycles in value and demand, many of which are beyond our control. Certain events may decrease cash available for operations, as well as the value of our real estate assets. These events include, but are not limited to:

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adverse changes in financial conditions of buyers and sellers of properties, particularly residential homes and land suitable for development of residential homes;

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adverse changes in international, national or local economic and demographic conditions;

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competition from other real estate investors with significant capital, including other real estate operating companies and developers and institutional investment funds;

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reductions in the level of demand for and increases in the supply of land suitable for development;

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fluctuations in interest rates, which could adversely affect our ability, or the ability of homebuyers, to obtain financing on favorable terms or at all;

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unanticipated increases in expenses, including, without limitation, insurance costs, development costs, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies; and

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changes in enforcement of laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws, governmental fiscal policies and the Americans with Disabilities Act of 1990.

In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in the purchase of homes or an increased incidence of home order cancellations. If we cannot successfully implement our business strategy, our business, prospects, liquidity, financial condition and results of operations will be adversely affected.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties for reasonable prices in response to changing economic, financial and investment conditions may be limited and we may be forced to hold non-income producing properties for extended periods of time.

Real estate investments are relatively difficult to sell quickly. As a result, our ability to promptly sell one or more properties in response to changing economic, financial and investment conditions is limited and we may be forced to hold non-income producing assets for an extended period of time. We cannot predict whether we will be able to sell any property for the price or on the terms that we set or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

If the market value of our land inventory decreases, our results of operations could be adversely affected by impairments and write-downs.

The market value of our land and housing inventories depends on market conditions. We acquire land for expansion into new markets and for replacement of land inventory and expansion within our current markets. There is an inherent risk that the value of the land owned by us may decline after purchase. The valuation of property is inherently subjective and based on the individual characteristics of each property. We may have acquired options on or bought and developed land at a cost we will not be able to recover fully or on which we cannot build and sell homes profitably. In addition, our deposits for lots controlled under option or similar contracts may be put at risk.

Factors, such as changes in regulatory requirements and applicable laws (including in relation to building regulations, taxation and planning), political conditions, the condition of financial markets, both local and national economic conditions, the financial condition of customers, potentially adverse tax consequences, and

interest and inflation rate fluctuations, subject land valuations to uncertainty. Moreover, all valuations are made on the basis of assumptions that may not prove to reflect economic or demographic reality. If housing demand decreases below what we anticipated when we acquired our inventory, our profitability may be adversely affected and we may not be able to recover our costs when we sell and build houses.

Due to economic conditions in the United States in recent years, including increased amounts of home and land inventory that entered certain U.S. markets from foreclosure sales or short sales, the market value of our land and home inventory was negatively impacted. We regularly review the value of our land holdings and continue to review our holdings on a periodic basis. Material write-downs and impairments in the value of our inventory may be required, and we may in the future sell land or homes at a loss, which could adversely affect our results of operations and financial condition.

Inflation could adversely affect our business and financial results.

Inflation could adversely affect us by increasing the costs of land, materials and labor needed to operate our business. In the event of an increase in inflation, we may seek to increase the sales prices of homes in order to maintain satisfactory margins. However, an oversupply of homes relative to demand and home prices being set several months before homes are delivered may make any such increase difficult or impossible. In addition, inflation is often accompanied by higher interest rates, which historically have had a negative impact on housing demand. In such an environment, we may not be able to raise home prices sufficiently to keep up with the rate of inflation and our margins could decrease. Moreover, the cost of capital increases as a result of inflation and the purchasing power of our cash resources declines. Current or future efforts by the government to stimulate the economy may increase the risk of significant inflation and its adverse impact on our business or financial results.

Our quarterly operating results may fluctuate because of the seasonal nature of our business and other factors.

Our quarterly operating results generally fluctuate by season. Historically, we have entered into a larger percentage of contracts for the sale of our homes during the spring and summer months. Weather-related problems, typically in the fall, late winter and early spring, may delay starts or closings and increase costs and thus reduce profitability. Seasonal natural disasters such as floods and fires could cause delays in the completion of, or increase the cost of, developing one or more of our communities, causing an adverse effect on our sales and revenues.

In many cases, we may not be able to recapture increased costs by raising prices. In addition, deliveries may be staggered over different periods of the year and may be concentrated in particular quarters. Our quarterly operating results may fluctuate because of these factors.

We will become subject to financial reporting and other requirements as a public company for which our accounting and other management systems and resources may not be adequately prepared.

As a public company with listed equity securities, we will need to comply with new laws, regulations and requirements, including the requirements of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”), certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (which we refer to as the “Sarbanes-Oxley Act”), related regulations of the U.S. Securities and Exchange Commission (which we refer to as the “SEC”) and requirements of the New York Stock Exchange, with which we were not required to comply as a private company. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting.

Section 404 of the Sarbanes-Oxley Act requires our management and independent auditors to report annually on the effectiveness of our internal control over financial reporting. However, we are an “emerging growth company,” as defined in the JOBS Act, and, so for as long as we continue to be an emerging growth

company, we intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent auditors on the effectiveness of our internal control over financial reporting.

We would cease to be an “emerging growth company” upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of this offering, (ii) the first fiscal year after our annual gross revenues are $1.0 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

We have begun the very early stages of the costly and challenging process of compiling the system and processing the documentation necessary to perform the evaluation needed to comply with Section 404 of the Sarbanes-Oxley Act. Prior to this evaluation and testing process, we have identified certain material weaknesses and significant deficiencies in our internal controls due to the absence of formalized and documented policies and procedures for current record keeping, and a lack of personnel within our accounting function that possessed expertise to perform certain functions. These material weaknesses resulted in certain misstatements in our financial statements which led us to restate our financial statements on two separate occasions. We are currently in the process of remediating these material weaknesses by (i) documenting and formalizing our internal controls and financial reporting policies and procedures, including implementing additional controls over our financial close process, (ii) hiring additional resources with significant experience to our accounting team, and (iii) instituting appropriate review and oversight responsibilities within our accounting team. We anticipate that we will have fully remediated the material weaknesses prior to June 30, 2014.

These reporting and other obligations will place significant demands on our management, administrative, operational, and accounting resources and will cause us to incur significant expenses. We may need to upgrade our systems or create new systems, implement additional financial and management controls, reporting systems and procedures, create or outsource an internal audit function, and hire additional accounting and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply to reporting companies could be impaired. Any failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

We also expect that being a public company and these rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in the Company and, as a result, the value of our common stock.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of our fiscal year 2015. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

We are in the very early stages of the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404 of the Sarbanes-Oxley Act. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. Prior to this evaluation and testing process, on two separate occasions we identified material weaknesses in our internal controls and certain misstatements in our financial statements attributable to accounting periods prior to our retention of our current Chief Financial Officer, which led us to restate our financial statements. We are currently in the process of remediating these material weaknesses, including hiring additional resources and implementing changes in our internal control processes over financial reporting.

If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.

We will be required to disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act, if we continue to take advantage of the exemptions contained in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Our remediation efforts may not enable us to avoid a material weakness in the future. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.

We will incur increased costs as a result of being a public company.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, rules implemented by the SEC and the New York Stock Exchange require changes in corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We will also incur additional costs associated with our public company reporting requirements. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, particularly to serve on our audit committee and compensation committee, or as executive officers.

Acts of war or terrorism may seriously harm our business.

Acts of war, any outbreak or escalation of hostilities between the United States and any foreign power or acts of terrorism may cause disruption to the U.S. economy, or the local economies of the markets in which we operate, cause shortages of building materials, increase costs associated with obtaining building materials, result

in building code changes that could increase costs of construction, affect job growth and consumer confidence or cause economic changes that we cannot anticipate, all of which could reduce demand for our homes and adversely impact our business, prospects, liquidity, financial condition and results of operations.

Negative publicity may affect our business performance and could affect our stock price.

Unfavorable media related to our industry, company, brands, marketing, personnel, operations, business performance or prospects may affect our stock price and the performance of our business, regardless of its accuracy or inaccuracy. Our success in maintaining, extending and expanding our brand image depends on our ability to adapt to a rapidly changing media environment. Adverse publicity or negative commentary on social media outlets, such as blogs, websites or newsletters, could hurt operating results, as consumers might avoid brands that receive bad press or negative reviews. Negative publicity may result in a decrease in operating results that could lead to a decline in the price of our common stock and cause you to lose all or a portion of your investment.

Failure to manage land acquisitions and development and construction processes could result in significant cost overruns or errors in valuing sites.

We own and purchase a large number of sites each year and are therefore dependent on our ability to process a very large number of transactions (which include, among other things, evaluating the site purchase, designing the layout of the development, sourcing materials and subcontractors and managing contractual commitments) efficiently and accurately. Errors by employees, failure to comply with regulatory requirements and conduct of business rules, failings or inadequacies in internal control processes, inabilities to obtain desired approvals and entitlements, cost overruns, equipment failures, natural disasters or the failure of external systems, including those of our suppliers or counterparties, could result in operational losses that could adversely affect our business, financial condition and operating results and our relationships with our customers.

We may incur a variety of costs to engage in future growth or expansion of our operations or acquisitions or disposals of businesses, and the anticipated benefits may never be realized.

As a part of our business strategy, we may make acquisitions, or significant investments in, and/or disposals of businesses. Any future acquisitions, investments and/or disposals would be accompanied by risks such as:

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difficulties in assimilating the operations and personnel of acquired companies or businesses;

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diversion of our management’s attention from ongoing business concerns;

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our potential inability to maximize our financial and strategic position through the successful incorporation or disposition of operations;

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maintenance of uniform standards, controls, procedures and policies; and

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impairment of existing relationships with employees, contractors, suppliers and customers as a result of the integration of new management personnel and cost-saving initiatives.

We cannot guarantee that we will be able to successfully integrate any company or business that we might acquire in the future, and our failure to do so could harm our current business.

In addition, we may not realize the anticipated benefits of these transactions and there may be other unanticipated or unidentified effects. While we would seek protection, for example, through warranties and indemnities in the case of acquisitions, significant liabilities may not be identified in due diligence or come to light after the expiry of warranty or indemnity periods. Additionally, while we would seek to limit our ongoing exposure, for example, through liability caps and period limits on warranties and indemnities in the case of disposals, some warranties and indemnities may give rise to unexpected and significant liabilities. Any claims arising in the future may adversely affect our business, financial condition and operating results.

Furthermore, our acquisition of LVLH will be accounted for as a business combination in accordance with the Company’s accounting policies with the acquired assets and assumed liabilities recorded at their estimated fair values as of April 1, 2014. Based upon our preliminary estimates of the fair value of the assets to be acquired and the liabilities to be assumed, we anticipate recording a significant step up to LVLH’s historical basis for inventories. As homes are delivered in future periods, this step up may result in gross margins from home sales revenues that are comparable to the gross margins realized by the Company during the three months ended March 31, 2014 and 2013 and the years ended December 31, 2013 and 2012. However, the ultimate gross margins from home sales revenues that we will be able to achieve will be impacted by (1) the final valuation assigned to acquired inventories as we complete the purchase price accounting for the LVLH Acquisition, (2) our ability to construct homes at prices consistent with our forecasted budgets, and (3) future pricing increases or decreases based on market demand, and such gross margins may be less than the gross margins realized by the Company during the three months ended March 31, 2014 and 2013 and the years ended December 31, 2013 and 2012.

Poor relations with the residents of our communities could negatively impact sales, which could cause our revenues or results of operations to decline.

Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities. Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents and subsequent actions by these residents could adversely affect sales or our reputation. In addition, we could be required to make material expenditures related to the settlement of such issues or disputes or to modify our community development plans, which could adversely affect our results of operations.

We may be subject to various risks relating to our future plan to vertically integrate mortgage lending into our business.

In the future, we plan to vertically integrate mortgage lending into our business, which will enable us to provide financing to our homebuyers. There are risks involved with engaging in the mortgage lending business, including establishing sufficient stringent underwriting standards, so as to limit the level of foreclosures experienced on mortgages originated by us. We may hold some of the loans we originate to maturity; however, in order to finance our planned mortgage business, we will most likely sell the loans we originate, either as whole loans or pursuant to a securitization. It is customary in connection with such transactions for the originator, such as we would be, to make representations and warranties to the purchasers, guarantors and insurers about the mortgage loans and the manner in which they were originated and to offer certain indemnities and guaranties to the purchasers, guarantors and insurers. In the event of defaults on the loans we originate, we may be required to repurchase or substitute mortgage loans, or indemnify buyers, guarantors or insurers of our loans. Because we have limited experience in originating and underwriting home loans, our underwriting standards may not be as stringent as a more traditional lender, and accordingly, we may experience a higher rate of default than lenders who have engaged in the mortgage lending industry for a longer period of time. Moreover, the loans we originate will be limited primarily to buyers of our homes, so our pool of borrowers will be less diverse than as would be the case with a traditional lender, and thus there could be a higher correlation in the default rate with our borrowers. In addition, because we would be originating loans to buyers of our homes, there is the risk that we may be more incentivized, compared to more traditional lenders, to lower our underwriting standards in order to close home sales. Should our underwriting standards not adequately screen quality applicants, the default rate on the loans we originate may be higher, which could have an adverse impact on our results of operations and financial condition, either because the loans we own are no longer performing or because we are required to repurchase or otherwise indemnify purchasers, guarantors or insurers of the loans we sell or securitize.

Risk Related to Conflicts of Interest

As a result of Dale Francescon’s and Robert Francescon’s relationship with the Company, conflicts of interest may arise with respect to any transactions involving or with Dale Francescon, Robert Francescon, or their affiliates, and their interests may not be aligned with yours.

Dale Francescon and Robert Francescon are our Co-Chief Executive Officers, sit on our board of directors, and collectively beneficially own 5,766,186 shares of our common stock, which will represent % of our common stock outstanding immediately after this offering, or % if the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock in this offering. For so long as Dale Francescon and Robert Francescon continue to beneficially own a significant stake in us, they will have significant influence over the power to:

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elect our directors and exercise overall control over the Company;

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agree to sell or otherwise transfer a controlling stake in the Company; and

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determine the outcome of substantially all actions requiring the majority approval of our stockholders, including transactions with related parties, corporate reorganizations, mergers, acquisitions and dispositions of assets.

The interests of Dale Francescon and Robert Francescon may not be fully aligned with yours, and this could lead to a strategy that is not in your best interests. In addition, their significant ownership in us and resulting ability to effectively control us will limit your ability to influence corporate matters and may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including transactions in which you as a holder of shares of our common stock might otherwise receive a premium for your shares over the then-current market price.

In addition, there may be transactions between us and Dale Francescon, Robert Francescon, or their affiliates that could present an actual or perceived conflict of interest. These conflicts of interest may lead Dale and/or Robert Francescon to recuse himself or themselves from actions of our board of directors with respect to any transactions involving or with Dale or Robert Francescon or their affiliates. For example, we have entered into employment agreements with Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, in their capacities as officers, pursuant to which they are required to devote substantially full-time attention to our affairs. See “Executive and Director Compensation—Employment Agreements.” These employment agreements were not negotiated on an arm’s-length basis. We may choose not to enforce, or to enforce less vigorously, our rights under these agreements because of our desire to maintain our ongoing relationship with the individuals party to these agreements.

Risks Related to Our Indebtedness

We expect to use leverage in executing our business strategy, which may adversely affect the return on our assets.

We may incur a substantial amount of debt in the future. Our existing indebtedness is recourse to us and we anticipate that future indebtedness will likewise be recourse. As of May 15, 2014, we had $100 million of aggregate borrowing capacity under our current revolving credit facility, of which no amount was outstanding. Our board of directors will consider a number of factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the purchase price of assets to be acquired with debt financing, the estimated market value of our assets and the ability of particular assets, and the Company as a whole, to generate cash flow to cover the expected debt service. Our charter does not contain a limitation on the amount of debt we may incur and our board of directors may change our target debt levels at any time without the approval of our stockholders.

Incurring a substantial amount of debt could have important consequences for our business, including:

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making it more difficult for us to satisfy our obligations with respect to our debt or to our trade or other creditors;

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increasing our vulnerability to adverse economic or industry conditions;

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limiting our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is limited;

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requiring a substantial portion of our cash flows from operations and the proceeds from this offering for the payment of interest on our debt and reducing our ability to use our cash flows and the proceeds from this offering to fund working capital, capital expenditures, acquisitions and general corporate requirements;

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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

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placing us at a competitive disadvantage to less leveraged competitors.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us through capital markets financings or under our credit facilities or otherwise in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, on or before its maturity. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. In addition, we may incur additional indebtedness in order to finance our operations or to repay existing indebtedness. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional debt or equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would be advantageous to our stockholders or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.

Access to financing sources may not be available on favorable terms, or at all, especially in light of current market conditions, which could adversely affect our ability to maximize our returns.

We expect to employ prudent levels of leverage to finance the acquisition and development of our lots and construction of our homes. Our existing indebtedness is recourse to us and we anticipate that future indebtedness will likewise be recourse. As of May 15, 2014, we had $100 million of aggregate borrowing capacity under our current revolving credit facility, of which no amount was outstanding. Our access to additional third-party sources of financing will depend, in part, on:

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general market conditions;

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the market’s perception of our growth potential;

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with respect to acquisition and/or development financing, the market’s perception of the value of the land parcels to be acquired and/or developed;

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our current debt levels;

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our current and expected future earnings;

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our cash flow; and

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the market price per share of our common stock.

Recently, domestic financial markets have experienced unusual volatility, uncertainty and a tightening of liquidity in both the investment grade debt and equity capital markets. Credit spreads for major sources of capital widened significantly during the U.S. credit crisis as investors demanded a higher risk premium. Given the current volatility and weakness in the capital and credit markets, potential lenders may be unwilling or unable to

provide us with financing that is attractive to us or may charge us prohibitively high fees in order to obtain financing. Consequently, there is greater uncertainty regarding our ability to access the credit market in order to attract financing on reasonable terms. Investment returns on our assets and our ability to make acquisitions could be adversely affected by our inability to secure additional financing on reasonable terms, if at all.

Depending on market conditions at the relevant time, we may have to rely more heavily on additional equity financings or on less efficient forms of debt financing that require a larger portion of our cash flow from operations, thereby reducing funds available for our operations, future business opportunities and other purposes. We may not have access to such equity or debt capital on favorable terms at the desired times, or at all.

Our current financing arrangements contain, and our future financing arrangements likely will contain, restrictive covenants relating to our operations.

Our current financing arrangements contain, and the financing arrangements we enter into in the future likely will contain, covenants (financial and otherwise) affecting our ability to incur additional debt, make certain investments, reduce liquidity below certain levels, make distributions to our stockholders and otherwise affect our operating policies. The restrictions contained in our financing arrangements could also limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans. If we fail to meet or satisfy any of these covenants in our debt agreements we would be in default under these agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral or enforce their respective interests against existing collateral. A default also could limit significantly our financing alternatives, which could cause us to curtail our investment activities and/or dispose of assets when we otherwise would not choose to do so. If we default on several of our debt agreements or any single significant debt agreement, it could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

Secured indebtedness exposes us to the possibility of foreclosure on our ownership interests in our land parcels.

Incurring mortgage and other secured indebtedness increases our risk of loss of our ownership interests in our land parcels or other assets because defaults thereunder, and the inability to refinance such indebtedness, may result in foreclosure action initiated by lenders.

Interest expense on debt we will incur may limit our cash available to fund our growth strategies.

As of May 15, 2014, we had $100 million of aggregate borrowing capacity under our current revolving credit facility, of which no amount was outstanding. As part of our financing strategy, we may incur a significant amount of additional debt. Our current debt has, and any additional debt we subsequently incur may have a floating rate of interest. Higher interest rates could increase debt service requirements on our current floating rate debt and on any floating rate debt we subsequently incur, and could reduce funds available for operations, future business opportunities or other purposes. If we need to repay existing debt during periods of rising interest rates, we could be required to refinance our then-existing debt on unfavorable terms or liquidate one or more of our assets to repay such debt at times which may not permit realization of the maximum return on such assets and could result in a loss. The occurrence of either such event or both could materially and adversely affect our cash flows and results of operations.

Interest rate changes may adversely affect us.

We currently do not hedge against interest rate fluctuations. We may obtain in the future one or more forms of interest rate protection—in the form of swap agreements, interest rate cap contracts or similar agreements—to hedge against the possible negative effects of interest rate fluctuations. However, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder. In addition, we may be subject to risks of default by hedging

counterparties. Adverse economic conditions could also cause the terms on which we borrow to be unfavorable. We could be required to liquidate one or more of our assets at times which may not permit us to receive an attractive return on our assets in order to meet our debt service obligations.

We may require additional capital in the future and may not be able to secure adequate funds on terms acceptable to us.

The expansion and development of our business may require significant capital, which we may be unable to obtain, to fund our capital expenditures and operating expenses, including working capital needs. In accordance with our growth strategy, following this offering, we expect to opportunistically raise additional debt capital to help fund the growth of our business, subject to market and other conditions, but such debt capital may not be available to us on a timely basis at reasonable rates or at all.

In the future, we may fail to generate sufficient cash flow from the sales of our homes and land to meet our cash requirements. Further, our capital requirements may vary materially from those currently planned if, for example, our revenues do not reach expected levels or we have to incur unforeseen capital expenditures and make investments to maintain our competitive position. If this is the case, we may require additional financing sooner than anticipated or we may have to delay or abandon some or all of our development and expansion plans or otherwise forego market opportunities.

To a large extent, our cash flow generation ability is subject to general economic, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. We cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs. As a result, we may need to refinance all or a portion of our debt, on or before its maturity, or obtain additional equity or debt financing. We cannot assure you that we will be able to do so on favorable terms, if at all. Any inability to generate sufficient cash flow, refinance our debt or incur additional debt on favorable terms could adversely affect our financial condition and could cause us to be unable to service our debt and may delay or prevent the expansion of our business.

Risks Related to Our Organization and Structure

We depend on key personnel.

Our success depends to a significant degree upon the contributions of certain key personnel including, but not limited to, Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, each of whom would be difficult to replace. Although we have entered into employment agreements with Dale Francescon and Robert Francescon, in their capacities as officers, there is no guarantee that these executives will remain employed with us. If any of our key personnel were to cease employment with us, our operating results could suffer. Further, the process of attracting and retaining suitable replacements for key personnel whose services we may lose would result in transition costs and would divert the attention of other members of our senior management from our existing operations. The loss of services from key personnel or a limitation in their availability could materially and adversely impact our business, prospects, liquidity, financial condition and results of operations. Further, such a loss could be negatively perceived in the capital markets. We have not obtained and do not expect to obtain key man life insurance that would provide us with proceeds in the event of death or disability of any of our key personnel.

We may not be able to successfully operate our business.

Our predecessor was formed in August 2002, and we converted into a Delaware corporation on April 30, 2013. We cannot assure you that our past experience will be sufficient to enable us to operate our business successfully or implement our operating policies and business strategies as described in this prospectus.

Furthermore, we may not be able to generate sufficient operating cash flows to pay our operating expenses or service our indebtedness. You should not rely upon the past performance of our management team, as past performance may not be indicative of our future results.

Termination of the employment agreements with the members of our management team could be costly and prevent a change in control of the Company.

The employment agreements we have entered into with Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, in their capacities as officers, each provide that if their employment with us terminates under certain circumstances, we may be required to pay them significant amounts of severance compensation, thereby making it costly to terminate their employment. Furthermore, these provisions could delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders, which could adversely affect the market price of our common stock.

Certain anti-takeover defenses and applicable law may limit the ability of a third party to acquire control of the Company.

Our charter and bylaws and Delaware law contain provisions that may delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders, which could adversely affect the market price of our common stock. Certain of these provisions are described below.

Selected provisions of our charter and bylaws . Our charter and/or bylaws contain anti-takeover provisions that:

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authorize our board of directors, without further action by the stockholders, to issue up to 50 million shares of preferred stock in one or more series, and with respect to each series, to fix the number of shares constituting that series, the powers, rights and preferences of the shares of that series, and the qualifications, limitations and restrictions of that series;

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require that actions to be taken by our stockholders may be taken only at an annual or special meeting of our stockholders and not by written consent;

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specify that special meetings of our stockholders can be called only by our board of directors, the chairman of our board of directors, our chief executive officer, or our president;

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provide that our bylaws may be amended by our board of directors without stockholder approval;

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provide that directors may be removed from office only by the affirmative vote of the holders of 66 ² / ₃ % of the voting power of our capital stock entitled to vote generally in the election of directors;

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provide that vacancies on our board of directors or newly created directorships resulting from an increase in the number of our directors may be filled only by a vote of a majority of directors then in office, even though less than a quorum;

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provide that, subject to the express rights, if any, of the holders of any series of preferred stock, any amendment, modification or repeal of, or the adoption of any new or additional provision, inconsistent with our charter provisions relating to the removal of directors, exculpation of directors, indemnification, the prohibition against stockholder action by written consent, and the vote of our stockholders required to amend our bylaws requires the affirmative vote of the holders of at least 66 ² / ₃ % of the voting power of our capital stock entitled to vote generally in the election of directors;

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provide that the stockholders may amend, modify or repeal our bylaws, or adopt new or additional provisions of our bylaws, only with the affirmative vote of 66 ² / ₃ % of the voting power of our capital stock entitled to vote generally; and

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establish advance notice procedures for stockholders to submit nominations of candidates for election to our board of directors and other proposals to be brought before a stockholders meeting.

Selected provisions of Delaware law . We are a Delaware corporation, and we have elected to be subject to Section 203 of the DGCL by provision of our charter. In general, Section 203 of the DGCL prevents an “interested stockholder” (as defined in the DGCL) from engaging in a “business combination” (as defined in the DGCL) with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:

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Before that person became an interested stockholder, our board of directors approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination;

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Upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) stock held by directors who are also officers of the Company and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer; or

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Following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least 66 ² / ₃ % of our outstanding voting stock not owned by the interested stockholder.

The DGCL generally defines “interested stockholder” as any person who, together with affiliates and associates, is the owner of 15% or more of our outstanding voting stock or is our affiliate or associate and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination.

See “Description of Capital Stock—Certain Provisions of Delaware Law, Our Charter and Bylaws” for additional information regarding these provisions.

We may change our operational policies, investment guidelines and business and growth strategies without stockholder consent, which may subject us to different and more significant risks in the future.

Our board of directors determines our operational policies, investment guidelines and business and growth strategies. Our board of directors may make changes to, or approve transactions that deviate from, those policies, guidelines and strategies without a vote of, or notice to, our stockholders. This could result in us conducting operational matters, making investments or pursuing different business or growth strategies than those contemplated in this prospectus. Under any of these circumstances, we may expose ourselves to different and more significant risks in the future, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

If we fail to implement and maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial results, which could materially and adversely affect us.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We have identified certain material weaknesses in our internal controls due to the absence of formalized and documented policies and procedures for current record keeping, and a lack of personnel within our accounting function that possessed expertise to perform certain functions. These material weaknesses resulted in certain misstatements in our financial statements which led us to restate our financial statements on two separate occasions. We are currently in the process of remediating these material weaknesses by (i) documenting and

formalizing our internal controls and financial reporting policies and procedures, including implementing additional controls over our financial close process, (ii) hiring additional resources with significant experience to our accounting team, and (iii) instituting appropriate review and oversight responsibilities within our accounting team. We anticipate that we will have fully remediated the material weaknesses prior to June 30, 2014.

There is no assurance that additional material weaknesses or significant deficiencies will not be identified in the future or that we will be successful in adequately remediating the material weaknesses and significant deficiencies. We may again in the future discover areas of our internal controls that need improvement. We cannot be certain that we will be successful in implementing or maintaining adequate internal control over our financial reporting and financial processes. Furthermore, as we grow our business, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective. Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements again, cause us to fail to meet our reporting obligations and cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us.

We are an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, a requirement to present only two years of audited financial statements, an exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act, reduced disclosure about executive compensation arrangements pursuant to the rules applicable to smaller reporting companies and no requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements. We have elected to adopt these reduced disclosure requirements. We could be an emerging growth company until the last day of the fiscal year following the fifth anniversary of the completion of this offering, although a variety of circumstances could cause us to lose that status earlier.

In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised financial accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have determined to opt out of such extended transition period and, as a result, we will comply with new or revised financial accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised financial accounting standards is irrevocable.

We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If some investors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may be more volatile.

Changes in accounting rules, assumptions and/or judgments could materially and adversely affect us.

Accounting rules and interpretations for certain aspects of our operations are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of our financial statements. Furthermore, changes in accounting rules and interpretations or in our accounting assumptions and/or judgments, such as asset impairments, could significantly impact our financial statements. In some cases, we could be required to apply a new or revised standard retroactively, resulting in

restating prior period financial statements. Any of these circumstances could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.

We may face substantial damages or be enjoined from pursuing important activities as a result of existing or future litigation, arbitration or other claims.

In our homebuilding activities, we are exposed to potentially significant litigation, including breach of contract, contractual disputes and disputes relating to defective title, property misdescription or construction defects, including use of defective materials. Although we have established warranty, claim and litigation reserves that we believe are adequate, due to the uncertainty inherent in litigation, legal proceedings may result in the award of substantial damages against us beyond our reserves. Furthermore, plaintiffs may in certain of these legal proceedings seek class action status with potential class sizes that vary from case to case. Class action lawsuits can be costly to defend, and if we were to lose any certified class action suit, it could result in substantial liability for us. In addition, we are subject to potential lawsuits, arbitration proceedings and other claims in connection with our business.

With respect to certain general liability exposures, including construction defect and product liability claims, interpretation of underlying current and future trends, assessment of claims and the related liability and reserve estimation process require us to exercise significant judgment due to the complex nature of these exposures, with each exposure often exhibiting unique circumstances. Furthermore, once claims are asserted for construction defects, it is difficult to determine the extent to which the assertion of these claims will expand geographically. As a result, our insurance policies may not be available or adequate to cover any liability for damages, the cost of repairs, and/or the expense of litigation surrounding current claims, and future claims may arise out of events or circumstances not covered by insurance and not subject to effective indemnification agreements with our subcontractors. Should such a situation arise, it may have a material adverse effect on our business, financial condition and operating results.

Any joint venture investments that we make could be adversely affected by our lack of sole decision making authority, our reliance on co-venturers’ financial conditions and disputes between us and our co-venturers.

Although it is currently not a focus in our business strategy, we may co-invest in the future with third parties through partnerships, joint ventures or other entities, acquiring non-controlling interests in or sharing responsibility for managing the affairs of a land acquisition and/or a development. In this event, we would not be in a position to exercise sole decision-making authority regarding the acquisition and/or development, and our investment may be illiquid due to our lack of control. Investments in partnerships, joint ventures, or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt, fail to fund their share of required capital contributions, make poor business decisions or block or delay necessary decisions. Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture. Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.

An information systems interruption or breach in security could adversely affect us.

We rely on fully integrated accounting, financial and operational management information systems to conduct our operations. Any disruption in these systems could adversely affect our ability to conduct our business. Furthermore, any security breach of information systems or data could result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, and a loss of confidence in our security measures, which could harm our business.

Risks Related to this Offering and Ownership of our Common Stock

There is currently no public market for the shares of our common stock. Although we have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS,” an active trading market for the shares of our common stock may never develop or if one develops, it may not be sustained following this offering. Accordingly, no assurance can be given as to the following:

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the likelihood that an active trading market for shares of our common stock will develop or be sustained;

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the liquidity of any such market;

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the ability of our stockholders to sell their shares of common stock; or

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the price that our stockholders may obtain for their common stock.

If an active market for our common stock does not develop or is not maintained, the market price of our common stock may decline and you may not be able to sell your shares. Even if an active trading market develops for our common stock subsequent to this offering, the market price of our common stock may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory action, tax laws, interest rates and market conditions in general could have a significant impact on the future market price of our common stock.

Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include:

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actual or anticipated variations in our quarterly operating results;

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changes in market valuations of similar companies;

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adverse market reaction to the level of our indebtedness;

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additions or departures of key personnel;

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actions by stockholders;

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speculation in the press or investment community;

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general market, economic and political conditions, including an economic slowdown or dislocation in the global credit markets;

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our operating performance and the performance of other similar companies;

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changes in accounting principles; and

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passage of legislation or other regulatory developments that adversely affect us or the homebuilding industry.

The offering price per share of our common stock offered under this prospectus may not accurately reflect the value of your investment.

Prior to this offering there has been no market for our common stock. The offering price per share of our common stock offered by this prospectus was negotiated between us and the underwriters. Factors considered in determining the price of our common stock include:

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the history and prospects of companies whose principal business is the design, construction and sale of single-family homes;

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prior offerings of those companies;

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our prospects for acquiring land parcels for development at attractive values;

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our capital structure;

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an assessment of our management and its experience in acquiring land parcels and designing, constructing and selling homes;

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general conditions of the securities markets at the time of this offering; and

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other factors we deemed relevant.

The offering price may not accurately reflect the value of our common stock and may not be realized upon any subsequent disposition of the shares.

If you purchase common stock in this offering, you will experience immediate dilution.

The offering price of our common stock is higher than the net tangible book value per share of our common stock outstanding upon the completion of this offering. Accordingly, if you purchase common stock in this offering, you will experience immediate dilution of approximately $ in the net tangible book value per share of our common stock, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus. This means that investors that purchase shares of our common stock in this offering will pay a price per share that exceeds the per share net tangible book value of our assets.

If securities analysts do not publish research or reports about our business, or if they downgrade our common stock, the price of our common stock could decline.

The trading market for our common stock could be influenced by any research and reports that securities or industry analysts publish about us or our business. We do not currently have, and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of the Company, the trading price for our common stock would be negatively impacted. In the event securities or industry analysts cover the Company and one or more of these analysts downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of the Company or fail to publish reports on us regularly, demand for our common stock could decrease, which could cause our common stock price and trading volume to decline.

We currently do not intend to pay dividends on our common stock.

We currently intend to retain our future earnings, if any, to finance the development and expansion of our business. The determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments and such other factors as our board of directors deems relevant in its discretion. Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them, or at all for an indefinite period of time, except as permitted under the Securities Act and the applicable securities laws of any other jurisdiction.

We have broad discretion to use the proceeds from this offering, and our investment of those proceeds may not yield a favorable return.

Our management has broad discretion to use the proceeds from this offering in ways with which you may not agree. The failure of our management to apply these funds effectively could result in unfavorable returns. This could harm our business and could cause the market value of our common stock to decline.

Future sales of our common stock, other securities convertible into our common stock or preferred stock could cause the market value of our common stock to decline and could result in dilution of your shares.

Our board of directors is authorized, without your approval, to cause us to issue additional shares of our common stock or to raise capital through the creation and issuance of preferred stock, other debt securities convertible into common stock, options, warrants and other rights, on terms and for consideration as our board of directors in its sole discretion may determine. Sales of substantial amounts of our common stock or of preferred stock could cause the market price of our common stock to decrease significantly. We cannot predict the effect, if any, of future sales of our common stock, or the availability of our common stock for future sales, on the value of our common stock. Sales of substantial amounts of our common stock by Dale or Robert Francescon or another large stockholder, or the perception that such sales could occur, may adversely affect the market price of our common stock.

In connection with the May 2013 private offering and private placement, each of our officers and directors entered into a lock-up agreement pursuant to which they agreed, subject to various exceptions, not to sell, pledge or otherwise dispose of or transfer any shares of our common stock or any securities convertible into or exchangeable for shares of our common, or, subject to various exceptions, file any registration statement with the SEC for a period of 180 days after the date of the effectiveness of any registration statement filed pursuant to the registration rights agreement we entered into in connection with the May 2013 private offering and private placement, including the registration statement of which this prospectus forms a part. These lock-up provisions, at any time and without notice, may be released by FBR Capital Markets & Co. in its sole discretion.

In addition, in connection with this offering, subject to certain exceptions, each of our officers and directors and certain significant stockholders has entered into a lock-up agreement that restricts the direct or indirect sale of shares of our common stock beneficially held by such person for 180 days after the date of this prospectus without the prior written consent of the representatives of the underwriters. In addition, all of our other stockholders have agreed with us not to directly or indirectly sell, offer to sell, grant any option or otherwise transfer or dispose of shares of our common stock for 180 days after the date of this prospectus, in the case of the selling stockholders in this offering, or 60 days after the date of this prospectus, in the case of stockholders who are not selling shares of our common stock in this offering; provided, however, that such restrictions shall not apply to (a) sales of common stock by the selling stockholders in this offering, (b) with respect to any of our stockholders (other than our officers, directors, managers or employees) the sale of shares of common stock acquired by them in the open market after the completion of this offering, and (c) proportionate sales by our existing stockholders as allowed to any officer or director under their respective lock-up agreements. We have agreed not to waive or otherwise modify that agreement without the prior written consent of the representatives of the underwriters. The representatives of the underwriters may, at any time, release, or authorize us to release, as the case may be, all or a portion of our common stock subject to the foregoing lock-up provisions. If the restrictions under the lock-up provisions of the lock-up agreements entered into in connection with this offering and the May 2013 private offering and private placement are waived, shares of our common stock may become available for sale into the market, subject to applicable law, which could reduce the market price for our common stock.

In addition, subsequent to the effectiveness of the registration statement of which this prospectus forms a part, we intend to file a registration statement on Form S-8 to register the total number of shares of our common stock that may be issued under our 2013 Long-Term Incentive Plan, including the shares of restricted stock granted to our executive officers and directors, as well as the options to purchase shares of our common stock to be granted to our executive officers. Upon registration, these shares of common stock will be eligible for sale without restriction.

Future offerings of debt securities, which would rank senior to our common stock upon our bankruptcy liquidation, and future offerings of equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our common stock.

In the future, we may attempt to increase our capital resources by making offerings of debt securities or additional offerings of equity securities. Upon bankruptcy or liquidation, holders of our debt securities and

lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on dividend payments or both that could limit our ability to pay dividends or make liquidating distributions to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control. As a result, we cannot predict or estimate the amount, timing or nature of our future offerings, and purchasers of our common stock in this offering bear the risk of our future offerings reducing the market price of our common stock and diluting their ownership interest in the Company.

Non-U.S. holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock.

Because of our holdings in United States real property interests, we believe we are a “United States real property holding corporation” (which we refer to as “USRPHC”) for United States federal income tax purposes. As a USRPHC, our stock may be treated as a United States real property interest (which we refer to as “USRPI”), gains from the sale of which by non-U.S. holders would be subject to U.S. income tax and reporting obligations pursuant to the Foreign Investment in Real Property Tax Act (which we refer to as “FIRPTA”), as described under “Certain Material Federal Income Tax Considerations—Taxation of Non-U.S. Holders—Sales or Other Taxable Dispositions of Shares of Our Common Stock.” Our common stock will not be treated as a USRPI if it is regularly traded on an established securities market, except in the case of a non-U.S. holder that actually or constructively holds more than five percent of such class of stock at any time during the shorter of the five-year period preceding the date of disposition or the holder’s holding period for such stock. We anticipate that our common stock will be regularly traded on an established securities market following this offering. However, no assurance can be given in this regard and no assurance can be given that our common stock will remain regularly traded in the future. If our stock is treated as a USRPI, a non-U.S. holder would be subject to regular United States federal income tax with respect to any gain on such stock in the same manner as a taxable U.S. holder (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). In addition, the purchaser of the stock would be required to withhold and remit to the IRS 10% of the purchase price unless an exception applies. A non-U.S. holder also would be required to file a U.S. federal income tax return for any taxable year in which it realizes a gain from the disposition of our common stock that is subject to U.S. federal income tax.

Non-U.S. holders should consult their tax advisors concerning the consequences of disposing of shares of our common stock.

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Various statements contained in this prospectus, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this prospectus speak only as of the date of this prospectus, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements:

•

economic changes either nationally or in the markets in which we operate, including declines in employment, volatility of mortgage interest rates and inflation;

•

continued or increased downturn in the homebuilding industry;

•

changes in assumptions used to make industry forecasts;

•

continued volatility and uncertainty in the credit markets and broader financial markets;

•

our future operating results and financial condition;

•

our business operations;

•

changes in our business and investment strategy;

•

availability of land to acquire and our ability to acquire such land on favorable terms or at all;

•

availability, terms and deployment of capital;

•

continued or increased disruption in the availability of mortgage financing or the number of foreclosures in the market;

•

shortages of or increased prices for labor, land or raw materials used in housing construction;

•

delays in land development or home construction resulting from adverse weather conditions or other events outside our control;

•

the cost and availability of insurance and surety bonds;

•

changes in, or the failure or inability to comply with, governmental laws and regulations;

•

the timing of receipt of regulatory approvals and the opening of projects;

•

the degree and nature of our competition;

•

our leverage and debt service obligations;

•

general volatility of the capital markets and the lack of a public market for shares of our common stock;

•

availability of qualified personnel and our ability to retain our key personnel; and

•

additional factors discussed under the sections captioned “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Our Business.”

USE OF PROCEEDS

We expect to receive net proceeds from this offering of approximately $ million (assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus), after deducting the underwriting discounts and commissions and the estimated offering expenses of approximately $ million payable by us. We will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders.

We intend to use the net proceeds from this offering primarily for the acquisition and development of land and, to the extent not used for the acquisition of land, we may also use net proceeds for general corporate purposes, including development, home construction and other related purposes.

•

Approximately $ million for the acquisition of lots under contract.

•

Approximately $ million for the acquisition of lots under non-binding letter of intent.

•

Approximately $ million for general corporate purposes, including estimated development and construction costs.

Pending these uses, we intend to invest the net proceeds from this offering in a variety of capital preservation investments, including short-term, interest-bearing investment grade securities, money market accounts, certificates of deposit and direct or guaranteed obligations of the U.S. government.

The underwriters have an option to purchase up to additional shares of our common stock at the offering price less the underwriting discounts and commissions within 30 days after the date of this prospectus to cover over-allotments, if any, made by the underwriters to investors from whom orders were solicited prior to the date of this prospectus. Exercise of this option in full would result in additional net proceeds to us of approximately $ million. All of such additional net proceeds would be used as described above in this section.

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase of 1,000,000 shares in the number of shares offered by us, together with a concomitant $1.00 increase in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase the net proceeds to us from this offering by approximately $ million, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us. Conversely, a decrease of 1,000,000 shares in the number of shares offered by us, together with a concomitant $1.00 decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would decrease the net proceeds to us from this offering by approximately $ million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The as-adjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2014 (i) on an actual basis, (ii) on a pro forma basis to give effect to the LVLH Acquisition, and (iii) as adjusted to give effect to this offering, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after the payment of the underwriting discounts and commissions and the estimated offering-related expenses payable by us.

This table should be read in conjunction with the sections captioned “Use of Proceeds,” “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and related notes thereto included elsewhere in this prospectus.


	As of March 31, 2014
	Actual		Pro Forma		Pro Forma As Adjusted ⁽¹⁾
	(unaudited, in thousands except per share amounts)
Cash	$	185,134	$	20,134	$
Debt:

Total debt	$	100,500	$	102,000	$
Stockholders’ equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized and 17,256,824 shares issued and outstanding, actual; 100,000,000 shares authorized and shares issued and outstanding, as adjusted		173		173
Preferred Stock, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized and no shares issued and outstanding, as adjusted		—		—		—
Additional paid-in capital		263,278		263,278
Retained earnings		11,769		11,769

Total equity		275,220		275,220

Total capitalization	$	375,720	$	377,220	$

⁽¹⁾

The number of outstanding shares (i) includes 181,824 shares of restricted stock issued under our 2013 Long-Term Incentive Plan as of March 31, 2014; and (ii) does not include: (a) 868,176 shares of our common stock reserved for issuance in connection with awards under our 2013 Long-Term Incentive Plan as of March 31, 2014, and (b) up to shares of our common stock that the underwriters have an option to purchase at the offering price less the underwriting discounts and commissions within 30 days after the date of this prospectus to cover over-allotments. See “Shares Eligible for Future Sale—2013 Long-Term Incentive Plan” for information regarding the number of shares of our common stock currently issued and available under our 2013 Long-Term Incentive Plan.

DILUTION

Purchasers of shares of our common stock will experience an immediate and substantial dilution in net tangible book value per share of their shares of common stock from the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

The difference between the per share offering price paid by purchasers of our common stock in this offering and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities, by the number of outstanding shares of our common stock.

As of March 31, 2014, our pro forma net tangible book value was approximately $ million, or approximately $ per share of our common stock. After giving effect to (i) the sale of shares of our common stock in this offering, at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, (ii) the receipt by us of the net proceeds of this offering, and (iii) the deduction of the underwriting discounts and commissions and the estimated offering expenses payable by us, our pro forma, as adjusted, net tangible book value as of December 31, 2013 would have been $ million, or approximately $ per share of our common stock, representing an immediate increase in net tangible book value of approximately $ per share of our common stock to our existing stockholders and an immediate dilution in net tangible book value of approximately $ per share of our common stock, or approximately %, to purchasers in this offering.

If the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock, dilution per share to new investors would be approximately $ based on the assumptions set forth above.

The following table illustrates the dilution to purchasers in this offering on a per share basis:


Initial offering price per share		$
Net tangible book value per share immediately before this offering	$
Increase in net tangible book value per share attributable to purchasers in this offering	$
Pro forma net tangible book value per share immediately after this offering		$
Dilution in pro forma net tangible book value per share to purchasers in this offering		$

The pro forma net tangible book value per share immediately after this offering:


Numerator:
Net tangible book value as of December 31, 2013		$
Net proceeds of this offering ⁽¹⁾		$

Total pro forma net tangible book value immediately after this offering		$

Denominator:
Shares of our common stock outstanding prior to this offering ⁽²⁾
Shares of our common stock being sold in this offering

Total shares of our common stock

⁽¹⁾	Assumes no exercise by the underwriters of their over-allotment option to purchase additional shares of our common stock.

⁽²⁾	Includes shares of our common stock which the selling stockholders are selling in this offering.

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma net tangible book value per share immediately after this offering by $ per share and the dilution in pro forma net tangible book value per share to purchasers in this offering by $ per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us.

We may also increase or decrease the number of shares we are offering. An increase of 1,000,000 shares in the number of shares of our common stock offered by us, together with a concomitant $1.00 increase in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase the pro forma net tangible book value per share immediately after this offering and the dilution in pro forma net tangible book value per share to purchasers in this offering by $ and $ , respectively, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us. Conversely, a decrease of 1,000,000 shares in the number of shares of our common stock offered by us, together with a concomitant $1.00 decrease in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would decrease the pro forma net tangible book value per share immediately after this offering and the dilution in pro forma net tangible book value per share to purchasers in this offering by $ and $ , respectively, after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us.

The following table sets forth, as of December 31, 2013, on the pro forma basis as described above, the differences between the number of shares of our common stock purchased from us, the total consideration paid to us, and the average price per share paid to us by existing stockholders and by purchasers in this offering, before deducting the underwriting discounts and commissions and the estimated offering expenses payable by us, at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

Shares Purchased

Total Consideration

Number

Percent

Amount

Percent

Average Price
Per Share

Existing Stockholders ⁽¹⁾

Purchasers in this Offering from Us

Total

⁽¹⁾	Includes shares of our common stock which the selling stockholders are selling in this offering.

Sales by the selling stockholders in this offering will cause the number of shares held by our existing stockholders to be reduced to shares, or approximately % of the total number of shares of our common stock outstanding after this offering.

If the underwriters’ over-allotment option to purchase additional shares of our common stock is exercised in full, the following will occur:

•

the number of shares of our common stock held by purchasers in this offering will increase to shares, or approximately % of the total number of shares of our common stock outstanding; and

•

the pro forma net tangible book value per share immediately after this offering would increase (decrease) by $ per share and the immediate dilution in pro forma net tangible book value per share to purchasers in this offering would increase (decrease) by $ per share.

DIVIDEND POLICY

We currently intend to retain our future earnings, if any, to finance the development and expansion of our business. The determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments and such other factors as our board of directors deems relevant in its sole discretion. Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them. See “Risk Factors—Risks Related to this Offering and Ownership of our Common Stock—We currently do not intend to pay dividends on our common stock.”

SELECTED FINANCIAL DATA

The following sets forth our selected financial and operating data on a historical and pro forma basis. You should read the following summary of selected financial data in conjunction with our consolidated historical financial statements, our unaudited pro forma condensed consolidated financial statements, and the related notes, and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.

•

the LVLH Acquisition; and

•

other adjustments described in the explanatory notes to the unaudited pro forma condensed consolidated financial information.


	Three Months Ended March 31,									Year Ended December 31,
(dollars in thousands, except as noted under Other Operating Information)	Pro Forma ⁽¹⁾ 2014			2014			2013			Pro Forma ⁽¹⁾ 2013			2013			2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Consolidated Statement of Operations Data :
Home sales revenues	$	64,643		$	49,671		$	24,717		$	245,386		$	171,133		$	96,030
Land sale revenues		233			—			—			1,272			—			—

Total home and land sale revenues		64,876			49,671			24,717			246,658			171,133			96,030
Cost of home sale revenues		48,086			37,274			18,499			186,896			129,651			75,448
Cost of land sale revenues		117			—			—			593			—			—

Total cost of home and land sale revenues		48,203			37,274			18,499			187,489			129,651			75,448

Gross margin from home and land sales		16,673			12,397			6,218			59,169			41,482			20,582
Golf course and other revenue		2,404			—			—			8,172			—			—
Cost of golf course and other revenue		1,690			—			—			8,271			—			—

Gross margin from golf course and other revenue		714			—			—			(99	)		—			—

Selling general and administrative		9,815			7,003			3,276			33,951			23,622			13,496

Operating income		7,572			5,394			2,942			25,119			17,860			7,086

Other income (expense)		(318	)		(198	)		85			(203	)		213			353

Income before tax expense		7,254			5,196			3,027			24,916			18,073			7,439

Income tax expense		2,539			1,828			—			7,410			5,015			—
Deferred taxes on conversion to a corporation		—			—			—			627			627			—

Consolidated net income		4,715			3,368			3,027			16,879			12,431			7,439

Net income attributable to the noncontrolling interests		—			—			52			52			52			1,301

Income attributable to common stockholders	$	4,715		$	3,368		$	2,975		$	16,827		$	12,379		$	6,138

Basic and diluted earnings per share	$	0.27		$	0.20					$	1.30		$	0.95

Select Balance Sheet Data (end of period) :
Cash and cash equivalents	$	20,134		$	185,134		$	7,165		$	43,998		$	109,998		$	7,897
Inventories		335,273			197,104			87,039			343,169			184,072			77,305
Total assets		415,557			410,073			100,242			418,319			312,639			90,673
Total debt		102,000			100,500			52,051			102,195			1,500			33,206
Total liabilities		140,337			134,853			73,828			146,763			41,083			66,112
Total equity		275,220			275,220			26,414			271,556			271,556			24,561

Other Financial Data :
EBITDA ⁽²⁾	$	8,292		$	5,755		$	3,387		$	29,321		$	20,531		$	9,064
EBITDA margin		12.8	%		11.6	%		13.7	%		11.9	%		12.0	%		9.4	%
Adjusted EBITDA ⁽²⁾	$	9,599		$	6,446		$	3,387		$	31,231		$	21,639		$	9,064
Adjusted EBITDA margin		16.2	%		13.0	%		13.7	%		13.9	%		12.6	%		9.4	%


	Three Months Ended March 31,									Year Ended December 31,
(dollars in thousands, except as noted under Other Operating Information)	Pro Forma ⁽¹⁾ 2014			2014			2013			Pro Forma ⁽¹⁾ 2013			2013			2012
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Other Operating Information :
Number of homes delivered		177			128			79			704			448			336
Average sales price of homes delivered (actual; not in thousands)	$	365,215		$	388,055		$	312,873		$	345,560		$	381,994		$	285,802
Cancellation rates		14	%		15	%		21	%		15	%		20	%		17	%
Backlog at end of period, number of homes		313			256			190			278			222			148
Backlog at end of period, aggregate sales value (in thousands)	$	139,769		$	122,321		$	72,027		$	120,009		$	103,250		$	51,562
Net new home orders		211			161			121			778			517			415
Average selling communities		26			23			15			22			19			13

⁽¹⁾	For information regarding the unaudited pro forma information reflecting the LVLH Acquisition, see the unaudited pro forma financial statements beginning on Page F-58.

⁽²⁾

EBITDA represents net income attributable to Century Communities, Inc. before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance. These adjustments are itemized below. We believe that the presentation of EBITDA and Adjusted EBITDA included in this offering memorandum provides useful information to investors with which to analyze our operating trends and performance. In addition, we believe that EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present EBITDA and Adjusted EBITDA measures when reporting their results. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as an alternative to net income as a measure of performance or to net cash flows provided by (used in) operations as a measure of liquidity.

A reconciliation of net income to EBITDA and Adjusted EBITDA for the periods presented is as follows:


	Three Months Ended March 31,						Year Ended December 31,
(dollars in thousands)	Pro Forma 2014		2014		2013		Pro Forma 2013		2013		2012
Net income	$	4,715	$	3,368	$	3,027	$	16,827	$	12,431	$	7,439
Income tax expense		2,539		1,828		—		7,410		5,015		—
Deferred taxes on conversion to a corporation		—		—		—		627		627		—
Interest amortized to cost of homes closing		164		76		288		1,906		1,521		1,429
Interest expense		34		—		—		158		—		—
Depreciation and amortization		840		483		72		2,393		937		196

EBITDA	$	8,292	$	5,755	$	3,387	$	29,321	$	20,531	$	9,064
Non-cash compensation expenses		296		296		—		735		735		—
Non-recurring expenses		1,011		395		—		1,175		373		—

Adjusted EBITDA	$	9,599	$	6,446	$	3,387	$	31,231	$	21,639	$	9,064

•

EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•

EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

•

EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

•

EBITDA and Adjusted EBITDA do not reflect our provision for income taxes, which may vary significantly from period to period;

•

other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following in conjunction with the sections of this prospectus entitled “Risk Factors,” “Cautionary Note Concerning Forward-Looking Statements,” “Selected Financial Data,” and “Our Business” and our historical financial statements and related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including our acquisition of Jimmy Jacobs in September 2013, our acquisition of LVLH in April 2014, our usage of our line of credit, and those discussed in the section entitled “Risk Factors” and elsewhere in this prospectus.

We are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in the greater Denver, Colorado metropolitan area and, more recently, in the greater Austin and San Antonio, Texas and Las Vegas, Nevada metropolitan areas, under the Century Communities name. In many of our projects, in addition to building homes, we are responsible for the entitlement and development of the underlying land.

We build and sell an extensive range of home types across a variety of price points. Our emphasis is on acquiring well located land positions and offering quality homes with innovative design elements. We are one of the top 50 largest homebuilders in the United States (as ranked among public and private companies by Builder Magazine based on total revenue in 2013).

Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, formed our predecessor company in 2002 and sold a 50% interest in the Company to the Woodside Group, at the time one of the country’s largest private homebuilders, for a valuation in excess of three times the Company’s book value. From 1996 to 2000, Dale Francescon and Robert Francescon served as Co-Division Presidents in Denver for D. R. Horton, the largest homebuilder in the United States. During their tenure at D. R. Horton, we believe that the Denver division consistently generated the highest return of any operating division within D.R. Horton based on return on assets. During their tenure, the division delivered increased revenues each year culminating at approximately $100 million per year, while achieving average gross margins of 28% and average pre-tax margins of 18%. Prior to serving as Co-Division Presidents at D.R. Horton, Dale Francescon and Robert Francescon owned and operated Trimark Communities when it was the largest builder of attached for-sale homes in Colorado. In 1996, Dale Francescon and Robert Francescon sold Trimark Communities to D.R. Horton for a valuation in excess of three times its book value.

Overview and Outlook

During the three months ended March 31, 2014, the housing market continued to show signs of improvement driven by rising consumer confidence, historically high housing affordability metrics, and reduced home inventory levels. Colorado and most Western U.S. markets have shown significant indicators of a sustainable housing recovery. The following key operating metrics improved substantially for us during the quarter ended March 31, 2014, as compared to the same period in 2013: net home sales increased by 31%, deliveries increased by 62%, revenue increased by 101%, backlog units increased by 35%, and backlog value increased by 70%.

Basis of Presentation

Our consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and have been prepared in accordance with GAAP as contained within the Financial Accounting Standards Board (which we refer to as “FASB”) Accounting Standards Codification (which we refer to as “ASC”).

Results of Operations

During the quarter ended March 31, 2014, we delivered 128 homes, with an average sales price of $388,055. During the same period, we generated approximately $49.7 million in revenue, approximately $5.2 million in pre-tax net income, and approximately $3.4 million in net income. For the quarter ended March 31, 2014, our net sales orders totaled 161 homes, a 33% increase over the same period in 2013. At March 31, 2014, we had a backlog of 256 sold but unclosed homes, a 35% increase over the same period in 2013, consisting of approximately $122.3 million in sales value, a 70% increase over the same period in 2013.

The average sales prices of homes during each period presented, including the increase in the average sales price of homes in backlog, are the result of changes to the mix of typical homes delivered and sold during those periods. The average sales price of homes may increase or decrease depending on the mix of typical homes delivered and sold during such period. These changes in the average sales prices of homes are part of our natural business cycle.

Revenues

We generate revenue primarily through the closing of homes. We recognize revenue on homes when they are completed and title to and possession of the property have been transferred to the homebuyer. All customer deposits are treated as liabilities.

We also serve as the general contractor for custom homes in our Texas operating segment, where the customers, and not the Company, own the underlying land. We recognize revenue for these contracts on a percentage of completion method.

Inventories and Cost of Sales

Inventories include the cost of land acquisition, land development, and home construction costs, including interest, real estate taxes, and certain direct and indirect overhead costs related to development and construction. For those communities for which construction and development activities have been idled, applicable interest and real estate taxes are expensed as incurred. Cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs (both incurred and estimated to be incurred) allocated to each residential lot based upon the total number of homes expected to be closed in each community.

Selling, General and Administrative Expenses

Selling, general and administrative expenses represent salaries and benefits, internal and external commissions, property taxes, advertising and marketing, a management fee, rent and lease expense, depreciation, and other administrative items, and are recorded in the period incurred.

Non-Recurring Compensation Expenses

We have entered into employment agreements with Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, pursuant to which we will be required to pay bonuses relating to the registration of our common stock in accordance with the registration rights agreement we entered into in connection with the May 2013 private offering and private placement. Each of Dale Francescon and Robert Francescon will be entitled to be paid a cash bonus of $250,000 by us if we file with the SEC a shelf registration statement relating to the registration for resale of the shares of our common stock sold in our May 2013 private offering and private placement, and the SEC declares the registration statement effective on or before June 30, 2014. We have filed with the SEC a registration statement on Form S-1 for this offering and for the resale of the registrable shares that are not sold by the selling stockholders in this offering, and this prospectus forms a part of that registration statement. Each of Dale Francescon and Robert Francescon should earn this bonus upon completion of this offering. We expect to incur approximately $500,000 in selling, general and administrative expense for the three months ending June 30, 2014 related to these arrangements.

David Messenger, our Chief Financial Officer, will be entitled to be paid a cash bonus of $125,000 by us upon the completion of our initial public offering, which he will earn upon the completion of this offering. We expect to incur approximately $125,000 in selling, general and administrative expense for the three months ending June 30, 2014 related to this arrangement.

Other Income (Expense)

Other income (expense) consists of interest income, interest expense, costs incurred for business acquisitions, income from a rental property, forfeited deposits, and income earned from a third-party mortgage company for referrals of our homebuyers.

The historical financial data presented below are not necessarily indicative of the results to be expected for any future period.

Consolidated Financial Data


(dollars in thousands, except as noted under Other Operating Information)	Three Months Ended March 31,						Year Ended December 31,
	2014			2013			2013			2012
	(unaudited)
Consolidated Statement of Operations :
Home sales revenues	$	49,671		$	24,717		$	171,133		$	96,030
Cost of sales		37,274			18,499			129,651			75,448

Gross margin		12,397			6,218			41,482			20,582
Selling, general and administrative		7,003			3,276			23,622			13,496

Operating income		5,394			2,942			17,860			7,086
Other income (expense)		(198	)		85			213			353

Income before tax expense		5,196			3,027			18,073			7,439
Income tax expense		1,828			—			5,015			—
Deferred taxes on conversion to a corporation		—			—			627			—

Consolidated net income of Century Communities, Inc.		3,368			3,027			12,431			7,439
Income attributable to the non-controlling interests		—			52			52			1,301

Income attributable to common stockholders	$	3,368		$	2,975		$	12,379		$	6,138

Basic and diluted earnings per share	$	0.20		$	—		$	0.95		$	—
Pro-forma basic and diluted earnings per share ⁽¹⁾	$	0.31		$	0.27		$	0.93		$	0.82
Balance Sheet Data (end of period) :
Cash and cash equivalents	$	185,134		$	7,165		$	109,998		$	7,897
Inventories		197,014			87,039			184,072			77,305
Total assets		410,073			100,242			312,639			90,673
Total debt		100,500			52,051			1,500			33,206
Total liabilities		134,853			73,828			41,083			66,112
Equity		275,220			26,414			271,556			24,561
Other Operating Information :
Number of homes delivered		128			79			448			336
Average sales price of homes delivered (actual; not in thousands)	$	388,055		$	312,873		$	381,994		$	285,802
Cancellation rates		11	%		21	%		20	%		17	%
Backlog at end of period, number of homes		256			190			222			148
Backlog at end of period, aggregate sales value (in thousands)	$	122,321		$	72,027		$	103,250		$	51,562
Net new home orders		163			121			517			415
Average selling communities		23			15			19			13

⁽¹⁾	For information regarding the unaudited pro-forma adjustments, see Notes 14 and 20 to our consolidated financial statements for the quarters ended March 31, 2014 and 2013 and the years ended December 31, 2013 and 2012, respectively.

Three Months Ended March 31, 2014 Compared to the Three Months Ended March 31, 2013

Net New Home Orders and Backlog


	Three Months Ended March 31,						Increase (Decrease)
	2014			2013			Amount			%
	(unaudited)
Net new home orders		161			121			40			33.1	%
Number of cancellations		28			33			(5	)		(15.2	%)
Cancellation rate		15	%		21	%		(6	%)		(28.6	%)
Average selling communities		23			15			8			53.3	%
Selling communities at end of period		23			16			7			43.8	%
Backlog at end of period, aggregate sales value (in thousands)	$	122,321		$	72,027		$	50,294			69.8	%
Backlog (units)		256			190			66			34.7	%
Average sales price of backlog	$	477,815		$	379,088		$	98,727			26.0	%

Net new home orders (new home orders net of cancellations) for the three months ended March 31, 2014 increased by 40 homes, or 33.1%, to 161, compared to 121 for the three months ended March 31, 2013. The increase in our net new home orders was driven by positive market conditions as well as our entry into the Texas market through the acquisition of Jimmy Jacobs which occurred in the third quarter of 2013, and comprises our Texas operating segment. Our Texas operating segment contributed 24 net new home orders for the three months ended March 31, 2014. Our overall “absorption rate” (the rate at which home orders are contracted, net of cancellations) for the three months ended March 31, 2014 was an average of 23 per selling community (2.3 monthly), compared to an average of 15 per selling community (2.7 monthly) for the three months ended March 31, 2013. Our cancellation rate of buyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was approximately 14.8% for the three months ended March 31, 2014, compared to 21.4% for the three months ended March 31, 2013. The decrease in our cancellation rate was not due to any one significant factor but was the result of general market activity during this period.

We experienced substantial order growth due to an increase in our average selling community count, primarily as the result of an overall improvement in market sentiment, including from our Texas operating segment which are not in the comparable period. Our average number of selling communities increased by eight communities to 23 for the three months ended March 31, 2014, from 15 for the three months ended March 31, 2013. The increase in net new home orders positively impacted our number of homes in backlog.

Backlog reflects the number of homes, net of actual cancellations experienced during the period, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. Homes in backlog are generally closed within one to six months, although we may experience cancellations of sales contracts prior to closing. Backlog units increased by 66 homes, or 34.7%, to 256 as of March 31, 2014, as compared to 190 as of March 31, 2013, primarily driven by an increase in the number of selling communities, including those in our Texas operating segment, which contributed 93 homes to backlog at March 31, 2014. The dollar value of backlog increased $50.3 million, or 69.8%, to $122.3 million as of March 31, 2014 from $72.0 million as of March 31, 2013. The increase in dollar value of backlog reflects an increase in the number of homes in backlog and an increase in the average sales price of homes in backlog. Our average sales price of homes in backlog increased $98,727, or 26%, to $477,815 for the three months ended March 31, 2014, compared to $312,873 for the three months ended March 31, 2013, due to rising sales prices generally, the introduction of new product at new communities with a shift to larger square footage homes with corresponding higher average sales prices in the 2014 period, and our expansion into markets within Texas which generally have a higher price point. The increase in the average sales price of homes in backlog is not the result of a new strategy of focusing

on new or different segments of the homebuilding market, but is the result of changes to the mix of typical homes delivered and sold during the period. The average sales price of homes may decrease back down depending on the mix of typical homes delivered and sold during a period. These changes in the average sales price of homes are a part of the Company’s natural business cycle.

Home Sales Revenue and New Homes Delivered


	Three Months Ended March 31,				Increase
	2014		2013		Amount		%
New homes delivered		128		79		49		62.0	%
Home sales revenue (dollar value in thousands)	$	49,671	$	24,717	$	24,954		101.0	%
Average sales price of homes delivered	$	388,055	$	312,873	$	75,182		24.0	%

New home deliveries increased by 49 homes, or 62.0%, to 128 during the three months ended March 31, 2014, from 79 during the three months ended March 31, 2013. The increase in new home deliveries was primarily attributable to the increase in net new home orders. Of the 128 deliveries during the three months ended March 31, 2014, 26 were delivered by our Texas operating segment.

Home sales revenue increased $25.0 million, or 101.0%, to $49.7 million for the three months ended March 31, 2014 from $24.7 million for the three months ended March 31, 2013. The increase in revenue was primarily attributable to: (1) a 62% increase in homes delivered to 128 for the three months ended March 31, 2014, from 79 for the three months ended March 31, 2013, and (2) an increase in average sales price of $75,182 per unit to $388,055 for the three months ended March 31, 2014, from $312,873 for the three months ended March 31, 2013. Our Texas operating segment contributed $13.8 million of home sales revenues during the three months ended March 31, 2014.

Homebuilding Gross Margin

Homebuilding gross margin represents home sales revenue less cost of home sales. Our homebuilding gross margin percentage remained consistent at 25.0% for the three months ended March 31, 2014 as compared to 25.2% for the three months ended March 31, 2013. Our significant components of cost of sales are land and land development, direct vertical costs of construction and interest and other indirect costs.

The following table outlines the percentages of each of these components as a total of cost of sales.


	Three Months Ended March 31,
	2014			2013
Land and land development		17	%		17	%
Direct vertical costs of construction		79	%		79	%
Interest and other indirect costs		4	%		4	%

In the following tables, we calculate our gross margins adjusting for interest costs so that we can be compared more accurately with our peer group.


	Three Months Ended March 31,
	2014		%			2013		%
Home revenues	$	49,671		100.0	%	$	24,717		100	%
Cost of home revenues		37,274		75.0	%		18,499		74.8	%

Homebuilding gross margin		12,397		25.0	%		6,218		25.2	%
Add: Interest on cost of home sales		76		0.1	%		288		1.1	%

Adjusted homebuilding gross margin ⁽¹⁾	$	12,473		25.1	%	$	6,506		26.3	%

⁽¹⁾

Non-GAAP financial measure.

Excluding interest on cost of home sales, our adjusted homebuilding gross margin percentage was 25.1% for the three months ended March 31, 2014, compared to 26.3% for the three months ended March 31, 2013. We believe this information is meaningful as it isolates the impact that indebtedness has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.

Inventories and Cost of Sales

Cost of sales increased $18.8 million, or 101.5%, to $37.3 million for the three months ended March 31, 2014, from $18.5 million for the three months ended March 31, 2013. The increase in cost of sales was primarily attributable to (1) a 53.3% increase in the average number of selling communities, and (2) a 62.0% increase in the number of homes delivered for the three months ended March 31, 2014, compared to the three months ended March 31, 2013.

Selling, General and Administrative Expense


	Three Months Ended March 31,				As a Percentage of Home Sales Revenue for the Three Months Ended March 31,
	2014		2013		2014			2013
Selling, general and administrative	$	7,003	$	3,276		14.1	%		13.3	%

We expect that our selling, general and administrative expense as a percentage of home sales revenue will decrease in the future as our increase in new home deliveries from growth in our community count generates increased home sales revenue. Our selling, general and administrative expenses as a percentage of home sales revenue was 14.1% and 13.3% for the three months ended March 31, 2013 and 2013, respectively.

Selling, general and administrative expenses increased $3.7 million or 113.8%, to $7.0 million during the three months ended March 31, 2014, from $3.3 million for the three months ended March 31, 2013. The increase was primarily attributable to (1) an increase of $1.9 million in our compensation-related expenses, including incentive compensation, resulting largely from a 121% increase in our headcount to 190 employees as of March 31, 2014 compared to 86 as of March 31, 2013, (2) an increase of $0.6 million in commission expense resulting from a 101.0% increase in home sales revenue, and (3) moderate increases in outside professional services, depreciation, travel and other miscellaneous expenses related to increased operations from our growth in the three months ended March 31, 2014.

Other Income (Expense)

Other income (expense) decreased by $0.3 million to an expense of $0.2 million for the three months ended March 31, 2014, from income of $0.1 million for the three months ended March 31, 2013. The decrease was driven by expenses of $0.4 million incurred in connection with our acquisition of LVLH, which was partially offset by an increase in interest income of $0.1 million as a result of our higher cash balances during the period.

Income Before Tax Expense

As a result of the foregoing factors, income before tax expense increased by $2.2 million, or 71.7%, for the three months ended March 31, 2014 to $5.2 million from $3.0 million for the same period in 2013.

Income Tax (Expense)

Income tax expense increased during the period as a result of our conversion from a limited liability company to a C corporation in April 2013. Our income tax expense for the quarter ended March, 31 2014 is reflective of our estimated annual tax rate of 35%.

Non-Controlling Interest

Net income associated with a non-controlling interest decreased $0.1 million for the three months ended March 31, 2014, as compared to the three months ended March 31, 2013. The decrease was a result of the redemption of the non-controlling interests. These non-controlling interests were in two entities formed by our Co-Chief Executive Officers and board members, Dale Francescon and Robert Francescon, to purchase two communities. We held a controlling minority interest in each entity. The final homes in each community were closed in the first quarter of 2013, at which point we allowed our interests to be redeemed.

Net Income

Net income increased by $0.4 million, or 13.2%, for the three months ended March 31, 2014 to $3.4 million from $3.0 million for the same period in 2013. In April 2013, we converted into a corporation from a limited liability company, at which time we became a taxable entity. As such, our net income for the three months ended March 31, 2013 did not include any tax expense, and as a result, our income before tax expense increased at a greater rate than our net income period over period.

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

Net New Home Orders and Backlog


	Year Ended December 31,						Increase (Decrease)
	2013			2012			Amount		%
Net new home orders		517			415			102		24.6	%
Number of cancellations		128			84			44		52.4	%
Cancellation rate		20	%		17	%
Average selling communities		19			13			6		46.2	%
Selling communities at end of period		23			14			9		76.9	%
Backlog (dollar value in thousands)	$	103,250		$	51,562		$	51,688		100.2	%
Backlog (units)		222			148			74		50.0	%
Average sales price of backlog	$	465,090		$	348,395		$	116,695		33.5	%

Net new home orders (new home orders net of cancellations) for the year ended December 31, 2013 increased by 102 homes, or 24.6%, to 517, compared to 415 for the year ended December 31, 2012. Our overall absorption rate for the year ended December 31, 2013 was an average of 24.0 per selling community (2.0 monthly), compared to an average of 31.9 per selling community (2.7 monthly) for the year ended December 31, 2012. The decrease in our absorption rate was primarily due to the opening of new communities during 2013. Our cancellation rate of buyers who contracted to buy a home but did not close (as a percentage of overall orders) was approximately 20% for the year ended December 31, 2013, compared to 17% for the year ended December 31, 2012. The increase in our cancellation rate was not due to any one significant factor but was the result of general market activity during this period.

We experienced substantial order growth due to an increase in our average selling community count, primarily as the result of an overall improvement in market sentiment. Our average number of selling communities increased by six communities, from 13 for the year ended December 31, 2012 to 19 for the year ended December 31, 2013. The increase in net new home orders positively impacted our number of homes in backlog.

Backlog units increased by 74 homes, or 50%, to 222 as of December 31, 2013, as compared to 148 as of December 31, 2012, primarily driven by the 25% increase in net new home orders for the year ended December 31, 2013. The dollar value of backlog increased $51.7 million, or 100%, to $103.3 million as of December 31, 2013 from $51.6 million as of December 31, 2012. The increase in dollar value of backlog reflects an increase in the number of homes in backlog and an increase in the average sales price of homes in backlog. Our average sales price of homes in backlog increased $116,695, or 33.5%, to $465,090 for the year ended December 31, 2013, compared to $348,395 for the year ended December 31, 2012, due to rising sales prices generally and the introduction of new product at new communities with a shift to larger square footage homes with corresponding higher average sales prices in the 2013 period. The increase in the average sales price of homes in backlog is not the result of a new strategy of focusing on new or different segments of the homebuilding market, but is the result of changes to the mix of typical homes delivered and sold during the period. The average sales price of homes may fluctuate depending on the mix of typical homes delivered and sold during a period. These changes in the average sales price of homes are a part of our natural business cycle.

Home Sales Revenue and New Homes Delivered


	Year Ended December 31,				Increase
	2013		2012		Amount		%
New homes delivered		448		336		112		33.3	%
Home sales revenue (dollar value in thousands)	$	171,133	$	96,030	$	75,103		78.2	%
Average sales price of homes delivered	$	381,994	$	285,802	$	96,192		33.7	%

New home deliveries increased by 112 homes, or 33.3%, to 448 during the year ended December 31, 2013, from 336 during the year ended December 31, 2012. The increase in new home deliveries was primarily attributable to the increase in net new home orders.

Home sales revenue increased $75.1 million, or 78.2%, to $171.1 million for the year ended December 31, 2013 from $96.0 million for the year ended December 31, 2012. The increase in revenue was primarily attributable to: (1) a 33.3% increase in homes delivered to 448 for the year ended December 31, 2013, from 336 for the year ended December 31, 2012, and (2) an increase in average sales price of $96,192 per unit to $381,994 for the year ended December 31, 2013, from $285,802 for the year ended December 31, 2012.

Gross Margin

Our gross margin percentage increased to 24.2% for the year ended December 31, 2013 as compared to 21.4% for the year ended December 31, 2012. The increase in margins is primarily due to the increase in new homes delivered and the average sale price increases during 2013.

Our significant components of cost of sales are land and land development, direct vertical costs of construction and interest and other indirect costs.

The following table outlines the percentages of each of these components as a total of cost of sales.


	Years ended
	2013			2012
Land and land development		16	%		21	%
Direct vertical costs of construction		81	%		74	%
Interest and other indirect costs		3	%		5	%

		100	%		100	%

In the following tables, we calculate our gross margins adjusting for interest costs so that we can be compared more accurately with our peer group.

Excluding interest on cost of home sales, adjusted homebuilding gross margin percentage was 25.1% for the year ended December 31, 2013, compared to 22.9% for the year ended December 31, 2012. We believe this information is meaningful as it isolates the impact that indebtedness has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.


	Year Ended December 31,
	2013		%			2012		%
	(dollar value in thousands)
Home sales revenues	$	171,133		100.0	%	$	96,030		100.0	%
Cost of home sales		129,651		75.8	%		75,448		78.6	%

Gross margin		41,482		24.2	%		20,582		21.4	%
Add: interest on cost of home sales		1,521		0.9	%		1,429		1.5	%

Adjusted homebuilding gross margin ⁽¹⁾	$	43,003		25.1	%	$	22,011		22.9	%

⁽¹⁾	Non-GAAP financial measure.

During the years ended December 31, 2013 and 2012, we delivered homes for which the land was originally purchased from entities under common control. We recorded these lots at the carrying basis of the entity under common control. Recording the lots at the carrying basis of the entities under common control as opposed to the purchase price benefitted gross margins by $4.3 million and $3.3 million for the years ended December 31, 2013 and 2012, respectively. As of December 31, 2013 and 2012, lots with a carrying basis, before development costs, of $2.1 million, and $4.4 million, respectively, which were purchased from or contributed by entities under common control, were included in inventories on our consolidated balance sheet.

Cost of Sales

Cost of sales increased $54.2 million, or 71.8%, to $129.7 million for the year ended December 31, 2013, from $75.4 million for the year ended December 31, 2012. The increase in cost of sales was primarily attributable to (1) a 46.2% increase in the average number of selling communities, and (2) a 33.3% increase in the number of homes delivered for the year ended December 31, 2013, compared to the year ended December 31, 2012.

Selling, General and Administrative Expense


	Year Ended December 31,				As a Percentage of Home Sales Revenue for the Year Ended December 31,
	2013		2012		2013			2012
Selling, general and administrative (dollar value in thousands)	$	23,622	$	13,496		13.8	%		14.1	%

Selling, general and administrative expense increased $10.1 million, or 75.0%, to $23.6 million for the year ended December 31, 2013, from $13.5 million for the year ended December 31, 2012. The increase was primarily attributable to (1) an increase of $5.5 million in our compensation- and bonus-related expenses resulting from a 132.1% increase in our headcount to 181 employees as of December 31, 2013 compared to 78 as of December 31, 2012, (2) an increase of $2.8 million in commission expense from an increase in the volume of deliveries, (3) settlement of certain construction defect cases in 2013 and (4) other fluctuations in outside professional services, depreciation, travel and other miscellaneous expenses related to increased operations from our growth in 2013. Our selling, general and administrative expenses as a percentage of home sales revenue was 13.8% and 14.1% for the years ended December 31, 2013 and 2012, respectively. We expect that our general and administrative expense as a percentage of home sales revenue will continue to decrease in the near future as our increase in new home deliveries from growth in our community count generates increased home sales revenue.

Other Income (Expense)

Other income (expense), which includes costs incurred for business acquisitions, income from a rental property, forfeited deposits, and income earned from a third-party mortgage company for referrals of our homebuyers, decreased $0.2 million, to $0.2 million for the year ended December 31, 2013, from $0.4 million for the year ended December 31, 2012. The decrease was a result of costs incurred in 2013 associated with the Jimmy Jacobs Acquisition which were partially offset by an increase in interest income.

Non-Controlling Interest

Non-controlling interest decreased $1.2 million to $52 thousand for the year ended December 31, 2013 from $1.3 million for the year ended December 31, 2012. Non-controlling interest decreased as a result of the redemption of our share of our interests in Arista Investors, LLC and Arista Investors II, LLC during the first quarter of 2013.

Net Income

As a result of the foregoing factors, net income for the year ended December 31, 2013 was $12.4 million, compared to net income for the year ended December 31, 2012 of $6.1 million, resulting in an increase of 101.7%.

Lots Owned and Controlled

The table below summarizes our lots owned and controlled as of the dates presented:

Lots Owned and Controlled


	Total Lots Owned and Controlled
As of April 1, 2014		10,095
As of December 31, 2013		8,341
As of December 31, 2012		3,072
As of December 31, 2011		2,220

Liquidity and Capital Resources

Overview

Our principal uses of capital for the year ended December 31, 2013 were operating expenses, land purchases, land development, home construction and the payment of routine liabilities. We used funds generated by operations and available borrowings to meet our short-term working capital requirements. We remain focused on generating increasingly positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and keep us poised for growth.

Cash flows for each of our communities depend on their stage in the development cycle, and can differ substantially from reported earnings. Early stages of development or expansion require significant cash outlays for land acquisitions, entitlements and other approvals, and construction of model homes, roads, utilities, general landscaping and other amenities. Because these costs are a component of our inventory and not recognized in our statement of income until a home closes, we incur significant cash outlays prior to our recognition of earnings. In the later stages of community development, cash inflows may significantly exceed earnings reported for financial statement purposes, as the cash outflow associated with home and land construction was previously incurred. From a liquidity standpoint, we are currently actively acquiring and developing lots in our markets to maintain and grow our lot supply and active selling communities that are strategically located in our core Colorado markets, and in the greater Austin and San Antonio, Texas and Las Vegas, Nevada metropolitan areas. As

demand for new homes improves and we continue to expand our business, we expect that cash outlays for land purchases and land development to grow our lot inventory will exceed our cash generated by operations. During the quarter ended March 31, 2014, we delivered 128 homes, acquired 61 lots, spent $ 3.2 million on land acquisition, and started construction on 201 homes. The opportunity to purchase substantially finished lots in desired locations is becoming increasingly more limited and competitive. As a result, we are spending more dollars on land development, as we are purchasing more undeveloped land and partially finished lots than in recent years.

We exercise strict controls and believe we have a prudent strategy for company-wide cash management, including controls related to cash outlays for land and inventory acquisition and development. As of March 31, 2014, we had $185.1 million of cash and cash equivalents, a $75.1 million increase from December 31, 2013. The increase in our cash position at March 31, 2014 was due to the $99 million draw on our revolving credit facility in March of 2014, which was subsequently used on April 1, 2014 for the LVLH Acquisition. We intend to generate cash from the sale of our inventory net of loan release payments on our notes payable, but we intend to redeploy the net cash generated from the sale of inventory to acquire and develop strategic and well-positioned lots that represent opportunities to generate desired margins, as well as for other operating purposes.

We employ both debt and equity as part of our ongoing financing strategy, coupled with redeployment of cash flow from continuing operations, to provide us with the financial flexibility to access capital on the best terms available. In that regard, we employ prudent leverage levels to finance the acquisition and development of our lots and construction of our homes. Our existing indebtedness is recourse to us, and we anticipate that future indebtedness will likewise be recourse.

Our management considers a number of factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the purchase price of assets to be acquired with debt financing, the estimated market value of our assets, and the ability of particular assets, and the Company as a whole, to generate cash flow to cover the expected debt service. As a means of sustaining our long-term financial health and limiting our exposure to unforeseen dislocations in the debt and financing markets, we currently expect to remain conservatively capitalized. However, our charter does not contain a limitation on the amount of debt we may incur and our board of directors may change our target debt levels at any time without the approval of our stockholders.

We intend to finance future acquisitions and developments with the most advantageous source of capital available to us at the time of the transaction, which may include a combination of common and preferred equity, secured and unsecured corporate level debt, property level debt and mortgage financing and other public, private or bank debt.

Issuance of $200 Million in Aggregate Principal Amount of Senior Unsecured Notes

May 2013 Private Offering and Private Placement

registration provided in Rule 506 of Regulation D under the Securities Act, where we received net proceeds of approximately $223.8 million (which we refer to as the “May 2013 private offering and private placement”). We used the net proceeds from the May 2013 private offering and private placement for the acquisition and development of land, home construction and other related purposes, including approximately $38 million for debt repayment, $62 million for the acquisition of lots, $19 million for development costs, $16 million for the Jimmy Jacobs Acquisition and to partially fund the LVLH Acquisition.

Revolving Credit Facility

As of March 31, 2014, we were party to a revolving credit facility which has a maximum loan amount of $100.0 million. Our revolving credit facility has a termination date of July 1, 2014 and a maturity date of July 22, 2014. We may borrow under our revolving credit facility for the purpose of financing the construction of residential homes on lots we own in certain approved subdivisions within the state of Colorado. Interest on our unsecured revolving credit facility is paid monthly at an adjustable per annum rate calculated each month as the sum of two and a half percent (2.50%) plus the daily LIBOR rate. As of March 31, 2014, the outstanding principal balance was $99.0 million, the interest rate was 2.60% per annum, we had $0.8 million in outstanding letters of credit, and we had $0.2 million of capacity under our revolving credit facility. Actual interest incurred for the years ending 2013 and 2012 was $1.1 million and $1.7 million, respectively; all such amount was capitalized to inventory.

Concurrently with the closing of the May 2014 senior notes offering, we repaid the outstanding balance including accrued interest of $99.2 million under our revolving credit facility.

Covenant Compliance

Under our revolving credit facility, we are required to comply with certain financial covenants. These financial covenants consist of maintaining (i) a minimum adjusted net worth of $200.0 million, (ii) a ratio of total liabilities to adjusted net worth of 1.50 to 1, (iii) a ratio of land/vacant lots to adjusted net worth of 1.0 to 1, (iv) a minimum liquidity of $20.0 million, (v) interest coverage of 2.0x, and (vi) no operating loss over a rolling four quarter period.

Letters of Credit

Under the terms of our revolving credit facility, we have the ability to issue letters of credit up to $15.0 million. Our borrowing availability under our revolving credit facility is reduced by the amount of letters of credit outstanding. As of March 31, 2014, there was $0.8 million in face amount of letters of credit outstanding under our revolving credit facility, leaving $14.2 million of availability for additional letters of credit.

In addition, we have one other outstanding letter of credit that does not fall under our revolving credit facility for $142,000.

Secured Acquisition and Development Loans and Construction Loans

As of March 31, 2014, we were party to one secured acquisition and development loan agreement to purchase and develop land parcels. As of March 31, 2014, the total aggregate commitment of our acquisition and development loan was approximately $1.5 million, of which $1.5 million was outstanding. The acquisition and development loan will be repaid as lots are released from the loan based upon a specific release price, as defined in the loan agreement. This loan matures in 2016. Interest on the loan is paid quarterly with an interest rate of 3.5%.

Cash Flows—Three Months Ended March 31, 2014 Compared to the Three Months Ended March 31, 2013

For the three months ended March 31, 2014 as compared to the three months ended March 31, 2013, the comparison of cash flows is as follows:

•

Net cash used in operating activities increased to $18.8 million during the three months ended March 31, 2014 from net cash used of $5.0 million during the three months ended March 31, 2013. The increase in cash used in operations was primarily a result of an increase in real estate inventories of $12.9 million during the three months ended March 31, 2014, compared to an increase of $7.6 million during the three months ended March 31, 2013, primarily driven by the increase in land, land development and homes under construction, partially offset by the increase in home closings and an increase in the average home selling price during the three months ended March 31, 2014 as compared to the three months ended March 31, 2013.

•

Net cash used in investing activities was $5.1 million during the three months ended March 31, 2014, compared to $9 thousand in net cash used during the three months ended March 31, 2013. The change was a result of a non-refundable deposit of $5.0 million for the acquisition of Las Vegas Land Holdings, LLC that occurred in the three months ended March 31, 2014.

•

Net cash provided by financing activities was $99.0 million during the three months ended March 31, 2014 compared to a $4.3 million during the three months ended March 31, 2013. The increase in cash provided by financing activities was the result of our draw of $99.0 million on our revolving credit facility during March 2014 in anticipation of acquiring Las Vegas Land Holdings, LLC.

As of March 31, 2014, our cash balance was $185.1 million.

Cash Flows—Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

For the year ended December 31, 2013 as compared to the year ended December 31, 2012, the comparison of cash flows is as follows:

•

Net cash used in operating activities increased to $67.5 million during the year ended December 31, 2013 from net cash used of $15.9 million during the year ended December 31, 2012. The change was primarily a result of an increase in real estate inventories of $92.3 million during the year ended December 31, 2013, compared to an increase of $28.8 million during the year ended December 31, 2012, primarily driven by the increase in land, land development and homes under construction, partially offset by the increase in home closings and an increase in the average home selling price during the year ended December 31, 2013 as compared to the year ended December 31, 2012.

•

Net cash used in investing activities was $16.3 million during the year ended December 31, 2013, compared to $0.8 million in net cash used during the year ended December 31, 2012. The change was a result of a business combination in 2013.

•

Net cash provided by financing activities increased to $188.8 million during the year ended December 31, 2013 compared to $15.9 million provided during the year ended December 31, 2012. The increase was driven by net proceeds of $223.8 million from our May 2013 private offering and private placement, which was partially offset by payments on outstanding obligations.

As of December 31, 2013, our cash balance was $110.0 million.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with our senior credit facility. Outstanding amounts borrowed under our senior credit facility bear

interest at a rate equal to LIBOR plus an applicable margin, or “add-on.” As of March 31, 2014, we had $99.0 million outstanding under our revolving credit facility. The remaining $1.5 million of our debt outstanding as of March 31, 2014 consists of an acquisition and development facility, bearing interest at a fixed rate.

Off-Balance Sheet Arrangements and Contractual Obligations

In the ordinary course of business, we enter into land purchase contracts in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. These purchase contracts typically require a cash deposit, and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. Option contracts generally require payment by us of a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. We generally have the right at our discretion to terminate our obligations under both purchase contracts and option contracts by forfeiting our cash deposit with no further financial responsibility to the land seller. Our obligations with respect to the option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. As of March 31, 2014, we had outstanding options for 435 lots totaling $27.7 million, and had $4.3 million of non-refundable cash deposits pertaining to land option contracts.

Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.

As of March 31, 2014, we were subject to a purchase commitment of approximately $4.5 million to acquire 59 lots in Austin, Texas upon the seller meeting certain development milestones.

As of March 31, 2014, the outstanding principal balance of our unsecured revolving credit facility was $99.0 million, the interest rate was 2.60% per annum and we had $0.2 million of potential capacity under our unsecured revolving credit facility. As of March 31, 2014, we also were party to a secured acquisition and development loan agreement to purchase and develop land parcels. As of March 31, 2014, the total aggregate of this acquisition and development loan was $1.5 million. We expect that the obligations secured by our unsecured revolving credit facility and the loan agreement generally will be satisfied in the ordinary course of business and in accordance with applicable contractual terms.

Contractual Obligations Table

The following table summarizes our future estimated cash payments under existing contractual obligations, including interest payments on long-term debt, as of March 31, 2014, including estimated cash payments due by period. We do not have any performance specific purchase obligations under any land option agreements as of March 31, 2014.


	Payments Due by Period (in thousands)
Contractual Obligations	Total		Less Than 1 Year		1-3 Years		4-5 Years		After 5 Years
Long-term debt payments of principal and interest	$	100,821	$	99,253	$	1,568	$	—	$	—
Operating leases		618		328		290		—		—
Purchase obligations		4,460		4,460		—		—		—

Total	$	105,899	$	104,041	$	1,858	$	—	$	—

Inflation

Our homebuilding operations can be adversely impacted by inflation, primarily from higher land, financing, labor, material and construction costs. In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers. While we attempt to pass on cost increases to customers through increased prices, when weak housing market conditions exist, we are often unable to offset cost increases with higher selling prices.

Seasonality

Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements. We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors. Since it typically takes four to six months to construct a new home, we deliver more homes in the second half of the year as spring and summer home orders convert to home deliveries. Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occurs during the second half of the year. We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry.

Significant Accounting Policies

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of costs and expenses during the reporting period. On an ongoing basis, our management evaluates its estimates and judgments, including those which impact our most critical accounting policies. Our management bases its estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. Our management believes that the following accounting policies are among the most important to the portrayal of our financial condition and results of operations and require among the most difficult, subjective or complex judgments:

Implications of Being an Emerging Growth Company

We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These provisions include:

•

a requirement to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in an initial public offering registration statement;

•

an exemption to provide less than five years of selected financial data in an initial public offering registration statement;

•

an exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act in the assessment of the emerging growth company’s internal control over financial reporting;

•

an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies; and

•

an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer.

We have determined to opt out of the exemption from compliance with new or revised financial accounting standards. As a result, we will comply with new or revised financial accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of this exemption is irrevocable.

We have elected to adopt the reduced disclosure requirements described above. As a result of these elections, the information that we provide in this prospectus may be different than the information you may receive from other public companies in which you hold equity interests.

We will remain an “emerging growth company” until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Principles of Consolidation

The consolidated financial statements include the accounts of (1) the Company, (2) the Company’s wholly owned limited liability companies that own the Company’s development projects, and (3) variable interest entities (which we refer to as “VIE”s) for which the Company is deemed the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Variable Interest Entities

A legal entity is referred to as a VIE if any of the following conditions exist: (1) the total equity investment at risk is insufficient to permit the legal entity to finance its activities without additional subordinated financial support from other parties, or (2) the entity has equity investors who cannot make significant decisions about the entity’s operations or who do not absorb their proportionate share of the expected losses or receive the expected returns of the entity.

All facts and circumstances are taken into consideration when determining whether we have variable interests that would deem us the primary beneficiary and, therefore, require consolidation of the related VIE or otherwise rise to the level where disclosure would provide useful information to the users of our financial statements. In many cases, it is qualitatively clear based on whether we have the power to direct the activities significant to the VIE and, if so, whether that power is unilateral or shared, and whether we are obligated to absorb significant losses of or have a right to receive significant benefits from the VIE. In other cases, a more detailed qualitative analysis and possibly a quantitative analysis are required to make such a determination.

We monitor the consolidated and unconsolidated VIEs to determine if any reconsideration events have occurred that could cause any of them to no longer be a VIE. We reconsider whether we are the primary beneficiary of a VIE on an ongoing basis. A previously unconsolidated VIE is consolidated when we become the primary beneficiary. A previously consolidated VIE is deconsolidated when we cease to be the primary beneficiary or the entity is no longer a VIE.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

We recognize revenue from all homebuilding activities upon the closing of the sale when title to and possession of the property are transferred to the buyer. All customer deposits are treated as liabilities.

Inventories and Cost of Sales

Inventories include the cost of land acquisition, land development, and home construction costs, including interest, real estate taxes, and certain direct and indirect overhead costs related to development and construction. For those communities for which construction and development activities have been idled, applicable interest and real estate taxes are expensed as incurred. Land acquisition and development costs are allocated to individual lots using an average lot cost determined based on the total expected land acquisition and development costs and the total expected home closings for the community. The specific identification method is used to accumulate home construction costs. In accordance with industry practice, we do not record the direct costs of homes held in inventory until our management has accepted the construction work as having been completed in accordance with the terms of the contract.

Cost of sales for homes closed includes the specific construction costs of each home and all applicable land acquisition, land development and related costs (both incurred and estimated to be incurred) allocated to each residential lot based upon the total number of homes expected to be closed in each community. Any changes to the estimated total development costs subsequent to the initial home closings in a community are allocated on a pro-rata basis to the homes in the community benefitting from the relevant development activity, which generally relates to the remaining homes in the community.

When a home sale is closed, we generally have not paid all incurred costs necessary to complete the home. A liability and a charge to cost of sales are recorded for the amount that is determined will ultimately be paid related to completed homes that have been closed. The home construction budgets are compared to actual recorded costs to determine the additional costs remaining to be paid on each closed home. The accrual is monitored by comparing actual costs incurred on closed homes in subsequent months to the amount previously accrued.

We regularly assess the land inventory and communities under development for indicators of potential impairment. If indicators of impairment are present for a community, we perform an impairment evaluation of the community. If it is determined that the carrying value of the inventory is not recoverable the affected inventory is written down to fair value.

Impairment of Real Estate Inventories

We review all of our communities for an indicator of impairment and record an impairment loss when conditions exist where the carrying amount of real estate is not recoverable and exceeds its fair value. Indicators of impairment include, but are not limited to, significant decreases in local housing market values and selling prices of comparable homes, significant decreases to gross margins and sales absorption rates, costs in excess of budget, and actual or projected cash flow losses. We prepare and analyze cash flows at the lowest level for which there is identifiable cash flows that are independent of the cash flows of other groups of assets.

If events or circumstances indicate that the carrying amount may be impaired, such impairment will be measured based upon the difference between the carrying amount and the fair value of such assets determined using the estimated future discounted cash flows, excluding interest charges, generated from the use and ultimate disposition of the respective real estate inventories. Such losses are reported within costs of sales.

When estimating undiscounted cash flows, we make various assumptions, including: the expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives offered by us or other builders in other communities, and future sales prices adjustments based on market and economic trends; the costs incurred to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction, and selling and marketing costs; any alternative product offerings that may be offered that could have an impact on sales, sales prices and/or building costs; and alternative uses for the property.

For the three months ended March 31, 2014 and 2013, and for the years ended December 31, 2013 and 2012, the following table shows the number of communities for which we identified an indicator of impairment and therefore tested for whether an impairment existed, compared to the total number of communities that existed during such period. For all periods, we did not identify any communities for which the undiscounted cash flows were not substantially in excess of the carrying values and for which potential future impairments, individually or in the aggregate, could materially impact operating results and/or total equity.


	Number of Communities Tested for Impairment		Total Number of Existing Communities
Three months ended March 31, 2014		4		77
Three months ended March 31, 2013		4		39
Year ended December 31, 2013		4		77
Year ended December 31, 2012		4		39

Stock-Based Compensation

We account for share-based awards in accordance with ASC 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. ASC 718 requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees. As our common stock is not actively traded in a liquid primary market, the determination of the fair value of our restricted stock awards requires the judgment of our management. Accordingly, we first consider transactions in our common stock by qualified institutional buyers in the secondary market subsequent to our May 2013 private offering and private placement. We take into consideration various factors to determine whether the closing price of our common stock in the secondary market is an accurate representation of the fair value of the restricted stock awards. These considerations include, but are not limited to, the timing of transactions in the secondary market and the elapsed time from the relevant grant date (if any), the volume of transactions in the secondary market, and the level of information available to the investors. To the extent we believe that the closing price of our common stock in the secondary market is not an accurate representation of the fair value of the restricted stock award, we also consider observable trends in stock prices of our publicly traded peers since our May 2013 private offering and private placement, as well as internal valuations based on our most recent forecasts, in determining the grant date fair value of the restricted stock award.

During the year ended December 31, 2013, we granted 0.2 million shares of restricted stock at a weighted average grant date fair value of $19.57. Of the shares granted during the year ended December 31, 2013, 133,500 were granted at the time of our May 2013 private offering and private placement. We determined that the grant date fair value of these restricted stock awards was equal to $20.00, the offering price per share in our May 2013 private offering and private placement, as the transactions were for identical securities and occurred on the same date, in an orderly market.

No stock-based compensation awards were granted during the three months ended March 31, 2014.

Income Taxes

Prior to our conversion to a Delaware corporation in April 2013, we were not directly subject to income taxes under the provisions of the Internal Revenue Code and applicable state laws. Therefore, taxable income or loss was reported to the individual members for inclusion in their respective tax returns and no provision for

federal and state income taxes was included in the accompanying financial statements for that period. With a few immaterial exceptions, we were not subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2009. Once we converted into a Delaware corporation on April 30, 2013, we became subject to state, federal, and local income taxes.

We account for income taxes in accordance with ASC 740, “ Tax Provision ,” and other, applicable authoritative pronouncements. Judgment is required in determining our provision for income taxes. In the normal course of business, we may engage in numerous transactions every day for which the ultimate tax outcome (including the period in which the transaction will ultimately be included in taxable income or deducted as an expense) is uncertain. Additionally, the tax returns we file are subject to audit and investigation by the Internal Revenue Service and certain states in the United States. We anticipate that our effective tax rate after this offering will be approximately 35-38%.

ASC 740, “ Accounting for Uncertainty in Income Taxes ,” clarifies the accounting for uncertainty in tax positions. ASC 740 requires that we recognize in our financial statements the impact of a tax position if that position is more likely than not to be sustained on audit, based on the technical merits of the position. These provisions will not have a material impact on our financial condition or results of operations.

Related Party Transactions

During the period beginning on January 1, 2011 to the date of this prospectus, we entered into or participated in several related party transactions. These transactions frequently involved the sale of land from Dale Francescon and Robert Francescon, our Co-Chief Executive Officers and board members, or entities controlled by them, to the Company. These transactions typically occurred either because we did not have the liquidity to purchase prime land that became available or because certain acquisition opportunities would have required us to purchase more land than we needed at one time for our home building activities. When this occurred Dale Francescon and Robert Francescon, or entities controlled by them, would purchase the land to sell to us at a later date and, if necessary, in smaller increments. Each transaction for the sale and/or purchase of land was priced at its fair market value as determined by our management taking into account one or more of the following: (i) independent third party appraisals, (ii) independent third party broker opinions of value, (iii) offers received from unrelated third parties, or (iv) calculation of residual land value resulting from homebuilding activities. We do not have any ongoing contractual commitments as a result of these transactions nor do we anticipate any going forward. See “Certain Relationships and Related Party Transactions” for a more detailed description of our transactions with related parties.

Las Vegas Land Holdings—Results of Operations

The historical financial data presented below are not necessarily indicative of the results to be expected for any future period. See additional discussion below regarding the expected impact on future gross margins of purchase accounting adjustments required as a result of recording inventories at fair value.

Consolidated Financial Data


	Three Months Ended March 31,						Year Ended December 31,
(dollars in thousands, except amounts under Other Operating Information)	2014			2013			2013			2012
	(unaudited)
Consolidated Statement of Operations :
Home sales revenue	$	14,972		$	13,630		$	74,253		$	50,100
Other revenues		2,637			2,205			9,444			9,993


Total operating revenues		17,609			15,835			83,697			60,093

Construction and land costs		8,526			9,117			45,950			35,164
Other costs and expenses		4,444			3,885			18,512			19,168


Total costs and expenses		12,970			13,002			64,462			54,332

Operating income		4,639			2,833			19,235			5,761

Total other expenses		(120	)		(63	)		(397	)		(1,333	)


Net income	$	4,519		$	2,770		$	18,838		$	4,428


Select Balance Sheet Data (end of period) :
Inventories	$	79,767		$	79,303		$	79,303		$	81,768
Total assets		112,594			103,825			103,825			104,340
Total liabilities		31,335			27,356			27,355			43,937
Members’ Equity		81,259			76,469			76,470			60,403

Other Operating Information :
Gross margin from home sales revenue		43.0	%		33.1	%		38.1	%		29.8	%
Number of homes delivered		49			51			256			197
Average sales price of homes delivered	$	305,551		$	267,255		$	290,050		$	254,315

Three Months Ended March 31, 2014 Compared to the Three Months Ended March 31, 2013

Results of Operations

During the three months ended March 31, 2014, LVLH delivered 49 homes, with an average sales price of $305,551, generating home sales revenue of $15.0 million, $4.6 million in operating income and $4.5 million in net income. During the three months ended March 31, 2013, LVLH delivered 51 homes, with an average sales price of $267,255, generating home sales revenue of $13.6 million, $2.8 million in operating income and $2.8 million in net income.

Gross profit from home sales revenue, which we define for LVLH as home sales revenue less construction and land costs divided by home sales revenue, was 43.0% and 33.1% for the three months ended March 31, 2014 and 2013, respectively. The historical gross margins of LVLH exceed those of the Company for the applicable periods primarily as a result of LVLH’s basis in land inventory, which was acquired in 2010 from the Rhodes Company, LLC and its affiliates (the predecessor entities to LVLH) pursuant to their plan of reorganization under Chapter 11 of Title II of the United States Code.

Home Sales Revenues and Gross Margin from Home Sales Revenue

Home sales revenue increased to $15.0 million for the three months ended March 31, 2014 from $13.6 million for the three months ended March 31, 2013 as a result of an increase of 14.3% in the average sales prices of homes delivered. This increase was partially offset by a 3.9% decrease in the number of homes delivered between periods. The average sales price of homes increased as a result of the mix of homes delivered during each period, as well as overall price appreciation from favorable market conditions. The increase in gross margin from home sales revenue is attributable to the increase in average sales price between periods.

Other Revenues

Other revenues consist of revenues from the operations of two golf courses, raw land sales and management fees from operations of home owners associations. Other revenues increased to $2.6 million for the three months ended March 31, 2014 from $2.2 million for the three months ended March 31, 2013. The increase is a result of an increase of $0.2 million increase in revenues from golf course operations as a result of an increase in the number of rounds played, as well as a $0.2 million increase in raw land sales revenues.

Construction and Land Costs

Construction and land costs decreased to $8.5 million for the three months ended March 31, 2014 from $9.1 million for the three months ended March 31, 2013. The decrease of $0.6 million, or 6.5%, is a result of the decrease in the number of deliveries between periods, as well as a change in the mix of homes delivered between periods.

Other Costs and Expenses

Other costs and expenses increased to $4.4 million for the three months ended March 31, 2014 from $3.9 million for the three months ended March 31, 2013. The increase was a result of an increase in general and administrative expenses as a result of costs incurred to sell Las Vegas Land Holdings, LLC to the Company.

Year ended December 31, 2013 Compared to the Year Ended December 31, 2012

Results of Operations

During the year ended December 31, 2013, LVLH delivered 256 homes, with an average sales price of $290,050, generating home sales revenue of $74.3 million, $19.2 million in operating income and $18.8 million in net income. During the year ended December 31, 2012, LVLH delivered 197 homes, with an average sales price of $254,315, generating home sales revenue of $50.1 million, $5.8 million in operating income and $4.4 million in net income.

Gross profit from home sales revenue, which we define for LVLH as home sales revenue less construction and land costs divided by home sales revenue, was 38.1% and 29.8% for the years ended December 31, 2013 and 2012, respectively. The historical gross margins of LVLH exceed those of the Company for the applicable periods primarily as a result of LVLH’s basis in land inventory, which was acquired in 2010 from the Rhodes Company, LLC and its affiliates (the predecessor entities to LVLH) pursuant to their plan of reorganization under Chapter 11 of Title II of the United States Code).

Home Sales Revenues and Gross Margin from Home Sales Revenue

Home sales revenue increased to $74.3 million for the year ended December 31, 2013 from $50.1 million for the year ended December 31, 2012 as a result of an increase of 29.9% in number of homes delivered, and a 14.1% increase in the average sales prices of homes delivered. The increase in the number of homes delivered was a result of the increase from two selling communities in 2012 to three selling communities in 2013, as well

as favorable overall market conditions which resulted in increased demand across all selling communities. The average sales price of homes increased as a result of the mix of homes delivered during each period, as well as overall price appreciation from favorable market conditions. The increase in gross margin from home sales revenue is attributable to the increase in average sales price between periods.

Other Revenues

Other revenues consist of revenues from the operations of two golf courses, raw land sales and management fees from operations of home owners associations. Other revenues decreased to $9.4 million for the year ended December 31, 2013 from $10.0 million for the year ended December 31, 2012 as a result of a decrease in raw land sales revenues.

Construction and Land Costs

Construction and land costs increased to $46.0 million for the year ended December 31, 2013 from $35.2 million for the year ended December 31, 2012. The increase of $10.8 million, or 30.7%, is a result of the increase in the number of deliveries between periods.

Other Costs and Expenses

Other costs and expenses decreased to $18.5 million for the year ended December 31, 2013 from $19.2 million for the year ended December 31, 2012. The decrease was a result of a decrease in the cost of land sold during the periods.

Outlook

Our acquisition of LVLH will be accounted for as a business combination in accordance with the Company’s accounting policies with the acquired assets and assumed liabilities recorded at their estimated fair values as of April 1, 2014. Based upon our preliminary estimates of the fair value of the assets to be acquired and the liabilities to be assumed, we anticipate recording a significant step up to LVLH’s historical basis for inventories. As homes are delivered in future periods, we anticipate this step up will result in gross margins from home sales revenues that are comparable to the gross margins realized by the Company during the three months ended March 31, 2014 and 2013 and the years ended December 31, 2013 and 2012.

MARKET OPPORTUNITY

Unless otherwise indicated, all market data included in this prospectus is derived from a market study prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC (“JBREC”) based on the most recent data available as of February 2014. Founded in 2001, JBREC is an independent research provider and consulting firm focused on the housing industry. The following information contains forward-looking statements which are subject to uncertainty and you should review “Cautionary Note Concerning Forward-Looking Statements.”

Some of the market data included in this prospectus is derived from the CoreLogic Case-Shiller Index, the Burns Home Value Index ^TM , and the Burns Affordability Index ^TM . The CoreLogic Case-Shiller Index is the most widely recognized measure of home price appreciation and depreciation, and is frequently used by investors; it is released to the public monthly and quarterly via the CoreLogic website at http://www.corelogic.com/products/case-shiller.aspx. The Burns Home Value Index ^TM is a proprietary index developed by JBREC to materially reduce the impact of shifts in the mix of homes sold during a period by using multiple data sources to measure home price appreciation or depreciation across all homes, rather than just those that have been purchased or sold during a given quarter. The Burns Affordability Index ^TM is a proprietary index which compares a metropolitan area’s affordability against its own historic affordability dating back to 1981, using income and home price data purchased from third party sources plus mortgage rate data from Freddie Mac. The Burns Home Value Index ^TM and the Burns Affordability Index ^TM are updated monthly for distribution to research clients of JBREC. The public may purchase research reports from JBREC to gain access to these proprietary indices at a price of $1,500 per month per metropolitan area with a minimum three-month trial commitment. In addition, JBREC occasionally shares portions of the information and analyses from its proprietary indices through its free newsletters, which are posted on JBREC’s website and may be viewed by the public without charge.

The estimates, forecasts and projections prepared by JBREC are based upon numerous assumptions and may not prove to be accurate. This section contains estimates, forecasts and projections that were prepared by JBREC, a real estate consulting firm. The estimates, forecasts and projections relate to, among other things, home value indices, payroll employment growth, median household income, housing permits and household formation. No assurance can be given that these estimates are, or that the forecasts and projections will prove to be, accurate. These estimates, forecasts and projections are based on data (including third-party data), significant assumptions, proprietary methodologies and the experience and judgment of JBREC. No assurance can be given regarding the accuracy or appropriateness of the assumptions and judgments made, or the methodologies used, by JBREC. The application of alternative assumptions, judgments or methodologies could result in materially less favorable estimates, forecasts and projections than those contained in this section. Other real estate experts have different views regarding these forecasts and projections that may be more positive or negative, including in terms of the timing, magnitude and direction of future changes.

The forecasts and projections are forward-looking statements and involve risks and uncertainties that may cause actual results to be materially different from the projections. JBREC has made these forecasts and projections based on studying the historical and current performance of the residential housing market and applying JBREC’s qualitative knowledge about the residential housing market. The future is difficult to predict, particularly given that the economy and housing markets can be cyclical, subject to changing consumer and market psychology, geo-political events and governmental policies related to mortgage regulations and interest rates. There will usually be differences between projected and actual outcomes because events and circumstances frequently do not occur as expected, and the differences may be material. Accordingly, the forecasts and projections included in this section or contained elsewhere in this prospectus based on the information contained in this section might not occur or might occur to a different extent or at a different time. For the foregoing reasons, JBREC cannot provide any assurance that the estimates, forecasts and projections, including third-party data, contained in this section are accurate; actual outcomes may vary significantly from those contained or implied by the forecasts and projections, and you should not place undue reliance on these estimates, forecasts and projections.

National Housing Market

The U.S. housing market continues to improve from the cyclical low points reached during the 2008-2009 national recession. Between the 2005 market peak and 2011, new single-family housing sales declined 76%, according to data compiled by the Census Bureau, and median home prices declined 34%, as measured by the CoreLogic Case-Shiller Index. In 2012, some U.S. markets showed early indications of recovery as a result of an improving macroeconomic backdrop and strong housing affordability. According to the Census Bureau, single-family homebuilding permits reached a cyclical low at approximately 419,000 units in 2011 before increasing by 24% to approximately 519,000 in 2012. Single-family permits rose by another 18% to approximately 610,000 in 2013. The single-family median resale home price decreased 5% year-over-year in 2011 followed by a 7% increase in 2012 and 11% increase in 2013, according to data compiled by the National Association of Realtors, which is influenced by the mix of homes sold. According to the Census Bureau, growth in new home sales outpaced growth in existing home sales from 2011 through 2013, increasing 40% versus 19% for existing homes.

Strong housing markets have historically been associated with favorable affordability, a healthy domestic economy, positive demographic trends such as population growth and household formation, low mortgage rates, increases in renters that qualify as homebuyers and locally based dynamics such as higher housing demand relative to housing supply. Many markets across the United States are experiencing a number of these positive trends. Relative to long-term historical averages, data compiled by the BLS and the Census Bureau shows that the U.S. economy is creating more jobs than homebuilding permits issued and the inventory of resale and new unsold homes is low compared to recent periods. Affordability remains better than normal nationally, with the median housing payment claiming 29.2% of the median income as of December 2013, compared to the historical median at 32.5%; however, affordability weakened in 2013 from rising home prices and mortgage rates, and some metropolitan areas cannot be considered more affordable than normal.

Despite recent momentum, the U.S. housing market has not fully recovered from the 2008-2009 recession as consumer confidence remains below average levels, mortgage underwriting standards have tightened, and the number of delinquent mortgages remains elevated relative to historical averages. Additionally, real estate is a local industry and not all markets exhibit the same trends.

The U.S. housing market is in phase three of a supply-constrained housing recovery, as described below:

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Phase 1 —job growth begins.

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Phase 2—price appreciation occurs among low-priced homes in foreclosure, increasing resale prices to the point where purchasing a new home provides a good value compared to purchasing an existing home. Reduced resale inventory and great affordability fuel a surge in demand for new homes during this recovery.

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Phase 3 —strong demand and limited supply lead to considerable price appreciation in land-constrained markets and a resurgence in construction activity in markets with sufficient land supplies. Price appreciation allows discretionary buyers to sell their existing homes and potentially purchase a new home.

While conditions are improving, significant future growth is required to return to pre-recession housing market conditions.

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Construction starts, as measured by the Census Bureau through December 2013, were at 999,000 units per year. This represents 67% of a recovery to a level of 1.5 million annual starts, which is comparable to housing starts in 2000, a year that is reflective of a more stable market. Permits issued through December 2013 are more than twice the level of the low of 478,000 annual starts in April 2009.

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Existing home sales reached 4,870,000 annualized transactions through December 2013 as measured by the National Association of Realtors. This volume is in line with JBREC’s estimates for a stable volume based on the ratio of existing home sales activity per household during the late 1980s and

1990s, when the resale housing market was in a more balanced environment and many economic variables were near historical averages. Existing home sales had fallen to an annualized rate of 3,300,000 transactions in July 2010.

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New home sales were at 414,000 annualized transactions through December 2013, as measured by the Census Bureau, representing 52% of a recovery to a level of 800,000 annual transactions. JBREC estimates this volume to be a stable level based on new home sales activity during the late 1990s, when the new home market was in a more balanced environment and many economic variables were near historical averages. New home sales had fallen to 306,000 annualized transactions in 2011.

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Home affordability for the nation as measured by the Burns Affordability Index™ reached its most favorable levels during the housing downturn as prices and mortgage rates declined. A combination of rising prices and mortgage rates has already increased the cost of housing relative to incomes of U.S. homebuyers, and JBREC believes that this trend is likely to continue over the next five years, bringing affordability measures closer to the historical median level measured from 1981 to 2012.

Demand

Job growth is the most important factor for a healthy housing market. While year-over-year job growth is once again positive after significant losses from 2008 through 2010, recent growth has moderated amidst fiscal uncertainty. Additionally, the rate of job growth in economic recoveries has slowed over the last 30 years, primarily as a result of the aging U.S. labor force, productivity improvements and globalization. As of December 2013, the seasonally adjusted unemployment rate was 6.7%, which is down from 7.8% a year ago. JBREC forecasts that job growth will grow at a 1.9% average annual rate from 2014 through 2016. By the end of 2014, the national economy is expected to have recovered all of the 7.7 million jobs lost between 2008 and 2010. The Census Bureau projects that the national population will grow by 0.8% annually from 2014 through 2016, expanding housing demand.

According to data compiled by the Census Bureau and the BLS, the current average employment growth to homebuilding permit ratio for the country is 2.4. A balanced ratio in a stable market is 1.2 to 1.3 jobs created for every homebuilding permit issued. This ratio has been above a stable market ratio for several quarters, due to a rise in employment growth coupled with historically low homebuilding permit levels. Over time, the relative excess job growth to homebuilding permit growth should lead to improving consumer confidence and new home sales, which should drive increased construction activity.

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After decreasing to 4.1 million transactions in 2008 from a peak of nearly 7.1 million transactions three years prior, existing home sales transactions are currently nearly 4.9 million, according to the National Association of Realtors, which JBREC estimates to be a normal volume. A lack of inventory throughout 2013 was limiting sales activity in the existing home market, and JBREC expects resale sales will grow through 2016 as supply improves. JBREC forecasts that sales will rise to 5.5 million transactions in 2016, which would be slightly higher than the sales activity in 2001, and will decline in 2017 when mortgage rates are expected to exceed 5.5% and the economy is anticipated to slow. The share of sales that were for investment purposes remained high at 27.8% in the fourth quarter of 2013, which was a slight decrease from a year ago, based on JBREC estimates using DataQuick data.

The share of distressed sales has been declining while investor activity remains above normal levels. Many investors have been converting distressed inventory to rentals for a long-term hold, which has supported the recovery process by removing marginal inventory that otherwise depresses prices.

The projected steady job growth is forecasted to support absorption of the rising new home supply, which is coming off historical lows. New single-family home sales transactions reached a trough in 2011 at 306,000 homes sold, according to the Census Bureau, and JBREC forecasts new home sales will rise steadily to 713,000 sales by 2016—a level last reached in pre-boom 1996 and slightly higher than in 2007. The new home market currently has only 170,000 units of completed supply as of December 2013, which is still historically low but rising, and JBREC expects construction levels to increase as home prices rise.

Supply

JBREC is forecasting measurable improvement in new residential construction activity. Activity is projected to steadily increase through 2016 at a rate that slightly exceeds the recoveries in past regional downturns, such as those in Houston in the late 1980s and Southern California in the late 1990s. With prices rising, and certain submarkets stabilized, homebuilder demand for lots has increased substantially.

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Very little entitlement processing took place during the housing correction, and the supply of finished, or even approved, lots is currently limited. As such, a lag in the delivery of new lot supply is delaying growth in new construction, especially in markets with prolonged approvals processes, such as California.

The number of existing homes available for sale (not including “shadow inventory,” which is the number of homes with a mortgage that are in some form of distress but that are not currently for sale) remains very low. As of December 2013, there were 4.6 months of resale inventory on the market, which is well below the peak level and below the average of 7.2 months of supply over the past 30 years, according to the National Association of Realtors.

There is currently an excess of vacant homes in the United States which JBREC estimates at 1.2 million units. The vacant housing inventory had accumulated as investors and second-home buyers purchased homes for profit and personal use, and again as the severe recession significantly reduced household formations. As household growth outpaces construction, the excess vacancy has been clearing, although this varies by local market.

While the number of homes entering the foreclosure process is declining, the overall volume is still quite high relative to historical levels. According to the Mortgage Bankers Association, approximately 9.5% of all mortgages were delinquent as of the third quarter of 2013. Shadow inventory has been declining since the third quarter of 2012 but remains above normal inventory levels. Based on estimates by JBREC, there were 1.9 million units of extra shadow inventory as of the third quarter of 2013. This supply is likely to be sold or liquidated over the next several years. JBREC believes that banks will dispose of many of these distressed loans through either short sales or foreclosures and will do so at a moderate rate so as to limit the downward pressure on home prices resulting from the liquidation. One risk is that banks change their philosophy and decide to dispose of these distressed loans at a more rapid pace.

The media has made much of the distress in the market, focusing on the homes that are in some form of delinquency or foreclosure. However, only 6% of the total households in the United States are in some sort of distress; the remaining 94% are not, according to JBREC estimates.

Affordability

Affordability in the existing home market is at historically favorable levels nationally, looking back over the last 30 years. The ratio of annual housing costs (which is mortgage payment plus a portion of the down payment) for the median-priced resale home to the median household income reached an historical low in 2012 that dated back to 1981, but is rising quickly and approaching the historical average. Due to rising mortgage rates coupled with expected home price appreciation, affordability conditions nationally started to weaken in the second half of 2013, and will continue to weaken gradually in the coming years, reaching their historical median levels in 2015. While affordability conditions vary by market, most markets have experienced their most favorable historical affordability during this cycle.

Home values are trending up, and the combination of low mortgage rates, a declining percentage of distressed sales, and low inventory levels are expected to drive home values further. JBREC estimates national home values appreciated by approximately 10.3% during the 12 months ended December 2013, and forecasts national appreciation of 5.5% in 2014 and 4.3% in 2015. Many factors can influence this outlook.

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Home price appreciation will likely be supported by low mortgage rates, which remain historically favorable and are expected to remain low in the near term due to low inflation and global economic uncertainty. JBREC forecasts that average 30-year fixed mortgage rates will rise gradually to 5.8% by 2016, as increasing inflation and an improving economy drive rates higher after this period of very low inflation. However, as interest rates can change quickly, this expectation may not materialize.

Expected Trends. Strong price appreciation may occur over the near term due to the following factors:

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Demand —demand is growing much faster than the new home supply is being added to the market, which is helping to reduce the excess existing supply in the market. With a lower level of excess supply, JBREC expects prices will rise, as there will be multiple buyers for every house on the market for sale.

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Affordability —better than average affordability will make it easier for buyers to pay higher prices for homes, so long as mortgage rates remain historically low.

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Investment —hard assets, such as real estate, are broadly considered an inflation hedge, and many investors will focus on inflation once the current deflation concerns subside. International investors sense an attractive opportunity to buy U.S. real estate, partially attributable to the strength of their currencies. Also, large institutional investors as well as local investment groups see an opportunity to buy homes at below the historical price/income ratio, and have been driving prices up.

The Bear Case

While the fundamentals are in place for a recovery in the housing market, there are a number of factors that are slowing or could slow the recovery, including the following:

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The market is experiencing a low level of activity from entry-level buyers due to a lack of savings, weak credit histories, and high back-end debt-to-income ratios.

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Fewer current homeowners are purchasing homes due to the high loan-to-value ratios of their existing loans.

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The economy could still experience slow and volatile growth in the years to come, and even a recession. Recessions caused by excess leverage, such as the recent recession, usually resolve over many years and the path is typically volatile.

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A large number of mortgaged homes will continue to go through the foreclosure process and will be sold under duress, though at lower levels than before.

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Mortgage rates could continue to rise, which could slow home sales rates and limit price appreciation.

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The implementation of qualified mortgage and qualified residential mortgage rules in the Dodd-Frank Wall Street Reform and Consumer Protection Act could make mortgages more difficult to obtain. The “qualified mortgage” definition requires a 43% or lower backend debt-to-income ratio, which is generally more accommodative than the definition in the early 1990s.

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Development and building costs are rising, which could negatively impact homebuilder margins.

In addition, the government deficit is substantial, and the United States may be subject to further credit rating downgrades until political leadership develops and executes a plan to address the deficit.

Conclusion

In summary, housing is a risky asset class, but JBREC believes the outlook for the housing market is favorable as a result of several factors, including the following:

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Demand is strong. According to the data derived from the Census Bureau and the BLS , the number of adults finding employment is exceeding new home supply by a ratio of 2.4 to 1.

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Supply is low. Resale inventory is below the historical average months of supply, new home inventory is near an all-time low, and new construction is below historical averages, according to the National Association of Realtors and the Census Bureau.

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Affordability is historically favorable nationally. With mortgage rates around 4.3% in January 2014 according to Freddie Mac, and home prices in many markets back to levels last seen in 2003 as measured by a variety of indices, including the Burns Home Value Index ^TM , homeownership is an attractive financial option.

JBREC forecasts that the excesses of the recent downturn will clear and that home prices and construction will increase for the foreseeable future.

Southwest Region

JBREC defines the Southwest region as consisting of Arizona, New Mexico, Nevada, Utah and Colorado. The Southwest housing markets improved significantly in late 2012 and the first half of 2013, and slowed in the second half of 2013. In 2012, investors buying distressed inventory helped reduce the resale inventory to record lows in many Southwest housing markets. Buyers confident in their jobs took advantage of lower home prices and low mortgage rates, and new home communities enjoyed significant gains in sales rates in 2012 and 2013, as well as price increases. In 2012, Southwest builders were the first in the country to report net prices were increasing each month. They were also the first to intentionally slow their sales pace and steadily raise prices to improve their margins.

Resale and new home sales rates slowed nationally and in the Southwest in the second half of 2013, as a result of rising mortgage rates and higher home prices that reduced affordability, weaker consumer confidence surrounding the government shutdown in October 2013, and seasonality. In the first quarter of 2014, many Southwest builders have observed a gradual seasonal rise in traffic and sales that is typical of a normal, but not exceptional, spring selling season. JBREC expects moderate home price appreciation in 2014 in most markets.

Labor shortages quickly emerged in 2013, as Southwest builders’ sales increased quickly and challenged the capacity of the dramatically reduced construction trades. These shortages continue to impact builders’ construction schedules, with some gradual signs of improvement as higher wages and confidence in the housing recovery are attracting labor back to the construction trades. In addition, strong demand for building products have driven up costs, as supplies are limited while product manufacturers gradually add capacity. Lot and land prices rose significantly in 2013 as Southwest builders competed for desirable lot locations; consequently, some new home communities may not be feasible for homebuilders in the current market, as current new home prices do not justify the prices paid for the lots. These challenges are typical of a housing recovery, and underscore the importance of an experienced management team to assess opportunities to buy land, and to work with local trades and suppliers to manage scheduling.

Texas Region

JBREC considers the State of Texas to be a region, and focuses on the Houston, Dallas, Fort Worth, Austin and San Antonio metropolitan areas. The Texas region fared better than others during the recession and housing correction. Although the housing markets were overbuilt, home prices did not inflate and subsequently overcorrect as much and job losses were not as steep as the national averages. Robust job growth in Texas is a significant driver for housing demand, with 248,400 new jobs created in the 12 months ended December 2013, for a 2.4% increase that is the highest of all regions within the United States. Houston added 82,000 jobs or 3.0% growth in the same 12-month period and was the first metropolitan area in the nation to regain all jobs lost during the recession. The Austin metropolitan area also had a high rate of job growth at 3.0% for the 12 months ended December 2013 and is expected to grow by a staggering 4.0% annually from 2014 through 2016. The supply of resale homes for sale is low, with 2.0 to 2.7 months of resale supply for the big metropolitan areas, except San Antonio with 4.0 months of supply. In most markets, 6.0 months of supply represents equilibrium. JBREC projects the Texas region will issue 104,500 single-family permits annually on average, from 2014 through 2016.

JBREC expects continuing improvement for the Texas housing markets. The region offers an affordable cost of living and doing business, which is supported by a desirable tax environment. Population growth, boosted by migration, is expected to support housing demand as residents come to pursue economic opportunities. Current challenges for builders in the Texas region include the limited supply of lots and land with development approvals as a result of little, if any, planning and development during the housing correction, labor shortages that impact scheduling, rising construction costs and a higher incidence of buyers with credit problems, anecdotally. Texas has a more relaxed regulatory environment compared to the coastal markets, and developers have major projects underway that will expand lot supplies in all of the large markets. In a normal market environment, Texas builders commonly use lot option agreements to control lot positions, but delay purchasing lots until needed for construction. The five big Texas metropolitan areas—Houston, Dallas, Fort Worth, Austin, and San Antonio—attract many large public and private builders, who typically build a high volume of homes annually, but at lower margins than in other regions. However, many mid-sized private builders flourish by pursuing profitable, niche opportunities.

Southern California Region

JBREC defines the Southern California region to include Los Angeles, Orange, San Diego, Riverside, San Bernardino, Ventura, Santa Barbara, Kern and Imperial counties. In 2013, homebuilders in all Southern California metropolitan areas enjoyed higher sale rates and pricing power as the housing recovery progressed. Although sales slowed nationally and in Southern California in the second half of 2013, demand for new and existing homes is exceeding the current supply. Job growth, which is a proxy for housing demand, has improved moderately but steadily with a 1.6% increase or 196,000 payroll jobs created regionally in the 12 months ended December 2013; however, higher mortgage rates and home values resulted in affordability conditions becoming slightly worse than their historical average, which slowed demand. The supply of homes for sale remains very low, despite a 33% increase in single-family permits in the 12 months ended December 2013. Total residential permits issued in the same period are still 80% below peak volume. Existing home supply is also very low, with an average of 2.8 months of supply regionally at current sales rates, ranging from 2.2 to 3.5 months of supply in the large metropolitan areas. In most markets, a 6.0 month supply is considered equilibrium.

JBREC expects Southern California will enjoy a sustained recovery. Although the cost of living and doing business is higher than the nearby Southwest metropolitan areas, the quality of life, economic and educational opportunities continue to be significant draws. Current challenges for builders in Southern California include the limited supply of lots and land, much higher lot and land costs, labor shortages that impact scheduling and rising construction costs. Some of these factors are expected to gradually ease as the recovery progresses. However, the Southern California housing markets are supply constrained due to both geography and restrictive regulations. The region has a long-term shortage of affordable housing, given the high cost of land and development. These conditions suggest an opportunity for builders with experience in designing and building higher density housing with sensitivity to concerns around privacy, sound control, natural light and storage.

Denver, CO Housing Market Overview

The Denver-Aurora-Lakewood MSA consists of ten counties, including Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park. The data analyzed by JBREC excludes Elbert and Gilpin counties, which represent just 1% of the MSA population. The metropolitan area is home to approximately 2.7 million residents and 1.0 million households. Known as “Mile High City” because it sits exactly one mile above sea level, Denver is a gateway to the Rocky Mountains for both locals and tourists.

The housing fundamentals in the Denver MSA continue to improve from extremely weak levels experienced in 2008 and 2009. Improvement in the fundamentals is often a precursor for home price appreciation. The Housing Cycle Risk Index™ measures the health of the housing market based on the performance of 24 market fundamentals in relation to their own history, and has historically been a one- to three-year leading indicator for home price appreciation. The improvement is due to the combination of significantly improved demand fundamentals, as a result of improving job growth and rising sales activity, and improved supply fundamentals as a result of low homebuilding permit and listings levels. Affordability has returned to Denver’s historical median due to rising prices and mortgage rates.

The Denver MSA had approximately 1,296,600 non-farm payroll jobs in the 12 months ended December 31, 2013. The MSA lost nearly 60,000 jobs in 2009 and 2010, or 4.8% of the 2008 peak employment level. Since the trough in 2010, Denver has added about 103,100 jobs to the economy, which surpasses the total amount of jobs lost during the recession. JBREC forecasts annual average job growth of 41,200 jobs per year from 2014 through 2016, or 3.1% annually. The non-seasonally adjusted unemployment rate in Denver as of December 2013 was 5.8%, down from 7.4% one year prior and lower than the 6.7% national average.

Denver’s economy is quite diverse. The largest sector by percentage of jobs is Trade, Transportation & Utilities, followed by Professional & Business Services and Government.

The Chamber of Commerce is focused on eight industry clusters, including aerospace, aviation, bioscience, broadcasting and telecommunications, energy, financial services, healthcare and wellness, and IT/software. The Chamber indicates Denver has the highest private aerospace employment of the 50 largest U.S. metropolitan areas, with 19,800 aerospace workers, adding “Colorado has the nation’s second-largest aerospace economy and is home to four military commands, eight major space contractors, and more than 400 aerospace companies and suppliers.” The state’s energy resources, paired with clean technology research and development, attracted the U.S. Department of Energy’s laboratory for renewable energy and energy efficiency research and development. Denver’s largest private employers include Lockheed Martin, which produces aerospace and defense-related systems, broadcastings companies, including CenturyLink, Comcast and DISH Network, and multiple healthcare organizations.

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JBREC forecasts Denver will see average annual growth of 20,900 households, or 1.9% per year, from 2014 through 2016, which is below the 2.5% annual average since 1972. The population in the Denver MSA is forecasted to grow at a pace of 42,600 people, or 1.6%, per year compared to the 2.0% annual average since 1972.

The median household income in the Denver MSA has risen by more than $3,600 since 2011. The MSA’s median household income was $63,500 through December 2013 and JBREC forecasts continued increases in income, averaging 3.7% growth per year from 2014 through 2016.

The existing home sale volume in the Denver MSA gained strength in 2012 with a 23% increase, after a 2% rise in 2011 began to reverse the five year decline from 2006 to 2010. Existing home sales in the 12 months ended December 31, 2012 totaled nearly 46,000 transactions, which is on par with the historical average since 1998. In the 12 months ended December 31, 2013, existing home transactions increased by 21% to 55,700. JBREC expects existing home sales to average 58,000 transactions annually through 2016. Denver’s median resale price declined by 13% from the peak in 2006 to the trough in 2009. The median single-family resale home price in Denver rose nearly 11% in 2012 to $242,200, which was slightly higher than the peak of $241,000 in 2006. The median resale price increased to $260,000 as of December 2013, setting a new peak for the area.

Rising new home sales volume and prices signal Denver’s housing market recovery. New home sales rose 17% in 2012 to 4,700 transactions from the trough of the housing cycle in 2011. In the 12 months ended December 31, 2013, new home sales reached 6,300 transactions for a 33% gain, and JBREC expects new

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home sales activity will increase to 7,400 transactions in 2014, and steadily improve to 10,200 transactions in 2016. The new home sales volume in 2016 is expected to be 57% below the 2005 peak of 17,800 transactions.

New homes typically have a pricing premium over resale homes, and that gap is growing again as housing recovers. DataQuick indicates the 2012 median price for new homes in Denver was $333,300 and $383,700 for the 12 months ended December 31, 2013.

The median new home price in the Denver MSA increased 4.3% in 2010, 2.8% in 2011 and another 8.7% in 2012; however, the median new home price is influenced by the mix of home types being sold at any given time, as well as the low level of transactions in recent years. As a result, resale home prices are a better indication of market trends.

Home values based on JBREC estimates of recent transactions in the Denver MSA increased by 9.9% in 2013 and are expected to rise through 2016, but at a declining rate. According to the Burns Home Value Index™, home values are poised for a 3.6% increase in 2014, and appreciation is expected to taper to 1.2% by 2016.

Homebuilding permit activity in the Denver MSA is forecasted to more than quadruple by 2016 from the trough level in 2009, spurred by solid household growth. Single-family homebuilding permits declined to a low of 2,723 units in 2009 after averaging more than 15,000 units per year from 1999 through 2007. JBREC forecasts that single-family permits will rise to 7,000 units in 2014, with a steady increase to 13,000 units in 2016, which would be the highest level in this market since 2006.

The demand for housing is likely to slightly exceed the supply being added to the market as the Denver MSA exhibits stronger job growth from 2014 to 2016. JBREC forecasts that the MSA will add an average of 2.5 jobs for every homebuilding permit from 2014 through 2016. The historical ratio of employment growth to homebuilding permits in Denver from 1991 to 2008 (the year prior to the most substantial job losses) was 1.3.

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Resale listings in the Denver MSA have declined to their lowest level since late 2005. The declining inventory levels could lead to more competitiveness and increasing prices in the resale market. Through December 31, 2013, the MSA had 5,500 homes listed on the market, which represented a 50% decline from one year prior and approximately 1.2 months of supply, based on existing home sales activity over the most recent 12 months. A 6.0 month supply is considered equilibrium for most markets. By comparison, listings topped 30,800 homes on the market in mid-2007 as inventory levels reached as high as 7.9 months of supply.

The volume of pre-foreclosure notices has been on a decreasing trend since the first quarter of 2010, and remains low in comparison to the peak of distress. Low levels of distress support home price appreciation. Approximately 5,500 notices issue in the fourth quarter of 2013 represented a 63% decline from one year prior and an 87% decline from the peak in 2007.

In addition, the Denver market has a relatively low level of potential distressed homes that are not yet on the market, which is also a positive for home price appreciation. As of March 31, 2013, the shadow inventory amounted to slightly more than 16,000 homes, or 4.1 months of supply. JBREC believes that most shadow inventory homes will gradually become distressed sales over the next few years, and the pace of distressed sales will be slow enough that home prices will not see material declines.

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At the end of 2011, housing affordability conditions in the Denver MSA were at their best level since 1995, according to the Burns Affordability Index™, which compares the monthly costs of owning the median-priced home with the median household income, taking into consideration the change in mortgage rates over time. During 2012, price increases began reducing affordability in Denver, and by June 2013 the metropolitan area’s affordability was back to its long-term average. Affordability from 2014 through 2016 is expected to weaken due to rising home prices and mortgage rates.

In summary, Denver’s job growth resumed in 2011, and the metropolitan area has recovered all jobs lost in the recession during 2013. Denver’s economy is especially diverse, which will help the metropolitan area absorb potential cuts in defense and government spending. Resale sales activity increased by 21% in 2013 and is expected to remain steady through 2016. New home sales activity also improved in 2013, and JBREC expects further gains from 2014 through 2016. Denver builders are benefitting from the very limited resale and new home inventory, which is driving traffic to new home communities and presenting some pricing power. However, affordability is back to the metropolitan area’s long-term average and is expected to worsen through 2016 as rising mortgage rates and home prices take their toll.

Colorado Springs, CO Housing Market Overview

The Colorado Springs MSA consists of El Paso and Teller counties; however, the data analyzed by JBREC excludes Teller, which represents just 4% of the MSA population. The metropolitan area is home to approximately 682,100 residents and 259,900 households. Located about 70 miles south of Denver, Colorado Springs is home to several military bases and the Air Force Academy. Pikes Peak is a major tourist attraction in the area.

The housing fundamentals in the Colorado Springs MSA continue to improve from extremely weak levels experienced in 2007, 2008 and 2009. Improvement in the fundamentals is often a precursor for home price appreciation. The Housing Cycle Risk Index™ measures the health of the housing market based on the performance of 24 market fundamentals in relation to their own history, and has historically been a one- to three-year leading indicator for home price appreciation. The improvement is due to the combination of significantly improved demand fundamentals, as a result of a stabilizing employment picture, rising sales activity and improved supply fundamentals as a result of low homebuilding permit and listings levels. Affordability is currently better than Colorado Springs’ historical median but weakening due to rising prices and mortgage rates.

The Colorado Springs MSA had approximately 255,300 non-farm payroll jobs in the12 months ended December 31, 2013, up 0.5% from 254,100 one year ago. From 2008 through 2010 the metropolitan area lost nearly 15,000 jobs or 5.7% of the 2007 peak employment level. Job growth picked up in 2011 with 3,300 jobs gained and 2,000 more in 2012. JBREC expects the metropolitan area to add 2,000 jobs in calendar 2014. The non-seasonally adjusted unemployment rate in Colorado Springs as of December 2013 was 7.2%, down from one year prior and slightly above the 6.7% national average.

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The Colorado Springs MSA is expected to see a gradual recovery through 2016. JBREC forecasts annual average job growth of 3,700 jobs per year from 2014 through 2016, or 1.4% annually. Colorado Springs’ economy is moderately diverse, with a larger share of government jobs than the national average. The largest sector by percentage of jobs is Government followed by Trade, Transportation & Utilities and Professional & Business Services. The government sector includes federal, county and local government as well as local school districts, and non-active duty military employees. Active military personnel are not captured in the payroll employment statistics, so housing demand may be stronger than implied by job growth.

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The economy of Colorado Springs is primarily based on the military installations in the area as well as on the aerospace and electronics industries and tourism. Fort Carson, a U.S. Army base, is the largest employer. The U.S. Air Force Academy, Fort Peterson Air Force Base, and the North American Air Defense Command are also major employers. There are also many defense related employers in Colorado Springs including Boeing, General Dynamics, Lockheed Martin and Northrop Grumman. The presence of the air and space focused manufacturers has drawn a number of technology-based manufacturers, such as Hewlett-Packard and ITT.

Leisure & Hospitality is also a large component of the economy accounting for about 13% of the MSA’s employment. Pikes Peak and the natural beauty of the surrounding area attract about 5.9 million visitors annually, and Pikes Peak region realized more than $1 billion of tourism related economic impact in 2010. The U.S. Olympic Committee and 24 other sports governing bodies are based in Colorado Springs, stimulating the creation of a sports/outdoor industry cluster that also supports tourism.

Population growth over the next three years in the Colorado Springs MSA is expected to be higher than the historical average in this market, while household growth is expected to be consistent with average. JBREC expects Colorado Springs will see average annual population growth of 7,900 residents or 1.2% per year from 2014 through 2016. Household growth is expected to average 4,000 annually, or 1.5% per year.

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The median household income in the Colorado Springs MSA has risen by roughly $3,100 since 2011. The MSA’s median household income was $58,200 through December 2013. JBREC expects continued increases in income, averaging 2.7% growth per year from 2014 through 2016.

The existing home sale volume in the Colorado Springs MSA gained strength in 2012 with a 12% increase, after decreases in five of the last six years. Resale sales in the 12 months ended December 31, 2013 totaled just over 11,100 which is still about 3,700 below peak resale sales in 2005.

JBREC expects existing home sales to average 11,800 transactions annually through 2016. The median single-family resale home price in Colorado Springs in the 12 months ended December 2013 rose 2.5% to $189,700 which is still 6.1% below the peak of $202,000 in 2007. The MSA’s median resale price declined by 12% from the peak in 2007 to the trough in 2011.

The trough of the new home market occurred in 2009 in Colorado Springs. There was a modest recovery in 2010 offset by a small decline in 2011. In 2012, the overall recovery in the Colorado Springs housing market began to solidly push up new home sales volumes. New home sales in the 12 months ended December 31, 2013 rose to 2,400 transactions, a 34% increase from the prior 12-month period. JBREC expects new home sales activity will increase to 2,700 transactions in 2014, and steadily improve to 3,200 transactions in 2016. At 3,200 units, new home sales will still be about 44% below the 2005 peak of 5,700 transactions.

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New homes typically have a pricing premium over resale homes, and that gap is growing again as housing recovers. DataQuick indicates the 2012 median price for new homes in Colorado Springs was $260,600 and increased to $287,450 in the 12 months ended December 31, 2013. The median new home price increased 2.4% in 2011, and 7.1% in 2012; however, the median new home price is influenced by the mix of home types being sold at any given time, as well as the low level of transactions in recent years. As a result, resale home prices are a better indication of market trends.

Home values based on JBREC’s estimates of recent transactions in the Colorado Springs MSA increased by 5.4% in 2013, and are expected to rise through 2016 at a lower rate. According to the Burns Home Value Index™, home values are poised for a 4.0% increase in 2014 and 3.0% in 2015 before tapering to 2.4% growth by 2016.

JBREC forecasts homebuilding permit activity in the Colorado Springs MSA as of 2016 will reflect a 295% increase from the trough level in 2009, spurred by solid household growth. Single-family homebuilding permits declined to a low of 1,353 units in 2009 after averaging more than 5,100 units per year from 1999 through 2007. Single-family permits increased by 19% in the 12 months ended December 2013 to 2,880 units. JBREC forecasts that single-family permits will rise another 18%, to 3,400 units in 2014, with a steady increase to 4,000 units in 2016, which would be the highest level in this market since 2006.

The historical ratio of employment growth to homebuilding permits in Colorado Springs from 1991 to 2007 (the year prior to the most substantial job losses) is 1.4. The Colorado Springs ratio as of December 2013 was well below the historical average, indicating that builders are adding new supply at a pace that nearly matches job growth. JBREC forecasts the metropolitan area’s employment to permit ratio will remain below the average, by adding an average 0.8 jobs for every homebuilding permit from 2014 through 2016.

Resale listings in the Colorado Springs MSA have declined steadily since mid-2010, more or less leveling out over the past year aside from seasonal trends, and are below 2005-2006 levels. The declining inventory levels could lead to more competitiveness and increasing prices in the resale market. At December 31, 2013, the MSA had 4,523 homes listed on the market, up roughly 7% from one year earlier. This represents an approximately 4.9 months of supply, based on existing home sales activity over the most recent 12 months. A 6.0 month supply is considered equilibrium for most markets. By comparison, listings topped 8,300 homes on the market in mid-2007 and inventory levels reached as high as 10.6 months of supply in the summer of 2008 as sales rate slowed.

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The volume of pre-foreclosure notices declined in each quarter of 2013 and remains low in comparison to the peak of distress. Low levels of distress support home price appreciation. Approximately 1,640 notices were issued in the fourth quarter of 2013, which represented a 53% decline from one year prior and a 71% decline from the peak in 2009.

In addition, the Colorado Springs market has a relatively low level of potential distressed homes that are not yet on the market, which is also a positive for home price appreciation. As of March 31, 2013, the shadow inventory amounted to slightly more than 4,200 homes, or 4.7 months of supply. JBREC believes that most shadow inventory homes will gradually become distressed sales over the next few years, and the pace of distressed sales will be slow enough that home prices will not see material declines.

In the final two quarters of 2012, housing affordability conditions in the Colorado Springs MSA were at their best levels since 1981, according to the Burns Affordability Index™, which compares the monthly costs of owning the median-priced home with the median household income, taking into consideration the change in mortgage rates over time. Price and mortgage rate increases in the first half of 2013 began driving affordability back towards the MSA’s long-term average.

In summary, Colorado Springs’ job growth decline appears to have reversed itself and the employment picture is expected to increase annually by 1.4% from 2014 through 2016. The metropolitan area should gradually recover all jobs lost in the recession by the end of 2016. However, potential cuts in defense and government spending could have an impact on the recovery due to the large presence of military and other government jobs. Resale sales activity increased by 15% in 2013 and is expected to increase by 3% annually through 2016. New home sales activity increased 34% in 2013 and JBREC forecasts continued strong recovery through 2016. Affordability remains very good compared to Colorado Springs’ history, although rising mortgage rates and home prices began to weaken affordability in 2013.

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Fort Collins, CO Housing Market Overview

The Fort Collins-Loveland MSA consists of Larimer County in Colorado. The metropolitan area is home to approximately 319,600 residents and 130,500 households. Located about 65 miles north of Denver, Fort Collins is home to Colorado State University and its research facilities, which have attracted a number of high-tech companies. The metropolitan area also has a strong manufacturing base, including such firms as Hewlett Packard, WaterPik, Woodward, In-Situ, and Anheuser-Busch.

The housing fundamentals in the Fort Collins MSA materially improved from 2010 through 2013, from very weak levels from 2006 through 2009. Improvement in the fundamentals is often a precursor for home price appreciation. The Housing Cycle Risk Index™ measures the health of the housing market based on the performance of 24 market fundamentals in relation to their own history, and has historically been a one- to three-year leading indicator for home price appreciation. The 2012 and early 2013 improvement in Fort Collins was driven by significantly improved demand fundamentals, as a result of a stabilizing employment picture, rising sales activity and improved supply fundamentals as a result of low homebuilding permit and listings levels. Affordability fundamentals are weakening in 2013, as a result of rising home prices and mortgage rates, and have returned to the metropolitan area’s historical median. Demand levels have also declined recently as the rate of job growth has slowed.

The Fort Collins MSA had approximately 143,500 non-farm payroll jobs as of December 31, 2013. The metropolitan area fared better than most during the national recession, with job losses limited to 2009. From the peak in 2008, Fort Collins lost 4,300 jobs or 3.1%, but recovered these jobs and more during 2011 and 2012. The MSA added 2,700 jobs on average in 2013 for a 1.9% increase, and JBREC expects annual average job growth of 3,700 jobs per year from 2014 through 2016, or 2.6% annually. The non-seasonally adjusted unemployment rate in Fort Collins as of December 2013 was 4.8%, down from 6.0% one year prior and well below the 6.7% national average.

Fort Collins’ economy is diverse, with a notably larger share of government jobs than the national average. The largest sector by percentage of jobs is Government followed by Trade, Transportation & Utilities and Education & Health Services. The government sector includes federal, county and local government as well as local school districts.

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The economy of Fort Collins is primarily based on Colorado State University, manufacturing and technology companies. The University is the metropolitan area’s largest employer providing roughly 7,000 jobs, and is also a leading research university with strong emphasis on vector-borne infectious disease, veterinary medicine, atmospheric science, clean energy technologies, and environmental science. Fort Collins has a major presence of semi-conductor firms, including AMD, Avago, Hewlett-Packard, Intel and LSA Corporation. The Chamber of Commerce notes other significant sectors are geospatial, water innovation, clean energy and bioscience, and concludes that Fort Collins has a “brain-driven economy with 11.45 patents issued per 10,000 people, which is four times higher than the average community.”

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Population growth over the next three years in the Fort Collins MSA is expected to be slightly below the historical average for this market, while household growth is expected to be higher than average. JBREC expects Fort Collins will see average annual population growth of 5,400 households or 1.7% per year from 2014 through 2016. Household growth is expected to average nearly 2,900 annually, or 2.2% per year.

After declines in 2009 and 2010, the median household income in the Fort Collins MSA has risen by $3,200 since 2011, and steady growth is expected through 2016. The MSA’s median household income in December 2013 was $58,100 and JBREC expects continued increases in income, averaging 2.3% growth per year from 2014 through 2016.

The existing home sale volume in the Fort Collins MSA gained strength in 2012 with an 18% increase, following a nominal increase in 2011 and annual declines from 2006 through 2010. Resale sales in the 12 months ended December 31, 2013 totaled roughly 6,700 transactions (19% year-over-year increase), which is slightly above the 5,900 average annual sales from 1998 to 2006. JBREC expects existing home sales to average 6,400 transactions annually through 2016. The median single-family resale home price in Fort Collins rose 2% in the 12 months ended December 31, 2013 to $238,000 which is above the recent peak in 2006. The MSA’s median resale price declined by 4% from the 2006 peak to the 2009 trough.

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In Fort Collins, the trough of the new home market occurred in 2009. Sales were flat in 2010 and began to rise in 2011. In 2012, the overall recovery in the Fort Collins housing market began to solidly push up new home sales volumes. New home sales in the 12 months ended December 31, 2013 rose to 1,500 transactions, a 47% increase from the prior year. JBREC doesn’t produce new home sales forecasts for this small metropolitan area.

Reduced resale and new home inventory levels paired with recovering demand are driving new home prices higher. New homes typically have a pricing premium over resale homes, and that gap is growing again as housing recovers. DataQuick indicates the median price for new homes in Fort Collins as of December 31, 2013 was $292,500. The median new home price increased 4.7% in 2011 and 7.1% in 2012, but declined 1.4% in 2013. However, the median new home price is influenced by the mix of home types being sold at any given time, as well as the low level of transactions in recent years. As a result, resale home prices are a better indication of market trends.

Home values based on JBREC’s estimates of recent transactions in the Fort Collins MSA increased by 7.4% in 2013 and are expected to rise through 2016 at a lower rate. According to the Burns Home Value Index™, home values are poised for a 2.7% increase in 2014 and 2.0% in 2015 before tapering to 1.2% growth by 2016.

JBREC forecasts that homebuilding permit activity in the Fort Collins MSA will increase by 720% by 2016 from the trough level in 2009, spurred by solid household growth. Single-family homebuilding permits declined to a low of 361 units in 2009 after averaging more than 2,250 units per year from 1999 through 2007. In 2012 single-family permits increased by 62% from the prior year to 1,139 units. In the 12 months ended December 31, 2013, Fort Collins issued 1,300 permits year-over-year, a 16% annual clip. JBREC forecasts that single-family permits will rise by 32%, to 1,750 units in 2014, and increase steadily to 2,600 units in 2016, which would be the highest level in this market since 2005.

As Fort Collins’ job growth resumed in 2010, supply and demand for housing came back into balance. In 2012, the MSA added an average of 1.9 jobs for every homebuilding permit. Employment growth slowed in 2013, dropping the ratio to 0.5 in the 12 months ended December 2013. JBREC forecasts that the employment to permit ratio will

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moderate to an average of 1.2 permits for every job added from 2014 through 2016. The historical ratio of employment growth to homebuilding permits in Fort Collins from 1991 to 2008 (the year prior to the most substantial job losses) is 1.2.

JBREC does not have data for resale listings and months of supply for the Fort Collins metropolitan area. The volume of pre-foreclosure notices has declined in every quarter of 2013, and remains low in comparison to the peak of distress. Low levels of distress support home price appreciation. Approximately 420 notices were issued in the fourth quarter of 2013, which represented a 60% decline from one year prior and an 82% decline from the peak in 2009. JBREC does not calculate shadow inventory for the Fort Collins metropolitan area. However, JBREC believes that most shadow inventory homes nationally will gradually become distressed sales over the next few years, and the pace of distressed sales will be slow enough that home prices will not experience a material negative impact. JBREC expects that the Fort Collins metropolitan area will be consistent with the national trend in this respect.

When comparing the monthly costs of owning the median-priced home with the median household income, affordability in Fort Collins has returned to the area’s historical median dating back to 1981. This estimate of the ownership costs takes into consideration the change in mortgage rates over time, which can significantly impact the monthly payment. Affordability conditions in the second half of 2012 were at their best level historically, and have worsened throughout 2013 due to rising home prices and mortgage rates. By 2016, affordability in the Fort Collins metropolitan area will be slightly worse than the long-term average.

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In summary, Fort Collins’ housing market is positioned for recovery. The metropolitan area fared better than most during the national recession, with job losses limited to 2009, and all of the lost jobs and more were recovered by 2012. The metropolitan area economy is fairly diverse given its small size, and relatively sheltered from cuts in defense and government spending. Since 2012, new home supply outpaced new home demand; however, JBREC expects new home supply and demand to return to the long-term average for this metropolitan area for the next several years. Although JBREC lacks resale inventory data, market contacts indicate homebuilders are benefiting from limited new and resale supply and are increasing prices in good locations.

Austin, TX Housing Market Overview

The Austin MSA consists of Bastrop, Caldwell, Hays, Travis, and Williamson counties. The new home sales and price data analyzed by JBREC excludes Bastrop and Caldwell counties, which represent just 6% of the MSA population, and is limited to Travis County prior to mid-2008. The metropolitan area is home to nearly 1.9 million residents and more than 725,200 households. Austin is the capital city of Texas and the fourth most populous city in the state.

The housing fundamentals in the Austin MSA continue to improve from the low levels experienced in 2008 and 2009. Improvement in the fundamentals is often a precursor for home price appreciation. The Housing Cycle Risk Index™ measures the health of the housing market based on the performance of 24 market fundamentals in relation to their own history, and has historically been a one- to three-year leading indicator for home price appreciation. The improvement is due to the combination of significantly improved demand fundamentals, as a result of job growth, rising sales activity and improved supply fundamentals. Affordability fundamentals weakened in 2013, as a result of rising home prices and mortgage rates, and have returned to Austin’s historical median.

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The Austin MSA had approximately 865,900 non-farm payroll jobs for the 12 months ended December 31, 2013. In 2009, the metropolitan area lost nearly 17,000 jobs or 2.2% of the 2008 peak employment level. Job growth recovered in 2010 and was strong in 2011 and 2012, averaging roughly 21,350 jobs per year or 2.7%. The MSA added 28,200 jobs on average in 2013 and is expected to see a robust recovery through 2016. JBREC projects average annual job growth of 35,200 jobs per year from 2014 through 2016, or 4.0% annually. The non-seasonally adjusted unemployment rate in Austin as of December 2013 was 4.5%, down from 5.0% one year prior and well below the 6.7% national average.

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Austin’s economy is moderately diverse, with a larger share of government jobs than the national average. The largest sector by percentage of jobs is Government followed by Trade, Transportation & Utilities and Professional & Business Services. The government sector includes state, county and federal government as well as local school districts, and non-active duty military employees.

Austin’s economy has concentrations of state and local government as well as a strong tech industry presence, led by Dell, Inc. as the largest tech employer. The proliferation of technology companies has led to the region’s nickname, “the Silicon Hills.” The University of Texas at Austin, Texas State University and local school districts are also major employers. There are also a number of medical related employers in Austin including Scott & White Healthcare and St. David’s Medical Center. Leisure & Hospitality is also a large component of the economy accounting for almost 12% of the MSA’s employment. As Austin’s official slogan is “The Live Music Capital of the World,” the city draws tourists from around the world to experience music and cultural events.

Austin’s population and household growth over the next three years are expected to exceed the area’s historical averages. JBREC projects Austin will see average annual population growth of 49,500 or 2.5% per year from 2014 through 2016. Household growth is expected to average 21,500 annually, or 2.9% per year.

Austin’s median household income has increased by roughly $2,100 since 2011. The MSA’s median household income for the 12 months ended December 2013 was $59,800 and JBREC forecasts continued increases in income, averaging 2.2% growth per year from 2014 through 2016.

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Austin’s existing home sales volume increased by nearly 7% in 2011 after losses from 2007 through 2010, and gained strength in 2012 with a 20% increase. Resale sales in the 12 months ended December 31, 2013 totaled just over 30,500, which is on par with the peak in 2006. JBREC expects existing home sales to average 33,100 transactions annually through 2016. Austin’s median single-family resale home price has been rising steadily since 2010, rising 7.4% for the 12 months ended December 31, 2013 to $227,200, which is a new peak.

The trough of the new home market occurred in 2011 in Austin. In 2012, new home sales volumes began rising as the housing recovery took hold in Austin. For Travis, Hays and Williamson counties, new home sales rose to 8,140 transactions in the 12 months ended December 31, 2013, a 21.3% increase from the prior 12-month period. JBREC forecasts new home sales activity for the three counties will increase to 8,700 transactions in 2014, and steadily improve to 11,500 transactions by 2016. Low resale and new home inventory levels paired with rising demand are driving new home prices higher.

New homes typically have a pricing premium over resale homes, and that gap is growing again as housing recovers. JBREC calculates new home prices for Austin using mortgage data and assuming a 20% down payment, indicating a $273,800 median price for the 12 months ended December 2013. The median new home price increased 2.3% in 2011, 5.0% in 2012 and 5.1% in 2013; however, the median new home price is influenced by the mix of home types being sold at any given time, as well as the low level of transactions in recent years. As a result, resale home prices are a better indication of market trends.

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Home values based on estimated recently negotiated transactions in the Austin MSA increased by 10.0% in 2013, and are expected to rise through 2016 at a slower rate. According to the Burns Home Value Index™, Austin home values are poised for a 4.9% increase in 2014. Thereafter, home value appreciation is expected to decrease to a 3.9% year-over-year growth rate in 2015 and a 3.1% growth rate in 2016.

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Homebuilding permit activity in the Austin MSA is forecasted to more than double by 2016 from the trough level in 2009, spurred by solid household and employment growth. Single-family homebuilding permits declined to a low of 6,200 units in 2010 after averaging more than 12,500 units per year from 1999 through 2007. For the 12 months ending December 2013, single-family permits increased by 11.9% from the prior year to 9,250 units. JBREC forecasts that single-family permits will increase 13.6%, to 10,500 units in 2014, with a steady increase to 12,200 units in 2016.

Current demand is slightly less than the new supply being added to the market, with recent job growth in the 12 months ended December 31, 2013 slightly lower than the number of homebuilding permits issued in that same time. The employment growth to homebuilding permit ratio was 1.1, compared to the -1.9 employment growth to homebuilding permit ratio for the market in 2009.

JBREC forecasts that the MSA will add an average of 1.4 jobs for every homebuilding permit from 2014 through 2016.

Resale listings in the Austin MSA have declined steadily since mid-2010 and are below 2005-2006 levels. The declining inventory levels could lead to more competitiveness and increasing prices in the resale market. At December 31, 2013, the MSA had 5,050 homes listed on the market which is 12% lower than the same time the prior year. This represents approximately 2.0 months of supply, based on existing home sales activity over the most recent 12 months. A 6.0 month supply is considered equilibrium for most markets. By comparison, listings topped 12,700 homes on the market in mid-2008 and inventory levels reached as high as 7.4 months of supply in the summer of 2010 as sales rate slowed.

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The volume of pre-foreclosure notices has been declining quarter-over-quarter since the second quarter of 2012, and remains low in comparison to the peak of distress. Low levels of distress support home price appreciation. Approximately 2,300 notices were issued in the fourth quarter of 2013, which represented a 40% decline from one year prior and a 65% decline from the peak in 2007.

While the level of future distressed home sales is generally declining, there remains a moderate level of distressed homes that are not yet on the market that will act to limit rapid appreciation of home prices. These delinquent mortgages represent shadow inventory. As of March 31, 2013, the shadow inventory amounted to an estimated 12,400 homes, or 6.6 months of supply. This is nearly more than two times the level of listings that are currently on the market. JBREC believes that most shadow inventory homes in Austin will gradually become distressed sales over the next few years, and the pace of distressed sales will be slow enough that home prices will not be significantly negatively affected.

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When comparing the monthly costs of owning the median-priced home with the median household income, through December 31, 2013, affordability in Austin has returned to the metropolitan area’s historical median dating back to 1981. This estimate of the ownership costs takes into consideration the change in mortgage rates over time, which can significantly impact the monthly payment. Affordability conditions in 2012 were at their best level, but rising home prices and mortgage rates will continue to weaken affordability conditions through 2016.

In summary, Austin’s housing fundamentals are strong. Job growth is better than the national average, resale and new home inventory are low, and the fundamentals that drive Austin’s housing market continue to improve, driving solid home price appreciation and rising construction. However, Austin’s housing affordability has already returned the metropolitan area’s long-term median due to rising prices and mortgage rates.

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Las Vegas, NV Housing Market Overview

The Las Vegas MSA consists only of Clark County. The metropolitan area is home to approximately 2.1 million residents and 763.4 thousand households. Las Vegas is a popular destination for tourism conventions and gaming, and offers a favorable business climate that is especially beneficial for logistics and distribution facilities serving the West Coast.

The housing fundamentals in the Las Vegas MSA are much improved from extremely weak levels from 2006 through 2011, and improving fundamentals is often a precursor for home price appreciation. The Housing Cycle Risk Index ^TM measures the health of the housing market based on the performance of 24 market fundamentals in relation to their own history, and has historically been a one- to three-year leading indicator for home price appreciation. The Index improvement is due to significantly better demand fundamentals, as a result of improving job growth and rising sales activity, and improved supply fundamentals as a result of low homebuilding permit and listings levels. Affordability remains very good compared to Las Vegas’ historical median.

The Las Vegas MSA had approximately 855,400 non-farm payroll jobs in the 12 months ended December 31, 2013, up 1.9% from 2012. The metropolitan area lost nearly 125,400 jobs from 2008 to 2010, or 13.4% of the 2007 peak employment level. Las Vegas has regained about 51,800 of the jobs lost during the recession and is not expected to recover all of the jobs lost in the recession until after 2016. JBREC expects annual average job growth of 22,500 jobs per year from 2014 through 2016, or 2.6% annually. The non-seasonally adjusted unemployment rate in Las Vegas as of December 2013 was 8.9%, down from 10.0% one year prior and higher than the 6.7% national average.

Las Vegas’ economy historically has lacked in diversity. The largest sector by share of jobs remains Leisure & Hospitality accounting for 30.9% of jobs ending December 2013; however, the recession has forced the Las Vegas economy to become more diversified. Trade, Transportation & Utilities is the fastest growing job sector in Las Vegas by adding 6,900 new jobs from December 2012 to December 2013.

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Las Vegas is a popular destination for tourism, conventions and the gaming industry, which brought nearly 39.7 million visitors to Las Vegas in 2013, above the earlier peak of 39.2 million in 2007. The 21,615 trade shows and conventions events hosted in Las Vegas in 2012 generated a $6.7 billion economic impact. Gaming

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revenues for Clark County totaled $9.4 billion in 2012, with $6.2 billion arising from the Strip. Las Vegas offers a favorable business climate, with no personal or corporate income taxes and no estate tax, affordable real estate and proximity to the West Coast. Accordingly, many companies locate their distribution facilities in Las Vegas to capitalize on the location, lower costs and Foreign Trade Zone tax benefits. The University of Las Vegas is home to one of the nation’s few supercomputers, spurring technology sector growth, and the lack of natural disasters makes Las Vegas a great location for data storage facilities.

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Las Vegas household and population growth over the next three years is expected to be higher than the historical average in this market. JBREC expects that Las Vegas will see average annual growth of 24,500 households, or 3.1% per year, from 2014 through 2016. The population is forecasted to grow at a pace of 63,700 people, or 3.0% per year.

Las Vegas median household income has risen by more than $2,600 since 2011, and growth is forecasted to remain steady in 2014. The MSA’s median household income ending December 2013 was $51,350 and JBREC expects that continued increases in income, averaging 1.8% growth per year from 2014 through 2016.

Existing home sale volume in the Las Vegas MSA declined in three of the last five years, with increases in 2009 and 2011. Resale volume declined by 8% in 2010, then increased by 8% in 2011 before declining by 5% and 4% in 2012 and 2013, respectively. Resale sales in the 12 months ended December 31, 2012 totaled over 47,700 transactions, which is higher than the historical average since 1998. In the 12 months ended December 31, 2013, resale transactions declined to 45,900. JBREC expects existing home sales to average 48,100 transactions annually through 2016. Las Vegas’ median resale price declined by 60% from the peak in 2006 to the trough in 2011. The median single-family resale home price rose 5% in 2012 to $128,200, which was 42% of the 2006 peak of $306,450 in 2006. The median resale price increased to $178,000 in December 2013.

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New home sales volume is slowly increasing from very low levels. New home sales in the 12 months ended December 31, 2012 rose 34% to 7,300 transactions from the prior 12-month period. In the 12 months ended December 31, 2013, new home sales reached 8,200 transactions for a 37% gain. JBREC expects that new home sales activity will increase to 9,500 transactions in 2014, and steadily climb to 14,500 transactions in 2016. JBREC expects the new home sales volume in 2016 will still be 63% below the 2005 peak of 38,900 transactions.

Low resale and very limited new home inventory paired with recovering demand are driving new home prices higher. New homes typically have a pricing premium over resale homes, and that gap is growing again as the housing market recovers. DataQuick indicates the 2012 median price for new homes in Las Vegas was $196,600 and jumped to $285,900 for the 12 months ended December 31, 2013.

The median new home price decreased by 4.3% in 2010 and by 2.8% in 2011 before increasing slightly by 0.3% in 2012, and then rising by 27% in 2013; however, the median new home price is influenced by the mix of home types being sold at any given time, as well as the low level of transactions in recent years. As a result, resale home prices are a better indication of market trends.

Home values based on JBREC’s estimates of recent transactions in the Las Vegas MSA increased by 26.9% in 2013 and are expected to rise through 2016, but at a declining rate. According to the Burns Home Value Index ^TM , home values are poised for a 9.6% increase in 2014, and appreciation is expected to taper to 3.7% by 2016.

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JBREC forecasts that homebuilding permit activity in the Las Vegas MSA will triple by 2016 from the trough level in 2009, spurred by solid household growth. Single-family homebuilding permits declined to a low of 3,777 units in 2009 after averaging more than 23,300 units per year from 1999 through 2007. JBREC forecasts that single-family permits will rise from 7,067 units in 2013 to 9,000 units in 2014, with a steady increase to 13,500 units in 2016, which would be the highest level in this market since 2007.

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JBREC believes that the demand for housing is likely to slightly exceed the supply being added to the market as the Las Vegas MSA begins to exhibit stronger job growth once again. Las Vegas experienced an average employment growth to permit ratio of 2.2 in 2013. JBREC forecasts that the MSA will add an average of 1.8 jobs for every homebuilding permit from 2014 through 2016. The historical ratio of employment growth to homebuilding permits in Las Vegas from 1991 to 2007 (the year prior to the most substantial job losses) was 1.1.

Resale listings in the Las Vegas MSA have declined to their lowest level since late 2005. The declining inventory levels could lead to more competitiveness and increasing prices in the Las Vegas resale market. Through December 31, 2013, the MSA had 16,700 homes listed on the market, which represented a 4.5% decline from one year prior and approximately 4.4 months of supply, based on existing home sales activity over the most recent 12 months. A 6.0 month supply is considered equilibrium for most markets. By comparison, listings topped 29,900 homes on the market in early-2009 as inventory levels reached as high as 9.5 months of supply.

The volume of pre-foreclosure notices reached a trough in the third quarter of 2012, and remains low in comparison to the peak of distress. Low levels of distress support home price appreciation. Approximately 14,500 notices were issued in the fourth quarter of 2013, which represented a 19% increase from one year prior but an 82% decline from the peak in 2009.

LOGO

However, the Las Vegas market has a relatively high level of potential distressed homes that are not yet on the market, which could constrain home price appreciation. As of March 31, 2013, the shadow inventory amounted to slightly more than 26,800 homes, or 7.2 months of supply. JBREC believes that most shadow inventory homes will gradually become distressed sales over the next few years, and the pace of distressed sales will be slow enough that home prices will not see material declines. Investor demand for distressed homes in Las Vegas would help clear the distressed inventory quickly.

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Housing affordability conditions in the Las Vegas MSA were at their best historical levels at the end of 2011, according to JBREC’s Affordability Index, which compares the monthly costs of owning the median-priced home with the median household income, taking into consideration the change in mortgage rates over time. Although affordability in Las Vegas began to worsen in early 2012, conditions are still significantly better than the metropolitan area’s long-term average. Affordability is expected to reach its long-term average in 2016 due to rising home prices and mortgage rates.

In summary, Las Vegas’ job growth resumed in 2011 and is projected to outpace the national job growth through 2016. Las Vegas’ economy remains largely dependent on the Leisure & Hospitality industry which accounts for 30.9% of payroll jobs ending December 2013. However, the Las Vegas economy is becoming more diversified with the largest year-over-year job growth coming from the Trade, Transportation & Utilities industry. New home sales activity grew by 34% and 37% in years 2012 and 2013, respectively. JBREC expects further new home sales activity gains through 2016. The Burns Home Value Index ^TM indicates a 26.9% year-over-year increase in Las Vegas home values in the 12 months ending December 2013, and home values are expected to increase at more moderate rates through 2016. Las Vegas builders are benefitting from much healthier resale and new home inventory, renewed employment growth, and historically great affordability.

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OUR BUSINESS

Our Company

We were formed in August 2002 when Dale Francescon and Robert Francescon sold certain predecessor companies to a new entity. At our inception, 50% of the Company was beneficially owned by Dale Francescon and Robert Francescon and 50% was owned by an affiliate of the Woodside Group, then one of the country’s largest private homebuilders. In 2010, the Woodside Group’s interest in the Company was purchased by Dale Francescon and Robert Francescon, resulting in Dale Francescon and Robert Francescon beneficially owning 100% of the equity interests in the Company. On April 30, 2013, our predecessor entity was converted from a Colorado limited liability company to a Delaware corporation pursuant to the DGCL. In addition, our properties are held through a number of subsidiaries that are wholly and directly owned by us.

As of April 1, 2014, we owned and controlled approximately 99 communities containing 10,095 lots in various stages of development. We seek to maximize our return on capital and reduce our risk exposure associated with holding land inventories by developing projects with targeted life cycles of approximately 24 to 36 months from the beginning of construction of the first home to close out of the community, plus an additional one to two years if necessary for the entitlement and development of land, based upon projected volumes.

Assuming that the number of homes we sold in 2013 on a pro forma basis, giving effect to the LVLH Acquisition, is representative of our closing rates generally, we believe we have over 12 years of land supply. Given that we expect an increase in our sales pace, we project that our currently owned and controlled land supply will generate closings through 2018. Generally (although not in all cases), the land that we purchase has the benefit of entitlements providing basic development rights to the owner. We continually evaluate new communities and expect to have an attractive pipeline of land acquisition opportunities.

During 2013, we have seen increased home construction, home sales and revenue compared to 2012. In addition, we have seen increased gross margin and backlog compared to 2012.

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The core of our business plan is to acquire and develop land strategically, based on our understanding of population growth patterns, entitlement restrictions and infrastructure development. We focus on locations within our markets with convenient access to metropolitan areas that are generally characterized by diverse economic and employment bases and demographics and increasing populations. We believe these conditions create strong demand for new housing, and these locations represent what we believe to be attractive opportunities for long-term growth. We also seek assets that have desirable characteristics, such as good access to major job centers, schools, shopping, recreation and transportation facilities, and we strive to offer a broad spectrum of product types in these locations. Cutting edge product development, as well as exemplary customer service, are key components of the lifestyle connection we seek to establish with each individual homebuyer. Our construction expertise across an extensive product offering allows us flexibility to pursue a wide array of land acquisition opportunities and appeal to a broad range of potential homebuyers, from entry-level to first- and second-time move-up homebuyers and even some move-down homebuyers. Additionally, we believe our diversified product strategy enables us to adapt quickly to changing market conditions and to optimize returns while strategically reducing portfolio risk.

According to a report from JBREC, all of our core historical markets, consisting of Denver, Colorado Springs, and Fort Collins, Colorado, are currently experiencing positive job and population growth. JBREC is forecasting that the average annual job growth by core market area will range from 1.3% to 2.3% through 2015, while the average annual population growth rate by primary market area will range from 1.2% to 1.7% during the same period. In addition, Texas and Las Vegas, Nevada, into which we recently expanded, and Southern California, into which we plan to expand, continue to experience positive job and population growth.

Capital Raising

In May 2013, we completed a private offering and a private placement of 12,075,000 shares of our common stock, in reliance on Rule 144A and Regulation S under the Securities Act, and pursuant to the exemption from registration provided in Rule 506 of Regulation D under the Securities Act, where we received net proceeds of approximately $223.8 million. We used the net proceeds from the May 2013 private offering and private placement for the acquisition and development of land, home construction and other related purposes, including approximately $38 million for debt repayment, $62 million for the acquisition of lots, $19 million for development costs, $16 million for the acquisition of Jimmy Jacobs and to partially fund the LVLH Acquisition.

Recent Developments

LVLH Acquisition

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adult buyers. The community includes amenities such as landscaped open areas, walking trails, parks, a recreation center, private streets and guard-gated entry. It also includes Tuscany Village Golf Club, an 18-hole Championship public golf course located within the community.

Potential New Senior Unsecured Revolving Credit Facility

Our Competitive Strengths

We believe the following strengths will provide us with a significant competitive advantage in implementing our business strategy:

Cycle-Tested Management Team

Prior to forming our predecessor company in 2002, Dale Francescon and Robert Francescon served as Co-Division Presidents for D.R. Horton, one of the largest homebuilders in the United States, and prior to that, they owned and operated Trimark Communities when it was the largest builder of attached for-sale homes in Colorado. In 1996, Dale Francescon and Robert Francescon sold Trimark Communities to D.R. Horton for a valuation in excess of 3.0 times its book value. Our senior management team’s combined real estate industry experience through peak markets and down markets spanning numerous market cycles has enabled them to learn to adapt and adjust to changing and varied market factors. We believe that the strong prior experience of our senior management team over various economic cycles provides us with a distinct and significant competitive advantage that optimizes our chances of success in any market.

Proven and Profitable Business Model

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States to be TRI Pointe Homes, Inc., William Lyon Homes, M/I Homes, Inc., Standard Pacific Corp., M.D.C. Holdings, Inc., Hovnanian Enterprises, Inc. and Beazer Homes USA, Inc., and we are among a select few of these homebuilding peers to be profitable in every year since our founding in 2002, including during the 2008-2009 recession and the distressed economic period that followed. In addition, since 2008, our revenues have approximately tripled. We believe that our management approach, which balances a decentralized local market expertise with a centralized executive management focusing on maximizing efficiencies, supports our strong margins and profitability.

To maintain our consistent profitability over the long term, we employ a well-developed land acquisition strategy and strive to control costs through a stringent process of setting realistic budgets and expectations, monitoring and evaluating them throughout the lifecycle of each project, and making any necessary adjustments to correct deviations going forward. This strategy has resulted in 2013 gross margins at the top quartile of our public homebuilding peer group. We believe these practices will allow us to maintain our consistent profitability over the long term.

Attractive Land Positions in Core Markets

As of April 1, 2014, we owned and controlled approximately 99 communities containing 10,095 lots in various stages of development. 3,707 of these lots are finished or partially developed and another 6,388 are already entitled for residential construction. Assuming that the number of homes we sold in 2013 on a pro forma basis, giving effect to the LVLH Acquisition, is representative of our closing rates generally, we believe we have over 12 years of land supply. Given that we expect an increase in our sales pace, we project that our currently owned and controlled land supply will generate closings through 2018.

Land Sourcing and Evaluation Capabilities

Our management team’s deep and wide-ranging knowledge of various Western U.S. land markets and our ability to quickly and efficiently identify, acquire and develop land in desirable locations and on favorable terms are the hallmarks of our success. We believe that our processes, procedures and operating disciplines will enable us to transfer these strengths from our existing markets in metropolitan Colorado to our continued expansion into Texas and planned entry into other markets in the Western United States, through establishment of local offices with local personnel and strategic acquisitions and/or partnerships with participants in the specific local markets. We evaluate land opportunities based on how we expect they will contribute to overall corporate profitability and returns, rather than how they might drive volume on a regional or submarket basis. Our land evaluation process is

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meant to reduce development and market cycle risk and involves reviewing the status of entitlements and other governmental processing, preparing detailed budgets for all cost categories, completing environmental reviews and third-party market studies and engaging architects and consultants to review our proposed acquisitions and design our homes and communities. In addition, because we efficiently perform preliminary due diligence on land parcels prior to committing to an acquisition, we believe we have developed a reputation as a buyer who can act quickly and decisively, which has created significant opportunities for us in our core markets. We believe that this reputation will carry over as we expand our business into additional markets.

Disciplined Investment Approach

Our management team has gained significant operating expertise, including managing components of much larger public homebuilders, through many varied economic cycles. The perspective gained from these experiences has helped shape the strict discipline and hands-on approach with which the Company is managed. Our management team has learned to effectively evaluate the market, and we believe that we react quickly, calmly and rationally to changes. For example, we have not made significant investments in rising markets when we believed that costs were too high, and we have not been afraid to invest in down markets when we found prices attractive. Combined with our cycle-tested management approach, where we balance on-site local day-to-day decision-making responsibility with centralized corporate oversight, and have a hands-on aspect that includes monthly financial and operating performance updates on each project and quarterly operating committee review and financial accountability at the project management level, our strict operating discipline provides us with a competitive advantage in maximizing returns while minimizing risk.

Superior Product Design

We are a builder with a wide variety of product lines and an extensive library of design plans that enable us to meet the specific needs of each of our targeted buyer profiles, which we believe provides us with a balanced portfolio and an opportunity to increase market share and maximize profitability. We have demonstrated expertise in effectively building homes across product offerings from entry-level through first-time and second-time move-up and even move-down housing. We devote significant time to researching and designing our homes to better meet the needs of our buyers through the use of architects, consultants and homeowner focus groups for all levels and price points in our target markets. We believe our diversified product strategy enables us to better serve a wide range of buyers, adapt quickly to changing market conditions and optimize performance and returns while strategically reducing portfolio risk. We determine the profiles of buyers we plan to attract in a given development, and design neighborhoods and homes with the specific needs of those buyers in mind. By providing a more customized product mix of varying lot sizes, product types and amenities in our communities, and addressing underserved segments, we believe we can accelerate the absorption of our subdivisions, maximize profitability and earn attractive returns for our stockholders.

Furthermore, we strive to attract a diverse group of buyers by designing multi-product neighborhoods within many of our communities that will be desirable for homebuyers at differing income levels and with different needs. Our core operating philosophy is to provide a positive, memorable experience to our homeowners through active engagement in the building process, and providing our customers with customization options to suit their lifestyle needs, and enhancing communication, knowledge, and satisfaction. We engineer our homes for energy-efficiency, which is aimed at reducing the impact on the environment and lowering energy costs to our homebuyers; as part of these efforts, we offer homebuyers environmentally friendly alternatives, such as the ability to utilize solar power to supplement a home’s energy needs.

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We seek to maximize customer satisfaction by offering homes that are built with quality materials and craftsmanship, exhibit distinctive design and floor plans, emphasize energy efficiency, and are situated in premium locations. Our competitive edge in the selling process focuses on the home’s features, design and available customizing options. We believe that our homes generally offer higher quality and more distinctive designs within a defined price range or category than those built by our competitors.

Our Business Strategy

Our business strategy is focused on land acquisition and development, entitlements, and the acquisition, development, construction, marketing, sale and management of single-family detached and attached homes in major metropolitan markets, including Colorado, Texas, Nevada, and other markets in the Western United States.

Our business strategy is driven by the following:

Acquire Land Opportunistically and Leverage Development Expertise

Our ability to identify, acquire and, if necessary, develop land in desirable locations and on favorable terms is the hallmark of our success. The core of our business plan is to secure land strategically, based on our understanding of population growth patterns, entitlement restrictions and infrastructure development. We do not speculate with respect to our land acquisitions, and we usually acquire land at various stages of development to place into our production cycle. Our land acquisition strategy focuses on finished lots as well as the development of entitled parcels that we can build homes on within approximately 24 to 36 months from the beginning of construction of the first home to close out of the community, plus an additional one to two years, if necessary, for the entitlement and development of land, in order to reduce development and market cycle risk while maintaining an inventory of owned lots and lots under land option contracts sufficient for the construction of homes in our business plan. Our determination as to whether we buy finished lots or raw land depends on pricing and other factors we deem relevant to maximizing profitability. We seek to minimize our exposure to land risk through disciplined management of entitlements and development, as well as the use of land options, where appropriate.

We evaluate land opportunities based on how we expect they will contribute to overall corporate profitability and returns, rather than how they might drive volume on a regional or submarket basis. We will continue to use our relationships with land sellers, brokers and investors to seek to obtain the “first look” at quality land opportunities as well as develop those relationships in our target and planned new markets. We expect to continue to allocate capital to pursue creative deal structures and other opportunities with the goal of achieving superior returns by utilizing our development expertise, efficiency and opportunistic mindset.

We will continue to combine our land development expertise with our homebuilding operations to increase the flexibility of our business, to enhance our margin performance and to control the timing of delivery of lots. Unlike many of our competitors, we believe we are able and willing to increase the value of our land portfolio through the zoning and engineering process by creating attractive land use plans and optimizing our use of land, which ultimately translates into greater opportunities to generate profits. While we focus on purchasing finished lots that generate an acceptable level of return, we will enter into land purchase contracts for undeveloped and, on occasion, unentitled land, which purchase contracts would include contingencies conditioning our obligation to purchase the land on our successful entitlement of such property. In so doing, we believe we are able to obtain better pricing on such unfinished and, on occasion, unentitled land, while mitigating risks associated with the entitlement process by including applicable contingencies in the land purchase contract. Such a strategy we believe enables us to deploy our well-established land development and entitlement capabilities in each of our markets, allowing us to generate margins both from land development and homebuilding.

Disciplined Management of Land Supply

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with our overall land inventory management process, our management team reviews those considerations, as well as other financial metrics, in order to decide the highest and best use of our current and prospective land assets. Historically, land dispositions have not had a material effect on our overall results of operations, but may impact overall margins. In an effort to minimize our exposure to market cycle risk, our strategy is to focus on developed lots or the development of entitled parcels that can be sold out within 24 to 36 months after the start of home construction. Assuming that the number of homes we sold in 2013 on a pro forma basis, giving effect to the LVLH Acquisition, is representative of our closing rates generally, we believe we have over 12 years of land supply.

We intend to maintain a consistent approach to land positioning within our core markets and new markets in the foreseeable future in an effort to concentrate a greater amount of our land inventory in areas with the attractive characteristics described above. We also intend to continue to combine our land development expertise with our homebuilding operations to increase the flexibility of our business, enhance our margin performance and control the timing of delivery of lots.

Provide Superior Quality and Homeowner Experience and Service

We seek to maximize customer satisfaction by offering homes that are built with quality materials and craftsmanship, exhibit distinctive design and floor plans, emphasize energy efficiency and are situated in premium locations. Our competitive edge in the selling process focuses on the home’s features, design and available customizing options. We believe that our homes generally offer higher quality and more distinctive designs within a defined price range or category than those built by our competitors. Our goal is not just to build houses, but rather to create desirable communities through superior design and execution.

Expand into New and Complementary Markets

We intend to explore expansion opportunities in other parts of the Western United States. Our strategy in this regard will be to expand first into similar market niches in areas where we perceive an ability to exploit a competitive advantage. The expansion may be effected through either organic growth or acquisitions of homebuilders operating in those new markets. We recently completed the Jimmy Jacobs Acquisition in Austin, Texas, and the LVLH Acquisition in Las Vegas, Nevada, with further expansion planned into these and other major metropolitan areas in the Western United States. We initially chose to focus on the Denver, Colorado Springs and Fort Collins markets in Colorado because we viewed such metropolitan areas as having unique demographic features, including higher than average anticipated growth in population and income. Likewise, we believe that Texas was less severely affected than other U.S. states by the recent economic downturn and that Texas, Nevada and California will experience above average population and personal income growth in the future.

Utilize Prudent Leverage

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indebtedness is recourse to us and we anticipate that future indebtedness will likewise be recourse. As a means of sustaining our long-term financial health and limiting our exposure to unforeseen dislocations in the debt and financing markets, we are and expect to remain conservatively capitalized.

Adhere to Our Core Operating Principles to Drive Consistent Long-Term Performance

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leveraging our management team’s significant experience, extensive relationships and strong reputation with local market participants to operate and grow our business;

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balancing decentralized, local, day-to-day decision-making responsibility with centralized corporate oversight;

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centralizing management approval of all land acquisitions and dispositions through an asset management committee that operates under stringent underwriting requirements;

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ensuring all team members understand the organization’s strategy and the goals of the business and have the tools to contribute to our success;

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attracting and retaining top talent through a culture in which team members are encouraged to contribute to our success and are given the opportunity to recognize their full potential; and

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maintaining a performance-based corporate culture committed to the highest standards of integrity, ethics and professionalism.

Focus on Efficient Operations

In connection with all of our projects, we strive to control costs through a stringent budget plan. We start by preparing a detailed budget for all cost categories as part of our due diligence. We closely monitor the budget throughout the process by continuing to revisit and update the budget on an ongoing basis. Virtually all components of our homes are provided by subcontractors. Much effort is expended to assure that scopes of work are complete and inclusive. Contract variances and extras are closely scrutinized for appropriateness. At the sale and closing of each home in a project, we compare the estimated and final margin of that house with the most recent budget to determine any negative variances so that we can adjust in order to better control costs on future homes in the project. We believe our disciplined process of setting realistic budgets and expectations, monitoring and evaluating them and making any necessary adjustments to correct deviations going forward enables us to prudently control our costs.

Drive Revenue by Opening New Communities From Existing Land Supply

We intend to capitalize on our existing land supply, which we believe is sufficient to supply home closings through 2018 and which will provide us with the opportunity to increase our average annual active community count. As of April 1, 2014, we had 99 communities, of which 26 were actively selling. We expect to open 22 new communities through December 31, 2014, and anticipate ending the year with approximately 48 active selling communities, representing an estimated 84% net increase from our 26 active selling communities as of April 1, 2014. Additionally, as of April 1, 2014, we owned and controlled approximately 10,095 lots in various stages of development. 3,707 of these lots were finished or partially developed and another 2,364 were already entitled for residential construction. Assuming that the number of homes we sold in 2013 on a pro forma basis, giving effect to the LVLH Acquisition, is representative of our closing rates generally, we believe we have over 12 years of land supply.

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Our Markets

Our business strategy is currently focused on the design, construction and sale of single-family detached and attached homes in major metropolitan markets in Colorado, Texas, and Nevada, with further expansion planned into other major metropolitan areas in the Western United States by the end of 2016. In Colorado, we principally operate in the greater Denver, Fort Collins and Colorado Springs metropolitan areas. We anticipate that we will utilize our existing relationships to expand into Texas and other markets in the Western United States. We initially chose to focus on the Denver, Colorado Springs and Fort Collins markets in Colorado because we viewed those metropolitan areas as having unique demographic features, including higher than the national average anticipated growth in population and income. Likewise, we believe that Texas was less severely affected by the recent economic downturn and that both Texas and California will experience population and personal income growth above the national average in the future.

In evaluating any location, we generally look for land or communities with convenient access to metropolitan areas that are generally characterized by diverse economic and employment bases and demographics and increasing populations. We believe these conditions create strong demand for new housing, and these locations represent what we believe to be attractive opportunities for long-term growth. We also seek assets that have desirable characteristics, such as good access to major job centers, schools, shopping, recreation and transportation facilities.

We secure land strategically, based on our understanding of current market size, population growth patterns and anticipated growth, entitlement restrictions, infrastructure development and total land supply.

Our Products

We offer a wide range of high-quality homes to consumers in our markets, ranging from entry-level and move down homes (typically single family attached homes from 1,000 to 2,500 square feet) to first and second move-up homes (typically single family detached homes from 2,000 to in excess of 4,000 square feet). We strive to maintain appropriate consumer product and price level diversification. We target what we believe to be the most profitable consumer groups for each of our locations while attempting to diversify so that our land portfolio is not overly concentrated in any one group. Our ability to build at multiple price points enables us to adjust readily to changing consumer preferences and affordability. We generally market our homes to entry-level and first- and second-time move-up buyers through targeted product offerings in each of the communities in which we operate. We determine the profile of buyers we hope to address in a given development, and design neighborhoods and homes with the specific needs of those buyers in mind. We also use measures of market-specific supply and demand to determine which consumer groups will be the most profitable in a specific land location, and then target those groups.

Our communities consist of single-family detached and/or attached homes, depending on what we believe is optimal for a community. Our single-family detached homes are marketed to first- and second-time move-up buyers. These single-family detached homes in our Colorado markets range in size from 1,500 to in excess of 4,000 square feet, with most being 2,000 to 3,000 square feet, and are priced from $250,000 to $900,000, with most selling in the mid $300,000s. Our single-family attached homes are marketed to entry-level and move-down homebuyers. These single-family attached homes in our Colorado markets range in size from 1,000 to 2,500 square feet and are priced from $150,000 to the low $400,000s.

We have developed a number of home designs with features such as outdoor living spaces, one-story living and first floor master bedroom suites to appeal to universal design needs, as well as building in communities with recreational amenities such as golf courses, pool complexes, country clubs and recreation centers. We have integrated these designs and features in many of our homes and communities. Our extensive library of design plans allows us to provide the right design to fit the market. We devote significant time to researching and designing our homes to better meet the needs of our buyers through the use of architects, consultants and homeowner focus groups for all levels and price points in our target markets.

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Description of Owned and Controlled Communities

The following table and maps present project information relating to our owned and controlled communities (including lots under contract and non-binding letters of intent) as of April 1, 2014. Owned communities are those to which we hold title, while controlled communities are those that we have the contractual right to acquire but do not currently own (including 726 lots under non-binding letters of intent). In total, as of April 1, 2014, we owned and controlled 99 communities containing 10,095 lots. Of these, the controlled communities consisted of total contracts outstanding to acquire 4,714 lots in 28 communities for aggregate acquisition consideration of $153.2 million. In addition, as of April 1, 2014, we had outstanding option contracts for 435 lots, totaling $27.8 million. Our obligations with respect to the option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. As of April 1, 2014, we had $4.3 million of non-refundable cash deposits pertaining to land option contracts.

Summary of Owned and Controlled Communities

As of April 1, 2014


Market	Communities		Lots Owned		Lots Controlled ⁽¹⁾		Total Lots Owned/ Controlled ⁽¹⁾		Product Type ⁽²⁾
Austin, TX		20		161		1,544		1,705	SFD
Colorado Springs, CO		9		305		182		487	SFA/SFD
Denver, CO		49		2,443		1,713		4,156	SFA/SFD
Las Vegas, NV		9		1,849		—		1,849	SFD
Northern Colorado		6		142		507		649	SFD
San Antonio, TX		6		6		1,243		1,249	SFD

Total		99		4,906		5,189		10,095

⁽¹⁾	Includes 726 lots that are under non-binding letters of intent.

⁽²⁾	Product type SFA and SFD denote Single Family Attached and Single Family Detached, respectively.

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Land Acquisition and Development Process

As of April 1, 2014, we owned and controlled approximately 99 communities containing 10,095 lots in various stages of development. This compares to 89 communities containing 8,341 lots as of December 31, 2013, 39 communities containing 3,072 lots as of December 31, 2012 and 32 communities containing 2,220 lots as of December 31, 2011.

Communities Owned and Controlled


	Total Communities Owned and Controlled		Total Lots Owned and Controlled
As of April 1, 2014		99		10,095
As of December 31, 2013		89		8,341
As of December 31, 2012		39		3,072
As of December 31, 2011		32		2,220

Our land acquisition strategy focuses on the development of projects that we can complete and close out within approximately 24 to 36 months from the beginning of construction of the first home, plus an additional one to two years, if necessary, for the entitlement and development of land, in order to reduce development and market cycle risk while maintaining an inventory of owned lots and lots under land option contracts sufficient for construction of homes over a three-year period. Our acquisition process generally includes the following steps to reduce development and market cycle risk:

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review of the status of entitlements and other governmental processing, including title reviews;

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complete due diligence on the land parcel prior to committing to the acquisition;

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prepare detailed budgets for all cost categories;

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complete environmental reviews and third-party market studies;

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utilize options, if necessary; and

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employ centralized control of approval over all acquisitions through a land committee process.

Before purchasing a land parcel, we also engage outside architects and consultants to help review the proposed acquisition and design the homes and community planned to be located there.

We occasionally utilize secured acquisition and development loans and construction loans in connection with our land acquisition and development process. As of December 31, 2013, we have one such loan outstanding with a balance of approximately $1,500,000. This loan accrues interest at a rate of 3.5% per annum (paid quarterly), matures in April 2016 (three years from the date of its issuance), and is subject to customary terms for the homebuilding industry. In addition, this loan contains a provision that if we dispose of any of the lots securing the loan, then that portion of outstanding principal balance equal to the value of such lots will become due.

Land Option Contracts

We enter into land option contracts to procure land or lots for the construction of homes in the ordinary course of business. Lot option contracts enable us to control significant lot positions with a minimal capital investment and substantially reduce the risks associated with land ownership and development. As of December 31, 2013, we had outstanding options for 388 lots totaling $26.2 million. Our obligations with respect

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to the option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. As of December 31, 2013, we had $1.9 million of non-refundable cash deposits pertaining to land option contracts.

Homebuilding, Marketing and Sales Process

Our philosophy is to provide a positive, memorable experience to our homeowners by actively engaging them in the building process and by enhancing communication, knowledge and satisfaction. We provide our customers with customization options to suit their lifestyle needs and have developed a number of home designs with features such as outdoor living spaces, one-story living and first floor master bedroom suites to appeal to universal design needs. We also engineer our homes for energy-efficiency, which is aimed at reducing impact on the environment and lowering energy costs to our homebuyers. As part of these efforts, we offer homebuyers environmentally friendly alternatives, such as solar power to supplement a home’s energy needs. We have developed a number of home designs with features such as outdoor living spaces, one-story living and first floor master bedroom suites to appeal to universal design needs.

We build both single-family detached and attached homes, depending on the community. Our single-family detached homes range in size from 1,500 to in excess of 4,000 square feet, with most being 2,000 to 3,000 square feet, and are priced from $250,000 to $900,000, with most selling in the mid $300,000s. Our single-family attached homes range in size from 1,000 to 2,500 square feet and are priced from $150,000 to the low $400,000s.

We engage architects, engineers and other professionals in connection with the home design process who are familiar with local market preferences, constraints, conditions and requirements. We serve as the general contractor, with all construction work typically performed by subcontractors. While we maintain long-standing relationships with many of our subcontractors and design professionals, we typically do not enter into long-term contractual commitments with them.

We generally market our homes to entry-level and first- and second-time move-up buyers as well as move-down buyers through targeted product offerings in each of the communities in which we operate. Our marketing strategy is determined during the land acquisition and feasibility stages of a community’s development.

We sell our homes through our own sales representatives and through independent real estate brokers. Our in-house sales force typically works from sales offices located in model homes close to or in each community. Sales representatives assist potential buyers by providing them with basic floor plans, price information, development and construction timetables, tours of model homes and the selection of options. Sales personnel are trained by us and generally have had prior experience selling new homes in the local market. Our personnel, along with subcontracted marketing and design consultants, carefully design the exterior and interior of each home to coincide with the lifestyles of targeted homebuyers.

We advertise directly to potential homebuyers through the Internet and in newspapers and trade publications, as well as through marketing brochures and newsletters. We may also use billboards, radio and television advertising, and our website, to market the location, price range and availability of our homes. We also attempt to operate in conspicuously located communities that permit us to take advantage of local traffic patterns. Model homes play a significant role in our marketing efforts by not only creating an attractive atmosphere, but also by displaying options and upgrades.

A new order is reported when a customer’s sales contract has been signed by the homebuyer, approved by us, and secured by a deposit. We may start construction of a home when a customer has selected a lot, chosen a floor plan and received preliminary mortgage approval. However, construction may begin prior to that point in order to satisfy market demand for completed homes and to facilitate construction scheduling and/or cost savings. Homebuilding revenues are recognized when home sales are closed, title and possession are transferred to the buyer, and there is no significant continuing involvement from us, subject to the product warranties we provide for the homes.

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Our sales contracts typically require an earnest money deposit. Buyers are generally required to pay an additional earnest deposit when they select options or upgrades for their homes. The amount of earnest money required varies between markets and communities, but typically averages 2.75% of the total purchase price of the home. Most of our sales contracts stipulate that when homebuyers cancel their contracts with us, we have the right to retain their earnest money and option deposits. Our sales contracts may also include contingencies that permit homebuyers to cancel and receive a partial refund of their deposits if they cannot obtain mortgage financing at prevailing or specified interest rates within a specified time period, or if they cannot sell an existing home. The length of time between the signing of a sales contract for a home and delivery of the home to the buyer may vary, depending on customer preferences, permit approval, and construction cycles.

The cancellation rate of buyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was approximately 20% during the year ended December 31, 2013, and 17% during the year ended December 31, 2012. Cancellation rates are subject to a variety of factors beyond our control such as adverse economic conditions and increases in mortgage interest rates.

Customer Relations, Quality Control and Warranty Programs

We pay particular attention to the product design process and carefully consider quality and choice of materials in order to attempt to eliminate building deficiencies. The quality and workmanship of the subcontractors we employ are monitored and we make regular inspections and evaluations of our subcontractors to seek to ensure our standards are met.

We maintain quality control and customer service staff whose role includes providing a positive experience for each customer throughout the pre-sale, sale, building, closing and post-closing periods. These employees are also responsible for providing after sales customer service. Our quality and service initiatives include taking customers on a comprehensive tour of their home prior to closing and using customer survey results to improve our standards of quality and customer satisfaction.

Warranty Programs

We provide each homeowner with product warranties covering workmanship and materials for one year from the time of closing, and warranties covering structural systems for eight to ten years from the time of closing in connection with our general liability insurance policy. We believe our warranty program meets or exceeds terms customarily offered in the homebuilding industry. The subcontractors who perform most of the actual construction also provide to us customary warranties on workmanship. We reserve 0.6% of the sale price of each home for future warranty expenses.

Customer Financing

We seek to assist our homebuyers in obtaining financing by arranging with mortgage lenders to offer qualified buyers a variety of financing options. Most homebuyers utilize long-term mortgage financing to purchase a home, and mortgage lenders will usually make loans only to qualified borrowers. In the future, we plan to vertically integrate mortgage underwriting into our business which will enable us to offer our homebuyers attractive financing options.

Materials

When constructing homes we use various materials and components. It has typically taken us four to six months to construct a home, during which time materials are subject to price fluctuations. Such price fluctuations are caused by several factors, among them seasonal variation in availability and increased demand for materials as a result of the improved housing market.

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Seasonality

We experience seasonal variations in our quarterly operating results and capital requirements. Historically, new order activity is highest during the spring and summer months. As a result, we typically have more homes under construction, close more homes, and have greater revenues and operating income in the third and fourth quarters of our fiscal year. Historical results are not necessarily indicative of current or future homebuilding activities.

Governmental Regulation and Environmental Matters

We are subject to numerous local, state, federal and other statutes, ordinances, rules and regulations concerning zoning, development, building design, construction and similar matters which impose restrictive zoning and density requirements in order to limit the number of homes that can eventually be built within the boundaries of a particular area. Projects that are not entitled may be subjected to periodic delays, changes in use, less intensive development or elimination of development in certain specific areas due to government regulations. We may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or “slow-growth” or “no-growth” initiatives that could be implemented in the future. Local and state governments also have broad discretion regarding the imposition of development fees for projects in their jurisdiction. Projects for which we have received land use and development entitlements or approvals may still require a variety of other governmental approvals and permits during the development process and can also be impacted adversely by unforeseen health, safety and welfare issues, which can further delay these projects or prevent their development.

We are also subject to a variety of local, state, federal and other statutes, ordinances, rules and regulations concerning the environment. The particular environmental laws which apply to any given homebuilding site vary according to the site’s location, its environmental conditions, and the present and former uses of the site, as well as adjoining properties. Environmental laws and conditions may result in delays, may cause us to incur substantial compliance and other costs, and can prohibit or severely restrict homebuilding activity in environmentally sensitive regions or areas. From time to time, the Environmental Protection Agency (which we refer to as the “EPA”) and similar federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to strictly comply with applicable environmental laws or impose additional requirements for future compliance as a result of past failures. Any such actions taken with respect to us may increase our costs. Further, we expect that increasingly stringent requirements will be imposed on homebuilders in the future. Environmental regulations can also have an adverse impact on the availability and price of certain raw materials such as lumber.

Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases, and may be held liable to a governmental entity or to third parties for property damage and for investigation and cleanup costs incurred by such parties in connection with the contamination. In addition, in those cases where an endangered species is involved, environmental rules and regulations can result in the elimination of development in identified environmentally sensitive areas. To date, we have never had a significant environmental issue.

Competition and Market Factors

We face competition in the homebuilding industry, which is characterized by relatively low barriers to entry. Homebuilders compete for, among other things, home buying customers, desirable land parcels, financing, raw materials and skilled labor. Increased competition may prevent us from acquiring attractive land parcels on which to build homes or make such acquisitions more expensive, hinder our market share expansion or lead to pricing pressures on our homes that may adversely impact our margins and revenues. Our competitors may independently develop land and construct housing units that are superior or substantially similar to our products,

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or may be significantly larger, have a longer operating history and have greater resources or lower cost of capital than us; accordingly, they may be able to compete more effectively in one or more of the markets in which we operate or plan to operate. We also compete with other homebuilders that have longstanding relationships with subcontractors and suppliers in the markets in which we operate or plan to operate and we compete for sales with individual resales of existing homes and with available rental housing.

Employees

As of December 31, 2013, we had 181 employees, 55 of whom were sales and marketing personnel, 63 of whom were executive, management and administrative personnel and 63 of whom were involved in construction. We recently hired additional employees as a result of the LVLH Acquisition. We believe that our relations with our employees and subcontractors are good.

Legal Proceedings

We are involved in certain legal proceedings incidental to business operations occurring in the ordinary course of business. While the outcome of these matters are not presently determinable, any ultimate liability beyond insurance and reserves is not expected to have a material adverse impact on our results of operations, financial position or cash flows.

Corporate Information

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MANAGEMENT

Executive Officers and Directors

Our board of directors consists of five directors. Of these five directors, we believe that three, constituting a majority, are considered “independent,” with independence being determined in accordance with the listing standards established by the New York Stock Exchange. Our directors will serve for one-year terms and until their successors are duly elected and qualified. There will be no cumulative voting in the election of directors. Consequently, at each annual meeting, the successors to each of our five directors will be elected by a plurality of the votes cast at that meeting.

Set forth below are the names, ages and positions of our directors and executive officers as of the date of this prospectus.


Name	Age		Position with the Company
Dale Francescon		61	Chairman of our Board of Directors and Co-Chief Executive Officer
Robert J. Francescon		56	Co-Chief Executive Officer, President and Director
David L. Messenger		43	Chief Financial Officer
Kenneth J. Rabel		52	Division President-Colorado
Steven M. Hayes		47	Division President-Central Texas
Don A. Boettcher		54	Division President-Las Vegas
James M. Lippman		56	Independent Director
Keith R. Guericke		65	Independent Director
John P. Box		68	Independent Director

Biographical Information

Current Directors and Executive Officers

The following is a summary of certain biographical information concerning our current directors and our executive officers.

Dale Francescon . Mr. Dale Francescon serves as our Co-Chief Executive Officer and has served as the Chairman of our Board of Directors since April 30, 2013. Mr. Dale Francescon possesses a broad background in all facets of operating a real estate company, and has had direct responsibility for the acquisition, financing, development, construction, sale and management of various residential projects including land development, single-family homes, townhomes, condominiums and apartments. These projects total in excess of 10,000 units and $2 billion in value. Mr. Dale Francescon has successfully managed the Company, a Top 50 national and Top 5 Colorado homebuilder, through successive profitable years, in various economic cycles, from inception in August 2002 to the present. Prior to the formation of the Company, from 1996 to 2000, Mr. Dale Francescon served as Co-Division President for D.R. Horton, the largest homebuilder in the United States. During that time, his division achieved among the highest profitability and return on investment as compared to the other Horton divisions. Prior to his tenure at D.R. Horton, Mr. Dale Francescon owned and operated Trimark Communities from 1993 to 1996 when it was sold to D.R. Horton. Trimark Communities was the largest builder of attached, for sale homes in the state of Colorado. Mr. Dale Francescon is actively involved in various civic and professional organizations. Mr. Dale Francescon is licensed in the state of Colorado as a real estate broker and in the state of California as an attorney (inactive) and a certified public accountant (inactive). Mr. Dale Francescon received his B.S. in Business Administration from the University of Southern California and a J.D. from Loyola University School of Law. Mr. Dale Francescon, as a co-founder of the Company, is qualified to serve as a director due to his familiarity with our history and operations, his expertise in the homebuilding industry, and his 25 years of experience operating real estate companies.

Robert J. Francescon . Mr. Robert Francescon serves as our Co-Chief Executive Officer and President, and has served as a member of our Board of Directors since April 30, 2013. Mr. Robert Francescon possesses a broad background in all facets of operating a real estate company, and has had direct responsibility for the acquisition, financing, development, architecture, construction, sale and management of various residential projects including land

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development, single-family homes, townhomes, condominiums and apartments. These projects total in excess of 10,000 units and $2 billion in value. Mr. Robert Francescon has successfully managed the Company, a Top 50 national and Top 5 Colorado homebuilder, through successive profitable years, in various economic cycles, from inception in August 2002 to the present. Prior to the formation of the Company, from 1996 to 2000, Mr. Robert Francescon served as Co-Division President for D.R. Horton, the largest homebuilder in the United States. During that time, his division achieved among the highest profitability and return on investment as compared to the other Horton divisions. Prior to his tenure at D.R. Horton, Mr. Robert Francescon owned and operated Trimark Communities from 1993 to 1996 when it was sold to D.R. Horton. Trimark Communities was the largest builder of attached, for sale homes in the state of Colorado. Mr. Robert Francescon also has management experience working in a variety of financial institutions, including thrifts and the Federal Home Loan Mortgage Corporation. Mr. Robert Francescon is actively involved in various civic and professional organizations. Mr. Robert Francescon received his B.S. in Business Administration from the University of Southern California. Mr. Robert Francescon, as a co-founder of the Company, is qualified to serve as a director due to his familiarity with our history and operations, his management experience in various business enterprises, and his 25 years of experience as a senior executive within the homebuilding industry.

David L. Messenger . Mr. David Messenger serves as our Chief Financial Officer and has been employed by the Company since June 2013. Mr. Messenger has extensive experience in finance and accounting for real estate companies. His direct responsibilities are overseeing all accounting, finance, capital markets, risk management and financial planning and analysis. Prior to his tenure at the Company, Mr. Messenger was at UDR, Inc., a publicly traded multifamily real estate investment trust, from August 2002 to May 2012, most recently as Chief Financial Officer. From June 2012 to February 2013, Mr. Messenger served as an independent consultant for UDR, Inc. Mr. Messenger is licensed in the State of Virginia as a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants and the Virginia Society of Certified Public Accountants. Mr. Messenger received a B.B.A. and M.A. in Accounting from the University of Iowa.

Kenneth J. Rabel . Mr. Rabel serves as our Division President-Colorado and has been employed by the Company since August 2009. Mr. Rabel has extensive experience in all aspects of homebuilding spanning over a 30 year career. His direct responsibilities are overseeing construction, purchasing, product development and customer service functions. Prior to his tenure at the Company, Mr. Rabel spent 20 years at MDC/Richmond American Homes, a publicly traded Top 10 national homebuilder in various positions including serving as Division President in the corporate headquarters. Mr. Rabel holds a Class B National Standard Contractors License and various other general contracting licensees. Mr. Rabel has been actively involved in the Colorado Homebuilders Association along with various civic organizations.

Steven M. Hayes . Mr. Hayes serves as our Division President-Central Texas and has been employed by the Company since June 2013. Mr. Hayes has extensive experience in all aspects of homebuilding spanning his 25 year career. His direct responsibilities are overseeing construction, purchasing, product development and customer service functions. Prior to his tenure at the Company, Mr. Hayes spent 19 years at McGuyer Homebuilders, Inc. in various positions, including serving as Division President for the most recent 14 years. Mr. Hayes received a B.B.A. from Midwestern State University.

Don A. Boettcher . Mr. Boettcher serves as our Division President-Las Vegas and has been employed by our company since April 2, 2014. Mr. Boettcher has extensive experience in all aspects of homebuilding spanning his 25 year career. His direct responsibilities are overseeing construction, purchasing, product development and customer service functions. Prior to his tenure at our company, Mr. Boettcher spent four years as President of Dunhill Homes. Prior to Dunhill Homes, Mr. Boettcher spent 23 years at Pulte Homes, Inc., a publicly traded national homebuilder, in various positions, including serving as Area Vice President and Division Vice President of Land. Mr. Boettcher received a B.S. in Accounting from the University of Nebraska.

James M. Lippman. Mr. Lippman is a director and has served on our Board of Directors since May 7, 2013. Mr. Lippman founded JRK Property Holdings in 1991 and currently serves as its Chairman and Chief Executive Officer. From an initial purchase of five multifamily properties, JRK has grown to a national leader in the

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commercial real estate sector. In 2011, JRK was featured as the 25th largest Multifamily Owner and Manager in the U.S. by the National Multi Housing Council and ranked 27th in the nation by Multifamily Executive Magazine. Mr. Lippman currently serves on the Board of Trustees of Union College. Prior to founding JRK, Mr. Lippman was the managing director of the Signature Group, where he managed a $1 billion, diversified real estate portfolio that included direct and indirect ownership in commercial properties as well as various debt and equity securities. Mr. Lippman also worked on Wall Street for many years where he traded equities, options and commodities for proprietary investment accounts. Mr. Lippman earned a B.A. in Economics and Political Science from Union College. Mr. Lippman is qualified to serve as a director because of his extensive leadership experience within the real estate industry, his financial management expertise, and his extensive contacts with senior real estate executives throughout the United States.

Keith R. Guericke . Mr. Guericke is a director and has served on our Board of Directors since May 7, 2013. Mr. Guericke has served as a Director of the Board of Essex Property Trust, Inc., (which we refer to as “Essex”) since June 1994. In 2002, Mr. Guericke was elected to the position of Vice Chairman of the Board a position he still holds. He held the position of President and Chief Executive Officer of Essex from 1988 through 2010. Effective January 2011, Mr. Guericke retired from his position as an Executive Officer. Mr. Guericke joined Essex’s predecessor, Essex Property Corporation, in 1977 to focus on investment strategies and portfolio expansion. Mr. Guericke prepared Essex for its initial public offering in 1994, and since then has overseen the significant growth of the Essex multifamily portfolio in supply-constrained markets along the West Coast. Mr. Guericke is a member of NAREIT the National Multi-Housing Council, and several local apartment industry groups. Mr. Guericke also serves as a Director of the Board of American Residential Properties. Prior to joining Essex, Mr. Guericke began his career with Kenneth Leventhal & Company, a certified public accounting firm noted for its real estate expertise. Mr. Guericke received his B.S. in Accounting from Southern Oregon College in 1971. Mr. Guericke is qualified to serve as a director because of his extensive leadership experience at a publicly traded company, his expansive knowledge of the real estate industry, his strong relationships with many executives at real estate companies throughout the United States and his expertise in accounting and finance.

John P. Box . Mr. Box is a director and has served on our Board of Directors since May 23, 2014. Mr. Box is a commercial real estate practitioner who has served as regional chairman of Newmark Grubb Knight Frank since 2013. Prior to his current role, from 1988 through 2012, Mr. Box was president and chief executive officer of the Frederick Ross Company, the largest locally owned commercial real estate service business in Colorado. Under his watch, the Frederick Ross Company diversified into several independent operating divisions and was active in commercial brokerage, consulting and property management, as well as apartment building and multi-family land sales. Mr. Box was recognized as honorary dean for 2002 by the University of Denver Franklin L. Burns School of Real Estate and Construction Management, and in 2001, he was awarded the 2000 NAIOP President’s Award for contributions to the real estate community. Earlier in his career, Mr. Box was recognized four times by the Denver Board of REALTORS ^® as the recipient of the top commercial sales award for achieving the highest personal sales volume in the Denver area. Mr. Box also serves on the board of trustees for Regis University, on the board of directors for the National Crime Prevention Council, and is former board chair of ONCOR International, a worldwide affiliation of real estate companies. Mr. Box is qualified to serve as a director because of his extensive leadership within the real estate industry, his relationships with many executives at real estate companies through the United States, and his proven ability to successfully grow and diversify a real estate business.

Family Relationships

Messrs. Dale Francescon and Robert Francescon are brothers. There are no other family relationships among any of our directors or executive officers.

Board of Directors

The number of members of our board of directors will be determined from time-to-time by action of our board of directors. Our board of directors currently consists of five persons. After the completion of this offering,

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we expect our board of directors to determine that three of our directors, constituting a majority, satisfy the listing standards for independence of the New York Stock Exchange and Rule 10A-3 under the Exchange Act.

Our board of directors believes its members collectively have or will have the experience, qualifications, attributes and skills to effectively oversee the management of the Company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing the Company, a willingness to devote the necessary time to board duties, a commitment to representing the best interests of the Company and our stockholders and a dedication to enhancing stockholder value.

Role of our Board of Directors in Risk Oversight

One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly, with support from its three standing committees (the audit committee, the compensation committee and the nominating and corporate governance committee), each of which will address risks specific to its respective areas of oversight. In particular, our audit committee will have the responsibility to consider and discuss our major financial risk exposures and the steps our management takes to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The audit committee will also monitor compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. Our compensation committee will assess and monitor whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. Our nominating and corporate governance committee will provide oversight with respect to corporate governance and ethical conduct and will monitor the effectiveness of our corporate governance guidelines, including whether such guidelines are successful in preventing illegal or improper liability-creating conduct.

Committees of our Board of Directors

Our board of directors has established three committees: the audit committee, the compensation committee and the nominating and corporate governance committee. Each of these committees consists of three members, each of whom satisfies the independence standards of the New York Stock Exchange.

Audit Committee . Our board of directors has established an audit committee, which is comprised of our three independent directors, James M. Lippman, Keith R. Guericke, and John P. Box, each of whom is “financially literate” under the rules of the New York Stock Exchange. Keith R. Guericke serves as the chairperson of the audit committee. Our audit committee, pursuant to its written charter, among other matters, oversees (i) our financial reporting, auditing and internal control activities; (ii) the integrity and audits of our financial statements; (iii) our compliance with legal and regulatory requirements; (iv) the qualifications and independence of our independent auditors; (v) the performance of our internal audit function and independent auditors; and (vi) our overall risk exposure and management. Duties of the audit committee also include:

•

annually review and assess the adequacy of the audit committee charter and the performance of the audit committee;

•

be responsible for the appointment, retention and termination of our independent auditors and determine the compensation of our independent auditors;

•

review with the independent auditors the plans and results of the audit engagement;

•

evaluate the qualifications, performance and independence of our independent auditors;

•

have sole authority to approve in advance all audit and non-audit services by our independent auditors, the scope and terms thereof, and the fees therefor;

•

review the adequacy of our internal accounting controls; and

•

meet at least quarterly with our executive officers, internal audit staff and our independent auditors in separate executive sessions.

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Keith R. Guericke has been designated as our audit committee financial expert, as that term is defined in the rules of the SEC.

Compensation Committee . Our board of directors has established a compensation committee, which is comprised of our three independent directors, James M. Lippman, Keith R. Guericke, and John P. Box. James M. Lippman serves as the chairperson of the compensation committee. The compensation committee, pursuant to its written charter, among other matters:

•

assists our board of directors in developing and evaluating potential candidates for executive officer positions and overseeing the development of executive succession plans;

•

administers, reviews and makes recommendations to our board of directors regarding our compensation plans, including our First Amended & Restated 2013 Long-Term Incentive Plan (which we refer to as our “2013 Long-Term Incentive Plan”);

•

annually reviews and approves our corporate goals and objectives with respect to compensation for executive officers and, at least annually, evaluates each executive officer’s performance in light of such goals and objectives to set his or her annual compensation, including salary, bonus and equity and non-equity incentive compensation, subject to approval by our board of directors;

•

provides oversight of management’s decisions regarding the performance, evaluation and compensation of other officers; and

•

reviews our incentive compensation arrangements to confirm that incentive pay does not encourage unnecessary risk-taking, and reviews and discusses, at least annually, the relationship between risk management policies and practices, business strategy and our executive officers’ compensation.

Our compensation committee has the authority to retain and terminate any compensation consultant to be used to assist in the evaluation of executive officer compensation.

Nominating and Corporate Governance Committee . Our board of directors has established a nominating and corporate governance committee, which is comprised of our three independent directors, James M. Lippman, Keith R. Guericke, and John P. Box. John P. Box serves as the chairperson of the nominating and corporate governance committee. The nominating and corporate governance committee, pursuant to its written charter, among other matters:

•

identifies individuals qualified to become members of our board of directors, and ensures that our board of directors has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds;

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develops, and recommends to our board of directors for its approval, qualifications for director candidates, and periodically reviews these qualifications with our board of directors;

•

reviews the committee structure of our board of directors and recommends directors to serve as members or chairs of each committee of our board of directors;

•

reviews and recommends committee slates annually and recommends additional committee members to fill vacancies as needed;

•

develops and recommends to our board of directors a set of corporate governance guidelines applicable to us and, at least annually, reviews such guidelines and recommends changes to our board of directors for approval as necessary; and

•

oversees the annual self-evaluations of our board of directors and management.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves, or in the past has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our board of directors or our compensation committee. None of the members of our compensation committee is, or has ever been, an officer or employee of the Company.

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Code of Business Conduct and Ethics

Our board of directors has adopted a code of business conduct and ethics that applies to our officers, directors and any employees. Among other matters, our code of business conduct and ethics is designed to deter wrongdoing and to promote the following:

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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

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full, fair, accurate, timely and understandable disclosure in our communications with and reports to our stockholders, including reports filed with the SEC, and other public communications;

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compliance with applicable governmental laws, rules and regulations;

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prompt internal reporting of violations of the code to appropriate persons identified in the code; and

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accountability for adherence to the code of business conduct and ethics.

Any waiver of the code of business conduct and ethics for our executive officers, directors or any employees may be made only by our nominating and corporate governance committee and will be promptly disclosed as required by law and New York Stock Exchange regulations once we become a publicly reporting, listed company.

Limitations on Liabilities and Indemnification of Directors and Officers

For information concerning limitations of liability and indemnification and advancement rights applicable to our directors and officers, see “Description of Capital Stock—Limitations on Liability of Directors and Officers and Insurance.”

Director Compensation

For a discussion of our director compensation arrangements, see “Executive and Director Compensation—Director Compensation.”

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EXECUTIVE AND DIRECTOR COMPENSATION

Executive Compensation

Summary Compensation Table

The following table summarizes information regarding the compensation awarded to, earned by or paid to Dale Francescon, our Co-Chief Executive Officer, Robert J. Francescon, our Co-Chief Executive Officer, David Messenger, our Chief Financial Officer, and Kenneth J. Rabel, our Division President-Colorado, in fiscal years 2012 and 2013.


Name and Principal Position	Year		Salary ($)			Bonus ($)			Stock Awards ($)			Nonequity Incentive Plan Compensation ($)			All Other Compensation ($)			Total ($)
Dale Francescon		2013		466,666			—			1,260,000	⁽⁵⁾		1,500,000	⁽⁹⁾		55,400	⁽¹⁰⁾		3,282,066
Co-Chief Executive Officer		2012		400,000			—			—			—			39,000	⁽¹¹⁾		439,000

Robert J. Francescon		2013		466,666			—			1,260,000	⁽⁶⁾		1,500,000	⁽⁹⁾		55,400	⁽¹⁰⁾		3,282,066
Co-Chief Executive Officer and President		2012		400,000			—			—			—			39,000	⁽¹¹⁾		439,000

David Messenger ⁽¹⁾		2013		135,417	⁽¹⁾		250,000	⁽²⁾		242,500	⁽⁷⁾		—			3,500	⁽¹²⁾		631,417
Chief Financial Officer		2012		—			—			—			—			—			—

Kenneth J. Rabel		2013		247,917			225,000	⁽³⁾		147,820	⁽⁸⁾		—			17,500	⁽¹³⁾		638,237
Division President-Colorado		2012		200,000			100,000	⁽⁴⁾		—			—			18,000	⁽¹⁴⁾		318,000

⁽¹⁾	David Messenger began serving as our Chief Financial Officer on June 3, 2013. Salary received in 2013 was pro-rated based on an annual base salary of $250,000.

⁽²⁾	David Messenger received a discretionary cash bonus of $250,000 for fiscal year 2013 based upon his performance during that period, which was approved by our compensation committee.

⁽³⁾	Kenneth Rabel received a discretionary cash bonus of $225,000 for fiscal year 2013 based upon his performance during that period, which was approved by our compensation committee.

⁽⁴⁾

Kenneth Rabel received a discretionary cash bonus of $100,000 for fiscal year 2012 based upon his performance during that period, which was approved by Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, pursuant to authority delegated to them by the manager of our predecessor entity, Century Communities Colorado, LLC.

⁽⁵⁾	Represents the grant date fair value of 63,000 shares of restricted stock granted to Dale Francescon for fiscal year 2013, computed in accordance with FASB ASC Topic 718.

⁽⁶⁾	Represents the grant date fair value of 63,000 shares of restricted stock granted to Robert Francescon for fiscal year 2013, computed in accordance with FASB ASC Topic 718.

⁽⁷⁾	Represents the grant date fair value of 12,500 shares of restricted stock granted to David Messenger for fiscal year 2013, computed in accordance with FASB ASC Topic 718.

⁽⁸⁾	Represents the grant date fair value of 8,000 shares of restricted stock granted to Kenneth Rabel for fiscal year 2013, computed in accordance with FASB ASC Topic 718.

⁽⁹⁾

Each of Dale Francescon and Robert Francescon received a performance-based cash bonus of $1,500,000 for fiscal year 2013 pursuant to the terms of their respective Employment Agreements. The target amounts of these performance-based cash bonuses are equal to 150% of their respective annual base salaries, with a maximum amount capped at 300% of their respective annual base salaries, based on the satisfaction and performance of discretionary goals established by our compensation committee.

⁽¹⁰⁾	Each of Dale Francescon and Robert Francescon received other compensation of $55,400 for fiscal year 2013, comprised of $9,400 in Company contributions to defined contribution plans, a $26,000 automobile and cellular telephone allowance and $20,000 in reimbursements for term life insurance.

⁽¹¹⁾	Each of Dale Francescon and Robert Francescon received other compensation of $39,000 for fiscal year 2012, comprised of $11,000 in Company contributions to defined contribution plans, $10,000 in personal financial or tax advice, and an $18,000 automobile and cellular telephone allowance.

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⁽¹²⁾	David Messenger received a $3,500 automobile and cellular telephone allowance for fiscal year 2013, which is the pro-rated from a $6,000 annual allowance based on his actual period of service beginning on June 3, 2013.

⁽¹³⁾	Kenneth Rabel received other compensation of $17,500 for fiscal year 2013, comprised of $5,500 in Company contributions to defined contribution plans and a $12,000 automobile and cellular telephone allowance.

⁽¹⁴⁾	Kenneth Rabel received other compensation of $18,000 for fiscal year 2012, comprised of $6,000 in Company contributions to defined contribution plans and a $12,000 automobile and cellular telephone allowance.

Narrative to Summary Compensation Table

We believe that the primary goal of executive compensation is to align the interests of our executive officers with those of our stockholders in a way that allows us to attract and retain the best executive talent. We have adopted compensation policies with respect to, among other things, setting base salaries, awarding bonuses and making future grants of equity awards to our executive officers. Our compensation committee has designed a compensation program that rewards, among other things, favorable stockholder returns, stock appreciation, the Company’s competitive position within the homebuilding industry and each executive officer’s long-term career contributions to the Company.

The compensation incentives designed to further these goals take the form of annual cash compensation and equity awards, as well as long-term cash and/or equity incentives measured by company and/or individual performance targets to be established by our compensation committee. In addition, our compensation committee may determine to make equity-based awards to new executive officers in order to attract talented professionals to serve us.

Named Executive Officer Compensation

Our named executive officers for fiscal year 2013 were Dale Francescon, Robert Francescon, Kenneth Rabel and David Messenger, who began serving as our Chief Financial Officer on June 3, 2013. The following is a summary of the elements of our compensation arrangements paid to our named executive officers for fiscal year 2013 and to be paid to our named executive officers for fiscal year 2014.

Annual Base Salary . Base salary is designed to compensate our named executive officers at a fixed level of compensation that serves as a retention tool throughout the executive’s career. In determining base salaries, our compensation committee considers each executive’s role and responsibility, unique skills, future potential with us, salary levels for similar positions in our market and internal pay equity.

Annual Cash Bonus . Annual cash bonuses are designed to incentivize our named executive officers at a variable level of compensation based on our and such individual’s performance. In connection with our annual cash bonus program, our compensation committee determines annual performance criteria that are flexible and that change with the needs of our business. Our annual cash bonus program is designed to reward the achievement of specific financial and operational objectives. For fiscal year 2013, Dale Francescon’s and Robert Francescon’s bonuses were calculated pursuant to formulas detailed in their respective employment agreements and based on the satisfaction and performance of the following maximum level goals established by our compensation committee: (i) increase of 20% or more in the number of closed homes in 2013 over 2012, (ii) increase of 20% or more in total revenue of the Company for 2013 over 2012, and (iii) increase of 20% or more in net income before taxes of the Company for 2013 over 2012. Our compensation committee approved Dale Francescon’s and Robert Francescon’s bonuses after verifying that each of the maximum level performance goals was achieved.

Discretionary Bonus . In 2013, we awarded a discretionary cash bonus equal to $225,000 and $250,000 to each of Kenneth Rabel and David Messenger, respectively, based upon their performance during that period. These bonuses were approved by our compensation committee.

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Equity Awards . In fiscal year 2013, we began providing time-based equity awards to our named executive officers pursuant to our 2013 Long-Term Incentive Plan. Time-vested equity awards are designed to focus and reward our named executive officers on our long-term goals and enhance stockholder value. In determining equity awards, our compensation committee takes into account our overall financial performance. The awards made under our 2013 Long-Term Incentive Plan in 2013 are granted to recognize such individuals’ efforts on our behalf, and to provide a retention element to their overall compensation. Generally, grants of stock options, restricted stock and restricted stock units made pursuant to the 2013 Long-Term Incentive Plan in 2013 vest in equal installments annually over three years, subject to the participant’s continued employment. We may also provide performance-based equity awards to our named executive officers pursuant to our 2013 Long-Term Incentive Plan.

Retirement Savings Opportunities. All of our employees are eligible to participate in a defined contribution retirement plan (which we refer to as a “401(k) plan”). We provide this 401(k) plan to help our employees save some amount of their cash compensation for retirement in a tax efficient manner. Under the 401(k) plan, employees are eligible to defer a portion of their base salary, and we, at our discretion, may make a matching contribution and/or a profit sharing contribution on their behalf. We do not currently provide, nor do we intend to provide in the future, an option for our employees to invest in shares of our common stock through the 401(k) plan.

Health and Welfare Benefits. We provide to all of our full-time employees a competitive benefits package, which includes health and welfare benefits, such as medical, dental, disability and life insurance benefits. The programs under which these benefits are offered do not discriminate in scope, terms or operation in favor of our named executive officers and are available to all of our full-time employees.

Severance . Under their employment agreements, each of Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, is entitled to receive severance payments under certain circumstances in the event that his employment is terminated. Severance payments are designed to protect and compensate them under those circumstances. The circumstances and payments are described in more detail below under “—Employment Agreements—Potential Payments Upon Termination or Change in Control.”

Other Income . In fiscal year 2012, each of Dale Francescon and Robert Francescon received other compensation of $39,000, comprised of $11,000 in Company contributions to defined contribution plans, $10,000 in personal financial or tax advice, and an $18,000 automobile and cellular telephone allowance. In fiscal year 2013, each of Dale Francescon and Robert Francescon received other compensation of $55,400, comprised of $9,400 in Company contributions to defined contribution plans, a $26,000 automobile and cellular telephone allowance and $20,000 in reimbursements for term life insurance. In addition, in connection with the registration of our common stock in accordance with the registration rights agreement we entered into in connection with the May 2013 private offering and private placement, each of Dale Francescon and Robert Francescon will be entitled to be paid a cash bonus of $250,000 by us if we file with the SEC a shelf registration statement relating to the registration for resale of the shares of our common stock sold in our May 2013 private offering and private placement, and the SEC declares the registration statement effective on or before June 30, 2014. We have filed with the SEC a registration statement on Form S-1 for this offering and for the resale of the registrable shares that are not sold by the selling stockholders in this offering, and this prospectus forms a part of that registration statement. Each of Dale Francescon and Robert Francescon should earn this bonus upon completion of this offering.

In fiscal year 2012, Mr. Rabel received other compensation of $18,000, comprised of $6,000 in Company contributions to defined contribution plans and a $12,000 automobile and cellular telephone allowance. In fiscal year 2013, Mr. Rabel received other compensation of $17,500, comprised of $5,500 in Company contributions to defined contribution plans and a $12,000 automobile and cellular telephone allowance.

In fiscal year 2013, Mr. Messenger received a $3,500 automobile and cellular telephone allowance. In addition, Mr. Messenger will be entitled to be paid a cash bonus of $125,000 by us upon the completion of our initial public offering, which he will earn upon the completion of this offering.

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Outstanding Equity Awards as of December 31, 2013


	Stock Awards as of December 31, 2013
Name	Number of shares of stock that have not vested (#)			Market Value of shares of stock that have not vested ($) ⁽⁴⁾
Dale Francescon		63,000	⁽¹⁾	1,197,000
Robert Francescon		63,000	⁽¹⁾	1,197,000
Kenneth Rabel		8,000	⁽²⁾	152,000
David Messenger		12,500	⁽³⁾	237,500

⁽¹⁾	63,000 shares of time-based restricted stock granted on May 7, 2013, which will vest in equal installments on the first, second and third anniversary of the grant date subject to continued employment with us.

⁽²⁾	5,000 shares of time-based restricted stock granted on June 6, 2013 and 3,000 shares of time-based restricted stock granted on September 17, 2013, which will vest in equal installments on the first, second and third anniversary of the respective grant dates subject to continued employment with us.

⁽³⁾	12,500 shares of time-based restricted stock granted on June 3, 2013, which will vest in equal installments on the first, second and third anniversary of the grant date subject to continued employment with us.

⁽⁴⁾	Value is calculated by multiplying the number of shares of restricted stock that have not vested by the last traded price of our stock on a secondary market ($19.00) as of December 31, 2013.

Employment Agreements

We have entered into employment agreements with each of our Co-Chief Executive Officers, Dale Francescon and Robert Francescon. Each of the employment agreements has an initial term of five years, and provides for automatic one-year extensions after the expiration of the initial term, unless either party provides the other with at least 90 days’ prior written notice of non-renewal. Each of the employment agreements requires Dale Francescon and Robert Francescon, respectively, to dedicate his full business time and attention to the affairs of the Company.

The employment agreements also provide for, among other things:

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an annual base salary of $500,000 for each of Dale Francescon and Robert Francescon, subject to future increases from time to time at the discretion of our compensation committee;

•

eligibility for annual cash performance bonuses, with a target amount equal to 150% of annual base salary and a maximum amount capped at 300% of annual base salary, based on the satisfaction and performance of discretionary goals to be established by our compensation committee;

•

participation in our 2013 Long-Term Incentive Plan and any subsequent equity incentive plans approved by our board of directors; and

•

participation in any employee benefit plans and programs that are maintained from time to time for our other senior executive officers.

In addition, each of the employment agreements for Dale Francescon and Robert Francescon provides for a bonus relating to the registration of our common stock in accordance with the registration rights agreement we entered into in connection with the May 2013 private offering and private placement. Each of Dale Francescon and Robert Francescon will be entitled to be paid a cash bonus of $250,000 by us if we file with the SEC a shelf registration statement relating to the registration for resale of the shares of our common stock sold in our May 2013 private offering and private placement, and the SEC declares the registration statement effective on or before June 30, 2014. We have filed with the SEC a registration statement on Form S-1 for this offering and for the resale of the registrable shares that are not sold by the selling stockholders in this offering, and this prospectus forms a part of that registration statement. Each of Dale Francescon and Robert Francescon should earn this bonus upon completion of this offering.

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The employment agreements contain customary non-competition, non-solicitation, and confidentiality provisions that apply during the term of the agreements and for two years after the termination of their employment for any reason.

Potential Payments Upon Termination or Change in Control

We may terminate Dale Francescon’s and Robert Francescon’s employment at any time with or without cause, and the executive may terminate his employment with or without good reason. If we terminate Dale Francescon’s or Robert Francescon’s employment for cause, if he resigns without good reason, or if he is terminated due to death or disability, he will be entitled to receive any earned but unpaid annual base salary, reimbursement of expenses incurred prior to the date of termination, accrued but unused vacation and any other benefits that have been earned and accrued prior to the date of termination. In addition, any outstanding awards granted to him under our 2013 Long-Term Incentive Plan will be paid in accordance with their terms.

If we terminate Dale Francescon’s or Robert Francescon’s employment without cause or if he terminates his employment for good reason, he will be entitled to the severance benefits described below. The severance benefits include the following:

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each of Dale Francescon and Robert Francescon will be entitled to receive any earned but unpaid annual base salary, reimbursement of expenses incurred prior to the date of termination, any accrued but unused vacation and any benefits that have vested or which he is eligible to receive prior to the date of termination;

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we will pay the employer’s portion of COBRA premiums under our major medical group health and dental programs for up to 30 months;

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each of Dale Francescon and Robert Francescon will be entitled to receive a lump sum cash payment in an amount equal to the sum of (i) three times his 12 months’ annual base salary (which we refer to as the “Base Severance”), provided that, if the date of his termination is within the initial term, the amount he will be entitled to receive shall be twice the normal Base Severance, plus (ii) a payment in lieu of the annual bonus for the fiscal year in which his employment was terminated equal to the amount of the annual bonus that would have become payable for the fiscal year if employment had not been terminated, based on performance actually achieved that year (determined by the board of directors following completion of performance year), multiplied by a fraction, the numerator of which is the number of days he was employed in the fiscal year of termination and the denominator of which is the total number of days in the fiscal year, provided that if the date of his termination is within the initial term the amount received shall be no less than the maximum allowable annual bonus that he could have been paid for such year pursuant to the terms of his employment agreement; and

•

all equity awards granted to Dale Francescon and Robert Francescon under our 2013 Long-Term Incentive Plan or any subsequent equity incentive plan approved by our board of directors will immediately vest, any forfeiture restrictions will immediately lapse and any target bonus performance criteria for the year in which such termination occurs will be treated as satisfied and, in the case of any options, will become vested and exercisable or, at the discretion of our board of directors, may be cashed out or cancelled.

The employment agreements also provide that if the termination occurs within 24 months following a “change in control” (as defined in the new employment agreements), in addition to the other payments provided for above (other than the payment in lieu of annual bonus), Dale Francescon and Robert Francescon will receive an amount equal to three (3) times the target bonus (150% of base salary) for the current fiscal year.

Director Compensation

Upon the completion of our May 2013 private offering and private placement, our board of directors established a compensation program for our non-employee directors. Pursuant to this compensation program, we paid the following fees to each of our non-employee directors during the fiscal year ended December 31, 2013:

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an annual cash retainer of $50,000;

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•

an initial grant of 2,500 shares of restricted stock pursuant to our 2013 Long-Term Incentive Plan, which shares will vest in equal installments annually over three years subject to continued service on our board;

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an additional annual cash retainer of $10,000 to the chair of our audit committee;

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an additional annual cash retainer of $10,000 to the chair of our compensation committee;

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an additional annual cash retainer of $10,000 to the chair of our nominating and corporate governance committee; and

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$1,000 for each meeting attended in person, and $500 for each meeting attended telephonically.

The following table sets forth information concerning the compensation of our non-employee directors during the fiscal year ended December 31, 2013.


Name	Fees Earned or Paid in Cash ($)		Stock Awards ($) ⁽¹⁾		Total ($)
Keith R. Guericke		60,000		50,000		110,000
James M. Lippman		60,000		50,000		110,000
William F. Owens ⁽²⁾		60,000		50,000		110,000

⁽¹⁾	Represents the grant date fair value of 2,500 shares of restricted stock computed in accordance with FASB ASC Topic 718.

⁽²⁾

Mr. William F. Owens served on our board of directors from May 2013 to May 2014. Pursuant to Mr. Owens’ request, and not because of any disagreement with our company or our management, policies or affairs, he was not renominated by our nominating and corporate governance committee as a candidate for election to our board of directors. Our nominating and corporate governance committee and our board of directors nominated Mr. John P. Box as a director candidate for election to our board of directors, and our stockholders elected Mr. Box to succeed Mr. Owens as a company director effective as of May 23, 2014, the date on which our stockholders elected our board of directors for the current term.

We also reimburse our non-employee directors for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors, including without limitation travel expenses in connection with their attendance in-person at board and committee meetings. Any non-employee director elected or appointed to our board of directors for the first time following the completion of this offering will receive an initial grant of 3,505 shares of restricted stock, which shares will vest in equal installments annually over three years. Directors who are employees will not receive any compensation for their services as directors.

Prior to the conversion of our predecessor entity, Century Communities Colorado, LLC, into a corporation in April 2013, our predecessor entity was manager managed by DARO Ventures LLC, an entity wholly owned by Dale Francescon and Robert Francescon, our Co-Chief Executive Officers. During fiscal year 2013, our predecessor entity paid a pro-rated management fee of $200,000 (through April 30, 2013) to DARO Ventures LLC.

2013 Long-Term Incentive Plan

Our board of directors has adopted, and our stockholders of record have approved, our First Amended & Restated 2013 Long-Term Incentive Plan (which we refer to as our “2013 Long-Term Incentive Plan”) to attract and retain directors, officers, employees and other service providers. Our 2013 Long-Term Incentive Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, common stock, restricted stock, restricted stock units and performance awards.

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Administration of our 2013 Long-Term Incentive Plan and Eligibility

Our 2013 Long-Term Incentive Plan is administered by our compensation committee, which may delegate certain of its authority under our 2013 Long-Term Incentive Plan to our board of directors or, subject to applicable law, to our Chief Executive Officer or such other executive officer as our compensation committee deems appropriate; provided, that our compensation committee may not delegate its authority under our 2013 Long-Term Incentive Plan to our Chief Executive Officer or any other executive officer with regard to the selection for participation in our 2013 Long-Term Incentive Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, price or amount of an award to such an officer, director or other person.

Our compensation committee has the authority to make awards to eligible participants, which includes our officers, directors, employees, consultants, agents and independent contractors, and persons expected to become our officers, directors, employees, consultants, agents and independent contractors. Our compensation committee also has the authority to determine what form the awards will take, the amount and timing of the awards and all other terms and conditions of the awards.

The compensation committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and stock appreciation rights shall become exercisable in part or in full, (ii) all or a portion of the restrictions applicable to any outstanding restricted stock or restricted stock units shall lapse, (iii) all or a portion of the performance period restrictions applicable to any outstanding restricted stock, restricted stock units or performance award shall lapse, and (iv) the performance measures (if any) applicable to any outstanding award shall be deemed to be satisfied at the target or any other level.

Share Authorization

The number of shares of our common stock that may be issued under our 2013 Long-Term Incentive Plan is 1,846,000 shares, of which 1,468,413 shares currently remain available for future grants. The number of shares of our common stock available under our 2013 Long-Term Incentive Plan shall be reduced by the sum of the aggregate number of shares of common stock which become subject to outstanding options, outstanding stock appreciation rights, outstanding stock awards and outstanding performance-related awards. To the extent that shares of our common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under our 2013 Long-Term Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of our common stock generally shall again be available under our 2013 Long-Term Incentive Plan.

Subject to certain adjustments described below, in any fiscal year during any part of which our 2013 Long-Term Incentive Plan is in effect, no participant may be granted (i) options or stock appreciation rights with respect to more than 375,000 shares of our common stock, or (ii) restricted stock, restricted stock units (other than restricted stock unit grants that qualify as performance awards, which would be subject to the dollar limitations set forth in the next sentence), and/or stock awards with respect to more than 250,000 shares of our common stock. In addition, the maximum dollar valuable payable to any one participant with respect to performance awards is $5,000,000 with respect to any 12 month performance period, and $10,000,000 with respect to any performance period that is more than 12 months.

In the event of any equity restructuring that causes the per share value of shares of our common stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, then our compensation committee will appropriately adjust the number and class of securities available under our 2013 Long-Term Incentive Plan and the terms of each outstanding award under our 2013 Long-Term Incentive Plan. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization or partial or complete liquidation, our compensation committee may make such equitable adjustments as it determines to be appropriate and equitable to prevent dilution or enlargement of rights of participants. The decision of our compensation committee regarding any such adjustment shall be final, binding and conclusive.

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Stock Options

Our 2013 Long-Term Incentive Plan authorizes the grant of incentive stock options and options that do not qualify as incentive stock options. The exercise price of each option will be determined by our compensation committee, provided that the price cannot be less than 100% of the fair market value of the shares of our common stock on the date on which the option is granted (or 110% of the shares’ fair market value on the grant date in the case of an incentive stock option granted to an individual who is a “ten percent stockholder” under Sections 422 and 424 of the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”)). The term of an option cannot exceed ten years from the date of grant (or five years in the case of an incentive stock option granted to a “ten percent stockholder”). Our compensation committee may grant performance-related options, the grant of which or the exercisability of all or a portion of which is contingent on the attainment of specified performance measures.

The compensation committee, in its sole discretion and without the approval of our stockholders, may amend or replace any previously granted option or stock appreciation right in a transaction that constitutes a repricing within the meaning of the rules of the New York Stock Exchange.

Stock Appreciation Rights

Our 2013 Long-Term Incentive Plan authorizes the grant of stock appreciation rights. A stock appreciation right provides the recipient with the right to receive, upon exercise of the stock appreciation right, cash, shares of our common stock or a combination of the two. The amount that the recipient will receive upon exercise of the stock appreciation right generally will equal the excess of the fair market value of the shares of our common stock on the date of exercise over the shares’ fair market value on the date of grant. Stock appreciation rights will become exercisable in accordance with terms determined by our compensation committee. Stock appreciation rights may be granted in tandem with an option grant or as an independent grant. The term of a stock appreciation right cannot exceed, in the case of a tandem stock appreciation right, the expiration, cancellation or other termination of the related option and, in the case of a free-standing stock appreciation right, ten years from the date of grant.

Stock Awards

Our 2013 Long-Term Incentive Plan also provides for the grant of common stock, restricted stock, and restricted stock units. Our compensation committee will determine the number of shares of common stock subject to a restricted stock award or restricted stock unit and the restriction period, performance period (if any), the performance measures (if any) and the other terms applicable to a restricted stock award under our 2013 Long-Term Incentive Plan. Restricted stock units confer on the participant the right to receive one share of common stock or, in lieu thereof, the fair market value of such share of common stock in cash. The holders of awards of restricted stock will be entitled to receive dividends, and the holders of awards of restricted stock units may be entitled to receive dividend equivalents.

Performance Awards

Our 2013 Long-Term Incentive Plan also authorizes the grant of performance awards. Performance awards represent the participant’s right to receive an amount of cash, shares of our common stock, or a combination of both, contingent upon the attainment of specified performance measures within a specified period. Our compensation committee will determine the applicable performance period, the performance goals and such other conditions that apply to the performance award.

Change in Control

Subject to the terms of the applicable award agreement, upon a “change in control” (as defined in our 2013 Long-Term Incentive Plan), our compensation committee may, in its discretion, determine whether some or all outstanding options and stock appreciation rights shall become exercisable in full or in part, whether the

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restriction period and performance period applicable to some or all outstanding restricted stock awards and restricted stock unit awards shall lapse in full or in part and whether the performance measures applicable to some or all outstanding awards shall be deemed to be satisfied. Our compensation committee may further require that shares of stock of the corporation resulting from such a change in control, or a parent corporation thereof, be substituted for some or all of our shares of common stock subject to an outstanding award and that any outstanding awards, in whole or in part, be surrendered to us by the holder, to be immediately cancelled by us, in exchange for a cash payment, shares of capital stock of the corporation resulting from or succeeding us or a combination of both cash and such shares of stock.

Termination; Amendment

Our 2013 Long-Term Incentive Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend our 2013 Long-Term Incentive Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation. Our compensation committee may amend the terms of any outstanding award under our 2013 Long-Term Incentive Plan at any time. No amendment or termination of our 2013 Long-Term Incentive Plan or any outstanding award may adversely affect any of the rights of an award holder without the holder’s consent.

Outstanding and Pending Awards

As of December 31, 2013, we had granted the following awards under our 2013 Long-Term Incentive Plan to our executive officers, directors, and other related parties:

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Each of Dale Francescon and Robert Francescon had been granted 63,000 shares of restricted stock, which shares vest ratably over three years on an annual basis from the date of grant.

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David Messenger had been granted 12,500 shares of restricted stock, which shares vest ratably over three years on an annual basis from the date of grant.

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Kenneth Rabel had been granted 8,000 shares of restricted stock, which shares vest ratably over three years on an annual basis from the date of grant.

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Each of our current independent directors had been granted 2,500 shares of restricted stock (7,500 shares of restricted stock in the aggregate), which shares vest ratably over three years on an annual basis from the date of grant.

Rule 10b5-1 Sales Plan

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they would contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them. The director or executive officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our policy on insider trading and communications with the public. Our directors and executive officers may not establish any such plan prior to the expiration of the lock-up agreements described under “Underwriting.”

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

During the period beginning on January 1, 2011 to the date of this prospectus, we have entered into or participated in the following transactions with related parties:

Acquisitions from Entities Managed by Dale Francescon and Robert Francescon

During 2011, we paid approximately $5.4 million for certain land previously owned by High Pointe, Inc., an entity controlled by Dale Francescon and Robert Francescon, our Co-Chief Executive Officers and board members.

During 2012, we paid approximately $8.1 million for certain land previously owned by High Pointe, Inc.

In 2013, we paid approximately $4.8 million for certain land previously owned by High Pointe, Inc.

In addition, during the period from March through May 2013, we acquired 1,034 lots in various stages of development located in Colorado and Nevada from entities beneficially owned by Dale Francescon and Robert Francescon, our Co-Chief Executive Officers and board members, for an aggregate purchase price of approximately $34.0 million. The purchase prices of these properties were determined by our management taking into account third party appraisals for 353 of the lots, representing approximately $19 million of the aggregate purchase price, and broker price opinions for the remaining 588 lots, representing approximately $15 million of the aggregate purchase price. Broker price opinions are opinions issued by real estate brokers or agents as to their opinion regarding the market selling price of property, and such opinions have limitations in their reliability and accuracy, as the broker review of the subject property is not as thorough or in depth as is the case in an appraisal. An appraisal, on the other hand, includes a full comparable property analysis, including scrutinizing the price comparisons of the comparable properties used and adjusting for differences in relation to the subject property.

We do not anticipate that we will acquire additional land from Dale Francescon, Robert Francescon or any entities managed by either of them in the future, and any such acquisitions, if they occur at all, will be separately considered for approval by our independent directors.

Lending Arrangements with Entities Managed by Dale Francescon and Robert Francescon

We had a loan arrangement with, and paid principal and interest to, Arcadia Acquisitions, LLC, which is controlled by Dale Francescon and Robert Francescon. This loan was originally for $4 million and had an interest rate of 6%. The highest principal balance during 2012 was approximately $1.9 million. We paid off the entire principal balance, as well as approximately $52 thousand in interest, in 2012.

In 2013, each of DARO Ventures LLC and DARO Ventures II LLC, entities wholly owned by Dale Francescon and Robert Francescon, loaned to us $350,000 (for an aggregate of $700,000). Each of these loans had an interest rate of 1.5% and a maturity date of June 30, 2013. The highest principal balance for each loan during 2013 was $350,000. These loans, along with an aggregate of $1,078 in interest, were repaid in full on May 7, 2013.

Subordinated Obligation Agreement with an Entity Managed by Dale Francescon and Robert Francescon

We had a subordinated obligation agreement with DARO Ventures II LLC, an entity controlled by Dale Francescon and Robert Francescon. The original amount of this obligation was approximately $11.2 million, and the interest rate is 6%. Every year until 2012, we made annual interest-only payments of approximately $0.7 million, and we did not make any payments on the obligation amount. This obligation was converted into common equity upon the completion of the May 2013 private offering and private placement.

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Guaranty of the Repayment of a Loan Issued to an Entity Managed by Dale Francescon and Robert Francescon

We had guaranteed the repayment of a loan issued to Regency at Ridgegate, LLC, an entity owned by DARO Ventures III LLC, which is wholly owned by Dale Francescon and Robert Francescon. Our guaranty was in effect through maturity of the loan. The loan had a maximum principal balance of $22.2 million and an interest rate of 3.5%. The highest principal balance for the loan since January 1, 2012 was approximately $20.2 million. The loan was paid off in its entirety in August 2013 with no amounts outstanding as of December 31, 2013, and the loan and our guaranty have been terminated in full.

Exchange of Ownership Interest in an Entity Managed by Dale Francescon and Robert Francescon for 26 Finished Lots

We previously had a 22% joint venture ownership interest in Regency at Ridgegate, LLC, an entity now owned by DARO Ventures III LLC, which is wholly owned by Dale Francescon and Robert Francescon. During 2012, we transferred all of our ownership interest in Regency at Ridgegate, LLC to DARO Ventures III LLC, in exchange for 26 finished lots from Arcadia Holdings at CC Highlands One LLC, an entity wholly owned by Dale Francescon and Robert Francescon. The lots received were recorded at the related party’s carrying basis. The carrying value of the investment at the date of transfer was $2.3 million. The difference of $1.7 million was recognized as a non-cash distribution.

Land Contribution by an Entity Managed by Dale Francescon and Robert Francescon

In 2012, 49 finished lots and 26 partially finished lots were contributed to us on behalf of DARO Ventures LLC and DARO Ventures II LLC, entities wholly owned by Dale Francescon and Robert Francescon, and were presented as a non-cash contribution of $1.3 million in our financial statements.

Distribution and Assignment of Membership Interests in a Related Entity

In December 2012, we assigned all of our membership interests in Waterside at Highland Park, LLC, an entity which we wholly owned, to Dale Francescon and Robert Francescon as individuals. The assets of Waterside at Highland Park, LLC consisted of 76 partially improved townhome lots and related common area, and it was anticipated that this property would be developed as a for-rent community, a business in which we are not engaged. It was subsequently decided that the community would be developed as a for sale community, and, as a result, in March 2013, Dale Francescon and Robert Francescon assigned all of the membership interests of Waterside at Highland Park, LLC back to us. Waterside at Highland Park, LLC is currently one of our wholly-owned subsidiaries. No money exchanged hands in these transactions, and there was no impact on the distribution following the assignment back. Waterside at Highland Park, LLC was valued at approximately $3.7 million at the time of the assignment in March 2013.

Capital Contribution by Entities Owned by Dale Francescon and Robert Francescon

In 2013, DARO Ventures LLC and DARO Ventures II LLC, entities wholly owned by Dale Francescon and Robert Francescon, each made a capital contribution of approximately $0.8 million to the Company.

Management Fees Paid to DARO, an Entity Owned by Dale Francescon and Robert Francescon

We paid management fees of $600,000 in each of 2011 and 2012 and $200,000 in 2013 (through April 30, 2013) to DARO Ventures LLC, an entity wholly owned by Dale Francescon and Robert Francescon, in its capacity as the manager of our predecessor entity, Century Communities Colorado, LLC.

Management Investment

In connection with the May 2013 private offering and private placement, Dale Francescon and Robert Francescon purchased an aggregate of 500,000 shares of our common stock (through an entity owned and controlled by them) directly from us for their own account at the offering price of $20.00 per share.

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Employment Agreements

Dale Francescon and Robert Francescon serve as our Co-Chief Executive Officers. We have entered into employment agreements with each of these officers, in their capacities as officers, which employment agreements provide for salary, bonus and other benefits, including the grant of restricted stock and options to purchase shares of our common stock, and severance upon a termination of employment under certain circumstances. We may enter into similar employment arrangements with certain executive officers that we hire in the future. See “Executive and Director Compensation—Employment Agreements” for a description of the material terms of the employment agreements.

Grants Under our 2013 Long-Term Incentive Plan

Dale Francescon and Robert Francescon have each been granted 133,093 shares of restricted stock pursuant to our 2013 Long-Term Incentive Plan, which shares vest ratably over three years. David Messenger has been granted 59,229 shares of restricted stock, which shares vest ratably over three years. In addition, Kenneth Rabel has been granted 8,000 shares of restricted stock, which shares vest ratably over three years on an annual basis from the date of grant.

In addition, each of Keith R. Guericke and James M. Lippman has been granted 6,005 shares of restricted stock, and John P. Box has been granted 3,505 shares of restricted stock (15,515 shares of restricted stock in the aggregate), pursuant to our 2013 Long-Term Incentive Plan, which shares vest ratably over three years.

See “Executive and Director Compensation—Executive Compensation—Named Executive Officer Compensation—Equity Awards” and “Executive and Director Compensation—Director Compensation” for a description of the material terms of these grants of our restricted stock and/or options to purchase shares of our common stock.

Indemnification Agreements

We have entered into an indemnification agreement with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We believe that the limitation of liability provision in our charter and the indemnification agreements will facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.

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CONFLICTS OF INTEREST

Dale Francescon and Robert Francescon, our Co-Chief Executive Officers and board members, collectively beneficially own 5,766,186 shares of our common stock, which will represent % of our common stock outstanding immediately after this offering, or % if the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock in this offering. For so long as Dale Francescon and Robert Francescon continue to beneficially own a significant stake in us, together they will have significant influence over the power to elect and remove our directors and to approve any action requiring the majority approval of our stockholders. The interests of Dale Francescon and Robert Francescon may not be fully aligned with your interests and this could lead us to follow a strategy that is not in your best interests. In addition, their significant ownership in us and resulting ability to effectively control us may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including transactions in which you as a holder of shares of our common stock might otherwise receive a premium for your shares over the then-current market price.

We have entered into employment agreements with Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, in their capacities as officers, pursuant to which they are required to devote substantially full-time attention to our affairs. See “Executive and Director Compensation—Employment Agreements.” These employment agreements were not negotiated on an arm’s-length basis. We may choose not to enforce, or to enforce less vigorously, our rights under these agreements because of our desire to maintain our ongoing relationships with the individuals party to these agreements.

We have adopted policies, contained in our Code of Business Conduct and Ethics, to reduce potential conflicts of interest. Generally, our policies provide that any transaction in which any of our directors, officers, or employees has an interest must be approved by a vote of a majority of our disinterested directors. A conflict of interest may be present whenever the interests of any of our directors, officers, or employees are inconsistent with ours, including, for example, if our employees or directors (or their family members) receive improper personal benefits as a result of a position with the Company, are simultaneously employed by a competitor company, or participate in a joint venture, partnership or other business arrangement with the Company. We cannot assure you that these policies will be successful in eliminating the influence of conflicts of interest. These policies may be amended from time to time at the discretion of our board of directors, without a vote of our stockholders. Our Nominating and Corporate Governance Committee is responsible for applying our policies and procedures related to conflicts of interest.

Dale Francescon and Robert Francescon will devote substantially all of their full-time attention to the affairs of the Company and will not conduct any homebuilding land acquisition or homebuilding activities outside of the Company. In addition, although we previously acquired certain lots in Colorado and Nevada from entities managed by Dale Francescon and Robert Francescon, as described above under “Certain Relationships and Related Party Transactions—Acquisition from Entities Managed by Dale Francescon and Robert Francescon,” we do not anticipate that we will acquire additional land from Dale Francescon, Robert Francescon or any entities managed by either of them in the future. Any such acquisitions, if they occur at all, will be separately considered for approval by our independent directors.

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PRINCIPAL STOCKHOLDERS

Immediately prior to the completion of this offering, there are 17,452,587 shares of our common stock outstanding. The following table sets forth the beneficial ownership of our common stock immediately prior to and immediately after the completion of this offering by:

•

each of our directors;

•

each of our named executive officers;

•

all of our directors and executive officers as a group; and

•

each person known by us to be the beneficial owner of 5% or more of our outstanding common stock.

To our knowledge, each person named in the table has sole voting and investment power with respect to all of the securities shown as beneficially owned by such person, except as otherwise set forth in the notes to the table. The number of securities shown represents the number of securities the person “beneficially owns,” as determined by the rules of the SEC. The SEC has defined “beneficial” ownership of a security to mean the possession, directly or indirectly, of voting power and/or investment power. A securityholder is also deemed to be, as of any date, the beneficial owner of all securities that such securityholder has the right to acquire within 60 days after that date through (i) the exercise of any option, warrant or right, (ii) the conversion of a security, (iii) the power to revoke a trust, discretionary account or similar arrangement, or (iv) the automatic termination of a trust, discretionary account or similar arrangement.

The percentages reflect beneficial ownership immediately prior to and immediately after the completion of this offering as determined in accordance with Rule 13d-3 under the Exchange Act and are based on 17,452,587 shares of our common stock outstanding as of the date immediately prior to the completion of this offering and shares of our common stock outstanding as of the date immediately following the completion of this offering. The percentages assume no exercise by the underwriters of their over-allotment option to purchase up to additional shares of our common stock in this offering within 30 days after the date of this prospectus. Except as noted below, the address for all beneficial owners in the table below is 8390 East Crescent Parkway, Suite 650, Greenwood Village, Colorado 80111.


	Amount and Nature of Beneficial Ownership
	Immediately Prior to this Offering					Immediately After this Offering
Name and Address of Beneficial Owner	Shares Owned		Percentage			Shares Owned		Percentage

Directors and Named Executive Officers:

Dale Francescon ⁽¹⁾		2,883,093		16.5	%		2,883,093			%
Robert J. Francescon ⁽²⁾		2,883,093		16.5	%		2,883,093			%
David Messenger		59,229		*			59,229		*
Kenneth J. Rabel		8,000		*			8,000		*
James M. Lippman		6,005		*			6,005		*
Keith R. Guericke		6,005		*			6,005		*
John P. Box		3,505		*			3,505		*
All directors and executive officers as a group (9 persons)		5,849,635		33.5	%		5,849,635			%

5% or more Stockholders:

Dale Francescon ⁽¹⁾		2,883,093		16.5	%		2,883,093			%
Robert J. Francescon ⁽²⁾		2,883,093		16.5	%		2,883,093			%
Luxor Capital Group, LP ⁽³⁾		1,613,000		9.2	%					%
BlueMountain Capital Management LLC ⁽⁴⁾		1,500,000		8.6	%					%
Claren Road Asset Management, LLC ⁽⁵⁾		1,000,000		5.7	%					%

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*	Represents less than 1% of the number of shares of our common stock outstanding.

⁽¹⁾

Includes 2,500,000 shares of our common stock beneficially owned through Dale Francescon’s ownership interest in DARO Ventures LLC and DARO Ventures II LLC, 133,093 shares of restricted stock granted to Dale Francescon pursuant to our 2013 Long-Term Incentive Plan, and 250,000 shares of our common stock purchased in the May 2013 private offering and private placement by Dale Francescon through Arcadia Holdings at Vista Ridge, LLC and Arista Investors Colorado, LLC, entities controlled by him.

⁽²⁾

Includes 2,500,000 shares of our common stock beneficially owned through Robert Francescon’s ownership interest in DARO Ventures LLC and DARO Ventures II LLC, 133,093 shares of restricted stock granted to Robert Francescon pursuant to our 2013 Long-Term Incentive Plan, and 250,000 shares of our common stock purchased in the May 2013 private offering and private placement by Robert Francescon through Arcadia Holdings at Vista Ridge, LLC and Arista Investors Colorado, LLC, entities controlled by him.

⁽³⁾

Includes 548,440 shares of our common stock beneficially owned through Luxor Capital Partners LP, 889,456 shares of our common stock beneficially owned through Marsa A LLC, and 175,104 shares of our common stock beneficially owned through Marsa B LLC. Luxor Capital Group, LP acts as the investment manager of Luxor Capital Partners LP, Marsa A LLC, and Marsa B LLC (which we refer to collectively as the “Luxor Investors”). Luxor Management, LLC is the general partner of Luxor Capital Group, LP. Christian Leone is the managing member of Luxor Management, LLC. Luxor Capital Group, LP, Luxor Management, LLC and Christian Leone are deemed to have shared voting and investment power over the securities held by each of the Luxor Investors. The address of Luxor Capital Group, LP is 1114 Avenue of the Americas, 29th Floor, New York City, New York 10036.

⁽⁴⁾

Includes 852,043 shares of our common stock beneficially owned through Blue Mountain Credit Alternatives Master Fund L.P., 65,433 shares of our common stock beneficially owned through BlueMountain Kicking Horse Fund L.P., 298,035 shares of our common stock beneficially owned through BlueMountain Long/Short Credit Master Fund L.P., 203,207 shares of our common stock beneficially owned through BlueMountain Montenvers Master Fund SCA SICAV-SIF, and 81,282 shares of our common stock beneficially owned through BlueMountain Timberline Ltd.

The address of each of Blue Mountain Credit Alternatives Master Fund L.P., BlueMountain Kicking Horse Fund L.P., BlueMountain Long/Short Credit Master Fund L.P. and BlueMountain Timberline Ltd. is c/o Maples Corporate Services Limited, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands.

The address of BlueMountain Montenvers Master Fund SCA SICAV-SIF is 6D, Route de Treves, L-2633, Senningerberg, Grand Duschy of Luxembourg.

Blue Mountain Capital Management, LLC is the investment manager of each of Blue Mountain Credit Alternatives Master Fund L.P., BlueMountain Kicking Horse Fund L.P., BlueMountain Long/Short Credit Master Fund L.P., BlueMountain Montenvers Master Fund SCA SICAV-SIF and BlueMountain Timberline Ltd. and has sole voting and investment power of the shares, but it receives only an asset-based fee relating to such shares. Andrew Feldstein, Stephen Siderow, Alan Gerstein, Michael Liberman, Bryce Markus, Derek Smith, David Rubenstein, Peter Greatrex and Jes Staley, as members of BlueMountain Capital Management, LLC’s Investment Committee, have shared voting and investment power over the shares.

Blue Mountain CA Master Fund GP, Ltd. is the general partner of Blue Mountain Credit Alternatives Master Fund L.P. and has an indirect profits interest in the shares owned by Blue Mountain Credit Alternatives Master Fund L.P.; BlueMountain Kicking Horse Fund GP, LLC is the general partner of BlueMountain Kicking Horse Fund L.P. and has an indirect profits interest in the shares owned by BlueMountain Kicking Horse Fund L.P.; BlueMountain Long/Short Credit GP, LLC is the general partner of BlueMountain Long/Short Credit Master Fund L.P. and has an indirect profits interest in the shares owned by BlueMountain Long/Short Credit Master Fund L.P.; and BlueMountain Montenvers GP S.a.r.l. is the general partner of BlueMountain Montenvers Master Fund SCA SICAV-SIF and its affiliate Blue Mountain Montenvers Holdings, LLC has an indirect profits interest in the shares owned by BlueMountain Montenvers Master Fund SCA SICAV-SIF.

BlueMountain GP Holdings, LLC is the ultimate beneficial owner of each of Blue Mountain CA Master Fund GP, Ltd., BlueMountain Kicking Horse Fund GP, LLC, BlueMountain Long/Short Credit GP, LLC and BlueMountain Montenvers Holdings, LLC.

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Blue Mountain Capital Management, LLC, BlueMountain GP Holdings, LLC, Blue Mountain CA Master Fund GP, Ltd., BlueMountain Kicking Horse Fund GP, LLC, BlueMountain Long/Short Credit GP, LLC, BlueMountain Montenvers GP S.a.r.l. and BlueMountain Montenvers Holdings, LLC disclaim such beneficial ownership, except to the extent of their pecuniary interest.

⁽⁵⁾

Includes 700,000 shares of our common stock beneficially owned through Claren Road Credit Master Fund, Ltd. and 300,000 shares of our common stock beneficially owned through Claren Road Credit Opportunities Master Fund, Ltd. Claren Road Asset Management, LLC serves as investment manager to Claren Road Credit Master Fund, Ltd. and Claren Road Credit Opportunities Master Fund, Ltd. Investment and voting decisions have been delegated to Messrs. John Eckerson, Sean Fahey, Brian Riano, and Albert Marino, members of Claren Road Asset Management, LLC. The address of Claren Road Asset Management, LLC is 900 Third Avenue, 29th Floor, New York, New York 10022.

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SELLING STOCKHOLDERS

The following table sets forth information, as of , 2014, with respect to each of the selling stockholders and the shares of our common stock beneficially owned by such selling stockholder that such selling stockholders propose to offer pursuant to this prospectus. In accordance with SEC rules, the beneficial ownership of each of the selling stockholders includes:

•

all shares the selling stockholder actually owns beneficially or of record;

•

all shares over which the selling stockholder has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund); and

•

all shares the selling stockholder has the right to acquire within 60 days (such as upon exercise of options that are currently vested or which are scheduled to vest within 60 days or warrants that are immediately exercisable or exercisable within 60 days). The shares issuable under those options are treated as if they were outstanding for computing the percentage ownership of the selling stockholder holding those options but are not treated as if they were outstanding for purposes of computing percentage ownership of any other person or entity.

The shares of our common stock offered by the selling stockholders pursuant to this prospectus were originally issued and sold by us in connection with our May 2013 private offering and private placement. The term selling stockholders includes the holders of our common stock listed below and the beneficial owners of the common stock and the beneficial owners’ transferees, pledgees, donees or other successors.

Certain of the selling stockholders may be deemed to be underwriters as defined in the Securities Act. Any profits realized by the selling stockholders may be deemed to be underwriting commissions.

We have been advised that, as noted below in the footnotes to the table, of the selling stockholders are affiliates of broker-dealers. We have been advised that each such selling stockholder purchased shares of common stock in the ordinary course of business, not for resale, and that no such selling stockholders had, at the time of purchase, any agreements or understandings, directly or indirectly, with any person to distribute shares of our common stock. All selling stockholders are subject to Rule 105 of Regulation M and are precluded from engaging in any short selling activities prior to effectiveness of the registration statement of which this prospectus forms a part.

Percentage ownership calculations are based on 17,452,587 shares of our common stock outstanding as of , 2014.

Shares of Our Common Stock
Beneficially Owned Prior to this
Offering

Number of
Shares of Our
Common Stock
to be Sold in
this Offering

Immediately After this
Offering

Name of Selling Stockholder

Shares

Percentage

Shares Owned

Percentage

*	Represents less than 1% of the number of shares of our common stock outstanding.

⁽¹⁾

⁽²⁾

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DESCRIPTION OF CAPITAL STOCK

General

Our predecessor entity was formed as a Colorado limited liability company in August 2002, and we converted into a Delaware corporation pursuant to the DGCL on April 30, 2013. Our authorized capital stock consists of 100,000,000 shares of common stock, par value of $0.01, and 50,000,000 shares of preferred stock. Immediately prior to this offering, there are 17,452,587 shares of our common stock outstanding. Upon the completion of this offering, as a result of the issuance of shares in this offering, there will be shares of our common stock issued and outstanding, and no shares of preferred stock issued and outstanding.

Common Stock

Each holder of our common stock is entitled to one vote per each share on all matters to be voted upon by the common stockholders, and there are no cumulative voting rights. Subject to applicable law and the rights, if any, of the holders of outstanding shares of any series of preferred stock we may designate and issue in the future, holders of our common stock shall be entitled to vote on all matters on which stockholders generally are entitled to vote. Subject to the rights, if any, of the holders of outstanding shares of any series of preferred stock we may designate and issue in the future, holders of our common stock will be entitled to receive ratably the dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for that purpose. If there is a liquidation, dissolution or winding up of the Company, subject to the rights, if any, of the holders of outstanding shares of any series of preferred stock we may designate and issue in the future, holders of our common stock would be entitled to ratable distribution of our assets remaining after the payment in full of our liabilities.

Under the terms of our charter, the holders of our common stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. All currently outstanding shares of our common stock are fully paid and non-assessable. The rights of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

We have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS.”

Preferred Stock

Our charter provides that our board of directors is expressly authorized to provide for the issuance of shares of preferred stock in one or more series and, by filing a certificate of designation pursuant to the applicable law of the State of Delaware (which we refer to as a “preferred stock designation”), to establish from time to time for each such series the number of shares to be included in each such series and to fix the designations, powers, rights and preferences of the shares of each such series, if any, and the qualifications, limitations and restrictions, if any, thereof. The authority of our board of directors with respect to each series of preferred stock includes, but is not limited to, establishing the following:

•

the designation of the series, which may be by distinguishing number, letter or title;

•

the number of shares of the series, which number our board of directors may thereafter (except where otherwise provided in the preferred stock designation) increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares thereof then outstanding);

•

whether dividends, if any, shall be paid, and, if paid, the date or dates upon which, or other times at which, such dividends shall be payable, whether such dividends shall be cumulative or noncumulative, the rate of such dividends (which may be variable) and the relative preference in payment of dividends of such series;

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•

the redemption provisions and price or prices, if any, for shares of the series;

•

the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, or dissolution of the Company; and

•

whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series of the Company, and, if so, the specification of such other class or series, the conversion price or prices, or rate or rates, any adjustments thereto, the date or dates on which such shares shall be convertible and all other terms and conditions upon which such conversion may be made.

Certain Provisions of Delaware Law and of our Charter and Bylaws

The following summary of certain provisions of the DGCL and of our charter and bylaws does not purport to be complete and is subject to and qualified in its entirety by reference to the DGCL and our charter and bylaws. See “Available Information” for how to obtain copies of our charter and bylaws.

Our Board of Directors

Our bylaws provide that the number of directors of the Company will be fixed from time to time exclusively by action of our board of directors. Our charter and bylaws provide that, subject to applicable law, the rights, if any, of holders of any series of preferred stock and the rights of stockholders to fill any vacancy that results from the removal of a director at a special election meeting as described under “—Removal of Directors” below, newly created directorships resulting from any increase in the authorized number of directors, and any vacancies in the board of directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may only be filled by the majority vote of the remaining directors in office, even if less than a quorum is present.

Pursuant to our bylaws, each member of our board of directors who is elected at our annual meeting of our stockholders, and each director who is elected in the interim to fill vacancies and newly created directorships, will hold office until the next annual meeting of our stockholders and until his or her successor is elected and qualified. Pursuant to our bylaws, directors will be elected by a plurality of votes cast by the shares present in person or by proxy at a meeting of stockholders and entitled to vote thereon, a quorum being present at such meeting.

Removal of Directors

Our charter provides that, subject to the rights, if any, of holders of one or more classes or series of preferred stock, any director may be removed from office at any time, but only by the affirmative vote of the holders of 66 ² / ₃ % of the voting power of our capital stock entitled to vote generally in the election of directors. Except as described below, this provision, when coupled with the exclusive power of our board of directors to fill vacant directorships, precludes stockholders from removing incumbent directors except with the affirmative vote of the holders of 66 ² / ₃ % of the voting power of our capital stock entitled to vote generally in the election of directors and from filling the vacancies created by such removal.

We entered into a registration rights agreement in connection with our May 2013 private offering and private placement. We may be required by the registration rights agreement and our bylaws to hold a special meeting of our stockholders for the purpose of considering and voting on the removal of our directors then in office and electing the successors of any directors so removed (which we refer to as a “special election meeting”) unless the requirement is waived or deferred in accordance with the registration rights agreement and our bylaws. At such a special election meeting, a director may be removed with or without cause by the affirmative vote of holders of a majority of the voting power of our capital stock entitled to vote generally in the election of directors. This requirement for a special election meeting should no longer be applicable upon completion of this offering. See also “—Bylaw Amendments” below.

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Meetings of Stockholders

Pursuant to our bylaws, an annual meeting of our stockholders for the purpose of the election of directors and the transaction of any other business will be held on a date and at the time and place, if any, determined by our board of directors. Each of our directors is elected by our stockholders to serve until the next annual meeting and until his or her successor is duly elected and qualified. In addition, our board of directors, the chairman of our board of directors, our chief executive officer or our president may call a special meeting of our stockholders for any purpose, but business transacted at any special meeting of our stockholders shall be limited to the purposes stated in the notice of such meeting. In addition, we will be required to hold a special election meeting under the circumstances described above under “—Removal of Directors.”

Elimination of Stockholder Action by Written Consent.

Our charter expressly eliminates the right of our stockholders to act by written consent. Stockholder action must take place at the annual or a special meeting of our stockholders.

Charter Amendments

Unless a higher vote is required by its certificate of incorporation, the affirmative vote of a majority of the outstanding stock entitled to vote is required to amend a Delaware corporation’s certificate of incorporation. However, amendments which make changes relating to the capital stock by increasing or decreasing the par value or the aggregate number of authorized shares of a class, or by altering or changing the powers, preferences or special rights of a class so as to affect them adversely, also require the affirmative vote of a majority of the outstanding shares of such class, even though such class would not otherwise have voting rights.

Pursuant to our charter, in addition to any votes required by applicable law and subject to the express rights, if any, of the holders of any series of preferred stock, the affirmative vote of the holders of at least 66 ² / ₃ % of the voting power of our capital stock entitled to vote generally in the election of directors shall be required to amend, modify or repeal any provision, or adopt any new or additional provision, in a manner inconsistent with our charter provisions relating to the removal of directors, exculpation of directors, indemnification, the prohibition against stockholders acting by written consent and the vote of our stockholders required to amend our bylaws. In addition, pursuant to our charter, we reserve the right at any time and from time to time to amend, modify or repeal any provision contained in our charter, and any other provision authorized by Delaware law in force at such time may be added in the manner prescribed by our charter or by applicable law, and all rights, preferences and privileges conferred upon stockholders, directors or any other persons pursuant to the charter are granted subject to the foregoing reservation of rights. Notwithstanding the foregoing, no amendment, modification or repeal to our charter provisions relating to indemnification or the exculpation of directors shall adversely affect any right or protection existing under our charter immediately prior to such amendment, modification or repeal.

Bylaw Amendments

Our board of directors has the power to amend, modify or repeal our bylaws or adopt any new provision authorized by the laws of the State of Delaware in force at such time. Under our charter, the stockholders have the power to amend, modify or repeal our bylaws, or adopt any new provision authorized by the laws of the State of Delaware in force at such time, at a duly called meeting of the stockholders, solely with, notwithstanding any other provisions of our bylaws or any provision of law which might otherwise permit a lesser vote or no vote, the affirmative vote of 66 ² / ₃ % of the voting power of our capital stock enabled to vote generally.

Pursuant to our bylaws, we are required to hold a special meeting of our stockholders for the purpose of considering and voting on the removal of our directors then in office and electing the successors of any directors so removed (a special election meeting) if, prior to June 30, 2014, the resale shelf registration statement we are required to file with the SEC pursuant to the registration rights agreement has not been declared effective by the SEC or the shares sold in this offering have not been listed for trading on a national securities exchange. This requirement for a special election meeting should no longer be applicable upon completion of this offering. See also “—Removal of Directors” above.

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Advance Notice of Director Nominations and New Business

Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of other business to be considered by our stockholders at an annual meeting of stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a stockholder who was a stockholder of record both at the time such stockholder gives the Company the requisite notice of such nomination or business and at the time of the meeting, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in our bylaws, including a requirement to provide certain information about the stockholder and its affiliates and the nominee or business proposal, as applicable.

With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting. Nominations of persons for election to our board of directors may be made at a special meeting of stockholders at which directors are to be elected only (1) by or at the direction of our board of directors or (2) provided that our board of directors has determined that a purpose of the special meeting is to elect directors, by a stockholder who was a stockholder of record both at the time such stockholder gives the Company the requisite notice of such nomination or business and at the time of the special meeting, who is entitled to vote at the meeting and upon such election and who has complied with the notice procedures set forth in our bylaws, including a requirement to provide certain information about the stockholder and its affiliates and the nominee.

Anti-Takeover Provisions

Selected provisions of our charter and bylaws . Our charter and/or bylaws contain anti-takeover provisions that:

•

require that actions to be taken by our stockholders may be taken only at an annual or special meeting of our stockholders and not by written consent;

•

specify that special meetings of our stockholders can be called only by our board of directors, the chairman of our board of directors, our chief executive officer, or our president;

•

provide that our bylaws may be amended by our board of directors without stockholder approval;

•

156

•

establish advance notice procedures for stockholders to submit nominations of candidates for election to our board of directors and other proposals to be brought before a stockholders meeting.

Delaware Anti-Takeover Statute . In our charter we elected to be subject to Section 203 of the DGCL, an anti-takeover statute. In general, Section 203 of the DGCL prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns 15% or more of a corporation’s voting stock or is our affiliate or associate and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

Limitations on Liability, Indemnification of Officers and Directors and Insurance

The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors, subject to certain exceptions, by provision of the corporation’s certificate of incorporation. Our charter contains a provision eliminating the personal liability of our directors to the fullest extent permitted by the DGCL. In addition, our charter includes provisions that require us to indemnify, to the fullest extent allowable under the DGCL, our directors and officers for monetary damages for actions taken as our director or officer, or for serving at our request as a director or officer or another position at another corporation or enterprise, as the case may be. Our charter also provides that we must advance reasonable expenses to our directors and officers, subject to our receipt of an undertaking from the indemnified party as may be required under the DGCL.

We are also expressly authorized by the DGCL to carry directors’ and officers’ insurance to protect us, our directors, officers and certain employees for some liabilities. The limitation of liability and indemnification and advancements provisions in our charter and bylaws, respectively, may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, our charter provision eliminating the personal liability of our directors to the fullest extent permitted by the DGCL does not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s fiduciary duties, including the duty of care. The indemnification provisions will not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a derivative or direct suit, we pay the litigation costs of our directors and officers and the costs of settlement and damage awards against directors and officers pursuant to these indemnification and advancements provisions. There is currently no pending material litigation or proceeding against any of our directors, officers or employees for which indemnification or advancement is sought.

We maintain standard policies of insurance that provide coverage (i) to our directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act and (ii) to us with respect to indemnification and advancements payments that we may make to such directors and officers.

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liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We believe that the limitation of liability provision in our charter and the indemnification agreements will facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.

Insofar as the above described indemnification provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we understand that in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock will be available for future issuance without your approval. We may use additional shares for a variety of purposes, including future offerings to raise additional capital, to fund acquisitions and as employee compensation. The existence of authorized but unissued shares of common stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Transfer Agent and Registrar

We have retained American Stock Transfer & Trust Company, LLC as the transfer agent and registrar for our common stock.

Registration Rights Agreement

In connection with our May 2013 private offering and private placement of our common stock, we entered into a registration rights agreement with FBR Capital Markets & Co., as the initial purchaser and placement agent, acting for itself and for the benefit of the purchasers of our common stock in our May 2013 private offering and private placement.

Under the registration rights agreement, we agreed, at our expense, to use our commercially reasonable efforts to file with the SEC as soon as reasonably practicable following the completion of the May 2013 private offering and private placement, but in no event later than December 31, 2013, a shelf registration statement registering for resale all of the shares of our common stock sold in our May 2013 private offering and private placement that are not sold by the selling stockholders in this offering (which we refer to as the “registrable shares”), plus any additional shares of common stock issued in respect thereof whether by stock dividend, stock distribution, stock split, or otherwise. We refer to this registration statement as the “resale shelf registration statement.” We are obligated to use our commercially reasonable efforts to cause the resale shelf registration statement to be declared effective by the SEC under the Securities Act as promptly as practicable after the filing (such time of effectiveness may be deferred until up to 60 days after completion of this offering), but in any event prior to June 30, 2014, and to maintain the resale shelf registration statement continuously effective under the Securities Act, subject to certain permitted blackout periods, until the first to occur of:

•

the date on which the registrable shares covered by the resale shelf registration statement have been resold in accordance with the resale shelf registration statement;

•

the date on which the registrable shares covered by the resale shelf registration statement have been transferred pursuant to Rule 144 (or any successor or analogous rule) under the Securities Act; and

•

the date on which the registrable shares covered by the resale shelf registration statement have been sold to us or cease to be outstanding.

We have filed with the SEC a registration statement on Form S-1 for this offering and for the resale of the registrable shares that are not sold by the selling stockholders in this offering, and this prospectus forms a part of that registration statement, which is considered the resale shelf registration statement.

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In addition, pursuant to the registration rights agreement, if the SEC declares the resale shelf registration statement effective on or before June 30, 2014, then we will pay each of Dale Francescon and Robert Francescon, if he is then employed by us, a cash bonus of $250,000. Each of Dale Francescon and Robert Francescon should earn this bonus upon completion of this offering.

However, if, prior to June 30, 2014, the resale shelf registration statement has not been declared effective by the SEC or our common stock has not been listed for trading on a national securities exchange, then the registration rights agreement and our bylaws require that we hold a special meeting of our stockholders for the purpose of considering and voting on the removal of our directors then in office and electing the successors of any directors so removed, unless the requirement is waived or deferred in accordance with the registration rights agreement and our bylaws. This requirement for a special election meeting should no longer be applicable upon completion of this offering.

All holders of the registrable shares and each of their respective direct and indirect transferees may elect to participate in this offering as selling stockholders, subject to:

•

execution of a customary underwriting agreement; completion and execution of any questionnaires, powers of attorney, indemnities, custody agreements, securities escrow agreements and other documents, including opinions of counsel, reasonably required under the terms of such underwriting agreement; and provision to us of such information as we may reasonably request in writing for inclusion in the registration statement of which this prospectus forms a part;

•

compliance with the registration rights agreement;

•

cutback rights on the part of the underwriters; and

•

other conditions and limitations that may be imposed by the underwriters.

In connection with our May 2013 private offering and private placement, the selling stockholders have agreed with us not to directly or indirectly sell, offer to sell, grant any option or otherwise transfer or dispose of any shares of our common stock (other than the shares of our common stock the selling stockholders are selling in this offering) for 180 days after the date of this prospectus, in the case of the selling stockholders in this offering, or 60 days after the date of this prospectus, in the case of stockholders who are not selling shares of our common stock in this offering. We have agreed not to waive or otherwise modify that agreement without the prior written consent of the representatives of the underwriters.

We have agreed to indemnify the selling stockholders for certain violations of federal or state securities laws in connection with any registration statement in which the selling stockholders sell their shares of our common stock pursuant to these registration rights.

The preceding summary of certain provisions of the registration rights agreement is not intended to be complete, and is subject to, and qualified in its entirety by reference to, all of the provisions of the registration rights agreement, the form of which has been filed as an exhibit to the registration statement of which this prospectus forms a part.

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SHARES ELIGIBLE FOR FUTURE SALE

General

Upon the completion of this offering, as a result of the issuance of shares in this offering, there will be shares of our common stock issued and outstanding ( shares if the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock in this offering).

Of the total number of shares of our common stock to be issued and outstanding upon completion of this offering:

•

shares are being offered and sold in this offering ( shares if the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock in this offering). These shares will be freely transferable without restriction or further registration under the Securities Act, except that any shares held or acquired by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, will be subject to the volume limitations and other restrictions of Rule 144 described below;

•

up to shares will be registered for resale on a continuous basis pursuant to the resale shelf registration statement we have filed with the SEC as part of the registration statement of which this prospectus forms a part. These shares will be freely transferable without restriction or further registration under the Securities Act, except that any shares held or acquired by our affiliates will be subject to the volume limitations and other restrictions of Rule 144 described below. In addition, these shares are subject to a lock-up agreement for 60 days after the date of this prospectus (or 180 days in the case of any such shares held by the selling stockholders and our officers and directors); and

•

the remaining shares have not been registered and may be “restricted” securities within the meaning of Rule 144 under the Securities Act. These shares may not be sold unless they are registered under the Securities Act or the restrictions under Rule 144 have lapsed or another exemption from registration is available. In addition, these shares are subject to lock-up agreements for 60 days after the date of this prospectus (or 180 days in the case of any such shares held by the selling stockholders and our officers and directors).

Prior to this offering, there has been no public market for shares of our common stock. Although we have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS,” an active trading market for the shares of our common stock may never develop or if one develops, it may not be sustained following this offering. No assurance can be given as to the likelihood that an active trading market for our common stock will develop, the liquidity of any such market, the ability of our stockholders to sell their shares or the prices that our stockholders may obtain for any of their shares. No prediction can be made as to the effect, if any, that future sales of shares of our common stock, or the availability of shares of our common stock for future sale, will have on the market price prevailing from time to time. Sales of substantial amounts of our common stock, or the perception that such sales could occur, may affect adversely prevailing market prices of our common stock. See “Risk Factors—Risks Related to this Offering and Ownership of our Common Stock.”

Rule 144

After giving effect to this offering, shares of our outstanding common stock will be “restricted” securities under the meaning of Rule 144 under the Securities Act, and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemption provided by Rule 144.

In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale and who has beneficially owned shares considered to be restricted securities under Rule 144 for at least six months would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned shares considered to be restricted securities under Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

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An affiliate of ours who has beneficially owned shares of our common stock for at least six months would be entitled to sell, within any three-month period, a number of shares that does not exceed the greater of:

•

1% of the shares of our common stock then outstanding, which will equal approximately shares immediately after this offering; or

•

the average weekly trading volume of our common stock on the New York Stock Exchange during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC;

provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale and have filed all required reports during that time period. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to manner of sale provisions, notice requirements and the availability of current public information about us.

2013 Long-Term Incentive Plan

We have adopted an equity incentive plan. The number of shares of our common stock that may be issued under our 2013 Long-Term Incentive Plan is 1,846,000 shares.

We have previously granted an aggregate of 377,587 shares of restricted stock to our executive officers, directors and certain employees pursuant to our 2013 Long-Term Incentive Plan. We expect to have an additional 1,468,413 shares of our common stock reserved for future issuance in connection with awards under our 2013 Long-Term Incentive Plan. For a description of our 2013 Long-Term Incentive Plan, see “Executive and Director Compensation—2013 Long-Term Incentive Plan.”

Subsequent to the effectiveness of the registration statement of which this prospectus forms a part, we intend to file a registration statement on Form S-8 to register the total number of shares of our common stock that may be issued under our 2013 Long-Term Incentive Plan, including the shares of restricted stock granted to our executive officers and directors, as well as any options to purchase shares of our common stock that may be granted to our executive officers.

Lock-Up Periods

For a description of certain lock-up periods, see “Description of Capital Stock—Registration Rights Agreement” and “Underwriting.”

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CERTAIN MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain material United States federal income tax consequences to you of the acquisition, ownership and disposition of shares of our common stock offered pursuant to this prospectus. This discussion is not a complete analysis of all of the potential United States federal income tax consequences relating thereto, and, except as otherwise specifically provided herein, it does not address any estate and gift tax consequences or any tax consequences arising under any state, local or foreign tax laws, or any other United States federal tax laws. This discussion is based on the Code, Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service (which we refer to as the “IRS”) all as in effect as of the date of this prospectus. These authorities may change, possibly retroactively, resulting in United States federal income tax consequences different from those discussed below. No ruling has been or will be sought from the IRS with respect to the matters discussed below, and there can be no assurance that the IRS will not take a contrary position regarding the tax consequences of the acquisition, ownership or disposition of the shares of our common stock, or that any such contrary position would not be sustained by a court.

This discussion is limited to holders who purchase shares of our common stock pursuant to this prospectus and who hold the shares of our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion also does not consider any specific facts or circumstances that may be relevant to holders subject to special rules under the United States federal income tax laws, including, without limitation:

•

financial institutions, banks and thrifts;

•

insurance companies;

•

tax-exempt organizations;

•

“S” corporations, partnerships or other pass-through entities;

•

traders in securities that elect to mark to market;

•

regulated investment companies and real estate investment trusts;

•

broker-dealers or dealers in securities or currencies;

•

United States expatriates;

•

persons subject to the alternative minimum tax;

•

persons holding our stock as a hedge against currency risks or as a position in a straddle; or

•

U.S. holders (as defined below) whose functional currency is not the United States dollar.

If a partnership (or other entity taxed as a partnership for United States federal income tax purposes) holds shares of our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, upon the activities of the partnership, and upon certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the specific United States federal income tax consequences to them.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF SHARES OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS AND ANY OTHER UNITED STATES FEDERAL TAX LAWS.

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For purposes of this discussion, a “U.S. holder” is any beneficial owner of shares of our common stock who, for United States federal income tax purposes, is:

•

an individual who is a citizen or resident of the United States;

•

a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or of any state or in the District of Columbia;

•

an estate the income of which is subject to United States federal income taxation regardless of its source; or

•

a trust, if a United States court can exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or if the trust has a valid election in place to be treated as a United States person.

A “non-U.S. holder” is any beneficial owner of our common stock that is neither a “U.S. holder” nor an entity treated as a partnership for United States federal income tax purposes.

Taxation of U.S. Holders

Distributions on Shares of Our Common Stock . If we make cash or other property distributions on shares of our common stock, such distributions generally will constitute dividends for United States federal income tax purposes to the extent of our current and accumulated earnings and profits, as determined under United States federal income tax principles. Subject to certain limitations, these distributions may be eligible for the dividends-received deduction in the case of U.S. holders that are corporations. In general, a dividend distribution to a corporate U.S. holder may qualify for the 70% dividends received deduction if the U.S. holder owns less than 20% of the voting power and value of our stock. Dividends paid to non-corporate U.S. holders generally will qualify for taxation at special rates as “qualified dividends” if such U.S. holder meets certain holding period and other applicable requirements. The special rate will not, however, apply to dividends received to the extent that the U.S. holder elects to treat dividends as “investment income,” which may be offset by investment expense.

Amounts not treated as dividends for United States federal income tax purposes will constitute a return of capital and will first be applied against and reduce a U.S. holder’s tax basis in the shares of our common stock, but not below zero. Distributions in excess of our current and accumulated earnings and profits and in excess of a U.S. holder’s tax basis in its shares of our common stock will be taxable as capital gain realized on the sale or other disposition of the shares of our common stock and will be treated as described under “—Sale or Other Taxable Dispositions of Shares of Our Common Stock” below.

Sale or Other Taxable Dispositions of Shares of Our Common Stock . If a U.S. holder sells or disposes of shares of our common stock, such U.S. holder generally will recognize gain or loss for United States federal income tax purposes in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale or other disposition and the U.S. holder’s adjusted basis in the shares of our common stock for United States federal income tax purposes. This gain or loss generally will be long-term capital gain or loss if the U.S. holder has held the shares of our common stock for more than one year. The deductibility of capital losses is subject to limitations.

Backup Withholding and Information Reporting . Information reporting will generally apply to U.S. holders with respect to payments of dividends on shares of our common stock and to certain payments of proceeds on the sale or other disposition of shares of our common stock. Certain U.S. holders may be subject to U.S. backup withholding on payments of dividends on shares of our common stock and certain payments of proceeds on the sale or other disposition of shares of our common stock unless the beneficial owner of shares of our common stock furnishes the payor or its agent with a taxpayer identification number, certified under penalties of perjury, and certain other information, or otherwise establishes, in the manner prescribed by law, an exemption from backup withholding.

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U.S. backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a credit against a U.S. holder’s United States federal income tax liability, which may entitle the U.S. holder to a refund, provided the U.S. holder timely furnishes the required information to the IRS.

Medicare Tax. A U.S. person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the U.S. person’s “net investment income” for the relevant taxable year and (2) the excess of the U.S. person’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000 depending on the individual’s circumstances). Net investment income generally includes dividends, and net gains from the disposition of common stock, unless such income or gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). A U.S. holder that is an individual, estate or trust should consult its tax advisor regarding the applicability of the Medicare tax to its income and gains in respect of its investment in our common stock.

Taxation of Non-U.S. Holders

Distributions on Shares of Our Common Stock . Distributions that are treated as dividends (see “—Taxation of U.S. Holders—Distributions on Shares of Our Common Stock”) generally will be subject to United States federal withholding tax at a rate of 30% of the gross amount of the dividends, or such lower rate specified by an applicable income tax treaty. If we cannot determine at the time a distribution is made whether or not the distribution will exceed current and accumulated earnings and profits (and therefore whether the distribution will be treated as a dividend), the Company intends to withhold from the distribution at the rate applicable to dividends. A non-U.S. holder may seek a refund from the IRS of any amounts withheld if it is subsequently determined that the distribution was, in fact, in excess of our current and accumulated earnings and profits. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish to us or our paying agent a valid IRS Form W-8BEN (or applicable successor form) certifying such non-U.S. holder’s qualification for the reduced rate. This certification must be provided to us or our paying agent prior to the payment of dividends and must be updated as required by law. Non-U.S. holders that do not timely provide us or our paying agent with the required certification, but that qualify for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

If a non-U.S. holder holds shares of our common stock in connection with the conduct of a trade or business in the United States, and dividends paid on the shares of our common stock are effectively connected with such non-U.S. holder’s United States trade or business (and if required by an applicable income tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States), the non-U.S. holder will be exempt from United States federal withholding tax. To claim the exemption, the non-U.S. holder must generally furnish to us or our paying agent a properly executed IRS Form W-8ECI (or applicable successor form).

Any dividends paid on shares of our common stock that are effectively connected with a non-U.S. holder’s United States trade or business (and if required by an applicable income tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States) generally will be subject to United States federal income tax on a net income basis at the regular graduated United States federal income tax rates in much the same manner as if such non-U.S. holder were a resident of the United States. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

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Distributions that we determine are in excess of our current and accumulated earnings and profits and that are in excess of a non-U.S. holder’s tax basis in its shares of our common stock will be treated as gain from the sale of common stock as described under “—Sale or Other Taxable Dispositions of Shares of Our Common Stock” below.

Sales or Other Taxable Dispositions of Shares of Our Common Stock . Subject to the discussion of backup withholding and withholding tax relating to foreign accounts below, a non-U.S. holder generally will not be subject to United States federal income tax for gain recognized on a sale or other disposition of common stock unless one of the following conditions is satisfied:

•

the gain is effectively connected with a trade or business conducted by the non-U.S. holder in the United States (and, if an income tax treaty applies, is attributable to a permanent establishment maintained in the United States by such non-U.S. holder). The non-U.S. holder will, unless an applicable treaty provides otherwise, be taxed on its net gain derived from the sale or other disposition under regular graduated United States federal income tax rates. Effectively connected gains realized by a corporate non-U.S. holder may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate as may be specified by an applicable income tax treaty;

•

in the case of a non-U.S. holder who is an individual and holds the common stock as a capital asset, the holder is present in the United States for 183 or more days in the taxable year of the sale or other disposition and certain other conditions exist. Such gain will be subject to United States federal income tax at a flat 30% rate (or such lower rate specified by an applicable income tax treaty), but may be offset by United States source capital losses (even though the individual is not considered a resident of the United States); or

•

our common stock constitutes a USRPI within the meaning FIRPTA by reason of our status as a USRPHC for United States federal income tax purposes.

With respect to the third bullet point above, because of our holdings of United States real property interests, we believe we are a USRPHC for United States federal income tax purposes. Because the determination of whether we are a USRPHC depends on the fair market value of our United States real property interests relative to the fair market value of our other trade or business assets and any foreign real property interests, it is possible that we may not remain a USRPHC in the future. As a USRPHC, if a class of our stock is regularly traded on an established securities market, such stock will be treated as a USRPI only with respect to a non-U.S. holder that actually or constructively holds more than five percent of such class of stock at any time during the shorter of the five-year period preceding the date of disposition or the holder’s holding period for such stock. We anticipate that our common stock will be regularly traded on an established securities market following this offering. However, no assurance can be given in this regard and no assurance can be given that our common stock will remain regularly traded in the future. If gain on the sale or other taxable disposition of shares of our common stock were subject to taxation under FIRPTA as a sale of a USRPI, the non-U.S. holder would be subject to regular United States federal income tax with respect to such gain in the same manner as a taxable U.S. holder (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). In addition, if the sale or other taxable disposition of shares of our common stock is subject to tax under FIRPTA, the purchaser of the stock would be required to withhold and remit to the IRS 10% of the purchase price unless an exception applies. A non-U.S. holder also will be required to file a United States federal income tax return for any taxable year in which it realizes a gain from the disposition of our common stock that is subject to United States federal income tax.

Non-U.S. holders should consult their tax advisors concerning the consequences of selling or otherwise disposing of shares of our common stock.

Backup Withholding Tax and Information Reporting . We must report annually to each non-U.S. holder of shares of our common stock and to the IRS the amount of payments on the shares of our common stock paid to

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such non-U.S. holder and the amount of any tax withheld with respect to those payments. These information reporting requirements apply even if no withholding was required because the payments were effectively connected with the non-U.S. holder’s conduct of a United States trade or business, or withholding was reduced or eliminated by an applicable income tax treaty. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. Backup withholding, however, generally will not apply to distribution payments to a non-U.S. holder of shares of our common stock provided the non-U.S. holder furnishes to us or our paying agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN or IRS Form W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s United States federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax Relating to Foreign Accounts . The Foreign Account Tax Compliance Act (which we refer to as “FATCA”) provides that a 30% withholding tax will be imposed on certain payments (including dividends as well as gross proceeds from sales of stock giving rise to such dividends) made to a foreign financial institution (as specifically defined in the Code) and certain other foreign entities if such entity fails to satisfy certain new disclosure and reporting rules. FATCA generally requires that (i) in the case of a foreign financial institution, the entity identifies and provides information in respect of financial accounts with such entity held (directly or indirectly) by U.S. persons and U.S.-owned foreign entities and (ii) in the case of a non-financial foreign entity, the entity identifies and provides information in respect of substantial U.S. owners of such entity. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (i) above, it must enter into an agreement with the U.S. Treasury requiring, among other things, that it undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to non-compliant foreign financial institutions and certain other account holders.

The IRS has released final regulations generally providing that withholding under FATCA will not apply with respect to payments of U.S. source fixed or determinable annual or periodic (FDAP), such as dividends, made prior to June 30, 2014, or to payments of gross proceeds and passthru payments made prior to January 1, 2017. The United States Treasury is also in the process of signing Intergovernmental Agreements with other countries to implement the exchange of information required under FATCA. Investors are strongly encouraged to consult with their own tax advisors regarding the potential application and impact of FATCA and any Intergovernmental Agreement between the United States and their home jurisdiction in connection with FATCA compliance.

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UNDERWRITING

We and the selling stockholders have entered into an underwriting agreement with FBR Capital Markets & Co. and J.P. Morgan Securities LLC, as representatives of the underwriters named below, with respect to the shares subject to this offering. Subject to the terms and conditions in the underwriting agreement, we and the selling stockholders have agreed to sell to the underwriters, and each underwriter has, severally and not jointly, agreed to purchase from us and the selling stockholders on a firm commitment basis, the respective number of shares of our common stock set forth opposite its name in the table below:


Underwriters		Number of Shares
FBR Capital Markets & Co.
J.P. Morgan Securities LLC
Deutsche Bank Securities Inc.
Zelman Partners LLC
Builder Advisor Group, LLC

Total

The underwriting agreement provides that the obligation of the underwriters to purchase all of the shares being offered to the public is subject to approval of legal matters by counsel and the satisfaction of other conditions. These conditions include, among others, the continued accuracy of representations and warranties made by us and the selling stockholders in the underwriting agreement, delivery of legal opinions and the absence of any material changes in our assets, business or prospects after the date of this prospectus. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of the non-defaulting underwriters may be increased or the offering terminated. The underwriters are obligated to purchase all of our shares in this offering, other than those covered by the over-allotment option described below, if they purchase any of our shares.

The representatives of the underwriters have advised us that the underwriters propose to offer the common stock directly to the public at the public offering prices listed on the cover page of this prospectus and to selected dealers, who may include the underwriters, at the public offering price less a selling concession not in excess of $ per share for the common stock. The underwriters may allow, and the selected dealers may reallow, a concession not in excess of $ per share for the common stock to brokers and dealers. After the completion of the offering, the underwriters may change the offering price and other selling terms. Sales of common stock made outside of the United States may be made by affiliates of the underwriters.

Pursuant to the underwriting agreement, we have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments which the underwriters or other indemnified parties may be required to make in respect of any such liabilities.

Commissions and Expenses

The following table provides information regarding the amount of the underwriting discounts and commissions to be paid to the underwriters by us and the selling stockholders. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares to cover over-allotments, if any.

Total

Per Share

Without
Over-Allotment

With
Over-Allotment

Underwriting discount paid by us

Proceeds, before expenses, to us

Underwriting discount paid by the selling stockholders

Proceeds, before expenses, to the selling stockholders

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We will apply to have our common stock listed on the New York Stock Exchange under the symbol “CCS.” We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting discounts and commissions, will be approximately $ .

Over-Allotment Option

We have granted the underwriters an over-allotment option. This option, which is exercisable for up to 30 days after the date of this prospectus, permits the underwriters to purchase a maximum of additional shares, consisting of additional shares of common stock from us, to cover over-allotments, if any. If the underwriters exercise all or part of this option, each underwriter will be obligated to purchase its proportionate number of shares covered by the option at the public offering price that appears on the cover page of this prospectus, less the underwriting discount.

Lock-Up Agreements

Our executive officers and directors and certain of our significant stockholders have agreed to a 180-day “lock-up” from the date of this prospectus relating to shares of our common stock that they beneficially own, including the issuance of common stock upon the exercise of currently outstanding options and options which may be issued. This means that, for a period of 180 days following the date of this prospectus, such persons may not offer, sell, pledge or otherwise dispose of these securities without the prior written consent of the representatives (either individually or jointly, as applicable), subject to certain exceptions, including (i) pursuant to the exercise and issuance of options, (ii) as a bona fide gift, (iii) to any trust for the benefit of such persons or their families, (iv) as a distribution to stockholders, partners or members of such persons, (v) any transfer required under any benefit plans or our bylaws, (vi) as required by participants in our amended and restated stock incentive plan for tax purposes, (vii) as collateral for any loan, or (viii) with respect to sales of securities acquired in the open market after the purchase of the 144A/Regulation S shares in the May 2013 private offering and private placement; provided that, where applicable, the recipients of the shares agree to be bound by the restrictions included in the lock-up agreements.

In addition, the underwriting agreement provides that we will not, for a period of 180 days following the date of this prospectus, offer, sell or distribute any of our securities, without the prior written consent of the underwriters.

Stabilization

Until the distribution of the securities offered by this prospectus is completed, rules of the SEC may limit the ability of the underwriters to bid for and to purchase our common stock. As an exception to these rules, the underwriters may engage in transactions effected in accordance with Regulation M under the Exchange Act that are intended to stabilize, maintain or otherwise affect the price of our common stock. The underwriters may engage in over-allotment sales, syndicate covering transactions, stabilizing transactions and penalty bids in accordance with Regulation M.

•

Stabilizing transactions permit bids or purchases for the purpose of pegging, fixing or maintaining the price of the common stock, so long as stabilizing bids do not exceed a specified maximum.

•

Over-allotment involves sales by the underwriters of securities in excess of the number of securities the underwriters are obligated to purchase, which creates a short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares of common stock over-allotted by the underwriters is not greater than the number of shares of common stock that they may purchase in the over-allotment option. In a naked short position, the number of shares of common stock involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing shares of our common stock in the open market.

168

•

Covering transactions involve the purchase of securities in the open market after the distribution has been completed in order to cover short positions. In determining the source of securities to close out the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open market as compared to the price at which they may purchase securities through the over-allotment option. If the underwriters sell more shares of common stock than could be covered by the over-allotment option, creating a naked short position, the position can only be closed out by buying securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in this offering.

•

Penalty bids permit the underwriters to reclaim a selling concession from a selected dealer when the securities originally sold by the selected dealer are purchased in a stabilizing or syndicate covering transaction.

These stabilizing transactions, covering transactions and penalty bids may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our common stock. As a result, the price of our securities may be higher than the price that might otherwise exist in the open market.

Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the prices of our securities. These transactions may occur on any trading market. If any of these transactions are commenced, they may be discontinued without notice at any time.

Electronic Prospectus

This prospectus may be made available in electronic format on Internet sites or through other online services maintained by the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. Other than this prospectus in electronic format, any information on the underwriters’ or their affiliates’ websites and any information contained in any other website maintained by the underwriters or any affiliate of the underwriters is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.

Market for Shares

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

•

the information set forth in this prospectus and otherwise available to the representatives;

•

our prospects and the history and prospects for the industry in which we compete;

•

an assessment of our management;

•

our prospects for future earnings;

•

the general condition of the securities markets at the time of this offering;

•

the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

•

other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for the shares of our common stock, or that the shares will trade in the public market at or above the initial public offering price.

169

Non-U.S. Legends

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Notice to Prospective Investors in the EEA

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’), from and including the date on which the European Union Prospectus Directive (the ‘‘EU Prospectus Directive’’) was implemented in that Relevant Member State (the ‘‘Relevant Implementation Date’’) an offer of securities described in this prospectus may not be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the EU Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of securities described in this prospectus may be made to the public in that Relevant Member State at any time:

•

to any legal entity which is a qualified investor as defined under the EU Prospectus Directive;

•

to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive); or

•

in any other circumstances falling within Article 3(2) of the EU Prospectus Directive, provided that no such offer of securities described in this prospectus shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the EU Prospectus Directive.

For the purposes of this provision, the expression an ‘‘offer of securities to the public’’ in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State. The expression “EU Prospectus Directive” means Directive 2003/71/EC (and any amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Notice to Prospective Investors in the United Kingdom

This prospectus is only being distributed to and is only directed at persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or the Order, and/or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”).

This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom who is not a relevant person should not act or rely on this document or any of its contents.

170

Each underwriter has represented, warranted and agreed that:

(A)

it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended, or the FSMA) received by it in connection with the issue or sale of the Shares in circumstances in which Section 21(1) of the FSMA does not apply to us; and

(B)

it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of our common stock in, from or otherwise involving the United Kingdom.

Notice to Prospective Investors in Germany

Any offer or solicitation of securities within Germany must be in full compliance with the German Securities Prospectus Act (Wertpapierprospektgesetz—WpPG). The offer and solicitation of securities to the public in Germany requires the publication of a prospectus that has to be filed with and approved by the German Federal Financial Services Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht—BaFin). This prospectus has not been and will not be submitted for filing and approval to the BaFin and, consequently, will not be published. Therefore, this prospectus does not constitute a public offer under the German Securities Prospectus Act (Wertpapierprospektgesetz). This prospectus and any other document relating to our common stock, as well as any information contained therein, must therefore not be supplied to the public in Germany or used in connection with any offer for subscription of our common stock to the public in Germany, any public marketing of our common stock or any public solicitation for offers to subscribe for or otherwise acquire our common stock. This prospectus and other offering materials relating to the offer of our common stock are strictly confidential and may not be distributed to any person or entity other than the designated recipients hereof.

Notice to Prospective Investors in Switzerland

This document, as well as any other material relating to the shares which are the subject of the offering contemplated by this prospectus, do not constitute an issue prospectus pursuant to Article 652a and/or 1156 of the Swiss Code of Obligations. The shares will not be listed on the SIX Swiss Exchange and, therefore, the documents relating to the shares, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange. The shares are being offered in Switzerland by way of a private placement, i.e. , to a small number of selected investors only, without any public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The investors will be individually approached by the issuer from time to time. This document, as well as any other material relating to the shares, is personal and confidential and do not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without express consent of the issuer. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Relationships

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

171

LEGAL MATTERS

Certain legal matters in connection with this offering, including the validity of the shares of our common stock offered hereby, will be passed upon for us by Greenberg Traurig, LLP, Los Angeles, California. Certain legal matters in connection with this offering will be passed upon for the underwriters by Gibson, Dunn & Crutcher LLP. Sidley Austin LLP has acted as counsel to the selling stockholders.

172

CHANGE IN ACCOUNTANTS

On October 21, 2013, we dismissed BKD, LLP as our independent registered public accounting firm, which dismissal has been approved by our Audit Committee and ratified by our board of directors.

The consolidated financial statements of Century Communities, Inc. and our predecessor Century Communities Colorado, LLC as of and for the years ended December 31, 2012 and 2011 were audited by BKD, LLP, and their reports on such financial statements did not contain any adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles. During the years ended December 31, 2012 and 2011, and the subsequent interim period through October 21, 2013, (i) there were no disagreements with BKD, LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BKD, LLP, would have caused them to make reference to the subject matter of the disagreements in connection with their report on the financial statements for such year, and (ii) there were no “reportable events” as such term is defined in Item 304(a)(1)(v) of Regulation S-K.

On October 21, 2013, we engaged Ernst & Young LLP as our independent registered public accounting firm, which engagement has been approved by our Audit Committee and ratified by our board of directors. During the years ended December 31, 2012 and 2011, and the subsequent interim period through October 21, 2013, we did not consult with Ernst & Young LLP on any matters regarding the application of accounting principles to a specified transaction, either completed or proposed, the type of audit opinion that might be rendered on our financial statements, or any other matter that was the subject of a disagreement (as such term is used in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as such term is used in Item 304(a)(1)(v) of Regulation S-K).

EXPERTS

The consolidated financial statements of Century Communities, Inc. as of December 31, 2013, and for the year then ended, included in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of Century Communities, Inc. and our predecessor Century Communities Colorado, LLC as of and for the year ended December 31, 2012 have been audited by BKD, LLP, independent registered accounting firm, as stated in their report appearing herein. We have included our financial statements in this prospectus and elsewhere in the registration statement in reliance on BKD, LLP’s report, given on its authority as an expert in accounting and auditing.

The consolidated financial statements of Las Vegas Land Holdings, LLC as of December 31, 2013 and 2012, and for each of the two years in the period ended December 31, 2013, included in this prospectus and in the registration statement have been so included in reliance on the report of BDO USA, LLP, independent certified public accountants, appearing elsewhere herein and in the registration statement, given on the authority of said firm as experts in auditing and accounting.

Unless otherwise indicated, all statistical and economic market data included in this prospectus, and in particular in the sections entitled “Summary,” “Market Opportunity” and “Our Business,” is derived from a market study prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC (which we refer to as “JBREC”), an independent research provider and consulting firm, and is included in this prospectus in reliance on JBREC’s authority as an expert on such matters. We have paid JBREC a fee of $46,500 for its services, plus an amount charged at an hourly rate for additional information we may require from JBREC from time to time in connection with its services.

173

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act of 1933, as amended, with respect to the shares of our common stock being offered by this prospectus. This prospectus, which constitutes part of that registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules which are part of the registration statement. Some items included in the registration statement are omitted from the prospectus in accordance with the rules and regulations of the SEC. For further information with respect to us and the common stock offered in this prospectus, we refer you to the registration statement and the accompanying exhibits.

A copy of the registration statement and the accompanying exhibits and any other document we file may be inspected without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from this office upon the payment of the fees prescribed by the SEC. The public may obtain information on the operation of the public reference facilities in Washington, D.C. by calling the SEC at 1-800-SEC-0330. Our filings with the SEC are available to the public from the SEC’s website at www.sec.gov .

Upon the completion of this offering, we will be subject to the information and periodic reporting requirements of the Exchange Act, applicable to a company with securities registered pursuant to Section 12 of the Exchange Act. In accordance therewith, we will file proxy statements, periodic information and other information with the SEC. All documents filed with the SEC are available for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.centurycommunities.com. You may access our reports, proxy statements and other information free of charge at this website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of this prospectus.

174

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Reports of Independent Registered Public Accounting Firms			F-2

Consolidated Balance Sheet of Century Communities, Inc. as of December 31, 2013 and December 31, 2012			F-4

Consolidated Statement of Operations of Century Communities, Inc. for the Years Ended December 31, 2013 and 2012			F-5

Consolidated Statement of Equity of Century Communities, Inc. for the Years Ended December 31, 2013 and 2012			F-6

Consolidated Statement of Cash Flows of Century Communities, Inc. for the Years Ended December 31, 2013 and 2012			F-7

Notes to Consolidated Financial Statements of Century Communities, Inc. (December 31, 2013 and 2012)			F-8

Unaudited Condensed Consolidated Balance Sheet of Century Communities, Inc. as of March 31, 2014 and December 31, 2013			F-26

Unaudited Condensed Consolidated Statement of Operations of Century Communities, Inc. for the Three Months Ended March 31, 2014 and 2013			F-27

Unaudited Condensed Consolidated Statement of Cash Flows of Century Communities, Inc. for the Three Months Ended March 31, 2014 and 2013			F-28

Notes to Unaudited Condensed Consolidated Financial Statements (March 31, 2014)			F-29

Independent Auditor’s Report			F-36

Consolidated Balance Sheet of Las Vegas Land Holdings, LLC and Subsidiaries as of December 31, 2013 and December 31, 2012			F-37

Consolidated Statement of Operations of Las Vegas Land Holdings, LLC and Subsidiaries for the Years Ended December 31, 2013 and 2012			F-38

Consolidated Statement of Members’ Equity of Las Vegas Land Holdings, LLC and Subsidiaries for the Years Ended December 31, 2013 and 2012			F-39

Consolidated Statement of Cash Flows of Las Vegas Land Holdings, LLC and Subsidiaries for the Years Ended December 31, 2013 and 2012			F-40

Notes to Consolidated Financial Statements of Las Vegas Land Holdings, LLC and Subsidiaries (December 31, 2013 and 2012)			F-41

Condensed Consolidated Balance Sheet of Las Vegas Land Holdings, LLC and Subsidiaries as of March 31, 2014 (unaudited) and December 31, 2013			F-51

Condensed Consolidated Statement of Operations of Las Vegas Land Holdings, LLC and Subsidiaries for the Three Months Ended March 31, 2014 and 2013 (unaudited)			F-52

Condensed Consolidated Statement of Cash Flows of Las Vegas Land Holdings, LLC and Subsidiaries for the Three Months Ended March 31, 2014 and 2013 (unaudited)			F-53

Notes to Condensed Consolidated Financial Statements of Las Vegas Land Holdings, LLC and Subsidiaries (March 31, 2014) (unaudited)			F-54

Unaudited Pro Forma Condensed Consolidated Financial Statements as of and for the Three Months Ended March 31, 2014 and for the Year Ended December 31, 2013			F-59

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors of Century Communities, Inc.

We have audited the accompanying consolidated balance sheet of Century Communities, Inc. as of December 31, 2013, and the related consolidated statements of operations, equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Century Communities, Inc. at December 31, 2013, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with the U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Denver, Colorado

April 7, 2014, except for Note 19 and Note 22,

as to which the date is May 29, 2014

F-2

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

Century Communities Colorado, LLC & Affiliates

Greenwood Village, Colorado

We have audited the accompanying consolidated balance sheet of Century Communities Colorado LLC & Affiliates as of December 31, 2012, and the related consolidated statements of operations, equity and cash flows for the year ended December 31, 2012. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing auditing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit also included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Century Communities Colorado LLC & Affiliates as of December 31, 2012, and the results of its operations and its cash flows for the year ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

/s/ BKD, LLP

February 12, 2014

Denver, Colorado

F-3

Century Communities, Inc.

Consolidated Balance Sheet

As of December 31, 2013 and 2012

(in thousands)


	As of December 31,
	2013		2012
Assets
Cash and cash equivalents	$	109,998	$	4,357
Cash held in trust		—		2,917
Accounts receivable		4,438		897
Inventories		184,072		75,316
Prepaid expenses and other assets		8,415		2,057
Property and equipment, net		3,360		2,517
Amortizable intangible assets, net		1,877		—
Goodwill		479		—
Assets of consolidated variable interest entities:
Cash and cash equivalents		—		623
Inventories		—		1,989

Total assets	$	312,639	$	90,673

Liabilities and equity
Liabilities:
Accounts payable	$	588	$	2,459
Accrued expenses and other liabilities		38,083		19,095
Deferred tax liability, net		912		—
Payable to affiliates		—		95
Notes payable and revolving loan agreement		1,500		33,206
Subordinated obligation due to member		—		11,244
Liabilities of consolidated variable interest entities:
Accrued expenses		—		13

Total liabilities		41,083		66,112

Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized, 17,257,774 shares issued and outstanding at December 31, 2013 (none at December 31, 2012)		173		—
Additional paid-in capital		262,982		—
Retained earnings		8,401		—
Members’ capital before non-controlling interests		—		22,060
Non-controlling interests		—		2,501

Total stockholders’ equity		271,556		24,561

Total liabilities and stockholders’ equity	$	312,639	$	90,673

See Notes to Consolidated Financial Statements

F-4

Century Communities, Inc.

Consolidated Statement of Operations

For the Years Ended December 31, 2013 and 2012

(in thousands, except per share amounts)


	Year Ended December 31,
	2013			2012
Home sales revenues	$	171,133		$	96,030
Cost of sales		129,651			75,448

Gross margin		41,482			20,582
Selling, general, and administrative (including related-party management fees of $200 and $600 in 2013 and 2012, respectively)		23,622			13,496

Operating income		17,860			7,086
Other income (expense):
Interest income		228			11
Interest expense		—			—
Other expense		(26	)		342
Gain on disposition of assets		11			—

Income before tax expense		18,073			7,439
Income tax expense		5,015			—
Deferred taxes on conversion to a corporation		627			—

Consolidated net income of Century Communities, Inc.		12,431			7,439
Net income attributable to the non-controlling interests		52			1,301

Income attributable to common stockholders	$	12,379		$	6,138

Earnings per share
Basic and diluted	$	0.95		$	—

Weighted average number of common shares outstanding
Basic and diluted		12,873,562			—

Unaudited pro forma net income, income attributable to common stockholders, and earnings per share (Note 20)
Net income	$	12,185		$	5,388

Income attributable to common stockholders		12,031			4,087

Basic and diluted earnings per share		0.93			0.82

Unaudited pro forma weighted average number of common shares (Note 20)
Basic and diluted		12,873,562			5,000,000

See Notes to Consolidated Financial Statements

F-5

Century Communities, Inc.

Consolidated Statement of Equity

December 31, 2013 and 2012

(in thousands)


	Members’ Capital			Common Stock				Paid-In Capital		Retained Earnings		Non- Controlling Interests			Total Equity
	Members’ Capital			Shares		Amount		Paid-In Capital		Retained Earnings		Non- Controlling Interests			Total Equity
Balance at December 31, 2011	$	26,316		$	—	$	—	$	—	$	—	$	2,215		$	28,531
Noncash contributions		1,280			—		—		—		—		—			1,280
Noncash distributions		(5,365	)		—		—		—		—		—			(5,365	)
Distributions		(6,309	)		—		—		—		—		(1,015	)		(7,324	)
Net income		6,138			—		—		—		—		1,301			7,439

Balance at December 31, 2012		22,060			—		—		—		—		2,501			24,561
Noncash contributions		3,708			—		—		—		—		—			3,708
Noncash distributions		—			—		—		—		—		(1,603	)		(1,603	)
Contributions		1,500			—		—		—		—		—			1,500
Distributions to non-controlling interests		—			—		—		—		—		(950	)		(950	)
Distributions to members		(3,830	)		—		—		—		—		—			(3,830	)
Conversion of subordinated obligation to equity		11,244			—		—		—		—		—			11,244
Net income January 1, 2013 through April 30, 2013		3,978			—		—		—		—		52			4,030

Members’ capital as of April 30, 2013		38,660			—		—		—		—		—			38,660
Conversion of LLC to C corporation		(38,660	)		5,000		50		38,610		—		—			—
Issuance of common stock		—			12,075		121		223,639		—		—			223,760
Issuance of restricted stock awards		—			183		—		—		—		—			—
Stock-based compensation expense		—			—		2		733		—		—			735
Net income May 1, 2013 through December 31, 2013		—			—		—		—		8,401		—			8,401

Balance at December 31, 2013	$	—		$	17,258	$	173	$	262,982	$	8,401	$	—		$	271,556

See Notes to Consolidated Financial Statements

F-6

Century Communities, Inc.

Consolidated Statement of Cash Flows

For the Years Ended December 31, 2013 and 2012

(in thousands)


	Year Ended December 31,
	2013			2012
Operating activities
Net income	$	12,431		$	7,439
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		937			196
Stock compensation expense		735			—
Deferred provision upon conversion		627			—
Deferred provision change post conversion		285			—
Changes in assets and liabilities:
Cash held in trust		2,917			(2,917	)
Accounts receivable		(3,400	)		(829	)
Inventories		(92,250	)		(28,758	)
Prepaid expenses and other assets		(4,858	)		(95	)
Accounts payable		(2,749	)		1,152
Accrued expenses and other liabilities		17,922			7,816
Payable to affiliates		(95	)		95

Net cash used in operating activities		(67,498	)		(15,901	)

Investing activities
Purchases of property and equipment		(550	)		(839	)
Business combination		(15,708	)		—

Net cash used in investing activities		(16,258	)		(839	)

Financing activities
Borrowings under line of credit		26,671			31,500
Payments on line of credit		(47,044	)		(16,335	)
Proceeds from debt issuances		5,763			11,123
Principal payments		(17,096	)		(1,256	)
Net proceeds from issuances of common stock		223,760			—
Principal payments on long-term debt, related party		—			(1,854	)
Contributions from members		1,500			—
Distributions to members		(3,830	)		(6,309	)
Distributions to non-controlling interest		(950	)		(1,015	)

Net cash provided by financing activities		188,774			15,854
Net increase in cash and cash equivalents	$	105,018		$	(886	)
Cash and cash equivalents:
Beginning of period		4,980			5,866

End of period	$	109,998		$	4,980

Noncash investing and financing information
Inventory contributed by members	$	3,708		$	1,280
Inventory distributed to non-controlling interests		1,603			—
Noncash distribution to members		—			5,365
Conversion of subordinated debt obligation to equity		11,244			—

Supplemental cash flow information
Interest paid, net of capitalized interest	$	—		$	—

Reconciliation of cash and cash equivalents
Cash and cash equivalents of the Company	$	109,998		$	4,357
Cash and cash equivalents of the consolidated variable interest entities		—			623

Total cash and cash equivalents	$	109,998		$	4,980

See Notes to Consolidated Financial Statements

F-7

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Century Communities, Inc. (we or the Company) is engaged in all aspects of homebuilding, including land acquisition and development, entitlements, and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects primarily in major metropolitan markets in Colorado and, more recently, in the greater Austin, Texas, metropolitan area.

We were formed as a Colorado limited liability company in August 2002, and we converted into a Delaware corporation pursuant to the General Corporation Law of the State of Delaware on April 30, 2013. In connection with the conversion, all of the outstanding membership interests were converted into an aggregate of 5.0 million shares of common stock, which represented 100% of the outstanding shares of the Company’s common stock immediately following the conversion. Also in connection with the conversion, the Company’s name was changed from Century Communities Colorado, LLC to Century Communities, Inc., and a total of 100.0 million shares of the Company’s common stock and 50.0 million shares of preferred stock were authorized for issuance.

In May 2013, we completed a private offering and a private placement of 12.1 million shares of our common stock, through which we received net proceeds of $223.8 million.

On September 12, 2013, we purchased substantially all the assets and certain liabilities of Jimmy Jacobs Homes L.P. (Jimmy Jacobs), a homebuilder with operations in the greater Austin, Texas, metropolitan area, for $15.7 million. Commencing with the acquisition of Jimmy Jacobs, our homebuilding operations comprise two divisions: Colorado and Texas. We also have limited land holdings in Nevada.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, as well as all subsidiaries in which we have a controlling interest, and variable interest entities (VIE’s) for which the Company is deemed the primary beneficiary. All intercompany accounts and transactions have been eliminated.

Reclassifications

Certain prior period amounts have been reclassified to conform to our current year’s presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2013 and 2012, cash equivalents consisted of certificates of deposit.

Cash Held in Trust

Cash held in trust represents cash received from a settlement with an insurance provider for $2.9 million in December 2012 related to certain residential real estate construction projects insured under the applicable

F-8

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Operations and Summary of Significant Accounting Policies (continued)

policies. The proceeds of the settlements are restricted to satisfy future construction defect claims. As of December 31, 2013, all proceeds had been used to satisfy construction defect claims.

Accounts Receivable

Accounts receivable primarily consist of amounts to be received by the Company from the title company for homes closed, which are typically received within a few business days of home close, and contract receivables related to certain contracts in our Texas division accounted for under the percentage-of-completion method.

We periodically review the collectability of our accounts receivables, and, if it is determined that a receivable might not be fully collectible, an allowance is recorded for the amount deemed uncollectible. As of December 31, 2013 and 2012, no allowance was recorded related to accounts receivable.

Inventories and Cost of Sales

We capitalize pre-acquisition, land, development, and other allocated costs, including interest, during development and home construction.

Land, development, and other common costs are allocated to inventory using the relative-sales-value method; however, as lots within a project typically have comparable market values, we generally allocate land, development, and common costs equally to each lot within the project. Home construction costs are recorded using the specific-identification method. Cost of sales for homes closed includes the allocation of construction costs of each home and all applicable land acquisition, land development, and related common costs, both incurred and estimated to be incurred. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the remaining homes in the community.

When a home is closed, the Company generally has not paid all incurred costs necessary to complete the home, and a liability and a charge to cost of sales are recorded for the amount that is estimated will ultimately be paid related to completed homes.

Inventories are carried at cost unless events and circumstances indicate that the carrying value may not be recoverable. We review for indicators of impairment at the lowest level of identifiable cash flows, which we have determined as the community level.

Indicators of impairment include, but are not limited to, significant decreases in local housing market values and selling prices of comparable homes, decreases in actual or trending gross margins or sales absorption rates, significant unforeseen cost in excess of budget, and actual or projected cash flow losses.

If an indicator of impairment is identified, we estimate the recoverability of the community by comparing the estimated future cash flows on an undiscounted basis to its carrying value. If the undiscounted cash flows are more than the carrying value, the community is recoverable and no impairment is recorded. If the undiscounted cash flows are less than the community’s carrying value, the community is deemed impaired and is written down to fair value. We generally estimate the fair value of the community through a discounted cash flow approach.

When estimating cash flows of a community, we make various assumptions, including the following: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on

F-9

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Operations and Summary of Significant Accounting Policies (continued)

market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition, and historical trends; (iii) costs expended to date and expected to be incurred, including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price, and/or building costs; and (v) alternative uses for the property. For the years ended December 31, 2013 and 2012, no inventory impairments were recorded.

Home Sales and Profit Recognition

Revenues from home sales are recorded and a profit is recognized when the respective units are closed, title has passed, the homeowners initial and continuing investment is adequate, and other attributes of ownership have been transferred to the homeowner. Sales incentives are recorded as a reduction of revenues when the respective unit is closed. When it is determined that the earnings process is not complete, the sale and the related profit are deferred for recognition in future periods.

We also serve as the general contractor for custom homes in our Texas operating segment, where the customer and not the Company owns the underlying land (Build on Your Own Lot Contracts). Accordingly, we recognize revenue for the Build on Your Own Lot Contracts, which are primarily cost plus contracts, on the percentage-of-completion method where progress toward completion is measured by relating the actual cost of work performed to date to the current estimated total cost of the respective contracts. As the Company makes such estimates, judgments are required to evaluate potential variances in the cost of materials and labor and productivity. During the year ended December 31, 2013, we earned revenue of $11.0 million and incurred costs of $8.8 million associated with 58 Build on Your Own Lot Contracts, which are presented in home sales revenues and cost of sales on the consolidated statement of operations, respectively. As of December 31, 2013, we had $1.2 million in contract receivables and $1.2 million in billings in excess of collections related to the Build on Your Own Lot Contracts, which are presented on the consolidated balance sheet in accounts receivable and accrued expenses and other liabilities, respectively.

We had no Build on Your Own Lot Contracts during the year ended December 31, 2012.

Performance Deposits

The Company is occasionally required to make a land, bond, and utility deposit as each new development is started. These amounts are refundable once the development is functioning and as each home is sold. Performance deposits are included in prepaid expenses and other assets on the consolidated balance sheet.

Lot Option and Escrow Deposits

The Company has entered into land and lot option purchase agreements with both related and unrelated parties to acquire land or lots for the construction of homes. Under these agreements, the Company has paid deposits, which in many cases are non-refundable, in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Lot option and escrow deposits are included in prepaid expenses and other assets on the consolidated balance sheet.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is charged to expense on the straight-line basis over the estimated useful life of each asset.

F-10

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Operations and Summary of Significant Accounting Policies (continued)

The estimated useful lives for each major depreciable classification of property and equipment are as follows:


	Years
Buildings		25–30 years
Leasehold improvements		5–10 years
Machinery and equipment		5–7 years
Furniture and fixtures		5–7 years
Model furnishings		3-5 years
Computer hardware and software		1-5 years

Amortizable Intangible Assets

Amortizable intangible assets consist of the estimated fair value of home construction contracts, trade names, non-compete agreements, and other intangible assets that were acquired upon closing of the Jimmy Jacobs acquisition, which was accounted for as a business combination as defined in Accounting Standards Codification (ASC) 805, Business Combinations . A high degree of judgment is made by management on variables, such as revenue growth rates, profitability, and discount rates, when calculating the value of the intangible assets. The identified intangible assets are amortized over their respective estimated useful life. Trade names, non-compete agreements, and other intangibles have estimated useful lives of 4, 2, and 7 years respectively. Home construction contracts are amortized to cost of sales in proportion to the revenue earned.

Warranties

Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the consolidated balance sheet, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through an internal lag development model that incorporates historical payment trends and adjust the amounts recorded if necessary. Changes in our warranty accrual for the years ended December 31, 2013 and 2012, are detailed in the table below (in thousands):


	Year Ended December 31,
	2013			2012
Beginning balance	$	679		$	474
Warranty expense provisions		1,112			630
Payments		(641	)		(425	)

Ending balance	$	1,150		$	679

Customer and Escrow Deposits

The Company collects earnest deposits at the time a home buyer’s contract is accepted. Earnest deposits held on homes under contract as of December 31, 2013 and 2012, totaled $2.9 million and $1.3 million, respectively, and are included in accrued expenses and other liabilities on the consolidated balance sheet.

Stock Based Compensation

We account for share-based awards in accordance with ASC 718, Compensation—Stock Compensation . ASC 718 requires us to estimate the grant date fair value of stock based compensation awards and to recognize the fair value as compensation costs over the requisite service period, which is generally three years, for all awards that vest.

F-11

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Operations and Summary of Significant Accounting Policies (continued)

As our common stock is not actively traded in a liquid primary market, the determination of the fair value of our restricted stock awards requires judgment by management. Accordingly, we first consider transactions in our common stock by qualified institutional buyers subsequent to our private placement in the secondary market. We take into consideration various factors to determine whether the closing price of our common stock in the secondary market is an accurate representation of the fair value of the restricted stock awards. These considerations include, but are not limited to, the timing of transactions in the secondary market and the elapsed time from the relevant grant date (if any), the volume of transactions in the market, and the level of information available to the investors. To the extent we believe that the closing price of our common stock in the secondary market is not an accurate representation of the fair value of the restricted stock award, we also consider observable trends in the stock prices of our publicly traded peers since our private placement, as well as internal valuations based on our most recent forecasts in determining the grant date fair value of the award.

Income Taxes

Prior to our conversion from a limited liability company to a corporation on April 30, 2013, the Company was not directly subject to income taxes under the provisions of the Internal Revenue Code and applicable state laws, and taxable income or loss was reported to the individual members for inclusion in their respective tax returns. Accordingly, prior to April 30, 2013, no provision for federal and state income taxes has been included in the consolidated statement of operations. As of December 31, 2012, the tax basis of the assets exceeded the recorded carrying amount by approximately $2.5 million, and the tax basis of the liabilities exceeded the recorded carrying amount by approximately $0.6 million, for a net difference of $1.9 million.

Subsequent to our conversion to a corporation, we account for income taxes in accordance with ASC 740, Income Taxes , which requires recognition of deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of its assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. When it is more likely than not that a portion or all of a deferred tax asset will not be realized in the future, the Company provides a corresponding valuation allowance against the deferred tax asset.

In addition, when it is more likely than not that a tax position will be sustained upon examination by a tax authority that has full knowledge of all relevant information, the Company measures the amount of tax benefit from the position and records the largest amount of tax benefit that is more likely than not of being realized after settlement with a tax authority. The Company’s policy is to recognize interest to be paid on an underpayment of income taxes in interest expense and any related statutory penalties in the provision for income taxes on the consolidated statement of operations.

Variable Interest Entities

The Company reviews its joint ventures to determine whether they are VIEs and, if so, whether the Company is the primary beneficiary. In addition, we review our land option contracts where we have a non-refundable deposit to determine whether the corresponding land sellers are VIEs and, if so, whether we are the primary beneficiary. In some instances, we may also expend funds for due diligence with respect to optioned land prior to takedowns. Such costs are classified as inventory on our consolidated balance sheet, and totaled $68 thousand and $80 thousand at December 31, 2013 and 2012, respectively. At each accounting period, we monitor whether takedowns of future lots under the respective contracts remain probable of occurring. If we determine future takedowns are no longer probable, we expense these costs to selling, general and administrative expenses.

F-12

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Operations and Summary of Significant Accounting Policies (continued)

In determining whether we are the primary beneficiary, we consider, among other things, whether we have the power to direct the activities that most significantly impact the economic performance of the VIE. In making this determination, we consider whether we have the power to direct certain activities, including, but not limited to, determining or limiting the scope or purpose of the VIE, the ability to sell or transfer property owned or controlled by the VIE, or arranging financing for the VIE.

As of December 31, 2013, we had no interest in VIEs. As of December 31, 2012, we held an interest in Arista Investors, LLC and Arista Investors II, LLC, both related parties through common ownership (collectively, the Arista Entities), which were determined to be VIEs, for which we were the primary beneficiary. In March 2013, we redeemed our interest in the Arista Entities for $25,443, which represented our carrying value at the time of redemption. In addition, at December 31, 2012, we had a variable interest in Regency at Ridgegate, LLC (Regency), a related party through common ownership, as a result of our guaranty of the outstanding debt of Regency. We determined we were not the primary beneficiary of Regency. The Company’s maximum exposure to losses of Regency at December 31, 2012, was limited to our guaranty of the outstanding balance of the debt of $11.4 million. At December 31, 2012, Regency had total assets of $21.6 million and total liabilities of $11.4 million. On August 30, 2013, Regency at Ridgegate, LLC repaid its debt, and the Company’s guaranty was eliminated.

2. Reporting Segments

We have identified our Colorado and Texas divisions as reportable segments. Our Corporate operations are a nonoperating segment, as it serves to support our Colorado and Texas divisions through functions such as our executive, finance, treasury, human resources, and accounting departments. In addition, our Corporate operations include certain assets and income produced from residential rental property in Colorado.

The following tables summarize home sales revenues and pretax income by segment (in thousands):


	Year Ended December 31,
	2013			2012
Colorado	$	149,997		$	96,030
Texas		21,136			—

Total home sales revenue	$	171,133		$	96,030

Colorado	$	26,117		$	11,045
Texas		299			—
Corporate		(8,343	)		(3,606	)

Total income before taxes	$	18,073		$	7,439

The following table summarizes total assets by segment (in thousands):


	As of December 31,
	2013		2012
Colorado	$	167,948	$	80,878
Texas		27,386		—
Corporate		117,305		9,795

Total assets	$	312,639	$	90,673

Corporate assets include cash and cash equivalents, cash held in trust, prepaid insurance, and certain property and equipment.

F-13

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

3. Business Combination

On September 12, 2013, we acquired real property and certain in-place contracts, and assumed certain liabilities, of Jimmy Jacobs, a homebuilder with operations in the greater Austin, Texas, metropolitan area, for cash consideration of $15.7 million (the Jimmy Jacobs Acquisition). The assets acquired in the Jimmy Jacobs Acquisition were primarily real property, including 50 land lots available for construction of single-family homes and 95 single-family residences and home construction contracts in various stages of construction. We also acquired in-place contracts for the sale of homes currently under construction, a purchase commitment to acquire 116 additional land lots from the seller upon the seller meeting certain development milestones, and certain other assets, including office-related personal property and intangible assets, including trade names and non-competition agreements. In total, as a result of the Jimmy Jacobs Acquisition, we obtained control of 166 lots and 95 homes under construction and home construction contracts in the greater Austin, Texas, metropolitan area. As the acquired set of assets and processes has the ability to create outputs, in the form of revenue from the sale of single-family residences, we concluded that the acquisition represented a business combination. We incurred $0.3 million in acquisition-related costs, which are included in other income (expense) on the consolidated statement of operations.

The following table summarizes the amounts recognized as of the acquisition date (in thousands):


Assets acquired and liabilities assumed
Accounts receivable	$	143
Inventory		12,411
Property and equipment		679
Prepaid and other assets		1,500
Intangible assets		2,428
Goodwill		479

Total assets	$	17,640

Accounts payable		878
Accrued and other expenses		1,054

Total liabilities	$	1,932

Included in home sales revenue and income before income taxes on the consolidated statement of operations is $21.1 million and $0.3 million, respectively, earned from Jimmy Jacobs subsequent to the acquisition date.

Had Jimmy Jacobs been included in the Company’s consolidated statement of operations as of the beginning of the years ended December 31, 2013 and 2012, unaudited pro forma home sales revenues of $204.7 million and $147.1 million, respectively, and unaudited pro forma income before taxes of $18.7 million and $8.3 million, respectively, would have resulted. See further detail related to pro forma results in Note 20, Pro forma Financial Information (unaudited).

F-14

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

4. Inventory

Inventory included the following (in thousands):


	As of December 31,
	2013		2012
Vertical costs of homes under construction	$	49,946	$	27,603
Land and land development		131,306		46,459
Capitalized interest		2,820		3,243

	$	184,072	$	77,305

5. Amortizable Intangible Assets

Information regarding our amortizable intangible assets as of December 31, 2013 (we had no amortizable intangible assets at December 31, 2012) is set forth below (in thousands):


	As of December 31, 2013
Trade names	$	1,185
Home construction contracts		719
Non-compete agreements		298
Other		226

Gross intangible assets		2,428
Accumulated amortization		(551	)

Intangible assets, net	$	1,877

As of December 31, 2013, expected amortization expense for amortizable intangible assets for each of the next five years, and thereafter, is as follows (in thousands):


2014	$	785
2015		434
2016		328
2017		242
2018		32
Thereafter		56

	$	1,877

F-15

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

6. Property and Equipment

Property and equipment included the following (in thousands):


	As of December 31,
	2013			2012
Land	$	347		$	349
Buildings		1,410			1,393
Leasehold improvements		186			145
Machinery and equipment		56			68
Furniture and fixtures		273			319
Model furnishings		1,776			920
Computer hardware and software		514			344

		4,562			3,538
Less accumulated depreciation and amortization		(1,202	)		(1,021	)

Total property and equipment, net	$	3,360		$	2,517

7. Prepaid Expenses and Other Assets

Prepaid expenses and other assets included the following (in thousands):


	As of December 31,
	2013		2012
Prepaid insurance	$	1,260	$	105
Lot option and escrow deposits		3,218		800
Performance deposits		1,899		662
Other		2,038		490

Total prepaid expenses and other assets	$	8,415	$	2,057

8. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities included the following (in thousands):


	As of December 31,
	2013		2012
Customer and escrow deposits	$	2,857	$	1,302
Warranty reserve		1,150		679
Accrued compensation costs		5,511		1,437
Land development and home construction accruals		21,142		10,954
Construction defect reserves		—		3,590
Income tax payable		4,730		—
Billings in excess of collections		1,199		—
Other		1,494		1,146

Total accrued expenses and other liabilities	$	38,083	$	19,108

F-16

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

9. Notes Payable and Revolving Line of Credit

Notes payable and revolving line of credit included the following as of December 31, 2013 and 2012 (in thousands):


	As of December 31,
	2013		2012
Land development note ^(A)	$	1,500	$	—
Note payable, bank ^(B)		—		632
Notes payable, bank ^(B)		—		1,632
Land purchase note, corporation ^(B)		—		2,760
Land development note, corporation ^(B)		—		2,918
Land development note ^(A)		—		—
Acquisition and development line, bank ^(B)		—		1,642
Construction loan agreement, bank ^(B)		—		1,066
Land purchase note, bank and trust ^(B)		—		1,750
Construction loan agreement, bank and trust ^(B)		—		290
Construction loan agreement, bank and trust ^(B)		—		143
Revolving line and construction facilities, bank ^(C)		—		20,373
Revolving line ^(D)		—		—

	$	1,500	$	33,206

^(A)	Due April 2016; interest only payments monthly at 3.50%.

^(B)	Outstanding principal on the note was paid during 2013.

^(C)	The line of credit was terminated in 2013. It had $43.0 million maximum capacity and interest accrued monthly at 3% plus one-month LIBOR. This line of credit was terminated in October 2013.

^(D)

On October 18, 2013, we entered into a three-year revolving line of credit agreement with maximum borrowings of $100.0 million. Borrowings on the line bear interest at a daily rate of LIBOR plus 2.50% and there is an annual fee of $50.0 thousand. As of December 31, 2013, we have $0.8 million in outstanding letters of credit under the line and total available capacity of $99.2 million. At December 31, 2013, we were in compliance with the various covenants.

Aggregate annual maturities of long-term debt as of December 31 2013, are as follows (in thousands):


2014	$	—
2015		—
2016		1,500

Total	$	1,500

10. Interest

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed. As our qualifying assets exceeded our outstanding debt during the years ended December 31, 2013 and 2012, we capitalized all interest costs incurred during these periods.

F-17

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

10. Interest (continued)

Our interest costs are as follows (in thousands):


	Year Ended December 31,
	2013			2012
Interest capitalized beginning of period	$	3,243		$	2,991
Interest capitalized during period		1,098			1,681
Less: capitalized interest in cost of sales		(1,521	)		(1,429	)

Interest capitalized end of period	$	2,820		$	3,243

11. Income Taxes

On April 30, 2013, the Company reorganized from a limited liability company into a Delaware corporation, and accordingly, we are subject to federal and state income taxes. On the date of conversion, we recorded a net deferred tax liability of $0.6 million on our consolidated balance sheet, the effect of which was recorded as an income tax expense on our consolidated statement of operations.

Our income tax expense comprises the following current and deferred amounts (in thousands):


	Year Ended December 31,
	2013
Current
Federal	$	4,168
State and local		562

Total current		4,730
Deferred
Federal		840
State and local		72

Total deferred		912

Income tax expense	$	5,642

Total income tax expense differed from the amounts computed by applying the federal statutory income tax rate of 35% to income before income taxes as a result of the following items (in thousands):


	Year Ended December 31,
	2013
Statutory income tax expense	$	4,897
State income tax expense, net of federal income tax expense		382
Section 199 deduction		(421	)
Other permanent items		157
Conversion to corporation		627

Income tax expense	$	5,642

F-18

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

11. Income Taxes (continued)

Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences. Temporary differences arise when revenues and expenses for financial reporting are recognized for tax purposes in a different period. ASC 740 requires that a valuation allowance be recorded against deferred tax assets unless it is more likely than not that the deferred tax asset will be utilized. As a result of this analysis, the Company has not recorded a valuation allowance against its deferred tax assets. The Company will continue to evaluate the need to record valuation allowances against deferred tax assets and will make adjustments in accordance with the accounting standard.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2013 (in thousands):


Deferred tax assets
Warranty reserves	$	437
Accrued expenses		993
Intangible assets		143

Deferred tax asset		1,573

Deferred tax liabilities
Prepaid assets		457
Property and equipment		511
Inventory valuation adjustment		1,517

Deferred tax liability		2,485

Net deferred tax liability	$	912

The uncertainty provisions of ASC 740 also require the Company to recognize the impact of a tax position in its consolidated financial statements only if the technical merits of that position indicate that the position is more likely than not of being sustained upon audit. During the year, the Company did not record a reserve for uncertain tax positions. The tax year end December 31, 2013, is open and subject to audit by the Internal Revenue Service and the states of Colorado and Texas.

12. Fair Value Disclosures

ASC 820, Fair Value Measurement , defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date.

Level 3 – Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date.

F-19

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

12. Fair Value Disclosures (continued)

The following table presents carrying values and estimated fair values of financial instruments (in thousands):


			December 31, 2013,				December 31, 2012,
	Hierarchy		Carrying		Fair Value		Carrying		Fair Value
Notes payable ⁽¹⁾		Level 2	$	1,500	$	1,490	$	33,206	$	32,145
Subordinated obligation ⁽²⁾		Level 3	$	—	$	—	$	11,244	$	23,605

⁽¹⁾	Estimated fair values of the notes payable at December 31, 2013 and 2012, were based on cash flow models discounted at market interest rates that considered underlying risks of the debt.

⁽²⁾	Estimated fair value of the subordinated obligation at December 31, 2012, was based on the subsequent private placement offering completed by the Company and its price of $20 per common stock share.

The carrying amount of cash and cash equivalents approximates fair value. Nonfinancial assets and liabilities include items such as inventory and long-lived assets that are measured at fair value when acquired and resulting from impairment, if deemed necessary.

13. Subordinated Obligation Agreement

The Company entered into an agreement in 2010 with one of the members, whereby $11.2 million of the member’s initial capital contribution was designated as a subordinated obligation. The obligation was subordinated to all indebtedness of the Company. The subordinated obligation earned a return of 6% per annum payable monthly. The subordinated obligation was not redeemable until all indebtedness of the Company was fully repaid. The subordinated obligation did not contain any redemption or beneficial conversion features. The resulting payments of the return were considered interest expense. Payments of the return made during the years ended December 31, 2013 and 2012, of $0.2 million and $0.7 million, respectively, have been capitalized to inventory on the consolidated balance sheet. In April 2013, concurrent with our conversion from a limited liability company to a Delaware corporation, and in contemplation of the Company’s May 2013 private offering and private placement, the outstanding subordinated obligation of $11.2 million was extinguished in exchange for shares of our common stock. The Company accounted for the transaction as a debt extinguishment. As the extinguishment was between related parties, it was accounted for as a capital transaction, and accordingly, no gain or loss was recorded.

14. Operating Leases

The Company maintains noncancellable operating leases for office space. The Company recognizes expense on a straight-line basis over the relative life of each lease. Rent expense for the years ended December 31, 2013 and 2012, was $0.3 million and $0.2 million, respectively, included in selling, general, and administrative on the consolidated statement of operations.

Future minimum lease payments as of December 31, 2013 (in thousands):


2014	$	328
2015		238
2016		52

	$	618

F-20

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

15. Postretirement Plan

The Company has a 401(k) plan covering substantially all employees. The Company makes matching contributions of 50% of employees’ salary deferral amounts on the first 6% of employees’ compensation. Contributions to the plan during the years ended December 31, 2013 and 2012, were $0.1 million and $0.1 million, respectively.

16. Stock Based Compensation

The Company’s authorized capital stock consists of 100.0 million shares of common stock, $0.01 par value per share and 50.0 million shares of preferred stock, $0.01 par value. As of December 31, 2013, the Company had 17.1 million shares of common stock issued and outstanding, exclusive of the restricted common stock issued. The Company also has reserved 0.4 million shares of common stock for stock award issuances and 0.6 million shares of common stock for future stock option issuances. During the year ended December 31, 2013, the Company issued 0.2 million shares of restricted common stock at a weighted average fair value of $19.57, which vest over three years, none of which were vested as of December 31, 2013.

As of December 31, 2013, 0.2 million shares of restricted stock were unvested, and $2.8 million of unrecognized compensation costs is expected to be recognized over a weighted average period of 2.4 years.

During the year ended December 31, 2013, the Company recognized stock-based compensation expense of $0.7 million, which is included in selling, general, and administrative on the consolidated statement of operations.

17. Earnings Per Share

We use the two-class method of calculating earnings per share (EPS) as our non-vested restricted stock awards have non-forfeitable rights to dividends, and accordingly represent a participating security. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period.

For purposes of determining weighted average shares outstanding, the 5.0 million shares that were issued to our outstanding membership interests upon conversion of the Company from a limited liability company to a Delaware corporation, are reflected as outstanding at the beginning of the period presented.

The following table sets forth the computation of basic and diluted earnings per share for the year ended December 31, 2013 (in thousands except share and per share information):


	Year Ended December 31, 2013
Numerator
Net income	$	12,431
Less: Net income attributable to the non-controlling interest		(52	)
Less: Undistributed earnings allocated to participating securities		(104	)

Numerator for basic and diluted EPS	$	12,275

Denominator
Basic and diluted earnings per share—weighted average shares		12,873,562
Basic and diluted EPS	$	0.95

F-21

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

18. Related-Party Transactions

Prior to our May 2013 private placement, the Company transacted with entities that were controlled by the same individuals who control the Company and are Co-CEOs of the Company. Transactions between entities under common control for land inventory are recorded at the carrying basis of the related party.

In December 2012, the members contributed land consisting of 49 finished lots, 26 partially finished lots, and certain utility deposits, which had a carrying basis to the related party of $1.3 million.

During 2012, we paid $8.1 million for land previously owned by entities under common control. We recorded the land at the carrying basis of the entity under common control of $2.7 million. The difference between the purchase amount and the carrying basis of the entity under common control was reflected as a distribution.

During 2012, the Company distributed its membership interests in Waterside at Highland Park, LLC to its members in the form of a noncash distribution of $3.7 million. The assets of Waterside at Highland Park, LLC consisted of 76 partially improved townhome lots and related common area. During 2013, the members contributed their membership interests in Waterside at Highland Park, LLC back to the Company.

In 2013, prior to the private placement, the Company purchased 92 unfinished lots and 82 finished lots for $4.8 million from a related party under common control. The lots had a carrying basis to the related party of $1.0 million. The difference of $3.8 million is reflected as a distribution on our consolidated statement of stockholder’s equity and members’ capital. In 2013 in connection with the private placement, the Company purchased 699 unfinished lots and 335 finished lots for $34.0 million, from a related party that was not under common control. These lots were originally purchased by the related party between 2005 and 2012 for approximately $9.8 million. As the purchase was from an entity that was not under common control, we recorded the land at the purchase price, which was determined by management based on valuations obtained from third parties.

During the years ended December 31, 2013 and 2012, we delivered homes for which the land was originally purchased from entities under common control. Recording the lots at the carrying basis of the entities under common control as opposed to the purchase price benefitted gross margins by $4.3 million and $3.3 million for the years ended December 31, 2013 and 2012, respectively. As of December 31, 2013 and 2012, lots with a carrying basis, before development costs, of $2.1 million, and $4.4 million, respectively, which were purchased from or contributed by entities under common control, were included in inventories on our consolidated balance sheet.

The Company previously guaranteed the repayment of a loan of Regency, a related party through common ownership. Regency is a real estate developer of multi-family apartment complexes. The loan had a maximum principal balance of $22.2 million, with an original maturity of November 30, 2013. The loan was secured by certain deeds of trust of land and improvements under development owned by Regency at Ridgegate, LLC. The loan was repaid in full and the guaranty was cancelled during the third quarter of 2013. At December 31, 2012, the outstanding balance on the loan was $11.4 million, and Regency had total assets and total liabilities of $21.6 million and $11.4 million, respectively.

Prior to September 30, 2012, the Company had a 22% joint venture ownership interest in Regency. During the third quarter of 2012, the Company exchanged all of its ownership interest in Regency for 26 finished lots with an entity under common control. The lots received were recorded at the related party’s carrying basis. The carrying value of the investment at the date of transfer was $2.3 million. The difference of $1.7 million was recognized as a noncash distribution.

F-22

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

18. Related-Party Transactions (continued)

During the years ended December 31, 2013 and 2012, the Company paid management fees of $0.2 million and $0.6 million, respectively, which are included in selling, general and administrative on the consolidated statement of operations. The management agreement was terminated during the second quarter of 2013.

19. Commitments and Contingencies

Letters of Credit and Performance Bonds

In the normal course of business, the Company posts letters of credit and performance bonds related to our land development performance obligations, with local municipalities. As of December 31, 2013 and 2012, we had $3.0 million and $1.1 million, respectively, in letters of credit and performance bonds issued and outstanding.

Land and Lot Option Purchase Agreements

The Company has entered into land and lot option purchase agreements with both related and unrelated parties to acquire land or lots for the construction of homes. Under these agreements, the Company has paid earnest deposits in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Under the terms of the option purchase contracts, many of the option deposits are not refundable at the Company’s discretion.


	2013		2012
Option with related parties:
Earnest deposits		—		—
Number of lots		—		82
Average exercise price	$	—	$	42,000
Total required to exercise options (in thousands)	$	—	$	3,400
Option with unrelated parties:
Earnest deposits (in thousands)	$	1,242	$	500
Number of lots		499		237
Average exercise price	$	63,044	$	64,000
Total required to exercise options (in thousands)	$	31,459	$	15,200

Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business, which consist primarily of construction defect claims. It is the opinion of management that if the claims have merit, parties other than the Company would be, at least in part, liable for the claims, and eventual outcome of these claims will not have a material adverse effect upon our consolidated financial condition, results of operations, or cash flows. When we believe that a loss is probable and estimable, we record a charge to selling, general, and administrative on our consolidated statement of operations for our estimated loss.

20. Pro forma Financial Information (Unaudited)

Unaudited pro forma income before taxes for the years ended December 31, 2013 and 2012, gives effect to including the results of Jimmy Jacobs as of the beginning of the fiscal years presented after adjusting the operating results of Jimmy Jacobs to reflect additional amortization that would have been recorded assuming the fair value adjustments to intangible assets had been applied as of January 1, 2013, and 2012. Certain other adjustments, including those related to conforming accounting policies and adjusting acquired inventory to fair

F-23

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

20. Pro forma Financial Information (Unaudited) (continued)

value, have not been reflected in the supplemental pro forma operating results due to the impracticability of estimating such impacts.

Pro forma basic and diluted net income per share for the years ended December 31, 2013 and 2012, gives effect to the conversion of the Company’s members’ equity into common stock as though the conversion had occurred as of the beginning of the period presented. In addition, the pro forma amounts give effect to reflect income tax adjustments as if the Company were a taxable entity as of the beginning of the period. The pro forma income tax adjustment reflects that the Company would have filed a consolidated tax return as a corporation reflecting a consolidated net income for the periods presented (in thousands, except share and per share information):


	Year Ended December 31,
	2013			2012
Pro forma income before taxes	$	18,746		$	8,289
Pro forma tax expense		(6,561	)		(2,901	)

Pro forma net income		12,185			5,388

Less: Net income attributable to the non-controlling interest		(52	)		(1,301	)
Less: Undistributed earnings allocated to participating securities		(102	)		—

Numerator for basic and diluted pro forma EPS	$	12,031		$	4,087

Pro forma weighted average shares		12,873,562			5,000,000
Pro forma basic and diluted EPS	$	0.93		$	0.82

21. Results of Quarterly Operations (Unaudited)


	Quarter
	First		Second		Third		Fourth
	(Amounts in Thousands, Except per Share Amounts)
2013
Home sales revenues	$	24,717	$	41,291	$	41,494	$	63,631
Gross margin	$	6,218	$	10,654	$	9,546	$	15,064
Income before tax	$	3,027	$	6,526	$	3,784	$	4,736
Net income	$	2,976	$	3,915	$	2,438	$	3,050
Earnings per share	$	0.60	$	0.32	$	0.14	$	0.18

2012
Home sales revenues	$	19,586	$	26,204	$	25,027	$	25,213
Gross margin	$	4,320	$	6,315	$	4,992	$	4,955
Income before tax	$	1,342	$	3,251	$	1,776	$	1,070
Net income	$	1,346	$	2,715	$	814	$	1,263
Earnings per share		NA		NA		NA		NA

22. Subsequent Events

On March 25, 2014, we borrowed $99.0 million on our revolving loan agreement.

F-24

Century Communities, Inc.

Notes to the Consolidated Financial Statements

December 31, 2013 and 2012

22. Subsequent Events (continued)

$165 million. As the acquired assets and processes have the ability to create outputs in the form of revenue from the sale of single family residences, we concluded that the acquisition represents a business combination.

On May 5, 2014, the Company closed an offering of $200 million in aggregate principal of senior unsecured notes due 2022 (the “Notes”). The Notes will carry a coupon of 6.875% per annum and were issued at a price equal to 99.239% of their principal amount. Concurrent with the closing of the Notes, we repaid the then outstanding balance including interest of $99.2 million on our revolving loan agreement.

In accordance with ASC 855, Subsequent Events, management has evaluated subsequent events through May 29, 2014.

F-25

Century Communities, Inc.

Unaudited Condensed Consolidated Balance Sheet

As of March 31, 2014 and December 31, 2013

(in thousands)


	March 31, 2014		December 31, 2013
Assets
Cash and cash equivalents	$	185,134	$	109,998
Accounts receivable		7,409		4,438
Inventories		197,014		184,072
Prepaid expenses and other assets		15,208		8,415
Property and equipment, net		3,284		3,360
Amortizable intangible assets, net		1,545		1,877
Goodwill		479		479

Total assets	$	410,073	$	312,639

Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	7,414	$	8,313
Accrued expenses and other liabilities		26,258		30,358
Deferred tax liability, net		681		912
Notes payable and revolving loan agreement		100,500		1,500

Total liabilities		134,853		41,083
Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized, 17,256,824 and 17,257,774 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively		173		173
Additional paid-in capital		263,278		262,982
Retained earnings		11,769		8,401

Total stockholders’ equity		275,220		271,556

Total liabilities and stockholders’ equity	$	410,073	$	312,639

See Notes to Unaudited Condensed Consolidated Financial Statements

F-26

Century Communities, Inc.

Unaudited Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2014 and 2013

(in thousands, except per share amounts)


	Three months ended March 31,
	2014			2013
Home sales revenues	$	49,671		$	24,717
Cost of sales		37,274			18,499

Gross margin		12,397			6,218
Selling, general, and administrative (including related-party management fees of $0 and $150 in 2014 and 2013, respectively)		7,003			3,276

Operating income		5,394			2,942
Other income (expense):
Interest income		69			3
Interest expense		—			—
Acquisition expense		(395	)		—
Other income		128			82

Income before tax expense		5,196			3,027
Income tax expense		1,828			—

Consolidated net income of Century Communities, Inc.		3,368			3,027
Net income attributable to the non-controlling interests		—			52

Income attributable to common stockholders	$	3,368		$	2,975


Earnings per share
Basic and diluted	$	0.20		$	—

Weighted average number of common shares outstanding
Basic and diluted		17,075,000			—

Unaudited pro forma net income, income attributable to common stockholders, and earnings per share (Note 14)
Net income	$	5,335		$	1,388

Income attributable to common stockholders		5,283			1,336

Basic and diluted earnings per share	$	0.31		$	0.27


Unaudited pro forma weighted average number of common shares (Note 14)
Basic and diluted		17,075,000			5,000,000

See Notes to Unaudited Condensed Consolidated Financial Statements

F-27

Century Communities, Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

For the Three Months Ended March 31, 2014 and 2013

(in thousands)


	Three months ended March 31,
	2014			2013
Operating activities
Net income	$	3,368		$	3,027
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		483			72
Stock compensation expense		296			—
Deferred income tax provision		(231	)		—
Changes in assets and liabilities:
Accounts receivable		(2,969	)		(175	)
Inventories		(12,942	)		(7,628	)
Prepaid expenses and other assets		(1,793	)		(455	)
Accounts payable		(900	)		(1,769	)
Accrued expenses and other liabilities		(4,100	)		2,050
Payable to affiliates		—			(165	)

Net cash used in operating activities		(18,788	)		(5,043	)

Investing activities
Purchases of property and equipment		(76	)		(9	)
Non-refundable deposit for acquisition of Las Vegas Land Holdings, LLC		(5,000	)		—

Net cash used in investing activities		(5,076	)		(9	)

Financing activities
Borrowings under line of credit		99,000			21,000
Payments on line of credit		—			(14,170	)
Proceeds from debt issuances		—			2,095
Principal payments		—			(1,325	)
Contributions from members		—			1,500
Distributions to members		—			(3,830	)
Distributions to non-controlling interest		—			(950	)

Net cash provided by financing activities		99,000			4,320
Net increase (decrease) in cash and cash equivalents	$	75,136		$	(732	)
Cash and cash equivalents:
Beginning of period		109,998			4,980

End of period	$	185,134		$	4,248


Noncash investing and financing information
Inventory contributed by members	$	—		$	3,708
Inventory distributed to non-controlling interests		—			1,603

Supplemental cash flow information
Interest paid, net of capitalized interest	$	—		$	—

See Notes to Unaudited Condensed Consolidated Financial Statements

F-28

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

1. Basis of Presentation

Century Communities, Inc. (“we” or the “Company”) is engaged in all aspects of homebuilding, including land acquisition and development, entitlements, and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects primarily in major metropolitan markets in Colorado, Austin, Texas, and as of April 1, 2014 with our acquisition of Las Vegas Land Holdings, LLC (LVLH) Las Vegas, Nevada.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of its financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2013.

Principles of Consolidation

Reclassifications

Certain prior period amounts have been reclassified to conform to our current year’s presentation.

Use of Estimates

2. Reporting Segments

F-29

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

2. Reporting Segments (continued)

The following tables summarize home sale revenues and pretax income by segment (in thousands):


	Three months ended March 31,
	2014			2013
Colorado	$	35,851		$	24,717
Texas		13,820			—

Total home sales revenue	$	49,671		$	24,717

Colorado	$	6,289		$	3,716
Texas		1,237			—
Corporate		(2,330	)		(689	)

Total income before taxes	$	5,196		$	3,027

The following table summarizes total assets by segment (in thousands):


	March 31, 2014		December 31, 2013
Colorado	$	176,378	$	167,948
Texas		35,140		27,386
Corporate		198,555		117,305

Total assets	$	410,073	$	312,639

Corporate assets include cash and cash equivalents, prepaid insurance, and certain property and equipment.

3. Inventory

A summary of inventory is as follows (in thousands):


	March 31, 2014		December 31, 2013
Vertical costs of homes under construction	$	57,342	$	49,946
Land and land development		136,869		131,306
Capitalized interest		2,803		2,820

Inventory	$	197,014	$	184,072

4. Prepaid Expenses and Other Assets

Prepaid expenses and other assets included the following (in thousands):


	March 31, 2014		December 31, 2013
Prepaid insurance	$	887	$	1,260
Lot option and escrow deposits		5,162		3,218
Performance deposits		2,051		1,899
Deposit for purchase of Las Vegas Land Holdings, LLC (see note 15)		5,000		—
Other		2,108		2,038

Total prepaid expenses and other assets	$	15,208	$	8,415

F-30

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

5. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities included the following (in thousands):


	March 31, 2014		December 31, 2013
Customer and escrow deposits	$	2,938	$	2,856
Warranty reserve		1,230		1,150
Accrued compensation costs		2,096		5,511
Land development and home construction accruals		13,497		12,286
Income tax payable		2,940		4,731
Billings in excess of collections		704		1,199
Other		2,853		2,625

Total accrued expenses and other liabilities	$	26,258	$	30,358

6. Warranties

Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the consolidated balance sheet, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through an internal lag development model that incorporates historical payment trends and adjust the amounts recorded if necessary. Changes in our warranty accrual for the three months ended March 31, 2014 and 2013, are detailed in the table below (in thousands):


	Three months ended March 31,
	2014			2013
Beginning balance	$	1,150		$	679
Warranty expense provisions		268			179
Payments		(188	)		(81	)

Ending balance	$	1,230		$	777

7. Notes Payable and Revolving Line of Credit

Notes payable and revolving line of credit included the following as of December 31, 2013 and 2012 (in thousands):


	March 31, 2013		December 31, 2013
Land development note ^(A)	$	1,500	$	1,500
Revolving line ^(B)		99,000		—

	$	100,500	$	1,500

^(A)

Due April 2016; interest only payments monthly at 3.50%.

^(B)

On October 18, 2013, we entered into a three-year revolving line of credit agreement with maximum borrowings of $100.0 million. Borrowings on the line bear interest at a daily rate of LIBOR plus 2.50% and there is an annual fee of $50.0 thousand. As of March 31, 2014, we have $0.8 million in outstanding letters of credit under the line and total available capacity of $0.2 million. At March 31, 2014, we were in compliance with the various covenants.

F-31

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

8. Interest

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed. As our qualifying assets exceeded our outstanding debt during the three months ended March 31, 2014 and 2013, we capitalized all interest costs incurred during these periods.

Our interest costs are as follows (in thousands):


	Three months ended March 31,
	2014			2013
Interest capitalized beginning of period	$	2,820		$	3,243
Interest capitalized during period		59			581
Less: capitalized interest in cost of sales		(76	)		(288	)

Interest capitalized end of period	$	2,803		$	3,536

9. Income Taxes

On April 30, 2013, the Company reorganized from a limited liability company into a Delaware corporation, and accordingly, no income tax expense was recognized for the quarter ended March 31, 2013. For periods subsequent to April 30, 2013 we are subject to federal and state income taxes.

At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and use that rate to provide for income taxes for the current year-to-date reporting period. Accordingly, we recorded income tax expense of $1.8 million for the three months ended March 31, 2014, based on our estimated annual effective tax rate of approximately 35%.

10. Fair Value Disclosures

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date.

Level 3—Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date.

The following table presents carrying values and estimated fair values of financial instruments (in thousands):


			March 31, 2014				December 31, 2013
	Hierarchy		Carrying		Fair Value		Carrying		Fair Value
Notes payable ⁽¹⁾		Level 2	$	1,500	$	1,487	$	1,500	$	1,490
Revolving line ⁽¹⁾		Level 2	$	99,000	$	99,000	$	—	$	—

⁽¹⁾	Estimated fair values of the notes payable and revolving line at March 31, 2014 and December 31, 2013 were based on cash flow models discounted at market interest rates that considered underlying risks of the debt.

F-32

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

10. Fair Value Disclosures (continued)

11. Stock Based Compensation

The Company’s authorized capital stock consists of 100.0 million shares of common stock, $0.01 par value per share and 50.0 million shares of preferred stock, $0.01 par value. As of March 31, 2014 and December 31, 2013, the Company had 17.1 million shares of common stock issued and outstanding, exclusive of the restricted common stock issued. The Company also has reserved 0.4 million shares of common stock for stock award issuances and 0.6 million shares of common stock for future stock option issuances. During the three months ended March 31, 2014, the Company did not issued any restricted stock.

As of March 31, 2014 0.2 million shares of restricted stock were unvested, and $2.5 million of unrecognized compensation costs is expected to be recognized over a weighted average period of 2.4 years.

During the three months ended March 31, 2014 the Company recognized stock-based compensation expense of $0.3 million, which is included in selling, general, and administrative on the consolidated statement of operations.

12. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2014 (in thousands except share and per share information):


	Three months ended March 31, 2014
Numerator
Net income	$	3,368
Less: Undistributed earnings allocated to participating securities		(36	)

Numerator for basic and diluted EPS	$	3,332

Denominator
Basic and diluted earnings per share—weighted average shares		17,075,000
Basic and diluted EPS	$	0.20

F-33

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

13. Commitments and Contingencies

Letters of Credit and Performance Bonds

In the normal course of business, the Company posts letters of credit and performance bonds related to our land development performance obligations, with local municipalities. As of March 31, 2014 and December 31, 2013, we had $4.2 million and $3.0 million, respectively, in letters of credit and performance bonds issued and outstanding.

Litigation

14. Pro forma Financial Information

Unaudited pro forma income before taxes for the three months ended March 31, 2013, gives effect to including the results of Jimmy Jacobs Home LP (“Jimmy Jacobs”) as of January 1, 2013 after adjusting the operating results of Jimmy Jacobs to reflect additional amortization that would have been recorded assuming the fair value adjustments to intangible assets had been applied as of January 1, 2013. Additionally, the unaudited pro forma income before taxes has been adjusted to assume that the acquisition of Las Vegas Land Holdings, LLC and its subsidiaries were included in the results from operations for the three months ended March 31, 2013 and 2014(see further discussion in Note 15, Subsequent Events).

Pro forma basic and diluted net income per share for the three months ended March 31, 2013 gives effect to the conversion of the Company’s members’ equity into common stock though the conversion had occurred as of the beginning of 2013. In addition, the pro forma amounts give effect to reflect income tax adjustments as if the Company were a taxable entity as of the beginning of the 2013. The pro forma income tax adjustment reflects that the Company would have filed a consolidated tax return as a corporation reflecting a consolidated net income for the periods presented (in thousands, except share and per share information):


	Three months ended March 31,
	2014			2013
Pro forma income before taxes	$	8,209		$	2,135
Pro forma tax expense		2,874			747

Pro forma net income		5,335			1,388

Less: Net income attributable to the non-controlling interest		—			(52	)
Less: Undistributed earnings allocated to participating securities		(52	)		—

Numerator for basic and diluted pro forma EPS	$	5,283		$	1,336

Pro forma weighted average shares		17,075,000			5,000,000
Pro forma basic and diluted EPS	$	0.31		$	0.27

F-34

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2014

15. Subsequent Events

On April 1, 2014, one of the Company’s wholly-owned subsidiaries, Century Communities of Nevada, LLC, purchased substantially all of the assets of Las Vegas Land Holdings, LLC and its subsidiaries (collectively, “ LVLH ”), a homebuilder with operations in Las Vegas, Nevada, for a purchase price of approximately $165 million. As the acquired assets and processes have the ability to create outputs in the form of revenue from the sale of single family residences, we concluded that the acquisition represents a business combination.

The following table summarizes the preliminary amounts recognized as of the acquisition date:


Assets acquired and liabilities assumed
Inventories	$	142,030
Prepaid expenses and other assets		3,268
Property and equipment		9,267
Amortizable intangible assets		6,240
Goodwill		12,513

Total assets	$	173,318

Accounts payable	$	2,077
Accrued expenses and other liabilities		1,926
Notes payable and revolving loan agreement		1,500
Amortizable intangible liabilities		2,815

Total liabilities	$	8,318

On May 5, 2014, the Company closed on an offering of $200 million in aggregate principal of senior unsecured notes due 2022 (the “Notes”). The Notes will carry a coupon of 6.875% per annum and were issued at a price equal to 99.239% of their principal amount. Concurrent with the closing of the Notes, we repaid the then outstanding balance including accrued interest of $99.2 million on our revolving loan agreement.

In accordance with ASC 855, Subsequent Events, management has evaluated subsequent events through May 29, 2014, the date at which the financial statements were available for issuance.

F-35

Independent Auditor’s Report

Board of Directors

Las Vegas Land Holdings, LLC and Subsidiaries

Las Vegas, Nevada

We have audited the accompanying consolidated financial statements of Las Vegas Land Holdings, LLC and its subsidiaries, which comprise the consolidated balance sheet as of December 31, 2013 and 2012, and the related statements of operations, members’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Las Vegas Land Holdings, LLC and its subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As described in Note 8 to the consolidated financial statements, subsequent to December 31, 2013, the Company sold substantially all of the assets to Century Communities, Inc. for a purchase price of approximately $165 million. The consolidated financial statements do not include any adjustments as a result of this transaction. Our opinion is not modified with respect to this matter.

/s/ BDO USA, LLP

March 21, 2014, except for Note 8 which is as of April 7, 2014

F-36

Las Vegas Land Holdings, LLC & Subsidiaries

Consolidated Balance Sheet

December 31, 2013 and 2012

(in thousands)


	As of December 31,
	2013		2012
Assets
Cash and cash equivalents	$	10,213	$	9,449
Restricted cash		746		934
Inventories		79,303		81,768
Pro-shop inventory		185		177
Prepaid expenses		2,370		411
Land held for sale		674		804
Property, plant, and equipment—net		10,050		10,560
Other assets		284		237

Total Assets	$	103,825	$	104,340

Liabilities and Members’ Equity
Accounts payable	$	1,896	$	1,963
Deferred revenue		1,133		1,267
Billings in excess of costs and estimated earnings on uncompleted contracts		422		497
Accrued liabilities		1,413		695
Accrued warranty liability		121		99
Notes payable and capital leases		22,370		39,416

Total Liabilities	$	27,355	$	43,937
Commitments and Contingencies (Note 7)
Members’ Equity		76,470		60,403

Total Liabilities and Members’ Equity	$	103,825	$	104,340

See accompanying independent auditor’s report and notes to consolidated financial statements.

F-37

Las Vegas Land Holdings, LLC & Subsidiaries

Consolidated Statement of Operations

For the Years ended December 31, 2013 and 2012

(in thousands)


	Year Ended December 31,
	2013			2012
Revenues
Home sales	$	74,253		$	50,100
Golf course operations		7,609			7,852
Raw land sales		1,272			1,582
Management fee		563			559

Total Operating Revenues		83,697			60,093

Costs and Expenses
Construction and land costs		45,950			35,164
Cost of golf course operations		7,770			8,387
General and administrative		5,867			5,413
Selling expenses		3,048			2,576
Depreciation		714			626
Cost of raw land sales		593			1,638
Cost of management operations		501			479
Loss on disposal of fixed assets		19			13
Land impairment		—			36

Total Costs and Expenses		64,462			54,332

Operating Income		19,235			5,761

Other (Expense) Income
Other income (expense)		9			22
Interest income		3			22
Interest expense—net of capitalized interest		(158	)		(717	)
Reorganization expenses		(251	)		(660	)

Total Other Expense		(397	)		(1,333	)
Net Income	$	18,838		$	4,428

See accompanying independent auditor’s report and notes to consolidated financial statements.

F-38

Las Vegas Land Holdings, LLC & Subsidiaries

Consolidated Statement of Members’ Equity

For the Years ended December 31, 2013 and 2012

(in thousands)


	Membership Units		Total
Balance, January 1, 2012		100,000,000	$	56,569
Distributions to members				(594	)
Net Income				4,428

Balance, December 31, 2012		100,000,000	$	60,403
Distributions to members				(2,770	)
Net Income				18,837

Balance, December 31, 2013		100,000,000	$	76,470

See accompanying independent auditor’s report and notes to consolidated financial statements.

F-39

Las Vegas Land Holdings, LLC & Subsidiaries

Consolidated Statement of Cash Flows

For the Years ended December 31, 2013 and 2012

(in thousands)


	Year Ended December 31,
	2013			2012
Cash Flows From Operating Activities
Net Income	$	18,838		$	4,428
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		714			626
Loss on disposal of fixed assets		19			12
Impairment of land		—			36
Amortization of loan fees		42			63
Changes in operating assets and liabilities:
Inventories		2,465			7,163
Pro-shop inventory		(8	)		(40	)
Prepaid expenses		(1,960	)		115
Land held for sale		130			(711	)
Other assets		(90	)		362
Accounts payable		(67	)		(373	)
Deferred revenue		(134	)		828
Billings in excess of costs and estimated earnings on uncompleted contracts		(75	)		497
Accrued liabilities		718			(197	)
Accrued warranty liability		23			14

Net cash provided by operating activities		20,615			12,823

Cash Flows From Investing Activities
Decrease in restricted cash		188			664
Purchase of property and equipment		(156	)		(672	)

Net cash provided by (used in) investing activities		32			(8	)

Cash Flows From Financing Activities
Repayments of notes payable and capital leases		(18,962	)		(18,530	)
Distributions to members		(2,770	)		(594	)
New financing secured—First Insurance Funding		1,849			—

Net cash used in financing activities		(19,883	)		(19,124	)

Net Increase (Decrease) in Cash and Cash Equivalents		764			(6,309	)

Cash and Cash Equivalents, beginning of period		9,449			15,758

Cash and Cash Equivalents, end of period	$	10,213			9,449

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for interest—net of capitalized interest	$	112		$	616

Non-Cash Financing Transaction
Property and equipment purchased with capital leases	$	67		$	152

See accompanying independent auditor’s report and notes to consolidated financial statements.

F-40

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

1. Nature of Business and Significant Accounting Policies

Nature of Business

Las Vegas Land Holdings, LLC (and together with its subsidiaries, “LVLH” or the “Company”) was incorporated in the State of Delaware on January 15, 2010. The Company is a Delaware limited liability company with an infinite life that was formed to acquire substantially all of the assets of the Rhodes Company, LLC and its affiliates (the “Predecessor”) pursuant to their plan of reorganization under Chapter 11 of Title II of the United States Code (the “Bankruptcy Code”). LVLH organizes various limited and general partnerships and limited liability corporations to acquire, develop, improve, and construct residential homes, operate a golf course in two of the developments, and purchase and sell real property. Presently most of the Company’s development is in Las Vegas, Nevada and the surrounding areas.

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. A summary of the Company’s significant accounting policies follows.

Balance Sheet Presentation

The operations of the Company involve a variety of real estate transactions, and it is not possible to precisely measure the operating cycles of the Company. The consolidated balance sheet of the Company have been prepared on an unclassified basis in accordance with real estate industry practice.

Principles of Consolidation

The accompanying consolidated financial statements include the following wholly-owned subsidiaries of Las Vegas Land Holdings, LLC (individually named or collectively “LVLH”):

•

Rhodes Ranch Golf, Inc. (“Rhodes Ranch Golf Course”)

•

Heritage Land Company, LLC (“Heritage”)

•

Tuscany Golf Country Club, LLC (“Tuscany Golf”)

•

Las Vegas Land Contracting, LLC (“Las Vegas Land Contracting”)

•

C & J Holdings, Inc. (“C & J”)

•

Parcel 20, LLC (“Parcel 20”)

•

Rhodes Ranch, GP (“RRGP”)

•

Rhodes Design and Development, Corp. (“Rhodes Design”)

•

Tuscany Acquisitions, LLC (“Tuscany I”)

•

Tuscany Acquisitions II, LLC (“Tuscany II”)

•

Tuscany Acquisitions III, LLC (“Tuscany III”)

•

Tuscany Acquisitions IV, LLC (“Tuscany IV”)

•

Dunhill Realty, Inc. (“DRI”)

All material intercompany balances and transactions have been eliminated in consolidation.

F-41

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

The Company dissolved six entities in 2013 that were materially inactive for the periods ending December 31, 2013 and 2012:

•

Tick, LP

•

Batcave, LP

•

Wallboard, LP

•

Chalkline, LP

•

Jackknife, LP

•

Overflow, LP

Cash and Cash Equivalents

Cash and cash equivalents principally consist of demand deposits with financial institutions and highly liquid investments having maturities of three months or less when purchased. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value. These balances may at times exceed federally insured limits. The Company has never experienced any losses related to these balances. All of the Company’s non-interest bearing cash balances were fully insured at December 31, 2012 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there was no limit to the amount of insurance for eligible accounts. Beginning 2013, insurance coverage reverted to $250 thousand per depositor at each financial institution. The Company has mitigated that risk by employing daily sweeps into money market funds invested 100% in US Treasuries.

Restricted Cash

Restricted cash at December 31, 2013 and 2012 was $0.7 million and $0.9 million, respectively. The Company renegotiated its Rhodes Ranch Golf Course loan with US Bank in 2012 and the loan covenants no longer require cash collateral (see Note 6). Restricted cash for 2013 includes certain amounts held in reserve accounts as collateral in connection with its construction projects.

Inventories

Owned inventory consists of residential real estate developments and are stated at cost unless an impairment exists, in which case it is written down to fair value. Inventory costs include pre-acquisition costs, property taxes, interest, and insurance incurred during development and construction, and direct and certain indirect project costs. The Company allocates land, land improvements, acquisition and carrying costs in a manner materially consistent with the relative fair value method. Construction costs are generally allocated to lots using the specific identification method.

Pro-Shop Inventories

Pro-shop inventories are stated at the lower of cost or market using the first-in, first out (FIFO) cost method.

Land Held for Sale

The Company determined that three parcels of land as of December 31, 2013 and six parcels of land as of December 31, 2012, which are actively being marketed, meet the held for sale criteria. The Company carries the land held for sale at the lower of cost or current fair value, less costs to sell. The Company recorded an impairment of $36 thousand for one of the parcels where it was determined the current fair value, less costs to sell, was less than the carrying value at December 31, 2012. There were no further impairments at December 31, 2013.

F-42

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Property, Plant, and Equipment

Property, plant and equipment, including golf course improvements, are recorded at the lower of cost or estimated market value. Depreciable golf course improvements are primarily comprised of irrigation systems, cart paths and other land improvements.

Depreciation on property, plant and equipment begins when assets are placed into service and are charged to operations using the straight-line method over the estimated service lives of the assets or terms of leases if shorter. Estimated useful lives are as follows:


	Years
Golf course improvements		5-40
Golf course equipment		5
Model home furnishings		1-3
Office equipment		3-5
Buildings and improvements		39
Construction equipment		3-5

Impairment of Long-Lived Assets

The Company follows the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). ASC 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment was recognized for the years ended December 31, 2013 or 2012.

Other Assets

Included in other assets are utility deposits, consulting retainers, rebates and construction service receivables.

Capitalized Interest

The Company capitalizes interest costs incurred in connection with the development of land and construction of homes. The Company capitalized $0.7 million and $0.7 million of interest for the years ended December 31, 2013 and 2012, respectively.

Revenue Recognition

The Company is primarily engaged in the development, construction and sale of residential homes, but also recognizes income from the operation of two golf courses.

Revenue from home sales is recognized in accordance with ASC 360 Property, Plant and Equipment - Real Estate Sales. Accordingly, home sales and raw land are recognized when a closing occurs, which is when payment has been received and title, possession and other attributes of ownership have been transferred to the buyer and the Company is not obligated to perform significant activities after the sale, and has no other continuing involvement. Earnest money and option deposits are deferred by the Company and recognized when a closing occurs. The cost of land sold is charged to operations on the basis of the allocated parcel cost.

F-43

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Land, land development and related costs (both incurred and estimated to be incurred in the future) are amortized to the cost of homes closed based upon the total number of homes the Company expects to construct in each community. Any changes resulting from a change in the estimated number of homes to be constructed or a change in the estimated costs subsequent to the commencement of delivery of homes are allocated to the remaining undelivered homes in the community. Home construction and related costs are charged to the cost of homes closed under the specific identification method.

Revenue from one land sale contract is reported on the percentage-of-completion method of accounting measured on the basis of incurred cost to estimated total cost for the contract. Contract cost includes all land costs, direct material and labor costs and those indirect costs related to contract performance. The liability “billings in excess of costs and estimated earnings on incomplete contracts,” represents billings in excess of revenues recognized.

Golf course operations revenues include golf course services revenues, food and beverage sales, and golf shop sales. Golf course services revenues include revenues generated from greens fees, driving range fees, golf instruction and golf club rental. Golf course operations revenues are recognized as goods are provided and services are performed.

Management fee revenues are recognized by the Company for management of various Home Owner Associations (“HOA’s”). The management fee revenues are recognized as services are rendered ratably over the annual term of the contract.

Deferred Revenue

The Company collects cash deposits from customers as part of its ordinary and customary process before starting construction of a Home. As such the Company classifies these deposits as deferred revenue until the buyer closes on their home. At close of escrow the Company recognizes these deposits as Revenue.

Percentage-of-Completion Contracts

Revenue from one land sale contract is reported on the percentage-of-completion method of accounting. Progress is measured based upon costs incurred. All known or anticipated losses on contracts are provided for in the period they become evident. Claims and change orders that are in the process of negotiation with customers for additional work or changes in the scope of work are included in contract value when collection is deemed probable and the value can be reliably estimated.

Billing practices for these projects are governed by the contract terms of each project based upon costs incurred, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized using the percentage-of-completion method of accounting. Billings in excess of recognized revenue are recorded in “billings in excess of costs and estimated earnings on uncompleted contracts.” When billings are less than recognized revenue, the difference is recorded in “costs and estimated earnings in excess of billings on uncompleted contracts.” With the exception of claims and change orders in the process of being negotiating with customers, unbilled receivables are usually billed during normal billing processes following achievement of the contractual requirements.

Recording of profits and losses on percentage-of-completion contracts requires an estimate of the total profit or loss over the life of each contract. This estimate requires consideration of contract value, change orders and claims reduced by costs incurred and estimated costs to complete. Anticipated losses on contracts are recorded in full in the period they become evident. The Company does not delay income recognition until projects have

F-44

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

reached a specified percentage of completion. Generally, profits are recorded from the commencement date of the contract based upon the total estimated contract profit multiplied by the current percentage complete for the contract. There were no loss provisions for the years ended December 31, 2013 or 2012.

Income Taxes

With the exception of Rhodes Ranch Golf Course, Tuscany Golf, Rhodes Design, Dunhill Realty, C&J and Elkhorn, all business entities consolidated into LVLH have elected to be taxed under Internal Revenue Code provisions for Partnership entities. Under those provisions, the Company is not required to pay federal corporate income taxes on earned income. Instead, members are liable for individual federal income taxes on the business entities’ earned income.

Accordingly, the Company accounts for income taxes related to its taxable subsidiaries under the asset and liability approach which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax basis of assets and liabilities and their combined financial statement reported amounts. As of December 31, 2013 and 2012, total federal tax net operating losses available to offset future taxable income were approximately $2.9 million and $3.0 million, respectively. The Company records a valuation allowance against deferred tax assets when it is more likely than not that such assets will not be realized. The Company has deferred tax assets of $1.0 million and $1.1 million as of December 31, 2013 and 2012, respectively, primarily relating to net operating losses which had a full valuation allowance. Total tax expense was not material for the years ended December 31, 2013 and 2012 and is included in other (expense) income.

Reorganization Expense

Reorganization expense includes professional fees and similar expenditures related to settlement of matters as a result of the Predecessor’s plan of reorganization. These expenses are expensed when incurred.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Such estimates include, but are not limited to, the allocation of land development costs to cost of sales, the estimates of future improvements and amenities costs, the estimated useful lives of property and equipment, the estimated cost of warranties provided to customers, the estimated cash flows used in determining whether long-lived assets are impaired, and the estimated outcome of ongoing litigation. Actual results could differ from those estimates.

Advertising Expense

Advertising costs are expensed the first time such advertising appears. Total advertising costs included in general and administrative expenses related to home sales on the accompanying consolidated statement of operations were $0.5 million and $0.5 million for the years ended December 31, 2013 and 2012, respectively.

Comprehensive Income

Comprehensive income is the change in equity of a business enterprise during a period from transactions and all other events and circumstances from non-owner sources. Other comprehensive income includes unrealized gain (loss) on available for sale securities, foreign currency items, and minimum pension liability adjustments. The Company did not have components of other comprehensive income during the years ended December 31, 2013 and 2012. As a result, comprehensive income is the same as the net income.

F-45

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Concentration of Risk

The Company maintains cash, cash equivalents and restricted cash with various financial institutions. A significant portion of the unrestricted cash is maintained with a select few banks and is, accordingly, subject to credit risk. Periodic evaluations of the relative credit standing of financial institutions maintaining the deposits are performed to evaluate and mitigate, if necessary, any credit risk.

2. Inventories

Inventories as of December 31, 2013 and 2012 consist of the following (in thousands):


	2013		2012
Land held for future development	$	56,145	$	66,616
Cost of land development and common elements & amenities		16,605		9,787
Homes under construction		4,363		3,371
Cost of Model Homes		2,190		1,994

Total Inventories	$	79,303	$	81,768

During 2012, the Company determined that certain non-core commercial land holdings were impaired as a result of factors impacted by decreases in current market conditions. Broker price opinions and comparable sales were used and considered in arriving at estimated fair values. As a result, the Company recognized a non cash impairment charge of $36 thousand for the year ended December 31, 2012. No further impairment occurred for the year ended December 31, 2013.

3. Property, Plant and Equipment

Property and equipment at December 31, 2013 and 2012 are summarized as follows (in thousands):


	2013			2012
Land	$	4,383		$	4,383
Golf course improvements		6,864			6,857
Golf course equipment		603			508
Model home furnishings		350			297
Office equipment		180			161
Buildings and improvements		49			40
Construction equipment		7			7

Total		12,436			12,253
Less accumulated depreciation		(2,386	)		(1,693	)

Property, Plant and Equipment—net	$	10,050		$	10,560

Depreciation expense for the years ended December 31, 2013 and 2012 were $0.7 million and $0.6 million, respectively.

Golf course capital leases as of December 31, 2013 and 2012 totaling $0.2 million and $0.2 million, respectively, are included in golf course improvements.

F-46

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

4. Other Assets

Other assets as of December 31, 2013 and 2012 consist of the following (in thousands):


	2013		2012
Refundable deposits	$	28	$	14
Rebates and other receivables, net of allowance of $2		104		179
Loan fees, net of amortization of $44 and $63		—		44
Litigation trust receivable, net of allowance of $17		60		—
Golf event deposits		83		—
Tax refund receivable		9		—

Total Other Assets	$	284	$	237

5. Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts

Following is a summary of contracts in progress at December 31, 2013 and 2012 (in thousands):


	2013			2012
Costs incurred on uncompleted contracts	$	282		$	235
Estimated earnings		396			368

Total		678			603
Less: Billings to date		1,100			1,100

Total		(422	)		(497	)

These amounts are included in accompanying consolidated balance sheet under the following captions:
Costs and estimated earnings in excess of billings on uncompleted contracts		—			—
Billings in excess of costs and estimated earnings on uncompleted contracts	$	(422	)	$	(497	)

F-47

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

6. Notes Payable and Capital Leases

Notes payable at December 31, 2013 and 2012 consist of the following (in thousands):


December 31,	2013		2012
Secured loan facility collateralized by deeds of trusts on the related inventories, with interest at one month LIBOR (.2481% and .2087% at December 31, 2013 and 2012, respectively), plus 5.00% per annum, and maturity date of March 31, 2016. The LIBOR portion of the interest must be paid in cash and the 5.00% portion may be paid in kind and added to the balance of the note. The LIBOR rate shall not exceed 2.00% per annum. The Company also has a cash payment option to this note which it can elect on a quarterly basis. The rate for the cash pay election is LIBOR plus 2.00%. The Company elected the cash pay option in the fourth quarter of 2011 and continued that election through 2013. The secured loan facility calls for principal payments to be made when the Company reaches greater than $15,000 in unrestricted Cash and Cash Equivalents as of the last day of the immediately preceding quarter.	$	18,421	$	36,921

Notes payable collateralized by deeds of trusts on the golf course property and improvements, with interest at 5.28% per annum, monthly principal and interest payments of $27 from November 2010 to October 2013, final payment due at maturity. The Company renegotiated the note and paid down principal to $2.5 million in 2012 resulting in a reduced monthly principal payment of $11 with interest of 3% + one month LIBOR. (3.25% per annum at December 31, 2013). All other terms remain unchanged. The Company exercised its 12 month extension option on this note which extends the term to October 2014.		2,254		2,388

Secured loan facility by the Company’s insurance policy premiums and the lender being named a loss payee on the policy with interest at 2.65% and monthly payments of $83.		1,613		—

Capital leases		82		107

Total Notes Payable	$	22,370	$	39,416

Notes payable at December 31, 2013 are due in future years as follows (in thousands):


December 31,	2013
2014	$	3,214
2015		653
2016		18,421
2017		—

Total	$	22,288

Refer to note 7 for future payments on capital leases.

F-48

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

years ended December 31, 2013 and 2012, respectively, of interest related to development and construction projects. Of this amount, $0.4 million and $0.6 million, respectively, is reflected in costs of home sales in the Consolidated Statement of Operations, for completed projects as of December 31, 2013 and 2012.

The note payable collateralized by deeds of trusts on the golf course property and improvements includes among other covenants, restrictions on certain financial ratios including maintaining a 1.25 to 1.0 fixed charge coverage ratio, for which the Company was in compliance at December 31, 2013.

To maintain compliance with the fixed charge ratio covenant, the Company entered into a Make-Well Agreement dated March 31, 2011, with the bank that allows the Company to provide cash transfers between non-guarantor entities and the guarantor golf course entity to increase the fixed charge coverage ratio to the required minimum level. In the event that the Company fails to provide such required funds to the guarantor entity within 60 days following the end of the quarterly period being measured, such event will constitute an event of Default. The Company made $0.7 million and $0.6 million in required Make-Well contributions for the years ended December 31, 2013 and 2012, respectively. The Company is in compliance with the covenants at December 31, 2013.

7. Commitments and Contingencies

Leases

The Company has an operating lease for office space at December 31, 2013. The Company entered into this office lease effective April 18, 2011. The office lease is for three years expiring April 30, 2014 with the option to extend twice for a total of 18 months. The Company has exercised its first 18 month option.

A schedule by year of minimum rental payments due under the operating lease as of December 31, 2013 as follows (in thousands):


Years ended December 31,
2014	$	103
2015 (assumes option exercised)		125
2016 (assumes option exercised)		125

Total Minimum Rental Payment Obligations	$	353

Rental expense for operating leases for the years ended December 31, 2013 and 2012 was $0.1 million and $0.1 million, respectively.

The Company also has four capital leases for golf course equipment as of December 31, 2013. The Company entered into these agreements effective November 15, 2011 and May 1, 2013. The leases are for a total of 36 months.

A schedule of the minimum rental payments due under the capital leases as of December 31, 2013 (in thousands):


Years ended December 31,
2014	$	48
2015 (assumes $1 buyout option exercised)		23
2016		11

Principal payment obligations		82
Interest payments		8

Total Minimum Rental Payment Obligations	$	90

Capital lease payments for the year ended December 31, 2013 were $86 thousand.

F-49

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Litigation

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

Management Fees

The Company entered into a Management Agreement (the “Management Agreement”) with a related party, DHNV, LLC (the “Manager”), to be provided services for day-to-day operations. These services include creating operating budgets, managing the financial department, serving as the human resource function and monitoring the Company’s compliance with all laws and regulations. In exchange for performing management services, the Company must pay the Manager $1.0 million per year, in equal monthly installments (the “Management Fee”). In addition to the Management Fee, the Company must pay the Manager a Performance Fee for each cash distribution made by the Company to its equity members, based on an escalating scale. The Company is responsible for reimbursing the Manager for any fees or costs incurred on the Company’s behalf. The agreement terminates the earlier of three years or on demand by either the Company or Manager by giving at least a 20 day notice.

For the years ended December 31, 2013 and 2012, the Company paid $1.0 million and $1.5 million, respectively, to the Manager which is included in general and administrative expenses on the Consolidated Statement of Operations. For the years ended December 31, 2013 and 2012 the Company did not pay performance distributions to equity members and therefore no Performance Fee was paid to the Manager.

8. Subsequent Events

On April 1, 2014, the Company sold substantially all of its assets to Century Communities, Inc. for a purchase price of approximately $165 million.

In accordance with ASC 855, Subsequent Events, management has evaluated subsequent events through April 7 , 2014, the date at which the financial statements were available for issuance.

F-50

Las Vegas Land Holdings, LLC & Subsidiaries

Condensed Consolidated Balance Sheet

(in thousands)


	March 31, 2014		December 31, 2013
	(unaudited)
Assets
Cash and Cash Equivalents	$	19,002	$	10,213
Restricted cash		513		746
Inventories		79,767		79,303
Pro-shop inventory		204		185
Prepaid expenses		2,138		2,370
Land held for sale		674		674
Property, plant, and equipment—net		9,969		10,050
Other assets		327		284

Total Assets	$	112,594	$	103,825

Liabilities and Members’ Equity
Accounts payable	$	2,177	$	1,896
Deferred revenue		1,273		1,133
Non-refundable deposit on the sale of assets		5,000		—
Billings in excess of costs and estimated earnings on uncompleted contracts		82		422
Accrued liabilities		523		1,413
Accrued warranty liability		141		121
Notes payable and capital leases		22,139		22,370

Total Liabilities		31,335		27,355

Commitments and Contingencies (Note 7)

Members’ Equity		81,259		76,470

Total Liabilities and Members’ Equity	$	112,594	$	103,825

F-51

Las Vegas Land Holdings, LLC & Subsidiaries

Condensed Consolidated Statement of Operations

(unaudited, in thousands)


	Three months ended March 31,
	2014			2013
Revenues
Home sales	$	14,972		$	13,630
Golf course operations		2,262			2,068
Raw land sales		233			—
Management fee		142			137

Total Operating Revenues		17,609			15,835

Costs and Expenses
Construction and land costs		8,526			9,117
Cost of golf course operations		1,672			1,766
Selling expenses		878			861
General and administrative		1,474			881
Cost of raw land sales		117			81
Depreciation		182			173
Cost of management operations		119			123
Loss on disposal of fixed assets		2			—

Total Costs and Expenses		12,970			13,002

Operating Income		4,639			2,833

Other (Expense) Income
Interest expense—net of capitalized interest		(34	)		(1	)
Reorganization (expense) income		(75	)		(63	)
Interest income		—			1
Other income (expense)		(11	)		—

Total Other Expense		(120	)		(63	)

Net Income	$	4,519		$	2,770

F-52

Las Vegas Land Holdings, LLC & Subsidiaries

Condensed Consolidated Statement of Cash Flows

(unaudited, in thousands)


	Three months ended March 31,
	2014			2013
Cash Flows From Operating Activities
Net Income	$	4,519		$	2,770
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		182			173
Loss on disposal of fixed assets		2			—
Amortization of loan fees		—			16
Changes in operating assets and liabilities:
Inventories		(464	)		2,229
Pro-shop inventory		(19	)		(74	)
Prepaid expenses		232			220
Land held for sale		—			(36	)
Other assets		(43	)		(273	)
Accounts payable		281			(1,346	)
Deferred revenue		140			434
Billings in excess of costs and estimated earnings on uncompleted contracts		(340	)		—
Accrued liabilities		(890	)		(350	)
Accrued warranty liability		20			23

Net cash provided by operating activities		3,620			3,786

Cash Flows From Investing Activities
Decrease (increase) in restricted cash		233			(82	)
Purchase of property and equipment		(103	)		(7	)
Non-refundable deposit on the sale of assets		5,000			—

Net cash provided by (used in) investing activities		5,130			(89	)

Cash Flows From Financing Activities
Repayments of notes payable and capital leases		(288	)		(2,050	)
New financing secured—Kubota Leasing		57			—
Distribution returned from Shareholders		270			—

Net cash provided by (used in) financing activities		39			(2,050	)

Net Increase in Cash and Cash Equivalents		8,789			1,647
Cash and Cash Equivalents, beginning of period		10,213			9,448

Cash and Cash Equivalents, end of period	$	19,002		$	11,095

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for interest—net of capitalized interest	$	149		$	228
Non-Cash Financing Transaction
Equipment and property purchased with capital leases		57			—

F-53

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2014

(unaudited)

1. Nature of Business and Significant Accounting Policies

Nature of Business

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.

Interim Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of its financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by U.S. generally accepted accounting principles for annual reports.

Asset Purchase Agreement

The Company entered into an Asset Purchase Agreement executed on March 9, 2014 to sell substantially all of the assets of the Company, and received a $5,000,000 non-refundable deposit from the acquirer on March 10, 2014 to be credited against the purchase price.

Accounting Policies and Principles of Consolidation

A description of the Company’s significant accounting policies is included in Note 1 to the consolidated financial statements for the year ended December 31, 2013. The consolidated financial statements include the accounts of Las Vegas Land Holdings, LLC and its wholly-owned subsidiaries. All intercompany accounts have been eliminated.

F-54

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2014

(unaudited)

2. Inventories

Inventories as of March 31, 2014 and December 31, 2013 consist of the following (in thousands):


	March 31, 2014		December 31, 2013
Land held for future development	$	54,440	$	56,145
Cost of land development and common elements & amenities		18,562		16,605
Homes under construction		4,571		4,363
Cost of Model Homes		2,194		2,190

Total Inventories	$	79,767	$	79,303

The Company determined that its non-core, commercial inventory holdings were not impaired for the periods ended March 31, 2014 and 2013.

3. Property, Plant and Equipment

Property and equipment at March 31, 2014 and December 31, 2013 are summarized as follows (in thousands):


	March 31, 2014			December 31, 2013
Golf course land	$	4,383		$	4,383
Golf course improvements		6,911			6,864
Golf course equipment		651			603
Model home furnishings		350			350
Office equipment		180			180
Buildings and improvements		51			49
Construction equipment		7			7

Total		12,533			12,436
Less accumulated depreciation		(2,564	)		(2,386	)

Property, Plant and Equipment —net	$	9,969		$	10,050

Depreciation expense for the quarter ended March 31, 2014 and 2013 were $182,247 and $173,101, respectively.

Golf course capital leases as of March 31, 2014 and December 31, 2013 totaling $281,753 and $219,208, respectively, are included in golf course equipment.

4. Other Assets

Other assets as of March 31, 2014 and December 31, 2013 consist of the following (in thousands):


	March 31, 2014		December 31, 2013
Refundable deposits	$	28	$	28
Rebates and other receivables, net of allowance of $24 and $0		224		104
Litigation trust receivable, net of allowance of $17 and $17		75		60
Golf event deposits				83
Tax refund receivable				9

Total Other Assets	$	327	$	284

F-55

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2014

(unaudited)

5. Billings in Excess of Costs and Estimated Earnings on Incomplete Contracts

Following is a summary of contracts in progress at March 31, 2014 and December 31, 2013 (in thousands):


	March 31, 2014			December 31, 2013
Costs incurred on uncompleted contracts	$	399		$	282
Estimated earnings		619			396

Total		1,018			678
Less: Billings to date		1,100			1,100

Total		(82	)		(422	)
These amounts are included in accompanying consolidated balance sheet under the following captions:
Costs and estimated earnings in excess of billings on uncompleted contracts		—			—
Billings in excess of costs and estimated earnings on uncompleted contracts	$	(82	)	$	(422	)

6. Notes Payable and Capital Leases

Notes payable at March 31, 2014 and December 31, 2013 consist of the following (in thousands):


	March 31, 2014		December 31, 2013
Secured loan facility collateralized by deeds of trusts on the related inventories, with interest at LIBOR (.1549% and .2481% at March 31, 2014 and December 31, 2013, respectively), plus 5.00% per annum, and maturity date of March 31, 2016. The LIBOR portion of the interest must be paid in cash and the 5.00% portion may be paid in kind and added to the balance of the note. The LIBOR rate shall not exceed 2.00% per annum. The Company also has a cash payment option to this note which it can elect on a quarterly basis. The rate for the cash pay election is LIBOR plus 2.00%. The Company elected the cash pay option in the fourth quarter of 2011 and continued that election through March 31, 2014. The secured loan facility calls for principal payments to be made when the company reaches greater than $15 million in unrestricted Cash and Cash Equivalents as of the last day of the immediately preceding quarter.	$	18,421	$	18,421

Notes payable collateralized by deeds of trusts on the golf course property and improvements, with interest at 5.28% per annum, monthly principal and interest payments of $27 thousand from November 2010 to October 2013, final payment due at maturity. The Company renegotiated the note and paid down principal to $2.5 million in 2012 resulting in a reduced monthly principal payment of $11 thousand with interest of 3% + LIBOR one month rate. (3.25% per annum at December 31, 2013). All other terms remain unchanged. The Company exercised its 12 month extension option on this note which extended the term to October, 2014.		2,221		2,254

Secured loan facility by the Company’s insurance policy premiums and the lender being named a loss payee on the policy with interest at 2.65% and monthly payments of $83 thousand.		1,376		1,613

Capital leases		121		82

Total Notes Payable and Capital Leases	$	22,139	$	22,370

F-56

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2014

(unaudited)

Notes payable at March 31, 2014 are due in future years as follows (in thousands):


2014	$	2,944
2015		653
2016		18,421
2017		—

Total	$	22,018

The interest cost associated with development and construction projects is capitalized and included in inventories. Interest capitalization ceases once a project is substantially complete or no longer under construction to prepare for its intended use. When no debt is specifically identified as being incurred in connection with a construction project, the Company capitalizes interest on amounts expended on the project at the Company’s weighted average cost of borrowed money. The Company capitalized $114,868 and $243,620 during the quarter ended March 31, 2014 and 2013, respectively, of interest related to development and construction projects. Of this amount, $87,911 and $114,711, respectively, is reflected in costs of home sales in the consolidated statement of operations, for completed projects during the quarters ended March 31, 2014 and 2013 respectively.

To maintain compliance with the fixed charge ratio covenant, the Company entered into a Make-Well Agreement dated March 31, 2011, with the bank that allows the Company to provide cash transfers between non-guarantor entities and the guarantor golf course entity to increase the fixed charge coverage ratio to the required minimum level. In the event that the Company fails to provide such required funds to the guarantor entity within 60 days following the end of the quarterly period being measured, such event will constitute an event of default. The Company made $0 and $91,000 in required make-well contributions for the quarter ended March 31, 2014 and 2013, respectively.

7. Litigation

8. Management Fees

The Company entered into a Management Agreement (the “Management Agreement”) with DNHV, LLC (the “Manager”) to be provided services for day-to-day operations. These services include creating operating budgets, managing the financial department, serving as the human resource function and monitoring the Company’s compliance with all laws and regulations. In exchange for performing management services, the Company must pay the Manager $1,000,000 per year, in equal monthly installments (the “Management Fee”). In addition to the Management Fee, the Company must pay the Manager a performance fee for each cash distribution made by the Company to its equity members, based on an escalating scale. The Company is responsible for reimbursing the Manager for any fees or costs incurred on the Company’s behalf. The agreement terminates the earlier of three years or on demand by either the Company or Manager by giving at least a 20 day notice.

F-57

Las Vegas Land Holdings, LLC & Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 2014

(unaudited)

For the quarters ended March 31, 2014 and 2013, the Company paid $540,516 and $279,604 respectively, to the Manager which is included in general and administrative expenses on the Consolidated Statement of Operations. For the quarter ended March 31, 2014 and 2013 the Company did not pay distributions to equity members and therefore no performance fee was paid to the Manager.

9. Subsequent Events

On April 1, 2014, the Company sold substantially all of its assets and certain liabilities to Century Communities, Inc. for approximately $165 million in proceeds.

In accordance with ASC 855, Subsequent Events, management has evaluated subsequent events through May 29, 2014, the date at which the financial statements were available for issuance.

F-58

Century Communities, Inc.

Unaudited Pro Forma Condensed Consolidated Financial Statements

As of and for the Three Months Ended March 31, 2014 and for the Year Ended December 31, 2013

On April 1, 2014, we purchased substantially all of the assets of Las Vegas Land Holdings, LLC and its subsidiaries (collectively, “LVLH”), a homebuilder with operations in Las Vegas, Nevada, for a purchase price of approximately $165 million (which we refer to as the “LVLH Acquisition”). LVLH targets first-time, second-time move-up, second home and active adult buyers, with houses typically ranging from $215,000 to $500,000. The acquired assets consist of five single-family communities in the greater Las Vegas, Nevada metropolitan area, two fully operational golf courses, three custom home lots, and two 1-acre commercial plots. LVLH was actively selling homes in three of these communities. The assets and liabilities which were not acquired primarily consist of cash and cash equivalents, certain prepaid expenses and other assets, certain accounts payables and accrued expenses, restricted cash, and certain debt obligations.

The transaction will be accounted for as a business combination in accordance with the Company’s accounting policies with the acquired assets and assumed liabilities recorded at their estimated fair values as of April 1, 2014. The following unaudited pro forma condensed financial information and explanatory notes, presents the pro forma impact of the LVLH Acquisition on the Company’s historical financial position as of March 31, 2014 and our historical results of operations for the three months ended March 31, 2014 and the year ended December 31, 2013.

We derived the unaudited pro forma condensed financial information set forth below by the application of pro forma adjustments to the audited and unaudited consolidated financial statements for the Company and LVLH, included elsewhere in this prospectus. The Company’s and LVLH’s historical consolidated financial information has been adjusted in the unaudited pro forma condensed financial statements to give effect to pro forma events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) with respect to the pro forma statement of operations, expected to have a continuing impact on the combined results. The unaudited pro forma condensed balance sheet as of March 31, 2014 is presented to reflect the acquisition as if it had occurred on March 31, 2014. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2014 and the year ended December 31, 2013 gives pro forma effect to the LVLH Acquisition, as if the acquisition had been completed on January 1, 2013.

The unaudited pro forma condensed financial information reflects pro forma adjustments that are described in the accompanying explanatory notes and are based on available information and certain assumptions we believe are reasonable, but are subject to change. We have made, in our opinion, all adjustments that are necessary to present fairly the unaudited pro forma condensed financial information.

The unaudited pro forma condensed financial information is presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the acquisition of LVLH been consummated on the dates indicated, and do not purport to be indicative of the financial condition or results of operations as of any future date or for any future period. You should read our unaudited pro forma condensed financial information and the accompanying explanatory notes in conjunction with the consolidated historical financial statements and related notes included elsewhere in this prospectus. Certain amounts in the historical consolidated financial statements of LVLH have been reclassified to conform to the Company’s presentation. These include presentation of pro shop inventory, prepaid assets, land held for sale, and other assets within prepaid expenses and other assets, as well as deferred revenue, billings in excess of collections, accrued liabilities and warranty accrual within accrued and other expenses on the unaudited pro forma condensed balance sheet. On the unaudited pro forma condensed consolidated statements of operations, selling expenses, general and administrative, and depreciation are included in selling, general and administrative. Additionally, reorganization expenses have been included in other income (expense).

F-59

Century Communities, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2014

(in thousands)


	Historical Century Communities, Inc.		Historical Las Vegas Land Holdings, LLC		Pro Forma Adjustments			Century Communities, Inc. Pro Forma
Assets
Cash and cash equivalents	$	185,134	$	19,002	$	(165,000	)(a)	$	20,134
						(19,002	)(b)
Restricted cash		—		513		(513	)(b)		—
Accounts receivable		7,409		—		—			7,409
Inventories		197,014		79,767		58,492	(a)		335,273
Prepaid expenses and other assets		15,208		3,343		(75	)(b)		18,476
Property and equipment, net		3,284		9,969		(1,345	)(a)		11,908
Amortizable intangible assets, net		1,545		—		2,899	(a)		4,444
Goodwill		479		—		17,434	(a)		17,913

Total Assets	$	410,073	$	112,594	$	(107,110	)	$	415,557

Liabilities and Equity
Liabilities
Accounts payable	$	7,414	$	2,177	$	(100	)(b)	$	9,491
Accrued expenses and other liabilities		26,258		7,019		(5,112	)(b)		28,165
Deferred tax liability, net		681		—		—			681
Notes payable and revolving loan agreement		100,500		22,139		(20,639	)(b)		102,000

Total liabilities		134,853		31,335		(25,851	)		140,337

Equity
Total Equity		275,220		81,259		(87,520	)(a)		275,220
						6,261	(b)

Total Liabilities and Equity	$	410,073	$	112,594	$	(107,110	)	$	415,557

The accompanying notes are an integral part of these pro forma financial statements.

F-60

Century Communities, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2014

(in thousands, except share and per share amounts)


	Historical Century Communities, Inc.			Historical Las Vegas Land Holdings, LLC			Pro Forma Adjustments			Century Communities, Inc. Pro Forma
Home sales revenues	$	49,671		$	14,972			—		$	64,643
Land sale revenues		—			233			—			233

Total Home and land sale revenues		49,671			15,205			—			64,876
Cost of home sale revenues		37,274			8,526			2,286	(c)		48,086
Cost of land sale revenues		—			117			—			117

Total cost of home and land sale revenues		37,274			8,643			2,286			48,203
Gross margin from home and land sales		12,397			6,562			(2,286	)		16,673

Golf course and other revenue		—			2,404			—			2,404
Cost of golf course and other revenue		—			1,690			—			1,690

Gross margin from golf course and other revenue		—			714			—			714

Selling general and administrative		7,003			2,637			175	(a)		9,815

Operating income		5,394			4,639			(2,461	)		7,572

Other income (expense)		(198	)		(120	)		—			(318	)

Income before tax expense		5,196			4,519			(2,461	)		7,254
Income tax expense		1,819			—			720	(d)		2,539

Consolidated net income		3,377			4,519			(3,181	)		4,715

Basic and diluted earnings per share	$	0.20							(e)	$	0.27

Basic and diluted weighted average common shares		17,075,000									17,075,000

The accompanying notes are an integral part of these pro forma financial statements.

F-61

Century Communities, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2013

(in thousands, except share and per share amounts)


	Historical Century Communities, Inc.		Historical Las Vegas Land Holdings, LLC			Pro Forma Adjustments			Century Communities, Inc. Pro Forma
Home sales revenues	$	171,133	$	74,253			—		$	245,386
Land sale revenues		—		1,272			—			1,272

Total Home and land sale revenues		171,133		75,525			—			246,658
Cost of home sale revenues		129,651		45,950			11,295	(c)		186,896
Cost of land sale revenues		—		593			—			593

Total cost of home and land sale revenues		129,651		46,543			11,295			187,489
Gross margin from home and land sales		41,482		28,982			(11,295	)		59,169

Golf course and other revenue		—		8,172			—			8,172
Cost of golf course and other revenue		—		8,271			—			8,271

Gross margin from golf course and other revenue		—		(99	)		—			(99	)

Selling general and administrative		23,622		9,629			700	(a)		33,951

Operating income		17,860		19,254			(11,995	)		25,119

Other income (expense)		213		(416	)		—			(203	)

Income before tax expense		18,073		18,838			(11,995	)		24,916
Income tax expense		5,015		—			2,395	(d)		7,410
Deferred taxes on conversion to a corporation		627		—			—			627

Consolidated net income		12,431		18,838			(14,390	)		16,879

Net income attributable to the noncontrolling interests		52		—			—			52
Income attributable to common stockholders	$	12,379	$	18,838		$	(14,390	)	$	16,827
Basic and diluted earnings per share	$	0.95						(e)	$	1.30

Basic and diluted weighted average common shares		12,873,562								12,873,562

The accompanying notes are an integral part of these pro forma financial statements.

F-62

Century Communities, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(in thousands)

The following pro forma adjustments are required to reflect the net impact of the LVLH Acquisition on the historical consolidated financial statements of the Company as of and for the three months ended March 31, 2014 and for the year ended December 31, 2013:

(a) Assets Acquired and Liabilities Assumed

We acquired substantially all the assets and assumed certain liabilities of LVLH for a purchase price of approximately $165,000, which was paid in cash on April 1, 2014. The purchase price was funded with available cash and cash equivalents and additional borrowings of $99,000 from our revolving loan agreement.

The following is a summary of the assets acquired and the liabilities assumed in the LVLH Acquisition. We have made an estimate of the fair value of the acquired assets and assumed liabilities based on information currently available to us. We acquired certain intangible assets, including, a non-solicitation agreement, architectural plans and certain in place contracts. Once we finalize our valuation analysis, assumptions utilized to estimate fair value may change and accordingly our estimated allocation may change.

Based upon our preliminary estimates of the fair value of the assets acquired and the liabilities assumed, we have recorded the following pro forma adjustments:


	Estimated Fair Value as of April 1, 2014		Historical balance as of March 31, 2014		Pro forma adjustment
Inventories	$	138,259	$	79,767	$	58,492
Prepaid expenses and other assets		3,268		3,268		—
Property and equipment		8,624		9,969		(1,345	)
Amortizable intangible assets		2,899		—		2,899
Goodwill		17,434		—		17,434

Total assets	$	170,484	$	93,004	$	77,480


Accounts payable	$	2,077	$	2,077	$	—
Accrued expenses and other liabilities		1,907		1,907		—
Notes payable and revolving loan agreement		1,500		1,500		—

Total liabilities	$	5,484	$	5,484	$	—

Purchase price/Net equity	$	165,000	$	87,520	$	77,480

The fair value of the assets acquired and liabilities assumed outlined above were estimated based on the following methodology.

Inventories

We determined the preliminary estimate of fair value for acquired inventories primarily using a forecasted cash flow approach for the development, marketing, and sale of each community acquired. Significant assumptions included in our estimate include future per lot development costs, construction timeline, construction and overhead costs, mix of products sold in each community as well as average sales price, sales incentives and cancellation rates. These assumptions were developed from the historical performance of the

F-63

Century Communities, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(in thousands)

communities, and cost estimates and other information obtained during our due diligence procedures. Such assumptions are made for each individual community and may vary significantly between communities. To a lesser extent we also utilized comparable sales of land inventory within the greater Las Vegas market as well as broker opinions of value for certain parcels acquired as inputs into our preliminary estimate of fair value. Due to the preliminary nature of these estimates combined with uncertainties in the estimation process and the significant volatility in demand for new housing, actual results could differ significantly from such estimates.

Prepaid expenses and other assets

Acquired prepaid expenses and other assets primarily consist of (1) prepaid insurance (2) land held for sale and (3) pro shop inventory. Due to the short-term nature of these assets we believe that the historical carrying cost approximates fair value.

Property and equipment

Acquired property and equipment is primarily comprised of two golf courses acquired (Rhodes Ranch Golf Course, and Tuscany Golf Club) and various office related fixed assets including leasehold improvements. The fair value of the golf courses was estimated based on applying a market based earnings multiple to actual historical earnings of each course. We determined that historical cost for office related fixed assets including leasehold improvements approximated fair value.

Amortizable intangible assets and liabilities

Acquired intangible assets and liabilities consist of home plans, a non-solicitation agreement, and cell phone tower leases. Our methodology for estimating the fair value of the intangible assets and liabilities is discussed below.

Home plans: We acquired eight home plans which were valued using a replacement cost approach, which resulted in an estimated fair value of $0.3 million.

Non-solicitation agreement: The non-solicitation agreement acquired was valued using a with and with-out approach which estimates the impact on future cash flows with and with-out the non-solicitation agreement. The difference between the projected cash flows is then discounted in order to estimate the fair value of the agreement. We estimated a fair value of $1.2 million for the non-solicitation agreement.

Acquired cell phone tower leases: The fair value of the acquired cell phone tower leases was estimated utilizing a discounted cash flow approach, which resulted in an estimated fair value of $1.4 million.

The intangible assets and liabilities will be amortized over their respective lives, which range from 9 months to 21 years. As a result we have made a pro forma adjustment to selling, general and administrative expense in the pro forma statement of operations for the three months ended March 31, 2014 and the year ended December 31, 2013 totaling $175 and $700, respectively, for the amortization of the intangibles.

Goodwill

Goodwill of $17,913 represents the excess of the consideration exchanged over the fair value of the net tangible and intangible assets acquired.

Accounts payable/Accrued expenses and other liabilities

We determined that historical cost approximates fair value for the acquired accounts payable and accrued expenses and other liabilities primarily due to the short term nature of these obligations.

F-64

Century Communities, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(in thousands)

Notes payable and revolving loan agreement

The acquired debt obligations were originated in the fourth quarter of 2013, and we believe that the interest rate at the time of origination approximates current market rates for similar obligations. Accordingly, the historical cost of the acquired obligations approximates fair value.

Transaction Costs

We estimate that our expenses for this transaction will be approximately $0.8 million, of which approximately $0.4 million are reflected as an expense in the three months ended March 31, 2014, and $0.4 million will be reflected in our consolidated financial statements for the three months ended June 30, 2014, respectively, the periods the expenses were incurred. These costs include fees for real estate transfer taxes, legal, accounting, due diligence, and other services necessary to complete the transaction. The estimated expenses have not been reflected in the pro forma financial statements due to the amounts being non-recurring and not material overall.

(b) Assets Not Acquired and Liabilities Not Assumed

In connection with the purchase, we did not acquire certain assets which primarily consist of cash and cash equivalents, restricted cash, certain prepaid expenses and other assets, certain accounts payables and accrued expenses and other liabilities, or assuming certain debt obligations. We have recorded pro forma adjustments to remove the historical balances as of March 31, 2014, which are $19,002 in cash and cash equivalents, $513 in restricted cash, $75 in prepaid expenses and other assets, $100 of accounts payable, $5,112 in accrued expenses and other liabilities, and $20,639 of debt obligations, which have a net impact on net equity of $6,261.

(c) Cost of Homes Sales Revenue

As noted in pro forma adjustment (a) above, the inventories purchased in the LVLH Acquisition were recognized at their estimated fair value as of the acquisition date. As a result, the historical cost of home sales revenue for LVLH for the year ended December 31, 2013, which resulted in a gross margin of 38%, also requires a pro forma adjustment to reflect this increase in pro forma inventory cost. The pro forma adjustment to cost of home sales revenue is estimated to be additional expense of $11,295. The historical cost of home sales revenue for LVLH for the three months ended March 31, 2014 resulted in a gross margin of 43% and requires a pro forma adjustment of $2,286 to cost of home sales revenue to reflect the increase in inventory cost.

The pro forma adjustments were determined for all the lots as of January 1, 2013, including the 256 and 49 lots that were delivered by LVLH during the year ended December 31, 2013, and the quarter ended March 31, 2014, respectively, in accordance with ASC 820-10-55-21(f). Accordingly, we applied pro forma adjustments to LVLH historical costs based upon an average of the estimated lot value per community and the stage of production of the lots as of January 1, 2013, such that the pro forma increase to inventory and cost of home sales results in an expected gross margin that we believe a market participant would require to complete the remaining development and requisite selling efforts. The stage of production, as of January 1, 2013, of the lots delivered by LVLH during the periods presented, ranged from raw land to fully completed single family residences. We estimated a market participant would require a gross margin ranging from 8% to 24% based upon the stage of production of the individual lot.

(d) Income Tax Expense

We have recorded a pro forma adjustment to increase current income tax expense by $2,395 for the year ended December 31, 2013 and $720 for the three months ended March 31, 2014. The adjustment is based upon the net pro forma impact the LVLH Acquisition has upon our historical taxable income for the period presented using the statutory federal and state income tax rate of 35%.

F-65

Century Communities, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(in thousands)

(e) Earnings Per Share

Pro-forma basic and diluted net income per share for the three months ended March 31, 2014 and the year ended December 31, 2013 gives effect to pro forma adjustments discussed above, as well as the application of the two-class method of calculating earnings per share, as our non-vested restricted stock awards have non-forfeitable rights to dividends, and accordingly represent a participating security. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period (in thousands except share and per share amounts).


	Three Months Ended			Year Ended
	March 31, 2014			December 31, 2013
Pro-forma net income	$	4,715		$	16,879
Less: Net income attributable to the non-controlling interest		—			(52	)
Less: Undistributed earnings allocated to participating securities		(52	)		(132	)

Numerator for basic and diluted pro-forma EPS	$	4,663		$	16,695
Pro-forma weighted average shares		17,075,000			12,873,562
Pro-forma basic and diluted EPS	$	0.27		$	1.30

F-66

LOGO

CENTURY COMMUNITIES

Shares

LOGO

Common Stock

P ROSPECTUS

, 2014

Joint Book-Running Managers


FBR		J.P. Morgan		Deutsche Bank Securities

Co-Managers


Zelman Partners LLC		Builder Advisor Group, LLC

Until , 2014 (25 days after the date of this prospectus), all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

The information in this preliminary prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

LOGO

Shares

C ENTURY C OMMUNITIES , I NC .

Common Stock

This prospectus relates solely to the resale of up to an aggregate of shares of our common stock, $0.01 par value per share, by the selling stockholders identified in this prospectus (which term as used in this prospectus includes pledgees, donees, transferees or other successors-in-interest). We are registering the offer and sale of the shares of our common stock, which were acquired by the selling stockholders in our May 2013 private offering and private placement.

The selling stockholders may offer the shares of our common stock from time to time as they may determine through public or private transactions or through other means described in the section entitled “Plan of Distribution” at prevailing market prices, at prices different than prevailing market prices or at privately negotiated prices. The prices at which the selling stockholders may sell the shares of our common stock may be determined by the prevailing market price for the shares at the time of sale, may be different than such prevailing market prices or may be determined through negotiated transactions with third parties. Until our shares of our common stock are regularly traded on the New York Stock Exchange, we expect that the selling stockholders initially will sell their shares, if any shares are sold, at a price of $ per share, which is the initial public offering price per share in our initial public offering.

We will not receive any of the proceeds from the sale of these shares of our common stock by the selling stockholders. We have agreed to pay all expenses relating to registering these shares of our common stock. The selling stockholders will pay any brokerage commissions and/or similar charges incurred for the sale of these shares of our common stock.

Prior to the date of this prospectus, there was not a public market for our shares. Because all of the shares offered under this prospectus are being offered by the selling stockholders, we cannot currently determine the price or prices at which our shares may be sold under this prospectus.

We have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 21.

, 2014.

Alternate Page for Selling Stockholders Resale Prospectus - front cover

You should rely only on the information contained in this prospectus or in any free writing prospectus prepared by us. We and the selling stockholders have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We and the selling stockholders are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information appearing in this prospectus and any free writing prospectus prepared by us is accurate as of any date other than the respective dates of such documents or as of the date or dates which are specified therein. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.

TABLE OF CONTENTS


Summary			1
Risk Factors
Cautionary Note Concerning Forward-Looking Statements
Use of Proceeds			3
Dividend Policy
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Market Opportunity
Our Business			4
Management
Executive and Director Compensation
Certain Relationships and Related Party Transactions
Conflicts of Interest
Principal Stockholders
Selling Stockholders			5
Description of Capital Stock			7
Shares Eligible For Future Sale			9
Certain Material Federal Income Tax Considerations
Plan of Distribution			10
Legal Matters			12
Change in Accountants
Experts
Where you can find more information
Index to Consolidated Financial Statements			F-1

Alternate Page for Selling Stockholders Resale Prospectus - i

SUMMARY

Recent Developments

Initial Public Offering

We are planning to sell our common stock in the IPO, and expect to receive net proceeds from the IPO of approximately $ million (assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of the IPO prospectus), or approximately $ million if the underwriters of the IPO exercise in full their over-allotment option to purchase up to additional shares of our common stock in the IPO, after deducting the underwriting discounts and commissions and the estimated offering expenses of approximately $ million payable by us. We intend to use the net proceeds from the IPO primarily for the acquisition and development of land, home construction and other related purposes.

Alternative Sections for Selling Stockholders Resale Prospectus - 1

The Offering

Common Stock Offered by the Selling Stockholders in this Offering

Common Stock Offered by Us in the IPO

shares (plus up to additional shares of our common stock that the underwriters of the IPO have an option to purchase from us at the initial public offering price less the underwriting discounts and commissions to cover over-allotments, if any)

Common Stock to be Outstanding Immediately After the IPO

shares ⁽¹⁾

Use of Proceeds

We will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders pursuant to this prospectus.

Dividend Policy

We currently intend to retain our future earnings, if any, to finance the development and expansion of our business and, therefore, do not intend to pay cash dividends on our common stock for the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments and such other factors as our board of directors deems relevant in its discretion. See “Dividend Policy.”

New York Stock Exchange Symbol

We have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS.”

Risk Factors

Investing in our common stock involves a high degree of risk . For a discussion of factors you should consider in making an investment, see “Risk Factors” beginning on page 21.

Except as otherwise indicated, all information in this prospectus assumes no exercise by the underwriters of the IPO of their over-allotment option to purchase additional shares of our common stock in the IPO.

⁽¹⁾

Assumes the IPO has been completed and excludes (i) 1,468,413 shares of our common stock reserved for future issuance in connection with awards under our First Amended & Restated 2013 Long-Term Incentive Plan; and (ii) up to shares of our common stock issuable upon the exercise in full by the underwriters of the IPO of their over-allotment option to purchase additional shares of our common stock in the IPO.

Alternative Sections for Selling Stockholders Resale Prospectus - 2

USE OF PROCEEDS

We are registering these shares of our common stock for resale by the selling stockholders. We will not receive any proceeds from the sale of the shares of our common stock offered by the selling stockholders pursuant to this prospectus. The net proceeds from the sale of the shares of our common stock offered pursuant to this prospectus will be received by the selling stockholders.

Alternative Sections for Selling Stockholders Resale Prospectus - 3

OUR BUSINESS

Recent Developments

Initial Public Offering

Alternative Sections for Selling Stockholders Resale Prospectus - 4

SELLING STOCKHOLDERS

The selling stockholders listed in the table below may from time to time offer and sell pursuant to this prospectus any or all of the shares of our common stock that they respectively beneficially own as set forth below. When we refer to “selling stockholders” in this prospectus, we mean the persons and entities listed in the table below, and the pledgees, donees, permitted transferees, assignees, successors and others who later come to hold any of the selling stockholders’ interests in shares of our common stock other than through a public sale.

In accordance with SEC rules, the beneficial ownership of each of the selling stockholders includes:

•

all shares the selling stockholder actually owns beneficially or of record;

•

all shares over which the selling stockholder has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund); and

•

Certain of the selling stockholders may be deemed to be underwriters as defined in the Securities Act. Any profits realized by the selling stockholders may be deemed to be underwriting commissions.

The following table sets forth, as of the date of this prospectus, the name of each selling stockholder for whom we are registering shares for resale to the public, and the number of shares that each selling stockholder may offer pursuant to this prospectus. The shares offered by the selling stockholders were originally issued and sold by us in our May 2013 private offering and private placement pursuant to exemptions from the registration requirements of the Securities Act. We agreed to file a registration statement covering the shares of our common stock received by the selling stockholders. We have filed with the SEC, under the Securities Act, a Registration Statement on Form S-l with respect to the resale of the shares of our common stock from time to time by the selling stockholders, and this prospectus forms a part of that registration statement.

Alternative Sections for Selling Stockholders Resale Prospectus - 5

Except as noted below in the footnotes to the table, none of the selling stockholders have, or have had since our inception, any position, office or other material relationship with us or any of our affiliates. Based on information provided to us by the selling stockholders and as of the date the same was provided to us, assuming that the selling stockholders sell all the shares of our common stock beneficially owned by them that have been registered by us and do not acquire any additional shares during the offering, the selling stockholders will not own any shares other than those appearing in the column entitled “Number of Shares Owned After the Offering.” We cannot advise as to whether the selling stockholders will in fact sell any or all of such shares. In addition, the selling stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, the shares in transactions exempt from the registration requirements of the Securities Act after the date on which they provided the information set forth on the table below.


Name of Selling Stockholder	Number of Shares of Our Common Stock Beneficially Owned Prior to the Offering	Number of Shares of Our Common Stock that May be Sold	Number of Shares of Our Common Stock Beneficially Owned After the Offering

⁽¹⁾

⁽²⁾

Alternative Sections for Selling Stockholders Resale Prospectus - 6

DESCRIPTION OF CAPITAL STOCK

Registration Rights Agreement

Under the registration rights agreement, we agreed, at our expense, to use our commercially reasonable efforts to file with the SEC as soon as reasonably practicable following the completion of the May 2013 private offering and private placement, but in no event later than December 31, 2013, a shelf registration statement registering for resale all of the shares of our common stock sold in our May 2013 private offering and private placement that were not sold by the selling stockholders in the IPO (which we refer to as the “registrable shares”), plus any additional shares of common stock issued in respect thereof whether by stock dividend, stock distribution, stock split, or otherwise. We refer to this registration statement as the “resale shelf registration statement.” We are obligated to use our commercially reasonable efforts to cause the resale shelf registration statement to be declared effective by the SEC under the Securities Act as promptly as practicable after the filing (such time of effectiveness may be deferred until up to 60 days after completion of the IPO), but in any event prior to June 30, 2014, and to maintain the resale shelf registration statement continuously effective under the Securities Act, subject to certain permitted blackout periods, until the first to occur of:

•

the date on which the registrable shares covered by the resale shelf registration statement have been resold in accordance with the resale shelf registration statement;

•

the date on which the registrable shares covered by the resale shelf registration statement have been sold to us or cease to be outstanding.

We have filed with the SEC a registration statement on Form S-1 for the IPO and for the resale of the registrable shares that are not sold by the selling stockholders in the IPO, and this prospectus forms a part of that registration statement, which is considered the resale shelf registration statement.

However, if, prior to June 30, 2014, the resale shelf registration statement has not been declared effective by the SEC or our common stock has not been listed for trading on a national securities exchange, then the registration rights agreement and our bylaws require that we hold a special meeting of our stockholders for the purpose of considering and voting on the removal of our directors then in office and electing the successors of any directors so removed (which we refer to as a “special election meeting”), unless the requirement is waived or deferred in accordance with the registration rights agreement and our bylaws. This requirement for a special meeting should no longer be applicable upon the effectiveness of the registration statement of which this prospectus forms a part.

Each of the selling stockholders has agreed with us not to directly or indirectly sell, offer to sell, grant any option or otherwise transfer or dispose of any shares of our common stock for days after the date of this prospectus. We have agreed not to waive or otherwise modify that agreement without the prior written consent of the representatives of the underwriters.

Alternative Sections for Selling Stockholders Resale Prospectus - 7

Alternative Sections for Selling Stockholders Resale Prospectus - 8

SHARES ELIGIBLE FOR FUTURE SALE

General

Upon the completion of the IPO, as a result of the issuance of shares in the IPO, there will be shares of our common stock issued and outstanding ( shares if the underwriters of the IPO exercise in full their over-allotment option to purchase additional shares of our common stock in the IPO).

Of the total number of shares of our common stock to be issued and outstanding upon completion of the IPO:

•

shares are being offered and sold in the IPO ( shares if the underwriters exercise in full their over-allotment option to purchase additional shares of our common stock in the IPO). These shares will be freely transferable without restriction or further registration under the Securities Act, except that any shares held or acquired by our “affiliates,” as that term is defined in Rule 144 under the Securities Act, will be subject to the volume limitations and other restrictions of Rule 144 described below;

•

shares may be resold by the selling stockholders identified in this prospectus. These shares will be freely transferable without restriction or further registration under the Securities Act, except that any shares held or acquired by our affiliates will be subject to the volume limitations and other restrictions of Rule 144 described below. In addition, these shares are subject to a lock-up agreement for days after the date of this prospectus (or days in the case of any such shares held by our officers and directors); and

•

the remaining shares have not been registered and may be “restricted” securities within the meaning of Rule 144. These shares may not be sold unless they are registered under the Securities Act or the restrictions under Rule 144 have lapsed or another exemption from registration is available. In addition, these shares are subject to lock-up agreements for 60 days after the date of this prospectus (or 180 days in the case of any such shares held by our officers and directors).

Prior to the IPO, there has been no public market for shares of our common stock. Although we have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS,” an active trading market for the shares of our common stock may never develop or if one develops, it may not be sustained following the IPO. No assurance can be given as to the likelihood that an active trading market for our common stock will develop, the liquidity of any such market, the ability of our stockholders to sell their shares or the prices that our stockholders may obtain for any of their shares. No prediction can be made as to the effect, if any, that future sales of shares of our common stock, or the availability of shares of our common stock for future sale, will have on the market price prevailing from time to time. Sales of substantial amounts of our common stock, or the perception that such sales could occur, may affect adversely prevailing market prices of our common stock. See “Risk Factors—Risks Related to this Offering and Ownership of our Common Stock.”

Alternative Sections for Selling Stockholders Resale Prospectus - 9

PLAN OF DISTRIBUTION

We are registering the shares of our common stock covered by this prospectus to permit the selling stockholders to conduct public secondary trading of these shares from time to time after the date of this prospectus. We will not receive any of the proceeds of the sale of the shares offered by this prospectus. The aggregate proceeds to the selling stockholders from the sale of the shares will be the purchase price of the shares less any discounts and commissions. Each selling stockholder reserves the right to accept and, together with their respective agents, to reject, any proposed purchase of shares to be made directly or through agents.

The selling stockholders and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock offered by this prospectus on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may occur at fixed prices, at negotiated prices, at market prices prevailing at the time of sale, or at prices related to prevailing market prices. Until our shares of our common stock are regularly traded on the New York Stock Exchange, we expect that the selling stockholders initially will sell their shares, if any shares are sold, at a price of $ per share, which is the initial public offering price per share in our initial public offering. The selling stockholders may use any one or more of the following methods when selling the shares offered by this prospectus:

•

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

•

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

•

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

•

an exchange distribution in accordance with the rules of the applicable exchange;

•

privately negotiated transactions;

•

broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

•

a combination of any such methods of sale; and

•

any other method permitted pursuant to applicable law.

In connection with these sales, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions that in turn may:

•

engage in short sales of shares of the common stock in the course of hedging their positions;

•

sell shares of the common stock short and deliver shares of the common stock to close out short positions;

•

loan or pledge shares of the common stock to broker-dealers or other financial institutions that in turn may sell shares of the common stock;

•

enter into option or other transactions with broker-dealers or other financial institutions that require the delivery to the broker-dealer or other financial institution of shares of the common stock, which the broker-dealer or other financial institution may resell under the prospectus; or

•

enter into transactions in which a broker-dealer makes purchases as a principal for resale for its own account or through other types of transactions.

Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

Alternative Sections for Selling Stockholders Resale Prospectus - 10

To our knowledge, there are currently no plans, arrangements or understandings between any selling stockholder and any underwriter, broker-dealer or agent regarding the sale of the shares by the selling stockholders.

We have applied to list the shares of our common stock on the New York Stock Exchange under the symbol “CCS.” However, we can give no assurances as to the development of liquidity or trading market for the shares.

Subject to certain exceptions, we and all of our officers and directors have agreed that, without the prior written consent of the representatives on behalf of the underwriters of the IPO, we and they will not, during the period ending days after the date of the IPO prospectus and this prospectus:

•

offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock;

•

file any registration statement with the SEC relating to the offering of any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock; or

•

enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock;

whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise. Additionally, all of our other stockholders have agreed with us not to directly or indirectly sell, offer to sell, grant any option or otherwise transfer or dispose of our common stock for days, in the case of the holder who is the selling stockholder in our initial public offering, or days, in the case of the selling stockholders named in this prospectus, in each case after the date of the IPO prospectus and this prospectus. We have agreed not to waive or otherwise modify this agreement without the prior written consent of the representatives of the underwriters of our initial public offering.

The restrictions described in the immediately preceding paragraph do not apply to the sale of shares of our common stock to the underwriters or transactions by any person other than us and our directors and officers relating to shares of our common stock or other securities acquired in the IPO or in open market transactions after completion of the IPO.

The representatives of the underwriters of the IPO, in their sole discretion, may release, or authorize us to release, as the case may be, the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice.

In compliance with the guidelines of the Financial Industry Regulatory Authority (which we refer to as “FINRA”), the aggregate maximum discount, commission or agency fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the proceeds from any offering pursuant to this prospectus and any applicable prospectus supplement.

Any shares covered by this prospectus that qualify for sale under Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The shares covered by this prospectus may also be sold to non-U.S. persons outside the U.S. in accordance with Regulation S under the Securities Act rather than under this prospectus. The shares may be sold in some states only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification is available and complied with.

Alternative Sections for Selling Stockholders Resale Prospectus - 11

LEGAL MATTERS

Alternative Sections for Selling Stockholders Resale Prospectus - 12

Shares

LOGO

Common Stock

P ROSPECTUS

, 2014

Alternate Page for Selling Stockholders Resale Prospectus - back cover

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.

Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable in connection with the sale of common stock being registered. All amounts shown are estimates, except the U.S. Securities and Exchange Commission registration fee and the Financial Industry Regulatory Authority filing fee.


Description	Amount
U.S. Securities and Exchange Commission registration fee	$	13,138
Financial Industry Regulatory Authority filing fee		15,800
New York Stock Exchange listing fee			*
Accounting fees and expenses		200,000
Legal fees and expenses			*
Transfer agent and registrar fees and expenses		10,000
Blue Sky fees and expenses		2,500
Printing expenses		100,000
Miscellaneous		2,500

Total	$		*

*	To be provided by amendment.

Item 14.

Indemnification of Directors and Officers.

General Corporation Law of the State of Delaware . Under Section 145 of the DGCL, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding (i) if such person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe such conduct was unlawful. In actions brought by or in the right of the corporation, a corporation may indemnify such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which that person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which the Court of Chancery or other such court shall deem proper. To the extent that such person has been successful on the merits or otherwise in defending any such action, suit or proceeding referred to above or any claim, issue or matter therein, he or she is entitled to indemnification for expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. The indemnification and advancement of expenses provided for or granted pursuant to Section 145 of the DGCL is not exclusive of any other rights of indemnification or advancement of expenses to which those seeking indemnification or advancement of expenses may be entitled, and a corporation may purchase and maintain insurance against liabilities asserted against any former or current director, officer, employee or agent of the

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corporation, or a person who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether or not the power to indemnify is provided by the statute.

Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for any breach of the director’s duty of loyalty to the corporation or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or for any transaction from which the director derived an improper personal benefit. Our certificate of incorporation (which we refer to as our “charter”) provides for such limitation of liability.

Our Charter and Bylaws . Each of Article EIGHTH of our charter, and Article VI of our bylaws (which we refer to as our “bylaws”), provides that we shall indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any person (which we refer to as a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (which we refer to as a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the foregoing, subject to certain exceptions, we will be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by our board of directors. We may, by action of our board of directors, provide indemnification to such employees and agents of the Company to such extent and to such effect as our board of directors shall determine to be appropriate and authorized by Delaware law.

Indemnification Agreements . In addition to the provisions of our charter and bylaws described above, we have entered into an indemnification agreement with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

Insurance . We maintain standard policies of insurance that provide coverage (i) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (ii) to us with respect to indemnification payments that we may make to such directors and officers.

Item 15.

Recent Sales of Unregistered Securities.

Our predecessor entity was formed as a Colorado limited liability company in August 2002, and we converted into a Delaware corporation pursuant to the General Corporation Law of the State of Delaware on April 30, 2013 (which we refer to as the “conversion”). Immediately prior to the conversion, each of DARO Ventures LLC and DARO Ventures II LLC held 50% of the membership interests in our predecessor entity. Upon the conversion, all of the membership interests in our predecessor entity (owned by DARO Ventures LLC and DARO Ventures II LLC) were converted into an aggregate of 5,000,000 shares of our common stock. Each of Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, own 50% of, and co-manage, each of DARO Ventures LLC and DARO Ventures II LLC.

On May 7, 2013, we completed an offering of 12,075,000 shares of our common stock at an offering price of $20.00 per share. Some of the shares of common stock offered by us were reoffered by FBR Capital Markets & Co., as the initial purchaser, to “qualified institutional buyers,” as defined in Rule 144A under the Securities

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Act of 1933, as amended (which we refer to as the “Securities Act”), in reliance on Rule 144A under the Securities Act, or to certain persons outside the United States in offshore transactions in reliance on Regulation S under the Securities Act. The remainder of the shares of common stock offered by us were offered and sold pursuant to a private placement, subject to various conditions, directly to “accredited investors,” as defined in Rule 501 under the Securities Act, with FBR Capital Markets & Co. acting as placement agent, pursuant to the exemption from registration provided in Rule 506 of Regulation D under the Securities Act. We refer to that offering as the “May 2013 private offering and private placement.” We received net proceeds from the May 2013 private offering and private placement in the amount of approximately $223.8 million. The aggregate initial purchaser’s/placement agent’s discount and placement fee was $16,205,000. We believe the issuances of our common stock in the May 2013 private offering and private placement were exempt from registration pursuant to Section 4(2) of the Securities Act, or Regulation D, Rule 144A or Regulation S, under the Securities Act, based upon the representations to us or FBR Capital Markets & Co. by each investor or investor transferee that such investor or investor transferee was at the time of issuance an “accredited investor” as defined in Rule 501(a) under the Securities Act, a “qualified institutional investor” as defined in Rule 144A under the Securities Act, or a non-U.S. person and otherwise was in compliance with the requirements for reliance on Regulation S under the Securities Act, as the case may be.

On May 5, 2014, we completed a private offering of $200 million in aggregate principal amount of senior unsecured notes due 2022 (which we refer to as the “Notes”). The Notes carry a coupon of 6.875% per annum and were issued at a price equal to 99.239% of their principal amount. The Notes offered by us were reoffered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and FBR Capital Markets & Co., as the initial purchasers, to “qualified institutional buyers,” as defined in Rule 144A under the Securities Act, in reliance on Rule 144A under the Securities Act, or to certain persons outside the United States in offshore transactions in reliance on Regulation S under the Securities Act. We refer to that offering as the “May 2014 senior notes offering.” We received net proceeds from the May 2014 senior notes offering in the amount of approximately $195 million. The aggregate initial purchaser’s discount was $3,250,000. We believe the issuances of the Notes in the May 2014 senior notes offering were exempt from registration pursuant to Rule 144A or Regulation S under the Securities Act, based upon the representations to us or the initial purchasers by each investor or investor transferee that such investor or investor transferee was at the time of issuance a “qualified institutional investor” as defined in Rule 144A under the Securities Act, or a non-U.S. person and otherwise was in compliance with the requirements for reliance on Regulation S under the Securities Act, as the case may be.

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Item 16.

Exhibits.

(a) The following exhibits are filed as part of this Registration Statement and are numbered in accordance with Item 601 of Regulation S-K:


Exhibit Number		Description

1.1		Form of Underwriting Agreement.

3.1**		Certificate of Incorporation of the Registrant, as amended.

3.2**		Bylaws of the Registrant.

4.1**		Specimen Common Stock Certificate of the Registrant.

4.2		Indenture (including forms of 6.875% Senior Notes Due 2022), dated as of May 5, 2014, among the Registrant, the Guarantors named therein, and U.S. Bank National Association, as trustee.

5.1*		Opinion of Greenberg Traurig, LLP regarding the validity of the shares of common stock being registered.

10.1†		First Amended & Restated 2013 Long-Term Incentive Plan.

10.2**†		Form of Stock Option Agreement for use with the First Amended & Restated 2013 Long-Term Incentive Plan.

10.3**†		Form of Restricted Stock Award Agreement for use with the First Amended & Restated 2013 Long-Term Incentive Plan.

10.4**†		Form of Non-Employee Director Restricted Stock Award Agreement for use with the 2013 Long-Term Incentive Plan.

10.5**†		Employment Agreement, dated as of May 7, 2013, between the Registrant and Dale Francescon.

10.6**†		Employment Agreement, dated as of May 7, 2013, between the Registrant and Robert Francescon.

10.7**		Form of Director and Officer Indemnification Agreement between the Registrant and each of its directors and officers.

10.8**		Indemnification Agreement, dated as of May 7, 2013, among the Registrant and Dale Francescon and Robert Francescon.

10.9**		Registration Rights Agreement, dated as of May 7, 2013, among the Registrant, FBR Capital Markets & Co., Daro Ventures, LLC, Daro Ventures II, LLC, Dale Francescon, and Robert Francescon.

10.10**		Sublease, dated as of April 29, 2011, between Clifton Gunderson LLP and the Registrant.

10.11**		Guaranty Agreement, dated as of November 30, 2011, between the Registrant and Commerce Bank.

10.12**		Amended and Restated Loan Agreement (Revolving Line of Credit with Construction Loan Facility, Lot Loan Facility, and Letter of Credit Facility), dated March 22, 2012, between the Registrant, Beacon Pointe, LLC, The Overlook at Tallyn’s Reach, LLC, The Wheatlands, LLC, Red Rocks Pointe, LLC, Belvedere at Ridgegate, LLC, Enclave at Boyd Ponds, LLC, The Vistas at Nor’Wood, LLC, Bradburn Village Homes, LLC, Barrington Heights, LLC, The Veranda, LLC, Lincoln Park at Ridgegate, LLC, Central Park Rowhomes, LLC, Shoenberg Farms, LLC, Montecito at Ridgegate, LLC, and Waterside at Highland Park, LLC, and Vectra Bank Colorado, National Association, as amended.

10.13**		Promissory Note, dated April 19, 2013, between Rutherford Investments, LLC and the Registrant.

10.14**		Assignment of Interest in Regency at Ridgegate, LLC, dated as of September 9, 2012, from the Registrant to Daro Ventures III, LLC.

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Exhibit Number		Description

10.15**		Assignment of Interest in Arcadia Holdings at CC Highlands One, LLC, dated as of December 31, 2012, from Daro Ventures, LLC and Daro Ventures II, LLC to the Registrant.

10.16**		Assignment of Interest in Arcadia Holdings at CC Highlands Two, LLC, dated as of December 31, 2012, from Daro Ventures, LLC and Daro Ventures II, LLC to the Registrant.

10.17**		Assignment of Interest in Waterside at Highland Park, LLC, dated as of December 31, 2012, from the Registrant to Dale and Robert Francescon.

10.18**		Assignment of Interest in Waterside at Highland Park, LLC, dated as of March 1, 2013, from Daro Ventures, LLC and Daro Ventures II, LLC to the Registrant.

10.19**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between Arcadia Holdings at Vista Ridge, LLC and the Registrant.

10.20**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between Arista Investors Colorado, LLC and the Registrant.

10.21**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between High Pointe, Inc. and the Registrant.

10.22**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between High Pointe, Inc. and Venue at Arista, LLC.

10.23		Registration Rights Agreement, dated as of May 5, 2014, among the Registrant, the Guarantors named therein, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the representative on behalf of the initial purchasers.

14.1**		Code of Business Conduct and Ethics.

16.1***		Letter from BKD, LLP.

21.1		Subsidiaries of the Registrant.

23.1		Consent of Ernst & Young, LLP.

23.2		Consent of BKD, LLP.

23.3		Consent of BDO USA, LLP.

23.4		Consent of John Burns Real Estate Consulting, LLC.

23.5*		Consent of Greenberg Traurig, LLP (included within the opinion filed as Exhibit 5.1).

24.1**		Powers of Attorney (included on the signature page of the initial filing of this Registration Statement).

*	To be provided by amendment.

**	Incorporated by reference from the initial filing of this Registration Statement (previously filed with the SEC on May 5, 2014).

***	Incorporated by reference from Amendment No. 1 to this Registration Statement (previously filed with the SEC on May 20, 2014).

†	Management contract or compensatory plan or arrangement.

(b) Financial Statement Schedules:

See our Consolidated Financial Statements starting on page F-1. All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required, are inapplicable or the information is included in the consolidated financial statements, and have therefore been omitted.

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Item 17.

Undertakings.

(a) The undersigned registrant (which we refer to as the “Registrant”) hereby undertakes

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)

To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;

(ii)

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement.

(2)

That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)

That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5)

That, for the purpose of determining liability of the Registrant under the Securities Act of 1933, as amended, to any purchaser in the initial distribution of the securities: The Registrant undertakes that in a primary offering of securities of the Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

Any preliminary prospectus or prospectus of the Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the Registrant or used or referred to by the Registrant;

(iii)

The portion of any other free writing prospectus relating to the offering containing material information about the Registrant or its securities provided by or on behalf of the Registrant; and

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(iv)

Any other communication that is an offer in the offering made by the Registrant to the purchaser.

(b) The undersigned registrant hereby further undertakes to provide to the underwriters at the closing date specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(d) The Registrant hereby further undertakes that:

(1)

For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2)

For the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenwood Village, State of Colorado, on May 29, 2014.


C ENTURY C OMMUNITIES , I NC .

By:		/s/ Dale Francescon
		Dale Francescon Chairman of the Board of Directors and Co-Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 2 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.


Signature	Title	Date
/s/ Dale Francescon Dale Francescon	Chairman of the Board of Directors and Co-Chief Executive Officer (Principal Executive Officer)	May 29, 2014


/s/ David L. Messenger	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	May 29, 2014
David L. Messenger

/s/ Robert J. Francescon	Co-Chief Executive Officer, President and Director	May 29, 2014
Robert J. Francescon

*	Director	May 29, 2014
James M. Lippman

*	Director	May 29, 2014
Keith R. Guericke

/s/ John P. Box John P. Box	Director	May 29, 2014



*By:		/s/ Dale Francescon
		Dale Francescon, Attorney-in-Fact

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EXHIBIT INDEX


Exhibit Number		Description

1.1		Form of Underwriting Agreement.

3.1**		Certificate of Incorporation of the Registrant, as amended.

3.2**		Bylaws of the Registrant.

4.1**		Specimen Common Stock Certificate of the Registrant.

4.2		Indenture (including forms of 6.875% Senior Notes Due 2022), dated as of May 5, 2014, among the Registrant, the Guarantors named therein, and U.S. Bank National Association, as trustee.

5.1*		Opinion of Greenberg Traurig, LLP regarding the validity of the shares of common stock being registered.

10.1†		First Amended & Restated 2013 Long-Term Incentive Plan.

10.2**†		Form of Stock Option Agreement for use with the First Amended & Restated 2013 Long-Term Incentive Plan.

10.3**†		Form of Restricted Stock Award Agreement for use with the First Amended & Restated 2013 Long-Term Incentive Plan.

10.4**†		Form of Non-Employee Director Restricted Stock Award Agreement for use with the 2013 Long-Term Incentive Plan.

10.5**†		Employment Agreement, dated as of May 7, 2013, between the Registrant and Dale Francescon.

10.6**†		Employment Agreement, dated as of May 7, 2013, between the Registrant and Robert Francescon.

10.7**		Form of Director and Officer Indemnification Agreement between the Registrant and each of its directors and officers.

10.8**		Indemnification Agreement, dated as of May 7, 2013, among the Registrant and Dale Francescon and Robert Francescon.

10.9**		Registration Rights Agreement, dated as of May 7, 2013, among the Registrant, FBR Capital Markets & Co., Daro Ventures, LLC, Daro Ventures II, LLC, Dale Francescon, and Robert Francescon.

10.10**		Sublease, dated as of April 29, 2011, between Clifton Gunderson LLP and the Registrant.

10.11**		Guaranty Agreement, dated as of November 30, 2011, between the Registrant and Commerce Bank.

10.12**		Amended and Restated Loan Agreement (Revolving Line of Credit with Construction Loan Facility, Lot Loan Facility, and Letter of Credit Facility), dated March 22, 2012, between the Registrant, Beacon Pointe, LLC, The Overlook at Tallyn’s Reach, LLC, The Wheatlands, LLC, Red Rocks Pointe, LLC, Belvedere at Ridgegate, LLC, Enclave at Boyd Ponds, LLC, The Vistas at Nor’Wood, LLC, Bradburn Village Homes, LLC, Barrington Heights, LLC, The Veranda, LLC, Lincoln Park at Ridgegate, LLC, Central Park Rowhomes, LLC, Shoenberg Farms, LLC, Montecito at Ridgegate, LLC, and Waterside at Highland Park, LLC, and Vectra Bank Colorado, National Association, as amended.

10.13**		Promissory Note, dated April 19, 2013, between Rutherford Investments, LLC and the Registrant.

10.14**		Assignment of Interest in Regency at Ridgegate, LLC, dated as of September 9, 2012, from the Registrant to Daro Ventures III, LLC.

10.15**		Assignment of Interest in Arcadia Holdings at CC Highlands One, LLC, dated as of December 31, 2012, from Daro Ventures, LLC and Daro Ventures II, LLC to the Registrant.

10.16**		Assignment of Interest in Arcadia Holdings at CC Highlands Two, LLC, dated as of December 31, 2012, from Daro Ventures, LLC and Daro Ventures II, LLC to the Registrant.

10.17**		Assignment of Interest in Waterside at Highland Park, LLC, dated as of December 31, 2012, from the Registrant to Dale and Robert Francescon.


Exhibit Number		Description

10.18**		Assignment of Interest in Waterside at Highland Park, LLC, dated as of March 1, 2013, from Daro Ventures, LLC and Daro Ventures II, LLC to the Registrant.

10.19**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between Arcadia Holdings at Vista Ridge, LLC and the Registrant.

10.20**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between Arista Investors Colorado, LLC and the Registrant.

10.21**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between High Pointe, Inc. and the Registrant.

10.22**		Contract for Purchase and Sale of Vacant Land, dated as of March 1, 2013, between High Pointe, Inc. and Venue at Arista, LLC.

10.23		Registration Rights Agreement, dated as of May 5, 2014, among the Registrant, the Guarantors named therein, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the representative on behalf of the initial purchasers.

14.1**		Code of Business Conduct and Ethics.

16.1***		Letter from BKD, LLP.

21.1		Subsidiaries of the Registrant.

23.1		Consent of Ernst & Young, LLP.

23.2		Consent of BKD, LLP.

23.3		Consent of BDO USA, LLP.

23.4		Consent of John Burns Real Estate Consulting, LLC.

23.5*		Consent of Greenberg Traurig, LLP (included within the opinion filed as Exhibit 5.1).

24.1**		Powers of Attorney (included on the signature page of the initial filing of this Registration Statement).

*	To be provided by amendment.

**	Incorporated by reference from the initial filing of this Registration Statement (previously filed with the SEC on May 5, 2014).

***	Incorporated by reference from Amendment No. 1 to this Registration Statement (previously filed with the SEC on May 20, 2014).

†	Management contract or compensatory plan or arrangement.

Exhibit 1.1

CENTURY COMMUNITIES, INC.

Shares of Common Stock

UNDERWRITING AGREEMENT

, 2014

FBR CAPITAL MARKETS & CO.

J.P. Morgan Securities LLC

as Representatives of the several Underwriters

c/o FBR Capital Markets & Co.

1001 19th Street North

Arlington, Virginia 22209

c/o J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Dear Sirs:

Century Communities, Inc., a Delaware corporation (the “ Company ”), and certain stockholders of the Company listed on Schedule I hereto (the “ Selling Stockholders ”), each confirms its agreement with each of the Underwriters listed on Schedule II hereto (collectively, the “ Underwriters ”), for whom FBR Capital Markets & Co. and J.P. Morgan Securities LLC are acting as representatives (in such capacity, each a “ Representative ” and collectively, the “ Representatives ”), with respect to (i) the sale by the Company and the Selling Stockholders, acting severally and not jointly, of an aggregate of [ ] shares (the “ Initial Shares ”) of Common Stock, par value $0.01 per share, of the Company (the “ Common Stock ”) in the respective numbers of shares set forth opposite the names of the Company and each Selling Stockholder in Schedule I hereto, and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Common Stock set forth opposite the names of the Underwriters in Schedule II hereto, and (ii) the grant of the option described in Section 1(b) hereof to purchase all or any part of [ ] additional shares of Common Stock to cover over-allotments (the “ Option Shares ”), if any, from the Company, to the Underwriters, acting severally and not jointly, in the respective numbers of shares of Common Stock set forth opposite the names of the Underwriters in Schedule II hereto. The Initial Shares to be purchased by the Underwriters and all or any part of the Option Shares subject to the option described in Section 1(b) hereof are hereinafter called, collectively, the “ Shares .”

The Company understands that the Underwriters propose to make a public offering of the Shares as soon as the Underwriters deem advisable after this Underwriting Agreement (the “ Agreement ”) has been executed and delivered.

The Company has filed with the Securities and Exchange Commission (the “ Commission ”), a registration statement on Form S-1 (No. 333-195678) including a related preliminary prospectus, for the registration of the Shares under the Securities Act of 1933, as amended (the “ Securities Act ”), and the rules and regulations thereunder (the “ Securities Act Regulations ”). The Company has prepared and filed such amendments to the registration statement and such amendments or supplements to the related preliminary prospectus as may have been required to the date hereof, and will file such additional amendments or supplements as may hereafter be required. The registration statement has been declared effective under the Securities Act by the Commission. The registration statement, as amended at the time

it was declared effective by the Commission (and, if the Company files a post-effective amendment to such registration statement which becomes effective prior to the Closing Time (as defined below), such registration statement as so amended), and including all information deemed to be a part of the registration statement pursuant to incorporation by reference, Rule 430A of the Securities Act Regulations or otherwise, is hereinafter called the “ Registration Statement .” Any registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is hereinafter called the “Rule 462(b) Registration Statement,” and after such filing the term “Registration Statement” shall include the 462(b) Registration Statement. Each prospectus included in the Registration Statement before it was declared effective by the Commission under the Securities Act, and any preliminary form of prospectus filed with the Commission by the Company with the consent of the Underwriters pursuant to Rule 424(a) of the Securities Act Regulations, including all information incorporated by reference in either such prospectus, is hereinafter called the “ Preliminary Prospectus .” The term “ Prospectus ” means the final prospectus, as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities Act Regulations, and any amendments thereof or supplements thereto including all information incorporated by reference therein.

The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus.

The term “ Disclosure Package ” means (i) the Preliminary Prospectus, as most recently amended or supplemented immediately prior to the Initial Sale Time (as defined herein), (ii) the Issuer Free Writing Prospectuses (as defined below), if any, identified in Schedule III hereto, and (iii) any other Free Writing Prospectus (as defined below) that the parties hereto shall hereafter expressly agree to treat as part of the Disclosure Package.

The term “ Issuer Free Writing Prospectus ” means any issuer free writing prospectus, as defined in Rule 433 of the Securities Act Regulations. The term “Free Writing Prospectus” means any free writing prospectus, as defined in Rule 405 of the Securities Act Regulations.

Each Selling Stockholder has executed and delivered a Custody Agreement and a Power of Attorney in the form attached hereto as Exhibit A (collectively, the “ Custody Agreement and Power of Attorney ”), pursuant to which each Selling Stockholder that is a party thereto has placed the Initial Shares to be sold by it pursuant to this Agreement in custody and appointed the persons designated therein as attorneys in fact (the “ Attorneys ”) with the authority to execute and deliver this Agreement on behalf of such Selling Stockholder and to take certain other actions with respect thereto and hereto.

The Company and each of the Selling Stockholders, as applicable, and the Underwriters agree as follows:

1. Sale and Purchase .

(a) Initial Shares. Upon the basis of the warranties and representations and other terms and conditions herein set forth, at the purchase price per share of Common Stock of $[ ], the Company agrees to sell to the Underwriters the number of Initial Shares set forth in Schedule I opposite its name and each Selling Stockholder agrees to sell to the Underwriters the number of Initial Shares set forth in Schedule I opposite such Selling Stockholder’s name, and each Underwriter agrees, severally and not jointly, to purchase from the Company and the Selling Stockholders the number of Initial Shares set forth in Schedule II opposite such Underwriter’s name, plus any additional number of Initial Shares which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof, subject in each case, to such adjustments among the Underwriters as the Representatives in their sole discretion shall make to eliminate any sales or purchases of fractional shares.

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(b) Option Shares . In addition, upon the basis of the warranties and representations and other terms and conditions herein set forth, at the purchase price per share of Common Stock set forth in paragraph (a) above, the Company hereby grants an option to the Underwriters, acting severally and not jointly, to purchase from the Company, all or any part of the Option Shares, plus any additional number of Option Shares which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time within such 30-day period only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Shares upon notice by the Representatives to the Company setting forth the number of Option Shares as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Shares. Any such time and date of delivery (an “ Option Closing Time ”) shall be determined by the Representatives, but shall not be later than three full business days (or earlier, without the consent of the Company, than two full business days) after the exercise of such option, nor in any event prior to the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of the Option Shares, the Company will sell that number of Option Shares then being purchased, and each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Shares then being purchased as the number of Initial Shares set forth in Schedule II opposite the name of such Underwriter bears to the total number of Initial Shares, subject in each case to such adjustments among the Underwriters as in their sole discretion shall make to eliminate any sales or purchases of fractional shares.

2. Payment and Delivery .

(a) Initial Shares . The Initial Shares to be purchased by each Underwriter hereunder and, to the extent the Initial Shares exist in definitive form, in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company and the Selling Stockholders shall be delivered by or on behalf of the Company and the Selling Stockholders to the Representatives, including, at the option of the Representatives, through the facilities of The Depository Trust Company (“ DTC ”) for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified to the Representatives by the Company and each of the Selling Stockholders, upon at least forty-eight hours’ prior notice. To the extent the Initial Shares exist in definitive form, the Company will cause the certificates representing the Initial Shares to be made available for checking and packaging not later than 1:00 p.m. New York City time on the business day prior to the Closing Time (as defined below) with respect thereto at the office of Gibson, Dunn & Crutcher, 2029 Century Park East, Los Angeles, California 90067, or at the office of DTC or its designated custodian, as the case may be (the “ Designated Office ”). The time and date of the delivery of the Initial Shares and payment shall be 9:30 a.m., New York City time, on the third (fourth, if the determination of the purchase price of the Initial Shares occurs after 4:30 p.m., New York City time) business day after the date hereof (unless another time and date shall be agreed to by the Representatives and the Company). The time and date at which such delivery and payment are actually made is hereinafter called the “ Closing Time .”

(b) Option Shares . Any Option Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company shall be delivered by or on behalf of the Company to the Representatives, including, at the option of the Representatives, through the facilities of DTC for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified to the Representatives by the Company, upon at least forty-eight hours’ prior notice. The Company will cause the certificates representing the Option Shares to be made available for checking and packaging at least twenty-four hours prior to the Option Closing Time with respect thereto

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at the Designated Office. The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on the date specified by the Representatives in the notice given by the Representatives to the Company of the Underwriters’ election to purchase such Option Shares or on such other time and date as the Company and the Representatives may agree upon in writing.

3. Representations and Warranties of the Company .

The Company represents and warrants to the Underwriters and agrees with each Underwriter as of the date hereof, the Initial Sale Time (as defined below), as of the Closing Time and as of any Option Closing Time (if any) that:

(a) the Company has an authorized capitalization as set forth in both the Prospectus and the Disclosure Package; the outstanding shares of capital stock of the Company and each subsidiary of the Company (each, a “ Subsidiary ”) have been duly and validly authorized and issued and are fully paid and non-assessable, and all of the outstanding shares of capital stock of the Subsidiaries are directly or indirectly owned of record and beneficially by the Company and all of the membership interests in each limited liability company Subsidiary have been duly and validly authorized and issued and fully paid; except as disclosed in both the Prospectus and the Disclosure Package, there are no outstanding (i) securities or obligations of the Company or any of the Subsidiaries convertible into or exchangeable for any capital stock of the Company or any such Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from the Company or any such Subsidiary any such capital stock or any such convertible or exchangeable securities or obligations, or (iii) obligations of the Company or any such Subsidiary to issue any shares of capital stock, any such convertible or exchangeable securities or obligation, or any such warrants, rights or options;

(b) each of the Company and the Subsidiaries (all of which are named in Exhibit 21 to the Registration Statement) has been duly incorporated or organized and is validly existing as a corporation or a limited liability company in good standing under the laws of its respective jurisdiction of incorporation or organization with full corporate or other power and authority to own its respective properties and to conduct its respective businesses as described in each of the Registration Statement, the Prospectus and the Disclosure Package, and, in the case of the Company, to execute and deliver this Agreement and to consummate the transactions contemplated herein;

(c) the Company and all of the Subsidiaries are duly qualified or licensed and are in good standing in each jurisdiction in which they conduct their respective businesses or in which they own or lease real property or otherwise maintain an office and in which the failure, individually or in the aggregate, to be so qualified or licensed would reasonably be expected to have a material adverse effect on (i) the business, condition (financial or otherwise), results of operations or prospects of the Company and the Subsidiaries, taken as a whole, or (ii) the consummation of the other transactions contemplated by the Disclosure Package or the Prospectus (any such effect or change, where the context so requires is hereinafter called a “ Material Adverse Effect ” or “ Material Adverse Change ”); except as disclosed in both the Prospectus and the Disclosure Package, no Subsidiary is prohibited or restricted, directly or indirectly, from paying dividends to the Company, or from making any other distribution with respect to such Subsidiary’s capital stock or from repaying to the Company or any other Subsidiary any amounts which may from time to time become due under any loans or advances to such Subsidiary from the Company or such other Subsidiary, or from transferring any such Subsidiary’s property or assets to the Company or to any other Subsidiary; other than as disclosed in both the Prospectus and the Disclosure Package, the Company does not own, directly or indirectly, any capital stock or other equity securities of any other corporation or any ownership interest in any partnership, joint venture or other association;

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(d) the Company is not in breach of, or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default under) (i) its certificate of incorporation, bylaws, or other organizational documents (collectively, the “ Charter Documents ”), (ii) the performance or observance of any obligation, agreement, covenant or condition contained in any contract, license, indenture, mortgage, deed of trust, bank loan or credit agreement or other agreement or instrument to which the Company is a party or by which it or its properties may be bound or affected, or (iii) any federal, state, local or foreign law, regulation or rule or any decree, judgment, permit or order (each, a “ Law ”) applicable to the Company, except, in the case of clauses (ii) and (iii) above, for such breaches or defaults which would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.;

(e) none of the Subsidiaries is in breach of, or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default under) (i) its Charter Documents, (ii) the performance or observance of any obligation, agreement, covenant or condition contained in any contract, license, indenture, mortgage, deed of trust, bank loan or credit agreement or other agreement or instrument to which such Subsidiary is a party or by which any of them or their respective properties may be bound or affected or (iii) any Law applicable to any Subsidiary, except, in the case of clauses (ii) and (iii) above, for such breaches or defaults which would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;

(f) the execution, delivery and performance of this Agreement, and the issuance, sale and delivery of the Shares by the Company, the use of the proceeds from the sale of the Shares as described in the Disclosure Package and the Prospectus and the consummation by the Company of the transactions contemplated hereby and thereby, and the compliance by the Company and the Subsidiaries with the terms and provisions hereunder and thereunder will not (A) conflict with, or result in any breach of, or constitute a default under (nor constitute any event which with notice, lapse of time, or both would constitute a breach of, or default under), (i) any provision of the Charter Documents of the Company or any Subsidiary, or (ii) any provision of any contract, license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by which it or its respective properties may be bound or affected, or under any Law applicable to the Company or any Subsidiary, except in the case of this clause (ii) for such breaches or defaults which have been validly waived or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or (B) result in the creation or imposition of any material lien, charge, claim or encumbrance upon any property or asset of the Company or any Subsidiary;

(g) this Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the other parties hereto, is a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general equitable principles, and except to the extent that the indemnification and contribution provisions of Section 11 hereof may be limited by federal or state securities laws and public policy considerations in respect thereof;

(h) no approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency (collectively, “ Governmental Authority ”) is required in connection with the Company’s execution, delivery and performance of this Agreement, its consummation of the transactions contemplated herein, and its sale and delivery of the Shares, other than (i) such as have been obtained, or will have been obtained at the Closing Time or the relevant Option Closing Time, as the case may be, under the Securities Act and/or the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), (ii) such approvals as have been obtained in connection with the approval of the quotation of the Shares on the New York Stock Exchange

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(the “ NYSE ”) and (iii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered by the Underwriters;

(i) each of the Company and the Subsidiaries has all necessary licenses, authorizations, consents and approvals and has made all necessary filings required under any federal, state, local or foreign law, regulation or rule, and has obtained all necessary authorizations, consents and approvals from other persons, required in order to conduct their respective businesses as described in both the Prospectus and the Disclosure Package, except to the extent that any failure to have any such licenses, authorizations, consents or approvals, to make any such filings or to obtain any such authorizations, consents or approvals would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; neither the Company nor any of the Subsidiaries is required by any applicable law to obtain accreditation or certification from any governmental agency or authority in order to provide the products and services which it currently provides or which it proposes to provide as set forth in both the Prospectus and the Disclosure Package; neither the Company nor any of the Subsidiaries is in violation of, in default under, or has received any notice regarding a possible violation, default or revocation of any such license, authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Company or any of the Subsidiaries the effect of which would reasonably be expected to result in a Material Adverse Change; and no such license, authorization, consent or approval contains a materially burdensome restriction that is not adequately disclosed in each of the Registration Statement, the Prospectus and the Disclosure Package;

(j) each of the Registration Statement and any Rule 462(b) Registration Statement has become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission; and the Company has complied to the Commission’s satisfaction with any request on the part of the Commission for additional information;

(k) the Preliminary Prospectus when filed and the Registration Statement as of each effective date and as of the date hereof complied or will comply, and the Prospectus and any further amendments or supplements to the Registration Statement, the Preliminary Prospectus or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, comply, in all material respects with the requirements of the Securities Act and the Securities Act Regulations;

(l) the Registration Statement, as of its effective date and as of the date hereof, did not, does not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Preliminary Prospectus does not, and the Prospectus or any amendment or supplement thereto will not, as of the applicable filing date, the date hereof and at the Closing Time and on each Option Closing Time (if any), contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in or omitted from the Registration Statement, the Preliminary Prospectus or the Prospectus in reliance upon and in conformity with the information concerning the Underwriters and furnished in writing by or on behalf of the Underwriters through the Representatives to the Company expressly for use therein (that information being limited to that described in the last sentence of the first paragraph of Section 11(c) hereof);

(m) as of :00 [am] [pm] (Eastern time) on the date of this Agreement (the “ Initial Sale Time ”), the Disclosure Package did not, and at the time of each sale of Shares and at the Closing Time and each Option Closing Time, the Disclosure Package will not, contain any untrue statement of a

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material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; as of its issue date or date of first use and at all subsequent times through the Initial Sale Time, each Issuer Free Writing Prospectus did not, and at the time of each sale of Shares and at the Closing Time and each Option Closing Time, each such Issuer Free Writing Prospectus will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in or omitted from the Disclosure Package in reliance upon and in conformity with the information concerning the Underwriters and furnished in writing by or on behalf of the Underwriters through the Representatives to the Company expressly for use therein (that information being limited to that described in the last sentence of the first paragraph of Section 11(c) hereof);

(n) each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Shares did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified;

(o) the Company is eligible to use Free Writing Prospectuses in connection with this offering pursuant to Rules 164 and 433 under the Securities Act; any Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act Regulations has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the Securities Act Regulations; and each Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act Regulations or that was prepared by or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations;

(p) except for the Issuer Free Writing Prospectuses identified in Schedule III hereto, and any electronic road show relating to the public offering of shares contemplated herein, the Company has not prepared, used or referred to, and will not, without the prior consent of the Representatives, prepare, use or refer to, any Free Writing Prospectus;

(q) the Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectuses (to the extent any such Issuer Free Writing Prospectus was required to be filed with the Commission) delivered to the Underwriters for use in connection with the public offering of the Shares contemplated herein have been and will be identical to the versions of such documents transmitted to the Commission for filing via the Electronic Data Gathering Analysis and Retrieval System (“ EDGAR ”), except to the extent permitted by Regulation S-T;

(r) the Company filed the Registration Statement with the Commission before using any Issuer Free Writing Prospectus; and each Issuer Free Writing Prospectus was preceded or accompanied by the most recent Preliminary Prospectus satisfying the requirements of Section 10 under the Securities Act, which Preliminary Prospectus included an estimated price range.

(s) from the time of initial confidential submission of a registration statement relating to the Shares with the Commission through the date hereof, the Company has been and is an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act. The Company (i) has not alone engaged in any Testing-the-Waters Communications other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of

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Rule 501 under the Securities Act and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications.

(t) other than as set forth in both the Disclosure Package and the Prospectus, there are no actions, suits, proceedings, inquiries or investigations pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary or any of their respective officers and directors or to which the properties, assets or rights of any such entity are subject, at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority, arbitral panel or agency which would reasonably be expected to result in a judgment, decree, award or order having a Material Adverse Effect;

(u) the consolidated financial statements and pro forma financial statements of the Company or any predecessor business or entity acquired by the Company, including the notes thereto, included in (or incorporated by reference into) each of the Registration Statement, the Prospectus and the Disclosure Package (i) fairly present, in all material respects, the consolidated financial position of the entities to which such financial statements relate (the “ Covered Entities ”) as of the dates indicated and the consolidated results of operations and changes in financial position and cash flows of the Covered Entities for the periods specified, (ii) correctly reflect and disclose all extraordinary items to the extent required by United States generally accepted accounting principles (“ GAAP ”), (iii) have been prepared in conformity with GAAP applied on a consistent basis during the periods involved and in accordance with Regulation S-X promulgated by the Commission; the financial statement schedules included in (or incorporated by reference into) the Registration Statement and the amounts in both the Prospectus and the Disclosure Package under the captions “Summary of Selected Financial Data” and “Selected Financial Data” fairly present in all material respects the information shown therein and have been compiled on a basis consistent with the financial statements included in each of the Registration Statement, the Prospectus and the Disclosure Package; no other financial statements or supporting schedules are required to be included in the Registration Statement, the Prospectus or the Disclosure Package; the unaudited pro forma financial information (including the related notes) included in each of the Registration Statement, the Prospectus and the Disclosure Package complies as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Act Regulations, and management of the Company believes that the assumptions underlying the pro forma adjustments are reasonable; such pro forma adjustments have been properly applied to the historical amounts in the compilation of the information and such information fairly presents in all material respects with respect to the Company and the Subsidiaries, the financial position, results of operations and other information purported to be shown therein at the respective dates and for the respective periods specified; and no other pro forma financial information is required to be included in (or incorporated by reference into) the Registration Statement, the Prospectus or the Disclosure Package;

(v) Ernst & Young, LLP, BKD, LLP and BDO USA, LLP, whose reports on the consolidated financial statements of the Company and the Subsidiaries are filed with the Commission as part of each of the Registration Statement, the Prospectus and the Disclosure Package or are incorporated by reference therein, and any other accounting firm that has certified Company financial statements and delivered its reports with respect thereto, are, and were during the periods covered by their reports, independent public accountants as required by the Securities Act and the Securities Act Regulations are registered with the Public Company Accounting Oversight Board;

(w) subsequent to the respective dates as of which information is given in each of the Registration Statement, the Prospectus and the Disclosure Package, and except as may be otherwise stated in such documents, there has not been (A) any Material Adverse Change or any development that would reasonably be expected to result in a Material Adverse Change, whether or not arising in the ordinary course of business, (B) any transaction that is material to the Company and the Subsidiaries taken as a

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whole, contemplated or entered into by the Company or any of the Subsidiaries, (C) any obligation, contingent or otherwise, directly or indirectly incurred by the Company or any Subsidiary that is material to the Company and Subsidiaries taken as a whole or (D) any dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock;

(x) the Shares conform in all material respects to the description thereof contained in the Registration Statement, the Prospectus and the Disclosure Package; this Agreement conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus;

(y) except as disclosed in both the Prospectus and the Disclosure Package, there are no persons with registration or other similar rights to have any equity or debt securities, including securities which are convertible into or exchangeable for equity securities, registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act, (i) except for certain of the Selling Stockholders, to the extent of the equity securities to be offered and sold by such Selling Stockholders as contemplated by this Agreement, and (ii) except for those registration or similar rights which have been waived with respect to the offering contemplated by this Agreement, all of which registration or similar rights described in clauses (i) and (ii) are fairly summarized in all material respects in both the Prospectus and the Disclosure Package;

(z) the Shares have been duly authorized and, when issued and duly delivered against payment therefor as contemplated by this Agreement, will be validly issued, fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, and the issuance and sale of the Shares by the Company is not subject to preemptive or other similar rights arising by operation of law, under the organizational documents of the Company or under any agreement to which the Company or any Subsidiary is a party or otherwise;

(aa) the Shares have been approved for listing on the NYSE, subject to official notice of issuance; the Company has taken all necessary actions to ensure that, upon and at all times after the NYSE shall have approved the Shares for listing, it will be in compliance with all applicable corporate governance requirements set forth in the NYSE’s listing rules that are then in effect;

(bb) none of the Company, any Subsidiary or any of their respective directors, officers, representatives or affiliates has taken, and none will take, directly or indirectly, any action which is designed to, which has constituted, or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares;

(cc) none of the Company, any of the Subsidiaries or any of their respective affiliates (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act, or the rules and regulations thereunder (the “ Exchange Act Regulations ”), or (ii) directly, or indirectly through one or more intermediaries, controls or has any other association with any member firm of Financial Industry Regulatory Authority (“ FINRA ”);

(dd) any certificate signed by any officer of the Company or any Subsidiary delivered to the Representatives or to counsel for the Underwriters pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby;

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(ee) the form of certificate used to evidence the Common Stock complies in all material respects with all applicable statutory requirements, with any applicable requirements of the organizational documents of the Company and the requirements of the NYSE;

(ff) each of the Company and the Subsidiaries has legal, valid and defensible title to all assets and properties reflected as owned by it in the Disclosure Package and the Prospectus (whether through fee ownership, mineral estates or similar rights of ownership), in each case free and clear of all liens, security interests, pledges, charges, encumbrances, mortgages and defects, except such as are disclosed in both the Prospectus and the Disclosure Package or as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and any real property or personal property held under lease by the Company or any Subsidiary is held under a lease that is valid, existing and enforceable by the Company or such Subsidiary, with such exceptions as are disclosed in the Disclosure Package and the Prospectus or as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any such lease;

(gg) the descriptions in each of the Registration Statement, the Prospectus and the Disclosure Package of the legal or governmental proceedings, contracts, leases and other legal documents therein described present fairly in all material respects the information required to be shown, and there are no legal or governmental proceedings, contracts, leases, or other documents of a character required to be described in the Registration Statement, the Prospectus or the Disclosure Package or to be filed as exhibits to the Registration Statement which are not described or filed as required; all agreements between the Company or any of the Subsidiaries and third parties expressly referenced in both the Prospectus and the Disclosure Package are legal, valid and binding obligations of the Company or one or more of the Subsidiaries, enforceable against the Company or its Subsidiaries, as applicable, and, to the Company’s knowledge, the other party thereto, in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles;

(hh) except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and each Subsidiary owns or possesses such licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights, software and design licenses, trade secrets, manufacturing processes, other intangible property rights and know-how (collectively “ Intangibles ”), as are necessary to entitle the Company and each Subsidiary to conduct the Company’s and each Subsidiary’s business as described in the Prospectus and the Disclosure Package, and neither the Company nor any Subsidiary has received written notice of any infringement of or conflict with (and, upon reasonable inquiry, none of the Company or any Subsidiary knows of any such infringement of or conflict with) asserted rights of others with respect to any Intangibles;

(ii) (x) the Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared, (ii) have been evaluated for effectiveness as of the end of the last fiscal period covered by the Registration Statement, and (iii) are effective in all material respects to perform the functions for which they were established, and (y) the Company is not aware of (a) any significant deficiency or material weakness in the design or operation of its internal controls over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information to management and the Board of Directors, or (b) any fraud, whether or not

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material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. Since the most recent evaluation of the Company’s disclosure controls and procedures described above, there have been no significant changes in internal control over financial reporting or in other factors that could significantly affect internal control over financial reporting;

(jj) the Company maintains systems of internal accounting controls sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in each of the Disclosure Package and the Prospectus, (i) there are no material weaknesses or significant deficiencies in the Company’s internal controls over financial reporting and (ii) there has been no material change in the Company’s internal controls over financial reporting since the respective dates of the information given in the Disclosure Package and the Prospectus.;

(kk) the Company and each Subsidiary carries, or is covered by, insurance (issued by insurers of recognized financial responsibility to the knowledge of the Company) in such amounts and covering such risks as is reasonably appropriate for the conduct of their respective businesses and the value of the assets to be held by them upon the consummation of the transactions contemplated by both the Disclosure Package and the Prospectus and as is customary for companies engaged in businesses similar to the business of the Company, all of which insurance is in full force and effect;

(ll) neither the Company nor any of the Subsidiaries is in violation, or has received notice of any violation with respect to, any applicable environmental, safety or similar law applicable to the business of the Company or any of the Subsidiaries; the Company and the Subsidiaries have received all permits, licenses or other approvals required of them under applicable federal and state occupational safety and health and environmental laws and regulations to conduct their respective businesses, and the Company and the Subsidiaries are in compliance with all terms and conditions of any such permit, license or approval, except any such violation of law or regulation, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change;

(mm) neither the Company nor any Subsidiary is in violation of or has received notice of any violation with respect to any federal or state law relating to discrimination in the hiring, promotion or pay of employees, nor any applicable federal or state wages and hours law, nor any state law precluding the denial of credit due to the neighborhood in which a property is situated, the violation of any of which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(nn) the Company and each of the Subsidiaries are in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ ERISA ”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company or any of the Subsidiaries would have any liability; the Company and each of the Subsidiaries have not incurred and do not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Section 412 or 4971 of the Internal

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Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (“ Code ”); and each “pension plan” for which the Company and each of its Subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification;

(oo) neither the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any officer, director, agent or employee purporting to act on behalf of the Company or any of the Subsidiaries has at any time, directly or indirectly, (i) made any contributions to any candidate for political office, or failed to disclose fully any such contributions, in violation of law, (ii) made any payment to any state, federal or foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or allowed by applicable law (including the Foreign Corrupt Practices Act of 1977, as amended (the “ FCPA ”), (iii) made any payment outside the ordinary course of business to any investment officer or loan broker or person charged with similar duties of any entity to which the Company or any of the Subsidiaries sells or from which the Company or any of the Subsidiaries buys loans or servicing arrangements for the purpose of influencing such agent, officer, broker or person to buy loans or servicing arrangements from or sell loans to the Company or any of the Subsidiaries, or (iv) engaged in any transactions, maintained any bank account or used any corporate funds except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Company and the Subsidiaries;

(pp) except as otherwise disclosed in both the Prospectus and the Disclosure Package, there are no outstanding loans, extensions of credit or advances or guarantees of indebtedness by the Company or any Subsidiary to or for the benefit of any of the officers, directors, affiliates or representatives of the Company or any Subsidiary or any of the members of the families of any of them;

(qq) neither the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any employee or agent of the Company or any of the Subsidiaries, has made any payment of funds of the Company or of any Subsidiary or received or retained any funds in violation of any law, rule or regulation or of a character required to be disclosed in the Prospectus or the Disclosure Package;

(rr) all securities issued by the Company, any of the Subsidiaries or any trusts established by the Company or any Subsidiary, have been or will be issued and sold in compliance with (i) all applicable federal and state securities laws, (ii) the laws of the applicable jurisdiction of incorporation of the issuing entity and, (iii) to the extent applicable to the issuing entity, the requirements of the NYSE;

(ss) (i) the Company knows of no violation of any municipal, state or federal law, rule or regulation (including those pertaining to environmental matters) concerning the properties of the Company or any Subsidiary or any part thereof which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (B) each of parcel of real property of the Company or a Subsidiary complies with all applicable zoning laws, ordinances, regulations and deed restrictions or other covenants in all material respects and, if and to the extent there is a failure to comply, such failure does not materially impair the value of any of such property and will not result in a forfeiture or reversion of title; (C) neither the Company nor any Subsidiary has received from any Governmental Authority any written notice of any condemnation of or zoning change affecting such property or any part thereof, and neither the Company nor any Subsidiary knows of any such condemnation or zoning change which is threatened and which if consummated would reasonably be expected to have a Material Adverse Effect; (D) all liens, charges, encumbrances, claims, or restrictions on or affecting the properties and assets of the Company or any of the Subsidiaries that are required to be described in the Prospectus (or, the most recent Preliminary Prospectus) are disclosed therein; and (E) no lessee of any portion of any of the real property of the Company or any Subsidiary is in default under any of the leases governing such property

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and there is no event which, but for the passage of time or the giving of notice or both would constitute a default under any of such leases, except such defaults that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(tt) except as described in both the Disclosure Package and the Prospectus or as would not in the aggregate reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) neither the Company nor any Subsidiary is in violation of any Law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, “ Hazardous Materials ”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “ Environmental Laws ”), (ii) the Company and each Subsidiary have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are no pending or, to the knowledge of the Company or any Subsidiary, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or Proceedings relating to any Environmental Law against the Company or any Subsidiary, and (iv) to the knowledge of the Company or any Subsidiary, there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or a Proceeding by any private party or Governmental Authority, against or affecting the Company or any Subsidiary relating to Hazardous Materials or any Environmental Laws;

(uu) except as disclosed in the Disclosure Package and the Prospectus, none of the Company or any predecessor or, to the knowledge of the Company, any former owner of any of the Company’s or any predecessor’s real property has received any notice from any Governmental Authority or any other person, nor is there any pending or threatened Proceeding, alleging that the Company has any liability under any Environmental Law or is not in compliance with any Environmental Law;

(vv) in connection with this offering, the Company has not offered and will not offer its Common Stock or any other securities convertible into or exchangeable or exercisable for Common Stock in a manner in violation of the Securities Act; and the Company has not distributed and will not distribute any offering material in connection with the offer and sale of the Shares except for the Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus or the Registration Statement;

(ww) the Company has not incurred any liability for any finder’s fees or similar payments in connection with the transactions herein contemplated;

(xx) no relationship, direct or indirect, exists between or among the Company or any of the Subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of the Subsidiaries on the other hand, which is required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Prospectus or the Disclosure Package, which is not so described;

(yy) neither the Company nor any of the Subsidiaries is and, after giving effect to the offering and sale of the Shares and the application of the net proceeds therefrom as described in both the Disclosure Package and the Prospectus under the caption “Use of Proceeds”, will be an “investment company” or an entity “controlled” by an “investment company” (as such terms are defined in the Investment Company Act of 1940, as amended and the rules and regulations promulgated thereunder (the “ Investment Company Act ”));

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(zz) there are no existing or, to the knowledge of the Company, threatened labor disputes with the employees of the Company or any of the Subsidiaries which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(aaa) the Company, the Subsidiaries and, to the knowledge of the Company, any of the officers and directors of the Company and the Subsidiaries, in their capacities as such, are, and at the Closing Time and any Option Closing Time will be, in compliance in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder that are effective and applicable to the Company as of the Closing Time and the Option Closing Time; the Company (i) complies in all material respects with the Privacy Statements (as defined below) as applicable to any given set of personal information collected by the Company from Individuals (as defined below), (ii) complies in all material respects with all applicable federal, state, local and foreign laws and regulations regarding the collection, retention, use, transfer or disclosure of personal information and (iii) takes reasonable measures to protect and maintain the confidential nature of the personal information provided to the Company by Individuals in accordance with the terms of the applicable Privacy Statements; to the Company’s knowledge, no claims or controversies have arisen regarding the Privacy Statements or the implementation thereof. As used herein, “ Privacy Statements ” means, collectively, any and all of the Company’s privacy statements and policies published on Company websites or products or otherwise made available by the Company regarding the collection, retention, use and distribution of the personal information of individuals, including, without limitation, from visitors or users of any Company websites or products (“ Individuals ”);

(bbb) the Company’s email direct marketing activities have not violated, in any material respect, the CAN SPAM Act or any other federal or state law or regulation applicable to electronic direct marketing;

(ccc) none of the Company nor any of the Subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of such entities is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the FCPA, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and the Subsidiaries and, to the knowledge of the Company, their affiliates have conducted their businesses in compliance with the FCPA;

(ddd) neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any of its affiliates or any director, officer, agent or employee of, or other person associated with or acting on behalf of, the Company, has violated the Bank Secrecy Act, as amended, the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001 or the rules and regulations promulgated under any such law or any successor law;

(eee) the operations of the Company and its Subsidiaries and, to the Company’s knowledge, its affiliates are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Money Laundering Control Act of 1986, as amended, any other money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”), and no action, suit or proceeding by or before any court or governmental agency,

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authority or body or any arbitrator involving the Company or any of its Subsidiaries, or, to the Company’s knowledge, any of its affiliates, with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened;

(fff) each of the Company and its Subsidiaries, and, to the Company’s knowledge, each of their affiliates and any director, officer, agent or employee of, or other person associated with or acting on behalf of, the Company has acted at all times in compliance with applicable Export and Import Laws (as defined below) and there are no claims, complaints, charges, investigations or proceedings pending or expected or, to the knowledge of the Company, threatened between the Company or any of its Subsidiaries and any Governmental Authority under any Export or Import Laws. The term “ Export and Import Laws ” means the Arms Export Control Act, the International Traffic in Arms Regulations, the Export Administration Act of 1979, as amended, the Export Administration Regulations, and all other laws and regulations of the United States government regulating the provision of services to non-U.S. parties or the export and import of articles or information from and to the United States of America, and all similar laws and regulations of any foreign government regulating the provision of services to parties not of the foreign country or the export and import of articles and information from and to the foreign country to parties not of the foreign country; and

(ggg) neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any director, officer, employee, agent, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“ OFAC ”) or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council (“ UNSC ”), the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority (collectively, “ Sanctions ”), nor is the Company, any of its Subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan and Syria (each, a “ Sanctioned Country ”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.

4. Representations and Warranties of the Selling Stockholders .

Each Selling Stockholder, severally and not jointly, represents and warrants to the Underwriters that as of the date hereof, the Initial Sale Time and as of the Closing Time, that:

(a) such Selling Stockholder has full power and authority to enter into this Agreement and the Custody Agreement and Power of Attorney to which it is a party. All authorizations and consents necessary for the execution and delivery by such Selling Stockholder of the Custody Agreement and Power of Attorney, and for the execution of this Agreement on behalf of such Selling Stockholder, have been given. Each of the Custody Agreement and Power of Attorney and this Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Stockholder and constitutes a valid and binding agreement of such Selling Stockholder and is enforceable against such Selling Stockholder in

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accordance with the terms thereof and hereof, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general equitable principles, and except to the extent that the indemnification and contribution provisions of Section 11 hereof may be limited by federal or state securities laws and public policy considerations in respect thereof;

(b) such Selling Stockholder now has, and immediately prior to the Closing Time will have, (i) a valid “security entitlement” (within the meaning of Section 8-501 of the New York Uniform Commercial Code (the “New York UCC”)) in respect of the Shares to be sold by such Selling Stockholder hereunder, in each case free and clear of all liens, encumbrances and claims whatsoever (other than pursuant to the Custody Agreement and Power of Attorney), and (ii) full legal power and authority to enter into this Agreement and to sell, transfer and deliver a security entitlement in respect of such Shares to the Underwriters hereunder, and to make the representations, warranties and agreements made by such Selling Stockholder herein. Upon (I) payment for the Shares to be sold by such Selling Stockholder pursuant to this Agreement, (II) delivery of such Shares, as directed by the Underwriters, to Cede & Co. or such other nominee as may be designated by DTC, (III) registration of such Shares in the name of DTC, Cede & Co. or such other nominee, (IV) DTC indicating by book entries on its books that security entitlements with respect to such Shares have been credited to the Underwriters’ securities accounts, the Underwriters will acquire a valid “security entitlement” (within the meaning of Section 8-501 of the New York UCC) with respect to such Shares and no action based on an “adverse claim” (as defined in Section 8-102 of the New York UCC) may be asserted against the Underwriters with respect to such security entitlement, and (IV) DTC shall be a “protected purchaser” of such Shares within the meaning of Section 8-303 of the New York UCC (assuming that (A) none of DTC, Cede & Co., any such other nominee or any Underwriter will have “notice of any adverse claim” to any of such Shares within the meaning of Section 8-105 of the New York UCC, (B) DTC will be registered as a “clearing corporation” within the meaning of Section 8-102 of the UCC, and (C) the jurisdiction of DTC is New York);;

(c) the performance of this Agreement by such Selling Stockholder and the consummation by such Selling Stockholder of the transactions contemplated herein will not conflict with, or result in any breach of, or constitute a default under (nor constitute any event which with notice, lapse of time, or both would constitute a breach of, or default under), (i) any provision of the certificate or articles of incorporation, other charter or similar constitutive documents, or the bylaws of such Selling Stockholder, (ii) any provision of any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which such Selling Stockholder is a party or by which it or its properties may be bound or affected, or (iii) any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to such Selling Stockholder; or result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of the Selling Stockholder (other than pursuant to the Custody Agreement and Power of Attorney);

(d) no approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency having jurisdiction over such Selling Stockholder or any of its properties is required in connection with such Selling Stockholder’s execution, delivery and performance of this Agreement, its consummation of the transactions contemplated herein, and its sale and delivery of the Shares, other than (i) such as have been obtained, or will have been obtained at the Closing Time under the Securities Act and the Exchange Act, (ii) such approvals as have been obtained in connection with the approval of the listing of the Shares on the NYSE and (iii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered by the Underwriters;

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(e) such Selling Stockholder (i) is familiar with the Registration Statement, the Prospectus and the Disclosure Package and has no knowledge of any material fact, condition or information not disclosed in the Registration Statement, the Prospectus or the Disclosure Package which has had or may have a Material Adverse Effect and (ii) is not prompted to sell Shares by any information concerning the Company which is not set forth in the Registration Statement, the Prospectus or the Disclosure Package;

(f) each of the Registration Statement, the Prospectus and the Disclosure Package (as amended or supplemented, if the Company shall have filed with the Commission any amendment or supplement thereto) (i) as of its effective date and as of the date hereof, with respect to the Registration Statement, (ii) on its date, at the time of filing the Prospectus pursuant to Rule 424(b) and at the Closing Time, with respect to the Prospectus, and (iii) as of the Initial Sale Time, with respect to the Disclosure Package, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus or the Disclosure Package, in light of the circumstances under which they were made) not misleading; provided , however , that this representation and warranty shall only apply to any statements or omissions in the Registration Statement, the Prospectus and the Disclosure Package made in reliance upon and in conformity with written information furnished by or on behalf of such Selling Stockholder specifically for use in the Registration Statement, the Prospectus or the Disclosure Package, together with any amendment or supplement thereto used by the Company or any Underwriter, as the case may be, it being understood and agreed that the only such information furnished by or on behalf of such Selling Stockholder consists of the information relating to such Selling Stockholder in the Registration Statement, the Prospectus and the Disclosure Package under the heading “Selling Stockholders” and the footnote thereunder, excluding any percentages set forth therein (the “ Selling Stockholder Information ”);

(g) such Selling Stockholder has not distributed and will not distribute any Free Writing Prospectus, preliminary prospectus, the Prospectus or any other offering material in connection with the offering and sale of the Shares, except for any such distribution to which the Representatives have consented in advance; and such Selling Stockholder has not taken, directly or indirectly, any action intended, or which would reasonably be expected, to cause or result in, under the Securities Act, the Securities Act Regulations or otherwise, or which has constituted, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares;

(h) the Shares to be sold hereunder by such Selling Stockholder have been placed in custody, for the purpose of making delivery of such Shares under this Agreement and under the Custody Agreement and Power of Attorney which appoints American Stock Transfer & Trust Company, LLC, as custodian (the “ Custodian ”), for such Selling Stockholder; such Selling Stockholder agrees that the Shares held in custody for him or it under the Custody Agreement and Power of Attorney are for the benefit of and coupled with and subject to the interest hereunder of the Custodian, the Attorneys, the Underwriters, each other Selling Stockholder and the Company; that the arrangements made by such Selling Stockholder for such custody and the appointment of the Custodian and the Attorneys by such Selling Stockholder are irrevocable; and that the obligations of such Selling Stockholder hereunder shall not be terminated by operation of law, whether by the death, disability, incapacity or liquidation of any Selling Stockholder or the occurrence of any other similar event; if any Selling Stockholder should die, become disabled or incapacitated or be liquidated or if any other such similar event should occur before the delivery of the Shares hereunder, the Shares shall be delivered by the Custodian in accordance with the terms and conditions of this Agreement and actions taken by the Attorneys and the Custodian pursuant to the Custody Agreement and Power of Attorney shall be as valid as if such death, liquidation, incapacity or other similar event had not occurred, regardless of whether or not the Custodian or the Attorneys, or either of them, shall have received notice thereof;

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(i) such Selling Stockholder has not relied upon the Representatives or legal counsel for the Representatives for any legal, tax or accounting advice in connection with the offering and sale of the Shares;

(j) such Selling Stockholder does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as are described in both the Prospectus and the Disclosure Package under “Shares Eligible for Future Sale;”

(k) such selling Stockholder does not have, or has waived prior to the date hereof, any preemptive right, co-sale right or right of first refusal or other similar right to purchase any of the Shares that are to be sold by the Company or any of the other Selling Stockholders to the Underwriters pursuant to this Agreement; and such Selling Stockholder does not own any warrants, options or similar rights to acquire, and does not have any right or arrangement to acquire, any capital stock, right, warrants, options or other securities from the Company, other than those described in the Registration Statement and the Prospectus;

(l) except as otherwise disclosed to the Underwriters in writing, such Selling Stockholder is not a member of or an affiliate of or associated with any member of FINRA;

(m) neither such Selling Stockholder nor any of its subsidiaries, nor any director, officer or employee of such Selling Stockholder or any of its subsidiaries nor, to the knowledge of such Selling Stockholder, any agent, affiliate or other person associated with or acting on behalf of such Selling Stockholder or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the FCPA, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. Such Selling Stockholder and its subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws;

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

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(o) Neither such Selling Stockholder nor any of its subsidiaries, directors, officers or employees, nor, to the knowledge of such Selling Stockholder, any agent, affiliate or other person associated with or acting on behalf of such Selling Stockholder or any of its subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, OFAC or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the UNSC, the HMT or other relevant Sanctions authority, nor is such Selling Stockholder, any of its subsidiaries located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, any Sanctioned Country; and such Selling Stockholder will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, such Selling Stockholder and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in and will not engage in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country; and

(p) such Selling Stockholder has not taken and will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

5. Certain Covenants of the Company .

The Company hereby agrees with each Underwriter:

(a) to furnish such information as may be required and otherwise to cooperate in qualifying the Shares for offering and sale, or establishing an exemption from such qualification, under the securities or blue sky laws of such jurisdictions (both domestic and foreign) as the Representatives may designate and to maintain such qualifications or exemptions in effect as long as requested by the Representatives for the distribution of the Shares, provided that the Company shall not be required to qualify as a foreign corporation, to subject itself to taxation, or to consent to the service of process under the laws of any such jurisdiction (except service of process with respect to the offering and sale of the Shares);

(b) if, at the time this Agreement is executed and delivered, it is necessary for a post-effective amendment to the Registration Statement to be declared effective before the offering of the Shares may commence, the Company will endeavor to cause such post-effective amendment to become effective as soon as reasonably practicable and will advise the Representatives promptly and, if requested by the Representatives, will confirm such advice in writing, when such post-effective amendment has become effective;

(c) to prepare the Prospectus in a form approved by the Underwriters and file such Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act not later than 12:00 p.m. (New York City time), on the business day following the execution and delivery of this Agreement or on such other day as the parties may mutually agree and to furnish promptly (and with respect to the initial delivery of such Prospectus, not later than 3:00 p.m. (New York City time) on the business day following the execution and delivery of this Agreement or on such other day as the parties may mutually agree to the Underwriters copies of the Prospectus (or of the Prospectus as amended or supplemented if the Company shall have made any amendments or supplements thereto after the effective date of the Registration Statement) in such quantities and at such locations as the Underwriters may reasonably

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request for the purposes contemplated by the Securities Act Regulations, which Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the version transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T;

(d) to advise the Representatives promptly and (if requested by the Representatives) to confirm such advice in writing, when the Registration Statement has become effective and when any post-effective amendment thereto becomes effective under the Securities Act Regulations;

(e) to furnish a copy of each proposed Free Writing Prospectus to the Representatives and counsel for the Underwriters and obtain the consent of the Representatives prior to referring to, using or filing with the Commission any Free Writing Prospectus pursuant to Rule 433(d) under the Securities Act, other than the Issuer Free Writing Prospectuses, if any, identified in Schedule III hereto;

(f) to comply with the requirements of Rules 164 and 433 of the Securities Act Regulations applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission, legending and record keeping, as applicable;

(g) to advise the Representatives immediately, confirming such advice in writing, of (i) the receipt of any comments from, or any request by, the Commission for amendments or supplements to the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or for additional information with respect thereto, (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes and, if the Commission or any other government agency or authority should issue any such order, to make every reasonable effort to obtain the lifting or removal of such order as soon as reasonably practicable, (iii) any examination pursuant to Section 8(e) of the Securities Act concerning the Registration Statement of which the Company is aware, or (iv) if the Company becomes subject to a proceeding under Section 8A of the Securities Act in connection with the public offering of Shares contemplated herein; to advise the Representatives promptly of any proposal to amend or supplement the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus and to file no such amendment or supplement to which the Representatives shall reasonably object in writing;

(h) to furnish to the Representatives for a period of two years from the date of this Agreement, unless made available to the public on EDGAR or any successor system, (i) as soon as available, copies of all annual, quarterly and current reports or other communications supplied to holders of shares of Common Stock, and (ii) as soon as practicable after the filing thereof, copies of all reports filed by the Company with the Commission, FINRA or any securities exchange;

(i) to advise the Representatives promptly of the happening of any event or development known to the Company within the time during which a Prospectus relating to the Shares (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act Regulations) is required to be delivered under the Securities Act Regulations which, in the judgment of the Company, (i) would require the making of any change in the Prospectus or the Disclosure Package so that the Prospectus or the Disclosure Package would not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) as a result of which any Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the Shares, or (iii) if it is necessary at any time to amend or supplement the Prospectus or the Disclosure Package to comply with any law and, during such time, to promptly prepare

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and furnish to the Representatives copies of the proposed amendment or supplement before filing any such amendment or supplement with the Commission and thereafter promptly furnish at the Company’s own expense to the Underwriters and to dealers, copies in such quantities and at such locations as the Representatives may from time to time reasonably request of an appropriate amendment or supplement to the Prospectus or the Disclosure Package so that the Prospectus or the Disclosure Package as so amended or supplemented will not, in the light of the circumstances when it (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act Regulations) is so delivered, be misleading or, in the case of any Issuer Free Writing Prospectus, conflict with the information contained in the Registration Statement, or so that the Prospectus or the Disclosure Package will comply with the law;

(j) to file promptly with the Commission any amendment or supplement to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus that may, in the reasonable judgment of the Company or the Representatives, be required by the Securities Act or requested by the Commission;

(k) prior to filing with the Commission any amendment or supplement to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, to furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain the consent (not to be unreasonably withheld or delayed) of the Representatives to the filing;

(l) to furnish promptly to the Representatives each a signed copy of the Registration Statement, as initially filed with the Commission, and of all amendments or supplements thereto (including all exhibits filed therewith or incorporated by reference therein) and such number of conformed copies of the foregoing as the Representatives may reasonably request;

(m) to apply the net proceeds of the sale of the Shares by the Company in accordance with its statements under the caption “Use of Proceeds” in the Prospectus and the Disclosure Package;

(n) to make generally available to its security holders and to the Representatives as soon as practicable, but in any event not later than the end of the fiscal quarter first occurring after the first anniversary of the effective date of the Registration Statement an earnings statement complying with the provisions of Section 11(a) of the Securities Act (in form, at the option of the Company, complying with the provisions of Rule 158 of the Securities Act Regulations,) covering a period of 12 months beginning after the effective date of the Registration Statement;

(o) to use its commercially reasonable efforts to maintain the listing of the Shares on the NYSE and to file with the NYSE all documents and notices required by the NYSE of companies that have securities that are listed on the NYSE;

(p) to promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) the completion of the distribution of the Shares within the meaning of the Securities Act and (ii) completion of the 180-day restricted period referred to in Section 5(r) hereof;

(q) to engage and maintain, at its expense, a registrar and transfer agent for the Shares;

(r) to refrain, from the date hereof until 180 days after the date of the Prospectus, without the prior written consent of the Representatives, from, directly or indirectly, (i) offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option for the sale of, or otherwise disposing of or transferring, (or entering into any transaction or device which is designed to, or could be expected to, result in the disposition by the

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Company at any time in the future of), any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or filing any registration statement under the Securities Act with respect to any of the foregoing, or (ii) entering into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B) issuances of equity-based awards pursuant to the Company’s equity incentive plan described in the Registration Statement, the Prospectus and the Disclosure Package, to the extent such awards do not vest within 180 days after the date of the Prospectus, or (C) any shares of Common Stock issued by the Company upon the exercise of an option or the vesting of any restricted stock units outstanding on the date hereof and referred to in the Prospectus;

(s) not to, and to use its commercially reasonable efforts to cause its officers, directors and affiliates not to, (i) take, directly or indirectly prior to termination of the underwriting syndicate contemplated by this Agreement, any action designed to stabilize or manipulate the price of any security of the Company, or which may cause or result in, or which might in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company, to facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone any compensation for soliciting purchases of the Shares, or (iii) pay or agree to pay to any person any compensation for soliciting any order to purchase any other securities of the Company;

(t) to the extent not previously entered into with a Representative, to cause each officer and director of the Company to furnish to the Representatives, prior to the Initial Sale Time, a letter or letters, substantially in the form of Exhibit B hereto, pursuant to which each such person shall agree not to, directly or indirectly, (i) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device which is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock or securities convertible into or exchangeable for Common Stock or (ii) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, in each case for a period from the date hereof until 180 days after the date of the Prospectus, without the prior written consent of the Representatives on behalf of the Underwriters; if the Representatives, in its sole discretion, agrees to release or waive the restrictions set forth in Section 5(r) or a lock-up letter described in this Section 5(t) hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver substantially in the form of Exhibit C hereto at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit D hereto through a major news service at least two business days before the effective date of the release or waiver.

(u) if, at any time during the 90-day period after the date of the Prospectus, any rumor, publication or event relating to or affecting the Company shall occur as a result of which, in the reasonable opinion of the Representatives, the market price of the Common Stock has been or is likely to be materially affected (regardless of whether such rumor, publication or event necessitates a supplement to or amendment of the Prospectus) and after written notice from the Representatives advising the Company to the effect set forth above, to forthwith prepare, consult with the Representatives concerning the substance of, and disseminate a press release or other public statement, reasonably satisfactory to the Representatives, responding to or commenting on such rumor, publication or event;

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(v) that the Company will comply with all of the provisions of any undertakings in the Registration Statement; and

(w) upon the reasonable request of the Representatives, the Company will deliver, without charge, (i) to the Representatives, two signed copies of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith and documents incorporated by reference therein; and (ii) to each Underwriter (A) a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein and each Issuer Free Writing Prospectus). As used herein, the term “ Prospectus Delivery Period ” means such period of time after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the Shares by any Underwriter or dealer.

6. Certain Covenants of the Selling Stockholders .

Each Selling Stockholder hereby agrees with each Underwriter:

(a) to deliver to the Representatives prior to the Closing Time a properly completed and executed United States Treasury Department Form W-8 (if the Selling Stockholder is a non-United States person, within the meaning of the Code or Form W-9 (if the Selling Stockholder is a United States person, within the meaning of the Code);

(b) to deliver to the Company or the Underwriters such documentation as the Company or the Underwriters or any of their respective counsel may reasonably request in order to effectuate any of the provisions of this Agreement; and

(c) to not prepare or have prepared on its behalf or use or refer to any Free Writing Prospectus and to not distribute any written materials in connection with the offer or sale of the Shares.

(d) for a period of 180 days after the date of the initial public offering of the Shares, such Selling Stockholder will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock or such other securities which may be deemed to be beneficially owned by such Selling Stockholder in accordance with the rules and regulations of the Commission and securities which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make any offer, sale, pledge or disposition, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (iii) make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock without the prior written consent of the Representatives, in each case other than the Shares to be sold by such Selling Stockholder hereunder;

(e) it will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Common Stock; and

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(f) it will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to a subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject of target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.

7. Payment of Expenses .

(a) The Company agrees to pay all costs, fees expenses and taxes incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including expenses, fees and taxes in connection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Underwriters and to dealers (including costs of mailing and shipment), (ii) the preparation, issuance and delivery of the certificates for the Shares to the Underwriters, if applicable, including any stock or other transfer taxes or duties payable upon the sale of the Shares to the Underwriters, (iii) the printing of this Agreement and any dealer agreements and furnishing of copies of each to the Underwriters and to dealers (including costs of mailing and shipment), (iv) the qualification of the Shares for offering and sale under state laws that the Company and the Representatives have mutually agreed are appropriate and the determination of their eligibility for investment under state law as aforesaid (including the legal fees and filing fees and other disbursements of counsel for the Underwriters and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Underwriters and to dealers); provided that, any legal fees or legal expenses incurred by the Underwriters or their counsel hereunder and reimbursed by the Company pursuant to this clause (iv) shall reduce the aggregate amount of the Company’s obligations to pay for the fees and disbursements of the Underwriters’ counsel under clause (xiii) below, (v) filing for review of the public offering of the Shares by FINRA (including the reasonable legal fees and filing fees and other reasonable disbursements of counsel for the Underwriters relating thereto); provided that, any legal fees or legal expenses incurred by the Underwriters or their counsel hereunder and reimbursed by the Company pursuant to this clause (v) shall reduce the aggregate amount of the Company’s obligations to pay for the fees and disbursements of the Underwriters’ counsel under clause (xiii) below, (vi) all fees and disbursements of counsel and accountants for the Company, (vii) the fees and expenses of any transfer agent or registrar for the Shares and miscellaneous expenses referred to in the Registration Statement, (viii) costs of background investigations, (ix) the fees and expenses incurred in connection with the inclusion of the Shares on the NYSE, (x) making road show presentations with respect to the offering of the Shares, (xi) preparing and distributing bound volumes of transaction documents for the Representatives and their legal counsel, (xii) reimbursement for the Underwriters’ reasonable documented actual out-of-pocket expenses in connection with the performance of their activities under this Agreement (including reasonable costs such as printing, facsimile, courier service, direct computer expenses, accommodations and travel, but for the avoidance of doubt, this clause (xii) shall not include fees and disbursements of Underwriters’ counsel), (xiii) the fees and disbursements of Underwriters’ counsel, not to exceed, with respect to this clause (xiii), $450,000, and (xiv) the performance of the Company’s other obligations hereunder. Upon the request of the Representatives, the Company will provide funds in advance for filing fees.

(b) The Company agrees with each Underwriter to pay (directly or by reimbursement) all fees and expenses incident to the performance of the obligations of the Company and the Selling Stockholders under this Agreement which are otherwise specifically provided for herein, including, but not limited to, (i) fees and expenses of counsel and other advisors for such Selling Stockholders, and (ii)

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fees and expenses of the Custodian. The Selling Stockholders shall pay (on a pro rata basis based on the number of Shares to be sold by each Selling Stockholder) any transfer taxes payable in connection with their respective sales of Shares to the Underwriters.

(c) If this Agreement shall be terminated by the Underwriters, or any of them, because (i) of any failure or refusal on the part of the Company or the Selling Stockholders to comply with the terms or to fulfill any of the conditions of this Agreement, or (ii) if for any reason the Company or the Selling Stockholders shall be unable to perform its or their obligations under this Agreement, the Company also will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all reasonable documented actual out-of-pocket expenses (such as printing, facsimile, courier service, direct computer expenses, accommodations, travel and the reasonable fees and disbursements of Underwriters’ counsel) reasonably incurred by such Underwriters in connection with this Agreement or the transactions contemplated herein. If the purchase of the Shares by the Underwriters provided for herein is not consummated because of any failure or refusal on the part of a Selling Stockholder to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason a Selling Stockholder shall be unable to perform its obligations under this Agreement, such Selling Stockholder will reimburse the Company for the fees and disbursements that the Company reimburses the Underwriters pursuant to the immediately preceding sentence.

8. Conditions of the Underwriters’ Obligations .

The obligations of the Underwriters hereunder to purchase Shares at the Closing Time or on each Option Closing Time, as applicable, are subject to the accuracy of the representations and warranties on the part of the Company and the Selling Stockholders hereunder and under the Custody Agreement and Power of Attorney on the date hereof and at the Closing Time and on each Option Closing Time, as applicable, the performance by the Company and the Selling Stockholders of their respective obligations hereunder and under the Custody Agreement and Power of Attorney and to the satisfaction of the following further conditions at the Closing Time or on each Option Closing Time, as applicable:

(a) The Company shall furnish to the Underwriters at the Closing Time and on each Option Closing Time an opinion of Greenberg Traurig, LLP, counsel for the Company and the Subsidiaries, addressed to the Underwriters and dated the Closing Time and each Option Closing Time and in form and substance satisfactory to the Underwriters, to the effect set forth in Exhibit E hereto.

(b) Each Selling Stockholder shall furnish to the Underwriters at the Closing Time and on each Option Closing Time an opinion of Sidley Austin LLP, counsel for the Selling Stockholders, addressed to the Underwriters and dated the Closing Time and each Option Closing Time and in form and substance satisfactory to the Underwriters, to the effect set forth in Exhibit F hereto.

(c) On the date of this Agreement and at the Closing Time and each Option Closing Time (if applicable), the Representatives shall have received from Ernst & Young, LLP, BKD, LLP and BDO USA, LLP letters dated the respective dates of delivery thereof and addressed to the Representatives and the Selling Stockholders, in form and substance satisfactory to the Representatives, containing statements and information of the type specified in AU Section 634 “Letters for Underwriters and Certain other Requesting Parties” issued by the American Institute of Certified Public Accountants with respect to the financial statements, including any pro forma financial statements, and certain financial information of the Company and the Subsidiaries included or incorporated by reference in the Registration Statement, the Prospectus and the Disclosure Package, and such other matters customarily covered by comfort letters issued in connection with registered public offerings; provided, that the letters delivered at the Closing Time and each Option Closing Time (if applicable) shall use a “cut-off” date no more than three business days prior to such Closing Time or such Option Closing Time, as the case may be.

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In the event that the letters referred to above set forth any changes in indebtedness, decreases in total assets or retained earnings or increases in borrowings, it shall be a further condition to the obligations of the Underwriters that (A) such letters shall be accompanied by a written explanation of the Company as to the significance thereof, unless the Representatives deem such explanation unnecessary, and (B) such changes, decreases or increases do not, in the sole judgment of the Representatives, make it impractical or inadvisable to proceed with the purchase and delivery of the Shares as contemplated by the Registration Statement.

(d) The Representatives shall have received at the Closing Time and on each Option Closing Time the favorable opinion of Gibson, Dunn & Crutcher LLP, dated the Closing Time or such Option Closing Time, addressed to the Representatives and in form and substance satisfactory to the Representatives.

(e) The Registration Statement shall have become effective not later than 5:00 p.m., New York City time, on the date of this Agreement, or such later time and date as the Representatives shall approve.

(f) No amendment or supplement to the Registration Statement, the Prospectus or any document in the Disclosure Package shall have been filed to which the Underwriters shall have objected in writing prior to its filing.

(g) Prior to the Closing Time and each Option Closing Time (i) no stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the Prospectus or any document in the Disclosure Package shall have been issued, and no proceedings for such purpose shall have been initiated or threatened, by the Commission, and no suspension of the qualification of the Shares for offering or sale in any jurisdiction, or the initiation or threatening of any proceedings for any of such purposes, has occurred; (ii) all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Representatives; (iii) the Registration Statement shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iv) the Prospectus and the Disclosure Package shall not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(h) All filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Time shall have been made within the applicable time period prescribed for such filing by such Rule.

(i) Between the time of execution of this Agreement and the Closing Time or the relevant Option Closing Time there shall not have been any Material Adverse Change, and (ii) no transaction which is material and unfavorable to the Company shall have been entered into by the Company or any of the Subsidiaries, in each case, which in the Representatives’ reasonable judgment, makes it impracticable or inadvisable to proceed with the public offering of the Shares as contemplated by the Registration Statement.

(j) The Shares shall have been approved for listing on the NYSE.

(k) FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.

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(l) The Representatives shall have received lock-up agreements from each officer and director, in the form of Exhibit B attached hereto, and such letter agreements shall be in full force and effect.

(m) The Company will, at the Closing Time and on each Option Closing Time, deliver to the Underwriters a certificate of its Chairman of the Board, Chief Executive Officer, President, Chief Operating Officer or Vice President and Chief Accounting Officer or Chief Financial Officer, to the effect that:

(i) the representations and warranties of the Company in this Agreement are true and correct, as if made on and as of the Closing Time or any Option Closing Time, as applicable, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Time or any Option Closing Time, as applicable;

(ii) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto and no order directed at any document incorporated by reference therein (“ Incorporated Document ”) has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the Securities Act;

(iii) the signers of such certificate have carefully examined the Registration Statement, the Prospectus, the Disclosure Package, any amendment or supplement thereto, and this Agreement, and that when the Registration Statement became effective and at all times subsequent thereto up to the Closing Time or any Option Closing Time, as applicable, the Registration Statement and the Prospectus and the Preliminary Prospectus, and any amendments or supplements thereto, contained all material information required to be included therein by the Securities Act or the Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects conformed to the requirements of the Securities Act or the Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be; the Registration Statement and any amendments thereto, did not and, as of the Closing Time or any Option Closing Time, as applicable, does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus and the Disclosure Package, and any amendments or supplements thereto, did not and as of the Closing Time or any Option Closing Time, as applicable, do not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and, since the effective date of the Registration Statement, there has occurred no event required to be set forth in an amendment or supplement to the Prospectus or the Disclosure Package which has not been so set forth; and

(iv) subsequent to the respective dates as of which information is given in the Registration Statement, the Prospectus and the Disclosure Package, there has not been (A) any Material Adverse Change, (B) any transaction that is material to the Company and the Subsidiaries considered as one enterprise, except transactions entered into in the ordinary course of business, (C) any obligation, direct or contingent, that is material to the Company and the Subsidiaries considered as one enterprise, incurred by the Company or the Subsidiaries, except obligations incurred in the ordinary course of business, (D) any change in the capital stock or outstanding indebtedness of the Company or any Subsidiary that is material to the Company and the Subsidiaries considered as one enterprise, (E) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, or (F) any loss or

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damage (whether or not insured) to the property of the Company or any subsidiary which has been sustained or will have been sustained which has a Material Adverse Effect.

(n) Each Selling Stockholder (or one or more Attorneys on behalf of the Selling Stockholders) will, at the Closing Time, deliver to the Representatives a certificate, to the effect that:

(i) the representations and warranties of such Selling Stockholder set forth in this Agreement and in the Custody Agreement and Power of Attorney are true and correct as of such date; and

(ii) such Selling Stockholder has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied hereunder and under the Custody Agreement and Power of Attorney at or prior to such date.

(o) The Company and the Selling Stockholders, as applicable, shall have furnished to the Underwriters such other documents and certificates as to the accuracy and completeness of any statement in the Registration Statement, the Prospectus and the Disclosure Package, the representations, warranties and statements contained herein and in the Custody Agreement and Power of Attorney, and the performance by the Company and the Selling Stockholders of their respective covenants contained herein and therein, and the fulfillment of any conditions contained herein or therein, as of the Closing Time or any Option Closing Time, as the Underwriters may reasonably request.

9. Termination .

The obligations of the several Underwriters hereunder shall be subject to termination in the absolute discretion of the Representatives, at any time prior to the Closing Time or any Option Closing Time, (i) if any of the conditions specified in Section 8 shall not have been fulfilled when and as required by this Agreement to be fulfilled, or (ii) if there has been since the respective dates as of which information is given in the Registration Statement, the Prospectus or the Disclosure Package, any Material Adverse Change, or material change in the senior management of the Company, whether or not arising in the ordinary course of business, or (iii) if there has occurred any outbreak or escalation of hostilities or other national or international calamity or crisis or change in economic, political or other conditions, the effect of which on the United States or international financial markets is such as to make it, in the judgment of the Representatives, impracticable to market the Shares or enforce contracts for the sale of the Shares, or (iv) if trading in any securities of the Company has been suspended by the Commission or by the NYSE, or if trading generally on the NYSE or in the Nasdaq over-the-counter market has been suspended (including an automatic halt in trading pursuant to market-decline triggers, other than those in which solely program trading is temporarily halted), or limitations on prices for trading (other than limitations on hours or numbers of days of trading) have been fixed, or maximum ranges for prices for securities have been required, by such exchange or FINRA or the over-the-counter market or by order of the Commission or any other Governmental Authority, or (v) if there has been any downgrade in the rating of any of the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization” (as defined under Section 3(a)(62) of the Exchange Act), or (vi) any federal, state, local or foreign statute, regulation, rule or order of any court or other Governmental Authority has been enacted, published, decreed or otherwise promulgated which, in the opinion of the Representatives, would reasonably be expected to have a Material Adverse Effect, or (vii) any action has been taken by any federal, state, local or foreign government or agency in respect of its monetary or fiscal affairs which, in the opinion of the Representatives, would reasonably be expected to have a material adverse effect on the securities markets in the United States.

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If the Representatives elect to terminate this Agreement as provided in this Section 7, the Company and the Underwriters shall be notified promptly by telephone, promptly confirmed by facsimile.

If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not carried out by the Underwriters for any reason permitted under this Agreement or if such sale is not carried out because the Company shall be unable to comply in all material respects with any of the terms of this Agreement, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 7 and 11 hereof) and the Underwriters shall be under no obligation or liability to the Company under this Agreement (except to the extent provided in Section 11 hereof) or to one another hereunder.

10. Increase in Underwriters’ Commitments .

If any Underwriter shall default at the Closing Time or on any Option Closing Time in its obligation to take up and pay for the Shares to be purchased by it under this Agreement on such date, the Representatives shall have the right, within 36 hours after such default, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Shares which such Underwriter shall have agreed but failed to take up and pay for (the “ Defaulted Shares ”). Absent the completion of such arrangements within such 36-hour period, (i) if the total number of Defaulted Shares does not exceed 10% of the total number of Shares to be purchased on such date, each non-defaulting Underwriter shall take up and pay for (in addition to the number of Shares which it is otherwise obligated to purchase on such date pursuant to this Agreement) the portion of the total number of Shares agreed to be purchased by the defaulting Underwriter on such date in the proportion that its underwriting obligations hereunder bears to the underwriting obligations of all non-defaulting Underwriters; and (ii) if the total number of Defaulted Shares exceeds 10% of such total, the Representatives may terminate this Agreement by notice to the Company, without liability of any party to any other party except that the provisions of Sections 7 and 11 hereof shall at all times be effective and shall survive such termination.

Without relieving any defaulting Underwriter from its obligations hereunder, the Company agrees with the non-defaulting Underwriters that it will not sell any Shares hereunder on such date unless all of the Shares to be purchased on such date are purchased on such date by the Underwriters (or by substituted Underwriters selected by the Representatives with the approval of the Company or selected by the Company with the approval of the Representatives).

If a new Underwriter or Underwriters are substituted for a defaulting Underwriter in accordance with the foregoing provision, the Company or the non-defaulting Underwriters shall have the right to postpone the Closing Time or the relevant Option Closing Time for a period not exceeding five business days in order that any necessary changes in the Registration Statement and Prospectus and other documents may be effected.

The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter substituted under this Section 10 with the same effect as if such substituted Underwriter had originally been named in this Agreement.

11. Indemnity and Contribution by the Company, the Selling Stockholders and the Underwriters .

(a) The Company agrees to indemnify, defend and hold harmless each Underwriter and any person who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the respective affiliates, directors, officers, employees and agents of each

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Underwriter from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which, jointly or severally, any such indemnified party may incur arising under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (A) any breach of any representation, warranty or covenant of the Company contained herein, (B) any failure on the part of the Company to comply with any applicable law, rule or regulation relating to the offering of securities being made pursuant to the Prospectus, (C) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment), any Issuer Free Writing Prospectus that the Company has filed or was required to file with the Commission or is otherwise required retain, any other Free Writing Prospectus that was approved by the Company, or the Prospectus (the term Prospectus for the purpose of this Section 11 being deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus as amended or supplemented by the Company), (D) any application or other document, or any amendment or supplement thereto, executed by the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction (domestic or foreign) in order to qualify the Shares under the securities or blue sky laws thereof or filed with the Commission or any securities association or securities exchange (each an “Application”), (E) any omission or alleged omission to state a material fact required to be stated in any such Registration Statement, or necessary to make the statements made therein not misleading, (F) any omission or alleged omission from any such Issuer Free Writing Prospectus, any other Free Writing Prospectus that was approved by the Company, Prospectus or any Application of a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, (G) any untrue statement or alleged untrue statement of any material fact contained in any audio or visual materials used in connection with the marketing of the Shares, including, without limitation, slides, videos, films and tape recordings; except, in the case of (C), (E) and (F) above only, insofar as any such loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in and in conformity with information furnished in writing by the Underwriters through the Representatives to the Company expressly for use in such Registration Statement, Prospectus or Application (that information being limited to that described in the last sentence of Section 11(c) hereof). The indemnity agreement set forth in this Section 11(a) shall be in addition to any liability which the Company may otherwise have.

(b) Each Selling Stockholder, severally and not jointly, agrees to indemnify, defend and hold harmless each Underwriter and any person who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the respective affiliates, directors, officers, employees and agents of each Underwriter from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which, jointly or severally, any such indemnified party may incur arising under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (A) any breach of any representation, warranty or covenant of such Selling Stockholder contained herein or in the Custody Agreement and Power of Attorney, (B) any failure on the part of such Selling Stockholder to comply with any applicable law, rule or regulation relating to the offering of securities being made pursuant to the Prospectus, (C) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or part thereof), any Issuer Free Writing Prospectus that the Company has filed or was required to file with the Commission, any Free Writing Prospectus, or the Prospectus, or any Application, (D) any omission or alleged omission to state a material fact required to be stated in such Registration Statement, or necessary to make the statements made therein not misleading, or (E) any omission or alleged omission from any such Issuer Free Writing Prospectus, any Free Writing Prospectus, Prospectus or any Application of a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; except in the case of (C), (D) and (E) above only insofar as any such loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in and

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in conformity with information furnished in writing by such Selling Stockholder to the Company expressly for use in such Registration Statement, Issuer Free Writing Prospectus, Prospectus or Application, it being understood and agreed that the only such information furnished by such Selling Stockholder consists of the Selling Stockholder Information; provided , however , that the indemnity agreement contained in this subsection (b) shall not require any such Selling Stockholder to reimburse the Underwriters for in excess of the gross sale price of the Shares sold by such Selling Stockholder pursuant to this Agreement. The indemnity agreement set forth in this Section 11(b) shall be in addition to any liabilities that the Selling Stockholders may otherwise have.

If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Company or any Selling Stockholder pursuant to subsection (a) or subsection (b) above, such Underwriter shall promptly notify the Company or such Selling Stockholder, as applicable, in writing of the institution of such action, and the Company or such Selling Stockholder, as applicable, shall assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Company or such Selling Stockholder, as applicable, will not relieve the Company or such Selling Stockholder, as applicable, of any obligation hereunder, except to the extent that its ability to defend is actually impaired by such failure or delay. Such Underwriter or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Company or such Selling Stockholder, as applicable, in connection with the defense of such action, or the Company or such Selling Stockholder, as applicable, shall not have employed counsel to have charge of the defense of such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Company or such Selling Stockholder, as applicable, (in which case neither the Company nor such Selling Stockholder shall have the right to direct the defense of such action on behalf of the indemnified party or parties or the named parties in any such proceeding (including any impleaded parties included by the Company or any Selling Stockholder and the indemnified person and represented by both parties by the same counsel would be inappropriate due to a conflict or potential differing interests between such parties)), in any of which events such fees and expenses shall be borne by the Company or the Selling Stockholder, as applicable, and paid as incurred (it being understood, however, that neither the Company nor any Selling Stockholder shall be liable for the expenses of more than one separate firm of attorneys for the Underwriters or controlling persons in any one action or series of related actions in the same jurisdiction (other than one local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this paragraph to the contrary notwithstanding and subject to the proviso in this sentence, neither the Company nor any Selling Stockholder shall be liable for any settlement of any such claim or action effected without its consent; provided, however, that if at any time an indemnified party shall have requested an indemnifying party to reimburse such indemnified party for fees and expenses of counsel as contemplated by this Section 11, the Company and each Selling Stockholder, as applicable, agree that they shall be liable for any settlement of any proceeding effected without their written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms such settlement at least 30 days prior to such settlement being entered into, and (iii) such indemnifying party shall not have (x) reimbursed the indemnified party in accordance with such request, (y) disputed in good faith the indemnified party’s entitlement to such reimbursement prior to the date of such settlement, or (z) disputed in good faith the terms of such settlement. No indemnifying party shall, without the written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnification could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability on claims

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that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(c) Each Underwriter agrees, severally and not jointly, to indemnify, defend and hold harmless the Company and each Selling Stockholder, the Company’s directors, the Company’s officers that signed the Registration Statement, and any person who controls the Company or any Selling Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which the Company, the Selling Stockholder or any such person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (A) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment), any Issuer Free Writing Prospectus that the Company has filed or was required to file with the Commission, or the Prospectus, or any Application, (B) any omission or alleged omission to state a material fact required to be stated in any such Registration Statement, or necessary to make the statements made therein not misleading, or (C) any omission or alleged omission from any such Issuer Free Writing Prospectus, any Free Writing Prospectus, Prospectus or any Application of a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, but in each case only insofar as such untrue statement or alleged untrue statement or omission or alleged omission was made in such Registration Statement, Issuer Free Writing Prospectus, Prospectus or Application in reliance upon and in conformity with information furnished in writing by the Underwriters through the Representatives to the Company expressly for use therein. The statements set forth in the third paragraph under the caption “Underwriting” and the first and second paragraphs under the heading identified by “Stabilization” under the caption “Underwriting” in the Preliminary Prospectus, the Disclosure Package and the Prospectus (to the extent such statements relate to the Underwriters) constitute the only information furnished by or on behalf of any Underwriter through the Representatives to the Company for purposes of this Agreement.

If any action is brought against the Company, any Selling Stockholder or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Company, the Selling Stockholder or such person shall promptly notify the Representatives in writing of the institution of such action and the Representatives, on behalf of the Underwriters, shall assume the defense of such action, including the employment of counsel and payment of expenses. The Company, the Selling Stockholder or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company, the Selling Stockholder or such person unless the employment of such counsel shall have been authorized in writing by the Representatives in connection with the defense of such action or the Representatives shall not have employed counsel to have charge of the defense of such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Underwriters (in which case the Representatives shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by such Underwriter and paid as incurred (it being understood, however, that the Underwriters shall not be liable for the expenses of more than one separate firm of attorneys in any one action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written consent of the Representatives.

(d) If the indemnification provided for in this Section 11 is unavailable or insufficient to hold harmless an indemnified party under subsections (a), (b) and (c) of this Section 11 in respect of any losses, expenses, liabilities, damages or claims referred to therein, then each applicable indemnifying

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party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, expenses, liabilities, damages or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the Selling Stockholders and the Underwriters from the offering of the Shares or (ii) if (but only if) the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, of the Selling Stockholders and of the Underwriters in connection with the statements or omissions which resulted in such losses, expenses, liabilities, damages or claims, as well as any other relevant equitable considerations. The relative benefits received by the Company, the Selling Stockholders and the Underwriters shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company or the Selling Stockholders, as applicable, bear to the underwriting discounts and commissions received by the Underwriters. The relative fault of the Company, of the Selling Stockholders and of the Underwriters shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company, by the Selling Stockholders or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any claim or action.

(e) The Company, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 11 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in subsection (d)(i) and, if applicable (ii), above. Notwithstanding the provisions of this Section 11, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Shares purchased by such Underwriter, and no Selling Stockholder shall be required to contribute any amount in excess of the gross sale price of the Shares sold by such Selling Stockholder pursuant to this Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 11 are several in proportion to their respective underwriting commitments and not joint.

The remedies provided for in this Section are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified person at law or in equity.

12. Survival .

The indemnity and contribution agreements contained in Section 11 and the covenants, warranties and representations of the Company and the Selling Stockholders contained in Sections 3, 4, 5, 6 and 7 of this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter, or any person who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the respective directors, officers, employees and agents of each Underwriter or by or on behalf of the Company, its directors and officers, the Selling Stockholders or any person who controls the Company or any Selling Stockholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the sale and delivery of the Shares. The Company, each Selling Stockholder and each Underwriter agree promptly to notify the others of the commencement of any litigation or proceeding against it and, in the case of the Company, against any of the Company’s officers and directors, in

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connection with the sale and delivery of the Shares, or in connection with the Registration Statement or Prospectus.

13. Duties .

Nothing in this Agreement shall be deemed to create a partnership, joint venture or agency relationship between the parties. The Underwriters undertake to perform such duties and obligations only as expressly set forth herein. Such duties and obligations of the Underwriters with respect to the Shares shall be determined solely by the express provisions of this Agreement, and the Underwriters shall not be liable except for the performance of such duties and obligations, or failure to perform such duties or obligations, with respect to the Shares as are specifically set forth in this Agreement. Each of the Company and the Selling Stockholders acknowledges and agrees that: (i) the purchase and sale of the Shares pursuant to this Agreement, including the determination of the public offering price of the Shares and any related discounts and commissions, is an arm’s-length commercial transaction between the Company and the Selling Stockholders, on the one hand, and the several Underwriters, on the other hand, and the Company and the Selling Stockholders are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with each transaction contemplated hereby and the process leading to such transaction each Underwriter is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary of the Company, the Selling Stockholders or their respective affiliates, stockholders, creditors or employees or any other party; (iii) no Underwriter has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Company or the Selling Stockholders with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or the Selling Stockholders on other matters); and (iv) the several Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and the Selling Stockholders and that the several Underwriters have no obligation to disclose any of such interests. The Company and each Selling Stockholder acknowledges that the Underwriters disclaim any implied duties (including any fiduciary duty), covenants or obligations arising from the Underwriters’ performance of the duties and obligations expressly set forth herein. The Company and the Selling Stockholders hereby waive and release, to the fullest extent permitted by law, any claims that the Company and the Selling Stockholders may have against the several Underwriters with respect to any breach or alleged breach of fiduciary duty in connection with the offering of Shares contemplated by this Agreement.

14. Notices .

Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by telegram and, (a) if to the Underwriters, shall be sufficient in all respects if delivered to FBR Capital Markets & Co., 1001 19th Street North, Arlington, Virginia 22209, Attention: Syndicate Department (facsimile: 703-312-9698) and to J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179; with a copy to Gibson, Dunn & Crutcher LLP, 1050 Connecticut Avenue, N.W., Washington, DC 20036, Attention: Howard Adler, Esq. (facsimile: 202-530-9526); (b) if to the Company, shall be sufficient in all respects if delivered to the Company at the offices of the Company at 8390 East Crescent Parkway, Suite 650, Greenwood Village, Colorado 80111, Attention: Dale Francescon (facsimile: (303) 770-8320); with a copy to Greenberg Traurig, LLP, 1840 Century Park East, Suite 1900, Los Angeles, California 90067, Attention: Mark Kelson, Esq. (facsimile: 310-586-7800); or (c) if to a Selling Stockholder, c/o Sidley Austin LLP, One South Dearborn, Chicago, IL 60603, Attention: John Sabl, Esq. (facsimile: 312-853-7036).

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15. Governing Law; Headings .

THIS AGREEMENT AND ANY CLAIM, CONTROVERSY, OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES). The parties hereto agree to be subject to, and hereby irrevocably submit to, the exclusive jurisdiction of any United States federal or New York state court sitting in New York, New York, in respect of any action, suit, proceeding, inquiry or investigation arising out of or relating to this Agreement or the transactions contemplated herein, and irrevocably agree that all claims in respect of any such action, suit, proceeding, inquiry or investigation may be heard and determined in any such court. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, any objection to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.

16. Parties at Interest .

The Agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Company, the Selling Stockholders and the controlling persons, directors and officers referred to in Sections 11 and 12 hereof, and their respective successors, assigns, executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.

17. Entire Agreement .

This Agreement and the Engagement Letter, dated March 11, 2013, between FBR Capital Markets & Co. and the Company (the “ Engagement Letter ”), constitute the entire agreement and understanding of the parties hereto with respect to the matters and transactions contemplated hereby and supersedes all prior agreements and understanding whatsoever relating to such matters and transactions; provided that (i) to the extent there is a conflict between the provisions of the Engagement Letter and the provisions of this Agreement, the provisions of this Agreement shall prevail to that extent, and (ii) the indemnification provisions in the Engagement Letter and the Annex thereto are hereby superseded and replaced by the indemnification and contribution provisions in Section 11 of this Agreement with respect to the transactions contemplated by this Agreement.

18. Counterparts and Facsimile Signatures .

This Agreement may be signed by the parties in counterparts which together shall constitute one and the same agreement among the parties. A facsimile, PDF, or other standard form of telecommunication signature shall constitute an original signature for all purposes.

If the foregoing correctly sets forth the understanding among the Company, the Selling Stockholders and the Underwriters, please so indicate in the space provided below for the purpose, whereupon this Agreement shall constitute a binding agreement among the Company, the Selling Stockholders and the Underwriters.

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19. Amendments or Waivers .

No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

20. Headings .

The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

[ Signature page follows ]

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Very truly yours,

CENTURY COMMUNITIES, INC.

By:
		Name:
		Title:

[SELLING STOCKHOLDERS LISTED ON SCHEDULE I ATTACHED HERETO

By: [Insert Name of Attorney-in-Fact]


		[Attorney-in-Fact]


Accepted and agreed to as of the date first above written:

FBR CAPITAL MARKETS & CO.

By:
		Name:
		Title:

J.P. MORGAN SECURITIES LLC

By:
		Name:
		Title:

Each for itself and as Representatives of the other

Underwriters named on Schedule II hereto.

[Signature Page to Underwriting Agreement]

S CHEDULE I


Name of Party Selling Shares	Number of Initial Shares To Be Sold
Century Communities, Inc.		[	]
[INSERT NAMES OF SELLING STOCKHOLDERS]		[	]
[INSERT NAMES OF SELLING STOCKHOLDERS]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]
[ ]		[	]

Total:		[	]

Schedule I

S CHEDULE II


Underwriter	Number of Initial Shares To Be Purchased			Number of Option Shares To Be Purchased
FBR Capital Markets & Co.		[	]		[	]
J.P. Morgan Securities LLC		[	]		[	]
Deutsche Bank Securities Inc.		[	]		[	]
Builder Advisor Group, LLC		[	]		[	]
Zelman Partners LLC		[	]		[	]

Total:		[	]		[	]

Schedule II

S CHEDULE III

Issuer Free Writing Prospectuses

E XHIBIT A

Custody Agreement and Power of Attorney

E XHIBIT B

Form of Lockup Agreement

, 2014

FBR Capital Markets & Co.

1001 Nineteenth Street North, 18th Floor

Arlington, Virginia 22209

J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Ladies and Gentlemen:

The undersigned understands and agrees as follows:

1. FBR Capital Markets & Co. and J.P. Morgan Securities LLC (collectively, the “ Representatives ”) propose to enter into an Underwriting Agreement (the “ Agreement ”) with Century Communities, Inc., a Delaware corporation (the “ Company ”), providing for (a) the public offering by the several Underwriters of shares of the Company’s common stock, $0.01 par value per share and (b) an option for the several Underwriters offer additional shares of the Company’s common stock (all of such shares of the Company’s common stock are collectively referred to as the “ Shares ” and the transactions referred to in (a) and (b) are collectively referred to as the “ Offering ”).

2. In recognition of the benefit that the Offering will confer upon the undersigned and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the undersigned, the undersigned hereby agrees that, without the prior written consent of the Representatives (which consent may be withheld or delayed in the Representatives’ sole discretion), he, she or it will refrain during the period commencing on the date hereof and ending on the date that is 180 days after the effective date of the registration statement, from (i) offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant for the sale of, lending or otherwise disposing of or transferring, directly or indirectly, any equity securities of the Company, or any securities convertible into or exercisable or exchangeable for equity securities of the Company, or (ii) entering into any swap or other arrangement that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of equity securities of the Company, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of common stock of the Company or such other securities, in cash or otherwise.

Notwithstanding the foregoing, subject to applicable securities laws and the restrictions contained in the Company’s charter, the undersigned may transfer any securities of the Company (including, without limitation, common stock) as follows: (i) pursuant to the exercise and issuance of options; (ii) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein; (iii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein; (iv) as a distribution to stockholders, partners or members of the undersigned, provided that such stockholders, partners or members agree to be bound in writing by the restrictions set forth herein; (v) any transfer required under any benefit plans or the Company’s amended

Exhibit B-1

and restated bylaws; (vi) as required by participants in the Company’s amended and restated stock incentive plan in order to reimburse or pay federal income tax and withholding obligations in connection with the vesting of restricted stock grants; (vii) as collateral for any loan, provided that the lender agrees in writing to be bound by the restrictions set forth in herein; or (viii) with respect to sales of securities acquired after the Closing Time in the open market; provided, however, that, in each case, no filing under Section 16 of the Securities Exchange Act of 1934, as amended, is required or otherwise made. For purposes of this agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

For the avoidance of doubt, nothing shall prevent the undersigned from, or restrict the ability of the undersigned to, (i) purchase common stock on the open market or (ii) exercise any options or other convertible securities granted under any benefit plan of the Company.

3. The undersigned acknowledges that the several Underwriters are relying on the agreements of the undersigned set forth herein in making its decision to enter into the Agreement and to continue their efforts in connection with the Offering.

4. This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws.

5. This Lock-Up Agreement may be executed in one or more counterparts and delivered by facsimile or pdf, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement.

[SIGNATURE PAGE FOLLOWS]

Exhibit B-2

IN WITNESS WHEREOF, the undersigned has executed this Lock-Up Agreement, or caused this Lock-Up Agreement to be executed, as of the date first written above.

Very truly yours,

Name:

Title:

(Address)

Exhibit B-3

E XHIBIT C

Form of Notice from Representatives to the Company

E XHIBIT D

Form of Press Release

Century Communities, Inc.

[Date]

Century Communities, Inc. (the “ Company ”) announced today that FBR Capital Markets & Co. and J.P. Morgan Securities LLC, the lead book-running managers, in the Company’s recent public sale of shares of common stock is [waiving][releasing] a lock-up restriction with respect to shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver][release] will take effect on , 201 , and the shares may be sold on or after such date.

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

Exhibit D-1

Exhibit 4.2

CENTURY COMMUNITIES, INC.,

as Issuer

THE GUARANTORS named herein,

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

INDENTURE

Dated as of May 5, 2014

6.875% Senior Notes Due 2022

CROSS-REFERENCE TABLE


TIA Section				Indenture Section
310(a)(1)				7.10
(a)(2)				7.10
(a)(3)				N.A.
(a)(4)				N.A.
(b)				7.08; 7.10
311(a)				7.11
(b)				7.11
312(a)				2.05
(b)				11.03
(c)				11.03
313(a)				7.06
(b)(1)				N.A.
(b)(2)				7.06
(c)				11.02
(d)				7.06
314(a)				4.02;
				11.02
(b)				N.A.
(c)(1)				11.04
(c)(2)				11.04
(c)(3)				N.A.
(d)				N.A.
(e)				11.05
(f)				N.A.
315(a)				7.01
(b)				7.05; 11.02
(c)				7.01
(d)				7.01
(e)				6.11
316(a)(last sentence)				11.06
(a)(1)(A)				6.05
(a)(1)(B)				6.04
(a)(2)				N.A.
(b)				6.07
317(a)(1)				6.08
(a)(2)				6.09
(b)				2.04
318(a)				11.01

N.A. means Not Applicable.

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

TABLE OF CONTENTS


		Page
	Article 1

	DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.	Definitions		1
SECTION 1.02.	Other Definitions		21
SECTION 1.03.	Incorporation by Reference of Trust Indenture Act		21
SECTION 1.04.	Rules of Construction		22

	Article 2

	THE SECURITIES

SECTION 2.01.	Form and Dating		22
SECTION 2.02.	Execution and Authentication		22
SECTION 2.03.	Registrar and Paying Agent		23
SECTION 2.04.	Paying Agent To Hold Money in Trust		23
SECTION 2.05.	Securityholder Lists		24
SECTION 2.06.	Transfer and Exchange		24
SECTION 2.07.	Replacement Securities		24
SECTION 2.08.	Outstanding Securities		24
SECTION 2.09.	Temporary Securities		24
SECTION 2.10.	Cancellation		24
SECTION 2.11.	Defaulted Interest		24
SECTION 2.12.	CUSIP Numbers, ISINs, etc.		25
SECTION 2.13.	Issuance of Additional Securities		25

	Article 3

	REDEMPTION

SECTION 3.01.	Notices to Trustee		25
SECTION 3.02.	Selection of Securities to Be Redeemed		25
SECTION 3.03.	Notice of Redemption		26
SECTION 3.04.	Effect of Notice of Redemption		26
SECTION 3.05.	Deposit of Redemption Price		26
SECTION 3.06.	Securities Redeemed in Part		27
SECTION 3.07.	Optional Redemption		27
SECTION 3.08.	Mandatory Redemption		27
SECTION 3.09.	Offer to Purchase by Application of Excess Proceeds		27

	Article 4

	COVENANTS

SECTION 4.01.	Payment of Securities		29
SECTION 4.02.	Reports to Holders		29
SECTION 4.03.	Limitations on Additional Indebtedness		30
SECTION 4.04.	Limitations on Restricted Payments		32
SECTION 4.05.	Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries		35
SECTION 4.06.	Limitations on Asset Sales		36
SECTION 4.07.	Limitations on Transactions with Affiliates		37
SECTION 4.08.	Conduct of Business		38
SECTION 4.09.	Change of Control		38
SECTION 4.10.	Limitations on Designation of Unrestricted Subsidiaries		39


SECTION 4.11.	Limitations on Liens	40
SECTION 4.12.	Additional Security Guarantees	40
SECTION 4.13.	Payments for Consent	40

	Article 5

	SUCCESSOR COMPANY

SECTION 5.01.	When Issuer May Merge or Transfer Assets	41

	Article 6

	DEFAULTS AND REMEDIES

SECTION 6.01.	Events of Default	42
SECTION 6.02.	Acceleration	43
SECTION 6.03.	Other Remedies	43
SECTION 6.04.	Waiver of Defaults	44
SECTION 6.05.	Control by Majority	44
SECTION 6.06.	Limitation on Suits	44
SECTION 6.07.	Rights of Holders to Receive Payment	44
SECTION 6.08.	Collection Suit by Trustee	44
SECTION 6.09.	Trustee May File Proofs of Claim	45
SECTION 6.10.	Priorities	45
SECTION 6.11.	Undertaking for Costs	45
SECTION 6.12.	Waiver of Stay or Extension Laws	45

	Article 7

	TRUSTEE

SECTION 7.01.	Duties of Trustee	45
SECTION 7.02.	Rights of Trustee	46
SECTION 7.03.	Individual Rights of Trustee	47
SECTION 7.04.	Trustee’s Disclaimer	47
SECTION 7.05.	Notice of Defaults	47
SECTION 7.06.	Reports by Trustee to Holders	47
SECTION 7.07.	Compensation and Indemnity	48
SECTION 7.08.	Replacement of Trustee	48
SECTION 7.09.	Successor Trustee by Merger	49
SECTION 7.10.	Eligibility; Disqualification	49
SECTION 7.11.	Preferential Collection of Claims Against Issuer	49

	Article 8

	SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01.	Discharge of Liability on Securities; Defeasance	49
SECTION 8.02.	Conditions to Defeasance	50
SECTION 8.03.	Application of Trust Money	51
SECTION 8.04.	Repayment to Issuer	51
SECTION 8.05.	Indemnity for U.S. Government Obligations	51
SECTION 8.06.	Reinstatement	51

	Article 9

	AMENDMENTS

SECTION 9.01.	Without Consent of Holders	52
SECTION 9.02.	With Consent of Holders	52
SECTION 9.03.	Compliance with Trust Indenture Act	53


SECTION 9.04.	Revocation and Effect of Consents and Waivers	53
SECTION 9.05.	Notation on or Exchange of Securities	53
SECTION 9.06.	Trustee To Sign Amendments	54

	Article 10

	GUARANTEES

SECTION 10.01.	Guarantees	54
SECTION 10.02.	Limitation on Liability	55
SECTION 10.03.	Successors and Assigns	55
SECTION 10.04.	No Waiver	55
SECTION 10.05.	Modification	55
SECTION 10.06.	Execution and Delivery of Security Guarantee	55
SECTION 10.07.	Release of Guarantor	56
SECTION 10.08.	Contribution	56

	Article 11

	MISCELLANEOUS

SECTION 11.01.	Trust Indenture Act Controls	56
SECTION 11.02.	Notices	56
SECTION 11.03.	Communication by Holders with Other Holders	57
SECTION 11.04.	Certificate and Opinion as to Conditions Precedent	57
SECTION 11.05.	Statements Required in Certificate or Opinion	57
SECTION 11.06.	When Securities Disregarded	58
SECTION 11.07.	Rules by Trustee, Paying Agent and Registrar	58
SECTION 11.08.	Legal Holidays	58
SECTION 11.09.	Governing Law	58
SECTION 11.10.	No Recourse Against Others	58
SECTION 11.11.	Successors	58
SECTION 11.12.	Multiple Originals	58
SECTION 11.13.	Severability	58
SECTION 11.14.	Table of Contents; Headings	58
SECTION 11.15.	USA PATRIOT Act	58

Rule 144A/Regulation S Appendix

Exhibit A – Form of Initial Security

Exhibit B – Form of Exchange Security or Private Exchange Security

Exhibit C – Form of Certificate of Transfer

Exhibit D – Form of Certificate of Exchange

Exhibit E – Form of Notation of Guarantee

Exhibit F – Form of Supplemental Indenture

iii

INDENTURE dated as of May 5, 2014, among CENTURY COMMUNITIES, INC., a Delaware corporation, the Guarantors (as hereinafter defined) that from time to time become parties to this Indenture and U.S. BANK NATIONAL ASSOCIATION, as Trustee (the “ Trustee ”).

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Initial Securities, Exchange Securities, Private Exchange Securities and any Additional Securities:

Article 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions .

“ Acquired Indebtedness ” means with respect to any Person, (1) Indebtedness of such Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary, (2) Indebtedness assumed in connection with the acquisition of an asset or assets from such Person, or (3) Indebtedness secured by a Lien encumbering any asset acquired by such Person, in each case whether or not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary or such merger or acquisition. Acquired Indebtedness shall be deemed to have been incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clauses (2) and (3) of the preceding sentence, on the date of consummation of such acquisition of assets.

“ Additional Assets ” means any property or assets (other than Indebtedness and Equity Interests) to be used by the Issuer or any of the Restricted Subsidiaries in a Permitted Business.

“ Additional Interest ” means any interest due and payable in accordance with Paragraph 1 of the Securities, as a result of a Registration Default (as defined in the Registration Rights Agreement).

“ Additional Securities ” means Securities issued under this Indenture after the Issue Date and in compliance with Sections 2.13 and 4.03 hereof, it being understood that any Securities issued in exchange for or replacement of any Initial Security issued on the Issue Date shall not be an Additional Security, including any such Securities issued pursuant to the Registration Rights Agreement.

“ Affiliate ” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of Sections 4.06 and 4.07 hereof, Affiliates shall be deemed to include, with respect to any Person, any other Person which beneficially owns or holds, directly or indirectly, 10% or more of any class of the Voting Stock of the referent Person. For purposes of this definition, “control” of a Person shall mean possession of the power, directly or indirectly, to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“ Applicable Premium ” means with respect to a Security at any redemption date, the greater of (1) 1.00% of the principal amount of such Security and (2) the excess of (A) the present value at such redemption date of (i) the redemption price of such Security on May 15, 2017 (such redemption price being described in paragraph 5 of the Securities and Section 3.07, exclusive of any accrued interest) plus (ii) all required remaining scheduled interest payments due on such Security to, but excluding May 15, 2017 (but excluding accrued and unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50%, over (B) the principal amount of such Security on such redemption date.

“ Asset Acquisition ” means (1) an Investment by the Issuer or any Restricted Subsidiary in any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary or shall be merged with or into the Issuer or any Restricted Subsidiary or (2) the acquisition by the Issuer or any Restricted Subsidiary of all or substantially all of the assets of any other Person or any division or line of business of any other Person.

“ Asset Sale ” means any direct or indirect sale, issuance, conveyance, transfer, lease (other than an operating lease entered into in the ordinary course of business), assignment or other disposition by the Issuer or any Restricted Subsidiary to any Person other than the Issuer or any Restricted Subsidiary (including by means of a Sale and Leaseback Transaction or a merger, consolidation or similar transaction) (collectively, for purposes of this definition, a “transfer”), in one transaction or a series of related transactions, of any assets (including Equity Interests) of the Issuer or any of its Subsidiaries. For purposes of this definition, the term “Asset Sale” shall not include:

(1) transfers of cash or Cash Equivalents;

(2) transfers of assets (including Equity Interests) that are governed by, and made in accordance with, Section 5.01;

(3) the making of Permitted Investments and Restricted Payments permitted under Section 4.04 (and transfers expressly excluded from the definition of Restricted Payments by the definition thereof);

(4) the creation or realization of any Permitted Lien;

(5) any transaction in the ordinary course of business, including without limitation dedications and other donations to governmental authorities pursuant to or in connection with a development agreement, sales (directly or indirectly), leases, Sale and Leaseback Transactions and other dispositions of (A) homes, improved land and unimproved land, whether in single or multiple lots, (B) real estate (including related amenities and improvements), whether in single or multiple lots and (C) Equity Interests of a Subsidiary, the assets of which consist entirely of amenities and improvements related to real estate, such as golf courses, and real estate underlying such amenities and improvements;

(6) dispositions of mortgage loans and related assets and mortgage-backed securities in the ordinary course of a mortgage lending business;

(7) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed $5.0 million;

(8) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

(9) any swap or exchange of assets, or lease, assignment or sublease of any real or personal property, in exchange for property or services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and the Restricted Subsidiaries as a whole, as determined in good faith by the senior management of the Issuer, in each case, in the ordinary course of business;

(10) surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;

(11) the licensing of intellectual property in the ordinary course of business or in accordance with industry practice;

(12) the disposition of assets or property that are obsolete or that are no longer useful in the conduct of the business of the Issuer and/or any Restricted Subsidiaries; and

(13) an issuance of Equity Interests by a Restricted Subsidiary to the Issuer or to a Restricted Subsidiary.

“ Attributable Indebtedness ,” when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at a rate equivalent to the Issuer’s then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of any lease included in any such Sale and Leaseback Transaction provided, however, that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligations.”

“ Board of Directors ” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the managing member or members or any controlling committee of managing members thereof or board of directors of such Person, as the case may be, (iii) in the case of any partnership, the board of directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change of Control,” any duly authorized committee of such body.

“ Borrowing Base Facility ” means one or more revolving debt facilities, in each case, with banks or other institutional lenders or other credit providers that provide for committed advances calculated by reference to the value of assets of the Issuer and its Restricted Subsidiaries, whether or not pledged as collateral to secure borrowings thereunder.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions in New York, New York or in the place of payment are authorized or required by law to close.

“ Capitalized Lease ” means an obligation required to be capitalized and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP.

“ Capitalized Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP at the time any determination thereof is to be made and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty.

“ Cash Equivalents ” means (1) marketable obligations with a maturity of one year or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof; (2) demand and time deposits and certificates of deposit or acceptances with a maturity of one year or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $250 million and the long-term debt of which is rated at the time of acquisition thereof at least “A” or the equivalent thereof by S&P, or Moody’s, or carrying an equivalent rating by a nationally recognized Rating Agency, if both of the two named Rating Agencies cease publishing ratings of investments; (3) commercial paper maturing no more than 365 days from the date of creation thereof issued by a corporation organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s; (4) repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (1) of this definition entered into with any commercial bank meeting the specifications of clause (2) of this definition; and (5) investments in money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (1) through (4) of this definition

“ Change of Control ” means the occurrence of any of the following events:

(1) any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than any Permitted Holder, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of “beneficial ownership” (as defined above) of more than 50% of the total voting power of the Voting Stock of the Issuer; provided that the acquisition of “beneficial ownership” (as defined above) of 100% of the Voting Stock of the Issuer by any direct or indirect holding company shall not constitute a Change of Control under this clause (1) if immediately after such acquisition, no “person” or “group” of related persons (as such terms are defined above) (other than any Permitted Holder) is or becomes the “beneficial owner” (as defined above) of more than 50% of the total voting power of the Voting Stock of such holding company;

(2) the members or stockholders, as applicable, of the Issuer adopt a plan or proposal for liquidation or dissolution of the Issuer; or

(3) the sale, assignment, conveyance, transfer, lease or other disposition (other than by way of a merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Issuer and the Restricted Subsidiaries (determined on a consolidated basis) taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) other than a Wholly-Owned Restricted Subsidiary or a Permitted Holder.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Consolidated Amortization Expense ” for any period means the amortization expense of the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Cash Flow Available for Fixed Charges ” for any period means, without duplication, the sum of the amounts for such period of:

(1) Consolidated Net Income, plus

(2) in each case only to the extent deducted in determining Consolidated Net Income,

(a) Consolidated Income Tax Expense to the extent actually paid with respect to such period,

(b) Consolidated Amortization Expense,

(d) Consolidated Interest Incurred, and

(e) all other non-cash items reducing the Consolidated Net Income (excluding any non-cash charge to the extent it represents or results in an accrual of a reserve for cash charges in any future period or amortization of a prepaid cash expense that was capitalized at the time of payment) for such period,

in each case determined on a consolidated basis in accordance with GAAP, minus

(3) the aggregate amount of all non-cash items, determined on a consolidated basis, to the extent such items increased Consolidated Net Income for such period other than accruals of revenue in the ordinary course of business.

“ Consolidated Depreciation Expense ” for any period means the depreciation expense of the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Fixed Charge Coverage Ratio ” means the ratio of Consolidated Cash Flow Available for Fixed Charges during the most recent four consecutive full fiscal quarters for which internal financial statements are available (the “ Four-Quarter Period ”) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the “ Transaction Date ”) to Consolidated Interest Incurred for the Four-Quarter Period. For purposes of this definition, Consolidated Cash Flow Available for Fixed Charges and Consolidated Interest Incurred shall be calculated after giving effect on a pro forma basis for the period of such calculation to:

(1) the incurrence of any Indebtedness, the inclusion of any Indebtedness on the balance sheet or the issuance of any preferred stock, in each case of the Issuer or any Restricted Subsidiary (and the application of the proceeds thereof) and any repayment, repurchase, defeasance or other discharge or the assumption by another Person that is not a Restricted Subsidiary and with respect to which the Issuer and all Restricted Subsidiaries have been validly and unconditionally released by such Person (collectively, “repayment”) of other Indebtedness or redemption of other preferred stock (other than the incurrence or repayment of Indebtedness pursuant to any revolving credit arrangement unless such Indebtedness has been permanently repaid and the related commitments terminated and not replaced) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period;

(2) any Asset Sale or disposition or Asset Acquisition (including any Asset Acquisition giving rise to the need to make such calculation as a result of the Issuer or any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring Acquired Indebtedness and also including any Consolidated Cash Flow Available for Fixed Charges (including any directly attributable pro forma expense and cost reductions calculated on a basis consistent with GAAP; provided however that any such pro forma expense and cost reductions shall be determined in good faith by a senior financial officer of the Issuer) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or disposition or Asset Acquisition or other disposition (including the incurrence of, or assumption or liability for, any such Indebtedness or Acquired Indebtedness) occurred on the first day of the Four-Quarter Period; and

(3) the Consolidated Cash Flow Available for Fixed Charges and the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with GAAP shall be excluded but only to the extent that the obligations giving rise to the Consolidated Interest Expense will not be obligations of the Issuer or any of the Restricted Subsidiaries following the Transaction Date.

If the Issuer or any Restricted Subsidiary directly or indirectly guarantees Indebtedness of a third Person (other than a Restricted Subsidiary, in the case of the Issuer, or the Issuer or another Restricted Subsidiary, in the case of a Restricted Subsidiary), the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if the Issuer or such Restricted Subsidiary had directly incurred or otherwise assumed such guaranteed Indebtedness.

If since the beginning of the Four-Quarter Period and on or prior to the Transaction Date, any Person (A) shall have become a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary and (B) shall have incurred any Indebtedness or discharged any Indebtedness or made any asset sale or disposition or any Asset Acquisition that would have required an adjustment pursuant to clause (1) or (2) above if made by the Issuer or a Restricted Subsidiary during such period, Consolidated Cash Flow Available for Fixed Charges and Consolidated Interest Incurred for such period will be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Issuer.

In calculating Consolidated Interest Incurred for purposes of determining the denominator (but not the numerator) of this Consolidated Fixed Charge Coverage Ratio:

(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on this Indebtedness in effect on the Transaction Date;

(2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter Period; and

(3) notwithstanding the immediately preceding clauses (1) and (2), interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements with a term of at least one year after the Transaction Date relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of these agreements.

“ Consolidated Income Tax Expense ” for any period means the provision for taxes of the Issuer and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Expense ” for any period means the sum, without duplication, of the total interest expense of the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP and including, without duplication:

(1) interest expense attributable to Capitalized Lease Obligations and the interest portion of rent expense associated with Attributable Indebtedness in respect of the relevant lease giving rise thereto, determined as if such lease were a Capitalized Lease;

(2) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings;

(3) the net costs associated with interest rate Hedging Obligations (including amortization of fees);

(4) amortization of debt issuance costs, debt discount (including the amortization of original issue discount resulting from the issuance of Indebtedness at less than par) or premium and other financing fees and expenses; provided , however , that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Interest Expense;

(5) the interest portion of any deferred payment obligations that constitute Indebtedness;

(6) all other non-cash interest expense; provided , however , that any non-cash interest expense or income attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instrument pursuant to GAAP shall be excluded from the calculation of Consolidated Interest Expense;

(7) all dividend payments on any series of Disqualified Equity Interests of the Issuer or any preferred stock of any Restricted Subsidiary (other than any such Disqualified Equity Interests or any preferred stock held by the Issuer or a Restricted Subsidiary or paid in Qualified Equity Interests), and;

(8) all interest on any Indebtedness of any other Person (other than a Restricted Subsidiary, in the case of the Issuer, or the Issuer or another Restricted Subsidiary, in the case of a Restricted Subsidiary) guaranteed by the Issuer or any Restricted Subsidiary or secured by a Lien on assets of the Issuer or one of the Restricted Subsidiaries, in each case to the extent paid by the Issuer or a Restricted Subsidiary.

“ Consolidated Interest Incurred ” for any period means the sum, without duplication, of (1) Consolidated Interest Expense and (2) interest capitalized for such period (including interest capitalized with respect to discontinued operations).

“ Consolidated Net Income ” for any period means the net income (or loss) of the Issuer and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from calculations of such net income (to the extent otherwise included therein), without duplication:

(1) the net income (or loss) of any Person (other than a Restricted Subsidiary) in which any Person other than the Issuer or any of the Restricted Subsidiaries has an ownership interest, except to the extent that cash in an amount equal to any such income has actually been received by the Issuer or any of the Restricted Subsidiaries during such period or such loss has been funded with cash or assets of the Issuer or any Restricted Subsidiary;

(2) for the purposes of calculating the Restricted Payments Basket only, the net income of any Non-Guarantor Subsidiary of such Person during such period to the extent that (but only so long as) the declaration or payment of dividends or similar distributions by such Non-Guarantor Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period;

(3) for the purposes of calculating the Restricted Payments Basket only, in the case of a successor to the Issuer by consolidation, merger or transfer of its assets, any income (or loss) of the successor prior to such merger, consolidation or transfer of assets;

(4) for the purposes of calculating the Restricted Payments Basket only, except to the extent includible in the consolidated net income of the Issuer pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or consolidated with the Issuer or any Restricted Subsidiary or (b) the assets of such Person are acquired by the Issuer or any Restricted Subsidiary;

(5) any gain (or loss), together with any related provisions for taxes on any such gain (or the tax effect of any such loss), realized during such period by the Issuer or any Restricted Subsidiary upon (a) the acquisition of any securities, or the extinguishment of any Indebtedness or early termination of Hedging Obligations or other derivative instruments, of the Issuer or any Restricted Subsidiary or (b) any Asset Sale by the Issuer or any Restricted Subsidiary;

(6) any extraordinary gain (or extraordinary loss), together with any related provision for taxes on any such extraordinary gain (or the tax effect of any such extraordinary loss), realized by the Issuer or any Restricted Subsidiary during such period;

(7) the cumulative effect of a change in accounting principles;

(8) any unrealized net gain or loss resulting in such period from Hedging Obligations or other derivative instruments;

(9) any non-cash impairment charge or asset write-off (other than with respect to inventory), in each case pursuant to GAAP; and

(10) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or employees.

Any return of capital with respect to an Investment that increased the Restricted Payments Basket pursuant to Section 4.04(a)(3)(D) or decreased the amount of Investments outstanding pursuant to clause (18) of the definition of “Permitted Investments” shall be excluded from Consolidated Net Income for purposes of calculating the Restricted Payments Basket.

“ Consolidated Tangible Assets ” means, as of any date, the total amount of assets of the Issuer and the Restricted Subsidiaries less Intangible Assets of the Issuer and the Restricted Subsidiaries, in each case as shown on the consolidated balance sheet of the Issuer for the then most recently ended fiscal quarter for which internal financial statements are available.

“ Consolidated Tangible Net Worth ” means, as of any date, the stockholders’ or members’ equity of the Issuer and the Restricted Subsidiaries less Intangible Assets of the Issuer and the Restricted Subsidiaries, in each case as shown on the consolidated balance sheet of the Issuer for the then most recently ended fiscal quarter for which internal financial statements are available.

“ Corporate Trust Office ” means the office at the address of the Trustee specified in Section 11.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Issuer.

“ Credit Facilities ” means one or more debt facilities (including, without limitation, the Proposed Credit Facility), commercial paper facilities or debt securities or other forms of debt financing, in each case, with banks, institutional investors or other lenders or credit providers or a trustee providing for the revolving credit loans, term loans, project loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), bankers acceptances, letters of credit or issuances of debt securities, including any related notes, guarantees, collateral documents, instruments, indentures, documents and agreements executed in connection therewith and in each case, as amended, restated, modified, renewed, extended, supplemented, restructured, refunded, replaced in any manner (whether upon or after termination or otherwise) or in part from time to time, in one or more instances and including any amendment increasing the amount of Indebtedness incurred or available to be borrowed thereunder (provided that such additional Indebtedness is incurred in accordance with Section 4.03, extending the maturity of any Indebtedness incurred thereunder or contemplated thereby or deleting, adding or substituting one or more parties thereto (whether or not such added or substituted parties are banks or other institutional lenders), including one or more separate instruments or facilities, in each case, whether any such amendment, restatement, modification, renewal, extension, supplement, restructuring, refunding, replacement or refinancing occurs simultaneously or not with the termination or repayment of a prior Credit Facility.

“ Default ” means (1) any Event of Default or (2) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.

“ Designated Non-cash Consideration ” means the Fair Market Value of non-cash consideration received by the Issuer or any of the Restricted Subsidiaries in connection with an Asset Sale that is designated as “Designated Non-cash Consideration” pursuant to an Officers’ Certificate, setting forth the basis of such valuation.

“ Directly Related Assets ” means, with respect to any particular property, assets directly related thereto or derived therefrom, such as proceeds (including insurance proceeds), products, rents, and profits thereof and improvements and accessions thereto.

“ Disqualified Equity Interests ” of any Person means any class of Equity Interests of such Person that, by their terms, or by the terms of any related agreement or of any security into which they are convertible, puttable or exchangeable, are, or upon the happening of any event or the passage of time would be, (i) required to be redeemed by such Person, whether or not at the option of the holder thereof, (ii) convertible into or exchangeable for Indebtedness or Disqualified Equity Interests (excluding Equity Interests

which are convertible or exchangeable solely at the option of the Issuer or a Restricted Subsidiary (it being understood that upon such conversion or exchange it shall be an incurrence of such Indebtedness or Disqualified Stock)); or (iii) mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, in each case, on or prior to the date which is the earlier of 91 days after the final maturity date of the Securities or the date the Securities are no longer outstanding; provided , however , that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that are not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided further , however , that any Equity Interests that would constitute Disqualified Equity Interests solely because of provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the Issuer to redeem such Equity Interests upon the occurrence of a Change of Control or Asset Sale (each defined in a substantially identical manner to the corresponding definitions in this Indenture) shall not constitute Disqualified Equity Interests if the terms of such Equity Interests (and all such securities into which it is convertible or exchangeable or for which it is redeemable) provide that the Issuer or the Restricted Subsidiaries, as applicable, are not required to repurchase or redeem any such Equity Interests (and all such securities into which it is convertible or exchangeable or for which it is redeemable) pursuant to such provision prior to compliance by the Issuer with Sections 4.06 or 4.09 and such repurchase or redemption complies with Section 4.04.

“ Equity Interests ” of any Person means (1) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person but excluding any debt securities convertible or exchangeable into such equity.

“ Equity Offering ” means a public or private equity offering or sale after the Issue Date of Qualified Equity Interests by the Issuer.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Fair Market Value ” means, with respect to any asset or liability, the fair market value of such asset or liability as is determined in good faith by an officer of the Issuer; provided that such determination of Fair Market Value shall be made in good faith by the Board of Directors of the Issuer or a duly authorized committee thereof, as evidenced by a resolution of such Board or committee, if such Fair Market Value would exceed $25.0 million.

“ Final Offering Memorandum ” means the final offering memorandum, dated April 30, 2014, for the sale of the Securities by the Issuer.

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time. Unless otherwise specified, all ratios and computations, contained in this Indenture will be computed in conformity with GAAP, except that in the event the Issuer is acquired in a transaction that is accounted for using purchase accounting, the effects of the application of purchase accounting shall be disregarded in the calculation of such ratios and other computations contained in this Indenture.

“ GP Indebtedness ” means as of any date the amount of the liability of Issuer or any of its Restricted Subsidiaries in its capacity as a general partner for the Indebtedness of a partnership or Joint Venture after subtracting the Fair Market Value as of such date of the assets of such partnership or Joint Venture that secure such Indebtedness.

“ Guarantee ” or “ guarantee ” means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), “guarantee,” when used as a verb, and “guaranteed” have correlative meanings.

“ Guarantors ” means each Person that executes a Security Guarantee in accordance with this Indenture, and their respective successors and assigns, in each case, until such Person is released from its Security Guarantee in accordance with this Indenture.

“ Hedging Obligations ” of any Person means the obligations of such Person pursuant to (1) any interest rate swap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect such Person against fluctuations in or manage exposure to interest rates, (2) agreements or arrangements designed to protect such Person against fluctuations in or manage exposure to foreign currency exchange rates in the conduct of its operations, or (3) any forward contract, commodity swap agreement, commodity option agreement or other similar agreement or arrangement designed to protect such Person against fluctuations in or manage exposure to commodity prices, in each case entered into for bona fide hedging purposes and not for the purpose of speculation.

“ Holder ” or “ Securityholder ” means any registered holder, from time to time, of the Securities.

“ Housing Unit ” means a detached or attached home (including a townhouse or condominium) owned by the Issuer or a Subsidiary of the Issuer (i) which is completed or for which there has been a start of construction and (ii) which has been or is being constructed on any real estate which immediately prior to the start of construction constituted a Lot.

“ Immaterial Subsidiary ” means, at any date of determination, any Restricted Subsidiary whose total assets at the last day of the most recently ended fiscal quarter ending prior to such date for which internal financial statements are available were less than $10.0 million, determined in accordance with GAAP.

“ incur ” means, with respect to any Indebtedness or obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary or at the time such Person merged with or into the Issuer or a Restricted Subsidiary shall be deemed to have been incurred at such time and (2) neither the accrual of interest nor the accretion of original issue discount shall be deemed to be an incurrence of Indebtedness.

“ Indebtedness ” of any Person at any date means, without duplication:

(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);

(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all obligations of such Person in respect of letters of credit, letters of guarantee, bankers’ acceptances or other similar instruments (or reimbursement obligations with respect thereto);

(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services due more than 365 days after such property is acquired or such services are completed, except (a) trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services and (b) any earn-out or similar obligation until the amount of such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;

(5) the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Equity Interests or, with respect to any Restricted Subsidiary, any preferred stock (but excluding, in each case, any accrued dividends),

(6) all Capitalized Lease Obligations of such Person,

(7) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person,

(8) all Indebtedness of other Persons guaranteed by such Person to the extent of such guarantee (whether or not such items would appear on the balance sheet of such Person in accordance with GAAP); provided that Indebtedness of the Issuer or its Subsidiaries that is guaranteed by the Issuer or its Subsidiaries shall be counted only once in the calculation of the amount of Indebtedness of the Issuer and its Subsidiaries on a consolidated basis;

(9) all Attributable Indebtedness; and

(10) to the extent not otherwise included in this definition, net obligations of such Person under Hedging Obligations (the amount of any such obligations to be equal at any time to the net termination values of such agreements or arrangements giving rise to such obligations that would be payable by such Person at such time).

Notwithstanding the foregoing the following shall not be considered Indebtedness : (a) accrued expenses, trade payables, customer deposits or deferred income taxes arising in the ordinary course of business, (b) completion guarantees entered into in the ordinary course of business, (c) obligations in respect of district improvement bonds pertaining to roads, sewers and other infrastructure, and (d) Indebtedness that has been discharged or defeased in accordance with its governing documents.

Except as provided in this paragraph, the amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (7) of this definition, the lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of other Persons on the date that the Lien attaches and (b) the amount of the Indebtedness secured. The outstanding balance at any date of all unconditional obligations of an instrument having a principal amount shall be the outstanding principal amount thereof. The amount outstanding as of any date of any Indebtedness issued with original issue discount shall be the accreted value thereof. Except to the extent provided in the preceding sentence, the amount of any Indebtedness that is convertible into or exchangeable for Equity Interests of the Issuer outstanding as of any date shall be deemed to be equal to the principal and premium, if any, in respect of such Indebtedness, notwithstanding the provisions of GAAP (including Accounting Standards Codification Topic 470-20, Debt-Debt with Conversion and Other Options). For purposes of clause (5) of this definition, the “maximum mandatory redemption or repurchase price” of any Disqualified Equity Interests or preferred stock that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interest or preferred stock as if such Disqualified Equity Interests or preferred stock were redeemed on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Indenture.

“ Indenture ” means this Indenture as amended or supplemented from time to time.

“ Indebtedness to Tangible Net Worth Ratio ” means, with respect to any determination date, the ratio of (i) total consolidated Indebtedness of the Issuer and the Restricted Subsidiaries to (ii) the Consolidated Tangible Net Worth of the Issuer, in each case, as of the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the date of the transaction giving rise to the need to calculate the Indebtedness to Tangible Net Worth Ratio. The Indebtedness to Tangible Net Worth Ratio shall be calculated on a pro forma basis consistent with the pro forma adjustments set forth in the definition of “Consolidated Fixed Charge Coverage Ratio.”

“ Independent Financial Advisor ” means an accounting appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of the Issuer’s Board of Directors, qualified to perform the task for which it has been engaged and disinterested and independent with respect to the Issuer and its Affiliates; provided , however , that the prior rendering of service to the Issuer or an Affiliate of the Issuer shall not, by itself, disqualify the advisor.

“ Intangible Assets ” means, with respect to any Person, all goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and all other items which would be treated as intangibles on the consolidated balance sheet of such Person prepared in accordance with GAAP.

“ Investments ” of any Person means, without duplication:

(1) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;

(2) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person;

(3) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP; and

(4) the Designation of any Subsidiary as an Unrestricted Subsidiary.

Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. The amount of any Investment pursuant to clause (4) of this definition shall be the Designation Amount determined in accordance with Section 4.10. Notwithstanding the foregoing, redemptions of Equity Interests of the Issuer shall be deemed not to be Investments.

“ Issue Date ” means the date on which the Securities are originally issued under this Indenture.

“ Issuer ” means Century Communities, Inc., a Delaware corporation, and its successors.

“ Joint Venture ” means a corporation, limited liability company, partnership or other entity engaged in a Permitted Business (other than an entity constituting a Wholly Owned Subsidiary or an Unrestricted Subsidiary of the Issuer) in which the Issuer or any Restricted Subsidiaries owns, directly or indirectly, at least 10% of the Equity Interests.

“ Legal Holiday ” means any date that is not a Business Day.

“ Lien ” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, lease, easement, restriction, covenant, charge, security interest, priority or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, and any lease in the nature thereof, any option or other agreement to sell or give a security interest in, and any filing of, or agreement to give, any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than cautionary filings in respect of operating leases).

“ Lots ” means all land owned by the Issuer or a Subsidiary of the Issuer which is zoned by the applicable governmental authority having jurisdiction for construction and use as Housing Units.

“ Model Home Unit ” means a completed Housing Unit to be used as a model home in connection with the sale of Housing Units in a residential housing project.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Net Available Proceeds ” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities or other assets received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Sale or received in any other non-cash form), net of

(1) brokerage commissions and other fees and expenses (including fees and expenses of legal counsel, accountants and investment banks) of such Asset Sale;

(2) provisions for taxes payable as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);

(3) amounts required to be paid to any Person (other than the Issuer or any Restricted Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon in accordance with the terms thereof;

(4) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold; and

(5) appropriate amounts to be provided by the Issuer or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other postemployment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale; provided , however , that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available Proceeds.

“ Non-Guarantor Subsidiary ” means any Restricted Subsidiary that is not a Guarantor.

“ Non-Recourse Indebtedness ” with respect to any Person means Indebtedness of such Person for which (1) the sole legal recourse for collection of principal and interest on such Indebtedness is against the specific property identified in the instruments evidencing or securing such Indebtedness and such property was acquired, developed or improved with the proceeds of such Indebtedness or such Indebtedness was incurred within 365 days after the acquisition, development or improvement of such property and (2) no other assets of such Person may be realized upon in collection of principal or interest on such Indebtedness. Indebtedness that is otherwise Non-Recourse Indebtedness will not lose its character as Non-Recourse Indebtedness because there is recourse for (a) environmental warranties or indemnities, (b) indemnities for and liabilities arising from fraud, misrepresentation, misapplication or non-payment of rents, profits, insurance and condemnation proceeds and other sums actually received by the obligor from secured assets to be paid to the lender, waste and mechanics liens or (c) similar customary “bad-boy” guarantees.

“ Officer ” of any Person means any of the following of such Person: the Chairman of the Board of Directors, the Chief Executive Officer (including, for the avoidance of doubt, any Co-Chief Executive Officer), the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary.

“ Officers’ Certificate ” of any Person means a certificate signed by two Officers of such Person.

“ Opinion of Counsel ” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee.

“ PAPA ” means an arrangement between the Issuer or any Restricted Subsidiary and any other Person (other than an Affiliate of the Issuer) entered into in connection with the acquisition of real estate by the Issuer or a Restricted Subsidiary from such Person, that provides for one or more future payments to such Person or any of its Affiliates, the amount of which is calculated by reference to the sales price of such real estate upon a disposition by the Issuer or a Restricted Subsidiary of such real estate (or parts thereof).

“ Pari Passu Indebtedness ” means any Indebtedness of the Issuer or any Guarantor that ranks equally in right of payment with the Securities or the Security Guarantee of such Guarantor, as applicable (without giving effect to collateral arrangements).

“ Permitted Business ” means (i) any business engaged in by the Issuer or any of the Restricted Subsidiaries on the Issue Date, (ii) any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, or necessary to, the business described in clauses (i) or (iii) of this definition and (iii) any business in the homebuilding, real estate development, commercial real estate development or management, brokerage and the sale, rental or management of homes and other real estate, mortgage lending or servicing, title or title-related services, homeowners’ insurance or community planning industries, or (iv) any other business which is not otherwise material to the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

“ Permitted Holders ” means (i) Messrs. Dale Francescon and Robert J. Francescon; (ii) any spouse, civil partner or relative (or the spouse or civil partner of such relative) of either Person specified in clause (i) of this definition; (iii) any Person directly or indirectly controlled by, or any trust for the benefit of, any Person specified in clauses (i) and (ii) of this definition; (iv) the estate, executors, administrators or similar Persons for any Person specified in clauses (i), (ii) or (iii) of this definition; (v) any Person or any of the Persons who were a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) whose ownership of assets or Voting Stock has triggered a Change of Control in respect of which a Change of Control Offer has been made and all Securities that were tendered therein have been accepted and paid; and (vi) any corporation, limited liability company or other entity more than 50% of the voting and economic rights of the equity interests of which are held, directly or indirectly, by any one or more of the foregoing Persons.

“ Permitted Investment ” means:

(1) Investments by the Issuer or any Restricted Subsidiary in any Restricted Subsidiary;

(2) Investments by the Issuer or any of the Restricted Subsidiaries in a Person that is engaged in a business permitted under Section 4.08 if as a result of or immediately following such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person, in one transaction or a series of related transactions, is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary,

and, in each case, any Investment held or committed to by such Person at the time of such acquisition, merger, consolidation or transfer; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer; and any extension, modification or renewal of any such Investment, but only to the extent such extension, modification or renewal does not involve additional advances, contributions or other Investments of cash or other assets, or other increases thereof (other than as a result of the appreciation, accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the date such Person was acquired);

(3) Investments in the Issuer by any Restricted Subsidiary;

(4) loans and advances to directors, employees and officers of the Issuer and the Restricted Subsidiaries in the ordinary course of business not in excess of $2.0 million with respect to all loans or advances outstanding at any time (without giving effect to the forgiveness of any such loan)

(5) Hedging Obligations incurred pursuant to Section 4.03(b)(4);

(6) cash or Cash Equivalents;

(7) receivables owing to the Issuer or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however , that such trade terms may include such concessionary trade terms as the Issuer or any such Restricted Subsidiary deems reasonable under the circumstances;

(8) Investments received (i) in compromise, settlement or resolution of obligations of trade creditors or customers that were incurred in the ordinary course of business of the Issuer or any Restricted Subsidiary, including pursuant to any plan of reorganization or similar arrangement, including foreclosure, perfection or enforcement of any Lien, upon the bankruptcy or insolvency of such trade creditors or customers, (ii) in compromise, settlement or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates or (iii) as a result of a foreclosure by the Issuer or any Restricted Subsidiary of any Lien;

(9) Investments made by the Issuer or any Restricted Subsidiary as a result of non-cash consideration received in connection with an Asset Sale made in compliance with Section 4.06;

(10) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation performance and other similar deposits in the ordinary course of business;

(11) Investments in existence or committed to on the Issue Date and any extension, modification or renewal of such Investments, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof to which the Issuer or any Subsidiary was not bound on the Issue Date (other than as a result of the appreciation, accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Issue Date);

(12) Guarantees issued in accordance with Section 4.03;

(13) obligations (but not payments thereon) with respect to homeowners association obligations, community facility district bonds, metro district bonds, mello-roos bonds and subdivision improvement bonds and similar bonding requirements arising in the ordinary course of business of a homebuilder;

(14) guarantee obligations, including completion guarantee or indemnification obligations (other than for the payment of borrowed money), entered into in the ordinary course of business and incurred for the benefit of any adjoining landowner, lender, seller of real property or municipal government authority (or enterprises thereof) in connection with the acquisition, construction, subdivision, entitlement and development of real property;

(15) Investments in Joint Ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in the joint venture arrangements and similar binding arrangements in the ordinary course of business;

(16) extensions of trade credit, asset purchases (including purchases of inventory, supplies and materials) and the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons, in each case in the ordinary course of business;

(17) Investments by the Issuer or any Restricted Subsidiary in Joint Ventures and Unrestricted Subsidiaries engaged in a Permitted Business at any one time outstanding not to exceed the greater of (a) $30.0 million and (b) 7.25% of Consolidated Tangible Assets determined at the time of such Investment (with each Investment being valued as of the date made and without regard to subsequent changes in value);

(18) other Investments in an aggregate amount at any one time outstanding not to exceed the greater of $15.0 million and 3.5% of Consolidated Tangible Assets determined at the time of such Investment (with each Investment being valued as of the date made and without regard to subsequent changes in value);

(19) lease, utility, marketing and business development and other similar deposits made in the ordinary course of business; and

(20) any Investment (other than any Investment made in accordance with clause (2) of this definition) to the extent made in exchange for the issuance of Qualified Equity Interests of the Issuer.

The amount of Investments outstanding at any time pursuant to clauses (17) and (18) of this definition shall be deemed to be reduced: (a) upon the disposition or repayment of or return on any Investment made pursuant to clauses (17) and (18) of this definition, by an amount equal to the return of capital with respect to such Investment to the Issuer or any Restricted Subsidiary (to the extent not included in the computation of Consolidated Net Income), less the cost of the disposition of such Investment and net of taxes and (b) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the lesser of (x) the Fair Market Value of the Issuer’s proportionate interest in such Subsidiary immediately following such Redesignation, and (y) the aggregate amount of Investments in such Subsidiary that increased (and did not previously decrease) the amount of Investments outstanding pursuant to clauses (17) or (18) of this definition.

“ Permitted Liens ” means the following types of Liens:

(1) Liens securing Permitted Indebtedness incurred pursuant to and outstanding under Section 4.03(b)(1) not to exceed $75.0 million in aggregate principal amount at any time outstanding; provided that, so long as the Indebtedness to Tangible Net Worth Ratio would be no more than 0.5 to 1.00 on a pro forma basis immediately after the incurrence thereof, an aggregate principal amount of such Permitted Indebtedness may be secured under this clause (1) not to exceed $150.0 million in aggregate principal amount at any time outstanding;

(2) (a) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, construction contractors, repairmen and other Liens imposed by law incurred in the ordinary course of business and (b) Liens for taxes, assessments or governmental or quasi-governmental charges or claims, in either case, for sums not yet delinquent or being contested in good faith by appropriate proceedings, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;

(3) Liens incurred or deposits and pledges made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, public or statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds, development obligations, progress payments, utility services, developer’s or other obligations to make on-site or off-site improvements and other similar obligations (including those to secure health, safety and environmental obligations) (exclusive of obligations for the payment of borrowed money);

(4) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person in the ordinary course of business to facilitate the purchase, shipment or storage of such inventory or other goods; provided , however , that such bankers’ acceptances do not constitute Indebtedness;

(5) Liens securing reimbursement obligations with respect to commercial letters of credit issued pursuant to the request of and for the due account of such Person in the ordinary course of its business which encumber documents, goods covered thereby and other assets relating to such letters of credit and products and proceeds thereof;

(6) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Issuer or any Restricted Subsidiary, including rights of offset and setoff;

(7) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Issuer or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that (a) such account is not a dedicated cash collateral account and is not subject to restrictions against access by the Issuer or such Restricted Subsidiary in excess of those set forth by regulations promulgated by the Federal Reserve Board, (b) such account is not intended by the Issuer or any Restricted Subsidiary to provide collateral to the depository institution and (c) in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(8) leases or subleases, licenses or sublicenses, (or any Liens related thereto) granted to others that do not materially interfere with the ordinary course of business of the Issuer or any Restricted Subsidiary;

(9) Liens arising from filing Uniform Commercial Code financing statements regarding operating leases entered into by the Issuer and the Restricted Subsidiaries in the ordinary course of business;

(10) Liens securing all of the Securities and Liens securing any Security Guarantee with respect to all of the Securities;

(11) Liens in favor of the Trustee under and as permitted by this Indenture and similar Liens in favor of other trustees, agents and representatives;

(12) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue Date (other than Liens permitted under clause (1)), plus renewals and extensions of such Liens secured by the same or similar property (without increase in the amount, or change in any direct or contingent obligor, of the Indebtedness or other obligations secured thereby);

(13) Liens in favor of the Issuer or any Restricted Subsidiary;

(14) Liens securing Non-Recourse Indebtedness of the Issuer, any Restricted Subsidiary permitted to be incurred under this Indenture; provided , that such Liens apply only to (a) the property financed out of the net proceeds of such Non-Recourse Indebtedness within 270 days after the incurrence of such Non-Recourse Indebtedness and (b) Directly Related Assets;

(15) Liens securing Purchase Money Indebtedness and Refinancing Indebtedness in respect thereof permitted to be incurred by Section 4.03(b)(7), provided that such Liens apply only to (a) the asset acquired, installed, designed, constructed or improved with the proceeds of such Purchase Money Indebtedness and, except with respect to Refinancing Indebtedness, within 270 days after the incurrence of such Purchase Money Indebtedness and (b) Directly Related Assets;

(16) Liens securing Acquired Indebtedness permitted to be incurred under this Indenture; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than Directly Related Assets); and provided , further that such Liens were not incurred in connection with or in contemplation or anticipation of the acquisition of such Person by the Issuer or any Restricted Subsidiaries;

(17) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Issuer or any such Restricted Subsidiary (and not created in anticipation or contemplation thereof); provided , that such Liens may not extend to any other assets owned by the Issuer or any Restricted Subsidiary;

(18) Liens to secure Attributable Indebtedness permitted to be incurred under this Indenture; provided that any such Lien shall not extend to or cover any assets of the Issuer or any Restricted Subsidiary other than (a) the assets which are the subject of the Sale and Leaseback Transaction in which the Attributable Indebtedness is incurred and (b) Directly Related Assets;

(19) Liens deemed to exist by reason of (i) any encumbrance or restriction (including put and call arrangements) with respect to the Equity Interests of any joint venture or similar arrangement pursuant to any joint venture or similar agreement or (ii) any encumbrance or restriction imposed under any contract for the sale by the Issuer or any Subsidiary of the Issuer of the Equity Interests of any Subsidiary of the Issuer, or any business unit or division of the Issuer or any Restricted Subsidiary permitted by this Indenture; provided that in each case such Liens shall extend only to the relevant Equity Interests;

(20) Liens to secure Indebtedness which is incurred in compliance with Section 4.03 and that refinances, refunds, replaces, amends, extends or modifies, as a whole or in part, any Indebtedness that was previously so secured pursuant to clauses (10), (12), (16), (17), (18) and (20) of this definition; provided that in each case (i) such Liens do not extend to any additional assets than those that secured the Indebtedness being refinanced, refunded, replaced, amended, extended, or modified (other than Directly Related Assets) and (ii) the Indebtedness secured by the new Lien is not increased to an amount greater than the sum of (x) the outstanding principal amount, or, if greater, the committed amount, of the Indebtedness being refinanced, refunded, replaced, amended, extended or modified, plus accrued and unpaid interest thereon and (y) the amount of any premium paid (including tender premiums), and the amount or expenses incurred by the Issuer or a Restricted Subsidiary in connection with such refunding, refinancing, replacement, amendment, extension or modification;

(21) attachment or judgment Liens not giving rise to a Default and which are adequately bonded and being contested in good faith by appropriate proceedings;

(22) survey exceptions, easements, rights-of-way, dedications, covenants, conditions, restrictions, reservations, assessment district and other similar charges or encumbrances not materially interfering with the ordinary course of business of the Issuer and its Subsidiaries;

(23) zoning restrictions, easements, licenses, reservations, encroachments, protrusion permits, servitudes, covenants, conditions, waivers, restrictions on the use of real property or minor irregularities in title thereto (and with respect to leasehold interests, mortgages, obligations, liens and other encumbrances recorded against the fee estate, with or without consent of the lessee), which do not materially impair the use of such real property in the ordinary course of business of the Issuer and its Subsidiaries or the value of such real property for the purpose of such business;

(24) Liens on Equity Interests in an Unrestricted Subsidiary to the extent that such Liens secure Indebtedness of such Unrestricted Subsidiary;

(25) Liens for homeowner, condominium and similar association fees and assessments and other payments;

(26) Licenses of intellectual property granted in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Issuer or any Restricted Subsidiary;

(27) pledges, deposits and other Liens existing under, or required to be made in connection with, (i) earnest money obligations, escrows or similar purpose undertakings or indemnifications in connection with any option agreements or purchase and sale agreement, (ii) development agreements or other contracts entered into with governmental authorities (or an entity sponsored by a governmental authority), in connection with the entitlement of real property or (iii) agreements for the funding of infrastructure, including in respect of the issuance of community facility district bonds, metro district bonds, mello-roos bonds and subdivision improvement bonds, and similar bonding requirements arising in the ordinary course of business of a homebuilder;

(28) Liens securing Hedging Obligations and Cash Management Obligations;

(29) Liens on Model Home Units and additions, accessions, improvements and replacements and customary deposits in connection therewith and proceeds and products therefrom;

(30) rights of purchasers and borrowers with respect to security deposits, escrow funds and other amounts held by the Issuer or any Restricted Subsidiary;

(31) any interest or title of a lessor under a Capitalized Lease Obligation or an operating lease;

(32) Liens securing Indebtedness; provided that the principal amount of such Indebtedness secured pursuant to this clause (32) together with all other Indebtedness then outstanding and incurred under this clause (32) does not exceed the greater of $15.0 million and 3.0% of Consolidated Tangible Assets at the time of incurrence;

(33) Liens securing Indebtedness of the Issuer or any Restricted Subsidiary in respect of Indebtedness of Joint Venture permitted to be incurred under this Indenture; provided that, with respect to such Indebtedness, such Liens do not extend to assets of the Issuer or any Restricted Subsidiaries other than (x) assets of the Joint Venture or (y) the Equity Interests held by the Issuer or a Restricted Subsidiary in such Joint Venture to the extent that such Liens secure Indebtedness in respect of such Joint Venture owing to lenders who have also been granted Liens on assets of such Joint Venture to secure Indebtedness of such Joint Venture;

(34) Liens securing obligations of the Issuer or any Restricted Subsidiary to any third party in connection with PAPAs, provided that such Liens do not at any time encumber any property, other than the property (and additions, accessions, improvements and replacements and customary deposits in connection therewith and proceeds and products therefrom) acquired in connection with such PAPA and the proceeds and products thereof; and

(35) any right of first refusal, right of first offer, option, contract or other agreement to sell an asset; provided such sale is not otherwise prohibited under this Indenture.

“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.

“ Plan of Liquidation ” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to creditors and holders of Equity Interests of such Person

“ principal ” means, with respect to the Securities, the principal of, and premium, if any, on the Securities.

“ Proposed Credit Facility ” means the contemplated unsecured revolving Credit Agreement by and between the Issuer and one or more lenders, as the same is entered into and as it may be amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time (including increasing the amount loaned thereunder; provided that such additional Indebtedness is incurred in accordance with Section 4.03).

“ Purchase Money Indebtedness ” means Indebtedness, including Capitalized Lease Obligations, of the Issuer or any Restricted Subsidiary incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment used in the business of the Issuer or any Restricted Subsidiary or the cost of installation, design, construction or improvement thereof; provided, however , that (1) the amount of such Indebtedness shall not exceed such purchase price or cost (including financing costs), (2) such Indebtedness shall not be secured by any asset other than the specified asset being financed or, in the case of real property or fixtures, including additions and improvements, the real property to which such asset is attached and Directly Related Assets and (3) such Indebtedness shall be incurred within 365 days after such acquisition of such asset by the Issuer or such Restricted Subsidiary or such installation, design, construction or improvement.

“ Qualified Equity Interests ” means Equity Interests of such Person other than Disqualified Equity Interests; provided , however , that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of any Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person and not repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan) and not repaid. Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Issuer.

“ Rating Agency ” means each of S&P and Moody’s or, if S&P or Moody’s or both shall not make a rating on the Securities publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer (as certified by a resolution of the Board of Directors) which shall be substituted for S&P or Moody’s or both, as the case may be.

“ redeem ” means to redeem, repurchase, purchase, defease, retire, discharge or otherwise acquire or retire for value; and “redemption” shall have a correlative meaning.

“ Refinancing Indebtedness ” means Indebtedness of the Issuer or a Restricted Subsidiary issued in exchange for, or the proceeds from the issuance and sale or disbursement of which are used to refund, replace, repurchase, renew, extend, redeem or refinance in whole or in part, any Indebtedness of the Issuer or any Restricted Subsidiary existing on the Issue Date or incurred in compliance with this Indenture (the “ Refinanced Indebtedness ”) in a principal amount (or if issued with original issue discount, an issue price) not in excess of the principal amount of the Refinanced Indebtedness (plus, in each case, the amount of any premium paid (including tender premiums), accrued and unpaid interest and the amount of expenses incurred by the Issuer or any Restricted Subsidiary in connection with such repayment or amendment); provided that:

(1) if the Refinanced Indebtedness was subordinated in right of payment to the Securities or the Security Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms, is expressly subordinated in right of payment to the Securities or the Security Guarantees, as the case may be, at least to the same extent as the Refinanced Indebtedness and if the Refinanced Indebtedness was pari passu with the Securities or the Security Guarantees, as the case may be, then the Refinancing Indebtedness ranks pari passu with, or is expressly subordinated in right of payment to, the Securities or the Security Guarantees, as the case may be;

(2) the Refinancing Indebtedness has a Stated Maturity that is not earlier than the earlier of (a) the Stated Maturity of the Refinanced Indebtedness being repaid or amended or (b) the date that is 91 days after the Stated Maturity of the Securities;

(3) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the Stated Maturity of the Securities has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the Stated Maturity of the Securities; and

(4) Refinancing Indebtedness shall not include Indebtedness of a Non-Guarantor Subsidiary that refinances Indebtedness of the Issuer or a Guarantor.

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of the Issue Date, among the Issuer and the other parties named on the signature pages thereof, relating to the Securities, as the same may be amended, supplemented or modified from time to time.

“ Restricted Payment ” means any of the following:

(1) the declaration or payment of any dividend or any other distribution (whether made in cash, securities or other property) on Equity Interests of the Issuer or any Restricted Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Issuer or any Restricted Subsidiary, including any payment in connection with any merger or consolidation involving the Issuer, but excluding (a) dividends or distributions payable solely in Qualified Equity Interests and (b) in the case of Restricted Subsidiaries, dividends or distributions payable to the Issuer or to a Restricted Subsidiary and pro rata dividends or distributions payable to minority stockholders of any Restricted Subsidiary;

(2) the redemption, purchase, retirement, defeasance or other acquisition for value of any Equity Interests of the Issuer, including any payment in connection with any merger or consolidation involving the Issuer, but excluding any such Equity Interests held by the Issuer or any Restricted Subsidiary;

(3) any Investment other than a Permitted Investment; or

(4) any payment on or with respect to, or purchase, repurchase, defeasance, redemption or other acquisition or retirement for value of, any Subordinated Indebtedness of the Issuer or any Guarantor (excluding any intercompany Indebtedness between or among the Issuer and any Guarantor), except (i) a payment of interest or principal at or after the stated date for payment thereof or (ii) the purchase, repurchase, defeasance, redemption or other acquisition or retirement of any such Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or payment at the stated date for payment thereof, in each case due within one year of the date of purchase, repurchase, defeasance, redemption or other acquisition or retirement.

“ Restricted Subsidiary ” means any Subsidiary of the Issuer other than an Unrestricted Subsidiary.

“ S&P ” means Standard & Poor’s Ratings Group.

“ Sale and Leaseback Transaction ” means, with respect to any Person, an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person of any asset of such Person which has been or is being sold or transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.

“ SEC ” means the U.S. Securities and Exchange Commission.

“ Secretary’s Certificate ” means a certificate signed by the Secretary of the Issuer.

“ Securities Act ” means the Securities Exchange Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Security Guarantee ” means, individually, any guarantee of payment of the Securities and the Issuer’s other obligations under this Indenture by a Guarantor pursuant to the terms of this Indenture and any supplemental indenture hereto, and, collectively, all such Guarantees.

“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Rule 1-02 under Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Issue Date.

“ Stated Maturity ” means, with respect to any security, the date specified in the agreement governing or certificate relating to such Indebtedness as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but not including any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

“ Subordinated Indebtedness ” means Indebtedness of the Issuer or any Guarantor that is subordinated in right of payment to the Securities or the Security Guarantees, respectively, by written agreement to that effect.

“ Subsidiary ” means, with respect to any specified Person:

(1) any corporation, association or other business entity (other than a partnership) of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the sole managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

“ TIA ” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

“ Treasury Rate ” means, as of any redemption date, the yield to maturity as of such redemption date of U.S. Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to May 15, 2017; provided , however , that if the period from the redemption date to May 15, 2017 is not equal to the constant maturity of a U.S. Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of U.S. Treasury securities for which such yields are given, except that if the period from the redemption date to May 15, 2017 is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year shall be used.

“ Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“ Trust Officer ” means any officer within the corporate trust department of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such person’s knowledge of or familiarity with the particular subject.

“ Unrestricted Subsidiary ” means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in accordance with Section 4.10 and (2) any Subsidiary of an Unrestricted Subsidiary.

“ U.S. Government Obligations ” means direct non-callable obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.

“ Voting Stock ” with respect to any Person, means securities of any class of Equity Interests of such Person entitling the holders thereof normally and without regard to any contingency) to vote in the election of members of the Board of Directors of such Person.

“ Weighted Average Life to Maturity ” when applied to any Indebtedness at any date, means the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (2) the then outstanding principal amount of such Indebtedness.

“ Wholly-Owned Restricted Subsidiary ” means a Restricted Subsidiary of which 100% of the Equity Interests (except for directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned directly by the Issuer or through one or more Wholly-Owned Restricted Subsidiaries.

SECTION 1.02. Other Definitions .


Term		Defined in Section
“ Acceptable Commitment ”		4.06(b)
“ Affiliate Transaction ”		4.07(a)
“ Asset Sale Offer ”		4.06(c)
“ Bankruptcy Law ”		6.01
“ Change of Control Offer ”		4.09(b)
“ Change of Control Purchase Price ”		4.09(a)
“ covenant defeasance option ”		8.01(b)
“ Custodian ”		6.01
“ Designation ”		4.10(a)
“ Designation Amount ”		4.10(a)
“ Event of Default ”		6.01
“ Excess Proceeds ”		4.06(c)
“ Guaranteed Obligations ”		10.01
“ legal defeasance option ”		8.01(b)
“ Paying Agent ”		2.03
“ Permitted Indebtedness ”		4.03(b)
“ Redesignation ”		4.10(c)
“ Registrar ”		2.03
“ Restricted Payments Basket ”		4.04(a)(3)
“ Successor ”		5.01(a)(1)
“ Triggering Lien ”		4.11

SECTION 1.03. Incorporation by Reference of Trust Indenture Act . This Indenture is subject to the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

“ Commission ” means the SEC;

“ indenture securities ” means the Securities and the Security Guarantees;

“ indenture security holder ” means a Securityholder;

“ indenture to be qualified ” means this Indenture;

“ indenture trustee ” or “ institutional trustee ” means the Trustee; and

“ obligor ” on the Securities and the Security Guarantees means the Issuer and each Guarantor, respectively, and any other obligor on the Securities and the Security Guarantees, respectively.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

SECTION 1.04. Rules of Construction . Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) “including” means including without limitation;

(5) words in the singular include the plural and words in the plural include the singular;

(6) Indebtedness shall not be considered subordinate in right of payment to any other Indebtedness solely by virtue of being unsecured, secured with a subset of the collateral securing such other Indebtedness or with different collateral, secured to a lesser extent or secured with lower priority, by virtue of structural subordination, by virtue of maturity date, order of payment or order of application of funds, or by virtue of not being guaranteed by all guarantors of such other Indebtedness, and any subordination in right of payment must be pursuant to a written agreement or instrument;

(7) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;

(8) the principal amount of any preferred stock shall be (A) the maximum liquidation value of such preferred stock or (B) the maximum mandatory redemption or mandatory repurchase price with respect to such preferred stock whichever is greater; and

(9) all references to the date the Securities were originally issued shall refer to the Issue Date.

Article 2

THE SECURITIES

SECTION 2.01. Form and Dating . Provisions relating to the Initial Securities, the Private Exchange Securities and the Exchange Securities are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “ Appendix ”) which is hereby incorporated in, and expressly made part of, this Indenture. The Initial Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A to the Appendix which is hereby incorporated in, and expressly made a part of, this Indenture. The Exchange Securities, the Private Exchange Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit B to the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Security shall be dated the date of its authentication. The terms of the Securities set forth in the Appendix and Exhibits A and B are part of the terms of this Indenture.

SECTION 2.02. Execution and Authentication . One Officer shall sign the Securities for the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

On the Issue Date, the Issuer shall issue and the Trustee shall authenticate and deliver $200,000,000 of 6.875% Senior Notes Due 2022 and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Securities for original issue in an aggregate principal amount specified by the Issuer in such order, in each case upon a written order of the Issuer signed by an Officer of the Issuer. Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and, in the case of an issuance of Additional Securities pursuant to Section 2.13 after the Issue Date, shall certify that such issuance is in compliance with this Indenture, including Section 4.03.

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

SECTION 2.03. Registrar and Paying Agent. The Issuer shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency where Securities may be presented for payment (the “ Paying Agent ”). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Issuer may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent and the term “Registrar” includes any co-registrar.

The Issuer shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Issuer or any Wholly Owned Restricted Subsidiary incorporated or organized within the United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent.

The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided , however , that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) written notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee; provided , however , that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.

The Issuer initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities.

SECTION 2.04. Paying Agent To Hold Money in Trust . Prior to 10:00 a.m., New York City time, on each due date of the principal and interest on any Security, the Issuer shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Issuer in making any such payment. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund for the benefit of the Trustee and the Holders. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.04, the Paying Agent shall have no further liability for the money delivered to the Trustee. Upon any Event of Default specified in Section 6.01(7) or (8), the Trustee shall serve as the Paying Agent for the Securities.

SECTION 2.05. Securityholder Lists . The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders.

SECTION 2.06. Transfer and Exchange . The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements therefor are met. When Securities are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. Without the prior consent of the Issuer, the Registrar is not required (1) to register the transfer of or exchange any Security selected for redemption, (2) to register the transfer of or exchange any Security for a period of 15 days before a selection of Securities to be redeemed or (3) to register the transfer or exchange of a Security between a record date and the next succeeding interest payment date.

SECTION 2.07. Replacement Securities . If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Security if the Trustee’s requirements are met. If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Issuer to protect the Issuer and in the judgment of the Trustee to protect, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Security.

Every replacement Security is an additional Obligation of the Issuer.

SECTION 2.08. Outstanding Securities . Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those replaced pursuant to Section 2.07 and those described in this Section 2.08 as not outstanding. A Security does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Security.

If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Security is held by a protected purchaser (as defined in Section 8-303 of the New York Uniform Commercial Code).

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

SECTION 2.09. Temporary Securities . Until definitive Securities are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Issuer considers appropriate for temporary Securities. Such temporary Securities may be Global Securities. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities.

SECTION 2.10. Cancellation . The Issuer at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Trustee, the Exchange Act and any other applicable law or regulation) all Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such cancellation to the Issuer upon the Issuer’s written request. The Issuer may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.

SECTION 2.11. Defaulted Interest . If the Issuer defaults in a payment of interest on the Securities, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Securityholders on a subsequent special record date. The Issuer shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly send to each Securityholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.12. CUSIP Numbers, ISINs, etc . The Issuer in issuing the Securities may use “CUSIP” numbers, ISINs and “Common Code” numbers (in each case if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to Holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall advise the Trustee promptly in writing of any change in any “CUSIP” numbers, ISINs or “Common Code” numbers applicable to the Securities.

SECTION 2.13. Issuance of Additional Securities . After the Issue Date, the Issuer shall be entitled, subject to its compliance with Section 4.03, to issue Additional Securities under this Indenture in an unlimited principal amount, which Securities shall have identical terms as the Initial Securities issued on the Issue Date, other than with respect to the issue date, the issue price, the first interest payment date and the first date from which interest will accrue. All the Securities issued under this Indenture shall be treated as a single class for all purposes of this Indenture including waivers, amendments, redemptions and offers to purchase.

With respect to any Additional Securities, the Issuer shall set forth in a resolution of the Board of Directors and an Officers’ Certificate, which shall be delivered to the Trustee, the following information:

(1) the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture and the provision of Section 4.03 that the Issuer is relying on to issue such Additional Securities;

(2) the issue price, the issue date, the first interest payment date, the first date from which interest will accrue and the CUSIP number of such Additional Securities; provided , however , that a separate CUSIP number will be issued for any Additional Securities unless the Securities and the Additional Securities are fungible for U.S. federal income tax purposes, subject to the procedures of the Depository; and

(3) whether such Additional Securities shall be Initial Securities or shall be issued in the form of Exchange Securities as set forth in Exhibit B to the Appendix.

Article 3

REDEMPTION

SECTION 3.01. Notices to Trustee . If the Issuer elects to redeem Securities pursuant to Section 3.07 and paragraph 5 of the Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed and the paragraph of the Securities pursuant to which the redemption will occur.

The Issuer shall give each notice to the Trustee provided for in this Section at least 30 days but not more than 60 days before the redemption date. Any such notice may be canceled at any time prior to a notice of such redemption being sent to any Holder and shall thereby be void and of no effect.

SECTION 3.02. Selection of Securities to Be Redeemed . If fewer than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed, as so notified by the Issuer; or if the Securities are not then listed on a national security exchange, on a pro rata basis (or in the case of Global Securities, based on the procedures of the Depository that most nearly approximates a pro rata selection), by lot or by such method as the Trustee shall deem fair and appropriate, subject to such rounding as may be determined by the Trustee to ensure that the Securities are redeemed in multiples of $1,000 in principal amount and that no unredeemed portion of a Security redeemed in part is less than $2,000 in principal amount. The Trustee shall make the selection from outstanding Securities not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $2,000. Securities and portions of them the Trustee selects shall be in principal amounts of $2,000 or any greater integral multiple of $1,000 thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Issuer promptly of the Securities or portions of Securities to be redeemed.

SECTION 3.03. Notice of Redemption . At least 30 days but not more than 60 days before a date for redemption of Securities, the Issuer shall mail a notice of redemption by first-class mail to each Holder’s registered address, or in the case of Global Securities, deliver electronically in accordance with the procedures of the Depository, to each Holder of Securities to be redeemed, except that redemption notices may be sent more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Securities or a satisfaction and discharge of this Indenture. Any inadvertent defect in the notice of redemption, including an inadvertent failure to give notice, to any Holder selected for redemption shall not impair or affect the validity of the redemption of any other Security redeemed in accordance with provisions of this Indenture.

The notice shall identify the Securities to be redeemed and shall state:

(1) the redemption date;

(2) the redemption price;

(3) the name and address of the Paying Agent;

(4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(5) if fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed;

(6) that, unless the Issuer defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

(7) the “CUSIP” number, ISIN or “Common Code” number, if any, printed on the Securities being redeemed;

(8) that no representation is made as to the correctness or accuracy of the “CUSIP” number, ISIN, or “Common Code” number, if any, listed in such notice or printed on the Securities; and

(9) if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer’s discretion, the redemption date may be extended or delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so extended or delayed.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense. In such event, the Issuer shall provide the Trustee with an Officers’ Certificate containing the information required by this Section 3.03 at least five (5) Business Days prior to the date on which the Issuer instructs the Trustee to send the notice (unless the Trustee consents to a shorter period).

SECTION 3.04. Effect of Notice of Redemption . Once notice of redemption is given, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice; provided , however , that any redemption notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of an Equity Offering or other corporate transaction, including without limitation a financing or a Change of Control. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date), and such Securities shall be canceled by the Trustee. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

SECTION 3.05. Deposit of Redemption Price . Prior to 10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit with the Paying Agent (or, if the Issuer or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Securities or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Securities to be redeemed. The Paying Agent will promptly return to the Issuer any money deposited with the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of and accrued interest on all Securities to be redeemed.

SECTION 3.06. Securities Redeemed in Part . Upon surrender of a Security that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder (at the Issuer’s expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered.

SECTION 3.07. Optional Redemption .

(a) Except as set forth below, the Issuer shall not be entitled to redeem the Securities.

(b) On and after May 15, 2017, the Issuer shall be entitled at its option to redeem all or a portion of the Securities upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 15 of the years set forth below:


Period	Redemption Price
2017		105.156	%
2018		103.438	%
2019		101.719	%
2020 and thereafter		100.000	%

(c) In addition, at any time prior to May 15, 2017, the Issuer shall be entitled at its option on one or more occasions to redeem Securities upon not less than 30 or more than 60 days’ notice, in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Securities issued prior to the redemption date at a redemption price (expressed as a percentage of principal amount) of 106.875%, plus accrued and unpaid interest to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), with an amount not to exceed the net cash proceeds from one or more Equity Offerings; provided , however , that (1) at least 65% of such aggregate principal amount of Securities remains outstanding immediately after the occurrence of each such redemption (with Securities held, directly or indirectly, by the Issuer or its Affiliates being deemed to be not outstanding for purposes of such calculation); and (2) the redemption has occurs prior to 90 days after the date of the close of the related Equity Offering.

(d) Prior to May 15, 2017, the Issuer shall be entitled at its option, on one or more occasions, to redeem all or a portion of the Securities at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, but excluding, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). With respect to any such redemption, the Issuer shall notify the Trustee of the Applicable Premium with respect to the Securities to be redeemed promptly after the calculation thereof and the Trustee will not be responsible for such calculation.

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof.

SECTION 3.08. Mandatory Redemption .

The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Securities.

SECTION 3.09. Offer to Purchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.06 hereof the Issuer is required to commence an Asset Sale Offer, it will follow the procedures specified in this Section 3.09.

(b) The Asset Sale Offer shall be made to all Holders. The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Issuer will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Securities and, if applicable, such Pari Passu Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Securities and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Securities so purchased will be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, if any, will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no further interest will be payable on such interest payment date to Holders who tender Securities pursuant to the Asset Sale Offer.

(d) Upon the commencement of an Asset Sale Offer, the Issuer will send, by first-class mail, postage prepaid, or electronically in the case of Global Securities in accordance with the procedures of the Depository, a notice to the Trustee and each of the Holders. The notice will contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:

(i) the CUSIP number;

(ii) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.06 hereof and the length of time the Asset Sale Offer will remain open;

(iii) the Offer Amount, the purchase price and the Purchase Date;

(iv) that any Security not tendered or accepted for payment will continue to accrue interest;

(v) that, unless the Issuer defaults in making such payment, any Security accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest on and after the Purchase Date;

(vi) that Holders electing to have a Security purchased pursuant to an Asset Sale Offer may elect to have Securities purchased in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof;

(vii) that Holders electing to have Securities purchased pursuant to any Asset Sale Offer will be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” attached to the Securities completed, or transfer by book-entry transfer, to the Issuer, a Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(viii) that Holders will be entitled to withdraw their election if the Issuer, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, an electronic mail, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Security purchased;

(ix) that, if the aggregate principal amount of Securities and other Pari Passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Issuer will select the Securities and other Pari Passu Indebtedness to be purchased on a pro rata basis based on the principal amount of Securities and such other Pari Passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Issuer so that only Securities in denominations of $2,000 and integral multiples of $1,000 in excess thereof, will remain outstanding after purchase); and

(x) that Holders whose Securities were purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered (or transferred by book-entry transfer).

(e) On or before the Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Securities or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Securities tendered, and will deliver or cause to be delivered to the Trustee the Securities properly

accepted together with an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Issuer in accordance with the terms of this Section 3.09. The Issuer, the depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Issuer for purchase, and the Issuer will promptly issue a new Security, and the Trustee, upon written request from the Issuer, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered. Any Security not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer will publicly announce the results of the Asset Sale Offer on the Purchase Date.

(f) Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Article 4

COVENANTS

SECTION 4.01. Payment of Securities . The Issuer shall promptly pay the principal of and interest, including any Additional Interest, on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if prior to such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due.

The Issuer shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

In the event that the Issuer is required to pay Additional Interest, the Issuer shall provide to the Trustee and Paying Agent written notice of such requirement at least ten (10) Business Days prior to the applicable interest payment date, which notice shall include the amount of Additional Interest to be paid on any such interest payment date. Neither the Trustee nor Paying Agent shall have any obligation to calculate or verify the Issuer’s calculations of Additional Interest.

SECTION 4.02. Reports to Holders . (a) Whether or not the Issuer is subject to Section 13 or 15(d) of the Exchange Act, for so long as the Securities are outstanding, the Issuer shall furnish to Holders of Securities, within the time periods specified in the SEC’s rules and regulations (including any grace periods or extensions permitted by the SEC): (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuer were required to file these Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, an audit report on the annual financial statements by the Issuer’s certified independent accountants, and (2) all current reports that would be required to be filed with the SEC on Form 8-K if the Issuer were required to file these reports.

(b) In addition, whether or not the Issuer is subject to Section 13 or 15(d) of the Exchange Act, for so long as the Securities are outstanding, the Issuer shall, to the extent permitted by the SEC, file a copy of all of the information and reports referred to in Section 4.02(a)(1) and (2) with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (including any grace periods or extensions permitted by the SEC) and make the information available to securities analysts and prospective investors upon request.

(c) At any time that there shall be one or more Unrestricted Subsidiaries that, in the aggregate, hold more than 15.0% of Consolidated Tangible Assets as of the last date of the fiscal quarter for which financial statements are required to be delivered pursuant to Section 4.02(a)(1), the quarterly and annual financial information required by this Section 4.02 shall include a reasonably detailed presentation, either on the face of the financial statements or in the notes thereto of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

(d) In addition, to the extent not satisfied by the foregoing, the Issuer and the Guarantors have agreed that, for so long as any Securities remain outstanding, the Issuer shall furnish to the Holders of the Securities and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(e) In addition, the Issuer will:

(1) hold a quarterly conference call to discuss the information contained in the reports not later than ten Business Days from the time the Issuer furnishes the reports to the Holders; and

(2) no fewer than three Business Days prior to the date of the conference call required to be held in accordance with Section 4.02(e)(1), issue a press release to the appropriate U.S. wire services announcing the time and date of such conference call and directing the Holders or beneficial owners of, and prospective investors in the Securities and securities analysts and market makers to contact an individual at the Issuer (for whom contact information shall be provided in such press release) to obtain the reports and information on how to access such conference call.

(f) Any information filed with, or furnished to, the SEC within the time periods specified in this Section 4.02 shall be deemed to have been furnished to the Holders of Securities and prospective investors as required by this Section 4.02, and to the extent such filings comply with the rules and regulations of the SEC regarding such filings, they will be deemed to comply with the requirements of this Section 4.02.

(g) When any Default or Event of Default has occurred and is continuing under this Indenture, the Issuer shall within 30 days of becoming aware of such Default or Event of Default deliver to the Trustee an Officers’ Certificate specifying such event and stating what action the Issuer and/or the Guarantor are taking or propose to take with respect thereto. The Issuer will also deliver to the Trustee annually an Officers’ Certificate stating that, to the signing Officers’ knowledge, no Default has occurred under this Indenture, or, if a Default has occurred, what action the Issuer and/or Guarantors are taking or propose to take with respect thereto.

SECTION 4.03. Limitations on Additional Indebtedness . (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) ; provided that, the Issuer or any Guarantor may incur additional Indebtedness (including Acquired Indebtedness) if no Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of the Indebtedness and if, after giving effect thereto on a pro forma basis, either (a) the Consolidated Fixed Charge Coverage Ratio would be at least 2.00 to 1.00 or (b) the Indebtedness to Tangible Net Worth Ratio would be no more than 2.25 to 1.00.

(b) Notwithstanding Section 4.03(a), each of the following shall be permitted (the “ Permitted Indebtedness ”):

(1) the incurrence by the Issuer or any Restricted Guarantor (and the guarantee thereof by the Issuer or any such Restricted Subsidiary) of Indebtedness under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this Section 4.03(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) in an aggregate amount outstanding at any time not to exceed the greater of (a) $150.0 million and (b) 27.5% of Consolidated Tangible Assets at the time of incurrence;

(2) the Securities and the Security Guarantees issued on the Issue Date and the Exchange Securities issued in exchange therefor (and any guarantee thereof);

(3) Indebtedness of the Issuer and the Restricted Subsidiaries to the extent existing on the Issue Date (other than Indebtedness referred to in Section 4.03(b)(1), (2), (4), (5), (6), (9), (10), (12), (14), (15), (16) and (18));

(4) Indebtedness of the Issuer and the Restricted Subsidiaries under Hedging Obligations;

(5) Indebtedness of the Issuer owed to and held by a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary owed to and held by the Issuer or any other Restricted Subsidiary; provided , however , that (a) any Indebtedness of the Issuer owed to a Non-Guarantor Subsidiary is unsecured and subordinated, pursuant to a written agreement, to the Issuer’s obligations under this Indenture and the Securities, (b) any Indebtedness of a Guarantor owed to a Non-Guarantor Subsidiary is unsecured and subordinated, pursuant to a written agreement, to such Guarantor’s obligations under this Indenture, the Securities or its Security Guarantee, as applicable, and (c) upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than the Issuer or a Restricted Subsidiary, such Restricted Subsidiary shall be deemed to have incurred Indebtedness not permitted by this Section 4.03(b)(5);

(6) Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, completion bonds, bid bonds, surety bonds, appeal bonds, performance, completion and compliance guarantees or other similar obligations incurred in the ordinary course of business; provided , however , that upon the drawing of letters of credit for reimbursement obligations, or the incurrence of other reimbursement-type Indebtedness with respect to the foregoing, such obligations are reimbursed within 30 days following such drawing or incurrence;

(7) Purchase Money Indebtedness incurred by the Issuer or any Restricted Subsidiary, in an aggregate amount, together with any Refinancing Indebtedness incurred in respect thereof pursuant to Section 4.03(b)(11), not to exceed at any time outstanding the greater of (a) $20.0 million and (b) 3.0% of Consolidated Tangible Assets at the time of incurrence;

(8) Non-Recourse Indebtedness of the Issuer or any Restricted Subsidiary incurred for the acquisition, development and/or improvement of real property and secured by Liens only on such real property and Directly Related Assets;

(9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however , that such Indebtedness is extinguished within five Business Days of incurrence;

(10) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(11) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to Section 4.03(a) and Sections 4.03(b)(2), (3), (7), (13), (19) or this clause (11);

(12) the guarantee by (a) the Issuer or any Guarantor of Indebtedness (other than Indebtedness incurred pursuant to Sections 4.03(b)(8) or (15) of the Issuer or a Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.03; provided , that to the extent such Indebtedness is a subordinated obligation, the guarantee thereof by the Issuer or such Guarantor shall be subordinated in right of payment to the Securities or the applicable Security Guarantee, as the case may be and (b) Non-Guarantor Subsidiaries of Indebtedness incurred by Non-Guarantor Subsidiaries in accordance with the provisions of this Indenture;

(13) Indebtedness of Persons incurred and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by, or merged into, the Issuer or any Restricted Subsidiary (other than Indebtedness incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Issuer or such Restricted Subsidiary or (b) otherwise in connection with, or in contemplation of, such acquisition); provided , however , that at the time such Person is acquired, either

(a)

the Issuer would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.03(a) on a pro forma basis after giving effect to the incurrence of such Indebtedness pursuant to this Section 4.03(b)(13);

(b)

on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries is higher than such ratio immediately prior to such acquisition or merger; or

(c)

on a pro forma basis, the Indebtedness to Tangible Net Worth Ratio of the Issuer and the Restricted Subsidiaries is less than such ratio immediately prior to such acquisition or merger;

(14) Indebtedness incurred in connection with a Sale and Leaseback Transaction of any Model Home Unit;

(15) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary deemed to exist pursuant to the terms of a joint venture agreement as a result of the failure of the Issuer or any Restricted Subsidiary to make a required capital contribution therein; provided that the only recourse on such Indebtedness is limited to the Issuer’s or such Restricted Subsidiary’s equity interests in the related joint venture;

(16) obligations of the Issuer or any Restricted Subsidiary under an agreement with any governmental authority, adjoining (or common masterplan) landowner or seller of real property, in each case entered into in the ordinary course of business in connection with the acquisition of real property, to entitle, develop or construct infrastructure thereupon;

(17) Guarantees by the Issuer or any Restricted Subsidiary in respect of Indebtedness incurred by Joint Ventures and GP Indebtedness of the Issuer or its Restricted Subsidiaries in respect of Joint Ventures, in an aggregate amount at any time outstanding under this Section 4.03(b)(17) not to exceed the greater of (a) $15.0 million and (b) 3.0% of Consolidated Tangible Assets at the time of incurrence;

(18) the incurrence of Indebtedness by the Issuer or a Restricted Subsidiary in respect of a PAPA; and

(19) Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate amount, together with any Refinancing Indebtedness incurred in respect thereof pursuant to Section 4.03(b)(11), not to exceed at any time outstanding the greater of (a) $15.0 million and (b) 3.0% of Consolidated Tangible Assets at the time of incurrence.

(c) For purposes of determining compliance with this Section 4.03, (1) in the event that an item of Indebtedness meets the criteria of more than one of the types of Permitted Indebtedness described in Section 4.03(b) or is permitted under Section 4.03(a), the Issuer, in its sole discretion, shall classify such item of Permitted Indebtedness on the date of incurrence and may later reclassify such item of Indebtedness in any manner that then complies with this Section 4.03 and will be entitled to divide the amount and type of such Indebtedness among more than one of such clauses under Sections 4.03(a) and (b); provided that all Indebtedness outstanding on the Issue Date under the Credit Facilities, after giving effect to the use of proceeds of this offering, shall be deemed incurred under Section 4.03(b)(1) and not Section 4.03(a) or Section 4.03(b)(3) and may not later be reclassified, (2) if obligations in respect of letters of credit are incurred pursuant to a revolving Credit Facility and relate to other Indebtedness, then such letters of credit shall be treated as incurred pursuant to Section 4.03(b)(1) and such other Indebtedness shall not be included, and (3) except as provided in Section 4.03(b)(2), Security Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included.

(d) Accrual of interest, accrual of dividends, the accretion of accreted value, the amortization of debt discount, the payment of interest in the form of additional Indebtedness, the reclassification of any obligation as Indebtedness due to a change in accounting principles and the payment of dividends in the form of additional shares of preferred stock or Disqualified Equity Interests will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.03. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Issuer or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

SECTION 4.04. Limitations on Restricted Payments . (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment unless at the time of and after giving effect to such Restricted Payment:

(1) no Default shall have occurred and be continuing or shall occur as a consequence thereof;

(2) immediately after giving effect to such transaction on a pro forma basis, the Issuer could incur $1.00 of additional Indebtedness pursuant to Section 4.03(a); and

(3) the amount of such Restricted Payment, when added to the aggregate amount of all other Restricted Payments made after the Issue Date (other than Restricted Payments made pursuant to Section 4.04(b) (2) through (5) and (7) through (13)), would not exceed the sum (the “ Restricted Payments Basket ”) of (without duplication):

(A) 50% of Consolidated Net Income for the period (taken as one accounting period) from April 1, 2014 to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (or, if such Consolidated Net Income shall be a deficit, minus 100% of such aggregate deficit), plus

(B) 100% of the aggregate net cash proceeds or the Fair Market Value of any assets to be used in a Permitted Business or Capital Stock of a Person engaged in a Permitted Business ( provided , that, such Person becomes a Restricted Subsidiary of the Issuer or such Person is merged or consolidated into the Issuer or any of the Restricted Subsidiaries) received by the Issuer either (i) as contributions to the common equity of the Issuer after the Issue Date or (ii) received by the Issuer from the issuance and sale of Qualified Equity Interests after the Issue Date, other than net cash proceeds received from an issuance or sale of such Qualified Equity Interests to a Subsidiary of the Issuer or to an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination, plus

(C) the aggregate amount by which Indebtedness of the Issuer or any Restricted Subsidiary is reduced on the Issuer’s balance sheet upon the conversion or exchange (other than in respect of Indebtedness held by a Subsidiary of the Issuer) of Indebtedness issued subsequent to the Issue Date into Qualified Equity Interests (less the amount of any cash or the fair value of assets, distributed by the Issuer or any Restricted Subsidiary upon such conversion or exchange), plus

(D) in the case of the disposition or repayment of or return on any Investment that was treated as a Restricted Payment made after the Issue Date, an amount (to the extent not included in the computation of Section 4.04(a)(3)(A)) equal to the net reduction of the portion of such Investment that was treated as a Restricted Payment, plus

(E) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, to the extent not already included in the computation of Section 4.04(a)(3)(A), the lesser of (i) the Fair Market Value of the Issuer’s proportionate interest in such Subsidiary immediately following such Redesignation, and (ii) the aggregate amount of the Issuer’s Investments in such Subsidiary to the extent such Investments reduced the amount available for subsequent Restricted Payments under this Section 4.04(a)(3) and were not previously repaid or otherwise reduced, plus

(F) 100% of the principal amount of, or, if issued at a discount, the accreted value of, any guarantee by the Issuer or any Restricted Subsidiary incurred after the Issue Date that is subsequently released or discharged (other than due to a payment on such guarantee), but only to the extent that such guarantee was treated as a Restricted Payment pursuant to this Section 4.04(a)(3) when made.

(b) The provisions of Section 4.04(a) shall not prohibit:

(1) the payment by the Issuer or any Restricted Subsidiary of any dividend or similar distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or distribution or the giving of the redemption notice, if on the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;

(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Indebtedness that constitutes Refinancing Indebtedness;

(3) the repurchase, redemption, defeasance or other acquisition or retirement for value of Equity Interests of the Issuer held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of the Issuer or any Restricted Subsidiary, pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement or benefit plan of any kind; provided that the aggregate cash consideration paid for all such payments shall not exceed $2.5 million during any calendar year (it being understood, however, that unused amounts permitted to be paid pursuant to this proviso are available to be carried over to subsequent calendar years, so long as the cash consideration applied to the repurchase, redemption, defeasance or other acquisition or retirement for value of Equity Interests pursuant to this Section 4.04(b)(3) shall in no event exceed $5.0 million in any calendar year);

(4) repurchases of Equity Interests deemed to occur upon the exercise of stock options or stock appreciation rights if the Equity Interests represent a portion of the exercise price thereof;

(5) the repurchase of Equity Interests upon vesting of restricted stock, restricted stock units, performance share units or similar equity incentives to satisfy tax withholding or similar tax obligations with respect thereto;

(6) the payment of dividends on the Issuer’s Qualified Equity Interests (other than preferred stock) (or the payment of any dividend to any parent of the Issuer to fund the payment by such parent of a dividend on such entity’s Qualified Equity Interests (other than preferred stock)) of up to 6% per annum of the net proceeds received by the Issuer from any public equity offering after the Issuer Date of such Qualified Equity Interests of the Issuer or contributed to the Issuer as common equity capital by any parent from any public equity offering of such Qualified Equity Interests of any direct or indirect parent of the Issuer;

(7) Restricted Payments in an aggregate amount, when taken together with all Restricted Payments made pursuant to this Section 4.04(b)(7) and then outstanding, does not exceed $10.0 million;

(8) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Equity Interests, Disqualified Equity Interests or Subordinated Indebtedness of the Issuer or any Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Issuer (other than Disqualified Equity Interests and other than Equity Interests issued or sold to a Subsidiary or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination); provided , however , that the net cash proceeds from such sale of Equity Interests will be excluded from Section 4.04(a)(3)(B) above to the extent so applied;

(9) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Equity Interests of the Issuer or a Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Disqualified Equity Interests of the Issuer or such Restricted Subsidiary, as the case may be, so long as such refinancing Disqualified Equity Interests constitute Refinancing Indebtedness;

(10) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness (a) at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness in the event of a Change of Control in accordance with provisions similar to Section 4.09 or (b) at a purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to Section 4.06; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Issuer has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenant with respect to the Securities and has completed the repurchase or redemption of all Securities validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;

(11) cash payments in lieu of the issuance of fractional shares of the Issuer’s Equity Interests upon the exercise, conversion or exchange of any stock options, warrants, other rights to purchase Equity Interests or other convertible or exchangeable securities or any other transaction otherwise permitted by this Section 4.04;

(12) payments or distributions to holders of Equity Interests of the Issuer or any of the Restricted Subsidiaries pursuant to appraisal or dissenter rights required under applicable law or pursuant to a court order in connection with any merger, amalgamation, arrangement, consolidation or sale, assignment, conveyance, transfer, lease or other disposition of assets; and

(13) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Equity Interests of the Issuer or preferred stock of any Restricted Subsidiary issued on or after the Issue Date in accordance with Section 4.03 to the extent such dividends are included in the definition of “Consolidated Interest Expense.”;

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or a Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The amount of any Restricted Payment paid in cash shall be its face amount.

SECTION 4.05. Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries . The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1) pay dividends or make any other distributions on or in respect of its Equity Interests to the Issuer or any Restricted Subsidiary, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness or other obligations owed to the Issuer or any Restricted Subsidiary (it being understood that the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common equity capital shall not be deemed a restriction on the ability to make distributions on Equity Interests);

(2) make loans or advances to the Issuer or any other Restricted Subsidiary; or

(3) sell, lease or transfer any of its property or assets to the Issuer or any other Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in Section 4.05(1) or (2)); except for:

(A) encumbrances or restrictions existing under or by reason of applicable law, regulation, rule, permit or other regulatory restrictions;

(B) encumbrances or restrictions existing under this Indenture, the Securities and the Security Guarantees;

(D) encumbrances or restrictions existing under the Proposed Credit Facility and under agreements in effect at or entered into on the Issue Date as in effect on the Issue Date;

(E) in the case of Section 4.05(3), restrictions on the transfer of assets subject to any Lien permitted under this Indenture;

(F) provisions limiting the disposition or distribution of assets or property in Joint Venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements, which limitations are applicable only to the assets that are the subject of such agreements;

(G) any encumbrance or restriction with respect to a Restricted Subsidiary or its property or assets in existence on or before the date on which such Restricted Subsidiary or its property or assets were acquired (directly or indirectly) by the Issuer or a Restricted Subsidiary (other than encumbrances or restrictions relating to Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Issuer or a Restricted Subsidiary), which encumbrance or restriction is not applicable to any Person, or the assets of any Person, other than the Person so acquired or any of its Subsidiaries, or the assets of the Person so acquired or any of its Subsidiaries (including after-acquired property);

(H) encumbrances or restrictions arising in connection with Refinancing Indebtedness; provided , however , that any such encumbrances and restrictions are not materially more restrictive than those contained in the agreements creating or evidencing the Indebtedness being refinanced (for which a determination in good faith by the Issuer’s Board of Directors shall be conclusive);

(I) customary provisions in leases, licenses, partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of leasehold interests. licensed interests or ownership interests in such partnership, limited liability company, joint venture or similar Person,

(J) Purchase Money Indebtedness incurred in the ordinary course of business and in compliance with Section 4.03 to the extent they impose restrictions of the nature described in Section 4.05(3) on the assets acquired;

(K) Non-Recourse Indebtedness incurred in the ordinary course of business and in compliance with Section 4.03 to the extent it imposes restrictions of the nature described in Section 4.05(3) on the assets securing such Non-Recourse Indebtedness or on the Equity Interests in the Person holding such assets;

(L) customary restrictions in other Indebtedness incurred in compliance with Section 4.03; provided that such restrictions, taken as a whole, in the good faith determination of the Issuer’s Board of Directors (a) are not materially more restrictive with respect to such encumbrances and restrictions than those contained in the existing agreements referenced in clause (D) of this Section 4.05, or (b) will not have a material adverse effect on the Issuer’s ability to make payments of interest on and principal of the Securities (for which a determination in good faith by the Issuer’s Board of Directors shall be conclusive);

(M) any encumbrances or restrictions existing under (A) development agreements or other contracts entered into with municipal entities, agencies or sponsors in connection with the entitlement or development of real property or (B) agreements for funding of infrastructure, including in respect of the issuance of community facility district bonds, metro district bonds and subdivision improvement bonds, and similar bonding requirements arising in the ordinary course of business of a homebuilder;

(N) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and

(O) any encumbrances or restrictions imposed by any amendments or refinancings of the contracts, instruments or obligations referred to in clauses (A) through (N) of this Section 4.05; provided that such amendments or refinancings are not materially more restrictive with respect to such encumbrances and restrictions than those prior to such amendment or refinancing (for which a determination in good faith by the Issuer’s Board of Directors shall be conclusive).

SECTION 4.06. Limitations on Asset Sales . (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, cause, make, suffer to exist or consummate any Asset Sale unless: (1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale) of the assets subject to such Asset Sale and (2) at least 75% of the total consideration received by the Issuer or such Restricted Subsidiary, as the case may be, in such Asset Sale or series of related Asset Sales consists of cash or Cash Equivalents; provided that the foregoing requirement shall not apply with respect to any Asset Sale by way of loss, damage or destruction of property or assets or condemnation or other involuntary disposition of such property or assets.

For the purposes of Section 4.06(a)(2) and for no other purpose, the following shall be deemed to be cash (i) the amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness) of the Issuer or such Restricted Subsidiary (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet) that is expressly assumed by the transferee in such Asset Sale and with respect to which the Issuer and all Restricted Subsidiaries have been validly and unconditionally released by the holder of such Indebtedness in writing; (ii) the amount of any securities, notes or other obligations received by the Issuer or any Restricted Subsidiary from such transferee that are within 120 days following the closing of such Asset Sale converted by the Issuer or such Restricted Subsidiary to cash (to the extent of the cash actually so received); (iii) the Fair Market Value of any assets (other than securities, unless such securities represent Equity Interests in an entity engaged in a Permitted Business, such entity becomes a Restricted Subsidiary and the Issuer or a Restricted Subsidiary acquires voting and management control of such entity) received by the Issuer or any Restricted Subsidiary to be used by it in the Permitted Business and (iv) any Designated Non-cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale, the Fair Market Value of which, when taken together with all other Designated Non-cash Consideration received since the Issue Date pursuant to this clause (iv) (and not subsequently converted into Cash Equivalents that are treated as Net Available Proceeds of an Asset Sale), does not exceed the greater of (A) $15.0 million and (B) 3.0% of Consolidated Tangible Assets at the time of the receipt of such Designated Non-cash Consideration, with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.

(b) If the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or such Restricted Subsidiary shall, no later than 365 days following the receipt of the Net Available Proceeds, apply all or any of the Net Available Proceeds therefrom (1) to repay, prepay, redeem or repurchase and, with respect to any revolving Indebtedness, permanently reduce Indebtedness and commitments with respect thereto ( provided that to the extent such Indebtedness is a Borrowing Base Facility, the Issuer or such

Restricted Subsidiary shall not be obligated to permanently reduce Indebtedness or commitments thereunder) any (x) Obligations under (i) secured Indebtedness under any Credit Facility and (ii) secured Indebtedness of the Issuer (other than any Disqualified Equity Interests or Subordinated Indebtedness) or secured Indebtedness of a Guarantor, in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer, (y) Obligations under the Securities or any other Pari Passu Indebtedness of the Issuer or any Guarantor; provided that if the Issuer or any Restricted Subsidiary shall so repay or prepay any such other Pari Passu Indebtedness, the Issuer will reduce Obligations under the Securities on a pro rata basis (based on the amount so applied to such repayments or prepayments) by, at their option, (A) redeeming Securities as described under paragraph 5 of the Securities, (B) making an offer (in accordance with the procedures set forth in Section 4.06(c) and (d) for an Asset Sale Offer) to all Holders to purchase their Securities at a purchase price of at least 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, thereon up to the principal amount of Securities to be repurchased or (C) purchasing Securities through privately negotiated transactions or open market purchases, in a manner that complies with this Indenture and applicable securities law, or (z) Indebtedness of a Non-Guarantor Subsidiary with proceeds of Asset Sales by such Non-Guarantor Subsidairy, other than Indebtedness owed to the Issuer or any Restricted Subsidiary of the Issuer; (2) to acquire all or substantially all of the assets of, or any Equity Interests of, another Person engaged in a Permitted Business, if, after giving effect to any such acquisition of Equity Interests, such Person is or becomes a Restricted Subsidiary of the Issuer; (3) to make a capital expenditure; (4) to acquire Additional Assets or improve or develop existing assets to be used in a Permitted Business; or (5) to make any combination of the foregoing payments, redemptions, repurchases, expenditures or investments; provided that in the case of subsections (2), (3), (4) or (5) of this Section 4.06(b), a binding commitment to acquire the assets of, or Equity Interests of, a Person engaged in a Permitted Business, invest in Additional Assets or to make such capital expenditures shall be treated as a permitted application of an amount of Net Available Proceeds from the date of such commitment so long as the Issuer or such Restricted Subsidiary enters into such commitment with the good faith expectation that such amount of Net Available Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “ Acceptable Commitment ”) and such Net Available Proceeds are actually applied in such manner within the later of 365 days from the consummation of the Asset Sale and 180 days from the date of the Acceptable Commitment. Pending the final application of any Net Available Proceeds, the Issuer may temporarily reduce revolving credit borrowings or otherwise invest the Net Available Proceeds in any manner that is not prohibited by this Indenture.

(c) Any Net Available Proceeds from Asset Sales that are not applied or invested as provided in Section 4.06(b) will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $15.0 million, the Issuer will make an Asset Sale Offer to all Holders of Securities and if the Issuer elects (or is required by the terms of such other Pari Passu Indebtedness), all holders of other Pari Passu Indebtedness (an “ Asset Sale Offer ”) to purchase the maximum aggregate principal amount of Securities, in denominations of $2,000 initial principal amount and multiples of $1,000 in excess thereof, and such Pari Passu Indebtedness, that may be purchased with an amount equal to the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, or, in the case of Pari Passu Indebtedness represented by securities sold at a discount, not more than the amount of the accreted value thereof at such time, plus accrued and unpaid interest to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. After the completion of an Asset Sale, the Issuer may make an Asset Sale Offer prior to the time it is required to do so by the first sentence of this paragraph. If the Issuer completes such an Asset Sale Offer with respect to any Net Available Proceeds, the Issuer shall be deemed to have complied with this Section 4.06 with respect to the application of such Net Available Proceeds, and any such Net Available Proceeds remaining after completion of such Asset Sale Offer will no longer be deemed Excess Proceeds and may be used by the Issuer and the Restricted Subsidiaries for any purpose not prohibited by this Indenture. If the aggregate principal amount of Securities and other Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Securities (in accordance with the procedures of the Depository) and the Issuer or its agent will select such other Pari Passu Indebtedness to be purchased on a pro rata basis (subject to adjustments so that no Security in an unauthorized denomination remains outstanding after such purchase) based on the aggregate principal amount of the Securities and the other Pari Passu Indebtedness to be purchased validly tendered and not withdrawn. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

(d) The Issuer shall comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Securities pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.06, the Issuer will not be deemed to have breached its obligations under this Section 4.06 by virtue of its compliance with such securities laws or regulations.

SECTION 4.07. Limitations on Transactions with Affiliates . (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, in one transaction or a series of related transactions, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with or for the benefit of, any Affiliate involving aggregate consideration in excess of $2.5 million (an “ Affiliate Transaction ”),

unless: (1) such Affiliate Transaction is on terms that are no less favorable to the Issuer or the relevant Restricted Subsidiary than those that could be obtained in a comparable transaction at such time on an arm’s-length basis by the Issuer or that Restricted Subsidiary from a Person that is not an Affiliate of the Issuer or that Restricted Subsidiary, and (2) the Issuer delivers to the Trustee (i) with respect to any Affiliate Transaction involving aggregate value expended or received by the Issuer or any Restricted Subsidiary in excess of $10.0 million, an Officers’ Certificate of the Issuer certifying that such Affiliate Transaction complies with Section 4.07(a)(1), and either (x) a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted by the Board of Directors approving such Affiliate Transaction or (y) a written opinion or appraisal of the type described in clause (ii) of this Section 4.07(a); and (ii) with respect to any Affiliate Transaction involving aggregate value expended or received by the Issuer or any Restricted Subsidiary exceeding $25.0 million, a written opinion as to the fairness of such Affiliate Transaction to the Issuer or such Restricted Subsidiary from a financial point of view or a written appraisal supporting the value of such Affiliate Transaction, in either case, issued by an Independent Financial Advisor.

(b) The provisions of Section 4.07(a) shall not apply to (1) transactions exclusively between or among (a) the Issuer and one or more Restricted Subsidiaries or (b) Restricted Subsidiaries; (2) reasonable director, officer, employee and consultant compensation (including bonuses) and other benefits (including retirement, health, stock and other benefit plans) and indemnification and insurance arrangements; (3) any Permitted Investment (other than any Permitted Investment made in accordance with clause (2) of the definition of “Permitted Investments” ); (4) any agreement as in effect as of the Issue Date or any extension, amendment, modification, restatement or renewal thereof (so long as any such extension, amendment, modification, restatement or renewal satisfies the requirements set forth in Section 4.07(a)(1)) or any transaction contemplated thereby; (5) Restricted Payments which are made in accordance with Section 4.04; (6) issuances, sales or other dispositions of Qualified Equity Interests by the Issuer to an Affiliate; (7) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services, in each case in the ordinary course of the business of the Issuer and the Restricted Subsidiaries (including pursuant to joint venture agreements) and otherwise in compliance with the terms of this Indenture ; provided that in the reasonable determination of the disinterested members of the Board of Directors of the Issuer, such transactions are on terms that are no less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained at the time of such transactions in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; (8) any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged into the Issuer or a Restricted Subsidiary; provided that such agreement was not entered into in contemplation of such acquisition or merger, and any amendment thereto, so long as any such amendment is not disadvantageous to the Holders in the good faith judgment of the Board of Directors of the Issuer, when taken as a whole, as compared to the applicable agreement as in effect on the date of such acquisition or merger; and (9) transactions with a Person (other than an Unrestricted Subsidiary of the Issuer) that is an Affiliate of the Issuer solely because the Issuer owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls (including pursuant to a joint venture or shareholders agreement), such Person.

SECTION 4.08. Conduct of Business . The Issuer shall not, and shall not permit any Restricted Subsidiary to, engage in any material respect in a business other than a Permitted Business.

SECTION 4.09. Change of Control . (a) Upon the occurrence of a Change of Control, each Holder shall have the right to require that the Issuer repurchase such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase (the “ Change of Control Purchase Price ”) plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in Section 4.09(b).

(b) No later than 30 days following any Change of Control, the Issuer shall mail or deliver electronically in accordance with the procedures of the Depository a notice to each Holder with a copy to the Trustee (the “ Change of Control Offer ”) stating:

(1) that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holder’s Securities at the Change of Control Purchase Price, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);

(2) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(3) the instructions, as determined by the Issuer, consistent with this Section 4.09, that a Holder must follow in order to have its Securities purchased.

(c) Holders electing to have a Security purchased will be required to surrender the Security, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. Holders will be entitled to withdraw their election if the Issuer receives not later than one Business Day prior to the purchase date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the Holder and a statement that such Holder is withdrawing its election to have such Security purchased.

(d) On the purchase date, all Securities purchased by the Issuer under this Section shall be delivered by, or on behalf of, the Issuer to the Trustee for cancellation, together with an Officers’ Certificate confirming the purchase and directing the Trustee to cancel such Securities, and the Issuer shall pay the purchase price plus accrued and unpaid interest, if any, to the Paying Agent for the account of the Holders entitled thereto.

(e) Notwithstanding any other provision of this Indenture, the Issuer shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in Sections 4.09(b) and (d) and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer or if notice of redemption has been given with respect to all Notes pursuant to paragraph 5 of the Securities.

(f) A Change of Control Offer may be made in advance of a Change of Control, conditioned upon the occurrence of such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(g) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.09. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.09, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.09 by virtue of its compliance with such securities laws or regulations.

SECTION 4.10. Limitations on Designation of Unrestricted Subsidiaries . (a) The Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary) as an “Unrestricted Subsidiary” under this Indenture (a “ Designation ”) only if: (1) no Default shall have occurred and be continuing at the time of or immediately after giving effect to such Designation; (2) (A) such Subsidiary has total assets of $1,000 or less or (B) the Issuer would be permitted to make, and shall be deemed to make, at the time of such Designation, (i) a Permitted Investment or (ii) an Investment pursuant to Section 4.04, in either case, in an amount (the “ Designation Amount ”) equal to the Fair Market Value of the Issuer’s proportionate interest in such Subsidiary on such date; (3) neither the Issuer nor any of its other Subsidiaries (other than Unrestricted Subsidiaries) (A) provides any direct or indirect credit support for any Indebtedness of such Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) or (B) is directly or indirectly liable for any Indebtedness of such Subsidiary other than, in each case, such Investments as are permitted pursuant to Section 4.04; (4) such Subsidiary is not party to any agreement, contract, arrangement or understanding with the Issuer or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding (A) are no less favorable to the Issuer or the Restricted Subsidiary than those that would be reasonably expected to be obtained at the time from Persons who are not Affiliates of the Issuer or such Restricted Subsidiary or (B) would be permitted as (i) an Affiliate Transaction under and in compliance with Section 4.07, (ii) an Asset Sale under and in compliance with Section 4.06, (iii) a Permitted Investment, or (iv) an Investment under and in compliance with Section 4.04; (5) such Subsidiary is a Person with respect to which neither the Issuer nor any Restricted Subsidiary has any direct or indirect obligation (A) to subscribe for additional Equity Interests or (B) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results, except, in each case, such Investments as are permitted pursuant to Section 4.04; and (6) such Subsidiary has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Issuer or any Restricted Subsidiary.

(b) If, at any time after the Designation, any Unrestricted Subsidiary fails to meet the requirements set forth in Section 4.10(a) it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of the date and, if the Indebtedness is not permitted to be incurred under Section 4.03 or the Lien is not permitted under Section 4.11, the Issuer shall be in default of the applicable covenant.

(c) The Issuer may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “ Redesignation ”) only if (1) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation, (2) (A) the Issuer would be able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.03(a), (B) the Consolidated Fixed Charge Coverage Ratio

of the Issuer and the Restricted Subsidiaries would be equal to or greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such Redesignation, or (C) the Indebtedness to Tangible Net Worth Ratio of the Issuer and the Restricted Subsidiaries would be equal to or less than such ratio immediately prior to such Redesignation, in each case on a pro forma basis taking into account such Redesignation; and (3) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Indenture.

(d) All Designations and Redesignations must be evidenced by resolutions of the Board of Directors of the Issuer and an Officers’ Certificate delivered to the Trustee certifying compliance with the foregoing provisions. Such resolutions and Officers’ Certificate shall be delivered to the Trustee within 45 days after the end of the fiscal quarter of the Issuer in which such Designation or Redesignation is made (or, in the case of a Designation or Redesignation made during the last fiscal quarter of the Issuer’s fiscal year, within 90 days after the end of such fiscal year).

SECTION 4.11. Limitations on Liens . The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to exist any Lien (a “ Triggering Lien ”) of any nature whatsoever against any property or assets now owned or hereafter acquired by the Issuer or such Restricted Subsidiary (including Equity Interests of a Subsidiary), or any proceeds, income or profits therefrom, securing any Indebtedness, except Permitted Liens, unless all payments and other obligations due under this Indenture and the Securities (or under a Security Guarantee in the case of Liens of a Guarantor) are secured on an equal and ratable basis (or on a senior priority basis, in the event the other Indebtedness is Subordinated Indebtedness) with the obligations so secured until such time as such obligations are no longer secured by a Triggering Lien.

SECTION 4.12. Additional Security Guarantees . If, after the Issue Date, (a) any Restricted Subsidiary guarantees Indebtedness for borrowed money of the Issuer or any Guarantor, or (b) the Issuer or any Restricted Subsidiary shall acquire or create any Wholly-Owned Restricted Subsidiary, other than an Immaterial Subsidiary (until such Immaterial Subsidiary is no longer an Immaterial Subsidiary), then, in each such case, the Issuer shall cause such Restricted Subsidiary to execute and deliver to the Trustee, within 30 Business Days after incurring such guarantee (in the case of clause (a)) or the applicable date of acquisition or creation (or change in status of an Immaterial Subsidiary) (in the case of clause (b)), to: (1) a supplemental indenture to this Indenture pursuant to which such Restricted Subsidiary shall provide a Security Guarantee; and (2) deliver to the Trustee, in addition to an Officers’ Certificate and opinion of counsel meeting the requirements of this Indenture, one or more opinions of counsel that such supplemental indenture (a) has been duly authorized, executed and delivered by such Restricted Subsidiary and (b) constitutes a valid and legally binding obligation of such Restricted Subsidiary in accordance with its terms.

The Issuer at any time at its sole option may cause any non-guarantor Subsidiary to become a Guarantor by executing a supplemental indenture to this Indenture and delivering the documents required by this Indenture.

SECTION 4.13. Payments for Consent . The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, pay or cause to be paid any consideration, to or for the benefit of any Holder of Securities for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid or agreed to be paid and is paid to all Holders of the Securities that consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent waiver or agreement; provided that if consents, waivers or amendments are sought in connection with an exchange offer where participation in such exchange offer is limited to Holders who are “qualified institutional buyers,” within the meaning of Rule 144A under the Securities Act, or non-U.S. persons, within the meaning of Regulation S under the Securities Act then such consideration need only be offered to all Holders to whom the exchange offer is made and to be paid to all such Holders that consent, waive or agree to amend in such time frame.

Article 5

SUCCESSOR COMPANY

SECTION 5.01. When Issuer May Merge or Transfer Assets . (a) The Issuer will not, directly or indirectly, in a single transaction or a series of related transactions, (i) consolidate or merge with or into any Person (other than a merger that satisfies the requirements of Section 5.01(a)(1) with a Wholly Owned Restricted Subsidiary solely for the purpose of changing the Issuer’s jurisdiction of formation to another State of the United States), or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer to any Person or (ii) adopt a Plan of Liquidation unless, in either case:

(1) either (A) the Issuer will be the surviving or continuing Person or (B) the Person formed by or surviving such consolidation or merger (if other than the Issuer) or to which such sale, lease, conveyance or other disposition shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “Successor”) is a corporation, limited liability company or limited partnership organized and existing under the laws of any State of the United States of America or the District of Columbia, and the Successor (if other than the Issuer) expressly assumes, by supplemental indenture in form and substance reasonably satisfactory to the Trustee, all of the obligations of the Issuer under the Securities and this Indenture; provided that at any time the Successor is a limited liability company or a limited partnership, there shall be a co-issuer of the Securities that is a corporation organized and existing under the laws of any State of the United States of America or the District of Columbia;

(2) immediately prior to and immediately after giving effect to such transaction and the assumption of the obligations as set forth in Section 5.01(a)(1)(B) and the incurrence of any Indebtedness to be incurred in connection therewith, no Default shall have occurred and be continuing;

(3) immediately after and giving effect to such transaction and the assumption of the obligations set forth in Section 5.01(a)(1)(B) and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, either (A) the Issuer or the Successor, as the case may be, could incur $1.00 of additional Indebtedness pursuant to Section 4.03(a), (B) the Consolidated Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries or the Successor and the Restricted Subsidiaries, as the case may be, would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction or (C) the Indebtedness to Tangible Net Worth Ratio of the Issuer and the Restricted Subsidiaries or the Successor and its Restricted Subsidiaries, as the case may be, would be less than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction; and

(4) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, disposition or Plan of Liquidation and such supplemental indenture, if any, comply with the Indenture, and in the case of the Opinion of Counsel, that such supplemental indenture constitutes the legal, valid and binding obligation of the Successor, enforceable against the Successor.

For purposes of this Section 5.01, any Indebtedness of the Successor which was not Indebtedness of the Issuer immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.

(b) Except as provided in Section 10.07, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (other than the Issuer or another Guarantor), whether or not affiliated with such Guarantor, unless (1) either, (A) such Guarantor will be the surviving or continuing Person or (B) the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) assumes, by supplemental indenture in form and substance satisfactory to the Trustee, all of the obligations of such Guarantor under the Security Guarantee of such Guarantor and this Indenture; (2) immediately after giving effect to such transaction and the assumption of the obligations as set forth in Section 5.01(b)(1)(B) and the incurrence of any Indebtedness to be incurred in connection therewith, no Default shall have occurred and be continuing; and (3) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation or merger and such supplemental indenture, if any, comply with the Indenture, and in the case of the Opinion of Counsel, that such supplemental indenture constitutes the legal, valid and binding obligation of the successor Guarantor, enforceable against the successor Guarantor.

(c) Notwithstanding the foregoing, (1) any Restricted Subsidiary may merge into the Issuer or another Restricted Subsidiary, (2) the above provisions of this Section 5.01 shall not apply to any transfer of assets between or among the Issuer and any Restricted Subsidiaries, and (3) the requirements of Section 5.01(b) will not apply to any transaction pursuant to which such Guarantor is permitted to be released from its Security Guarantee in accordance with the provisions described under Section 10.07.

(d) For purposes of this Section 5.01, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the assets of one or more Subsidiaries, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer, on a consolidated basis, will be deemed to be the transfer of all or substantially all of the assets of the Issuer.

(e) Upon any consolidation, combination or merger of the Issuer or a Guarantor, or any sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with this Section 5.01 in which the Issuer or such Guarantor is not the continuing obligor under the Securities or its Security Guarantee, the surviving entity formed by such

consolidation or into which the Issuer or such Guarantor is merged or to which the sale, lease, transfer, conveyance or other disposition is made will succeed to, and be substituted for, and may exercise every right and power of, the Issuer or such Guarantor under this Indenture, the Securities and the Security Guarantees with the same effect as if such surviving entity had been named herein as the Issuer or such Guarantor and, except in the case of a lease, the Issuer or such Guarantor, as the case may be, will be released from the obligation to pay the principal of, premium, if any, and interest on the Securities or in respect of its Security Guarantee, as the case may be, and all of the Issuer’s or such Guarantor’s other obligations and covenants under the Securities, this Indenture and its Security Guarantee, if applicable.

Article 6

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default . Each of the following is an “Event of Default”:

(1) failure by the Issuer to pay interest on any of the Securities when it becomes due and payable and the continuance of any such failure for 30 days;

(2) failure by the Issuer to pay the principal or premium on any of the Securities when it becomes due and payable, whether at Stated Maturity, upon redemption, upon required purchase, upon acceleration or otherwise;

(3) failure by the Issuer or the Guarantors to comply with any of its agreements or covenants described in Section 5.01;

(4) failure by the Issuer or any Restricted Subsidiary to comply with any other agreement or covenant in this Indenture and continuance of this failure for 60 days after written notice of the failure has been given to the Issuer by the Trustee or by the Holders (with a copy to the Trustee) of at least 25% of the aggregate principal amount of the Securities then outstanding;

(5) default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness (other than Non-Recourse Indebtedness) of the Issuer or any Restricted Subsidiary, or the payment of which is guaranteed by the Issuer or any Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is incurred after the Issue Date, which default (a) is caused by a failure to pay when due principal on such Indebtedness within the applicable express grace period, or (b) results in the acceleration of such Indebtedness prior to its express final maturity, and in each case the principal amount of such Indebtedness, together with any other Indebtedness with respect to which an event described in 6.01(5)(a) or (b) has occurred and is continuing, aggregates $15.0 million or more; provided , however , that if any such default is cured or waived or any acceleration rescinded or such Indebtedness is repaid within a period of ten (10) days from the continuation of such default beyond any applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default under this Indenture and any consequential acceleration of the Securities shall automatically be rescinded so long as such rescission does not conflict with any judgment or decree;

(6) one or more judgments or orders that exceed $15.0 million in the aggregate (net of any amounts covered by insurance issued by a creditworthy insurance company to the extent such insurer has not denied coverage therefor (other than reserving its rights) or that are bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against the Issuer or any Restricted Subsidiary and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within 60 days of being entered;

(7) the Issuer or any Significant Subsidiary of the Issuer or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements of the Issuer and the Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(A) commences a voluntary case;

(B) consents to the entry of an order for relief against it in an involuntary case;

(D) makes a general assignment for the benefit of its creditors.

(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(A) is for relief against the Issuer or any Significant Subsidiary of the Issuer as debtor in an involuntary case;

(B) appoints a Custodian of the Issuer or any Significant Subsidiary of the Issuer or a Custodian for all or substantially all of the assets of the Issuer or any Significant Subsidiary of the Issuer; or

(C) orders the liquidation of the Issuer or any Significant Subsidiary of the Issuer, and the order or decree remains unstayed and in effect for 60 days; or

(9) the Security Guarantee of any Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Security Guarantee and this Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its Security Guarantee (other than by reason of release of a Guarantor from its Security Guarantee in accordance with the terms of this Indenture and the Security Guarantee).

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

The term “Bankruptcy Law” means Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.

SECTION 6.02. Acceleration . If an Event of Default (other than an Event of Default specified in Section 6.01(7) or (8) with respect to the Issuer) occurs and is continuing the Trustee by written notice to the Issuer, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding by written notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders in accordance with this Indenture shall, declare all amounts owing under the Securities to be due and payable immediately. Upon such declaration of acceleration, the aggregate principal of and accrued and unpaid interest on the outstanding Securities shall immediately become due and payable. If an Event of Default specified in Section 6.01(7) or (8) with respect to the Issuer occurs, all outstanding Securities shall become due and payable without any further action or notice. In the event of a declaration of acceleration of the Securities because an Event of Default specified in Section 6.01(5) has occurred and is continuing, the declaration of acceleration of the Securities shall be automatically annulled if the default triggering such Event of Default pursuant to Section 6.01(5) shall be remedied or cured by the Issuer or a Restricted Subsidiary or waived by the holders of the relevant Indebtedness within 30 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Securities would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium, if any, or interest on the Securities that became due solely because of the acceleration of the Securities, have been cured or waived. The Holders of a majority in principal amount of the outstanding Securities may waive all past or existing defaults (except with respect to nonpayment of principal, premium or interest) and rescind any such acceleration with respect to the Securities and its consequences if (1) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal, premium, if any, and interest on the Securities that have become due solely by such declaration of acceleration, have been cured or waived.

SECTION 6.03. Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Defaults . The Holders of a majority in principal amount of the Securities then outstanding by notice to the Trustee may waive an existing Default or Event of Default and its consequences except (a) a Default or Event of Default in the payment of the principal of or interest on a Security (b) a Default arising from the failure to redeem or purchase any Security when required pursuant to this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Securityholder affected; provided , however , that the Holders of a majority in principal amount of the Securities then outstanding may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

SECTION 6.05. Control by Majority . The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines in good faith is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification and security satisfactory to the Trustee against all losses, liabilities and expenses that may be caused by taking or not taking such action.

SECTION 6.06. Limitation on Suits . Except to enforce the right to receive payment of principal, premium (if any) or interest when due (after giving effect to the grace period specified in Section 6.01(1)), no Securityholder may pursue any remedy with respect to this Indenture or the Securities unless:

(1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing;

(2) the Holders of at least 25% in principal amount of the Securities make a written request to the Trustee to pursue the remedy;

(3) such Holder or Holders offer to the Trustee security or indemnity satisfactory to it against any loss, liability or expense;

(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

(5) the Holders of a majority in principal amount of the Securities do not give the Trustee a direction inconsistent with the request during such 60-day period.

A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. In the event that the Definitive Securities are not issued to any beneficial owner promptly after the Registrar has received a request from the Holder of a Global Security to issue such Definitive Securities to such beneficial owner of its nominee, the Issuer expressly agrees and acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to this Indenture, the right of such beneficial holder of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial holder’s Securities as if such Definitive Securities had been issued.

SECTION 6.07. Rights of Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

SECTION 6.08. Collection Suit by Trustee . If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07.

SECTION 6.09. Trustee May File Proofs of Claim . The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Issuer, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any proceeding.

SECTION 6.10. Priorities . If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:

FIRST: to the Trustee for amounts due under Section 7.07;

SECOND: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

THIRD: to the Issuer.

The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 6.10. At least 15 days before such record date, the Issuer shall send to each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid.

SECTION 6.11. Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the Securities then outstanding.

SECTION 6.12. Waiver of Stay or Extension Laws . The Issuer (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

Article 7

TRUSTEE

SECTION 7.01. Duties of Trustee . (a) If an Event of Default actually known to a Trust Officer has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the same circumstances in the conduct of his or her own affairs.

(b) Except during the continuance of an Event of Default:

(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the form requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(1) this Section 7.01(c) does not limit the effect of Section 7.01(b);

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.

(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

SECTION 7.02. Rights of Trustee . (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided , however , that the Trustee’s conduct does not constitute willful misconduct, negligence or bad faith as determined by a final order of a court of competent jurisdiction that is not subject to appeal.

(e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) Except with respect to Section 4.01 (and only if the Trustee is the Paying Agent for the Securities), the Trustee shall have no duty to inquire as to the performance of the Issuer’s covenants in this Indenture. The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. In addition, the Trustee shall not

be deemed to have knowledge of any Default or Event of Default except (i) any Event of Default occurring pursuant to Sections 6.01(1) and 6.01(2); provided that the Trustee is the Paying Agent for the Securities at the time of such Event of Default or (ii) any Default or Event of Default of which the Trustee shall have received written notice in the manner set forth in this Indenture or a Trust Officer shall have obtained actual knowledge.

(g) Delivery of reports, information and documents to the Trustee under Section 4.02 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants thereunder (as to which the Trustee is entitled to rely exclusively on an Officers’ Certificate).

(h) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action, it being understood that the Trustee shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

(i) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

(j) Anything in this Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of profit), even if the Issuer has been advised as to the likelihood of such loss or damage and regardless of the form of action.

SECTION 7.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.

SECTION 7.04. Trustee’s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Securities or the Security Guarantees, it shall not be accountable for the Issuer’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Issuer in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

SECTION 7.05. Notice of Defaults . If a Default or Event of Default occurs, is continuing and is known to a Trust Officer, the Trustee shall give notice of the Default or Event of Default to each Securityholder upon the later to occur of: (a) 90 days after such Default occurs or (b) 30 days after a Trust Officer has actual knowledge of the Default. Except in the case of a Default or Event of Default in the payment of principal of or interest on any Security (including payments pursuant to the mandatory redemption provisions of such Security, if any) or a Default or Event of Default in complying with Section 5.01, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice does not adversely affect the interests of the Securityholders.

SECTION 7.06. Reports by Trustee to Holders . As promptly as practicable after each May 1 beginning with the May 1 following the date of this Indenture, and in any event prior to July 1 in each year, the Trustee shall mail to each Securityholder a brief report dated as of May 1 that complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b). The Trustee will also transmit by mail all reports as required by TIA §313(c).

A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Issuer agrees to notify promptly the Trustee in writing whenever the Securities become listed on any stock exchange and of any delisting thereof.

SECTION 7.07. Compensation and Indemnity . The Issuer shall pay to the Trustee from time to time compensation for its services as may be agreed to from time to time in writing for the Trustee’s acceptance of its duties under this Indenture. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all reasonable expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Issuer and each Guarantor shall jointly and severally indemnify each of the Trustee and any predecessor Trustee, their officers, directors, employees and agents, for, and hold each of them harmless against, any and all loss, damage, claim, liability or expense, including taxes (other than taxes based on the income of the Trustee) and reasonable attorneys’ fees and expenses incurred by each of them in connection with acceptance or performance of its duties under this Indenture including the reasonable costs and expenses of enforcing this Indenture against the Issuer (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuer, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder (including settlement costs). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee shall provide reasonable cooperation at the Issuer’s expense in the defense. The Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel; provided , however , that the Issuer shall not be required to pay such fees and expenses if it assumes the Trustee’s defense and, in the Trustee’s reasonable judgment, there is no conflict of interest between the Issuer and the Trustee in connection with such defense, except the reasonable fees and expenses incurred in the Trustee’s determination of the absence of a conflict of interest between the Issuer and the Trustee. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith as determined by a final order of a court of competent jurisdiction.

To secure the Issuer’s payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Securities.

The Issuer’s obligations pursuant to this Section 7.07 shall survive the resignation or removal of the Trustee and the satisfaction, discharge or other termination of this Indenture, including any termination or rejection hereof under any Bankruptcy Law. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(7) or (8) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

SECTION 7.08. Replacement of Trustee . The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged bankrupt or insolvent;

(3) a receiver or other public officer takes charge of the Trustee or its property; or

(4) the Trustee otherwise becomes incapable of acting.

If the Trustee has or shall acquire a conflicting interest within the meaning of the TIA, the Trustee shall either eliminate such conflict, petition the SEC to continue or resign, to the extent and in the manner provided by, and subject to the provisions of, the TIA and this Indenture.

If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10, any Securityholder who has been a bona fide holder of a Security for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

SECTION 7.09. Successor Trustee by Merger . If the Trustee consolidates with merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.

SECTION 7.10. Eligibility; Disqualification . The Trustee shall at all times satisfy the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b); provided , however , that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

SECTION 7.11. Preferential Collection of Claims Against Issuer . The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

Article 8

SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01. Discharge of Liability on Securities; Defeasance . (a) This Indenture shall be discharged and shall cease to be of further effect (except as to rights of registration of transfer or exchange of the Securities which shall survive until all Securities have been canceled and indemnifications which shall survive discharge and cancellation of the Securities) as to all outstanding Securities when either: (1) all the Securities that have been authenticated and delivered (except lost, stolen or destroyed Securities which have been replaced or paid and Securities for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from this trust) have been delivered to the Trustee for cancellation or (2) (i) all Securities not delivered to the Trustee for cancellation otherwise have become due and payable or will become due and payable within one year by reason of the sending of a notice of redemption or otherwise and the Issuer has irrevocably deposited or caused to be deposited with the Trustee trust funds in trust for the Holders in an amount of money in cash in U.S. dollars or U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, as confirmed, certified or attested to by an Independent Financial Advisor in writing to the Trustee, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness (including all principal, premium and accrued interest to the date of maturity or redemption, as the case may be) on the Securities not theretofore delivered to the Trustee for cancellation, (ii) the Issuer has paid all sums payable by it under this Indenture, (iii) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Securities at maturity or on the date of redemption, as the case may be, and (iv) no Default has occurred and is continuing on the date of such deposit (other than a Default resulting from the borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) and the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or material instrument (other than this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound. In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent to satisfaction and discharge have been complied with. After such delivery and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of the Issuer’s and the Guarantors’ obligations under the Securities, the Security Guarantees and this Indenture.

(b) Subject to Section 8.02, the Issuer at any time may terminate (1) all its obligations under the Securities and this Indenture (“ legal defeasance option ”) or (2) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the operation of Sections 6.01(3), (4), (5), (6) and 6.01(9) and the limitations contained in Section 5.01(a)(3) (“ covenant defeasance option ”). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. Legal defeasance means that the Issuer and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the Securities and the Security Guarantees, and this Indenture shall cease to be of further effect as to all outstanding Securities and Security Guarantees, except as to:

(1) rights of Holders to receive payments in respect of the principal of, premium and interest on the Securities when such payments are due from the trust referred to in Section 8.02 hereof;

(2) the Issuer’s obligations with respect to the Securities under Article 2 hereof;

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer’s obligations in connection therewith; and

(4) this Article 8.

In the event that the Issuer terminates all of its obligations under the Securities and this Indenture (with respect to such Securities) by exercising its legal defeasance option or its covenant defeasance option, the obligations of each Guarantor under its Security Guarantee of such Securities shall be terminated simultaneously with the termination of such obligations.

If the Issuer exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified in Sections 6.01(3), (4), (5), (6) and 6.01(9).

Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates.

SECTION 8.02. Conditions to Defeasance . The Issuer may exercise its legal defeasance option or its covenant defeasance option only if:

(1) the Issuer irrevocably deposits with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without reinvestment) as confirmed, certified or attested to by an Independent Financial Advisor in writing to the Trustee to pay the principal of, premium and interest on the Securities on the stated date for payment or on the applicable redemption date, as the case may be, of the principal or installment of principal of, premium or interest on the Securities;

(2) in the case of Legal Defeasance, the Issuer delivers to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (a) the Issuer has received from, or there has been published by the Internal Revenue Service, a ruling, or (b) since the date of this Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon this opinion of counsel shall confirm that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Issuer delivers to the Trustee an opinion of counsel in the United States confirming that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred;

(4) (x) no Default shall have occurred and be continuing on the date of such deposit or will occur as a result of such deposit (other than a Default resulting from the borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) and (y) the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or material instrument (other than this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

(5) the Issuer delivers to the Trustee an Officers’ Certificate stating that the deposit was not made by it with the intent of preferring the Holders over any other of its creditors or with the intent of defeating, hindering, delaying or defrauding any other of its creditors or others;

(6) the Issuer delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the conditions provided for in, in the case of the Officers’ Certificate, Section 8.02(1) through (6) and, in the case of the Opinion of Counsel, Section 8.02(2) and/or (3) and (4)(y) have been complied with; and

(7) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Securities at maturity or on the date of redemption, as the case may be (which instructions may be contained in the Officers’ Certificate referred to in Section 8.02(5) or (6)).

Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article 3.

SECTION 8.03. Application of Trust Money . The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U. S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities so discharged or defeased.

SECTION 8.04. Repayment to Issuer . The Trustee and the Paying Agent shall promptly turn over to the Issuer upon request any excess money or securities held by them at any time.

Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Issuer upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Securityholders entitled to the money must look to the Issuer for payment as general creditors.

SECTION 8.05. Indemnity for U.S. Government Obligations . The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

SECTION 8.06. Reinstatement . If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining restraining or otherwise prohibiting such application, the Issuer’s and each Guarantor’s obligations under this Indenture, each Security Guarantee and the Securities so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided , however , that, if the Issuer has made any payment of principal of or interest on any Securities because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

Article 9

AMENDMENTS

SECTION 9.01. Without Consent of Holders . The Issuer, the Guarantors and the Trustee may amend this Indenture, the Security Guarantees or the Securities without notice to or consent of any Securityholder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Securities in addition to or in place of certificated Securities, provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code;

(3) to provide for the assumption by a successor entity of the obligations of the Issuer or any Guarantor in accordance with Section 5.01;

(4) to add any Guarantor with respect to the Securities, or to release any Guarantor from any of its obligations under its Security Guarantee or this Indenture, in each case, in accordance with the applicable provisions of this Indenture;

(5) to make any change that would provide any additional rights or benefits (including the addition of collateral for the purpose of securing the Securities and the Security Guarantees) to the Holders of Securities or that does not adversely affect in any material respect the legal rights under this Indenture, the Securities or the Security Guarantees of any such Holder;

(6) to comply with applicable SEC rules and regulations or changes to applicable law;

(7) to conform the text of this Indenture, the Security Guarantees or the Securities to any provision of the “Description of Notes” section of the Final Offering Memorandum;

(8) to provide for the issuance of Additional Securities in compliance and in accordance with the limitations set forth in this Indenture;

(9) to evidence or provide for the acceptance of appointment under this Indenture of a successor trustee or to comply with any requirements under the TIA;

(10) to allow any Guarantor to execute a supplemental indenture or a Security Guarantee with respect to the Securities; or

(11) to comply with the rules of any applicable securities depository.

After an amendment under this Section becomes effective, the Issuer shall send to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section

SECTION 9.02. With Consent of Holders . The Issuer, the Guarantors and the Trustee may amend this Indenture, the Securities or the Security Guarantees with the written consent (including consents obtained in connection with a tender offer or exchange for the Securities) of the Holders of at least a majority in principal amount of the Securities then outstanding (including without limitation, Additional Securities, if any) voting as a single class, and any existing Default under, or compliance with any provision of, this Indenture may be waived (other than any continuing Default in the payment of the principal or interest on the Securities, except a payment default resulting from an acceleration that has been rescinded) with the consent (which may include consents obtained in connection with a tender offer or exchange offer of the Securities) of the Holders of a majority in principal amount of the Securities then outstanding (including, without limitation, Additional Securities, if any) voting as a single class. However, without the consent of each Securityholder affected thereby, an amendment or waiver may not (with respect to the Securities held by a non-consenting Holder):

(1) change the Stated Maturity of any Security;

(2) reduce the amount, extend the due date or otherwise affect the terms of any scheduled payment of interest on or principal of the Securities;

(3) reduce any premium payable upon the redemption of the Securities, change the date on which any Securities are subject to redemption or otherwise alter the provisions with respect to the redemption of the Securities set forth in Article 3 of this Indenture (other than provisions specifying the notice periods for effecting a redemption);

(4) amend, change or modify in any material respect the obligation of the Issuer to make and consummate a Change of Control Offer or an Asset Sale Offer after such Change of Control has occurred or the obligation to make such Asset Sale Offer has arisen, respectively;

(5) make any Security payable in money or currency other than that stated in the Securities;

(6) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver to this Indenture or the Securities;

(7) impair the rights of Holders to receive payments of principal of, premium or interest on the Securities or to institute suit for the enforcement thereof;

(8) modify the Security Guarantees in any manner adverse to the Holders, or release any Guarantor from any of its obligations under its Security Guarantee or this Indenture, except a release in accordance with the terms of this Indenture; or

(9) waive a Default in the payment of principal of, premium, if any, or interest on the Securities (except a rescission of acceleration of the Securities by the Holders of at least a majority in aggregate principal amount of the then outstanding Securities with respect to a nonpayment default and a waiver of the payment default that resulted from such acceleration as set forth in Section 6.02); or

(10) make any change in this Section 9.02.

It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.

SECTION 9.03. Compliance with Trust Indenture Act . Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect.

SECTION 9.04. Revocation and Effect of Consents and Waivers . A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder. An amendment or waiver becomes effective in accordance with its terms.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described in this Article 9 or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date.

SECTION 9.05. Notation on or Exchange of Securities . If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment, supplement or waiver.

SECTION 9.06. Trustee To Sign Amendments . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not sign it. In signing any amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture.

Article 10

GUARANTEES

SECTION 10.01. Guarantees . Each Guarantor hereby unconditionally and irrevocably guarantees, jointly and severally, to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment of principal of and interest on the Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Issuer under this Indenture and the Securities and (b) the full and punctual performance within applicable grace periods of all other obligations of the Issuer under this Indenture and the Securities (all the foregoing being hereinafter collectively called the “ Guaranteed Obligations ”). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from such Guarantor and that such Guarantor will remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.

Each Guarantor waives presentation to, demand of, payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Securities or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (1) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person (including any Guarantor) under this Indenture, the Securities or any other agreement or otherwise; (2) any extension or renewal of this Indenture, the Securities or any other agreement; (3) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (4) the release of any security, if any, held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (5) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (6) except as set forth in Section 10.07, any change in the ownership of such Guarantor.

Each Guarantor further agrees that its Security Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.

Except as expressly set forth in Sections 8.01(b), 10.02 and 10.07, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of such Guarantor or would otherwise operate as a discharge of such Guarantor as a matter of law or equity.

Except as expressly set forth in Sections 8.01(b), 10.02 and 10.07, each Guarantor further agrees that its Security Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise.

In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash to the Holders or the Trustee an amount equal to the sum of (A) the unpaid principal amount of such Guaranteed Obligations, (B) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (C) all other monetary Guaranteed Obligations of the Issuer to the Holders and the Trustee.

Each Guarantor agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations hereby may be accelerated as provided in Article 6 for the purposes of such Guarantor’s Security Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section.

SECTION 10.02. Limitation on Liability . Each Guarantor, and by its acceptance of the Securities, each Holder, hereby confirms that it is the intention of all such parties that the Security Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Security Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that, any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

SECTION 10.03. Successors and Assigns . This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

SECTION 10.04. No Waiver . Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.

SECTION 10.05. Modification . No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee in accordance with the terms and conditions of this Indenture and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.

SECTION 10.06. Execution and Delivery of Security Guarantee .

To evidence its Security Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Security Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by manual or facsimile signature of an Officer of such Guarantor on Securities authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.

Each Guarantor hereby agrees that its Security Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on such Security a notation of such Security Guarantee.

If an Officer whose signature is on this Indenture or on the Security Guarantee no longer holds that office at the time the Trustee authenticates the Securities on which a Security Guarantee is endorsed, the Security Guarantee will be valid nevertheless.

The delivery of any Global Security by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Security Guarantee set forth in this Indenture on behalf of the Guarantors.

In the event that (1) any Restricted Subsidiary guarantees Indebtedness for borrowed money of the Issuer or any Guarantor, or (2) the Issuer or any Restricted Subsidiary creates or acquires any Wholly-Owned Restricted Subsidiary (other than an Immaterial Subsidiary) after the date of this Indenture, then, in each case if required by Section 4.12 hereof, the Issuer will cause such Subsidiary to comply with the provisions of Section 4.12 hereof and this Article 10, to the extent applicable.

SECTION 10.07. Release of Guarantor . A Guarantor will be released from its Security Guarantee and all other obligations under this Article 10 (other than any obligation that may have arisen under Section 10.08) and discharged:

(1) upon any sale, assignment, transfer, conveyance, exchange or other disposition (by merger, consolidation or otherwise) of Equity Interests of such Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary, which sale, assignment, transfer, conveyance, exchange or other disposition does not constitute an Asset Sale or is made in compliance with Section 4.06(a);

(2) upon any sale, assignment, transfer, conveyance, exchange or other disposition (by merger, consolidation or otherwise) of all or substantially all of the assets of such Guarantor to a Person, which sale, assignment, transfer, conveyance, exchange or other disposition does not constitute an Asset Sale or is made in compliance with Section 4.06(a); provided , that after such sale, assignment, transfer, conveyance, exchange or other disposition, such Guarantor is an Immaterial Subsidiary;

(3) unless a Default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any Indebtedness for borrowed money of the Issuer and the Guarantors so long as such Guarantor would not then otherwise be required to provide a Security Guarantee pursuant to this Indenture; provided that if such Guarantor has incurred any Indebtedness in reliance on its status as a Guarantor under Section 4.03, such Guarantor’s obligations under such Indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) under Section 4.03;

(4) upon the designation of such Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture;

(5) if the Issuer exercises its legal defeasance option or covenant defeasance option, or if the obligations of the Issuer and the Guarantors under this Indenture are discharged pursuant to Section 8.01, upon such exercise or discharge; or

(6) in connection with the dissolution of such Guarantor under applicable law in accordance with this Indenture.

At the request of the Issuer, the Trustee shall execute and deliver such instrument reasonably requested by the Issuer evidencing such release.

SECTION 10.08. Contribution . Without limiting any provisions of this Article 10, each Guarantor that makes a payment under its Security Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

Article 11

MISCELLANEOUS

SECTION 11.01. Trust Indenture Act Controls . If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control.

SECTION 11.02. Notices . Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows:

If to the Issuer or any Guarantor:

CENTURY COMMUNITIES, INC.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

Attention: Dale Francescon

Fax Number: (303) 770-8320

with a copy to (which shall not constitute notice):

Greenberg Traurig, LLP

1840 Century Park East, Suite 1900

Los Angeles, California 90067

Fax Number: (310) 586-0556

Attention: Mark Kelson, Esq.

If to the Trustee:

U.S. BANK NATIONAL ASSOCIATION

Global Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103

Attention: K. Mitchell (Century Communities)

Fax Number: (860) 241-6881

The Issuer, any Guarantor or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Notwithstanding any other provision of this Indenture, any Security or Security Guarantee, where this Indenture, any Security or Security Guarantee provides for notice of any event (including any notice of redemption) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depository (or its designee), pursuant to the customary procedures of the Depository.

Failure to send a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. Other than notices to the Trustee, if a notice or communication is mailed in the manner provided in this Section 11.02, it is duly given, whether or not the addressee receives it.

SECTION 11.03. Communication by Holders with Other Holders . Securityholders may communicate pursuant to TIA § 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Issuer, any Guarantor, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

SECTION 11.04. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee:

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(2) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

SECTION 11.05. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

(1) a statement that the individual making such certificate or opinion has read such covenant or condition;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

SECTION 11.06. When Securities Disregarded . In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Issuer or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Trust Officer actually knows are so owned shall be so disregarded. In connection with any such direction, waiver or consent, the Issuer shall furnish to the Trustee an Officers’ Certificate listing and identifying all Securities, if any, known by the Issuer to be owned by or for the account of any of the above-described Persons. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

SECTION 11.07. Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or at a meeting of Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions.

SECTION 11.08. Legal Holidays . If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

SECTION 11.09. Governing Law . This Indenture, the Security Guarantees and the Securities shall be governed by, and construed in accordance with the internal laws of the State of New York, without giving effect to applicable conflicts of law principles to the extent that the laws of another jurisdiction would be applied thereby.

SECTION 11.10. No Recourse Against Others . No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor shall have any liability for any obligations of the Issuer under the Securities or this Indenture or of any Guarantor under its Security Guarantee or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities and the Security Guarantees.

SECTION 11.11. Successors . All agreements of the Issuer in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 11.12. Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

SECTION 11.13. Severability . In case any provision in this Indenture or in the Securities is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

SECTION 11.14. Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 11.15. USA PATRIOT Act . The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help the government fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account. The parties to this Indenture agree that they will provide the Trustee with such information as it may request to satisfy the requirements of the USA PATRIOT Act.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.


CENTURY COMMUNITIES, INC.

By:		/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

Signature pages to Indenture


U.S. BANK NATIONAL ASSOCIATION, as Trustee,

By:		/s/ Kathy L. Mitchell
		Name: Kathy L. Mitchell
		Title: Vice President

Signature pages to Indenture


GUARANTORS :

C ENTURY C OMMUNITIES , I NC ., Sole Member of Augusta Pointe, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Augusta Pointe, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Avalon at Inverness, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC, Manager of Avalon at Inverness, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC .,
Sole Member of Beacon Pointe, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC, Manager of Beacon Pointe, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer


C ENTURY L AND H OLDINGS , LLC,
Sole Member of Blackstone Homes, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC,
Manager of Blackstone Homes, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC .,
Sole Member of Bradburn Village Homes, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC,
Manager of Bradburn Village Homes, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer


C ENTURY C OMMUNITIES , I NC .,
Sole Member of CC Communities, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC,
Manager of CC Communities, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC ., Sole Member and Manager of CCC Holdings, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer


C ENTURY C OMMUNITIES , I NC ., Sole Member of CCH Homes, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC, Manager of CCH Homes, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC .,
Sole Member of Central Park Rowhomes, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC, Manager of Central Park Rowhomes, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer


C ENTURY L AND H OLDINGS , LLC,
Sole Member of Century at Ash Meadows, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and


H ORIZON B UILDING S ERVICES , LLC,
Manager of Century at Ash Meadows, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Beacon Pointe, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Beacon Pointe, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Century at Candelas, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Candelas, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Harvest Meadows, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Harvest Meadows, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Lowry, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Lowry, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Midtown, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Midtown, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Murphy Creek, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Murphy Creek, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Outlook, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Outlook, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Southshore, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Southshore, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member




						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Terrain, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Terrain, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century at Wolf Ranch, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century at Wolf Ranch, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Century City, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century City, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Century Land Holdings, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

CCC H OLDINGS , LLC,

Manager of Century Land Holdings, LLC



		By:		Century Communities, Inc.,
				its Sole Member and Manager



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Century Land Holdings II, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Century Land Holdings II, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Cherry Hill Park, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Cherry Hill Park, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Cottages at Willow Park, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Cottages at Willow Park, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Enclave at Boyd Ponds, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Enclave at Boyd Ponds, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Enclave at Cherry Creek, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Enclave at Cherry Creek, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Estates at Chatfield Farms, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Estates at Chatfield Farms, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Hearth at Oak Meadows, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Hearth at Oak Meadows, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture

C ENTURY C OMMUNITIES , I NC .,

Sole Member of Hometown, LLC



		By:		/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Hometown, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,

Sole Member of Lakeview Fort Collins, LLC



		By:		Century Communities, Inc.,
				its Sole Member

and

H ORIZON B UILDING S ERVICES , LLC,

Manager of Lakeview Fort Collins, LLC



		By:		Century Land Holdings, LLC,
				its Sole Member



						By:		/s/ Dale Francescon
								Name: Dale Francescon
								Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY L AND H OLDINGS , LLC,
Sole Member of Madison Estates, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Madison Estates, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Meridian Ranch, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Meridian Ranch, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC .,
Sole Member of Montecito at Ridgegate, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Montecito at Ridgegate, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Park 5th Avenue Development Co., LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Reserve at Highpointe Estates, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Reserve at Highpointe Estates, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY L AND H OLDINGS , LLC,
Sole Member of Reserve at The Meadows, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Reserve at The Meadows, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Saddle Rock Golf, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Saddle Rock Golf, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY L AND H OLDINGS , LLC,
Sole Member of Saddleback Heights, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Saddleback Heights, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY L AND H OLDINGS , LLC,
Sole Member of Stetson Ridge Homes, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Stetson Ridge Homes, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC .,
Sole Member of The Vistas at Nor’wood, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of The Vistas at Nor’wood, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of The Wheatlands, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of The Wheatlands, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC .,
Sole Member of Venue at Arista, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Venue at Arista, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Verona Estates, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Verona Estates, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY L AND H OLDINGS , LLC, Sole Member of Villas at Murphy Creek, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Villas at Murphy Creek, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Waterside at Highland Park, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Waterside at Highland Park, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES , I NC ., Sole Member of Wildgrass, LLC


		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

and

H ORIZON B UILDING S ERVICES , LLC,
Manager of Wildgrass, LLC

	By:	Century Land Holdings, LLC, its Sole Member

		By:	Century Communities, Inc., its Sole Member

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Century Communities of Nevada, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Century Rhodes Ranch GC, LLC

			By:	/s/ Dale Francescon
				Name: Dale Francescon
				Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Century Tuscany GC, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

C ENTURY C OMMUNITIES , I NC .,
Sole Member of Neighborhood Associations Group, LLC

	By:	/s/ Dale Francescon
		Name: Dale Francescon
		Title: Co-Chief Executive Officer

Signature pages to Indenture


C ENTURY C OMMUNITIES OF N EVADA , LLC,
Manager and Sole Member of Century Communities of Nevada Realty, LLC

	By:	Century Communities, Inc., its Sole Member

		By:	/s/ Dale Francescon
			Name: Dale Francescon
			Title: Co-Chief Executive Officer

Signature pages to Indenture

RULE 144A/REGULATION S APPENDIX

PROVISIONS RELATING TO INITIAL SECURITIES,

PRIVATE EXCHANGE SECURITIES

AND EXCHANGE SECURITIES

1. Definitions

1.1 Definitions

For the purposes of this Appendix the following terms shall have the meanings indicated below:

“ Applicable Procedures ” means, with respect to any transfer or transaction involving a Regulation S Global Security or beneficial interest therein, the rules and procedures of the Depository for such a Regulation S Global Security, to the extent applicable to such transaction and as in effect from time to time.

“ Clearstream ” means Clearstream Banking, Société Anonyme.

“ Definitive Security ” means a certificated Initial Security or Exchange Security or Private Exchange Security bearing, if required, the appropriate restricted securities legend set forth in Section 2.3(e).

“ Depository ” means The Depository Trust Company, its nominees and their respective successors.

“ Euroclear ” means Euroclear S.A./N.V., as operator of the Euroclear system.

“ Exchange Securities ” means (1) the 6.875% Senior Notes Due 2022 issued pursuant to this Indenture in connection with a Registered Exchange Offer in compliance with the terms of the Registration Rights Agreement and (2) Additional Securities, if any, issued pursuant to a registration statement filed with the SEC under the Securities Act.

“ Indirect Participant ” means a Person who holds a beneficial interest in a Global Security through a Participant.

“ Initial Purchasers ” means (1) with respect to the Initial Securities issued on the Issue Date, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and FBR Capital Markets & Co., and (2) with respect to each issuance of Additional Securities, the Persons purchasing such Additional Securities under the related Purchase Agreement.

“ Initial Securities ” means (1) $200,000,000 aggregate principal amount of 6.875% Senior Notes Due 2022 issued on the Issue Date and (2) Additional Securities, if any, issued in a transaction exempt from the registration requirements of the Securities Act.

“ Participant ” means, with respect to the Depository, Euroclear or Clearstream, a Person who has an account with the Depository, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

“ Private Exchange ” means the offer by the Issuer, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for the Initial Securities held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Securities.

“ Private Exchange Securities ” means any 6.875% Senior Notes Due 2022 issued in connection with a Private Exchange.

“ Private Placement Legend ” means the legend set forth in Section 2.3(e)(i)(A) of this Appendix to be placed on all Securities issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

“ Purchase Agreement ” means (1) with respect to the Initial Securities issued on the Issue Date, the Purchase Agreement dated April 30, 2014, among the Issuer, the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated as representative of the Initial Purchasers, and (2) with respect to each issuance of Additional Securities, the purchase agreement or underwriting agreement among the Issuer and the Persons purchasing such Additional Securities.

Appendix-1

“ QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

“ Registered Exchange Offer ” means the offer by the Issuer, pursuant to a Registration Rights Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act.

“ Registration Rights Agreement ” means (1) with respect to the Initial Securities issued on the Issue Date, the Registration Rights Agreement dated as of the date hereof, among the Issuer, the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated as representative of the Initial Purchasers and (2) with respect to each issuance of Additional Securities issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Issuer and the Persons purchasing such Additional Securities under the related Purchase Agreement.

“ Restricted Definitive Security ” means a Definitive Security bearing the Private Placement Legend.

“ Restricted Global Security ” means a Global Security bearing the Private Placement Legend.

“ Restricted Period ”, with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Securities are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Securities.

“ Rule 144A Securities ” means all Securities offered and sold to QIBs in reliance on Rule 144A.

“ Securities ” means the Initial Securities, the Exchange Securities and the Private Exchange Securities, treated as a single class.

“ Securities Act ” means the Securities Act of 1933.

“ Securities Custodian ” means the custodian with respect to a Global Security (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.

“ Shelf Registration Statement ” means the registration statement issued by the Issuer in connection with the offer and sale of Initial Securities or Private Exchange Securities pursuant to the Registration Rights Agreement.

“ Transfer Restricted Securities ” means Restricted Definitive Securities and Restricted Global Securities.

“ Unrestricted Definitive Security ” means a Definitive Security that does not bear and is not required to bear the Private Placement Legend.

“ Unrestricted Global Security ” means a Global Security that does not bear and is not required to bear the Private Placement Legend.

1.2 Other Definitions


Term		Defined in Section:

“ Global Securities ”		2.1(a)

“ Regulation S ”		2.1(a)

“ Regulation S Global Security ”		2.1(a)

“ Regulation S Permanent Global Security ”		2.1(a)

“ Regulation S Temporary Global Security ”		2.1(a)

“ Rule 144A ”		2.1(a)

“ Rule 144A Global Security ”		2.1(a)

Appendix-2

2. The Securities .

2.1 (a) Form and Dating . The Initial Securities will be offered and sold by the Issuer pursuant to a Purchase Agreement. The Initial Securities will be resold initially only to (i) QIBs in reliance on Rule 144A under the Securities Act (“ Rule 144A ”) and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act (“ Regulation S ”). Initial Securities may thereafter be transferred to, among others, QIBs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Securities initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the “ Rule 144A Global Security ”) and Initial Securities initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global securities in fully registered form (collectively, the “ Regulation S Temporary Global Security ”), in each case without interest coupons and with the global securities legend and the applicable restricted securities legend set forth in Exhibit A hereto, which shall be deposited on behalf of the purchasers of the Initial Securities represented thereby with the Securities Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. During the Restricted Period, beneficial interests in the Regulation S Temporary Global Security may be held only through Euroclear and Clearstream, and, except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Security will not be exchangeable for interests in the Rule 144A Global Security or any other Security prior to the expiration of the Restricted Period and then, after the expiration of the Restricted Period, may be exchanged for interests in a Rule 144A Global Security only upon delivery to the Registrar and the Issuer of the certification in the form provided for in Exhibits C or D, as applicable, that beneficial ownership interests in such Regulation S Global Security are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act. Within a reasonable time period after the expiration of the Restricted Period, the Regulation S Temporary Global Security will be exchanged for one or more permanent Securities in registered, global form without interest coupons (collectively, the “ Regulation S Permanent Global Security” and, together with the Regulation S Temporary Global Security, the “Regulation S Global Security”) pursuant to the procedures of the Depository. Simultaneously with the authentication of the Regulation S Permanent Global Security, the Trustee shall cancel the Regulation S Temporary Global Security.

Prior to the expiration of the Restricted Period, Beneficial interests in Regulation S Global Securities may be transferred or exchanged for interests in Rule 144A Global Securities only if (1) such exchange occurs in connection with a transfer of the Notes pursuant to Rule 144A and (2) the transferor of the beneficial interest in the Regulation S Global Securities first delivers to the Trustee a written certificate in a form provided for in Exhibit C or D, as applicable.

Beneficial interests in Rule 144A Global Securities may be transferred or exchanged for interests in Regulation S Global Securities, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the Trustee a written certificate in a form provided for in Exhibit C or D, as applicable.

The Rule 144A Global Security and the Regulation S Global Security are collectively referred to herein as “Global Securities”. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.

(b) Book-Entry Provisions . This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depository.

The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository and (ii) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instructions or held by the Trustee as custodian for the Depository.

Appendix-3

Participants shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Security, and the Issuer, the Trustee and any agent of the Issuer or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Participants, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Security.

(c) Definitive Securities . Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Securities shall not be entitled to receive physical delivery of Definitive Securities.

2.2 Authentication . The Issuer shall issue and the Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $200,000,000 6.875% Senior Notes due 2022, (2) any Additional Securities for an original issue in an aggregate principal amount specified in the written order of the Issuer pursuant to Section 2.02 of this Indenture and (3) Exchange Securities or Private Exchange Securities for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Securities or Additional Securities, as the case may be, in each case upon a written order of the Issuer signed by an Officer of the Issuer. Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and, in the case of any issuance of Additional Securities pursuant to Section 2.13 of this Indenture, shall certify that such issuance is in compliance with this Indenture, including Section 4.03.

2.3 Transfer and Exchange .

(a) Transfer and Exchange of Definitive Securities. When Definitive Securities are presented to the Registrar with a request:

(x) to register the transfer of such Definitive Securities; or

(y) to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided , however , that the Definitive Securities surrendered for transfer or exchange:

(i) shall be duly endorsed or accompanied by a written instrument of transfer substantially in the form of the Assignment Form annexed hereto, duly executed by the Holder thereof or its attorney duly authorized in writing; and

(ii) if such Definitive Securities are required to bear a restricted securities legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) of this Section 2.3(a), and are accompanied by the following additional information and documents, as applicable:

(A) if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or

(B) if such Definitive Securities are being transferred to the Issuer, a certification to that effect; or

(C) if such Definitive Securities are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act, (i) a certification to that effect (in the form set forth in Exhibits C or D, as applicable) and (ii) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

Appendix-4

(b) Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security . A Definitive Security may not be exchanged for a beneficial interest in a Rule 144A Global Security or a Regulation S Global Security except upon satisfaction of the requirements set forth below. Upon receipt by the Registrar of a Definitive Security, duly endorsed or accompanied by appropriate instruments of transfer, substantially in the form of the Assignment Form annexed hereto, together with:

(i) certification, in the form set forth in Exhibits C or D, as applicable, that such Definitive Security is either (A) being transferred to a QIB in accordance with Rule 144A or (B) being transferred after expiration of the Restricted Period by a Person who initially purchased such Security in reliance on Regulation S to a buyer who elects to hold its interest in such Security in the form of a beneficial interest in the Regulation S Global Security; and

(ii) written instructions directing the Registrar to make, or to direct the Securities Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Security (in the case of a transfer pursuant to clause (b)(i)(A)) or Regulation S Global Security (in the case of a transfer pursuant to clause (b)(i)(B)) to reflect an increase in the aggregate principal amount of the Securities represented by the Rule 144A Global Security or Regulation S Global Security, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Securities Custodian, the aggregate principal amount of Securities represented by the Rule 144A Global Security or Regulation S Global Security, as applicable, to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Security or Regulation S Global Security, as applicable, equal to the principal amount of the Definitive Security so canceled. If no Rule 144A Global Securities or Regulation S Global Securities, as applicable, are then outstanding, the Issuer shall issue and the Trustee shall authenticate, upon written order of the Issuer signed by an Officer of the Issuer, a new Rule 144A Global Security or Regulation S Global Security, as applicable, in the appropriate principal amount.

(i) The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Security shall deliver to the Registrar a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Security. The Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Security and to debit the account of the Person making the transfer the beneficial interest in the Global Security being transferred.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Security from which such interest is being transferred.

(iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

(iv) In the event that Global Security is exchanged for Definitive Securities pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth in Exhibits C or D, as applicable, intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.

Appendix-5

(d) [reserved]

(e) Legend .

(i) (A) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Security certificate evidencing the Global Securities (and all Securities issued in exchange therefor or in substitution thereof), shall bear a legend in substantially the following form:

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

(B) [reserved.]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

(ii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Security) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Security for a certificated Security that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Security, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Security).

Appendix-6

(iii) After a transfer of any Initial Securities or Private Exchange Securities pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities or Private Exchange Securities, as the case may be, all requirements pertaining to legends on such Initial Security or such Private Exchange Security will cease to apply, the requirements requiring any such Initial Security or such Private Exchange Security issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Security or Private Exchange Security or an Initial Security or Private Exchange Security in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Securities or Private Exchange Securities upon exchange of such transferring Holder’s certificated Initial Security or Private Exchange Security or directions to transfer such Holder’s interest in the Global Security, as applicable.

(iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Securities that do not exchange their Initial Securities, and Exchange Securities in certificated or global form, in each case without the restricted securities legend set forth in Exhibit A hereto, will be available to Holders that exchange such Initial Securities in such Registered Exchange Offer.

(v) Upon the consummation of a Private Exchange with respect to the Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Securities that do not exchange their Initial Securities, and Private Exchange Securities in global form with the global securities legend and the applicable restricted securities legend set forth in Exhibit A hereto will be available to Holders that exchange such Initial Securities in such Private Exchange.

(f) Cancellation or Adjustment of Global Security . At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, redeemed, purchased or canceled, such Global Security shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for certificated Securities, redeemed, purchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

(g) No Obligation of the Trustee .

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depository participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Appendix-7

2.4 Definitive Securities.

(a) A Global Security deposited with the Depository or with the Trustee as Securities Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 hereof and (i) the Depository (A) notifies the Issuer that it is unwilling or unable to continue as Depository for such Global Security, or (B) at any time such Depository ceases to be a “clearing agency” registered under the Exchange Act, and, in either case, a successor depository is not appointed by the Issuer within 90 days, (ii) an Event of Default has occurred and is continuing and the Depository or a beneficial holder so requests or (iii) the Issuer, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under this Indenture; provided that in no event shall the Regulation S Global Note be exchanged for Definitive Securities prior to (x) the expiration of the Restricted Period and (y) the receipt of any certificates required under the provisions of Regulation S.

(b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee at the Corporate Trust Office of the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Issuer shall issue and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. Any portion of a Global Security transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in minimum denominations of $2,000 principal amount and any greater integral multiple of $1,000 thereof and registered in such names as the Depository shall direct. Any Definitive Security delivered in exchange for an interest in the Transfer Restricted Security shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted securities legend and definitive securities legend set forth in Exhibit A hereto.

(c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Security shall be entitled to grant proxies and otherwise authorize any Person, including Participants and Indirect Participants, to take any action which a Holder is entitled to take under this Indenture or the Securities.

(d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Issuer shall promptly make available to the Trustee a reasonable supply of Definitive Securities in definitive, fully registered form without interest coupons. In the event that such Definitive Securities are not issued, the Issuer expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.06 of this Indenture, the right of any beneficial owner of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial owner’s Securities as if such Definitive Securities had been issued.

Appendix-8

EXHIBIT A

RULE 144A/REGULATION S APPENDIX

[FORM OF FACE OF INITIAL SECURITY]

[Global Securities Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]

[Restricted Securities Legend]

[Definitive Securities Legend]

Exh. A-1

Exh. A-2


No.		$

6.875% Senior Notes Due 2022

Century Communities, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of Dollars [, as may be increased or decreased as reflected on the attached Schedule of Increases and Decreases in Global Security](1) on May 15, 2022.

Interest Payment Dates: May 15 and November 15.

Record Dates: May 1 and November 1.

Additional provisions of this Security are set forth on the other side of this Security.

Dated:


CENTURY COMMUNITIES, INC.

By
		Name:
		Title:

(1)	Include on Global Securities.

Exh. A-3

TRUSTEE’S CERTIFICATE OF AUTHENTICATION


U.S. BANK NATIONAL ASSOCIATION, as Trustee, certifies that this is one of the Securities referred to in the Indenture.

By
		Authorized Signatory



Dated:

Exh. A-4

[FORM OF REVERSE SIDE OF INITIAL SECURITY]

6.875% Senior Note Due 2022

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest

Century Communities, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “ Issuer ”), promises to pay interest on the principal amount of this Security at the rate per annum shown above; provided , however , that if a Registration Default (as defined in the Registration Rights Agreement) occurs, Additional Interest will accrue on this Security at a rate of 0.25% per annum for the first 90-day period immediately following the occurrence of the Registration Default (increasing by an additional 0.25% per annum after each subsequent 90-day period that occurs until all Registration defaults have been cured, up to a maximum additional interest rate of 1.00%; provided , that additional interest will not accrue under more than one Registration Default at any one time) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Issuer will provide written notice to the Trustee of any Registration Defaults and the amount of Additional Interest due and owing on the next interest payment date. The Issuer will pay interest semiannually on May 15 and November 15 of each year, commencing . Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from . Interest will be computed on the basis of a 360-day year of twelve 30-day months. If any payment date with respect to the Securities is not on a Business Day, it shall be made on the next succeeding Business Day with the same effect as if made on the relevant payment date, without additional interest. The Issuer will pay interest on overdue principal at the rate borne by this Security plus 1.0% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.

2. Method of Payment

The Issuer will pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the May 1 and November 1 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. If a Holder has given wire transfer instructions to the Issuer at least ten (10) Business Days prior to the applicable payment date, the Issuer will make all payments on the Holder’s Securities in accordance with those instructions. Otherwise, payments on the Securities will be made at the office or agency of the Paying Agent and Registrar unless the Issuer elects to make interest payments by check mailed to the Holder entitled thereto at the address indicated on the register maintained by the Registrar for the Securities.

3. Paying Agent and Registrar

Initially, U.S. Bank National Association (the “Trustee”) will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Issuer or any of its domestically incorporated Wholly Owned Restricted Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. Indenture

The Issuer issued the Securities under an Indenture dated as of May 5, 2014 (“ Indenture ”), among Century Communities, Inc., a Delaware Corporation (the “ Issuer ”), the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C . §§ 77aaa-77bbbb) (the “ Act ”), as amended from time to time. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of those terms. To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

The Securities are general unsecured obligations of the Issuer. The Issuer shall be entitled, subject to its compliance with Section 4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13 of the Indenture. The Initial Securities issued on the Issue Date, any Additional Securities and all Exchange Securities or Private Exchange Securities issued in exchange therefor will be treated as a single class for all purposes under the Indenture.

Exh. A-5

5. Optional Redemption

Except as set forth below, the Issuer shall not be entitled to redeem the Securities.

On and after May 15, 2017, the Issuer shall be entitled at its option to redeem all or a portion of the Securities upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 15 of the years set forth below:


Period	Redemption Price
2017		105.156	%
2018		103.438	%
2019		101.719	%
2020 and thereafter		100.000	%

In addition, at any time prior to May 15, 2017, the Issuer shall be entitled at its option on one or more occasions to redeem Securities (which includes Additional Securities, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Securities (which includes Additional Securities, if any) issued prior to such date at a redemption price (expressed as a percentage of principal amount) of 106.875%, plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), with an amount not to exceed the net cash proceeds from one or more Equity Offerings; provided , however , that (1) at least 65% of such aggregate principal amount of Securities (which includes Additional Securities, if any) remains outstanding immediately after the occurrence of each such redemption (with Securities held, directly or indirectly, by the Issuer or its Affiliates being deemed to be not outstanding for purposes of such calculation); and (2) notice of such redemption has been given within 90 days after the date of the related Equity Offering.

Prior to May 15, 2017, the Issuer shall be entitled at its option to redeem all or a portion of the Securities at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

6. Mandatory Redemption

The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Securities.

7. Notice of Redemption

Notice of redemption shall be sent by or on behalf of the Issuer by first class mail to each Holder’s registered address or in the case of Global Securities, delivered electronically in accordance with the procedures of the Depository, not less than 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed, except that redemption notices may be sent more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Securities or a satisfaction and discharge of the Indenture. Any inadvertent defect in the notice of redemption, including an inadvertent failure to give notice, to any Holder selected for redemption shall not impair or affect the validity of the redemption of any other Security redeemed in accordance with the provisions of the Indenture. Securities in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption

Exh. A-6

8. Put Provisions

Upon the occurrence of a Change of Control, each Holder of Securities shall have the right, subject to certain conditions specified in the Indenture, to require the Issuer to repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the related interest payment date) as provided in, and subject to the terms of, the Indenture.

The Indenture provides that, under certain circumstances, the Issuer shall use the Excess Proceeds from Asset Sales to make an offer to all Holders to purchase Securities at an offer price in cash in an amount not less than 100% of the principal amount thereof, plus accrued and unpaid interest.

9. Guarantee

The payment by the Issuer of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior basis by each of the Guarantors to the extent set forth in the Indenture.

10. Denominations; Transfer; Exchange

The Securities are in registered form without coupons in minimum denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. Without the prior consent of the Issuer, the Registrar is not required (1) to register the transfer of or exchange any Security selected for redemption, (2) to register the transfer of or exchange any Security for a period of 15 days before a selection of Security to be redeemed or (3) to register the transfer or exchange of a Security between a record date and the next succeeding interest payment date.

11. Persons Deemed Owners

The registered Holder of this Security may be treated as the owner of it for all purposes.

12. Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee or Paying Agent for payment.

13. Discharge and Defeasance

Subject to certain conditions, the Issuer at any time shall be entitled to terminate some or all of its obligations under the Securities and the Indenture if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.

14. Amendment; Waiver

Subject to certain exceptions set forth in the Indenture, (a) the Indenture, the Securities or the Security Guarantees may be amended with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding voting as a single class and (b) any existing default under, or compliance with any provision of, the Indenture may be waived with the consent of the Holders of a majority in principal amount of the Securities then outstanding voting as a single class. Subject to certain exceptions set forth in the Indenture, the Issuer, the Guarantors and the Trustee may amend the Indenture, the Security Guarantees or the Securities without notice to or consent of any Securityholder (i) to cure any ambiguity, omission, mistake, defect or inconsistency; (ii) to provide for uncertificated Securities in addition to or in place of certificated Securities, provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code; (iii) to provide for the assumption by a successor entity of the obligations of the Issuer or any Guarantor in accordance with Section 5.01 of the Indenture; (iv) to add any Guarantor with respect to the Securities, or to release any Guarantor from any of its obligations under its Security Guarantee or this Indenture, in each case, in accordance with the applicable provisions of the Indenture; (v) to make any change that would provide any additional rights or benefits (including the addition of collateral for the purpose of securing the Securities and the Security Guarantees) to the Holders of Securities or that does not adversely affect in any material respect the legal rights under the Indenture, the Securities or the Security Guarantees of any such Holder; (vi) to comply with applicable SEC rules and regulations or changes to applicable law; (vii)

Exh. A-7

to conform the text of the Indenture, the Security Guarantees or the Securities to any provision of the “Description of Notes” section of the Final Offering Memorandum; (viii) to provide for the issuance of Additional Securities in compliance and in accordance with the limitations set forth in the Indenture; (ix) to evidence or provide for the acceptance of appointment under the Indenture of a successor trustee or to comply with any requirements under the TIA; (x) to allow any Guarantor to execute a supplemental indenture or a Security Guarantee with respect to the Securities; or (xi) to comply with the rules of any applicable securities depository.

15. Defaults and Remedies

Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Securities; (b) default in payment of principal or premium on the Securities at maturity, upon redemption, upon purchase, upon acceleration or otherwise; (c) failure by the Issuer to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Issuer or any Restricted Subsidiary if the amount accelerated (or so unpaid) exceeds $15.0 million; (e) certain events of bankruptcy or insolvency with respect to the Issuer or any Significant Subsidiary; (f) certain judgments or decrees for the payment of money in excess of $ 15.0 million; and (g) certain defaults with respect to Security Guarantees of the Issuer or any Significant Subsidiary. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default that will result in the Securities being due and payable immediately upon the occurrence of such Events of Default.

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of principal or interest or a Default in complying with Section 5.01 of the Indenture) if it determines that withholding notice is in the interest of the Holders.

16. Trustee Dealings with the Issuer

Subject to certain limitations imposed by the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

17. No Recourse Against Others

No director, officer, employee, incorporator or stockholder of the Issuer or any Restricted Subsidiary shall have any liability for any obligations of the Issuer under the Securities or the Indenture or of any Guarantor under its Security Guarantee or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities and the Security Guarantees.

18. Authentication

This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

19. Abbreviations

Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

20. CUSIP Numbers

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

Exh. A-8

21. Holders’ Compliance with Registration Rights Agreement

Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Issuer to the extent provided therein.

22. Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

The Issuer will furnish to any Securityholder upon written request and without charge to the Security holder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to:

CENTURY COMMUNITIES, INC.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

Attention: Dale Francescon

Exh. A-9

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint agent to transfer this Security on the books of the Issuer. The agent may substitute another to act for him.

Date: Your Signature:

Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

(1)

to the Issuer; or

(2)

pursuant to an effective registration statement under the Securities Act of 1933; or

(3)

inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or

(4)

outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or

(5)

pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933.

Exh. A-10

Unless one of the boxes is checked, the Registrar will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered holder thereof ; provided , however , that if box (5) is checked, the Registrar shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.


Signature

Signature Guarantee:

Signature must be guaranteed				Signature

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.


Dated:	Notice:
		To be executed by an executive officer

Exh. A-11

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

Date of Exchange

Amount of

decrease in

Principal amount

of this Global

Security

Amount of

increase in

Principal amount

of this Global

Security

Principal amount
of this Global
Security following
such decrease or
increase)

Signature of
authorized officer
of Trustee or
Securities
Custodian

Exh. A-12

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Security purchased by the Issuer pursuant to Section 4.06 or 4.09 of the Indenture, check the box:

¨ Section 4.06 ¨ Section 4.09

If you want to elect to have only part of this Security purchased by the Issuer pursuant to Section 4.06 or 4.09 of the Indenture, state the amount in principal amount: $


Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)


Signature Guarantee:
		(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Exh. A-13

EXHIBIT B

[FORM OF FACE OF EXCHANGE SECURITY

OR PRIVATE EXCHANGE SECURITY] */**/

*/	If the Security is to be issued in global form add the Global Securities Legend from Exhibit A to Appendix A and the attachment from such Exhibit A captioned “[TO BE ATTACHED TO GLOBAL SECURITIES]—SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.

**/

If the Security is a Private Exchange Security issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Securities Legend from Exhibit A to Appendix A and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit A.

Exh. B-1


No.		$

6.875% Senior Notes Due 2022

Century Communities, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of Dollars [, as may be increased or decreased as reflected on the attached Schedule of Increases or Decreases in Global Security](2) on May 15, 2022.

Interest Payment Dates: May 15 and November 15.

Record Dates: May 1 and November 1.

Additional provisions of this Security are set forth on the other side of this Security.

Dated:


CENTURY COMMUNITIES, INC.

By
		Name: Title:

(2)	Include on Global Securities.

Exh. B-2

TRUSTEE’S CERTIFICATE OF AUTHENTICATION


U.S. BANK NATIONAL ASSOCIATION, as Trustee, certifies that this is one of the Securities referred to in the Indenture.

By
		Authorized Signatory

Dated:

Exh. B-3

[FORM OF REVERSE SIDE OF EXCHANGE SECURITY

OR PRIVATE EXCHANGE SECURITY]

6.875% Senior Note Due 2022

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest

2. Method of Payment

3. Paying Agent and Registrar

Initially, U.S. Bank National Association (the “ Trustee ”), will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Issuer or any of its domestically incorporated Wholly Owned Restricted Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. Indenture

5. Optional Redemption

Except as set forth below, the Issuer shall not be entitled to redeem the Securities.

Exh. B-4


Period	Redemption Price
2017		105.156	%
2018		103.438	%
2019		101.719	%
2020 and thereafter		100.000	%

6. Mandatory Redemption

The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Securities.

7. Notice of Redemption

Notice of redemption shall be sent by or on behalf of the Issuer by first class mail to each Holder’s registered address or in the case of Global Securities, delivered electronically in accordance with the procedures of the Depository, not less than 30 days nor more than 60 days before the redemption date to each Holder of Securities to be redeemed, except that redemption notices may be sent more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Securities or a satisfaction and discharge of the Indenture. Any inadvertent defect in the notice of redemption, including an inadvertent failure to give notice, to any Holder selected for redemption shall not impair or affect the validity of the redemption of any other Security redeemed in accordance with the provisions of the Indenture. Securities in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption.

8. Put Provisions

Exh. B-5

9. Guarantee

10. Denominations; Transfer; Exchange

11. Persons Deemed Owners

The registered Holder of this Security may be treated as the owner of it for all purposes.

12. Unclaimed Money

13. Discharge and Defeasance

14. Amendment; Waiver

Exh. B-6

15. Defaults and Remedies

16. Trustee Dealings with the Issuer

17. No Recourse Against Others

18. Authentication

This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

19. Abbreviations

20. CUSIP Numbers

22. Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Exh. B-7

CENTURY COMMUNITIES, INC.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

Attention: Dale Francescon

Exh. B-8

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint agent to transfer this Security on the books of the Issuer. The agent may substitute another to act for him.

Date: Your Signature:

Sign exactly as your name appears on the other side of this Security.

Signature Guarantee:

Signature must be guaranteed

Signature

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Exh. B-9

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Security purchased by the Issuer pursuant to Section 4.06 or 4.09 of the Indenture, check the box:

¨ Section 4.06 ¨ Section 4.09

If you want to elect to have only part of this Security purchased by the Issuer pursuant to Section 4.06 or 4.09 of the Indenture, state the amount in principal amount: $


Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)


Signature Guarantee:
		(Signature must be guaranteed)

Exh. B-10

EXHIBIT C

FORM OF CERTIFICATE OF TRANSFER

CENTURY COMMUNITIES, INC.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

Attention: Dale Francescon

U.S. BANK NATIONAL ASSOCIATION

Global Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103

Attention: K. Mitchell (Century Communities)

Re: Century Communities, Inc. 6.875% Senior Notes due 2022

Reference is hereby made to the Indenture, dated as of May 5, 2014 (the “ Indenture ”), among Century Communities, Inc., as issuer (the “ Issuer ”), the Guarantors from time to time party thereto and U.S. Bank National Association, as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

, (the “ Transferor ”) owns and proposes to transfer the Securities or interest in such Securities specified in Annex A hereto, in the principal amount of $ in such Securities or interests (the “ Transfer ”), to (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨ Check if Transferee will take delivery of a beneficial interest in the Rule 144A Global Security or a Definitive Security pursuant to Rule 144A . The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Security is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Security for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States and other jurisdictions. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Rule 144A Global Security and/or the Definitive Security and in the Indenture and the Securities Act.

2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Security or a Definitive Security pursuant to Regulation S . The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act [and/,] (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act [and (iv) if the proposed transfer is being made prior to the expiration of the applicable holding period with respect to restricted securities set forth in Rule 144 under the Securities Act, as amended, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser)] and (v) if the proposed transfer is being made prior to the expiration of the Restricted Period under Regulation S, the interest transferred will be held immediately thereafter through Euroclear or Clearstream. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Security and/or the Restricted Security and in the Indenture and the Securities Act.

Exh. C-1

3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in a Restricted Definitive Security pursuant to any provision of the Securities Act other than Rule 144A or Regulation S . The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Securities and Restricted Definitive Securities and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

(b) ¨ such Transfer is being effected to the Issuer or a Subsidiary thereof;

(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act.

4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Security or of an Unrestricted Definitive Security .

(a) ¨ Check if Transfer is pursuant to Rule 144 . (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Transfer Restricted Security and in the Indenture.

(b) ¨ Check if Transfer is Pursuant to Regulation S . (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Transfer Restricted Security and in the Indenture.

(c) ¨ Check if Transfer is Pursuant to Other Exemption . (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Transfer Restricted Security and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.


[Insert Name of Transferor]

By:
		Name: Title:

Dated:

Exh. C-2

ANNEX A TO CERTIFICATE OF TRANSFER

1.	The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

(a) ¨ a beneficial interest in the:

(i)

¨ Rule 144A Global Security (CUSIP ), or

(ii)

¨ Regulation S Global Security (CUSIP ), or

(b) ¨ a Restricted Definitive Security

2. After the Transfer the Transferee will hold:

[CHECK ONE]

(i)

¨ Rule 144A Global Security (CUSIP ), or

(ii)

¨ Regulation S Global Security (CUSIP ), or

(iii)

¨ Unrestricted Global Security (CUSIP ); or

(d) ¨ a Restricted Definitive Security; or

(e) ¨ an Unrestricted Definitive Security, in accordance with the terms of the Indenture.

Exh. C-3

EXHIBIT D

FORM OF CERTIFICATE OF EXCHANGE

CENTURY COMMUNITIES, INC.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

Attention: Dale Francescon

U.S. BANK NATIONAL ASSOCIATION

Global Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103

Attention: K. Mitchell (Century Communities)

Re: Century Communities, Inc. 6.9875% Senior Notes due 2022

, (the “ Owner ”) owns and proposes to exchange the Securities or interest in such Securities specified herein, in the principal amount of $ in such Securities or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1. Exchange of Restricted Definitive Securities or Beneficial Interests in a Restricted Global Securities for Unrestricted Definitive Securities or Beneficial Interests in an Unrestricted Global Securities

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Security to beneficial interest in an Unrestricted Global Security . In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Security for a beneficial interest in an Unrestricted Global Security in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Securities and pursuant to and in accordance with the Securities Act of 1933, as amended (the “ Securities Act ”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ¨ Check if Exchange is from beneficial interest in a Restricted Global Security to Unrestricted Definitive Security . In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Security for an Unrestricted Definitive Security, the Owner hereby certifies (i) the Definitive Security is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(c) ¨ Check if Exchange is from Restricted Definitive Security to beneficial interest in an Unrestricted Global Security . In connection with the Owner’s Exchange of a Restricted Definitive Security for a beneficial interest in an Unrestricted Global Security, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Securities and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

Exh. D-1

(d) ¨ Check if Exchange is from Restricted Definitive Security to Unrestricted Definitive Securities . In connection with the Owner’s Exchange of a Restricted Definitive Security for an Unrestricted Definitive Security, the Owner hereby certifies (i) the Unrestricted Definitive Security is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Security and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. Exchange of Restricted Definitive Securities or Beneficial Interests in Restricted Global Securities for Restricted Definitive Securities or Beneficial Interests in Restricted Global Securities

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Security to Restricted Definitive Security. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Security for a Restricted Definitive Security with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Security is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Security issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Security and in the Indenture and the Securities Act.

(b) ¨ Check if Exchange is from Restricted Definitive Security to beneficial interest in a Restricted Global Security . In connection with the Exchange of the Owner’s Restricted Definitive Security for a beneficial interest in the [CHECK ONE] ¨ Rule 144A Global Security, ¨ Regulation S Global Security, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Securities and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Security and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.


[Insert Name of Transferor]

By:
		Name: Title:

Dated:

Exh. D-2

EXHIBIT E

FORM OF NOTATION OF GUARANTEE

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of May 5, 2014 (the “ Indenture ”), among Century Communities, Inc., a Delaware corporation (the “ Issuer ”), the Guarantors party thereto and U.S. Bank National Association, as Trustee, (a) the due and punctual payment of the principal of, premium on, if any, and interest, if any, on, the Securities, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of, premium on, if any, and interest, if any, on, the Securities, if any, if lawful, and the due and punctual performance of all other obligations of the Issuer to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Securities and to the Trustee pursuant to the Security Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Security Guarantee.

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.


[NAME OF GUARANTORS]

By:
		Name: Title:

Exh. E-1

EXHIBIT F

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”), dated as of , among (the “ Guaranteeing Subsidiary ”), a subsidiary of Century Communities, Inc. (or its permitted successor), a Delaware corporation (the “ Company ”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under the Indenture referred to below (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of May 5, 2014 providing for the issuance of 6.875% Senior Notes due 2022 (the “ Securities ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Securities and the Indenture on the terms and conditions set forth herein (the “ Security Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Company and the Trustee are authorized to execute and deliver this Supplemental Indenture without the consent of Holders.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the other Guarantors, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Securityholders as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Security Guarantee on the terms and subject to the conditions set forth in the Security Guarantee and in the Indenture including but not limited to Article 10 thereof.

3. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder of the Company or any Security Guarantor, as such, will have any liability for any obligations of the Company or the Security Guarantors under the Securities, this Indenture, the Security Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities and the Security Guarantees. The waiver may not be effective to waive liabilities under the federal securities laws.

4. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Supplemental Indenture. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

6. EFFECT OF HEADINGS. The Section headings herein are for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

Exh. F-1

7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

8. RATIFICATION OF INDENTURE. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder heretofore and hereafter authenticated and delivered shall be bound hereby.

Exh. F-2

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

Dated: ,


[GUARANTEEING SUBSIDIARY]

By:
		Name: Title:


CENTURY COMMUNITIES, INC.

By:
		Name: Title:


[EXISTING GUARANTORS]

By:
		Name: Title:


U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
		Name: Title:

Exh. F-3

Exhibit 10.1

CENTURY COMMUNITIES, INC.

FIRST AMENDED & RESTATED 2013 LONG-TERM INCENTIVE PLAN

I. INTRODUCTION

1.1 Purposes . The purposes of the Century Communities, Inc. 2013 Long-Term Incentive Plan (this “ Plan ”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining directors, officers, employees and other service providers and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.

1.2 Certain Definitions .

“ Agreement ” shall mean the written or electronic agreement evidencing an award hereunder between the Company and the recipient of such award.

“ Board ” shall mean the Board of Directors of the Company.

“ Bonus Stock ” shall mean shares of Common Stock which are not subject to a Restriction Period or Performance Measures.

“ Bonus Stock Award ” shall mean an award of Bonus Stock under this Plan.

“ Change in Control ” shall have the meaning set forth in Section 5.8(b).

“ Code ” shall mean the Internal Revenue Code of 1986, as amended.

“ Committee ” shall mean the Committee designated by the Board, consisting of two or more members of the Board, each of whom may be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code and (iii) “independent” within the meaning of the rules of the New York Stock Exchange or any other stock exchange on which the shares of Common Stock have been listed by the Company.

“ Common Stock ” shall mean the common stock, par value $0.01 per share, of the Company, and all rights appurtenant thereto.

“ Company ” shall mean Century Communities, Inc., a Delaware corporation, or any successor thereto.

“ Consultant ” means any consultant or advisor who is a natural person and who provides services to the Company or any Subsidiary, so long as that person (i) renders bona fide services that are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, (ii) does not directly or indirectly promote or maintain a market for the Company’s securities, and (iii) otherwise qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of securities on a Form S-8 registration statement (or any successor thereto).

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Fair Market Value ” shall mean the closing transaction price of a share of Common Stock as reported on The New York Stock Exchange on the date as of which such value is being determined or, if the Common Stock is not listed on The New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided , however , that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate and in compliance with Section 409A of the Code.

“ Free-Standing SAR ” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

“ Incentive Stock Option ” shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option.

“ Initial Public Offering ” means the initial public offering of the Company registered on Form S-1 (or any successor form under the Securities Act of 1933, as amended).

“ Non-Employee Director ” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.

“ Nonqualified Stock Option ” shall mean an option to purchase shares of Common Stock which is not an Incentive Stock Option.

“ Performance Award ” shall mean a right to receive an amount of cash, shares of Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“ Performance Measures ” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such award, or, in the case of a Restricted Stock Unit Award or Performance Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award. Such criteria and objectives may include, without limitation, one or more of the following corporate-wide or subsidiary,

division, operating unit or individual measures, stated in either absolute terms or relative terms, such as rates of growth or improvement: the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time, earnings per share, return to stockholders (including dividends), return on assets, return on equity, earnings of the Company before or after taxes and/or interest, revenues, expenses, market share, cash flow or cost reduction goals, interest expense after taxes, return on investment, return on investment capital, return on operating costs, economic value created, operating margin, gross margin, the achievement of annual operating profit plans, net income before or after taxes, pretax earnings before interest, depreciation and/or amortization, pretax operating earnings after interest expense and before incentives, and/or extraordinary or special items, operating earnings, net cash provided by operations, and strategic business criteria, specified market penetration, cost targets, customer satisfaction or any combination of the foregoing. In the sole discretion of the Committee, the Committee may amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in law or accounting principles.

“ Performance Period ” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect.

“ Restricted Stock ” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

“ Restricted Stock Award ” shall mean an award of Restricted Stock under this Plan.

“ Restricted Stock Unit ” shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“ Restricted Stock Unit Award ” shall mean an award of Restricted Stock Units under this Plan.

“ Restriction Period ” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.

“ SAR ” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.

“ Stock Award ” shall mean a Bonus Stock Award, Restricted Stock Award or a Restricted Stock Unit Award.

“ Subsidiary ” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.

“ Substitute Award ” shall mean an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation or acquisition of property or stock; provided , however , that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an option or SAR.

“ Tandem SAR ” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock) with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, which is surrendered.

“ Tax Date ” shall have the meaning set forth in Section 5.5.

“ Ten Percent Holder ” shall have the meaning set forth in Section 2.1(a).

1.3 Administration . This Plan shall be administered by the Committee. Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free-Standing SARs; (iii) Stock Awards in the form of Bonus Stock, Restricted Stock or Restricted Stock Units; and (iv) Performance Awards. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs, the number of Restricted Stock Units, the dollar value subject to an award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock or Restricted Stock Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding Restricted Stock, Restricted Stock Units or Performance Award shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding award shall be deemed to be satisfied at the target or any other level. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.

The Committee may delegate some or all of its power and authority hereunder to the Board or, subject to applicable law, to the Chief Executive Officer or such other executive officer as the Committee deems appropriate; provided , however , that the Committee may not delegate its power and authority to the Chief Executive Officer or any other executive officer with regard to the selection for participation in this Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, director or other person.

No member of the Board or Committee, and neither the Chief Executive Officer or any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer or any other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

A majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at which a quorum is present or (ii) acts approved in writing by all of the members of the Committee without a meeting.

1.4 Eligibility . Participants in this Plan shall consist of such officers, Non-Employee Directors, employees and Consultants, and persons expected to become officers, Non-Employee Directors, employees and Consultants of the Company and its Subsidiaries as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time. For purposes of this Plan and except as otherwise provided for in an Agreement, references to employment by the Company shall also mean employment by a Subsidiary, and references to employment shall include service as a Non-Employee Director or independent contractor. The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during any periods during which such participant is on an approved leave of absence.

1.5 Shares Available . Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Section 1.5, 1,846,000 shares of Common Stock shall be available for all awards under this Plan, of which no more than 1,846,000 shares of Common Stock in the aggregate may be issued under the Plan in connection with Incentive Stock Options. The number of shares of Common Stock available under the Plan shall be reduced by the sum of the aggregate number of shares of Common Stock which become subject to outstanding options, outstanding Free-Standing SARs, outstanding Stock Awards and outstanding Performance Awards. To the extent that shares of Common Stock subject to an outstanding option, SAR, stock award or performance award granted under the Plan or any predecessor plan are not issued

or delivered by reason of (i) the expiration, termination, cancellation or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related tandem SAR or shares subject to a tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock shall again be available under this Plan.

Notwithstanding anything in this Section 1.5 to the contrary, shares of Common Stock subject to an award under this Plan may not be made available for issuance under this Plan if such shares are: (i) shares that were subject to a stock-settled SAR and were not issued upon the net settlement or net exercise of such SAR; (ii) shares delivered to or withheld by the Company to pay the purchase price or the withholding taxes related to an outstanding option or SAR; or (iii) shares repurchased on the open market with the proceeds of an option exercise. Shares delivered to or withheld by the Company to pay the withholding taxes for Stock Awards or Performance Awards shall again be available under this Plan.

The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder approved plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) which become subject to awards granted under this Plan (subject to applicable stock exchange requirements).

Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

1.6 Annual Per Person Limitations . Subject to adjustment as provided in Section 5.7 and the limits set forth in Section 1.5 hereof, in any fiscal year of the Company during any part of which the Plan is in effect, no Participant may be granted (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options or SARs with respect to more than 375,000 shares of Common Stock or (ii) Restricted Stock, Restricted Stock Units (other than Restricted Stock Unit grants that qualify as Performance Awards which would be subject to the dollar limitation set forth in the following sentence), and/or Bonus Stock Awards with respect to more than 250,000 shares of Common Stock. In addition, the maximum dollar valuable payable to any one Participant with respect to Performance Awards is (x) $5,000,000 with respect to any 12 month Performance Period and (y) with respect to any Performance Period that is more than 12 months, $10,000,000.

II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1 Stock Options . The Committee may, in its discretion, grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee; provided , however , that Incentive Stock Options shall be granted only to persons who are employees of the Company or one of its Subsidiaries that is a corporation within the meaning of Section 7701 (a)(3) of the Code, in accordance with Section 422 of the Code. Each option, or portion thereof, that is not an Incentive Stock Option, shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of

Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Nonqualified Stock Options.

Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Number of Shares and Purchase Price . The number of shares of Common Stock subject to an option and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided , however , that the purchase price per share of Common Stock purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided , further , that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns, or is deemed to own pursuant to Section 424(d) of the Code, capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “ Ten Percent Holder ”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided , that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate purchase price of such shares.

(b) Option Period and Exercisability . The period during which an option may be exercised shall be determined by the Committee; provided , however , that no option shall be exercised later than ten years after its date of grant; provided , further , that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant. The Committee may, in its discretion, establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant of such option or to the exercisability of all or a portion of such option. The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

(c) Method of Exercise . An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by

attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the option or as otherwise authorized by the Committee, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the option and (iii) by executing such documents as the Company may reasonably request. Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

2.2 Stock Appreciation Rights . The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee. The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a) Number of SARs and Base Price . The number of SARs subject to an award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option. The base price of a Free-Standing SAR shall be determined by the Committee; provided , however , that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR.

Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided , that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.

(b) Exercise Period and Exercisability . The period for the exercise of an SAR shall be determined by the Committee; provided , however , that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related option and no Free-Standing SAR shall be exercised later than ten years after its date of grant. The Committee

may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.3(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.3(d). Prior to the exercise of an SAR, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.

(c) Method of Exercise . A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised (A) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request. No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

2.3 Termination of Employment or Service . All of the terms relating to the exercise, cancellation or other disposition of an option or SAR (i) upon a termination of employment with or service to the Company of the holder of such option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.

2.4 Repricing of Options and SARs . The Committee, in its sole discretion and without the approval of the stockholders of the Company, may amend or replace any previously granted option or SAR in a transaction that constitutes a repricing within the meaning of the rules of The New York Stock Exchange.

III. STOCK AWARDS

3.1 Stock Awards . The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Bonus Stock Award, Restricted Stock Award or Restricted Stock Unit Award.

3.2 Terms of Bonus Stock Awards . The number of shares of Common Stock subject to a Bonus Stock Award shall be determined by the Committee. Bonus Stock Awards shall not be subject to any Restriction Periods or Performance Measures. Upon the grant of a

Bonus Stock Award, subject to the Company’s right to require payment of any taxes in accordance with Section 5.5, a certificate or certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award or such shares shall be transferred to the holder in book entry form.

3.3 Terms of Restricted Stock Awards . Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms . The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

(b) Vesting and Forfeiture . The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

(c) Stock Issuance . During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award.

(d) Rights with Respect to Restricted Stock Awards . Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided ,

however , that (i) a distribution with respect to shares of Common Stock, other than a regular cash dividend, and (ii) a regular cash dividend with respect to shares of Common Stock that are subject to performance-based vesting conditions, in each case, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.

3.4 Terms of Restricted Stock Unit Awards . Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Number of Shares and Other Terms . The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

(b) Vesting and Forfeiture . The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

(c) Settlement of Vested Restricted Stock Unit Awards . The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive, on a current or deferred basis, dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents with respect to Restricted Stock Units that are subject to performance-based vesting conditions shall be subject to the same restrictions as such Restricted Stock Units. Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.

3.5 Termination of Employment or Service . All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award (i) upon a termination of employment or service with the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.

IV. PERFORMANCE AWARDS

4.1 Performance Awards . The Committee may, in its discretion, grant Performance Awards to such eligible persons as may be selected by the Committee.

4.2 Terms of Performance Awards . Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a) Value of Performance Awards and Performance Measures . The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee.

(b) Vesting and Forfeiture . The Agreement relating to a Performance Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period.

(c) Settlement of Vested Performance Awards . The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.3(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.3(d). Any dividends or dividend equivalents with respect to a Performance Award that is subject to performance-based vesting conditions shall be subject to the same restrictions as such Performance Award. Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company.

4.3 Termination of Employment or Service . All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such award upon a termination of employment or service with the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, shall be determined by the Committee.

V. GENERAL

5.1 Effective Date and Term of Plan . This Plan shall be submitted to the stockholders of the Company for approval and, if approved, shall become effective immediately prior to the effective date of the Initial Public Offering. This Plan shall terminate on the tenth anniversary of its effective date, unless terminated earlier by the Board; provided that Incentive Stock Options may not be granted later than 10 years from the date the Plan is adopted or the date the Plan is approved by the Company’s stockholders, whichever is earlier. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination. Awards hereunder may be made at any time prior to the termination of this Plan, provided that no award may be made later than ten years after the effective date of this Plan.

5.2 Amendments . The Board may amend this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code and any rule of The New York Stock Exchange, or, if the Common Stock is not listed on The New York Stock Exchange, any rule of the principal national stock exchange on which the Common Stock is then traded; provided , however , that no amendment may impair the rights of a holder of an outstanding award without the consent of such holder.

5.3 Agreement . Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award. No award shall be valid until an Agreement is executed by the Company and, to the extent required by the Company, either executed by the recipient or accepted by the recipient by electronic means approved by the Company within the time period specified by the Company. Upon such execution or electronic acceptance, such award shall be effective as of the effective date set forth in the Agreement.

5.4 Non-Transferability . No award shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes, a charitable organization designated by the holder or pursuant to a qualified domestic relations order, in each case, without consideration. Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.

5.5 Tax Withholding . The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such award. An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax

Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of an option and except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise; or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award or as otherwise authorized by the Committee. Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate. Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder.

5.6 Restrictions on Shares . Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

5.7 Adjustment . In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the number and class of securities available under this Plan, the terms of each outstanding option and SAR (including the number and class of securities subject to each outstanding option or SAR and the purchase price or base price per share), the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award (including the number and class of securities subject thereto), and the terms of each outstanding Performance Award shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price and in accordance with Section 409A of the Code. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such adjustment shall be final, binding and conclusive.

5.8 Change in Control .

(a) Subject to the terms of the applicable award Agreement, in the event of a Change in Control, the Board (as constituted prior to such Change in Control) may, in its discretion:

(i)

provide that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (B) the Restriction Period applicable to some or all outstanding Restricted Stock Awards and Restricted Stock Unit Awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (D) the Performance Measures applicable to some or all outstanding awards shall be deemed to be satisfied at the target or any other level;

(ii)

require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding award, with an appropriate and equitable adjustment to such award as shall be determined by the Board in accordance with Section 5.7; and/or

(iii)

require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of an option or an SAR, the number of shares of Common Stock then subject to the portion of such option or SAR surrendered, to the extent such option or SAR is then exercisable or becomes exercisable pursuant to Section 5.8(a)(i), multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (2) in the case of a Stock Award or a Performance Award denominated in shares of Common Stock, the number of shares of Common Stock then subject to the portion of such award surrendered, to the extent the Restriction Period and Performance Period, if any, on such Stock Award or Performance Award have lapsed or will lapse pursuant to Section 5.8(a)(i) and to the extent that the Performance Measures, if any, have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(i), multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (3) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered, to the extent the Performance Period applicable to such award has lapsed or will lapse pursuant to Section 5.8(a)(i) and to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(a)(i); (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.

(b) A “Change in Control” of the Company shall be deemed to have occurred upon the happening of any of the following events:

(i)

The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its Subsidiaries, or any employee benefit plan (or related trust) of the Company or its Subsidiaries, or any entity with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding equity of such entity and the combined voting power of the then outstanding voting equity of such entity entitled to vote generally in the election of all or substantially all of the members of such entity’s governing body is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Common Stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; or

(ii)

The consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Common Stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of Common Stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation; or

(iii)

a complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company.

Notwithstanding the foregoing, the Initial Public Offering or any bona fide primary or secondary public offering following the occurrence of the Initial Public Offering shall not constitute a Change in Control.

5.9 Deferrals . The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any award (other than awards of Incentive Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.

5.10 No Right of Participation, Employment or Service . Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment or service of any person at any time without liability hereunder.

5.11 Rights as Stockholder . No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

5.12 Designation of Beneficiary . A holder of an award may file with the Committee a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity. To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Committee.

Each beneficiary designation shall become effective only when filed in writing with the Committee during the holder’s lifetime on a form prescribed by the Committee. The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Committee of a new beneficiary designation shall cancel all previously filed beneficiary designations.

If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding option and SAR hereunder held by such holder, to the extent exercisable, may be exercised by such holder’s executor, administrator, legal representative or similar person.

5.13 Governing Law . This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

5.14 Foreign Employees . Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.

Exhibit 10.23

REGISTRATION RIGHTS AGREEMENT

by and among

Century Communities, Inc.

Each of the Guarantors Named Herein

and

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Dated as of May 5, 2014

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of May 5, 2014, by and among Century Communities, Inc., a Delaware corporation (the “Company”), the entities listed on the signature page hereto as “Guarantors” (collectively, the “Guarantors”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, (the “Representative”), on behalf of the Initial Purchasers (the “Initial Purchasers”) named in Schedule A to the Purchase Agreement (as defined below), each of whom has agreed to purchase the Company’s 6.875% Senior Notes due 2022 (the “Initial Notes”) fully and unconditionally guaranteed by the Guarantors (the “Guarantees”) pursuant to the Purchase Agreement. The Initial Notes and the Guarantees attached thereto are herein collectively referred to as the “Initial Securities.”

This Agreement is made pursuant to the Purchase Agreement, dated April 30, 2014 (the “Purchase Agreement”), among the Company, the Guarantors and the Representative on behalf of the Initial Purchasers (i) for the benefit of the Initial Purchasers and (ii) for the benefit of the holders from time to time of the Initial Securities, including the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Initial Securities, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5(f) of the Purchase Agreement.

The parties hereby agree as follows:

SECTION 1. Definitions . As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest Payment Date: With respect to the Initial Securities, each Interest Payment Date.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York are authorized or obligated to be closed.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal amount of Initial Securities that were tendered by Holders thereof pursuant to the Exchange Offer.

Effectiveness Target Date: As defined in Section 5 hereof.

Equity Registration Rights Agreement: The Registration Rights Agreement, dated May 7, 2013, among the Company, the Management Holders (as defined therein) and FBR Capital Markets & Co.

Equity Registration Statement Effectiveness Date: The date of effectiveness of the Company’s registration statement filed with the Commission in accordance with the requirements of the Equity Registration Rights Agreement.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Offer: The registration by the Company under the Securities Act of the Exchange Securities pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Exempt Resales: The transactions in which the Initial Purchasers propose to sell the Initial Securities to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Securities Act, to certain institutional “accredited investors,” as such term is defined in Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act and to certain non-U.S. persons pursuant to Regulation S under the Securities Act.

Exchange Securities: The 6.875% Senior Notes due 2022, of the same series under the Indenture as the Initial Notes and the Guarantees attached thereto, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

FINRA: Financial Industry Regulatory Authority .

Holders: As defined in Section 2(b) hereof.

Indemnified Holder: As defined in Section 8(a) hereof.

Indenture: The Indenture, dated as of May 5, 2014, by and among the Company, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”), pursuant to which the Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Initial Purchaser: As defined in the preamble hereto.

Initial Notes: As defined in the preamble hereto.

Initial Placement: The issuance and sale by the Company of the Initial Securities to the Initial Purchasers pursuant to the Purchase Agreement.

Initial Securities: As defined in the preamble hereto.

Interest Payment Date: As defined in the Indenture and the Securities.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities: As defined in the preamble hereto.

Securities Act: The Securities Act of 1933, as amended.

Shelf Filing Deadline: As defined in Section 4(a) hereof.

Shelf Registration Statement: As defined in Section 4(a) hereof.

Transfer Restricted Securities: Each Initial Security, until the earliest to occur of (a) the date on which such Initial Security is exchanged in the Exchange Offer for an Exchange Security entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement and (c) the date on which such Initial Security is distributed to the public by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein).

Trust Indenture Act: The Trust Indenture Act of 1939, as amended.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

SECTION 2. Securities Subject to this Agreement .

(a) Transfer Restricted Securities . The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities . A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.

SECTION 3. Registered Exchange Offer .

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), each of the Company and the Guarantors shall (i) cause to be filed with the Commission no later than 210 days after the Equity Registration Statement Effectiveness Date (or if such 210th day is not a Business Day, the next succeeding Business Day), a Registration Statement under the Securities Act relating to the Exchange Securities and the Exchange Offer, (ii) use its commercially reasonable efforts to cause such Registration Statement to become effective at the earliest possible time after its initial filing, but in no event later than 270 days after the Equity Registration Statement Effectiveness Date (or if such 270th day is not a Business Day, the next succeeding Business Day), (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Securities to be made under the state securities or blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Securities to be offered in exchange for the Transfer Restricted Securities and to permit resales of Initial Securities held by Broker-Dealers as contemplated by Section 3(c) hereof.

(b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however , that in no event shall such period be less than 30 days after the date notice of the Exchange Offer is mailed to the Holders. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Securities shall be included in the Exchange Offer Registration Statement. The Company shall use its commercially reasonable efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 360 days after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day).

(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Securities that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company), may exchange such Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Initial Securities held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

Each of the Company and the Guarantors shall use its commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.

The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 180-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

SECTION 4. Shelf Registration .

(a) Shelf Registration. If (i) the Company is not required to file an Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 360 days after the Closing Date (or if such 360th day is not a Business Day, the next succeeding Business Day), or (iii) with respect to any Holder of Transfer Restricted Securities (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Securities acquired directly from the Company or one of its affiliates, then, upon such Holder’s request, the Company and the Guarantors shall:

(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) on or prior to the earliest to occur of (1) the 30th day after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement, and (2) the 30th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities as contemplated by clause (iii) above; provided, however, that in no event shall the Company be permitted to file a Shelf Registration Statement prior to the 180th day following the Equity Registration Statement Effectiveness Date (such earliest date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

(y) use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 60th day after the Shelf Filing Deadline (or if such 60th day is not a Business Day, the next succeeding Business Day).

Each of the Company and the Guarantors shall use its commercially reasonable efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the effective date of such Shelf Registration Statement (or shorter period that will terminate when all the Initial Securities covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement).

(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

SECTION 5. Additional Interest. If (i) the Exchange Offer Registration Statements required by this Agreement is not filed with the Commission on or prior to the date that is 270 days following the Closing Date, (ii) the Shelf Registration Statement has not been filed with the Commission on or prior to the Shelf Filing Deadline, (iii) the Exchange Offer Registration Statement has not been declared effective by the Commission on or prior to the date that is 330 days following the Closing Date (the “Effectiveness Target Date”), (iv) the Shelf Registration Statement has not been declared effective by the Commission on or prior to the date specified in

clause (y) of Section 4(a) hereof, (v) the Exchange Offer has not been Consummated on or prior to the date that is 360 days following the Closing Date or (vi) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared effective (each such event referred to in clauses (i) through (vi), a “Registration Default”), the Company hereby agrees that the interest rate borne by the Transfer Restricted Securities shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum. Following the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, the interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original interest rate borne by such Transfer Restricted Securities; provided, however, that, if after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing provisions.

All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

SECTION 6. Registration Procedures .

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the provisions of Section 6(c) hereof, shall use their commercially reasonable efforts to effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, each of the Company and the Guarantors hereby agrees to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Securities. Each of the Company and the Guarantors hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. Each of the Company and the Guarantors hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a favorable resolution by the Commission staff of such submission.

(ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Securities obtained by such Holder in exchange for Initial Securities acquired by such Holder directly from the Company.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, each of the Company and the Guarantors shall comply with all the provisions of Section 6(c) hereof and shall use its commercially reasonable efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto each of the Company and the Guarantors will as expeditiously as possible, subject to the provisions of Section 4 hereof, prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Initial Securities by Broker-Dealers), each of the Company and the Guarantors shall:

(i) use its commercially reasonable efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 3 or 4 hereof, as applicable; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required

by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its commercially reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws, each of the Company and the Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

(iv) furnish without charge to each of the Initial Purchasers, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or

Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which an Initial Purchaser of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of an Initial Purchaser or underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;

(v) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Initial Purchasers, each selling Holder named in any Registration Statement, and to the underwriter(s), if any, make the Company’s and the Guarantors’ representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

(vi) make available at reasonable times for inspection by the Initial Purchasers, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Initial Purchasers or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Company and the Guarantors and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent requested by the managing underwriter(s), if any;

(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Securities covered thereby or the underwriter(s), if any;

(ix) furnish to each Initial Purchaser, each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; each of the Company and the Guarantors hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) enter into such agreements (including an underwriting agreement), and make such representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement, all to such extent as may be requested by any Initial Purchaser or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Company and the Guarantors shall:

(A) furnish to each Initial Purchaser, each selling Holder and each underwriter, if any, in such substance and scope as they may request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer or, if applicable, the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of each of the Company and the Guarantors, confirming, as of the date thereof, the matters set forth in paragraphs (i), (ii) and (iii) of Section 5(e) of the Purchase Agreement and such other matters as such parties may reasonably request;

(2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantors, covering the matters set forth in Section 5(c) of the Purchase Agreement

and such other matters as such parties may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors, representatives of the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and

(3) a customary comfort letter or comfort letters, as the case may be, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letters delivered pursuant to Section 5(a) of the Purchase Agreement, without exception;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 6(c)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company or any of the Guarantors pursuant to this Section 6(c)(xi), if any.

If at any time the representations and warranties of the Company and the Guarantors contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct, the Company or the Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided , however , that neither the Company nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

(xiii) shall issue, upon the request of any Holder of Initial Securities covered by the Shelf Registration Statement, Exchange Securities having an aggregate principal amount equal to the aggregate principal amount of Initial Securities surrendered to the Company by such Holder in exchange therefor or being sold by such Holder; such Exchange Securities to be registered in the name of such Holder or in the name of the purchaser(s) of such Securities, as the case may be; in return, the Initial Securities held by such Holder shall be surrendered to the Company for cancellation;

(xiv) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);

(xv) use its commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xii) hereof;

(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

(xvii) provide a CUSIP number for all Securities not later than the effective date of the Registration Statement covering such Securities and provide the Trustee under the Indenture with printed certificates for such Securities which are in a form eligible for deposit with the Depository Trust Company and take all other action necessary to ensure that all such Securities are eligible for deposit with the Depository Trust Company;

(xviii) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA;

(xix) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute and use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner;

(xxi) cause all Securities covered by the Registration Statement to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed if requested by the Holders of a majority in aggregate principal amount of Initial Securities or the managing underwriter(s), if any; and

(xxii) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until

it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice; provided, however, that no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest, it being agreed that the Company’s option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 5 hereof.

SECTION 7. Registration Expenses .

(a) All expenses incident to the Company’s and each Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any Initial Purchaser or Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws; (iii) all expenses of printing (including printing certificates for the Exchange Securities to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantors and, subject to Section 7(b) hereof, the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Securities on a securities exchange or automated quotation system pursuant to the requirements thereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

Each of the Company and the Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors.

(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors, jointly and severally, will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration

Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Gibson, Dunn & Crutcher, LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

SECTION 8. Indemnification .

(a) The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Company or any of the Guarantors may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantors, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Company and the Guarantors in writing; provided, however, that the failure to give such notice shall not relieve any of the Company or the Guarantors of its obligations pursuant to this Agreement. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company and the Guarantors (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Company and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the Company’s and the Guarantors’ prior

written consent, which consent shall not be withheld unreasonably, and each of the Company and the Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantors. The Company and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.

(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors and their respective directors, officers of the Company and the Guarantors who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company or any of the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Company, the Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantors, and the Company, the Guarantors, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.

(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Company and the Guarantors shall be deemed to be equal to the total gross proceeds to the Company and the Guarantors from the Initial Placement), the amount of Additional Interest which did not become payable as a result of the filing of the Registration Statement resulting in such losses, claims, damages, liabilities, judgments actions or expenses, and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any of the Guarantors, on

the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount received by such Holder with respect to the Initial Securities exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Securities held by each of the Holders hereunder and not joint.

SECTION 9. Rule 144A. Each of the Company and the Guarantors hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.

SECTION 10. Participation in Underwritten Registrations. No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

SECTION 11. Selection of Underwriters. The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, however , that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.

SECTION 12. Miscellaneous.

(a) Remedies. Each of the Company and the Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. Each of the Company and the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Company nor any of the Guarantors has previously entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s or any of the Guarantors’ securities under any agreement in effect on the date hereof.

(c) Adjustments Affecting the Securities. The Company will not take any action, or permit any change to occur, with respect to the Securities that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding any Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be in writing and shall be mailed, hand delivered, air couriered or facsimiled and confirmed to the parties hereto as follows:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

(ii)

if to the Company or to the Guarantors:

Century Communities, Inc.

8390 East Crescent Parkway, Suite 650

Greenwood Village, Colorado 80111

Facsimile: (303) 770-8320

Attention: Dale Francescon

With a copy to:

Greenberg Traurig, LLP

1840 Century Park East, Suite 1900

Los Angeles, California 90067

Facsimile: (310) 586-0556

Attention: Mark Kelson, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if facsimiled; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

(g) Counterparts. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

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

CENTURY COMMUNITIES, INC.

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Guarantors

Augusta Pointe, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Avalon at Inverness, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Beacon Pointe, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Blackstone Homes, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Bradburn Village Homes, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

CC Communities, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

CCC Holdings, LLC

By:

Century Communities, Inc.,

its Sole Member and Manager

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

CCH Homes, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Central Park Rowhomes, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Ash Meadows, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Beacon Pointe, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century at Candelas, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Harvest Meadows, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century at Lowry, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Midtown, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Murphy Creek, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century at Outlook, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Southshore, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century at Terrain, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century at Wolf Ranch, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century City, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century Communities of Nevada Realty, LLC

By:

Century Communities of Nevada, LLC,

Manager and its Sole Member,

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century Communities of Nevada, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century Land Holdings, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

CCC Holdings, LLC,

its Manager

By:

Century Communities, Inc.,

its Sole Member and Manager

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century Land Holdings II, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Century Rhodes Ranch GC, LLC

By:

Century Communities of Nevada, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Century Tuscany GC, LLC

By:

Century Communities of Nevada, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Cherry Hill Park, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Cottages at Willow Park, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Enclave at Boyd Ponds, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Enclave at Cherry Creek, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Estates at Chatfield Farms, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Hearth at Oak Meadows, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Hometown, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Lakeview Fort Collins, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Madison Estates, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Meridian Ranch, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Montecito at Ridgegate, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Neighborhood Associations Group, LLC

By:

Century Communities of Nevada, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

Park 5th Avenue Development Co., LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Reserve at Highpointe Estates, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Reserve at The Meadows, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Saddle Rock Golf, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Saddleback Heights, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Stetson Ridge Homes, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

The Vistas at Nor’wood, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

The Wheatlands, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Venue at Arista, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Verona Estates, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Villas at Murphy Creek, LLC

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Waterside at Highland Park, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

Wildgrass, LLC

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

and

[ Signature Page to Registration Rights Agreement ]

By:

Horizon Building Services, LLC,

its Manager

By:

Century Land Holdings, LLC,

its Sole Member

By:

Century Communities, Inc.,

its Sole Member

By:

/s/ Dale Francescon

Name: Dale Francescon

Title: Co-Chief Executive Officer

[ Signature Page to Registration Rights Agreement ]

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By: Merrill Lynch, Pierce, Fenner & Smith Incorporated


By:		/s/ Authorized Signatory
		Director

[ Signature Page to Registration Rights Agreement ]

Exhibit 21.1

List of Subsidiaries of Century Communities, Inc.


	Name	State of Formation
1.	Augusta Pointe, LLC		Colorado
2.	Avalon at Inverness, LLC		Colorado
3.	Beacon Pointe, LLC		Colorado
4.	Blackstone Homes, LLC		Colorado
5.	Bradburn Village Homes, LLC		Colorado
6.	CC Communities, LLC		Colorado
7.	CCC Holdings, LLC		Colorado
8.	CCH Homes, LLC		Colorado
9.	Central Park Rowhomes, LLC		Colorado
10.	Century at Ash Meadows, LLC		Colorado
11.	Century at Beacon Pointe, LLC		Colorado
12.	Century at Candelas, LLC		Colorado
13.	Century at Harvest Meadows, LLC		Colorado
14.	Century at Lowry, LLC		Colorado
15.	Century at Midtown, LLC		Colorado
16.	Century at Murphy Creek, LLC		Colorado
17.	Century at Outlook, LLC		Colorado
18.	Century at Southshore, LLC		Colorado
19.	Century at Terrain, LLC		Colorado
20.	Century at Wolf Ranch, LLC		Colorado
21.	Century City, LLC		Colorado
22.	Century Communities of Nevada Realty, LLC		Nevada
23.	Century Communities of Nevada, LLC		Delaware
24.	Century Land Holdings II, LLC		Colorado
25.	Century Land Holdings, LLC		Colorado
26.	Century Rhodes Ranch GC, LLC		Delaware
27.	Century Tuscany GC, LLC		Delaware
28.	Cherry Hill Park, LLC		Colorado
29.	Cottages at Willow Park, LLC		Colorado
30.	Enclave at Boyd Ponds, LLC		Colorado
31.	Enclave at Cherry Creek, LLC		Colorado
32.	Estates at Chatfield Farms, LLC		Colorado
33.	Hearth at Oak Meadows, LLC		Colorado
34.	Hometown, LLC		Colorado
35.	Lakeview Fort Collins, LLC		Colorado
36.	Madison Estates, LLC		Colorado
37.	Meridian Ranch, LLC		Colorado
38.	Montecito at Ridgegate, LLC		Colorado
39.	Neighborhood Associations Group		Delaware
40.	Park 5th Avenue Development Co., LLC		Colorado
41.	Reserve At Highpointe Estates, LLC		Colorado
42.	Reserve at The Meadows, LLC		Colorado
43.	Saddle Rock Golf, LLC		Colorado
44.	Saddleback Heights, LLC		Colorado
45.	Stetson Ridge Homes, LLC		Colorado
46.	The Vistas at Nor’wood, LLC		Colorado
47.	The Wheatlands, LLC		Colorado
48.	Venue at Arista, LLC		Colorado
49.	Verona Estates, LLC		Colorado
50.	Villas at Murphy Creek, LLC		Colorado
51.	Waterside at Highland Park, LLC		Colorado
52.	Wildgrass, LLC		Colorado

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated April 7, 2014 (except for Note 19 and Note 22, as to which the date is May 29, 2014), in Amendment No. 2 to the Registration Statement (Form S-1 No. 333-195678) and related Prospectus of Century Communities, Inc. for the registration of its common stock.

/s/ Ernst & Young LLP

Denver, Colorado

May 29, 2014

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the inclusion in this Amendment No. 2 to the Registration Statement on Form S-1 of our report dated February 12, 2014, on our audit of the financial statements of Century Communities, Inc. We also consent to the references to our firm under the caption “Experts.”

/s/ BKD, LLP

Denver, Colorado

May 29, 2014

Exhibit 23.3

Consent of Independent Auditor

Century Communities, Inc.

Greenwood Village, Colorado

We hereby consent to the use in the Prospectus constituting a part of this Amendment No. 2 to the Registration Statement of our report dated March 21, 2014, except for Note 8 which is as of April 7, 2014, relating to the consolidated financial statements of Las Vegas Land Holdings, LLC and its subsidiaries, which are contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Las Vegas, Nevada

May 29, 2014

Exhibit 23.4

CONSENT OF JOHN BURNS REAL ESTATE CONSULTING, LLC

We hereby consent to the use of our name in Amendment No. 2 to the registration statement on Form S-1 (collectively with any amendments and supplements thereto, the “ Registration Statement ”), filed by Century Communities, Inc., a Delaware corporation (the “ Company ”), with the U.S. Securities and Exchange Commission, and to the references to the market study prepared by us for the Company, wherever appearing in the Registration Statement, including, but not limited to, the references, conclusions, forecasts and assumptions contained under the headings “Statement Regarding Market Data,” “Summary,” “Market Opportunity,” “Our Business,” and “Experts” in the Registration Statement.

Dated: May 29, 2014

/s/ JOHN BURNS REAL ESTATE CONSULTING, LLC