PURCHASE AND SALE AGREEMENT

dated as of March 25, 2014 between

UCP, LLC

and

CITIZENS HOMES, INC.

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TABLE OF CONTENTS

PAGE

ARTICLE 1 DEFINITIONS
Section 1.01. Definitions    2
Section 1.02. Other Definitional and Interpretative Provisions    10
ARTICLE 2 PURCHASE AND SALE
Section 2.01. Purchase and Sale    10
Section 2.02. Excluded Assets    12
Section 2.03. Excluded Liabilities    13
Section 2.04. Assumed Liabilities    14
Section 2.05. Assignment of Contracts and Rights    14
Section 2.06. Purchase Price; Allocation of Purchase Price    15
Section 2.07. Closing Statement    15
Section 2.08. Closing    16
Section 2.09.    Post-Closing Statement    18
Section 2.10. Adjustment Of Purchase Price    20
ARTICLE 3 EARNOUT
Section 3.01. Earn-Out Payments.    20
Section 3.02. Earn-Out Notice    21
Section 3.03. Payment    21
Section 3.04. Post-Closing Efforts; Disclaimers    22
Section 3.05. Earn-Out Payments Not a Security    22
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER
Section 4.01. Corporate Existence and Power    22
Section 4.02. Corporate Authorization    23
Section 4.03. Governmental Authorization    23
Section 4.04. Noncontravention    23
Section 4.05. Consents    24
Section 4.06. Financial Statements    24
Section 4.07. Absence of Certain Changes    24
Section 4.08. No Undisclosed Material Liabilities    26

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Section 4.09. Material Contracts    26
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PAGE
Section 4.10. Litigation    27
Section 4.11. Compliance with Laws and Court Orders    28
Section 4.12. Properties    28
Section 4.13. Equity Interests    30
Section 4.14. Sufficiency of the Purchased Assets    31
Section 4.15. Development of Properties; Products    31
Section 4.16. Intellectual Property    32
Section 4.17. Insurance Coverage    33
Section 4.18. Licenses and Permits    34
Section 4.19. Inventories    34
Section 4.20. Receivables    34
Section 4.21. Selling Documents    35
Section 4.22. Finders’ Fees    35
Section 4.23. Employees    35
Section 4.24. Environmental Matters    35
Section 4.25. Taxes    36
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
Section 5.01. Corporate Existence and Power    37
Section 5.02. Corporate Authorization    38
Section 5.03. Governmental Authorization    38
Section 5.04. Noncontravention    38
Section 5.05. Financing    38
Section 5.06. Litigation    38
ARTICLE 6 COVENANTS OF SELLER
Section 6.01. Conduct of the Business    38
Section 6.02. No Solicitation; Other Offers    40
Section 6.03. Access to Information; Confidentiality    40
Section 6.04. Notices of Certain Events    41
Section 6.05. Non-Competition; Non-Solicitation    42
Section 6.06. Payment of Excluded Liabilities; Limitations on Distributions and
Dissolution
43

Section 6.07. Warranty Services Agreement    43
Section 6.08.    Seller Insurance Policies    43
ARTICLE 7 COVENANTS OF BUYER
Section 7.01. Confidentiality    44

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Section 7.02. Foreign Qualifications    44
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PAGE
ARTICLE 8 COVENANTS OF BUYER AND SELLER
Section 8.01. Reasonable Best Efforts; Further Assurances    44
Section 8.02. Certain Filings    45
Section 8.03. Public Announcements    45
Section 8.04. WARN Act    45
ARTICLE 9 TAX MATTERS
Section 9.01. Tax Cooperation; Allocation of Taxes    46
ARTICLE 10 EMPLOYEE BENEFITS
Section 10.01. ERISA Representations    47
Section 10.02. Employees and Offers of Employment    49
Section 10.03. Seller’s Employee Benefit Plans    49
Section 10.04. Buyer Benefit Plans    49
Section 10.05. No Third Party Beneficiaries    50
ARTICLE 11 CONDITIONS TO CLOSING
Section 11.01. Conditions to Obligations of Buyer and Seller    50
Section 11.02. Conditions to Obligation of Buyer    50
Section 11.03. Conditions to Obligation of Seller    52
ARTICLE 12 SURVIVAL; INDEMNIFICATION
Section 12.01. Survival    53
Section 12.02. Indemnification    53
Section 12.03. Third Party Claim Procedures    54
Section 12.04. Direct Claim Procedures    55
Section 12.05. Indemnification Basket And Cap    55
Section 12.06. Earn-Out Payment Offset    56
Section 12.07. Purchase Price Adjustment    56
ARTICLE 13 TERMINATION
Section 13.01. Grounds for Termination    56

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Section 13.02. Effect of Termination    57

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PAGE
ARTICLE 14 MISCELLANEOUS
Section 14.01. Notices    58
Section 14.02. Amendments and Waivers    59
Section 14.03. Disclosure Schedule References    59
Section 14.04. Expenses.    59
Section 14.05. Successors and Assigns    60
Section 14.06. Governing Law    60
Section 14.07. Jurisdiction    60
Section 14.08. WAIVER OF JURY TRIAL    61
Section 14.09. Counterparts; Effectiveness; Third Party Beneficiaries    61
Section 14.10. Entire Agreement    61
Section 14.11. Bulk Sales Laws    61
Section 14.12. Severability    61
Section 14.13. Specific Performance    62

Exhibit A    Form of Written Consents
Exhibit B    Form of Equityholder Support Agreement Exhibit C    Assignment and
Assumption Agreement Exhibit D    Assignment of Copyrights
Exhibit E    Assignment of Domain Names
Exhibit F    Form of Warranty Services Agreement

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as
of this twenty-fifth day of March, 2014, by and between UCP, LLC, a Delaware
limited liability company (“Buyer”), and Citizens Homes, Inc., a Delaware
corporation (“Seller”).

W I T N E S S E T H :

WHEREAS, Seller is engaged in the purchase of real estate and the construction
and marketing of residential homes in North Carolina, South Carolina and
Tennessee (the “Business”);

WHEREAS, Buyer desires to purchase from Seller all or substantially all of the
assets of the Business, which constitutes all or substantially all of the assets
of Seller, and Seller desires to sell to Buyer all or substantially all of the
assets of the Business, which constitutes all or substantially all of the assets
of Seller, upon the terms and subject to the conditions hereinafter set forth;

WHEREAS, the Board of Directors of Seller (i) has determined that the sale of
all or substantially all of the assets of Seller is fair to and in the best
interests of the stockholders of Seller and has approved this Agreement and the
other transactions contemplated hereby and (ii) has recommended the approval and
adoption of this Agreement by the stockholders of Seller in accordance with the
DGCL;

WHEREAS, after the execution and delivery of this Agreement and prior to or upon
the Closing, and as a condition and inducement to Buyer’s willingness to enter
into this Agreement, Seller shall have obtained the irrevocable approval and
adoption of this Agreement and the other transactions contemplated hereby by the
stockholders of Seller set forth on Annex I hereto holding at least a majority
of the capital stock of Seller pursuant to the execution and delivery of written
consents in the form of Exhibit A hereto (collectively, the “Written Consents”);

WHEREAS, after the execution and delivery of this Agreement and prior to or upon
the Closing, and as a condition and inducement to Buyer’s willingness to enter
into this Agreement, each of the holders of Series A Convertible Preferred Stock
and Series A- 1 Convertible Preferred Stock of Seller set forth on Annex I has
executed and delivered that certain Equityholder Support Agreement in the form
of Exhibit B hereto (collectively, the “Equityholder Support Agreements”);

WHEREAS, after the execution and delivery of this Agreement and prior to or upon
the Closing, and as a condition and inducement to Buyer’s willingness to enter
into

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this Agreement, each of the Key Employees has accepted an offer of employment
with Buyer, conditioned upon completion of the Closing, and has executed and
delivered all

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agreements and other documents required by Buyer relating to such employment
(collectively, the “Key Employee Arrangements”); and

WHEREAS, after the execution and delivery of this Agreement and prior to or upon
the Closing, as a condition and inducement to Buyer’s willingness to enter into
this Agreement, each of the Major Stockholders has executed and delivered to
Buyer an agreement, effective upon the Closing, not to compete with the Business
or solicit the employees of the Business during the period specified in such
agreements (collectively, the “Non-Competition Agreements”).

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which each party hereto
acknowledges, and subject to the terms and conditions hereinafter set forth, the
parties hereto, intending to be legally bound hereby, agree as follows:

ARTICLE 1 DEFINITIONS

Section 1.01. Definitions. (a) The following terms, as used herein, have the
following meanings:

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

“Acquisition Proposal” means, other than the transactions contemplated by this
Agreement, any offer, proposal or inquiry relating to, or any Third Party
indication of interest in, (i) any acquisition or purchase, direct or indirect,
of 10% or more of the consolidated assets of Seller, or of any class of equity
or voting securities of Seller or any of its Subsidiaries, (ii) any tender offer
(including a self-tender offer) or exchange offer with respect to any class of
equity or voting securities of Seller or any of its Subsidiaries or
(iii) a merger, consolidation, share exchange, business combination, sale of
substantially all the assets, reorganization, recapitalization, liquidation,
dissolution or other similar transaction involving Seller or any of its
Subsidiaries.

“Adjusted Pre-Tax Net Income” of the Business, as of any period, shall mean (A)
the total revenue of the Business (i.e. the Tennessee, North Carolina, and South
Carolina segments of Buyer’s business, including, without limitation, any new
business of Buyer in such states following the Closing) during such period less
(B) (i) all direct and indirect expenses of the Business during such period plus
(ii) an overhead allocation to the

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Business consistent with Buyer’s allocation of overhead to its other operating
divisions (but in no event shall such overhead allocation for the Business
exceed 4.5% of the Business’s division revenue) during the applicable period.
Such amount shall be calculated

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in accordance with GAAP using principles used in the preparation of Buyer’s
financial statements consistently applied during all applicable periods.

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such other
Person. For purposes of this definition, “control” when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms “controlling” and “controlled” have
correlative meanings.

“Applicable Law” means, with respect to any Person, any transnational, domestic
or foreign federal, state or local law (statutory, common or otherwise),
constitution, treaty, convention, ordinance, code, rule, regulation, order,
injunction, judgment, decree, ruling or other similar requirement enacted,
adopted, promulgated or applied by a Governmental Authority that is binding upon
or applicable to such Person, as amended unless expressly specified otherwise.

“Apportioned Tax Obligations” means real property Taxes, personal property Taxes
and similar ad valorem obligations levied with respect to the Purchased Assets
or the Business for a taxable period which includes (but does not end on) the
Closing Date and that are paid after the Closing Date.

2013.

“Balance Sheet” means the audited balance sheet of Seller as of December 31,

“Balance Sheet Date” means December 31, 2013.

“Building Design” means any design, blueprint, plan, schematic or prototype
relating to any house, building or other structure built, sold or proposed to be
built or sold by or on behalf of Seller or its Subsidiaries.

“Business Day” means a day, other than Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by Applicable
Law to close.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and any rules or regulations promulgated
thereunder.

“Change of Control Payments” means all amounts (including any bonus, severance
or other payments) that shall become payable (whether currently or in the
future)

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to any employees, consultants or contractors of Seller or any of its
Subsidiaries or any other Third Party as a result of or in connection with any
“change of control” provision binding on Seller or any of its Subsidiaries
triggered by the Closing of the sale of the Purchased Assets or any other
transaction contemplated by this Agreement (either alone or together with any
other trigger event).

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“Closed” means the transfer of title of a Home to a third-party homebuyer in
exchange for receipt of the purchase price from such third party homebuyer,
subject only to customary holdbacks.

“Closing Date” means the date of the Closing.

“Code” means the Internal Revenue Code of 1986, as amended.

“Development Reimbursements” means any right, title or interest of Seller or any
Subsidiary of Seller to any reimbursement, incentive payment or other monetary
remuneration from any third party (including any Governmental Authority) arising
out of the ownership, use or development of the Owned Real Property or the
Optioned Real Property.
“DGCL” means the Delaware General Corporation Law, as amended. “Environmental
Laws” means any Applicable Law or any agreement with any
Governmental Authority or other third party, relating to human health and
safety, the environment or to Hazardous Substances.

“Environmental Liabilities” means any and all liabilities arising in connection
with or in any way relating to Seller (or any predecessor of Seller or any prior
owner of all or part of its business and assets), any property now or previously
owned, leased or operated by Seller, the Business (as currently or previously
conducted), the Purchased Assets or any activities or operations occurring or
conducted at the Real Property (including offsite disposal), whether accrued,
contingent, absolute, determined, determinable or otherwise, which (i) arise
under or relate to any Environmental Law and
(ii) relate to actions occurring or conditions existing on or prior to the
Closing Date (including any matter disclosed or required to be disclosed in
Section 4.24 of the Seller Disclosure Schedule).

“Environmental Permits” means all Permits relating to or required by
Environmental Laws.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” of any entity means any other entity which, together with such
entity, would be treated as a single employer under Section 414 of the Code.

“Escrow Agent” means as follows: with respect to the Owned Real Property and the
Optioned Real Property located in the State of Tennessee, Tune, Entrekin &
White, P.C.; with respect to the Owned Real Property and the Optioned Real
Property located in the State of South Carolina, The Bellamy Law Firm; with
respect to the Owned Real

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Property and the Optioned Real Property located in Raleigh, North Carolina and
its general vicinity, Burns, Day and Presnell, P.A.; with respect to the Owned
Real Property and the

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Optioned Real Property located in Charlotte, North Carolina and its general
vicinity, Lancaster & Trotter, P.A.
“GAAP” means generally accepted accounting principles in the United States.
“Governmental Authority” means any transnational, domestic or foreign federal,
state or local governmental, regulatory or administrative authority, department,
court, agency or official, including any political subdivision thereof.

“Hazardous Substances” means any pollutant, contaminant, waste or chemical or
any toxic, radioactive, ignitable corrosive, reactive or otherwise hazardous
substance, waste or material or any substance, waste or material having any
constituent elements displaying any of the foregoing characteristics including
petroleum, its derivatives, by- products and other hydrocarbons, and any
substance, waste or material regulated under any Environmental Law.

“Homebuyer Deposits” means any cash of Seller held in the accounts of escrow
agents with respect to customer deposits for Homes to be delivered by Seller,
calculated as of 11:59 pm on the day immediately prior to the Closing Date and
determined in accordance with GAAP applied consistently with the principles used
in the preparation of the Balance Sheet.

“Home” means a single family home, townhome, or unit of a multi-family structure
that is constructed, produced, marketed or sold by the Business.

“Indebtedness” means, without duplication, with respect to any Person, (i) all
obligations for borrowed money or extensions of credit (including bank
overdrafts and advances), (ii) all obligations evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations to pay the deferred
purchase price of property or services,
(iv)all obligations as lessee capitalized in accordance with GAAP, (v) all
obligations for borrowed money or extensions of credit of others secured by a
Lien on any asset of such Person, whether or not such obligations are assumed,
(vi) all obligations, contingent or otherwise, directly or indirectly
guaranteeing any of the obligations described in clauses (i)-(v) above, of any
other Person, in each such case as set forth in (i) –(vi) including any interest
accrued thereon and prepayment or similar penalties and expenses which would be
payable if such liability were paid in full as of the Closing Date and any
success fee payable thereunder in connection with the Closing.

“Intellectual Property Rights” means (i) inventions, whether or not patentable,
reduced to practice or made the subject of one or more pending patent
applications, (ii) patents and patent applications (including all reissues,
divisions, continuations, continuations-in-part, extensions and reexaminations
thereof) registered or applied for in the United States and all other nations
throughout the world, all improvements to the inventions disclosed in each such
registration, patent or patent application, (iii) trademarks,

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service marks, trade dress, logos, domain names, trade names and corporate names
(whether or not registered) in the United States and all other nations
throughout the world,

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including all variations, derivations, combinations, registrations and
applications for registration of the foregoing and all goodwill associated
therewith, (iv) copyrights (whether or not registered) and registrations and
applications for registration thereof in the United States and all other nations
throughout the world (including copyrights in any “architectural work” as such
term is defined in 17 U.S.C. Section 101), including all derivative works, moral
rights, renewals, extensions, reversions or restorations associated with such
copyrights, now or hereafter provided by law, regardless of the medium of
fixation or means of expression, (v) computer software, (including source code,
object code, firmware, operating systems and specifications), (vi) trade secrets
and, whether or not confidential, business information (including pricing and
cost information, business and marketing plans and customer and supplier lists)
and know-how (including manufacturing and production processes and techniques
and research and development information), (vii) databases and data collections,
(viii) any other similar type of proprietary intellectual property right, (ix)
copies and tangible embodiments of any of the foregoing, in whatever form or
medium, and (x) all rights to sue or recover and retain damages and costs and
attorneys’ fees for past, present and future infringement or misappropriation of
any of the foregoing.

“IT Assets” means any and all computers, computer software, firmware,
middleware, servers, workstations, routers, hubs, switches, data communications
lines and all other information technology, network and communications
equipment, and all associated documentation owned by or licensed, leased or used
by or in connection with the Business (excluding any public networks).
“Key Employees” means Scott Thorson, Gilford Edwards, and David Hughes.
“Knowledge” means, with respect to Seller, the knowledge of Scott Thorson,
Gilford Edwards, David Hughes, Antonio Mon or Ralph Teal, after reasonable
inquiry.

“Licensed Intellectual Property Rights” means all Intellectual Property Rights
owned by a third party and licensed or sublicensed to Seller or a Subsidiary of
Seller, or for which Seller or any Subsidiary of Seller has obtained a covenant
not to be sued.

“Lien” means, with respect to any property or asset, any mortgage, deed of
trust, lien, pledge, hypothecation, charge, easement, servitude, security
interest, encumbrance or other adverse claim of any kind in respect of such
property or asset. For the purposes of this Agreement, a Person shall be deemed
to own subject to a Lien any property or asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
property or asset.

“Major Stockholders” means Scott Thorson, Gilford Edwards, David Hughes, Antonio
Mon, and Ralph Teal.

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“Material Adverse Effect” means a material adverse effect on (i) the condition
(financial or otherwise), business, assets, results of operations or prospects
of Seller, the

6

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Business or the Purchased Assets, taken as a whole, excluding any effect
resulting from
(A)changes in the general economic or political conditions in the United States
not having a materially disproportionate effect on the Business relative to
other participants in the homebuilding industry in North Carolina, South
Carolina and Tennessee, (B) changes (including changes of Applicable Law) or
conditions generally affecting the homebuilding industry in North Carolina,
South Carolina and Tennessee and not specifically relating to or having a
materially disproportionate effect on the Business or (C) acts of war, sabotage
or terrorism or natural disasters involving the United States of America not
having a materially disproportionate effect on the Business relative to other
participants in the industry in which the Business operates or (ii) Seller’s
ability to consummate the transactions contemplated by this Agreement.

“Owned Intellectual Property Rights” means all Intellectual Property Rights
owned or purported to be owned by Seller or a Subsidiary of Seller.

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.

“Post-Closing Tax Period” means (i) any Tax period beginning after the Closing
Date and (ii) with respect to a Tax period that begins on or before but ends
after the Closing Date, the portion of such period beginning after the Closing
Date.

“Pre-Closing Tax Period” means (i) any Tax period ending on or before the
Closing Date and (ii) with respect to a Tax period that begins on or before but
ends after the Closing Date, the portion of such period ending on the Closing
Date.

“Representatives” means, with respect to any Person, the directors, officers,
employees, financial advisors, attorneys, accountants, consultants, agents and
other authorized representatives of such Person, in each case acting in such
capacity.

“Seller Acquisition Expenses” means all fees and expenses accrued or incurred by
or on behalf of Seller in connection with the negotiation of this Agreement and
consummation of the Closing of the sale of the Purchased Assets or any of the
other transactions contemplated hereby, including all legal, accounting,
investment banking and financial advisory fees and expenses, other than any fees
incurred by or on behalf of Buyer. For the avoidance of doubt, any fees and
expenses that are contingent upon the Closing shall be deemed to have been
accrued as of immediately prior to the Closing.

“Subsidiary” means, with respect to any Person, any entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at any
time directly or indirectly owned by such Person.

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“Tax” means (i) any tax, governmental fee or other like assessment or charge of
any kind whatsoever (including withholding on amounts paid to or by any Person),
or any interest, penalty, addition to tax or additional amount relating thereto,
or any liability for

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any of the foregoing as transferee, (ii) liability for the payment of any
amounts of the type described in (i) as a result of being a member of an
affiliated, consolidated, combined or unitary group or being party to any
agreement or arrangement, as a result of which liability of Seller or any of its
Subsidiaries to a Taxing Authority is determined or taken into account with
reference to the activities of any other Person and (iii) liability of Seller or
any of its Subsidiaries for the payment of any amount as a result of being party
to any Tax Sharing Agreement.

“Tax Return” means any Tax return, statement, report, election, declaration,
disclosure, schedule or form (including any estimated tax or information return
or report) filed or required to be filed with any Taxing Authority.

“Tax Sharing Agreement” means any agreement or arrangement (whether or not
written) entered into prior to the Closing binding Seller or any of its
Subsidiaries that provide for the allocation, apportionment, sharing or
assignment of any Tax liability or benefit, or the transfer or assignment of
income, revenues, receipts, or gains for the purpose of determining any Person’s
Tax liability.

“Taxing Authority” means any governmental authority (domestic or foreign)
responsible for the imposition or collection of any Tax.

“Total Assets” means the total consolidated assets of Seller calculated as of
11:59 pm on the day immediately prior to the Closing Date and determined in
accordance with GAAP applied consistently with the principles used in the
preparation of the Balance Sheet, as modified as set forth in Section 1.01(B) of
the Seller Disclosure Schedules.

“Transfer Taxes” means any sales, use, value added, registration, stamp,
recording, documentary, conveyancing, transfer, and similar Taxes (including any
penalties and interest).

“Third Party” means any Person as defined in this Agreement or in Section 13(d)
of the 1934 Act, other than Buyer or any of its Subsidiaries or Representatives
or Seller or any of its Subsidiaries or Representatives.

“Transaction Documents” means this Agreement, the Assignment and Assumption
Agreement, the Equityholder Support Agreement, the Assignment of Domain Names,
the Assignment of Copyrights, and the Warranty Services Agreement.

“Warranty Liability Amount” means $200,000.

term:

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(b)

Each of the following terms is defined in the Section set forth opposite such

Term    Section
2014 Operating Plan    4.07
Accounting Referee    2.06

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Section 1.02. Other Definitional and Interpretative Provisions. The words
“hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections, Exhibits and Schedules are to
Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise
specified. All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise
defined therein, shall have the meaning as defined in this Agreement. Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular. Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”, whether or not they are in fact followed by
those words or words of like import. “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form. References to any statute shall be deemed
to refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder. References to any agreement or contract are
to that agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof; provided that with respect
to any agreement or contract listed on any schedules hereto, all such
amendments, modifications or supplements must also be listed in the appropriate
schedule. References to any Person include the successors and permitted assigns
of that Person. References from or through any date mean, unless otherwise
specified, from and including or through and including, respectively. References
to “law”, “laws” or to a particular statute or law shall be deemed also to
include any and all Applicable Law.

ARTICLE 2 PURCHASE AND SALE

Section 2.01. Purchase and Sale. Except as otherwise provided below, upon the
terms and subject to the conditions of this Agreement, Buyer agrees to, or to
cause one of its designated Subsidiaries to, purchase from Seller and Seller
agrees to sell, convey, transfer, assign and deliver, or cause to be sold,
conveyed, transferred, assigned and delivered, to Buyer (or one of its
designated Subsidiaries, as applicable) at the Closing,

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free and clear of all Liens all of Seller’s and Seller’s Subsidiaries’ right,
title and interest in, to and under the assets, properties and business, of
every kind and description, wherever located, real, personal or mixed, tangible
or intangible, known or unknown, owned, held or used in or arising from the
conduct of the Business as the same shall exist on the Closing Date, including
all assets shown on the Balance Sheet and not disposed of in the ordinary course
of business as permitted by this Agreement, and all assets of the Business
thereafter acquired by Seller (the “Purchased Assets”), and including all right,
title and interest of Seller and Seller’s Subsidiaries’ in, to and under:

(a)all owned real property and interests in owned real property, in each case
together with all buildings, structures, improvements, and fixtures thereon and
all easements and rights of way pertaining thereto or accruing to the benefit
thereof and all other appurtenances and real property rights pertaining thereto
(collectively, the “Owned Real Property”);

(b)all interests in real property held pursuant to an option or purchase
Contract, in each case together with all buildings, structures, improvements,
and fixtures thereon and all easements and rights of way pertaining thereto or
accruing to the benefit thereof and all other appurtenances and real property
rights pertaining thereto (collectively, the “Optioned Real Property”);

(c)all interests in real property pursuant to the Real Property Leases, in each
case together with all buildings, structures, improvements and fixtures thereon
(collectively, the “Leased Real Property” and together with the Owned Real
Property and the Optioned Real Property, the “Real Property”);

(d)all reimbursements, payments made or deposits on any of the Real Property;

(e)
all Homebuyer Deposits;

(f)all personal property and interests therein, including machinery, equipment,
furniture, office equipment, communications equipment, vehicles, storage tanks,
spare and replacement parts, fuel and other tangible property, including the
items listed on Section 4.12(d) of the Seller Disclosure Schedule;

(g)all raw materials, work-in-process, finished goods, supplies and other
inventories;

(h)all contracts, agreements, leases, Real Estate Leases, licenses, commitments,
sales and purchase orders and other instruments, including those listed on
Section 4.09 of the Seller Disclosure Schedule (collectively, the “Contracts”);
(i)
all accounts, notes and other receivables;

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(j)all credits, prepaid expenses (including ad valorem Taxes), rebates, deferred
charges, advance payments, security deposits and prepaid items;

(k)all rights, claims, credits and causes of action relating to or arising from
the Business or the Purchased Assets, including any Development Reimbursements,
warranty, indemnity, right of recovery, right of set-off or similar right in
favor of Seller in respect of the Business or any Purchased Asset;

(l)all Licensed Intellectual Property Rights and Owned Intellectual Property
Rights, including the items listed on Section 4.16 of the Seller Disclosure
Schedule;

(m)all licenses, franchises, permits, certificates, approvals or other similar
authorizations of any Governmental Authority affecting, or relating in any way
to, Seller, the Business or the Purchased Assets, including those listed on
Section 4.18 of the Seller Disclosure Schedule (collectively, the “Permits”);

(n)all books, records, files and papers, whether in hard copy or computer
format, used in the Business, including engineering information, sales and
promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, lists of present and former customers,
personnel and employment records, Building Designs, and any information relating
to any Tax imposed on the Purchased Assets;

(o)all of Seller’s Class B Investor Units in Stonegate Property Ventures, LLC
(“Stonegate”);

(p)all of the Class B Investor Units in UC Ventures, LLC (“UC Ventures”) held by
Citizens Homes Investments, LLC’s (“CHI”) (a wholly owned Subsidiary of Seller);
and

(q)all goodwill associated with the Business or the Purchased Assets, together
with the right to represent to third parties that Buyer is the successor to the
Business.

Section 2.02. Excluded Assets. Buyer expressly understands and agrees that (i)
all of the capital stock or other equity interest of any Subsidiary of Seller;
(ii) all cash and cash equivalents as of the Closing Date, wherever held,
including all bank accounts of Seller or any of its subsidiaries, other than
Homebuyer Deposits (the “Closing Cash”); (iii) all insurance policies set forth
in Section 4.17 of the Seller Disclosure Schedule and all rights and claims
thereunder and any proceeds thereof (subject to Section 6.08); and (iv) any
Purchased Assets sold or otherwise disposed of in the ordinary course of
business and not in violation of any provisions of this Agreement during the
period from the date hereof

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until the Closing Date (the “Excluded Assets”) shall be excluded from the
Purchased Assets.

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Section 2.03. Excluded Liabilities. Notwithstanding any provision in this
Agreement or any other writing to the contrary, neither Buyer nor any of its
Subsidiaries is assuming any liability or obligation of Seller or any of its
Subsidiaries (or any predecessor of Seller or any prior owner of all or part of
its businesses and assets) of whatever nature, whether presently in existence or
arising hereafter, other than the Assumed Liabilities. All such liabilities and
obligations shall be retained by and remain liabilities and obligations and
liabilities of Seller (all such liabilities and obligations being herein
referred to as the “Excluded Liabilities”). Notwithstanding any provision in
this Agreement or any other writing to the contrary, Excluded Liabilities
include:

(a)any accounts payable and accrued liabilities of Seller;

(b)any liabilities arising out of the Real Property at any time, including
liabilities for refunds, adjustments, allowances, repairs, exchanges, returns
and warranty, product liability, merchantability and other claims relating to
such products;

(c)any liability or obligation of Seller, any Subsidiary of Seller, or any
member of any consolidated, affiliated, combined or unitary group of which
Seller or any Subsidiary of Seller is or has been a member, for Taxes (including
for the avoidance of doubt, Taxes of Seller, any Subsidiary of Seller, or any
member of any consolidated, affiliated, combined or unitary group of which
Seller or any Subsidiary of Seller is or has been a member, that are imposed on
Buyer as a result of successor or transferee liability);

(d)Apportioned Tax Obligations and Transfer Taxes expressly allocated to Seller
under Section 9.01 and any other Taxes imposed on the Business or the Purchased
Assets or payable by Stonegate or UC Ventures that relate to the Pre-Closing Tax
Period;

(e)except to the extent provided in Section 10.02, any liability or obligation
relating to employee benefits or compensation arrangements existing on or prior
to the Closing Date, including any liability or obligation under any of Seller’s
employee benefit agreements, plans or other arrangements listed on Section
10.01 of the Seller Disclosure Schedule;

(f)
any Indebtedness of Seller or any of its Subsidiaries;

(g)
any Environmental Liability;

(h)any liabilities in respect of any action, pending or threatened, and claims,
whether or not presently asserted, at any time arising out of or primarily
relating to the ownership, operation or conduct of the Business prior to the
Closing;

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(i)
any Acquisition Expenses;

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(j)
any Change in Control Payments; and

(k)
any liability or obligation relating to an Excluded Asset.

Section 2.04. Assumed Liabilities. Upon the terms and subject to the conditions
of this Agreement, Buyer shall assume only the following liabilities and
obligations of Seller upon the Closing as the same exist as of the Closing (the
“Assumed Liabilities”):

(a)except to the extent explicitly identified as an Excluded Liability, any
obligations of Seller or any of its Subsidiaries pursuant to Contracts assigned
to Buyer hereunder arising from and after the Closing Date (but excluding any
liability, whether arising prior to, on or after the Closing Date, in connection
with any actual or alleged breach, default or other failure to perform under any
such Contract occurring prior to the Closing); and

(b)all trade account payables incurred by Seller in the ordinary course of
business related to the Purchased Assets that remain unpaid at and are not
delinquent as of the Closing Date that are set forth on Section 2.04(b) of the
Seller Disclosure Schedule; and

(c)any other Liabilities set forth on Section 2.04(c) of the Seller Disclosure
Schedule.

Section 2.05. Assignment of Contracts and Rights. Anything in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign any Purchased Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if such assignment, without the consent of a
third party thereto, would constitute a breach or other contravention of such
Purchased Asset or in any way adversely affect the rights of Buyer or its
designated Subsidiaries thereunder. Seller and Buyer shall use their best
efforts (but without any payment of money by Buyer) to obtain the consent of
such third parties to any such Purchased Asset or any claim or right or any
benefit arising thereunder for the assignment thereof to Buyer or its designated
Subsidiary as Buyer may request. If such consent is not obtained, or if an
attempted assignment thereof would be ineffective or would adversely affect the
rights of Seller thereunder so that Buyer or its designated Subsidiary would not
in fact receive all such rights, Seller and Buyer shall cooperate in a mutually
agreeable arrangement under which Buyer or its designated Subsidiary would
obtain the benefits and assume the obligations thereunder in accordance with
this Agreement, including sub-contracting, sub-licensing, or sub-leasing to
Buyer or its designated Subsidiary, or under which Seller would enforce for the
benefit of Buyer or its designated Subsidiary, with Buyer or its designated
Subsidiary assuming Seller’s obligations, any and all rights of Seller against a
third party thereto. Seller shall promptly pay to Buyer or its designated
Subsidiary when received all monies received by Seller under any Purchased Asset
or any claim or right or any benefit arising thereunder, except to the extent
the same represents an Excluded Asset.

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Section 2.06. Purchase Price; Allocation of Purchase Price. (a) The purchase
price for the Purchased Assets to be delivered at Closing shall be an amount in
cash equal to (A) the Closing Total Assets less (B) Closing Cash less (C) the
amount, as of the Closing Date, of trade payables assumed by Buyer pursuant to
Section 2.04(b) (the “Closing Purchase Price”). The Closing Purchase Price shall
be paid as provided in Section 2.08 and is subject to adjustment as set forth in
Section 2.10 (such amount, as adjusted “Purchase Price”).

(b)As soon as practicable after the date hereof, but in all events at least 20
days prior to the Closing Date, Seller shall deliver to Buyer, for Buyer’s
review and comment, a proposed statement (the “Allocation Statement”) allocating
the Purchase Price (plus Assumed Liabilities, to the extent properly taken into
account under Section 1060 of the Code) among the Purchased Assets in accordance
with Section 1060 of the Code. Buyer and Seller shall use commercially
reasonable efforts to agree to the final form of the Allocation Statement. In
the event that an agreement is not reached by the date that is at least 10 days
prior to the Closing Date, Buyer and Seller shall jointly retain a nationally
recognized accounting firm mutually acceptable to Buyer and Seller for such
purpose (an “Accounting Referee”) to resolve the disputed items. Upon resolution
of the disputed items, the allocation reflected on the Allocation Statement
shall be adjusted to reflect such resolution. The costs, fees and expenses of
the Accounting Referee shall be borne equally by Buyer and Seller.

(c)Seller and Buyer agree to (i) be bound by the Allocation Statement for U.S.
federal income Tax purposes and (ii) act in accordance with the Allocation
Statement in the preparation, filing and audit of any Tax Return (including
filing Form 8594 with its federal income Tax Return for the taxable year that
includes the date of the Closing).

(d)Not later than 30 days prior to the filing of their respective Forms 8594
relating to this transaction, each party shall deliver to the other party a copy
of its Form 8594.

(e)The Allocation Statement shall be adjusted in accordance with Section 1060 of
the Code and as mutually agreed by Buyer and Seller to reflect any adjustment to
the Purchase Price made pursuant to Section 2.10 and any Earn-Out Payment made
pursuant to Section 3.03. In the event that an agreement is not reached within
20 days, any disputed items shall be resolved by the Accounting Referee
appointed pursuant to Section 2.06(b). The costs, fees and expenses of the
Accounting Referee shall be borne equally by Buyer and Seller.

Section 2.07. Closing Statement. On the date that is three Business Days prior
to the Closing Date, Seller shall deliver to Buyer a certificate (the “Closing
Statement”) of Seller signed by the President of Seller, prepared in reasonable
detail, certifying as to the accuracy and completeness, in each case as of the
Closing Date, of Seller’s good faith estimate of (i) the Total Assets (as
estimated by Seller the “Closing Total Assets”), (ii)

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Closing Cash, (ii) Homebuyer Deposits, (iii) any unpaid Seller Acquisition
Expenses (which estimate shall specify the payees for each Seller Acquisition
Expense and include

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valid wire transfer information for such payees), (iv) the Change of Control
Payments, (v) the Warranty Liability Amount, (vi) all amounts necessary to
discharge fully the then- outstanding balance of all Indebtedness outstanding at
the closing (including for the avoidance of doubt any prepayment or similar
penalties and expenses payable if such liability were paid in full as of the
Closing Date and/or any success fee payable thereunder in connection with the
Closing) (the “Closing Repaid Indebtedness”) (which estimate shall specify the
payees for each Indebtedness and include valid wire transfer information for
such payees), (vii) the Apportioned Tax Obligations and Transfer Taxes expressly
allocated to Seller under Section 9.01 (as estimated by Seller, the “Estimated
Apportioned Tax Obligations and Transfer Taxes”) and (viii) all amounts
necessary to discharge fully the outstanding Excluded Liabilities of Seller
described on Section 2.07 of the Seller Disclosure Schedule (for which Seller
shall request as of the Closing Date a final invoice from the obligee of such
liability) (the “Other Closing Date Obligations”) (which estimate shall specify
the payees for each such liability and include valid wire transfer information
for such payees).

Section 2.08. Closing. The closing (the “Closing”) of the purchase and sale of
the Purchased Assets hereunder shall take place at the offices of Davis Polk &
Wardwell LLP, 1600 El Camino Real, Menlo Park, California, via the exchange of
documents and signatures (electronically or otherwise), as soon as possible, but
in no event later than five Business Days, after satisfaction or, to the extent
permissible, waiver by the party or parties entitled to the benefit of the
conditions set forth in Article 11 (other than conditions that by their nature
are to be satisfied at the Closing, but subject to the satisfaction or, to the
extent permissible, waiver of those conditions at the Closing), or at such other
time or place as Buyer and Seller may agree. At the Closing:

(a)Buyer shall, on behalf of Seller, deliver the full amounts of Closing Repaid
Indebtedness to the applicable lender in exchange for a payout letter executed
by each such lender, effective as of such payment and in form satisfactory to
Buyer and Seller (collectively, the “Payout Letters”), and related termination
of all related Liens on the assets of Seller and its Subsidiaries, including the
appropriate UCC filing (collectively, the “Lien Terminations”).

(b)Buyer shall, on behalf of Seller, deliver the full amounts of the unpaid
Seller Acquisition Expenses, the Change of Control Payments and the Other
Closing Date Liabilities in exchange for release letters executed by each such
payee, effective as of such payment and in form satisfactory to Buyer and
Seller.

(c)Buyer shall deliver the Warranty Liability Amount by wire transfer in
immediately available funds to Seller for deposit into a separate account (the
“Warranty Account”) to be held in accordance with the terms of the Warranty
Services Agreement.

(d)Buyer shall withhold an amount equal to the Estimated Apportioned Tax
Obligations and Transfer Taxes.

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(e)Buyer shall deliver to Seller an amount equal to the Closing Purchase Price
less all amounts paid or delivered or withheld by Buyer pursuant to Sections
2.08(a), 2.08(b), Section 2.08(c)and 2.08(d) above in immediately available
funds by wire transfer to an account of Seller with a bank designated by Seller,
by notice to Buyer, which notice shall be delivered not later than two Business
Days prior to the Closing Date (or if not so designated, then by certified or
official bank check payable in immediately available funds to the order of
Seller in such amount).

(f)Seller and Buyer (and Buyer’s designated Subsidiaries, if applicable) shall
enter into an Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit C.

(g)Seller and Buyer and Buyer’s designated Subsidiaries shall enter into an
Assignment of Copyrights and an Assignment of Domain Names, each substantially
in the form attached hereto as Exhibit D and Exhibit E, respectively.

(h)Seller and Buyer shall enter into the Warranty Services Agreement
substantially in the form attached hereto as Exhibit F (the “Warranty Services
Agreement”).

Agent:
(i)

For each Owned Real Property, Seller shall deliver to the applicable Escrow

(i)a warranty deed, or other good and sufficient instrument of conveyance in a
form approved by Buyer;

(ii)all Transfer Tax returns and filings required to be completed by Seller
under Applicable Law; and

(iii)all such other documents as are reasonably necessary or appropriate to vest
in Buyer all right, title and interest in and to such Owned Real Property or for
the issuance of a Buyer's Title Insurance Policy with respect to such Owned Real
Property pursuant to Section 11.02(i), including any owner's title affidavits,
"gap" indemnities, real estate tax bills, water bills and current assessments
relating to such Owned Real Property.

(j)For each Optioned Real Property, Seller shall deliver to the applicable
Escrow Agent:

(i)an assignment and assumption agreement assigning all of Seller's interest in
the Contract for such Optioned Real Property to Buyer;

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Buyer;
(ii)

an estoppel certificate from Seller in a form reasonably acceptable to

(iii)
a recent ALTA survey of such Optioned Real Property; and

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(iv)a binder or commitment to issue an ALTA extended coverage form of owner's
title insurance policy in an amount satisfactory to Buyer committing to insure,
at ordinary premium rates without any requirement for additional premiums, good
and marketable title to the Optioned Real Property and any associated title
exception documents.

(k)Seller shall deliver to Buyer, or cause to be delivered to Buyer, the
certification described in Section 11.02(j)(i) and shall cause CHI to deliver to
Buyer the certification described in Section 11.02(j)(ii).

(l)For each Real Property Lease, Seller and Buyer shall enter into an assignment
and assumption agreement assigning all of Seller's interest in such Real
Property Lease to Buyer, and Seller shall deliver to Buyer, or cause to be
delivered to Buyer, any consents required under the Real Property Leases in
order to consummate the assignment of such Real Property Leases to Buyer.

(m)Seller shall deliver to Buyer Seller’s Class B Investor Units in Stonegate
together with all unit powers, member consents and other instruments reasonably
necessary to transfer such Class B Investor Units into Buyer’s name.

(n)Seller shall deliver to Buyer CHI’s Class B Investor Units in UC Ventures
together with all unit powers, member consents and other instruments reasonably
necessary to transfer such Class B Investor Units into Buyer’s name.

(o)Seller shall deliver to Buyer a properly completed and executed Internal
Revenue Service Form W-9 for Seller and shall cause CHI to deliver to Buyer a
properly completed and executed Internal Revenue Service Form W-9 for CHI.

(p)Seller shall deliver to Buyer, or cause to be delivered to Buyer, such other
warranty deeds, bills of sale, endorsements, consents, assignments and other
good and sufficient instruments of conveyance and assignment as the parties and
their respective counsel shall deem reasonably necessary or appropriate to vest
in Buyer (or its designated Subsidiaries, as applicable), all right, title and
interest in, to and under the Purchased Assets.

Section 2.09. Post-Closing Statement. (a) As promptly as practicable, but no
later than 60 days after the Closing, Buyer shall prepare and deliver to Seller
a statement (including reasonably detailed supporting calculations) setting
forth Buyer’s calculation of Total Assets (the “Post-Closing Statement”).

(b)If Seller disagrees with Buyer’s calculation of Total Assets set forth in the
Post-Closing Statement, Seller may, within 30 days after receipt of the
Post-Closing Statement (including reasonably detailed supporting calculations),
deliver a written notice to Buyer disagreeing with such calculation and setting
forth Seller’s calculation of such

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amount (the “Post-Closing Statement Objection”). The Post-Closing Statement
Objection shall specify those items or amounts as to which Seller disagrees, and
Seller

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shall be deemed to have agreed with all other items and amounts contained in the
Post- Closing Statement. If Seller fails to deliver such a written notice within
such 30 day period, Buyer’s calculation of Total Assets set forth in the
Post-Closing Statement shall be binding upon the parties.

(c)If the Post-Closing Statement Objection shall be duly delivered pursuant to
Section 2.09(b), Seller and Buyer shall, during the 30 days following such
delivery, use reasonable efforts to reach agreement on the disputed items or
amounts in order to determine the amount of Total Assets. If, during such period
or any mutually agreed extension thereof, Seller and Buyer are unable to reach
such agreement, they shall promptly thereafter cause an Accounting Referee to
review this Section 2.09, the definitions of Total Assets and the disputed items
or amounts for the purpose of calculating Total Assets. In making such
calculation, the Accounting Referee shall consider only those items or amounts
in Buyer’s calculation of Total Assets as to which Seller has disagreed. In no
event shall the Accounting Referee assign a value to Total Assets that is less
than Buyer’s calculation set forth on the Post-Closing Statement or greater than
Seller’s calculation set forth in the Post-Closing Statement Objection. The
Accounting Referee shall deliver to Seller and Buyer, as promptly as
practicable, a report setting forth such calculation. Such report shall be final
and binding upon Seller and Buyer.

(d)If the Final Total Assets as determined by the Accounting Referee is closer
in amount to Buyer’s calculation of Total Assets as set forth on the
Post-Closing Statement than to Seller’s calculation of Total Assets as set forth
on the Post-Closing Statement Objection, then Seller shall pay all fees and
expenses of the Accounting Referee in connection with the services provided
pursuant to Section 2.09(c). If the Final Total Assets as determined by the
Accounting Referee is closer in amount to Seller’s calculation of Total Assets
as set forth on the Post-Closing Statement Objection than to Buyer’s calculation
of Total Assets as set forth on the Post-Closing Statement, then Buyer shall pay
all fees and expenses of the Accounting Referee in connection with the services
provided pursuant to Section 2.09(c). If the difference between Total Assets as
determined by the Accounting Referee and Buyer’s calculation of Total Assets as
set forth on the Post- Closing Statement is equal to the difference between
Total Assets as determined by the Accounting Referee and Seller’s calculation of
Total Assets as set forth on the Post- Closing Statement Objection, then all
fees and expenses of the Accounting Referee provided pursuant to Section 2.09(c)
shall be borne one-half by Buyer and one-half by Seller.

(e)Buyer and Seller shall reasonably cooperate with one another in the
preparation of the Post-Closing Statement and Post-Closing Statement Objection,
as applicable, including by providing the other party and its representatives
with reasonable access during normal business hours to such party’s books,
records (including work papers, schedules, memoranda and other documents),
facilities and employees.

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(f)“Final Total Assets” means Total Assets as set forth on (i) the Post-Closing
Statement, if Seller does not deliver a Post-Closing Statement Objection to
Buyer in accordance with Section 2.09(b), (ii) the Post-Closing Statement as
adjusted by written

agreement of Buyer and Seller, if so adjusted in accordance with Section 2.09(c)
or (iii) the Post-Closing Statement as adjusted by the Accounting Referee, if so
adjusted in accordance with Section 2.09(c).

Section 2.10. Adjustment Of Purchase Price. (a) If Closing Total Assets exceeds
Final Total Assets, within ten days after the Final Total Assets has been
determined Seller shall pay to Buyer, as an adjustment to the Purchase Price,
with interest as provided in Section 2.10(b), by wire transfer in immediately
available funds to such account as may be designated by Buyer, an amount equal
to (x) 1.3 multiplied by (y) the amount of such excess. If Final Total Assets
exceeds Closing Total Assets, within ten days after the Final Closing Total
Assets has been determined Buyer shall pay to Seller, as an adjustment to the
Purchase Price, with interest as provided in Section 2.10(b), an amount equal to
(x) 1.3 multiplied by (y) the amount of such excess.

(b)    The amount of any payment or distribution pursuant to Section 2.10(a)
shall bear interest from and including the Closing Date to but excluding the
date of payment at a rate per annum equal to the prime rate as published in the
Wall Street Journal, Eastern Edition in effect from time to time during the
period from the Closing Date to the date of payment. Such interest shall be
payable at the same time as the payment to which it relates and shall be
calculated daily on the basis of a year of 365 days and the actual number of
days elapsed.

ARTICLE 3 EARNOUT

Section 3.01. Earn-Out Payments.

(a)In addition to the payments made pursuant to Article 2, Buyer will pay, or
cause to be paid, to Seller, subject to Section 3.01(b), Section 6.06 and
Section 12.06(a), twenty-five percent (25%) of the Adjusted Pre-Tax Net Income
of the Business calculated for each of the following periods (the amounts
payable pursuant to this Section 3.01 being referred to as “Earn-Out Payments”):
(i) from the Closing Date to December 31, 2014;
(ii)calendar year 2015; (iii) calendar year 2016; (iv) calendar year 2017; (v)
calendar year 2018; and (vi) from January 1, 2018 to the five (5) year
anniversary of the Closing Date. The maximum aggregate Earn-Out Payments payable
pursuant to this Section 3.01 shall be equal to $6,000,000; provided that, for
the avoidance of doubt, such maximum amount shall be decreased by any amounts
set off, held back or deducted pursuant to Section 3.01(b), Section 6.06 or
Section 12.06(a).

(b)For the avoidance of doubt, Seller shall be responsible for any incremental
investment banking or other incentive-based fees, including any such fees of
Zelman Partners, that becomes payable as a result of the achievement of any such
Earn-Out Payments, and Buyer shall be entitled to hold back the amount of such
incremental fees from any Earn-Out Payment prior to making any such Earn-Out
Payment to Seller;

provided that Buyer shall timely deliver any such held back amounts to the
payees of such incremental fees.

Section 3.02. Earn-Out Notice. As soon as reasonably practicable (but no later
than 60 days following the end of the period to which the applicable Earn-Out
Payment relates), Buyer shall deliver to Seller a certificate stating Buyer’s
calculation of the applicable Earn-Out Payment (an “Earn-Out Notice”). If Seller
disagrees with Buyer’s calculation of the applicable Earn-Out Payment, Seller
may, within 20 days after receipt of the Earn-Out Notice (including reasonably
detailed supporting calculations), deliver a written notice to Buyer disagreeing
with such calculation and setting forth Seller’s calculation of the applicable
Earn-Out Payment (an “Earn-Out Notice Objection”). If Seller fails to deliver an
Earn-Out Notice Objection within such 20 day period, Buyer’s calculation of the
Earn-Out Payment shall be binding upon the parties. If Seller delivers an
Earn-Out Notice Objection to Seller, and Buyer and Seller are unable to agree,
within 15 days after the date of the Earn-Out Notice Objection, to the
applicable Earn-Out Payment, the parties shall select an Accounting Referee to
resolve such dispute. The Accounting Referee shall deliver to Seller and Buyer,
as promptly as practicable, a report setting forth such calculation. Such report
shall be final and binding upon Seller and Buyer. If the applicable Earn-Out
Payment as determined by the Accounting Referee is closer in amount to Buyer’s
calculation of the applicable Earn-Out Payment as set forth on the Earn-Out
Notice than to Seller’s calculation of the applicable Earn-Out Payment as set
forth on the Earn-Out Notice Objection, then Seller shall pay all fees and
expenses of the Accounting Referee in connection with the services provided
pursuant to this Section. If the applicable Earn-Out Payment as determined by
the Accounting Referee is closer in amount to Seller’s calculation of the
applicable Earn-Out Payment as set forth on the Earn-Out Notice Objection than
to Buyer’s calculation of the applicable Earn-Out Payment as set forth on the
Earn-Out Notice, then Buyer shall pay all fees and expenses of the Accounting
Referee in connection with the services provided pursuant to this Section. If
the difference between the applicable Earn-Out Payment as determined by the
Accounting Referee and Buyer’s calculation of the applicable Earn-Out Payment as
set forth on the Earn-Out Notice is equal to the difference between Total Assets
as determined by the Accounting Referee and Seller’s calculation of the
applicable Earn-Out Payment as set forth on the Earn-Out Notice Objection, then
all fees and expenses of the Accounting Referee provided pursuant to this
Section shall be borne one-half by Buyer and one-half by Seller.

Section 3.03. Payment. Buyer shall pay to Seller the applicable Earn-Out
Payment, if any, subject to Section 3.01(b), Section 6.06 and Section 12.06(a),
within 5 days following (a) the earlier to occur of Seller delivering notice to
Buyer that it agrees with the calculation of the applicable Earn-Out Payment as
set forth in the Earn-Out Notice, or the expiration of the period set forth in
Section 3.02 above in which Seller may deliver an Earn-Out Notice Objection, or
(b) if an Earn-Out Notice Objection is delivered by Seller to Buyer, the earlier
to occur of the date of the mutual agreement of Seller and Buyer to the
applicable Earn-Out Payment, or the date the Accounting Referee’s report is
issued pursuant to Section 3.02 above. Notwithstanding anything herein to the
contrary, Buyer shall not be obligated to pay to Seller the Earn-Out Payment
due, if any with respect

to the initial period ended December 31, 2014 until the date that is the one
year anniversary of the Closing Date.

Section 3.04. Post-Closing Efforts; Disclaimers. Except as set forth herein, (i)
this Article 3 shall impose no restrictions on the operations, business or
activities of the Business, Buyer or any Subsidiary of Buyer following the
Closing, (ii) Buyer shall have the right to operate the business and activities
of the Business, Buyer and Subsidiary of Buyer following the Closing in any way
that Buyer deems appropriate in its sole discretion and (iii) Buyer shall have
no obligation to operate the Business in order to achieve or maximize any
Earn-Out Payment. The Parties acknowledge and agree that this Article 3 shall
not create any duty of Buyer to Seller or any successor to or stockholder of
Seller, including any fiduciary duty or any other express or implied duty, other
than a duty of good faith and fair dealing. Notwithstanding the foregoing, Buyer
shall not, and shall not authorize or permit its Subsidiaries to, take any
action with the sole intent of avoiding or reducing the payment of any Earn-Out
Payment.

Section 3.05. Earn-Out Payments Not a Security. The Parties do not intend the
right of Seller (or any successor to or stockholder of Seller, as applicable) to
receive Earn- Out Payments to be a security. Accordingly, the right of Seller
(or any successor to or stockholder of Seller, as applicable) to receive
Earn-Out Payments (i) shall not be represented by a certificate, (ii) does not
represent an ownership interest in Buyer or the Business, and (iii) does not
entitle Seller (or any successor to or stockholder of Seller, as applicable) to
any rights common to stockholders of Buyer other than as expressly set forth
herein. The right of Seller (or any successor to or stockholder of Seller, as
applicable) to receive Earn-Out Payments pursuant to this Agreement shall not be
transferable without the prior written consent of Buyer.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER

Subject to Section 14.03, except as set forth in the Seller Disclosure Schedule,
Seller represents and warrants to Buyer as of the date hereof and as of the
Closing Date that:

Section 4.01. Corporate Existence and Power. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted. Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. Seller has heretofore delivered to Buyer true and complete
copies of the certificate of incorporation and bylaws of Seller as currently in
effect.

Section 4.02. Corporate Authorization. (a) The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby are within Seller’s corporate powers. This Agreement
constitutes a valid and binding agreement of Seller enforceable against Seller
in accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws affecting
creditors’ rights generally and general principles of equity).

(b)At a meeting duly called and held, or by unanimous written consent, the Board
of Directors of Seller (i) has determined that the sale of all or substantially
all of the assets of Seller is fair to and in the best interests of the
stockholders of Seller and has approved this Agreement and the other
transactions contemplated hereby and (ii) has recommended the approval and
adoption of this Agreement by the stockholders of Seller in accordance with the
DGCL (the “Seller Board Approval”) and no other corporate actions on the part of
the Board of Directors of Seller are necessary in connection with the
authorization, execution and delivery of this Agreement by Seller and the
performance by Seller of the transactions contemplated hereby. Seller has
delivered to Buyer a certified copy of the Seller Board Approval which has not
been, and at the Closing will not have been, revoked, rescinded or amended.

(c)The adoption and approval of this Agreement by the holders of at least a
majority of the outstanding shares of common stock and preferred stock of Seller
(voting together as a single class and on an as-converted to common stock basis)
(the “Seller Stockholder Approval”) constitutes all of the votes, consents and
approvals required of the stockholders of Seller for the authorization,
execution and delivery of this Agreement by Seller and the performance by Seller
of the transactions contemplated hereby. The holders of at least a majority of
the outstanding shares of common stock and preferred stock of Seller have
delivered a Written Consent. The execution and delivery of the Written Consents
constitute the valid and effective Seller Stockholder Approval. At the Closing,
the Written Consents will not have been revoked, rescinded or amended.

Section 4.03. Governmental Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
Governmental Authority.

Section 4.04. Noncontravention. The execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) violate the certificate of incorporation or
bylaws of Seller or any Subsidiary of Seller, (ii) assuming compliance with the
matters referred to in Section 4.03, violate any Applicable Law, (iii) assuming
the obtaining of all Consents, constitute a default or an event that, with or
without notice or lapse of time or both, would constitute a default under or
give rise to any right of termination, cancellation or acceleration of any right
or obligation of Buyer or to a loss of any benefit relating to the Business to
which Seller or any Subsidiary of Seller is entitled under any provision of any
agreement or other

instrument binding upon Seller or by which any of the Purchased Assets is or may
be bound or (iv) result in the creation or imposition of any Lien on any
Purchased Asset.

Section 4.05. Consents. Section 4.05 of the Seller Disclosure Schedule sets
forth each agreement, contract or other instrument binding upon Seller or any
Subsidiary of Seller or any Permit (including any Environmental Permit)
requiring a consent or other action by any Person as a result of the execution,
delivery and performance of this Agreement (the “Consents”).

Section 4.06. Financial Statements. Section 4.06 of the Seller Disclosure
Statement sets forth a true and complete copy of the audited consolidated
balance sheets of Seller as of December 31, 2013, 2012 and 2011 and the related
audited consolidated statements of income and cash flows of Seller for each of
the years ended December 31, 2013, 2012 and 2011 (together, the “Financial
Statements”). The Financial Statements fairly present, in conformity with GAAP
applied on a consistent basis (except as may be indicated in the notes thereto),
the financial position of Seller as of the dates thereof and its results of
operations and cash flows for the periods then ended.

Section 4.07. Absence of Certain Changes. (a) Since the Balance Sheet Date,
there has not been any event, occurrence, development or state of circumstances
or facts that has had or would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.

(b)Since the Balance Sheet Date until the date hereof, the Business has been
conducted in the ordinary course consistent with past practices and neither
Seller nor any of its Subsidiaries has:

(i)(A) declared, set aside or paid any dividend or other distribution with
respect to any shares of the capital stock of Seller or any of its Subsidiaries,
or any redemption, repurchase or other acquisition by Seller or any of its
Subsidiaries of any outstanding shares of the capitals stock or other securities
of Seller or any of its Subsidiaries or (B) made any other payment to or for the
benefit of any equityholder of Seller or any Affiliate of any equityholder of
Seller (other than Seller or any of its Subsidiaries), including any return of
capital, interest payment, management charge, service charge, consultancy or
other fee, or any full or partial repayment of loans (collectively, “Restricted
Payments”);

(ii)incurred any capital expenditures or any obligations or liabilities with
respect to the Business, except for those included in the operating plan
attached as Section 4.07(b)(ii) of the Seller Disclosure Schedules (the “2014
Operating Plan”);

(iii)acquired (by merger, consolidation, acquisition of stock or assets or
otherwise), directly or indirectly, any assets, securities, properties,
interests or businesses for the conduct of the Business, other than (A) supplies
in the ordinary

course of business in a manner that is consistent with past practice and (B) as
provided for in the 2014 Operating Plan;

(iv)sold, leased, sublicensed, licensed, assigned, abandoned, transferred or
otherwise disposed of, or created or incurred any Lien on, any Purchased Assets,
other than sales of inventory in the ordinary course of business consistent with
past practice;

(v)materially amended, modified, terminated, entered into, renewed or extended
any Real Property Lease;

(vi)made any loans, advances or capital contributions to, or investments in, any
other Person, other than in the ordinary course of business consistent with past
practice;

(vii)created, incurred, assumed, suffered to exist or otherwise be liable with
respect to any indebtedness for borrowed money, or guarantees thereof;

(viii)(A) entered into any agreement or arrangement that limits or otherwise
restricts in any material respect the conduct of Seller, the Business or any of
their respective Affiliates or any successor thereto or that could, after the
Closing Date, limit or restrict in any material respect the Business, Buyer or
any of their respective Affiliates, from engaging or competing in any line of
business, in any location or with any Person or (B) entered into, amended or
modified in any material respect or terminated any contract material to Seller
or the Business or otherwise waived, released or assigned any material rights,
claims or benefits of the Business;

(ix)(A) granted or increased any severance or termination pay to (or amend any
existing arrangement with) any director, officer or employee, (B) increased
benefits payable under any existing severance or termination pay policies or
employment agreements with employees, officers or directors, (C) entered into
any employment, deferred compensation or other similar agreement (or amend any
such existing agreement) with any director, officer or employee, (D)
established, adopted or amended (except as required by Applicable Law) any
collective bargaining, bonus, profit-sharing, thrift, pension, retirement,
deferred compensation, compensation, stock option, restricted stock or other
benefit plan or arrangement covering any director, officer or employee or (E)
increased compensation, bonus or other benefits payable to any director, officer
or employee;

(x)changed the methods of accounting or accounting practice by Seller, except as
required by concurrent changes in GAAP as agreed to by its independent public
accountants;

(xi)settled, or offered or proposed to settle, (A) any material litigation,
investigation, arbitration, proceeding or other claim involving or against
Seller or

the Business or (B) any litigation, arbitration, proceeding or dispute that
relates to the transactions contemplated hereby; or

(xii)
agreed, resolved or committed to do any of the foregoing.

Section 4.08. No Undisclosed Material Liabilities. To Seller’s Knowledge, there
are no liabilities of Seller or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other than:

(a)liabilities provided for in the Balance Sheet or disclosed in the notes
thereto;

(b)liabilities disclosed on Section 4.08 of the Seller Disclosure Schedule; and

(c)other undisclosed liabilities which, individually or in the aggregate, are
not material to Seller, the Business or the Purchased Assets, taken as a whole.

Section 4.09. Material Contracts. (a) Except for those disclosed in Section
4.09(a) of the Seller Disclosure Schedule (other than any agreement entered
into, modified or amended after the date hereof pursuant to and in accordance
with Section 6.01(h)), neither Seller nor any of its Subsidiaries is a party to
or bound by:

(i)any lease or sublease of personal property providing for annual rentals of
$25,000 or more;

(ii)any agreement (including option agreements) for the purchase of materials,
supplies, goods, services, equipment or other assets or for the construction or
development of buildings or other improvements or infrastructure, in each case
providing for either (A) annual payments by Seller or its Subsidiaries of
$25,000 or more or (B) aggregate payments by Seller or its Subsidiaries of
$50,000 or more;

(iii)any sales, distribution or other similar agreement providing for the sale
by Seller or its Subsidiaries of materials, supplies, goods, services, equipment
or other assets that provides for either (A) annual payments to Seller or its
Subsidiaries of $25,000 or more or (B) aggregate payments to Seller or its
Subsidiaries of $50,000 or more;

(iv)any partnership, joint venture or other similar agreement or arrangement;

(v)any agreement relating to the acquisition or disposition of any business
(whether by merger, sale of stock, sale of assets or otherwise);

(vi)any agreement relating to Indebtedness, except any such agreement with an
aggregate outstanding principal amount not exceeding $25,000 and which may be
prepaid at Closing without the payment of any penalty;

(vii)
any option, license, franchise or similar agreement;

(viii)any agreement pursuant to which Seller or any of its Subsidiaries obtains
or grants the right to use, or a covenant not to be sued under, any Intellectual
Property Right (excluding licenses for commercial “off-the-shelf” computer
software that are generally available on nondiscriminatory pricing terms) or
Building Design;

(ix)any agency, dealer, sales representative, marketing or other similar
agreement;

(x)any agreement that (A) limits the freedom of Seller or its Subsidiaries (or
which would so limit the freedom of Buyer or its Subsidiaries after the Closing
Date) to (1) compete in any line of business or with any Person or in any area
or to own, operate, sell, transfer, pledge or otherwise dispose of or encumber
any Purchased Asset or (2) solicit, hire, retain or attempt to hire or retain
any employee of any Person or (B) provides for “most favored nations” terms or
establishes an exclusive sale or purchase obligation with respect to any product
or any geographic location;

(xi)any agreement with or for the benefit of any Affiliate of Seller or any
director or officer of Seller or any of its Affiliates;

(xii)any agreement providing for payment of any Restricted Payments; or

(xiii)any other agreement, commitment, arrangement or plan not made in the
ordinary course of business that is material to the Business.

(b)    Each agreement (i) required to be disclosed pursuant to this Section
and/or
(ii) entered into or amended after the date hereof pursuant to or in accordance
with Section 6.01(h) (each Contract in clause (i) and/or clause (ii), a
“Material Contract”) is a valid and binding agreement of Seller or its
Subsidiaries, as applicable, and is in full force and effect, and none of Seller
or its Subsidiaries, as applicable, or, to the Knowledge of Seller, any other
party thereto is in default or breach in any material respect under the terms of
any such Material Contract, and, to the Knowledge of Seller, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute any event of default thereunder. True and complete copies of each
such Material Contract have been delivered to Buyer.

Section 4.10. Litigation. There is no action, suit, investigation or proceeding
(or any basis therefor) pending against, or to the Knowledge of Seller,
threatened against or

affecting, Seller, the Business or any Purchased Asset before (or, in the case
of threatened actions, suits, investigations or proceedings, would be before)
any Governmental Authority or arbitrator which, individually or in the
aggregate, if determined or resolved adversely in accordance with the
plaintiff’s demands, could reasonably be expected to be material to Seller, the
Business or the Purchased Assets, or which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.

Section 4.11. Compliance with Laws and Court Orders. Neither Seller nor any of
its Subsidiaries is in violation of, has since January 1, 2009 violated, or, to
the Knowledge of Seller, is under investigation with respect to or has been
threatened to be charged with or given notice of any violation of, any
Applicable Law to which Seller, the Business or the Purchased Assets are subject
. There is no judgment, decree, injunction, rule or order of any arbitrator or
Governmental Authority outstanding against Seller or any of its Subsidiaries
that has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Seller, the Purchased Assets or the
Business or that in any manner seeks to prevent, enjoin, alter or materially
delay the consummation of the transactions contemplated by this Agreement.

Section 4.12. Properties. (a) Section 4.12(a) of the Seller Disclosure Schedule
sets forth a true and complete list of all Owned Real Property. As of the date
hereof, (i) Seller or one of its Subsidiaries, as applicable, has good and
marketable fee simple title to all Owned Real Property, in each case free and
clear of all Liens, (ii) Seller or its Subsidiaries have not leased or otherwise
granted to any Person the right to use or occupy such Owned Real Property or any
portion thereof and (iii) there are no reversion rights, outstanding options,
rights of first offer or rights of first refusal in favor of any other Person to
purchase, lease, occupy or otherwise utilize the Owned Real Property or any
portion thereof or interest therein.

(b)Section 4.12(b) of the Seller Disclosure Schedule sets forth a true and
complete list, as of the date hereof, of all Optioned Real Property. Seller or
one of its Subsidiaries, as applicable, has a valid option to acquire all
Optioned Real Property pursuant to and in accordance with the terms of the
relevant option or purchase agreement, in each case free and clear of all Liens.
Seller has made available to Buyer a true and complete copy of each material
option or purchase agreement under which the Optioned Real Property is held.
There is no material default (or any event which with notice or lapse of time or
both would constitute a default) under any such agreement by Seller or any
Subsidiary of Seller or, to the Knowledge of Seller, by any other party thereto.

(c)Section 4.12(c) of the Seller Disclosure Schedule sets forth a true and
complete list, as of the date hereof, of all Leased Real Property and each
lease, sublease, license or other Contract pursuant to which Seller or one of
its Subsidiaries occupies such Leased Real Property (each, a “Real Property
Lease”). Seller or one of its Subsidiaries, as applicable, has good and valid
title to the leasehold estates in all Leased Real Property, in each case free
and clear of all Liens and is in possession of each property purported to be
leased, subleased or licensed under the applicable Real Property Lease. Each
Real Property
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Lease is valid and binding on Seller or Subsidiary of Seller party thereto,
enforceable in accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting generally the
enforcement of creditors’ rights and subject to general principles of equity).
The Seller or one of its Subsidiaries, and, to Seller’s Knowledge, each of the
other parties thereto, has performed in all material respects all material
obligations required to be performed by it under each Real Property Lease. There
are no written or oral subleases, licenses, concessions or other contracts
granting to any Person other than Seller or one of its Subsidiaries the right to
use or occupy any Leased Real Property or any portion thereof. Neither Seller
nor its Subsidiaries have collaterally assigned or granted any other security
interest in any Real Property Lease or any interest therein. There are no
developments affecting any Leased Real Property pending, or to the Knowledge of
Seller, threatened, which individually or in the aggregate, impair, or would
reasonably be expected to impair, the value of the Leased Real Property to which
they relate or the present or intended use, occupancy and/or operation of such
Leased Real Property. Seller has made available to Buyer a true and complete
copy of each lease agreement under which the Leased Real Property is held
(including all amendments, extensions, renewals, guaranties and other agreements
with respect thereto). There is no material default (or any event which with
notice or lapse of time or both would constitute a default) under any such lease
by Seller or any Subsidiary of Seller or, to the Knowledge of Seller, by any
other party thereto.

(d)Section 4.12(d) of the Seller Disclosure Schedule correctly describes all
tangible personal property used or held for use in the Business included in the
Purchased Assets, including machinery, equipment, furniture, vehicles, fuel and
other trade fixtures and fixed assets, which Seller or one of its Subsidiaries,
as applicable, owns, leases or subleases. Seller or one of its Subsidiaries, as
applicable, has good and valid title to all tangible and intangible personal
properties and assets necessary for the conduct of the Business as currently
conducted (or to the leasehold estates in the case of leased personal property),
free and clear of all Liens, except for any failure to have good and valid title
that, individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect.

(e)The Real Property includes all real property, and only such real property, as
is used or held for use in connection with the conduct of the business and
operations of the Business as heretofore conducted by Seller and as presently
planned to be conducted by Buyer.

(f)To Seller’s Knowledge, there is no pending or threatened condemnation or
eminent domain proceeding with respect to any Real Property; no
developer-related charges or assessments imposed by any Governmental Authority
or other Person for improvements (or otherwise) against any Real Property held
for development are unpaid, except for charges or assessments reflected in the
Balance Sheet or incurred after the date of the Balance Sheet in the ordinary
course of business; no Applicable Law or judgment, decree, injunction, rule or
order of any arbitrator or Governmental Authority exists or is pending before a
Governmental Authority that restricts the development or sale of Real Property
that is currently under development or being held for sale by Seller or any of
its

Subsidiaries; with respect to any Real Property that is under development as a
subdivision or community, such subdivisions or communities under development are
or will be supplied with utilities, including electricity, water, telephone,
sanitary sewer and storm sewer, and other services necessary for the intended
operation of such subdivisions or communities, all of which utilities and
services are adequate for such operation pursuant to all Applicable Laws; the
Real Property, and its continued use, occupancy and operation as currently used,
occupied and operated, does not constitute a nonconforming use under any
Applicable Law relating to building, zoning, subdivision and other land use.

(g)No Real Property is located in a flood plain or an area that has been
identified by the Secretary of Housing and Urban Development or any other
Governmental Authority as an area having special flood hazards within the
meaning of the national Flood Insurance Act of 1968.

(h)Policies of title insurance (each a “Title Insurance Policy”) have been
issued insuring, as of the effective date of each such Title Insurance Policy,
the fee simple title of Seller or one of its Subsidiaries, as applicable, to or
in all Owned Real Property and Optioned Real Property, subject to the matters
disclosed and exclusions listed on each such Title Insurance Policy. Section
4.12(h) of the Seller Disclosure Schedule sets forth a list of all such Title
Insurance Policies.

(i)To Seller’s Knowledge, no defective products have been used in the buildings
and structures (including Homes) included in the Purchased Assets. Subject to
the foregoing limitation as to Seller’s Knowledge regarding defective products,
the buildings, structures and equipment included in the Purchased Assets have no
material defects, are in good operating condition and repair and have been
reasonably maintained consistent with standards generally followed in the
industry (giving due account to the age and length of use of same, ordinary wear
and tear excepted), are adequate and suitable for their present and intended
uses and, in the case of buildings and other structures (including the roofs
thereof), are structurally sound.

(j)None of the Purchased Assets, other than the Seller’s Class B Units in
Stonegate and CHI’s Class B Units in UC Ventures, is an equity interest in an
entity.

Section 4.13. Equity Interests. (a) Seller holds its Class B Units in Stonegate
free and clear of all Liens and, at the Closing, will transfer to Buyer good and
valid title to such Class B Units free and clear of all Liens.

(b)Section 4.13(b) of the Seller Disclosure Schedule sets forth all of the
documents and agreements (together with any and all amendments thereto) which
govern the rights, preferences or privileges of the Class B Units or other
equity interests in Stonegate, or the rights or obligations of the holder of
such equity interests (the “Stonegate Governance Documents”). Seller has
previously made available to Buyer true and correct copies, as amended to the
date of this Agreement, of all of such Stonegate Governance Documents. Such
Stonegate Governance Documents are, to Seller’s Knowledge, valid and

binding and are in full force and effect, and Seller has no reason to believe
that any of such agreements will not be in full force and effect following the
Closing.

(c)Following the Closing, Seller will retain no rights in the Class B Units in
Stonegate or under any of the Stonegate Governance Documents. Seller has no
equity interest in Stonegate other than the Class B Units being sold pursuant to
this Agreement.

(d)CHI holds its Class B Units in UC Ventures free and clear of all Liens and,
at the Closing, will transfer to Buyer good and valid title to such Class B
Units free and clear of all Liens.

(e)Section 4.13(b) of the Seller Disclosure Schedule sets forth all of the all
of the documents and agreements (together with any and all amendments thereto)
which govern the rights, preferences or privileges of the Class B Units or other
equity interests in UC Ventures, or the rights or obligations of the holder of
such equity interests (the “UC Ventures Governance Documents”). Seller has
previously made available to Buyer true and correct copies, as amended to the
date of this Agreement, of all of such UC Ventures Governance Documents. Such UC
Ventures Governance Documents are, to Seller’s Knowledge, valid and binding and
are in full force and effect, and Seller has no reason to believe that any of
such agreements will not be in full force and effect following the Closing.

(f)Following the Closing, neither Seller nor CHI will retain any rights in the
Class B Units in UC Ventures or under any of the UC Ventures Governance
Documents. Neither Seller nor CHI has any equity interest in UC Ventures other
than the Class B Units being sold pursuant to this Agreement.

Section 4.14. Sufficiency of the Purchased Assets. The Purchased Assets
constitute all of the tangible and intangible property and assets used or held
for use in the Business and are adequate to conduct the Business as currently
conducted and as planned to be conducted by Buyer.

Section 4.15. Development of Properties; Products. (a) All building and other
improvements situated on or forming part of the real properties owned by or
previously sold or constructed within the past ten years (and for which the
applicable statute of limitations has not yet expired) by or on behalf of Seller
or one of its Subsidiaries, as applicable, were completed in a good and
competent manner, free of material defect, and in all material respects in
accordance with Applicable Law.

(b)As of the date hereof, there is no material impediment (including any
impediments relating to land or soil conditions or the protection of endangered
species) to the development of, or to the approval for the development of, any
project located or to be located on any Real Property at which Seller or one of
its Subsidiaries is currently selling residential units, including in respect of
access to streets, utilities, water, gas and other similar services in the
manner in which Seller currently anticipates building thereon.

(c)As of the date hereof, all Real Property intended to be used for development
or under development is, or is expected to be at the time of such development,
suitable in all material respects under current planning regulations, or under
amendments to, or relief from, planning regulations of a type that would be
expected to be approved upon application, for developing and constructing
housing projects or other developments in the manner in which Seller currently
anticipates building thereon.

(d)Section 4.15(d) of the Seller Disclosure Schedule sets forth the general
planning status and public report status, if applicable, as of the date hereof
of all development projects owned by Seller or one of its Subsidiaries.

(e)Neither Seller nor any of its Subsidiaries has any obligation under any
Applicable Law to construct any on-site or off-site infrastructure improvement
with a current estimated cost of more than $50,000 with respect to, or in order
to maximize the number of lots contained in, any project at which Seller or one
of its Subsidiaries, as applicable, is currently selling residential units.

(f)Section 4.15(f) of the Seller Disclosure Schedule sets forth any so-called
“rollback taxes” that, as of the date hereof, are or would reasonably be
expected to become due and payable by Seller with respect to the Purchased
Assets, together with an estimated amount and description thereof.

(g)Section 4.15(g) of the Seller Disclosure Schedule contains a true and
complete list of all letters of credit, bonds and other security provided by
Seller or one of its Subsidiaries, as applicable, to any Governmental Authority
in connection with the development projects of Seller or any of its
Subsidiaries.

Section 4.16. Intellectual Property. (a) Section 4.16(a)(i) of the Seller
Disclosure Schedule contains a true and complete list of each of the
registrations and applications for registrations and other material Intellectual
Property Rights included in the Owned Intellectual Property Rights.

(b)The Licensed Intellectual Property Rights and the Owned Intellectual Property
Rights included in the Purchased Assets together constitute all the Intellectual
Property Rights necessary to, or used or held for use in, the Business as
currently conducted and as planned to be conducted by Buyer. Seller or a
Subsidiary of Seller are the sole owners of all material Owned Intellectual
Property Rights and hold all right, title and interest in and to all material
Owned Intellectual Property Rights and Licensed Intellectual Property Rights,
free and clear of any Lien. There exist no material restrictions on the
disclosure, use, license or transfer of any of the Owned Intellectual Property
Rights. The consummation of the transactions contemplated by this Agreement will
not alter, encumber, impair or extinguish any Owned Intellectual Property Rights
or Licensed Intellectual Property Rights. None of the Owned Intellectual
Property Rights or Licensed Intellectual Property Rights has been adjudged
invalid or unenforceable in whole or in part, and, to the Knowledge of Seller,
all material Owned Intellectual Property Rights and Licensed Intellectual
Property Rights are valid and enforceable.

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(c)Neither Seller nor any Subsidiary of Seller, nor the conduct of the Business,
has materially infringed, misappropriated or otherwise violated any Intellectual
Property Right of any Person, and to the Knowledge of Seller, no Person has
materially infringed, misappropriated or otherwise violated any Owned
Intellectual Property Right. There is no claim, action, suit, investigation or
proceeding pending against, or, to the Knowledge of Seller, threatened against
or affecting, Seller, any of its Subsidiaries, the Business or any Purchased
Assets (i) based upon, or challenging or seeking to deny or restrict, the
validity, scope or enforceability of, or the rights of Seller or any Subsidiary
of Seller in, any of the material Owned Intellectual Property Rights or Licensed
Intellectual Property Rights, (ii) alleging that any material Owned Intellectual
Property Rights, Licensed Intellectual Property Rights, or the use thereof in
the conduct of the Business does or may conflict with or otherwise violate any
rights of any Person or (iii) alleging that Seller or any Subsidiary of Seller,
or any services provided, processes used or products manufactured, used,
imported or sold with respect to the Business has materially infringed,
misappropriated or otherwise violated any Intellectual Property Right of any
Person. Neither Seller nor any Subsidiary of Seller has received from any Person
an offer to license any Intellectual Property Rights of such Person for use in
the Business.

(d)Seller and its Subsidiaries have taken reasonable steps in accordance with
normal industry practice to maintain the confidentiality of all material
Intellectual Property Rights, the value of which to the Business is contingent
upon maintaining the confidentiality thereof, and none of such Intellectual
Property Rights has been disclosed other than to parties bound by written
confidentiality agreements.

(e)Section 4.16(e) of the Seller Disclosure Schedule contains a true and
complete list of each Building Design, and with respect to each such Building
Design, all agreements pursuant to which Seller or any of its Subsidiaries has
obtained any rights with respect to such Building Design.

(f)To the extent any Building Design or Intellectual Property Right relating to
any Building Design has been developed, created or contributed to, by a third
party (including any current or former employee of Seller and its Subsidiaries),
Seller or one of its Subsidiaries, as the case may be, has a written agreement
with such third party with respect thereto, and Seller or one of its
Subsidiaries thereby either (i) has obtained ownership of and is the exclusive
owner of, or (ii) has obtained a valid and unrestricted right to exploit,
sufficient for the conduct of its business as currently conducted or proposed to
be conducted, such Building Design or Intellectual Property Right.

(g)The IT Assets included in the Purchased Assets operate and perform in a
manner that permits the conduct of the Business as currently conducted and as
planned to be conducted by Buyer. Seller has implemented reasonable backup and
disaster recovery technology with respect to such IT Assets, and to the
Knowledge of Seller, no Person has gained unauthorized access to such IT Assets.

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Section 4.17. Insurance Coverage. Section 4.17 of the Seller Disclosure Schedule
contains a list of all insurance policies and fidelity bonds relating to Seller,
the Purchased

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Assets, the business and operations of the Business and its officers and
employees, other than the Title Insurance Policies (collectively, the “Insurance
Policies”). There is no claim by Seller pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds or in respect of which such underwriters
have reserved their rights. All premiums payable under the Insurance Policies
have been timely paid and Seller has otherwise complied fully with the terms and
conditions of the Insurance Policies. The Insurance Policies (or other policies
and bonds providing substantially similar insurance coverage) have been in
effect since January 1, 2009 and remain in full force and effect. The Insurance
Policies are of the type and in amounts customarily carried by Persons
conducting businesses similar to the Business. Seller does not know of any
threatened termination of, premium increase with respect to, or material
alteration of coverage under, any Insurance Policy. After the Closing, Seller
shall continue to have coverage under the Insurance Policies with respect to
events occurring prior to the Closing.

Section 4.18. Licenses and Permits. Section 4.18 of the Seller Disclosure
Schedule correctly describes each Permit, together with the name of the
Governmental Authority issuing such Permit. Except as set forth on Section 4.18
of the Seller Disclosure Schedule, (i) the Permits are valid and in full force
and effect, (ii) neither Seller nor any of its Subsidiaries is in default under,
and no condition exists that with notice or lapse of time or both would
constitute a default under, the Permits and (iii) none of the Permits will be
terminated or impaired or become terminable, in whole or in part, as a result of
the transactions contemplated hereby. Upon consummation of such transactions,
Buyer will, assuming the related Consents have been obtained prior to the
Closing Date, have all of the right, title and interest in all the Permits.

Section 4.19. Inventories. The inventories set forth in the Balance Sheet were
properly stated therein at the lesser of cost or fair market value determined in
accordance with GAAP consistently maintained and applied by Seller. Since the
Balance Sheet Date, the inventories related to the Business have been maintained
in the ordinary course of business. All such inventories are owned free and
clear of all Liens. All of the inventories recorded on the Balance Sheet consist
of, and all inventories related to the Business on the Closing Date will consist
of, items of a quality usable or saleable in the normal course of the Business
consistent with past practices and are and will be in quantities sufficient for
the normal operation of the Business in accordance with past practice.

Section 4.20. Receivables. All accounts, notes receivable and other receivables
(other than receivables collected since the Balance Sheet Date) reflected on the
Balance Sheet are, and all accounts and notes receivable of Seller at the
Closing Date will be, valid, genuine and fully collectible in the aggregate
amount thereof, subject to normal and customary trade discounts, less any
reserves for doubtful accounts recorded on the Balance Sheet. All accounts,
notes receivable and other receivables arising out of or relating to the
Business at the Balance Sheet Date have been included in the Balance Sheet, in
accordance with GAAP applied on a consistent basis.

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Section 4.21. Selling Documents. None of the documents or information delivered
to Buyer in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading.
The financial projections relating to the Business delivered to Buyer are made
in good faith and are based upon reasonable assumptions, and Seller is not aware
of any fact or set of circumstances that would lead it to believe that such
projections are incorrect or misleading in any material respect.

Section 4.22. Finders’ Fees. Except for Zelman Partners LLC (“Zelman Partners”),
whose fees and expenses will be paid by Seller, there is no investment banker,
broker, finder or other intermediary which has been retained by or is authorized
to act on behalf of Seller who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.

Section 4.23. Employees. Section 4.23 of the Seller Disclosure Schedule sets
forth a true and complete list of (a) the names, titles, location, annual
salaries and other compensation of all employees of the Business, and whether
active or inactive, and (b) the wage rates for non-salaried employees of the
Business (by classification). None of such employees and no other key employee
of the Business has indicated to Seller that he or she intends to resign or
retire as a result of the transactions contemplated by this Agreement or
otherwise within one year after the Closing Date. None of such employees is
subject to a collective bargaining agreement.

Section 4.24. Environmental Matters. (a)

(i)In connection with or relating to the Purchased Assets, Business or Real
Property, no notice, notification, demand, request for information, citation,
summons or order has been received, no complaint has been filed, no penalty has
been assessed and no investigation, action, claim, suite, proceeding or review
is pending or, to Seller’s Knowledge, threatened by any Governmental Authority
or other Person with respect to any matters relating to the Purchased Assets,
Business or Real Property and relating to or arising out of any Environmental
Law.

(ii)There are no liabilities arising in connection with or in any way relating
to Seller, Purchased Assets, Business or Real Property of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
arising under or relating to any Environmental Law, and there are no facts,
events, conditions, situations or set of circumstances which could reasonably be
expected to result in or be the basis for any such liability.

(iii)No polychlorinated biphenyls, radioactive material, lead, asbestos-
containing material, incinerator, sump, surface impoundment, lagoon, landfill,
septic, wastewater treatment or other disposal system or underground storage
tank (active or inactive) is or has been present at, on or under any Real
Property or in

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any Purchased Asset or any other property now or previously owned, leased or
operated by Seller.

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(iv)No Hazardous Substance has been discharged, disposed of, dumped, injected,
pumped, deposited, spilled, leaked, emitted or released at, on or under any Real
Property or any other property now or previously owned, leased or operated by
Seller.

(v)No Real Property nor property now or previously owned, leased or operated by
Seller nor any property to which Hazardous Substances located on or resulting
from the use of any Purchased Asset or Real Property have been transported nor
any property to which Seller has, directly or indirectly, transported or
arranged for the transportation of any Hazardous Substances is listed or, to
Seller’s Knowledge, proposed for listing on the National Priorities List
promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any
similar federal, state, local or foreign list of sites requiring investigation
or cleanup.

(vi)Seller is in compliance with all Environmental Laws and has and is in
compliance with all Environmental Permits; such Environmental Permits are valid
and in full force and effect and assuming the related Required Consents and
Other Consents have been obtained prior to the Closing Date, are transferable
and will not be terminated or impaired or become terminable as a result of the
transactions contemplated hereby.

(b)There has been no environmental investigation, study, audit, test, review or
other analysis conducted of which Seller has Knowledge in relation to any
Purchased Asset or Real Property any other property or facility now or
previously owned or leased by Seller which has not been delivered to Buyer at
least 10 days prior to the date hereof.

(c)None of the Purchased Assets or the Real Property is located in New Jersey or
Connecticut.

(d)For purposes of this Section, the term “Seller” shall include any entity
which is, in whole or in part, a predecessor of Seller.

Section 4.25. Taxes. (a) Each of Seller and its Subsidiaries has timely paid, or
caused to be paid, all Taxes required to be paid, the non-payment of which would
result in a Lien on any Purchased Asset, would otherwise adversely affect the
Business or would result in Buyer becoming liable or responsible therefor.

(b)Each of Seller and its Subsidiaries has established, in accordance with GAAP
applied on a basis consistent with that of preceding periods, adequate reserves
for the payment of, and will timely pay, all Taxes which arise from or with
respect to the Purchased Assets or the operation of the Business and are
incurred in or attributable to a Pre-Closing Tax Period, the non-payment of
which would result in a Lien on any

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Purchased Asset, would otherwise adversely affect the Business or would result
in Buyer becoming liable therefor.

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(c)All Tax Returns in respect of the Business and the Purchased Assets required
to have been filed have been or will be timely filed (taking into account any
extension of time to file granted or obtained) and are true and correct in all
material respects.

(d)No Tax Returns are required to be filed in connection with the Business or
the Purchased Assets in any jurisdiction in which such Tax Returns are not
currently being filed.

(e)Neither Seller nor any of its Subsidiaries has received from any Taxing
Authority any written notice of proposed adjustment, deficiency or underpayment
of any Taxes relating to the Business or the Purchased Assets, other than a
proposed adjustment, deficiency or adjustment that has been satisfied by payment
or settlement, or withdrawn.

(f)There is no claim, audit, action, suit, proceeding or investigation now
pending or, to Seller’s Knowledge, threatened with respect to Taxes of the
Business or the Purchased Assets.

(g)To the Knowledge of Seller, each of Stonegate and UC Ventures has filed all
Tax Returns that it is required to file when due in accordance with all
Applicable Laws; all such Tax Returns are true and complete in all respects; and
all Taxes due and payable by Stonegate or UC Ventures have been timely paid, or
withheld and remitted, to the appropriate Taxing Authority, including, without
limitation, employment and sales Taxes.

(h)To the Knowledge of Seller, no deficiencies for Taxes have been proposed,
asserted or assessed in writing against Stonegate or UC Ventures.

(i)To the Knowledge of Seller, no election has been made under Treasury
Regulations Section 301.7701-3 or any similar provision of Tax law to treat
Stonegate or UC Ventures as an association or corporation and each of Stonegate
and UC Ventures has been treated as a partnership for U.S. federal and state
income tax purposes at all times since its formation.

(j)To the Knowledge of Seller, neither Stonegate nor UC Ventures holds any
equity interest, security or other ownership interest in any entity.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER

Subject to Section 14.03, except as disclosed in the Buyer Disclosure Schedule,
Buyer represents and warrants to Seller as of the date hereof and as of the
Closing Date that:

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Section 5.01. Corporate Existence and Power. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
Delaware

and has all corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.

Section 5.02. Corporate Authorization. The execution, delivery and performance
by Buyer of this Agreement and the consummation of the transactions contemplated
hereby are within the corporate powers of Buyer and have been duly authorized by
all necessary corporate action on the part of Buyer. This Agreement constitutes
a valid and binding agreement of Buyer.

Section 5.03. Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby require no material action by or in respect of, or material
filing with, any Governmental Authority other than compliance with any
applicable requirements of the 1934 Act.

Section 5.04. Noncontravention. The execution, delivery and performance by Buyer
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) violate the certificate of incorporation or bylaws of
Buyer or (ii) assuming compliance with the matters referred to in Section 5.03,
violate any material Applicable Law.

Section 5.05. Financing. Buyer has, or will have prior to the Closing,
sufficient cash, available lines of credit or other sources of immediately
available funds to enable it to make payment of the Purchase Price.

Section 5.06. Litigation. There is no action, suit, investigation or proceeding
(or any basis therefor) pending against, or to the knowledge of Buyer threatened
against or affecting, Buyer before (or, in the case of threatened actions,
suits, investigations or proceedings, would be before) any Governmental
Authority or arbitrator which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement.

ARTICLE 6 COVENANTS OF SELLER

Seller agrees that:

Section 6.01. Conduct of the Business. From the date hereof until the Closing
Date, Seller shall conduct the Business in the ordinary course consistent with
past practice and use its best efforts to (i) preserve intact the present
business organization of the Business, (ii) maintain in effect all foreign,
federal, state and local Permits, (iii) keep available the services of the
directors, officers and key employees of Seller and (iv) maintain satisfactory
relationships with the customers, lenders, suppliers and others having material
business relationships of the Business. Without limiting the generality of the

foregoing, except as expressly contemplated by this Agreement, neither Seller
nor any of its Subsidiaries shall:

(a)make any Restricted Payment;

(b)incur any capital expenditures or any obligations or liabilities, except for
those contemplated by the 2014 Operating Budget;

(c)acquire (by merger, consolidation, acquisition of stock or assets or
otherwise), directly or indirectly, any assets (including any real property
assets), securities, properties, interests or businesses, other than (i)
supplies in the ordinary course of business in a manner that is consistent with
past practice and (ii) those acquisitions expressly contemplated by the 2014
Operating Budget;

(d)sell, lease, sublicense, license, assign, abandon, transfer or otherwise
dispose of, or create or incur any Lien on, any Purchased Assets, other than
sales of inventory in the ordinary course of business consistent with past
practice;

Lease;
(e)

amend, modify, terminate, enter into, renew or extend any Real Property

(f)other than in connection with actions permitted by Section 6.01(a) or Section
6.01(c), make any loans, advances or capital contributions to, or investments
in, any other Person with respect to the Business;

(g)create, incur, assume, suffer to exist or otherwise be liable with respect to
any indebtedness for borrowed money or guarantees thereof;

(h)(i) enter into any agreement or arrangement that limits or otherwise
restricts in any material respect the conduct of Seller, the Business or any of
their respective Affiliates or any successor thereto or that could, after the
Closing Date, limit or restrict in any material respect the Business, Buyer or
any of their respective Affiliates, from engaging or competing in any line of
business, in any location or with any Person or (ii) enter into, amend or modify
in any material respect or terminate any contract material to Seller or the
Business or otherwise waived, released or assigned any material rights, claims
or benefits of the Business;

(i)(i) grant or increase any severance or termination pay to (or amend any
existing arrangement with) any director, officer or employee, (ii) increase
benefits payable under any existing severance or termination pay policies or
employment agreements with employees, officers or directors, (iii) enter into
any employment, deferred compensation or other similar agreement (or amend any
such existing agreement) with any director, officer or employee, (iv) establish,
adopt or amend (except as required by Applicable Law) any collective bargaining,
bonus, profit-sharing, thrift, pension, retirement, deferred compensation,
compensation, stock option, restricted stock or other benefit plan or

arrangement covering any director, officer or employee or (v) increase
compensation, bonus or other benefits payable to any director, officer or
employee;

(j)change the methods of accounting or accounting practice of Seller, except as
required by concurrent changes in GAAP as agreed to by its independent public
accountants;

(k)settle, or offer or propose to settle, (i) any litigation, investigation,
arbitration, proceeding or other claim involving or against Seller, the Business
or the Purchased Assets or (ii) any litigation, arbitration, proceeding or
dispute that relates to the transactions contemplated hereby;

(l)take any action that would make any representation or warranty of Seller
hereunder, or omit to take any action necessary to prevent any representation or
warranty of Seller hereunder from being, inaccurate in any respect at, or as of
any time before, the Closing Date; or

(m)
agree, resolve or commit to do any of the foregoing.

Section 6.02. No Solicitation; Other Offers. (a) From the date hereof until the
earlier to occur of the Closing and the termination of this Agreement in
accordance with its terms, neither Seller nor any of its Subsidiaries shall, nor
shall Seller or any of its Subsidiaries authorize or permit any of its or their
Representatives to, directly or indirectly,
(i) solicit, initiate or take any action to knowingly facilitate or knowingly
encourage the submission of any Acquisition Proposal, (ii) enter into or
participate in any discussions or negotiations with, furnish any information
relating to Seller or any of its Subsidiaries or afford access to the business,
properties, assets, books or records of Seller or any of its Subsidiaries to,
otherwise cooperate in any way with, or knowingly assist, participate in,
facilitate or encourage any effort by any Third Party that is seeking to make,
or has made, an Acquisition Proposal, (iii) grant any waiver or release under
any standstill or similar agreement with respect to any class of equity
securities of Seller or any of its Subsidiaries, or (iv) enter into any
agreement in principle, letter of intent, term sheet, merger agreement,
acquisition agreement, option agreement or other similar instrument relating to
an Acquisition Proposal. It is agreed that any violation of the restrictions on
Seller set forth in this Section 6.02 by any Representative of Seller or any of
its Subsidiaries shall be a breach of this Section 6.02 by Seller.

(b)    Seller shall, and shall cause its Subsidiaries and its and their
Representatives to, cease immediately and cause to be terminated any and all
existing activities, discussions or negotiations, if any, with any Third Party
and its Representatives conducted prior to the date hereof with respect to any
Acquisition Proposal.

Section 6.03. Access to Information; Confidentiality. (a) From the date hereof
until the Closing Date, Seller will (i) give Buyer, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of Seller and its Affiliates relating to
the Business, (ii) furnish to Buyer, its

counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Business as
such Persons may reasonably request and (iii) instruct the employees, counsel
and financial advisors of Seller and its Affiliates to cooperate with Buyer in
its investigation of the Business. Any investigation pursuant to this Section
shall be conducted in such manner as not to interfere unreasonably with the
conduct of the business of Seller. No investigation by Buyer or other
information received by Buyer shall operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by Seller hereunder. Without
limiting the generality of the foregoing, Buyer and its agents, employees,
consultants and contractors shall have the right to enter the Real Property to
conduct physical inspections, and to perform such soil, engineering, geologic
and other tests and inspections, as Buyer shall deem suitable, provided,
however, that any tests and inspections pursuant to this Section shall be
conducted in such manner as not to interfere unreasonably with the conduct of
the business of Seller.

(b)After the Closing, Seller and its Affiliates will hold, and will use their
best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by Applicable Law, all confidential documents and
information concerning the Business, except to the extent that such information
can be shown to have been (i) previously known on a nonconfidential basis by
Seller, (ii) in the public domain through no fault of Seller or its Affiliates
or (iii) later lawfully acquired by Seller from sources other than those related
to its prior ownership of the Business. The obligation of Seller and its
Affiliates to hold any such information in confidence shall be satisfied if they
exercise the same care with respect to such information as they would take to
preserve the confidentiality of their own similar information.

(c)On and after the Closing Date, subject to Applicable Law, Seller and its
Affiliates will afford promptly to Buyer and its agents reasonable access to its
books of account, financial and other records (including accountant’s work
papers), information, employees and auditors to the extent necessary or useful
for Buyer in connection with any audit, investigation, dispute or litigation or
any other reasonable business purpose relating to the Business; provided that
any such access by Buyer shall not unreasonably interfere with the conduct of
the business of Seller.

Section 6.04. Notices of Certain Events. Prior to the Closing Date, Seller shall
promptly notify Buyer of:

(a)any notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement;

(b)any notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Agreement;

(c)any actions, suits, claims, investigations or proceedings commenced or, to
its Knowledge threatened against, relating to or involving or otherwise
affecting Seller, the Business or the Purchased Assets that, if pending on the
date of this Agreement, would have been required to have been disclosed pursuant
to Section 4.10 or that relate to the consummation of the transactions
contemplated by this Agreement;

(d)the damage or destruction by fire or other casualty of any Purchased Asset or
part thereof or in the event that any Purchased Asset or part thereof becomes
the subject of any proceeding or, to the Knowledge of Seller, threatened
proceeding for the taking thereof or any part thereof or of any right relating
thereto by condemnation, eminent domain or other similar governmental action;

(e)any inaccuracy of any representation or warranty contained in this Agreement
at any time during the term hereof that could reasonably be expected to cause
the conditions set forth in Sections 11.02(a) not to be satisfied; and

(f)any failure of Seller to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder;

provided, however, that the delivery of any notice pursuant to this Section 6.04
shall not limit or otherwise affect the remedies available hereunder to the
party receiving that notice.

Section 6.05. Non-Competition; Non-Solicitation. (a) During the period beginning
on the Closing Date and ending on the fifth anniversary of the Closing Date (the
“Non- Compete Period”), Seller shall not, and shall not allow any of its
respective Affiliates to, directly own any interest in, manage, control,
participate in (whether as an owner, operator, franchisor, franchisee, creditor,
advisor, representative or otherwise), consult, render services, organize, plan
to organize or in any manner engage, or make preparation to engage, in any
homebuilding business or enterprise in North Carolina, South Carolina or
Tennessee (a “Competitive Business”). Seller expressly acknowledges and agrees
that each and every restriction imposed by this Section 6.05(a) is reasonable
with respect to subject matter, time period and geographical area.

(b)Seller agrees that, during the period beginning on the Closing Date and
ending on the fifth anniversary of the Closing Date, without the prior written
consent of Buyer, it shall not, and shall not permit any of its Affiliates to,
directly or indirectly,

(i)solicit for the purpose of offering employment to or hiring (whether as an
employee, consultant, agent, independent contractor or otherwise) or hire any
Hired Employee without the prior written consent of Buyer; or

(ii)solicit or attempt to induce any supplier or other material business
relation of the Business into any business relationship which might materially
harm

Buyer or any of its Affiliates or disparage the Buyer or any of its Affiliates
or any of their respective officers, directors, principals or employees.

Section 6.06. Payment of Excluded Liabilities; Limitations on Distributions and
Dissolution. (a) Seller shall pay in full, or make adequate provision for the
payment in full of, all of the Excluded Liabilities for which payment is not
made pursuant to Section 2.08. If any such Excluded Liabilities are not so paid
or provided for, or if Buyer reasonably determines that failure to make any
payments will impair Buyer’s use or enjoyment of the Purchased Assets or the
conduct of the Business as heretofore conducted by Seller and as presently
planned to be conducted by Buyer, Buyer may, at any time after the Closing Date,
elect to make all such payments directly (but shall have no obligation to do so)
and set off and deduct the full amount of all such payments from any payments
that become payable to Seller pursuant to Section 3.01.

(b)    Seller shall not dissolve, or make any distribution of the proceeds
received pursuant to this Agreement to its Affiliates or its equityholders,
until Seller’s payment, or adequate provision for the payment, of all of its
obligations pursuant to this Section 6.06 and, in any event, shall hold at least
$200,000 until the earlier to occur of (i) the date of the final determination
of Final Total Assets as set forth in Section 2.9, or (ii) the payment of the
amount of any adjustment to the Purchase Price as set forth in Section 2.10.

Section 6.07. Warranty Services Agreement. At the Closing, Seller and Buyer
shall enter into the Warranty Services Agreement pursuant to which Buyer or an
Affiliate of Buyer shall provide repair services to purchasers of homes from
Seller prior to the Closing Date that Seller is obligated to deliver pursuant to
(i) the terms of the warranty provisions of any sales agreements or (ii) any
obligation imposed by Applicable Law, including but not limited to any legal
duty of workman like construction using ordinary care. The cost for such
services as specified in the Warranty Services Agreement shall be satisfied
first from any amounts available in the Warranty Account and thereafter shall be
paid directly by Seller.

Section 6.08. Seller Insurance Policies. (a) Seller shall use its reasonable
best efforts to provide that Buyer is named as an additional insured with
respect to each of the Insurance Policies, including all those identified on
Section 4.17 of the Seller Disclosure Schedule.

(b)    Seller shall take all steps required to maintain coverage under any
Insurance Policies for at least two years following the Closing Date.

ARTICLE 7 COVENANTS OF BUYER

Buyer agrees that:

Section 7.01. Confidentiality. Prior to the Closing Date and after any
termination of this Agreement, Buyer and its Affiliates will hold, and will use
their best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by Applicable Law, all confidential documents and
information concerning the Business or Seller furnished to Buyer or its
Affiliates in connection with the transactions contemplated by this Agreement,
except to the extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by Buyer, (ii) in the public domain
through no fault of Buyer or
(iii)later lawfully acquired by Buyer from sources other than Seller; provided
that Buyer may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement and to its lenders or other Persons
in connection with obtaining the financing for the transactions contemplated by
this Agreement so long as such Persons are informed by Buyer of the confidential
nature of such information and are directed by Buyer to treat such information
confidentially. The obligation of Buyer and its Affiliates to hold any such
information in confidence shall be satisfied if they exercise the same care with
respect to such information as they would take to preserve the confidentiality
of their own similar information.

Section 7.02. Foreign Qualifications. Within thirty (30) days after the Closing
Date, Seller shall be duly qualified to do business as a foreign company and
shall be in good standing in the states of North Carolina, South Carolina and
Tennessee.

ARTICLE 8 COVENANTS OF BUYER AND SELLER

Buyer and Seller agree that:

Section 8.01. Reasonable Best Efforts; Further Assurances. (a) Subject to the
terms and conditions of this Agreement, Buyer and Seller will use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under Applicable Law to
consummate the transactions contemplated by this Agreement, including (i)
preparing and filing as promptly as practicable with any Governmental Authority
or other third party all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information, applications
and other documents and (ii) obtaining and maintaining all approvals, consents,
registrations, permits, authorizations and other confirmations required to be
obtained from any Governmental Authority or other third party that are
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement; provided that the parties hereto understand and agree that the
reasonable best efforts of any party hereto shall not be deemed to include (i)
entering into any settlement, undertaking, consent decree, stipulation or
agreement with any Governmental Authority in connection with the transactions
contemplated hereby or (ii) divesting or otherwise holding separate (including
by establishing a trust or otherwise), or taking any other action (or otherwise
agreeing to

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do any of the foregoing) with respect to the Business or the Purchased Assets or
any assets or business of Buyer or any of its Affiliates. Seller and Buyer agree
to execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated by
this Agreement and to vest in Buyer good and, in the case of owned Real
Property, marketable title to the Purchased Assets.

(b)    Seller hereby constitutes and appoints, effective as of the Closing Date,
Buyer and its successors and assigns as the true and lawful attorney of Seller
with full power of substitution in the name of Buyer, or in the name of Seller
but for the benefit of Buyer, (i) to collect for the account of Buyer any items
of Purchased Assets and (ii) to institute and prosecute all proceedings which
Buyer may in its sole discretion deem proper in order to assert or enforce any
right, title or interest in, to or under the Purchased Assets, and to defend or
compromise any and all actions, suits or proceedings in respect of the Purchased
Assets. Buyer shall be entitled to retain for its own account any amounts
collected pursuant to the foregoing powers, including any amounts payable as
interest in respect thereof.

Section 8.02. Certain Filings. Seller and Buyer shall cooperate with one another
(i)in determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (ii) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers.

Section 8.03. Public Announcements. Seller agrees to obtain Buyer’s written
consent prior to any press release or making any public statement with respect
to this Agreement or the transactions contemplated hereby.

Section 8.04. WARN Act. The parties agree to cooperate in good faith to
determine whether any notification may be required under the Worker Adjustment
and Retraining Notification Act (the “WARN Act”) as a result of the transactions
contemplated by this Agreement. Buyer will be responsible for providing any
notification that may be required under the WARN Act with respect to any Hired
Employees. Seller will be responsible for providing any notification that may be
required under the WARN Act with respect to any employees of the Business that
are not Hired Employees, provided that Buyer has given sufficient notice to
enable Seller to provide such timely notification. If Buyer fails to provide
sufficient notice, Buyer shall be liable for any additional expenditure
resulting from the failure to provide notification required under the WARN Act
with respect to any employees of the Business.

ARTICLE 9 TAX MATTERS

Section 9.01. Tax Cooperation; Allocation of Taxes. (a) Buyer and Seller agree
to furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance relating to the Business and the
Purchased Assets (including access to books and records) as is reasonably
necessary for the filing of all Tax Returns, the making of any election relating
to Taxes, the preparation for any audit by any Taxing Authority, and the
prosecution or defense of any claim, suit or proceeding relating to any Tax.
Seller and Buyer shall cooperate with each other in the conduct of any audit or
other proceeding relating to Taxes involving the Purchased Assets or the
Business.

(b)All Apportioned Tax Obligations shall be allocated between the Pre-Closing
Tax Period and the Post-Closing Tax Period based on the number of days of such
taxable period included in the Pre-Closing Tax Period and the number of days of
such taxable period included in the Post-Closing Tax Period. Seller shall be
liable for the proportionate amount of such Apportioned Tax Obligations that is
attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the
proportionate amount of such Apportioned Tax Obligations that is attributable to
the Post-Closing Tax Period. For purposes of Section 2.03(d), the Taxes payable
by Stonegate or UC Ventures that relate to a Pre-Closing Tax Period for a Tax
period that includes but does not end on the Closing Date (x) in the case of any
Taxes other than gross receipts, sales or use Taxes and Taxes based upon or
related to income, shall be deemed to include the amount of such Tax for the
entire Tax period multiplied by a fraction the numerator of which is the number
of days in the Tax period ending on and including the Closing Date and the
denominator of which is the number of days in the entire Tax period, and (y) in
the case of any Tax based upon or related to income and any gross receipts,
sales or use Tax, shall be deemed to include the amount that would be payable if
the relevant Tax period ended on and included the Closing Date.

(c)All Transfer Taxes incurred in connection with the transactions contemplated
by this Agreement shall be borne by Seller, other than such Transfer Taxes
imposed by the state of Tennessee or any local jurisdiction located within the
state of Tennessee, which shall be borne by Buyer. Seller represents and
warrants to Buyer that, with respect to the transactions contemplated by this
agreement, Seller is entitled to an exemption from Transfer Taxes for isolated,
casual or occasional sales in each jurisdiction that would otherwise impose a
Transfer Tax on the transactions. Buyer and Seller shall cooperate in providing
each other with any appropriate resale exemption certifications and other
similar documentation.

(d)Apportioned Tax Obligations and Transfer Taxes shall be timely paid, and all
applicable filings, reports and returns shall be filed, as provided by
Applicable Law. The paying party shall be entitled to reimbursement from the
non-paying party in accordance with Section 9.01(b) or Section 9.01(c), as the
case may be; provided that Seller shall not be required to pay any Apportioned
Tax Obligations and Transfer Taxes reflected in the Estimated Apportioned Tax
Obligations and Transfer Taxes withheld by Buyer pursuant to Section 2.08(d).
Upon payment of any Apportioned Tax Obligation or Transfer Tax

required to be reimbursed by the other party, the paying party shall present a
statement to the non-paying party setting forth the amount of reimbursement to
which Buyer or Seller, as the case may be, is entitled under this Section 9.01,
together with such supporting evidence as is reasonably necessary to calculate
the amount to be reimbursed. Buyer or Seller, as the case may be, shall make
such reimbursement promptly but in no event later than 10 days after the
presentation of such statement. Any payment not made within such time shall bear
shall bear interest from and including the Closing Date to but excluding the
date of payment at a rate per annum equal to the prime rate as published in the
Wall Street Journal, Eastern Edition in effect from time to time during the
period from the Closing Date to the date of payment. Such interest shall be
payable at the same time as the payment to which it relates and shall be
calculated daily on the basis of a year of 365 days and the actual number of
days elapsed.

ARTICLE 10 EMPLOYEE BENEFITS

Section 10.01. ERISA Representations. Seller hereby represents and warrants to
Buyer that:

(a)Section 10.01(a) of the Seller Disclosure Schedule contains a correct and
complete list identifying each material “employee benefit plan,” as defined in
Section 3(3) of ERISA, each employment, severance or similar contract, plan,
arrangement or policy and each other plan or arrangement (written or oral)
providing for compensation, bonuses, profit-sharing, stock option or other
stock- related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance (including any self-insured arrangements), health
or medical benefits, employee assistance program, disability or sick leave
benefits, workers’ compensation, supplemental unemployment benefits, severance
benefits and post- employment or retirement benefits (including compensation,
pension, health, medical or life insurance benefits) which is maintained,
administered or contributed to by Seller or any of its ERISA Affiliates and
covers any employee or former employee of the Business, or with respect to which
Seller or any of its ERISA Affiliates has any liability. Copies of such plans
(and, if applicable, related trust or funding agreements or insurance policies)
and all amendments thereto and written interpretations thereof have been
furnished to Buyer together with the most recent annual report (Form 5500
including, if applicable, Schedule B thereto) and Tax Return (Form 990) prepared
in connection with any such plan or trust. Such plans are referred to
collectively herein as the “Employee Plans.” Seller has provided Buyer with, or
has caused to be provided to Buyer, complete actuarial data (including age,
salary, service and related data) as of the most recent practicable date for
employees of the Business.

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(b)None of Seller, any of its ERISA Affiliates and any predecessor thereof
sponsors, maintains or contributes to, or has in the past sponsored, maintained
or contributed to, any Employee Plan subject to Title IV of ERISA.

(c)None of Seller, any ERISA Affiliate of Seller and any predecessor thereof
contributes to, or has in the past contributed to, any multiemployer plan, as
defined in Section 3(37) of ERISA (a “Multiemployer Plan”).

(d)Each Employee Plan that is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter, or has pending or has
time remaining in which to file, an application for such determination from the
Internal Revenue Service, and Seller is not aware of any reason why any such
determination letter should be revoked or not be reissued. Seller has made
available to Buyer copies of the most recent Internal Revenue Service
determination letters with respect to each such Employee Plan. Each
Employee Plan has been maintained in material compliance with its terms and with
the requirements prescribed by any and all statutes, orders, rules and
regulations, including ERISA and the Code, which are applicable to such Employee
Plan. No material events have occurred with respect to any Employee Plan that
could result in payment or assessment by or against the Business, Buyer or any
of its Affiliates of any material excise taxes under the Code.

(e)There is no current or projected liability in respect of post- employment or
post-retirement health or medical or life insurance benefits for retired, former
or current employees of the Business, except as required to avoid excise tax
under Section 4980B of the Code.

(f)All contributions and payments accrued under each Employee Plan, determined
in accordance with prior funding and accrual practices, as adjusted to include
proportional accruals for the period ending on the Closing Date, will be
discharged and paid on or prior to the Closing Date except to the extent (i)
reflected as a liability on the Closing Balance Sheet or (ii) is an Excluded
Liability. There has been no amendment to, written interpretation of or
announcement (whether or not written) by Seller or any of its Affiliates
relating to, or change in employee participation or coverage under, any Employee
Plan which would increase materially the expense of maintaining such Employee
Plan above the level of the expense incurred in respect thereof for the most
recent fiscal year ended prior to the date hereof.

(g)There is no contract, plan or arrangement (written or otherwise) covering any
employee or former employee of the Business that, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to the terms of Sections 280G of the Code.

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(h)The Purchased Assets are not now nor will they after the passage of time be
subject to any Lien imposed under Code Section 412(n) by reason of the

failure of Seller or its Affiliates to make timely installments or other
payments required by Code Section 412.

(i)No Hired Employee will become entitled to any bonus, retirement, severance,
job security or similar benefit, or the enhancement of any such benefit, as a
result of the transactions contemplated hereby.

(j)There is no action, suit, investigation, audit or proceeding pending against
or involving or, to the Knowledge of Seller, threatened against or involving,
any Employee Plan before any arbitrator or any Governmental Authority.

Section 10.02. Employees and Offers of Employment. On or prior the Closing Date,
Buyer may offer employment to active employees of the Business. Any such offers
shall be at such salary or wage and benefit levels and on such other terms and
conditions as Buyer shall in its sole discretion deem appropriate and shall be
subject to Buyer’s standard employment application process (which shall include
background checks). The employees who accept and commence employment with Buyer
are hereinafter collectively referred to as the “Hired Employees.” Seller will
not take, and will cause each of its subsidiaries not to take, any action which
would impede, hinder, interfere or otherwise compete with Buyer’s effort to hire
any Hired Employees. Buyer shall not assume responsibility for any Hired
Employee until such employee commences employment with Buyer.

Section 10.03. Seller’s Employee Benefit Plans. (a) Seller shall retain all
obligations and liabilities under the Employee Plans in respect of each employee
or former employee (including any beneficiary thereof) who is not a Hired
Employee. Except as expressly set forth herein, Seller or its designated
Affiliate shall retain all liabilities and obligations in respect of benefits
accrued as of the Closing Date by Hired Employees under the Employee Plans, and
neither Buyer nor any of its Affiliates shall have any liability with respect
thereto. No assets of any Employee Plan shall be transferred to Buyer or any of
its Affiliates or to any plan of Buyer or any of its Affiliates. Accrued
benefits or account balances of Hired Employees under the Employee Plans shall
be fully vested as of the Closing Date.

(b)With respect to the Hired Employees (including any beneficiary or dependent
thereof), Seller shall retain all liabilities and obligations arising under the
Employee Plans to the extent any such liability or obligation relates to the
period prior to the Closing Date, including proportional accruals through the
Closing Date and including liabilities and obligations in respect of accruals
through the Closing Date under any bonus plan or arrangement, any vacation
plans, arrangements and policies.

Section 10.04. Buyer Benefit Plans. (a) Buyer or one of its Affiliates will
recognize all service of the Hired Employees with Seller or any of its
Affiliates, only for purposes of eligibility to participate in those employee
benefit plans, within the meaning of Section 3(3) of ERISA, in which the Hired
Employees are enrolled by Buyer or one of its Affiliates immediately after the
Closing Date.

Section 10.05. No Third Party Beneficiaries. No provision of this Article shall
create any third party beneficiary or other rights in any employee or former
employee (including any beneficiary or dependent thereof) of Seller or of any of
its subsidiaries in respect of continued employment (or resumed employment) with
either Buyer or the Businesses or any of their Affiliates and no provision of
this Article 10 shall create any such rights in any such Persons in respect of
any benefits that may be provided, directly or indirectly, under any Employee
Plan or any plan or arrangement which may be established by Buyer or any of its
Affiliates. No provision of this Agreement shall constitute a limitation on
rights to amend, modify or terminate after the Closing Date any such plans or
arrangements of Buyer or any of its Affiliates or change the at-will employment
of any Hired Employee or of any employee of the Business.

ARTICLE 11 CONDITIONS TO CLOSING

Section 11.01. Conditions to Obligations of Buyer and Seller. The obligations of
Buyer and Seller to consummate the Closing are subject to the satisfaction of
the following conditions:

(a)The Seller Stockholder Approval shall have been obtained in accordance with
Applicable Law and be in full force and effect.

(b)No temporary restraining order, preliminary injunction or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition
prohibiting the consummation of the Closing shall be in effect; nor shall any
Applicable Law be enacted, entered or enforced which prohibits the consummation
of the Closing.

(c)All actions by or in respect of or filings with any Governmental Authority
required to permit the consummation of the Closing shall have been taken, made
or obtained.

Section 11.02. Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the Closing is subject to the satisfaction of the following further
conditions:

(a)(i) Seller shall have performed in all material respects all of its
obligations hereunder required to be performed by it on or prior to the Closing
Date and (ii) the representations and warranties of Seller contained in this
Agreement and in any certificate or other writing delivered by Seller pursuant
hereto (A) that are qualified by materiality or Material Adverse Effect shall be
true at and as of the Closing Date as if made at and as of such date, and (B)
that are not qualified by materiality or Material Adverse Effect shall be true
in all material respects at and as of the Closing Date as if made at and as of
such time,

(b)There shall not have occurred and be continuing as of or otherwise arisen
before the Closing any event, occurrence, revelation or development of a state
of circumstances or facts which, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect.

(c)Seller shall have delivered to Buyer a certificate of Seller, executed by the
President of Seller, that each of the conditions set forth in Section 11.02(a)
and Section 11.02(b) has been satisfied.

(d)(i) There shall not be threatened, instituted or pending any action or
proceeding by any Person before any Governmental Authority, (A) seeking to
restrain, prohibit or otherwise interfere with the ownership or operation by
Buyer or any of its Affiliates of all or any material portion of the Purchased
Assets or the business or assets of Buyer or any of its Affiliates or to compel
Buyer or any of its Affiliates to dispose of all or any material portion of the
Purchased Assets or of Buyer or any of its Affiliates or (B) seeking to require
divestiture by Buyer or any of its Affiliates of any Purchased Assets or any
business or assets of Buyer or any of its Affiliates and (ii) there shall not be
any action taken, or any Applicable Law proposed, enacted, enforced,
promulgated, issued or deemed applicable to the purchase of the Purchased
Assets, by any Governmental Authority that, in the reasonable judgment of Buyer
could, directly or indirectly, result in any of the consequences referred to in
clauses (A) or (B) above.

(e)(i) The Key Employee Arrangements shall be delivered to Buyer and shall be in
full force and effect upon the Closing and none of the Key Employees shall have
revoked his acceptance of employment with Buyer or otherwise communicated to
Buyer his intention not to commence employment with Buyer or continue employment
with Seller, as applicable, following the Closing Date, (ii) the Non-Compete
Agreements shall be delivered to Buyer and shall be in full force and effect
upon the Closing, and (iii) the Equityholder Support Agreements shall be
delivered to Buyer and shall be in full force and effect upon the Closing.

(f)Buyer shall have conducted any and all confirmatory due diligence with
respect to the Purchased Assets and the Business that it deems necessary or
advisable, including an environmental audit (including testing, if desired) of
the Purchased Assets (including the Real Property) and of any other property or
assets now or previously owned, leased or operated by Seller, the results of
which shall be satisfactory to Buyer in its sole discretion. Buyer and Seller
acknowledge and agree that the condition set forth in this Section 11.02(f)
shall be deemed satisfied unless Buyer provides Seller with written notice on or
prior to February 15, 2014 that the results of its confirmatory due diligence
with respect to the Purchased Assets and the Business has been unsatisfactory.

(g)Seller shall have received each Consent identified on Section 11.02(g) of the
Seller Disclosure Schedule, in each case in form and substance reasonably
satisfactory to Buyer, and no such Consent shall have been revoked.

(h)Buyer shall have received, in form satisfactory to Buyer, Payout Letters and
Lien Terminations evidencing payment at the Closing of the Closing Repaid
Indebtedness, as well as evidence reasonably satisfactory to Buyer of the
satisfaction at the Closing of all other accrued liabilities of Seller.

(i)On or before the Closing Date (i) Buyer shall have obtained ALTA extended
coverage form of owner’s title insurance policies, or binders to issue the same,
dated the Closing Date and in amounts satisfactory to Buyer insuring or
committing to insure, at ordinary premium rates without any requirement for
additional premiums, good and marketable title to the Owned Real Property being
transferred pursuant to the terms of this Agreement free and clear of any Liens
(each a “Buyer’s Title Insurance Policy”) and (ii) Seller shall have delivered
to Buyer recent ALTA surveys of such Owned Real Property and “no change”
affidavits sufficient for the applicable title insurance company to provide full
survey coverage in each Buyer’s Title Insurance Policy.

(j)(i) Seller shall have delivered to Buyer a certification, signed under
penalties of perjury and dated not more than 30 days prior to the Closing Date,
that satisfies the requirements of Treasury Regulation Section 1.1445-2(b)(2)
and confirms that Seller is not a “foreign person” as defined in Section 1445 of
the Code and (ii) CHI shall have delivered to Buyer a certification, signed
under penalties of perjury and dated not more than 30 days prior to the Closing
Date, that satisfies the requirements of Treasury Regulation Section
1.1445-2(b)(2) and confirms that CHI is not a “foreign person” as defined in
Section 1445 of the Code..

Section 11.03. Conditions to Obligation of Seller. The obligation of Seller to
consummate the Closing is subject to the satisfaction of the following further
conditions:

(a)(i) Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the Closing
Date,
(ii)the representations and warranties of Buyer contained in this Agreement and
in any certificate or other writing delivered by Buyer pursuant hereto shall be
true in all material respects at and as of the Closing Date, as if made at and
as of such date and (iii) Seller shall have received a certificate signed by the
Chief Executive Officer of Buyer to the foregoing effect.

(b)Buyer shall have received all consents, authorizations or approvals from the
Governmental Authorities referred to in Section 5.03, in each case in form and
substance reasonably satisfactory to Seller, and no such consent, authorization
or approval shall have been revoked.

ARTICLE 12 SURVIVAL; INDEMNIFICATION

Section 12.01. Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing
until the second anniversary of the Closing Date; provided that the
representations and warranties in Sections 4.01, 4.02, 4.03, 4.04, 4.22, 4.24
and Section 4.25 and Article 10 (the “Fundamental Representations”) shall
survive indefinitely or until the latest date permitted by law. The covenants
and agreements of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall survive the Closing indefinitely or for the shorter period explicitly
specified therein, except that for such covenants and agreements that survive
for such shorter period, breaches thereof shall survive indefinitely or until
the latest date permitted by law. Notwithstanding the preceding sentences, any
breach of covenant, agreement, representation or warranty in respect of which
indemnity may be sought under this Agreement shall survive the time at which it
would otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy thereof giving rise to such right of indemnity shall have been given
to the party against whom such indemnity may be sought prior to such time.

Section 12.02. Indemnification. (a) Effective at and after the Closing, Seller
hereby indemnifies Buyer, its Affiliates and their respective successors and
assignees (the “Buyer Indemnified Parties”) against and agrees to hold each of
them harmless from any and all damage, loss, liability and expense (including
reasonable expenses of investigation and reasonable attorneys’ fees and expenses
in connection with any action, suit or proceeding whether involving a
third-party claim or a claim solely between the parties hereto and any
incidental, indirect or consequential damages, losses, liabilities or expenses,
and any lost profits or diminution in value) (“Damages”) incurred or suffered by
the Buyer Indemnified Parties arising out of:

(i)any misrepresentation or breach of warranty (determined without regard to any
qualification or exception contained therein relating to materiality or Material
Adverse Effect or any similar qualification or standard (each such
misrepresentation and breach of warranty a “Warranty Breach”) made by Seller
pursuant to this Agreement;

(ii)any breach of covenant or agreement made or to be performed by Seller
pursuant to this Agreement;

(iii)
any error in the Balance Sheet; or

(iv)
any Excluded Liability;

regardless of whether such Damages arise as a result of the negligence or strict
liability (or any other liability under any theory of law or equity) of Buyer,
any of its Affiliates or any of their respective successors and assignees.

(b)    Effective at and after the Closing, Buyer hereby indemnifies Seller, its
Affiliates and their respective successors and assignees (the “Seller
Indemnified Parties”) against and agrees to hold each of them harmless from any
and all Damages incurred or suffered by Seller, any of its Affiliates or any of
their respective successors and assignees arising out of any Warranty Breach or
breach of covenant or agreement made or to be performed by Buyer pursuant to
this Agreement, regardless of whether such Damages arise as a result of the
negligence or strict liability (or any other liability under any theory of law
or equity) of the Seller Indemnified Parties.

Section 12.03. Third Party Claim Procedures. (a) The party seeking
indemnification under Section 12.02 (the “Indemnified Party”) agrees to give
prompt notice in writing to the party against whom indemnity is to be sought
(the “Indemnifying Party”) of the assertion of any claim or the commencement of
any suit, action or proceeding by any third party (“Third Party Claim”) in
respect of which indemnity may be sought under such Section. Such notice shall
set forth in reasonable detail such Third Party Claim and the basis for
indemnification (taking into account the information then available to the
Indemnified Party). The failure to so notify the Indemnifying Party shall not
relieve the Indemnifying Party of its obligations hereunder, except to the
extent such failure shall have materially and adversely prejudiced the
Indemnifying Party.

(b)The Indemnifying Party shall be entitled to participate in the defense of any
Third Party Claim and, subject to the limitations set forth in this Section,
shall be entitled to control and appoint lead counsel for such defense, in each
case at its own expense; provided that prior to assuming control of such
defense, the Indemnifying Party must (i) acknowledge that it would have an
indemnity obligation for the Damages resulting from such Third Party Claim as
provided under this Article 12 and (ii) furnish the Indemnified Party with
evidence that the Indemnifying Party has adequate resources to defend the Third
Party Claim and fulfill its indemnity obligations hereunder.

(c)The Indemnifying Party shall not be entitled to assume or maintain control of
the defense of any Third Party Claim and shall pay the fees and expenses of
counsel retained by the Indemnified Party if (i) the Indemnifying Party does not
deliver the acknowledgment referred to in Section 12.03(b)(i) within 30 days of
receipt of notice of the Third Party Claim pursuant to Section 12.03(a), (ii)
the Third Party Claim relates to or arises in connection with any criminal
proceeding, action, indictment, allegation or investigation, (iii) the
Indemnified Party reasonably believes an adverse determination with respect to
the Third Party Claim would be materially detrimental to the reputation or
future business prospects of the Indemnified Party or any of its affiliates,
(iv) the Third Party Claim seeks an injunction or equitable relief against the
Indemnified Party or any of its affiliates, (v) the Indemnifying Party has
failed or is failing to prosecute or defend vigorously the Third Party Claim or
(vi) the Third Party Claim relates to Taxes.

(d)If the Indemnifying Party shall assume the control of the defense of any
Third Party Claim in accordance with the provisions of this Section 12.03, the
Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld) before entering into any
settlement of such Third Party Claim, if
54

the settlement does not expressly unconditionally release the Indemnified Party
and its affiliates from all liabilities and obligations with respect to such
Third Party Claim or the settlement imposes injunctive or other equitable relief
against the Indemnified Party or any of its affiliates.

(e)In circumstances where the Indemnifying Party is controlling the defense of a
Third Party Claim in accordance with paragraphs (b) and (c) above, the
Indemnified Party shall be entitled to participate in the defense of any Third
Party Claim and to employ separate counsel of its choice for such purpose, in
which case the fees and expenses of such separate counsel shall be borne by the
Indemnified Party; provided that in such event the Indemnifying Party shall pay
the fees and expenses of such separate counsel (i) incurred by the Indemnified
Party prior to the date the Indemnifying Party assumes control of the defense of
the Third Party Claim or (ii) if representation of both the Indemnifying Party
and the Indemnified Party by the same counsel would create a conflict of
interest.

(f)Each party shall cooperate, and cause their respective affiliates to
cooperate, in the defense or prosecution of any Third Party Claim and shall
furnish or cause to be furnished such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials or appeals, as
may be reasonably requested in connection therewith.

Section 12.04. Direct Claim Procedures. In the event an Indemnified Party has a
claim for indemnity under Section 12.02 against an Indemnifying Party that does
not involve a Third Party Claim, the Indemnified Party agrees to give prompt
notice in writing of such claim to the Indemnifying Party. Such notice shall set
forth in reasonable detail such claim and the basis for indemnification (taking
into account the information then available to the Indemnified Party). The
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder, except to the extent such failure shall have
materially and adversely prejudiced the Indemnifying Party. If the Indemnifying
Party does not notify the Indemnified Party within 30 days following the receipt
of a notice with respect to any such claim that the Indemnifying Party disputes
its indemnity obligation to the Indemnified Party for any Damages with respect
to such claim, such Damages shall be conclusively deemed a liability of the
Indemnifying Party and the Indemnifying Party shall promptly pay to the
Indemnified Party any and all Damages arising out of such claim.

Section 12.05. Indemnification Basket And Cap. Notwithstanding anything in this
Agreement to the contrary, Seller shall not have any obligation to indemnify any
of the Buyer Indemnified Parties in respect of any Damages for which
indemnification is claimed under this Agreement, (a) if the Damages associated
with any individual claim are less than $50,000 (the “De Minimis Claim Amount”)
and (b) unless and until the aggregate of such Damages exceeds $250,000 (the
“Basket”), at which point Seller will be obligated to indemnify the Buyer
Indemnified Persons from and against all Damages in excess of the Basket;
provided, that the De Minimis Claim Amount and Basket shall not apply to Damages
relating to fraud, Excluded Liabilities, or Warranty Breaches of Fundamental
Representations. The maximum amount of Damages that the Buyer Indemnified
Parties

shall be entitled to recover pursuant to this Article 12 shall be an aggregate
amount equal to $2,000,000 (the “Cap”); provided, that the Cap shall not apply
to Damages relating to fraud, Excluded Liabilities, or Warranty Breaches of
Fundamental Representations (which claims shall be capped at the Purchase Price,
and which Damages shall not, for the avoidance of doubt, be included in the
calculation of Damages subject to the Cap).

Section 12.06. Earn-Out Payment Offset. (a) Buyer shall also have the right, but
not the obligation, to offset and deduct the amount of any indemnifiable Damages
pursuant to Section 12.02(a) from any Earn-Out Payment that is earned and
becomes payable pursuant to Section 3.01. In the event that at any time one or
more Earn-Out Payments becomes due and payable under Article 3 and Buyer has
made a claim for indemnification under Section 12.03 or Section 12.04 and such
claim is pending and unresolved at the time an Earn-Out Payment is payable, then
Buyer shall be entitled to deduct from such Earn- Out Payment an amount equal to
the amount of Buyer’s claim for indemnification (an “Earn-Out Payment Holdback”)
until a final determination of such claim is made. Upon final determination or
resolution of the indemnification claim for which the Earn-Out Payment Holdback
was established, then any portion of the Earn-Out Payment Holdback that is
greater than the Damages payable by Seller in respect of such claim shall be
paid to Seller within ten (10) Business Days of such final determination;
provided that no other claim for indemnification under Section 12.03 or Section
12.04 is pending and unresolved at such time.

(b)The representations, warranties, covenants and obligations of Seller, and the
rights and remedies that may be exercised by Buyer based on such
representations, warranties, covenants and obligations, will survive and not be
limited or affected by any investigation conducted by Buyer or any agent of
Buyer with respect to, or any knowledge acquired (or capable of being acquired)
by Buyer or any agent of Buyer at any time, whether before or after the
execution and delivery of this Agreement or the Closing, with respect to the
accuracy or inaccuracy of, or compliance with or performance of, any such
representation, warranty, covenant or obligation, and Buyer shall not be
required to show that it relied on any such representation, warranty, covenant
or obligation of Seller in order to be entitled to indemnification pursuant to
this Article 12. The waiver by Buyer of any of the conditions set forth in
Article 11 will not affect or limit the provisions of this Article 12.

Section 12.07. Purchase Price Adjustment. Any amount paid by Seller pursuant to
this Article 12 shall, for tax purposes, be treated as an adjustment to the
Purchase Price.

ARTICLE 13 TERMINATION

Section 13.01. Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing:

(a)by mutual written agreement of Seller and Buyer;

(b)by either Seller or Buyer, if the Closing shall not have been consummated on
or before April 30, 2014;

(c)by either Seller or Buyer, if consummation of the transactions contemplated
hereby would violate any nonappealable final order, decree or judgment of any
Governmental Authority having competent jurisdiction;

(d)
by Seller, if the Closing shall not have been consummated by 11:59

p.m. California time on the fifth Business Day after such date that Seller has
delivered written notice to Buyer certifying that all of the conditions set
forth in Article 11 (other than conditions that by their nature are to be
satisfied at the Closing, provided that such conditions will be satisfied at the
Closing) have been satisfied (or, in the case of conditions set forth in Section
11.03, waived by Seller); or

(e)by Buyer, three Business Days following delivery of written notice to Seller
that Buyer has determined that the condition set forth in Section 11.02(f) is
not capable of being satisfied.

The party desiring to terminate this Agreement pursuant to Section 13.01(b),
13.01(c), 13.01(d) or 13.01(e) shall give notice of such termination to the
other party.

Section 13.02. Effect of Termination. If this Agreement is terminated as
permitted by Section 13.01, such termination shall be without liability of
either party (or any stockholder, director, officer, employee, agent, consultant
or representative of such party) to the other party to this Agreement; provided
that if such termination shall result from the
(i) willful failure of either party to fulfill a condition to the performance of
the obligations of the other party, (ii) failure to perform a covenant of this
Agreement or (iii) breach by either party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for any
and all Damages incurred or suffered by the other party as a result of such
failure or breach. The provisions of Section 7.01, 14.02, 14.05, 14.06 and 14.07
shall survive any termination hereof pursuant to Section 13.01. Notwithstanding
anything to the contrary in this Agreement, if Buyer fails for any reason to
consummate the purchase contemplated hereunder or otherwise is in breach of this
Agreement, the aggregate liability of Buyer and any of its former, current and
future direct or indirect equity holders, controlling persons, stockholders,
directors, officers, employees, agents, Affiliates, members, managers, general
or limited partners or assignees shall be limited to the amount of any
Termination Fee that may be payable, whether at law or equity, in contract, in
tort or otherwise. None of Buyer or any of its former, current and future direct
or indirect equity holders, controlling persons, stockholders, directors,
officers, employees, agents, Affiliates, members, managers, general or limited
partners or assignees shall have any further liability or obligation relating to
or arising out of this Agreement or the transactions contemplated by this
Agreement except as expressly provided herein (including Section 14.13).

ARTICLE 14 MISCELLANEOUS

Section 14.01. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,

if to Buyer, to:

UCP, LLC
99 Almaden Boulevard, Suite 400 San Jose, California 95113
Attention: Dustin Bogue, Chief Executive Officer Facsimile No.: (408) 380-7983

with a copy to:

UCP, LLC
548 W. Cromwell, Suite 104
Fresno, California 93711 Attention: W. Allen Bennett, Esq.
Facsimile No.: (559) 439-4477 with a copy to:
Davis Polk & Wardwell LLP 1600 El Camino Real
Menlo Park, California 94025 Attention: Alan Denenberg Facsimile No.: (650)
752-3604

if to Seller, to:

Citizens Homes, Inc. 11811 Eversfield Lane
Charlotte, North Carolina 28269 Attention: Scott Thorson, President Facsimile
No.:     

with a copy to:

Fox Rothschild LLP
747 Constitution Drive, Suite 100
P.O. Box 673
Exton, Pennsylvania 19341
Attention: Michael S. Harrington, Esq. Facsimile No.: (610) 458-7337

or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. in the place of
receipt and such day is a Business Day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding Business Day in the place of receipt.

Section 14.02. Amendments and Waivers. (a) Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement, or in
the case of a waiver, by the party against whom the waiver is to be effective.

(b)    No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

Section 14.03. Disclosure Schedule References. The parties hereto agree that any
reference in a particular Section of the Seller Disclosure Schedule or Buyer
Disclosure Schedule, as applicable, shall only be deemed to be an exception to
(or, as applicable, a disclosure for purposes of) (a) the representations and
warranties (or covenants, as applicable) of the relevant party that are
contained in the corresponding Section of this Agreement and (b) any other
representations and warranties of such party that is contained in this
Agreement, but only if the relevance of that reference as an exception to (or a
disclosure for purposes of) such representations and warranties would be readily
apparent to a reasonable person who has read that reference and such
representations and warranties, without any independent knowledge on the part of
the reader regarding the matter(s) so disclosed.

Section 14.04. Expenses. (a) Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.

(b)In the event that this Agreement is terminated by Seller pursuant to Section
13.01(d), then Buyer shall pay or cause to be paid to Seller in immediately
available funds
$500,000 (the “Termination Fee”) within three Business Days after such
termination, it being understood that in no event shall Buyer be required to pay
the Termination Fee on more than one occasion.

(c)Each party acknowledges that the agreements contained in this Section 14.04
are an integral part of the transactions contemplated by this Agreement and
that, without these agreements, the other parties would not enter into this
Agreement.

(d)NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IF THE
SALE OF THE PURCHASED ASSETS TO BUYER IS

NOT CONSUMMATED DUE TO MATTERS OBLIGATING BUYER TO PAY THE TERMINATION FEE
PURSUANT TO THIS SECTION 14.04, THE TERMINATION FEE SHALL BE PAYABLE TO SELLER
AS LIQUIDATED DAMAGES. THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE AND
EXTREMELY DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLER AS A
RESULT OF BUYER'S FAILURE TO CONSUMMATE THE PURCHASE OF THE PURCHASED ASSETS
PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, AND THAT UNDER
THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, THE LIQUIDATED
DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A REASONABLE ESTIMATE OF THE
DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH FAILURE, AND SELLER'S SOLE
AND EXCLUSIVE REMEDY AGAINST BUYER AND ANY BUYER RELATED PARTY IN THE EVENT OF
FAILURE TO CLOSE RESULTING FROM BUYER'S DEFAULT SHALL BE LIMITED TO SUCH AMOUNT
AND SELLER SHALL HAVE NO RIGHT TO ANY ACTION FOR SPECIFIC PERFORMANCE OF ANY
PROVISION OF THIS AGREEMENT. IN CONSIDERATION OF THE PAYMENT OF LIQUIDATED
DAMAGES PURSUANT TO THIS SECTION, SELLER WILL BE DEEMED TO HAVE WAIVED ALL OTHER
CLAIMS FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY. THE PARTIES ACKNOWLEDGE THAT
THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR
PENALTY BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER.

Section 14.05. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto; except that Buyer may transfer or assign its
rights and obligations under this Agreement, in whole or from time to time in
part, to (i) one or more of its Affiliates at any time and (ii) after the
Closing Date, to any Person; provided that no such transfer or assignment will
relieve Buyer of its obligations hereunder or enlarge, alter or change any
obligation of any other party hereto or due to Buyer.

Section 14.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the State of Delaware, without regard to the
conflicts of law rules of such state.

Section 14.07. Jurisdiction. The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the Delaware Chancery Court or, if such court shall
not have jurisdiction, any federal court located in the State of Delaware or
other Delaware state court, and each of the parties hereby irrevocably consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any

such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 14.01 shall be deemed
effective service of process on such party.

Section 14.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

Section 14.09. Counterparts; Effectiveness; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by all of the other
parties hereto. Until and unless each party has received a counterpart hereof
signed by the other party hereto, this Agreement shall have no effect and no
party shall have any right or obligation hereunder (whether by virtue of any
other oral or written agreement or other communication). No provision of this
Agreement is intended to confer any rights, benefits, remedies, obligations or
liabilities hereunder upon any Person other than the parties hereto and their
respective successors and assigns.

Section 14.10. Entire Agreement. This Agreement and the other Transaction
Documents constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.

Section 14.11. Bulk Sales Laws. Buyer and Seller each hereby waive compliance by
Seller with the provisions of the “bulk sales,” “bulk transfer” or similar laws
of any state. Seller agrees to indemnify and hold Buyer harmless against any and
all Damages incurred or suffered by Buyer or any of its Affiliates as a result
of any failure to comply with any such “bulk sales,” “bulk transfer” or similar
laws.

Section 14.12. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.

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Section 14.13. Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof, in addition to
any other remedy to which they are entitled at law or in equity; provided that,
notwithstanding the foregoing, prior to the Closing, Seller shall not be
entitled to an injunction or injunctions to prevent breaches of this Agreement
by Buyer or any remedy to enforce specifically the terms and provisions of this
Agreement and that Seller’s sole and exclusive remedies with respect to any such
breach shall be the remedies set forth in Section 14.04.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

UCP,LLC

By: /s/Dustin Bogue    
Name:    Dustin Bogue
Title:    Chief Executive Officer

CITIZENS HOMES, INC.

By: /s/Scott Thorson    
Name:    Scott Thorson
Title:    President

#85450695v46

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ANNEX I

STOCKHOLDERS

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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EXHIBIT A

FORM OF WRITTEN CONSENT

CITIZENS HOMES, INC.

ACTION OF THE STOCKHOLDERS BY WRITTEN CONSENT PURSUANT TO THE PROVISIONS OF THE
DELAWARE GENERAL CORPORATION LAW

The undersigned, being stockholders of Citizens Homes, Inc., a Delaware
corporation (the “Company”), holding at least a majority of the outstanding
shares of capital stock of the Company (the “Stockholders”), do hereby consent
to and adopt the following Preambles and Resolutions for and on behalf of the
Company with the intent that the same shall be valid actions as though adopted
at a duly- held meeting of the Stockholders:
WHEREAS, the officers of the Company have negotiated with UCP, LLC, a Delaware
limited liability company (“UCP”), for UCP to purchase substantially all of the
assets (the “Assets”) and to assume certain of the liabilities (the
“Liabilities”) of the Company pursuant the terms and conditions of a certain
Purchase and Sale Agreement negotiated by the Company and UCP (the “Purchase
Agreement”), a form of which has been presented to the undersigned for their
review and approval;

WHEREAS, in consideration of the sale of the Assets and assumption of the
Liabilities, UCP has agreed to pay to the Company up to approximately
$23,890,139 (subject to the determination of a final purchase price based upon
the book value of the assets of the Company as of the closing date and subject
to adjustment as set forth in the Purchase Agreement), pursuant to the terms and
conditions set forth in the Purchase Agreement (the “Purchase Price”);

--------------------------------------------------------------------------------

WHEREAS, following the closing of the transaction contemplated by the Purchase
Agreement, the proceeds of the Purchase Price (less amounts to pay off the
Company’s retained liabilities, to hold back funds pursuant to the Purchase
Agreement, to pay expenses of the Company related to the Transaction, and for
appropriate reserves as determined by the Company’s Board of Directors) shall be
distributed to the Stockholders of the Company in accordance with the waterfall
spreadsheet presented to the undersigned (the “Waterfall Spreadsheet”), which
contemplates a different distribution of the remaining proceeds to the holders
of Series A Convertible Preferred Stock and Series A-1 Convertible Preferred
Stock than as set forth in the Company’s Amended and Restated Certificate of
Incorporation but not affecting the rights of the holders of the Company’s
Common Stock (i.e., the holders of Series A Convertible Preferred Stock get
their initial investment returned with the remaining proceeds paid to the
holders of Series A-1 Convertible Preferred Stock); and

WHEREAS, the undersigned deem it to be in the best interests of the Company to
sell the Assets to UCP in accordance with the terms of the Purchase Agreement.

NOW, THEREFORE, BE IT RESOLVED, that the
undersigned hereby approve the Company’s sale of the Assets to UCP in accordance
with the terms of the Purchase Agreement; and be it further

RESOLVED, that the proper officers of the Company, acting for and on behalf of
the Company, be and hereby are authorized, empowered and directed to execute and
deliver the Purchase Agreement in substantially the form presented to the
undersigned and to proceed with the transaction as set forth in the Purchase
Agreement; and be it further

RESOLVED, that it is hereby directed that following the closing of the
transaction contemplated by the Purchase Agreement, the proceeds of the Purchase
Price (less amounts to pay off the Company’s retained

--------------------------------------------------------------------------------

liabilities, to hold back funds pursuant to the Purchase Agreement, to pay
expenses of the Company related to

--------------------------------------------------------------------------------

the Transaction, and for appropriate reserves as determined by the Company’s
Board of Directors) shall be distributed in accordance with the Waterfall
Spreadsheet; and be it further

RESOLVED, that the officers of the Company are hereby authorized to do or cause
to be done any and all such acts and things necessary to execute and deliver any
and all such further documents and papers as, with the advice of counsel, they
deem necessary or appropriate to carry into effect the full intent and purposes
of the foregoing resolutions, for and on behalf and in the name of Company; and
be it further

RESOLVED, that the officers of the Company are hereby authorized to engage all
such counsel, accountants or others as may be desirable under the circumstances
for the purposes of assisting in effectuating the foregoing resolutions; and be
it further

RESOLVED, that to the extent the Company has performed certain actions or things
to effectuate the purposes of the foregoing resolutions, the doing of such
actions or things are hereby ratified, approved, confirmed and adopted.

This Action by Written Consent is executed pursuant to the Delaware General
Corporation Law and the Bylaws of the Company.
This Action by Written Consent may be executed in one or more counterparts, all
of which together shall be one and the same document.
For purposes of this Action by Written Consent, a facsimile copy containing a
signature shall be deemed to contain an original signature.
[signature page follows]

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IN WITNESS WHEREOF, the undersigned have executed this Action by Written Consent
as of the dates set forth below.

STOCKHOLDERS:

If an Individual:

Signature:      Print Name:     

Date:     

If an Entity:

(Print Entity Name)

Signature:     

Print Name:     

Print Title:     

Date:     

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EXHIBIT B

FORM OF EQUITYHOLDER SUPPORT AGREEMENT

EQUITYHOLDER SUPPORT AGREEMENT (this “Agreement”), dated as of March 25, 2014,
among UCP, LLC, a Delaware limited liability company (“Buyer”), Citizens Homes,
Inc., a Delaware corporation (the “Seller”) and the holders of Series A
Convertible Preferred Stock and Series A-1 Convertible Preferred Stock of Seller
listed on Annex I hereto (each, an “Equityholder” and, collectively, the
“Equityholders”).

WHEREAS, the Seller and Buyer propose to enter into a Purchase and Sale
Agreement dated as of the date hereof (as amended from time to time, the
“Purchase and Sale Agreement”) pursuant to which Buyer and its designated
Subsidiaries will purchase the Purchased Assets from Seller (the “Asset
Purchase”);

WHEREAS, each Equityholder owns the number of shares of each class of capital
stock of the Seller (“Seller Stock”) set forth opposite its name on Annex I
hereto (such shares of Seller Stock, the “Subject Shares” of such Equityholder);
and

WHEREAS, as a condition to its willingness to enter into the Purchase and Sale
Agreement, Buyer has requested that each Equityholder enter into this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement, intending to be legally bound, hereby agree as follows:

SECTION 1. Defined Terms. Each capitalized term used herein but not otherwise
defined shall have the meaning assigned to such term in the Purchase and Sale
Agreement.

SECTION 2. Waiver; Release; and Covenant Not to Sue.

(a)Waiver of Released Claims. With effect from and after the Closing, each
Equityholder and each of its respective past and present agents,
representatives, employees, officers, directors, managers, Affiliates,
controlling persons, shareholders, members, partners, predecessors, successors
and assigns (collectively, the “Releasing Persons”), hereby fully releases and
forever discharges, to the fullest extent permitted by law, Buyer, the Seller,
each of their respective Subsidiaries and each of their respective past, present
and future agents, representatives, employees, officers, directors, managers,
Affiliates, controlling persons, shareholders, members, partners, predecessors,
successors and assigns (including, without limitation, Antonio B. Mon, Scott K.
Thorson, Ralph R. Teal, Jr., H. Gilford Edwards, Keith Hinson, David Hughes, and
each of their heirs, successors and assigns) (collectively, the “Released
Persons”) from any and all rights, claims, demands, actions, causes of action,
judgments, obligations, contracts, agreements, debts and liabilities whatsoever,
whether known or unknown, suspected or unsuspected, both at law and in equity
(including any right, whether arising at law or in equity, to seek
indemnification, contribution, cost recovery, damages, or any

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

other recourse or remedy, including as may arise under common law)
(collectively, the “Claims”) which any of the Releasing Persons or their
respective successors and assigns now has, has ever had or may hereafter have
against the respective Released Persons from any transaction, event, occurrence,
action or inaction with respect to periods on or prior to the Closing on account
of, arising out of, contemplated by, implied or alleged in, or relating in any
way to (i) any Released Person’s relationship with the Seller on or prior to the
Closing, (ii) any Releasing Person’s investment in Seller, or (iii) the
operation of the Seller on or prior to the Closing and/or the consummation of
the transactions contemplated by the Purchase and Sale Agreement (the Claims
referred to in this sentence, after taking into account the exclusion of the
Claims referred to in the proviso to this sentence, the “Released Claims”);
provided, however, that the Released Claims shall not include any claims for
indemnification made by any such Equityholder (in his role as a an officer of
Seller or as a member of Seller’s Board of Directors) that such Equityholder
would otherwise have pursuant to a written agreement with Seller previously
provided to Buyer and the articles of incorporation and bylaws of Seller. Each
Equityholder hereby acknowledges that such Equityholder may hereafter discover
facts other than or different from those that it knows or believes to be true
with respect to the subject matter of the Released Claims, but, with effect from
and after the Closing, such Equityholder hereby expressly waives and fully,
finally and forever settles and releases any known or unknown, suspected or
unsuspected, asserted or unasserted, contingent or noncontingent claim with
respect to the Released Claims, whether or not concealed or hidden, without
regard to the subsequent discovery or existence of such different or additional
facts. Without limitation of the foregoing, such Equityholder hereby waives the
application of any provision of law, including, without limitation, California
Civil Code Section 1542, that purports to limit the scope of a general release.
Section 1542 of the California Civil Code provides: “A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him would have
materially affected his settlement with the debtor.”

(b)Covenant Not to Sue. With effect from and after the Closing, each
Equityholder, on its behalf and on behalf of the applicable Releasing Persons,
further agrees not to institute any litigation, lawsuit, claim or similar action
or proceeding against any of the Released Persons with respect to any Released
Claim.

(c)Effect of Release. Each Equityholder, on its behalf and on behalf of the
applicable Releasing Persons, acknowledges and agrees that if such Equityholder
or Releasing Person should hereafter make any claim or demand or commence or
threaten to commence any action, claim or proceeding against any Released Person
with respect to any Released Claim, this Section 2 may be raised as a complete
bar to any such action, claim or proceeding, and the applicable Released Person
may recover from such Equityholder all costs incurred in connection with such
action, claim or proceeding, including attorneys’ fees.

(d)Consultation. Each Equityholder acknowledges and agrees that (i) it has had
ample opportunity to consult with its attorneys prior to execution of this
Agreement and has done so and (ii) it has knowingly and voluntarily decided to
sign and enter into this Agreement.

--------------------------------------------------------------------------------

SECTION 3. Representations and Warranties of Each Equityholder. Each
Equityholder, severally and not jointly, hereby represents and warrants to
Buyer, as of the date hereof and as of the Closing, that:

(a)Authorization.

(i)If such Equityholder is a natural person, (A) such Equityholder has the legal
capacity and has all requisite power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby, and (B) if such
Equityholder is married and the Subject Shares constitute community property
under Applicable Laws, this Agreement has been duly authorized, executed and
delivered by, and constitutes the valid and binding agreement of, such
Equityholder’s spouse. If this Agreement is being executed in a representative
or fiduciary capacity, the Person signing this Agreement has full power and
authority to enter into and perform this Agreement.

(ii)If such Equityholder is not a natural person, (A) such Equityholder has all
requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby, (B) the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of such
Equityholder, and
(C) this Agreement constitutes the valid and binding obligation of such
Equityholder, enforceable against it in accordance with its terms, except as
such enforceability may be subject to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.

(b)Governmental Authorization. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, or notice to, any
Governmental Authority, is required by or with respect to such Equityholder in
connection with the execution and delivery of this Agreement by such
Equityholder or the consummation by such Equityholder of the transactions
contemplated hereby, except for such filings, authorizations, consents and
approvals that if not obtained or made would not have a material and adverse
effect on the ability of such Equityholder to consummate the transactions
contemplated by this Agreement.

(c)Non-contravention. The execution and delivery by such Equityholder of this
Agreement and the consummation of the transactions contemplated hereby, does not
conflict with or result in any violation of or default under (with or without
notice or lapse of time, or both) or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or loss of any
benefit under (i) if such Equityholder is not a natural person, any provision of
the certificate of incorporation, by-laws or comparable organizational documents
of such Equityholder, (ii) any material contract to which such Equityholder is a
party or to which it or any of its properties or assets (whether tangible or
intangible) is subject or bound, or (iii) any Applicable Law except, in the case
of clauses (ii) and (iii), for such conflicts, violations or defaults as would
not individually or in the aggregate reasonably be expected to have a material
and adverse effect on the ability of such Equityholder to consummate the
transactions contemplated by this Agreement.

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(d)Ownership of Seller Stock. Such Equityholder is the record and beneficial
owner of such Equityholder’s Subject Shares, and owns such Subject Shares, free
and clear of any Lien or restriction on the right to vote, sell or otherwise
dispose of the Subject Shares.

SECTION 4. Termination. This Agreement and all rights and obligations hereunder
shall terminate upon the earlier to occur of (a) the Closing and (b) the
termination of the Purchase and Sale Agreement in accordance with its terms;
provided that (i) Sections 2, 5(d) and 5(d) shall survive any termination of
this Agreement pursuant to clause (a) above, and Sections 4 and 6 shall survive
any termination of this Agreement, and (ii) nothing herein shall relieve any
party from liability for any fraudulent or willful and bad faith breach of this
Agreement.

SECTION 5. Additional Matters.

(a)Each party shall, from time to time, execute and deliver, or cause to be
executed and delivered, such additional or further consents, documents and other
instruments as may be required for the purpose of effectively carrying out the
transactions contemplated by this Agreement.

(b)No person executing this Agreement who is or becomes during the term hereof a
director or officer of the Seller makes any agreement or understanding herein in
his or her capacity as a director or officer of the Seller. Each Equityholder
signs solely in his, her or its capacity as the record holder and beneficial
owner of, or the trustee of a trust whose beneficiaries are the beneficial
owners of, such Equityholder’s Subject Shares and nothing in this Agreement
shall limit or affect any actions taken by any Equityholder in his capacity as
an officer or director of the Seller to the extent not otherwise prohibited by
the Purchase and Sale Agreement.

(c)In the event that any Equityholder acquires record or beneficial ownership
of, or the power to vote or direct the voting of, any additional voting interest
with respect to the Seller, such voting interests shall, without further action
of the parties, be subject to the provisions of this Agreement, and the number
of Subject Shares set forth on the signature page hereto will be deemed amended
accordingly. Such Equityholder shall promptly notify Buyer of any such event.

(d)Each Equityholder agrees that it will not (i) bring, commence, institute,
maintain, prosecute, participate in or voluntarily aid any action, claim, suit
or cause of action, in law or in equity, in any court or before any governmental
entity (an “Action”), which challenges the validity of or seeks to enjoin the
operation of any provision of this Agreement or (ii) bring or commence any
Action that alleges that the execution and delivery of this Agreement by such
Equityholder, or the approval of the Purchase and Sale Agreement by the Board of
Directors of the Seller, breaches any fiduciary duty of the Board of Directors
of the Seller or any member thereof.

(e)Notwithstanding anything to the contrary contained in this Agreement, in no
event shall any Equityholder have any responsibility or liability whatsoever
relating to any breach by any other Equityholder of any representation,
warranty, covenant or obligation contained in this Agreement.

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SECTION 6. General Provisions.

(a)Amendments and Waivers. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each party to this Agreement, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

(b)Notice. All notices and other communications hereunder shall be in writing
and shall be deemed given and received if properly addressed (i) if delivered
personally, by commercial delivery service or by facsimile (with acknowledgment
of a complete transmission), on the day of delivery, or (ii) if delivered by
internationally recognized courier (appropriately marked for next day delivery),
one Business Day after sending, or (iii) if delivered by first class, registered
or certified mail (return receipt requested), three Business Days after mailing.
Notices shall be deemed to be properly addressed to any party hereto if
addressed to Buyer in accordance with Section 14.01 of the Purchase and Sale
Agreement and to the Equityholders their respective addresses set forth on Annex
I hereto (or at such other address for a party as shall be specified by like
notice).

(c)Interpretation. When a reference is made in this Agreement to Sections, such
reference shall be to a Section to this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Each party hereto has participated in the drafting of this Agreement, which each
party acknowledges and agrees is the result of extensive negotiations among the
parties. Wherever the words “include”, “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation”.

(d)Counterparts. This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement. This Agreement shall
become effective against Buyer when one or more counterparts have been signed by
Buyer and delivered to any Equityholder. This Agreement shall become effective
against any Equityholder when one or more counterparts have been executed by
such Equityholder and delivered to Buyer. Each party need not sign the same
counterpart.

(e)
Entire Agreement; Third-Party Beneficiaries. This Agreement

(i)constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder; provided that Sections
2 and 5 are intended to benefit the Released Persons, and each such Person shall
be deemed a third-party beneficiary of this Agreement and this Agreement shall
be enforceable by such Persons.

(f)Governing Law. This Agreement shall be construed in accordance with, and
governed in all respects by, the laws of the State of Delaware, without regard
to the laws of such jurisdiction that would require the substantive laws of
another jurisdiction to apply.

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(g)Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by Buyer without the prior written consent of
each Equityholder or by any Equityholder without the prior written consent of
Buyer, and any purported assignment without such consent shall be void.
Notwithstanding the foregoing, Buyer may transfer or assign its rights and
obligations under this Agreement, in whole or from time to time in part, to (i)
one or more of its Affiliates at any time and (ii) after the Closing, to any
Person; provided that no such transfer or assignment shall relieve Buyer of its
obligations hereunder. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.

(h)No Ownership Interest. Nothing contained in this Agreement shall be deemed to
vest in Buyer any direct or indirect ownership or incidence of ownership of or
with respect to the Subject Shares.

(i)Enforcement. Unless otherwise explicitly provided in this Agreement, any
action, claim, suit or proceeding relating to this Agreement or the enforcement
of any provision of this Agreement shall be brought or otherwise commenced in
the Delaware Chancery Court or, if such court shall not have jurisdiction, any
federal court located in the State of Delaware or other Delaware state court.
Each party hereto irrevocably consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 6(b) shall be deemed effective service of
process on such party

(j)Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
THAT MAY ARISE UNDER THIS AGREEMENT OR ANY RELATED AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

(k)Severability. In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
Persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of such void or unenforceable provision.

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(l)Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

(m)Public Disclosure. Except as contemplated by the Purchase and Sale Agreement,
no public disclosure (whether or not in response to an inquiry) of the subject
matter of this Agreement or the Purchase and Sale Agreement shall be made by any
Equityholder, nor shall any Equityholder permit any of its Representatives to
make any such disclosure, unless approved by Buyer prior to release.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each party has duly executed this Agreement, all as of the
date first written above.

UCP, LLC

By: /Dustin L. Bogue
Name: Dustin L Bogue

Title: Chief Executive Officer President

CITIZENS HOMES, INC.

By: /Scott Thorson
Name: Scott Thorson

Title: President

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EXHIBIT C

ASSIGNMENT AND ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
     , 2014, between Citizens Homes, Inc., a Delaware corporation (“Seller”) and
Citizens Homes Investments, LLC, a Delaware limited liability company (“CHI”),
on the one hand, and UCP, LLC, a Delaware limited liability company (“Buyer”),
on the other.

W I T N E S S E T H :

WHEREAS, Buyer and Seller have concurrently herewith consummated the purchase by
Buyer of the Purchased Assets pursuant to the terms and conditions of the
Purchase and Sale Agreement dated March 25, 2014 between Buyer and Seller, (the
“Purchase Agreement”); and

WHEREAS, pursuant to the Purchase Agreement, Buyer has agreed to assume certain
liabilities and obligations of Seller and Seller’s Subsidiaries with respect to
the Purchased Assets and the Business;

NOW, THEREFORE, in consideration of the sale of the Purchased Assets and in
accordance with the terms of the Purchase Agreement, Buyer, on the one hand, and
Seller and CHI, on the other, agree as follows:

1.(a) Each of Seller and CHI does hereby sell, transfer, assign and deliver to
Buyer all of the right, title and interest of Seller and CHI in, to and under
the applicable Purchased Assets; provided that no sale, transfer, assignment or
delivery shall be made of any or any material portion of any of the Contracts or
Permits if an attempted sale, assignment, transfer or delivery, without the
consent of a third party, would constitute a breach or other contravention
thereof or in any way adversely affect the rights of Buyer, on the one hand, and
Seller and CHI, on the other, thereunder.

(b)    Buyer does hereby accept all the right, title and interest of Seller and
CHI in, to and under all of the Purchased Assets (except as aforesaid) and Buyer
agrees to perform all of the obligations of Seller and CHI to be performed under
the Contracts except to the extent liabilities thereunder constitute Excluded
Liabilities.

2.Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Purchase Agreement.

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3.This Agreement shall be governed by and construed in accordance with the law
of the State of Delaware, without regard to the conflicts of law rules of such
state.

4.This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.

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

CITIZENS HOMES, INC.

By:
Name: Scott Thorson

Title:    President

CITIZENS HOMES INVESTMENTS, LLC

By:
Name:

Title:

UCP, LLC

By:
Name: Dustin Bogue

Title:    Chief Executive Officer

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#85510512v4
#85510512v4

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EXHIBIT D

ASSIGNMENT OF COPYRIGHTS

THIS ASSIGNMENT OF COPYRIGHTS (this “Assignment”) is made this [•] day of [•],
2014 by and between Citizens Homes, Inc., a Delaware corporation (“Assignor”),
and UCP, LLC, a Delaware limited liability company (“Assignee”; each of Assignor
and Assignee, a “Party”, and collectively, the “Parties”).

W I T N E S S E T H :

WHEREAS, Assignor and Assignee are parties to that certain Purchase and Sale
Agreement, dated as of March 25, 2014 (the “Purchase Agreement”), pursuant to
which, among other things, Assignor agreed to assign to Assignee all right,
title and interest in and to the copyrights and copyright applications set forth
on Schedule A (collectively, the “Copyrights”); and

WHEREAS, Assignor desires to transfer all right title and interest in and to the
Copyrights to Assignee and Assignee desires to acquire all such right, title and
interest in and to such Copyrights.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and as more fully set forth in the Purchase
Agreement and subject to the terms and conditions therein, Assignor and Assignee
intending to be legally bound, agree as follows:

1.Assignor does hereby sell, assign, transfer, convey and deliver unto Assignee
its entire right, title and interest of every kind in and to the Copyrights and
copyrights in all countries of the world based thereon or corresponding thereto
including any and all rights to file applications and receive copyrights in all
countries of the world, the same to be held and enjoyed by the Assignee to the
full end of the term for which said copyrights may be granted, as fully and
entirely as the same would have been held and enjoyed by Assignor had this
Assignment not been made; and Assignor hereby agrees to sign all necessary
papers and do all lawful acts reasonably requisite in connection with the
prosecution, assignment, enforcement and disclaimer of each and every copyright
application based upon the Copyrights, without further compensation, but at the
expense of the Assignee or its successors and assigns, and Assignor assigns to
Assignee all rights to sue for infringement, including past infringement if any,
of any Copyright or copyright based upon or corresponding to the Copyrights.

2.Assignor hereby authorizes and requests the officials of all countries in
which the Copyrights are now or in the future will be issued to issue to
Assignee all of Assignor’s right, title and interest in and to the same for the
sole use and enjoyment of Assignee, its successors and assigns.

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3.Any provision of this Assignment may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Assignment, or in the case of a waiver, by the
party against whom the waiver is to be effective. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

4.This Assignment shall be governed by and construed in accordance with the law
of the State of Delaware, without regard to the conflicts of law rules of such
state.

5.This Assignment may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Assignment shall become effective
when each party hereto shall have received a counterpart hereof signed by all of
the other parties hereto. Until and unless each party has received a counterpart
hereof signed by the other party hereto, this Assignment shall have no effect
and no party shall have any right or obligation hereunder (whether by virtue of
any other oral or written agreement or other communication). No provision of
this Assignment is intended to confer any rights, benefits, remedies,
obligations or liabilities hereunder upon any person other than the parties
hereto and their respective successors and assigns.

6.EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
ASSIGNMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties have caused this Assignment to be to be duly
executed by their respective authorized officers as of the day and year first
above written.

CITIZENS HOMES, INC.

By:
     Name: Scott Thorson

Title:    President

UCP, LLC

By:
     Name:

Title:

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SCHEDULE A

Copyright    Registration No.    Registration Date

#85450695v46

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EXHIBIT E

ASSIGNMENT OF DOMAIN NAMES

THIS ASSIGNMENT OF DOMAIN NAMES (this “Assignment”) is made this [•] day of [•],
2014 by and between Citizens Homes, Inc., a Delaware corporation (“Assignor”),
and UCP, LLC, a Delaware limited liability company (“Assignee”; each of Assignor
and Assignee, a “Party”, and collectively, the “Parties”).

W I T N E S S E T H :

WHEREAS, Assignor and Assignee are parties to that certain Purchase and Sale
Agreement, dated as of March 25, 2014 (the “Purchase Agreement”), pursuant to
which, among other things, Assignor agreed to assign to Assignee all right,
title and interest in and to the domain names set forth on Schedule A
(collectively, the “Domains”); and

WHEREAS, Assignor desires to transfer all right title and interest in and to the
Domains to Assignee and Assignee desires to acquire all such right, title and
interest in and to such Domains.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and as more fully set forth in the Purchase
Agreement and subject to the terms and conditions therein, Assignor and Assignee
intending to be legally bound, agree as follows:

1.Assignor does hereby sell, assign, transfer, convey and deliver unto Assignee
its entire right, title and interest of every kind in and to the Domains,
including all rights to sue or recover and retain damages and costs and
attorneys’ fees for past, present and future infringement or cybersquatting of
the Domains and to fully and entirely stand in the place of the Assignor in all
matters relating to the Domains.

2.This Assignment has been executed and delivered by the Assignor for the
purpose of recording the assignment herein with the appropriate entity. At
Assignee’s sole cost and expense, Assignor shall execute and deliver such other
documents and take all other commercially reasonable actions which Assignee, its
successors and/or assigns, may reasonably request to effect the terms of this
Assignment, including its recordation with any relevant domain registrars.
Assignor shall take the steps reasonably required by each registrar for the
Domains to effect the recordation of the transfer and transfer of the Domains’
registrations to Assignee (including delivering to Assignee all necessary
Auth-Info codes or other required passwords necessary to unlock the Domains), at
Assignee's sole cost and expense.

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3.Any provision of this Assignment may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Assignment, or in the case of a waiver, by the
party against whom the waiver is to be effective. No failure or delay by any
party in exercising any right, power or privilege hereunder

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shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

4.This Assignment shall be governed by and construed in accordance with the law
of the State of Delaware, without regard to the conflicts of law rules of such
state.

5.This Assignment may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Assignment shall become effective
when each party hereto shall have received a counterpart hereof signed by all of
the other parties hereto. Until and unless each party has received a counterpart
hereof signed by the other party hereto, this Assignment shall have no effect
and no party shall have any right or obligation hereunder (whether by virtue of
any other oral or written agreement or other communication). No provision of
this Assignment is intended to confer any rights, benefits, remedies,
obligations or liabilities hereunder upon any person other than the parties
hereto and their respective successors and assigns.

6.EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
ASSIGNMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties have caused this Assignment to be to be duly
executed by their respective authorized officers as of the day and year first
above written.

CITIZENS HOMES, INC.

By:
     Name: Scott Thorson

Title:    President

UCP, LLC

By:
     Name:

Title:

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SCHEDULE A

[Insert list of domain names to be transferred]

#85450695v46

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EXHIBIT F

FORM OF WARRANTY SERVICES AGREEMENT

THIS WARRANTY SERVICES AGREEMENT (the “Agreement”) is made and entered into as
of    , 2014 (the “Effective Date”), by and between UCP, LLC, a Delaware limited
liability company (“Buyer”), and Citizens Homes, Inc., a Delaware corporation
(“Seller”).

RECITALS

A.Buyer and Seller entered into that certain Purchase and Sale Agreement dated
March 25, 2014 (the “Purchase Agreement”). Except as otherwise defined herein,
all capitalized terms shall have the meaning set forth in the Purchase
Agreement.

B.Pursuant to Section 6.07 of the Purchase Agreement, Buyer and Seller agreed to
enter into an agreement for Buyer or an affiliate of Buyer to provide repair
services to purchasers of homes from Seller prior to the Effective Date that
Seller is obligated to deliver pursuant to (i) the terms of the warranty
provisions of any sales agreements or (ii) any obligation imposed by Applicable
Law, including but not limited to any legal duty of workmanlike construction
using ordinary care (collectively, “Warranty Obligations”).

NOW THEREFORE, for and in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

AGREEMENT

1.Warranty Obligations. (a) Buyer shall deliver, or cause to be delivered by one
of its Affiliates or other third party subcontractors, the repair services that
Seller is obligated to deliver pursuant to the Warranty Obligations (the
“Warranty Services”). Buyer shall use its commercially reasonable efforts to (i)
deliver the Warranty Services in a prompt, diligent and efficient manner that
does not result in undue expense, (ii) deliver the Warranty Services in such
manner that is consistent with Buyer’s warranty programs (which programs, for
the avoidance of doubt, may be amended or modified by Buyer in its sole
discretion), (iii) commence the Warranty Services within the time periods, if
any, required by Applicable Law, and (iv) diligently pursue the Warranty
Services to completion unless prevented by matters beyond Buyer’s reasonable
control. Seller shall promptly notify Buyer of any claim it receives with
respect to Warranty Obligations. Each party acknowledges and agrees that Buyer’s
obligation to provide Warranty Services shall be limited to the extent to which
(i) Seller’s failure to perform its obligations under this Agreement adversely
impacts Buyer’s ability to provide Warranty Services or (ii) third party
resources necessary for Buyer to provide Warranty Services become unavailable
through no fault of Buyer and such unavailability adversely impacts Buyer’s
ability to provide such Warranty Services. Notwithstanding the foregoing or
anything else in this Agreement, if Buyer or Seller tenders defense of the
warranty claim to which a Warranty Obligation relates to the insurance carrier
under any Insurance Policy, the parties shall cooperate with such insurance
carrier as required by the terms of such policy.

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(b)    The written approval of Scott Thorson shall be necessary prior to Buyer’s
commencement of any Warranty Services that exceed, or are anticipated to exceed,
$5,000 of “Repair Costs” (as defined below) per “Home” (as defined in the
Purchase Agreement).

2.Repair Obligation Costs.    The direct cost (including proportionate share of
overhead and wages and salaries of employees of Buyer) of all Warranty Services
in excess of (and only to the extent exceeding) $250 per Home (collectively, the
“Repair Costs”), will be reimbursed by Seller to Buyer, and paid as follows:

2.1.    Warranty Reserve.    Seller has placed in reserve an amount equal to
$200,000 (the “Warranty Reserve”). Buyer shall deduct the amount of the Warranty
Reserve from the Purchase Price under the Purchase Agreement and hold such
amount (together with any interest thereon) in the Warranty Account until the
funds therein are exhausted or finally released in accordance with Section 2.3
hereof. Buyer shall deduct any Repair Costs that Buyer incurs in connection with
the Warranty Services from time to time; provided, however, that in the event a
claim related to any Warranty Obligation is tendered by Buyer or Seller under
any Insurance Policy, any award or recovery from the insurer with respect to
such claim shall be used to replenish the Warranty Reserve for any amounts that
were withdrawn from the Warranty Reserve in connection with such claim. Buyer
will provide to Seller, on a quarterly basis, an accounting of funds deducted
from the Warranty Reserve, together with (a) a description of the Warranty
Services delivered and Repair Costs incurred for each home, and (b) any amount
replenished by insurance awards or recoveries under Insurance Policies.

2.2.    Remaining Costs. Once the funds in the Warranty Account are exhausted or
finally distributed to Seller in accordance with Section 2.3 hereof, Seller will
be responsible for direct payment of all remaining Repair Costs. Buyer shall
have the right, in its sole discretion, to either (i) pay any subcontractors,
material suppliers or vendors directly for Warranty Services and obtain
reimbursement from Seller, or (ii) submit any invoices from subcontractors,
material suppliers or vendors directly to Seller, for timely payment by Seller.
Within thirty (30) days after receipt of a request for reimbursement from Buyer,
accompanied by reasonable documentation of the associated Warranty Services and
Repair Costs, Seller will reimburse Buyer for such Repair Costs.

2.3.    Release of Warranty Reserve.    On the date which is the one (1) year
anniversary of the date hereof, Buyer shall release from the Warranty Account an
amount equal to $100,000 less the amount of the Warranty Reserve paid to Buyer
by Seller pursuant to Section
2.1 above prior thereto (and less any amount which Buyer estimates in its
reasonable and good faith judgment may become payable with respect to then
outstanding claims related to Warranty Obligations, which shall remain in the
Warranty Account until such claims are finally satisfied, at which point Buyer
shall release any remaining funds). On the date which is the two (2) year
anniversary of the date hereof, Buyer shall release from the Warranty Account
any funds in such account then remaining (less any amount which Buyer estimates
in its reasonable and good faith judgment may become payable with respect to
then outstanding claims related to Warranty Obligations, which shall remain in
the Warranty Account until such claims are finally satisfied and subject to the
further terms of this Section 2.3). Buyer shall deliver such released funds to
Seller in cash to an account designated by Seller in writing. For the avoidance
of doubt, Seller shall be responsible for the payment of any incremental
investment banking or other incentive-

3

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based fees that become payable by Seller as a result of such release pursuant to
arrangements entered into by Seller.

3.Limitation of Liability. Neither Buyer nor any Affiliate or other third party
subcontractors delivering Warranty Services hereunder, nor any of their
respective directors, officers, employees, contractors or representatives, shall
be liable to Seller for any error, default or delay in the performance of the
Warranty Services or any of Buyer’s other obligations under this Agreement
unless, and only to the extent that, such error, default or delay arises,
results from or constitutes Buyer’s gross negligence or willful misconduct, and
excluding any act, errors or omissions by such party taken at the specific
direction of the other party; provided, however, that in no case shall Buyer nor
any Affiliate or other third party subcontractors be liable for incidental,
consequential, special, exemplary, or punitive damages.

4.Seller Indemnity. Seller hereby agrees to indemnify, defend and hold harmless
Buyer, its Affiliates and their respective successors and assignees (the “Buyer
Indemnified Parties”) against and agrees to hold each of them harmless from any
and all costs, damage, loss, liability and expense (including reasonable
expenses of investigation and reasonable attorneys’ fees and expenses in
connection with any claim, action, suit or proceeding whether involving a
third-party claim or a claim solely between the parties hereto and any
incidental, indirect or consequential damages, losses, liabilities or expenses,
and any lost profits or diminution in value) (“Damages”) incurred or suffered by
the Buyer Indemnified Parties arising out of the Warranty Obligations, to the
extent the Repair Costs exceed the Warranty Reserve, with the exception of any
Damages caused by Buyer’s gross negligence or willful misconduct of Buyer in
performing or failing to perform any Warranty Services. Seller’s indemnity and
agreement to defend and hold Buyer harmless shall survive the expiration or
other termination of this Agreement.

5.Seller Representations and Covenants.    Seller hereby makes the following
representations, warranties and covenants:

5.1.    No Other Warranty. Seller represents that it has not granted, and will
not grant or offer, any additional express warranties or repair rights to any
homeowners, other than as have previously been disclosed to Buyer and described
on Exhibit A.

5.2.    Insurance. Seller shall take all steps required to maintain coverage
under any Insurance Policies related to the Warranty Obligations for at least
two (2) years following the date hereof. Seller shall use its reasonable best
efforts to provide that Buyer and (and any Affiliate requested by Buyer) is
named as an additional insured with respect to each of the Insurance Policies.

6.Binding on Successors.    The terms and conditions herein contained shall be
binding upon and inure to the benefit of the successors and assigns of the
parties hereto.

7.Notices. All notices, requests and other communications to any party hereunder
shall be in writing (including facsimile transmission) and shall be given,

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if to Buyer, to:

UCP, LLC
99 Almaden Boulevard, Suite 400 San Jose, California 95113
Attention: Dustin Bogue, Chief Executive Officer Facsimile No.: (408) 380-7983

with a copy to:

UCP, LLC
548 W. Cromwell, Suite 104
Fresno, California 93711 Attention: W. Allen Bennett, Esq.
Facsimile No.: (559) 439-4477 with a copy to:
Davis Polk & Wardwell LLP 1600 El Camino Real
Menlo Park, California 94025 Attention: Alan Denenberg Facsimile No.: (650)
752-3604

if to Seller, to:

Citizens Homes, Inc. 11811 Eversfield Lane
Charlotte, North Carolina 28269 Attention: Scott Thorson, President Facsimile
No.:     

with a copy to:

Fox Rothschild LLP
747 Constitution Drive, Suite 100
P.O. Box 673
Exton, Pennsylvania 19341
Attention: Michael S. Harrington, Esq.
Facsimile No.: (610) 458-7337

or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. in the place of
receipt and such day is a business day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.

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8.Applicable Law. This Agreement shall be construed in accordance with the laws
of the State of Delaware.

9.Partial Invalidity.    If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement shall continue in full force and effect and shall in no way be
impaired or invalidated, and the parties agree to substitute for the invalid or
unenforceable provision a valid and enforceable provision that most closely
approximates the intent and economic effect of the invalid or unenforceable
provision.

10.Definitions.    Any capitalized term used but not defined herein shall have
the meaning assigned to such term in the Purchase Agreement.

11.Entire Agreement.    All exhibits referred to herein are attached hereto and
incorporated herein by this reference. This Agreement together with the Purchase
Agreement contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and cannot be amended or modified except by
a written agreement, executed by each of the parties hereto.

12.Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall, for all purposes, be deemed an original and all such
counterparts, taken together, shall constitute one and the same instrument.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

UCP, LLC, a Delaware limited liability company

By: _      Name:          Title:         

Citizens Homes Inc., a Delaware corporation

By: _      Name:          Title:         

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Exhibit A

Express Warranties and Repair Rights Of Seller

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