Exhibit 10.1

VOTING SUPPORT AND TRANSFER RESTRICTION AGREEMENT

VOTING SUPPORT AND TRANSFER RESTRICTION AGREEMENT (this “Agreement”), dated
April 10, 2017, by and among Century Communities, Inc., a Delaware corporation
(“Parent”), Casa Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Parent (“Merger Sub”), PICO Holdings, Inc., a California
corporation (“PICO”), for the purpose of Sections 1(g) and 6(m) hereof only,
UCP, Inc., a Delaware corporation (the “Company”), and for the purpose of
Section 1(g) hereof only, UCP, LLC, a Delaware limited liability company.

WHEREAS, concurrently with the execution of this Agreement, Parent, Merger Sub,
and the Company, are entering into an Agreement and Plan of Merger of even date
herewith (the “Merger Agreement”), providing for the Merger and the other
Transactions upon the terms and subject to the conditions prescribed in the
Merger Agreement;

WHEREAS, all capitalized terms used but not defined in this Agreement have the
respective meanings ascribed thereto in the Merger Agreement;

WHEREAS, as of the date hereof, PICO is the beneficial owner and holder of
record of 100 shares of Class B Stock, representing approximately 57% of the
aggregate voting power attributable to all outstanding shares of Company Capital
Stock (such shares, together with all other shares of Company Capital Stock
acquired by PICO and its Affiliates from and after the date hereof, being
collectively referred to herein as the “PICO Shares”); and

WHEREAS, as a material inducement and condition to their willingness to enter
into the Merger Agreement, Parent and Merger Sub have requested that PICO enter
into this Agreement and, in order to satisfy such condition and induce Parent
and Merger Sub to enter into the Merger Agreement, PICO desires and has agreed
to enter into this Agreement.

WHEREAS, the Company Board, After Consultation, having determined and resolved
in good faith that the Merger Agreement is advisable, fair to and in the best
interest of the Company and its stockholders and having approved the Merger
Agreement, has approved this Agreement and the transactions contemplated hereby
for all purposes of Article XII of the Company Charter and has taken all other
action necessary to render inapplicable to Parent, Merger Sub, PICO, and this
Agreement (and the transactions contemplated hereby), any Anti-Takeover Law.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

1.    Agreements of PICO.

(a)    Voting. From the date hereof until the termination of this Agreement in
accordance with its terms, at each and every meeting of the Company’s
stockholders, however called and convened (including each meeting convened or
reconvened pursuant to any previous adjournment, recess or postponement
thereof), and in connection with any action taken and effected by the written
consent of the Company’s stockholders (in lieu of any such meeting of the
Company’s stockholders in accordance with the Section 228 of the DGCL and/or the
Company Charter), PICO hereby agrees (i) to appear and be present at all
meetings of the Company’s stockholders and otherwise cause all of the PICO
Shares to be counted for purposes of determining a quorum, and (ii) to (A)
affirmatively vote and cause to be voted all PICO Shares in favor of (“for”),
or, if action is to be taken by written consent in lieu of a meeting of the
Company’s stockholders, deliver to the Company a duly executed affirmative
written consent in favor of (“for”), the adoption of the Merger Agreement by the
Company’s stockholders and approval of the

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Merger and the other Transactions, and (B) vote and cause to be voted all PICO
Shares against, and not provide any written consent with respect to or for, the
adoption or approval of (1) any Company Takeover Proposal (and the transactions
contemplated thereby), (2) any action or agreement (including, without
limitation, any amendment of any agreement to which the Company or any Company
Subsidiary is a party or to which any assets or properties of the Company or any
Company Subsidiary is subject or bound) that PICO knows, or would reasonably be
expected to know, would result in (x) a breach or violation of, or
non-compliance with, any representation, warranty, covenant, agreement or other
obligation of the Company or any Company Subsidiary or Affiliate of the Company
set forth in the Merger Agreement, or (y) the failure of any of the conditions
to the obligations of Parent or Merger Sub to consummate the Merger and the
other Transactions set forth in Sections 7.01 and 7.02 of the Merger Agreement,
(3) any change in the size, term in office, or composition of the Board of
Directors of the Company, and (4) any agreement (including, without limitation,
any amendment, waiver, release from, or non-enforcement of any agreement), any
amendment or restatement of the Company Charter or the Company By-laws, or any
other action (or failure to act) that is intended or would reasonably be
expected to prevent, interfere with, or materially impair or delay, the
consummation of the Merger or any of the other Transactions in accordance with
their terms. PICO shall not enter into or propose to enter into any agreement,
plan, commitment or understanding with any Person the effect of which would be
inconsistent with or violate the provisions and agreements contained in this
Section 1(a).

(b)    Grant of Irrevocable Proxy in the Case of PICO Default. As security for
and in furtherance of the agreements contained in Section 1(a) hereof, and
subject to each of the third sentence and the last sentence of this Section
1(b), PICO hereby irrevocably grants to, constitutes and appoints Parent and
each of the executive officers of Parent, in their respective capacities as
executive officers of Parent, as the case may be, and any individual who
hereafter shall succeed to any such executive office of Parent, and each of them
individually, as PICO’s proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of PICO, to vote all the
PICO Shares that are owned beneficially and/or held of record by PICO and its
Affiliates on the date hereof and, from time to time, with full and
unconditional authority to grant or withhold a consent or approval in respect of
such PICO Shares and to execute and deliver a proxy (or proxies) to vote such
PICO Shares (this “Proxy”) at each meeting of the holders of Company Capital
Stock convened in respect of the matters set forth in Section 1(a) hereof. This
Proxy shall be deemed to be a proxy coupled with an interest, is (subject to the
last sentence of this Section 1(b)) irrevocable, and shall not be terminated by
operation of Law or upon the occurrence of any other event. This Proxy shall
become immediately exercisable by Parent, and the proxies and attorneys-in-fact
named and appointed herein, if (and only if) and to the extent that PICO shall
have failed, in any respect, after 24 hours prior written notice from Parent to
PICO, to comply with any of its voting and other obligations set forth in
Section 1(a) hereof (with Parent’s good faith determination of any such failure
by PICO to so comply being conclusive, final and binding). PICO represents and
warrants to Parent that any and all proxies heretofore given in respect of the
PICO Shares are not irrevocable and that all such proxies (if any) have been
properly revoked or are no longer in effect as of the date hereof. PICO hereby
affirms that this Proxy is hereby given by PICO in connection with, and in
consideration of and as a material inducement to, Parent entering into this
Agreement and the Merger Agreement and that this Proxy is hereby given to secure
the obligations of PICO under Section 1(a) hereof. Parent covenants and agrees
with PICO that Parent will exercise the Proxy, if applicable, solely with
respect to the matters set forth in Section 1(a) hereof. During the term of this
Agreement, PICO shall not take any action that would render invalid the exercise
of the Proxy in accordance with its terms by Parent and the proxies and
attorneys-in-fact named herein. Notwithstanding any of the foregoing, this Proxy
shall terminate automatically, without any action required by PICO, Parent or
otherwise, simultaneously upon the termination of this Agreement in accordance
with Section 5 hereof.

(c)    Other Voting Matters. PICO shall retain at all times the right to vote
all PICO Shares in its sole discretion and without any other limitation on such
matters, other than those matters set forth in Section 1(a) hereof that are at
any time, or from time to time, presented for consideration to the Company’s
stockholders generally.

 

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(d)    Appraisal Rights. PICO hereby irrevocably and unconditionally waives, and
agrees not to exercise or assert, in respect of any shares of Company Capital
Stock it beneficially owns and/or holds of record, any appraisal, dissenter’s or
similar rights under Section 262 or other applicable Law in connection with the
Merger and the other Transactions.

(e)    Restriction on Transfer; Proxies; Non-Interference; etc. Except as
expressly contemplated by this Agreement or the Merger Agreement, from the date
hereof until the termination of this Agreement in accordance with its terms,
PICO shall not, directly or indirectly, whether in a single transaction or
series of transactions, (i) sell, transfer (including by operation of Law),
gift, pledge, hypothecate, encumber, assign or otherwise dispose of (including,
without limitation, any Constructive Disposition (as hereinafter defined)), or
enter into any contract, agreement, plan, commitment, arrangement, or
understanding with respect to the sale, transfer, gift, pledge, hypothecation,
encumbrance, assignment or other disposition (including, without limitation, any
Constructive Disposition) of, any PICO Shares (or any right, title or interest
thereto or therein) (each of the foregoing transactions referred to in this
clause (i) of this Section 1(e) being hereafter referred to as, a “Transfer”),
(ii) deposit any PICO Shares into a voting trust or grant any proxies or enter
into a voting agreement, power of attorney or voting trust with respect to any
PICO Shares, (iii) take any action that would make any representation or
warranty of PICO set forth in this Agreement untrue or incorrect or have the
effect of preventing, disabling or delaying PICO from performing any of its
obligations under this Agreement, or (iv) agree (whether or not in writing) to
take any of the actions referred to in the foregoing clauses (i), (ii) or
(iii) of this Section 1(e).

As used herein, the term “Constructive Disposition” means, with respect to any
PICO Shares, a short sale with respect to such security, entering into or
acquiring a derivative contract with respect to such security, entering into or
acquiring a futures or forward contract to deliver such security or entering
into any other hedging or other derivative, swap, “put-call,” margin, securities
lending or other transaction that has or reasonably would be expected to have
the effect of changing, limiting, arbitraging or reallocating the economic
benefits and risks of ownership.

(f)    Exchange of PICO Membership Interests. Prior to the Effective Time, PICO
shall affirmatively exercise its right to exchange and shall exchange the PICO
Membership Interests for shares of Company Common Stock upon the terms and
subject to the conditions of the Exchange Agreement (the “Exchange”), whereby
the Exchange shall have become effective and irrevocable subject to and
contingent upon the occurrence of the Effective Time, and, from and after
consummation of the Exchange (and the transactions contemplated thereby), all
issued and outstanding membership interests and other voting and economic
interests in and to UCP, LLC shall be wholly owned by the Company.

(g)    Termination of Related Party Agreements. Each of PICO, the Company, and
UCP, LLC, as applicable, hereby irrevocably terminate, effective as of the
Effective Time, the following agreements (without any payments or other
obligations due or owing from, or any cost or expense to, the Company, Parent,
Merger Sub or the Surviving Corporation), in each case subject to and contingent
upon the occurrence of the Effective Time: (i) the Exchange Agreement, (ii) the
Tax Receivable Agreement, dated as of July 23, 2013, by and among the Company,
UCP, LLC, and PICO, (iii) the Transition Services Agreement, dated as of
July 23, 2013, by and between PICO and the Company, and (iv) the Registration
Rights Agreement, dated July 23, 2013, by and between the Company and PICO.

(h)    No Solicitation; Obligations to Inform Parent. Solely in its capacity as
a beneficial owner and holder of record of Company Common Stock and subject in
all events to

 

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Section 6(b), from the date hereof until the termination of this Agreement in
accordance with its terms, PICO (i) shall terminate all soliciting activities,
discussions and negotiations with any Person (other than the Company, Parent,
Merger Sub or their respective Representatives) regarding any proposal,
expression of interest, request for information, or other communication that
constitutes, or could reasonably be expected to lead to, a Company Takeover
Proposal; (ii) shall not, and shall cause its controlled Affiliates and each of
its and its controlled Affiliates’ Representatives not to, directly or
indirectly, (A) propose, make, submit or announce a Company Takeover Proposal,
(B) solicit, initiate, or knowingly encourage or facilitate (including by means
of furnishing any information or responding to any communication), any inquiries
or the making, announcement or submission of any proposal or offer that
constitutes, or could reasonably be expected to lead to, any Company Takeover
Proposal, (C) enter into any agreement (whether binding, non-binding,
conditional or otherwise) with respect to a Company Takeover Proposal (other
than an Acceptable Confidentiality Agreement), (D) knowingly cooperate with,
assist, or participate in any effort by, any Person (or any Representative of a
Person) that has made, is seeking to make, has informed the Company or PICO of
any intention to make, or has publicly announced an intention to make, any
proposal that constitutes, or could reasonably be expected to lead to, any
Company Takeover Proposal, or (E) otherwise knowingly facilitate a Company
Takeover Proposal; (iii) shall promptly (and in any case within one Business
Day) notify Parent or its Representatives in writing of its receipt of any
Company Takeover Proposal or any inquiry constituting, with respect to, or that
could reasonably be expected to lead to, any Company Takeover Proposal or
inquiry, and the material terms of any such Company Takeover Proposal or
inquiry, and (iv) shall keep Parent informed on a prompt and current basis of
the status of any such Company Takeover Proposal or inquiry received by PICO
(including the content and status of all material discussions and communications
in respect thereof and any change or proposed change to the terms thereof);
provided, however, that none of the foregoing restrictions shall prohibit PICO
from taking any action that is concurrently taken by the Company and the Company
Board pursuant to Section 5.02(c) of the Merger Agreement under the
circumstances in which the Company is permitted to take such actions pursuant to
Section 5.02(c) of the Merger Agreement.

(i)    Publication. PICO consents to the publication and disclosure in the Proxy
Statement and S-4 Registration Statement of PICO’s identity and ownership of
PICO Shares and the nature of PICO’s commitments, arrangements and
understandings under this Agreement. Parent agrees to provide PICO reasonable
advance opportunity to review and comment on such disclosure in the S-4
Registration Statement and will reasonably consider any such comments provided
by PICO. PICO shall not issue any press release or make any other public
statement with respect to this Agreement, the Merger Agreement or the
Transactions without the prior written consent of Parent, except for filings
required under the Exchange Act or as may be required by applicable Law.

(j)    Restrictions on Transfer of Parent Common Stock Received in the Merger.
For the 60-day period immediately following the Effective Time, none of PICO or
its Affiliates shall, without Parent’s prior written consent (which may be
withheld by Parent in its sole discretion), Transfer (including any Constructive
Disposition) any shares of Parent Common Stock that PICO receives in the Merger
(or any right, title or interest therein or thereto), and after such initial
60-day period until the 210th day following the Effective Time, PICO shall not,
in any of the next three 50-day periods, agree to or consummate any Transfer
(including any Constructive Disposition) in respect of its and/or its Affiliates
shares of Parent Common Stock if such Transfer relates to more than 5% of the
aggregate then-outstanding shares of Parent Common Stock during any such 50-day
period. From and after the 210th day following the Effective Time, PICO and its
Affiliates will not be restricted in respect of any Transfer of Parent Common
Stock held by it.

(k)    Restriction on Beneficial Ownership of Parent Common Stock; Voting of
Parent Common Stock on Certain Matters. PICO confirms and acknowledges that it
is a party to the standstill letter agreement, dated October 16, 2015, as
amended by the Amendment No. 1 to October 2015

 

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Standstill Agreement, dated March 14, 2017, each among Parent, the Company and
PICO (as amended, the “Standstill Agreement”), and agrees to continue to observe
and comply with all the terms and provisions of the Standstill Agreement until
the earlier of (i) 18 months following the date hereof, and (ii) such time as
PICO no longer beneficially owns or holds of record any shares of Parent Common
Stock (the date of such earlier event, the “Fallaway Date”). PICO and Parent,
concurrently with the execution of this Agreement, have entered into an
amendment to the Standstill Agreement to reflect the provisions of this Section
1(k). Without limiting the generality of the foregoing sentence of this Section
1(k) and without limiting anything contained in the Standstill Agreement as
amended on the date hereof, until the Fallaway Date, PICO shall, and shall cause
its controlled Affiliates to, affirmatively vote and cause to be voted all
shares of Parent Common Stock it (or any of its controlled Affiliates), directly
or indirectly, so owns, holds or controls at each and every meeting of Parent’s
stockholders, however called or convened (including each meeting convened or
reconvened pursuant to any previous adjournment, recess or postponement
thereof), and to furnish a written consent in the case of any action taken or
effected by written consent of Parent’s stockholders (in lieu of any such
meeting of Parent’s stockholders in accordance with Section 228 of the DGCL or
the Parent Charter), in each case in favor of (“for”) all proposals made,
proposed and recommended by the Parent Board (including, without limitation, the
election of Parent’s directors and any other business submitted to Parent’s
stockholders for their consideration and vote or written consent); provided,
however, that nothing herein shall require PICO (or any of its controlled
Affiliates) to vote in favor of any proposal made, proposed or recommended by
the Parent Board with respect to any merger, business combination, acquisition
of material assets, businesses or securities, or other similar extraordinary
corporate transaction involving Parent so long as PICO otherwise complies with
and observes in all respects the provisions of the Standstill Agreement as
amended on the date hereof.

(l)    Further Assurances. From time to time, at the request of Parent and
without further consideration, prior to the termination of this Agreement, PICO
shall execute and deliver such additional documents and instruments and take all
such further action as may be reasonably required to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated by
this Agreement.

2.    Post-Effective Time Covenants of Parent.

(a)    Reasonable Post-Effective Time Access. Parent agrees for a period of 12
months following the Effective Time, upon the reasonable request of PICO, from
time to time, during such period, to reasonably cooperate, and to cause the
Surviving Corporation to reasonably cooperate, with PICO and its internal
accounting personnel and external auditor, at PICO’s sole expense, with respect
to the preparation of PICO’s statements of results of operations, cash flows and
financial condition (and any review and attestation thereof by PICO’s external
auditor) for PICO’s fiscal year ending December 31, 2017 and for any of PICO’s
quarterly fiscal periods from and after the Effective Time through December 31,
2017, and further to enable the appropriate executive officers of PICO to
certify that during such periods appropriate internal controls and disclosure
controls were maintained by the Company. To facilitate the foregoing, Parent
agrees to provide PICO’s internal accounting personnel and external auditor
reasonable access during regular business hours to relevant financial and other
information relating to the Company for the aforementioned periods, and access
to accounting personnel of the Surviving Corporation having knowledge of such
financial and other information.

(b)    Reasonable Non-Monetary Cooperation with Share Disposition. For a period
of 12 months following the Effective Time, in the event PICO seeks to Transfer
any shares of Parent Common Stock that PICO receives in the Merger (such shares,
“PICO’s Parent Shares”) in a marketed offering, “block trade,” or other
transaction not involving the sale of such shares in the ordinary course on the
open market (subject in each case to any applicable restrictions on transfer set
forth in Section 1(j)

 

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hereof), upon the reasonable request of PICO, from time to time, during such
12-month period, Parent shall reasonably cooperate, and shall cause the
Surviving Corporation to reasonably cooperate, with PICO by making available to
PICO the executive officers of Parent to participate in any “road show”
presentations or similar investor meetings held in connection with any such
Transfer or attempted Transfer by PICO; provided, however, that the provisions
of this Section 2(b) are not to intended, and shall not create any obligation on
the part of Parent, the Surviving Corporation, or the Company, to (i) pay, or
reimburse PICO, for any fees, costs or other expenses incurred or to be incurred
by PICO in respect of any Transfer or attempted Transfer by PICO of any of
PICO’s Parent Shares (including, without limitation, the fees, costs and
expenses of any placement agents, underwriters or brokers engaged by PICO to
conduct any marketed offering, “block trade,” or other transaction not involving
an open market Transfer or attempted Transfer by PICO of PICO’s Parent Shares),
or (ii) prepare any confidential or other information or placement memoranda.

(c)    Tax Obligations. Following the Effective Time, Parent shall cause the
Surviving Corporation, in its capacity as the Managing Member of UCP, LLC, to
continue to comply with, or cause UCP, LLC to continue to comply with, UCP,
LLC’s obligations under Sections 5.6(b)(ii), 6.6, 6.7 and 6.8 of the Second
Amended and Restated Limited Liability Company Operating Agreement of UCP, LLC
dated July 23, 2013 (the “Operating Agreement”), with respect to taxable periods
ending on or prior to the Effective Time; provided, however, that no payment of
any interest shall be made with respect to any Tax Distribution. Such
obligations shall include, without limitation, (i) promptly following the
Effective Time, making any Tax Distributions (as defined in the Operating
Agreement) to PICO that remain outstanding or are due for completed 2016 and
2017 quarterly periods ended prior to the Effective Time, (ii) following the
filing by UCP, LLC of its annual federal income tax return for the year ended
December 31, 2016, making an additional Tax Distribution to PICO in an amount
equal to PICO’s True-Up Amount (as defined in the Operating Agreement) for such
year, if such True-Up Amount is negative, (iii) at least 10 days prior to the
due date (without extensions) for PICO of its estimated tax for the partial
quarter ending on the date of the Effective Time, determining and making a Tax
Distribution to PICO for such partial quarter, (iv) following the filing by UCP,
LLC of its federal income tax return for the partial year ending on the date of
the Effective Time, making an additional Tax Distribution to PICO in an amount
equal to PICO‘s True-Up Amount (as defined in the Operating Agreement) for such
partial year, if such True-Up Amount is negative, (v) delivering to PICO draft
Schedule K-1s and the draft federal income tax return of UCP, LLC for the tax
year of UCP, LLC ending on the date of the Effective Time in accordance with the
30-day timelines in Section 6.6(b) of the Operating Agreement, and (vi) without
the prior written consent of PICO, which consent shall not be unreasonably
withheld or delayed, taking any of the following actions in respect of a taxable
period of UCP, LLC ending on or prior to the date of the Effective Time:
(x) filing a federal partnership income tax return of UCP, LLC or Schedule K-1s,
(y) agreeing to any extension, filing any petition or complaint, filing a
request for administrative adjustment, or entering into a settlement agreement,
in each case as more fully described in Section 6.7 of the Operating Agreement,
or (z) making any tax election. If PICO’s True-Up Amount (as defined in the
Operating Agreement) is positive for the year ended December 31, 2016, PICO
shall, within 10 days of the filing by UCP, LLC of its annual federal income tax
return, deliver to UCP, LLC, the amount of the positive True-Up Amount. Within
10 days following the filing by UCP, LLC of its federal income tax return for
the partial year ending on the date of the Effective Time, if the True-Up Amount
for such partial year is positive, PICO shall pay to UCP, LLC an amount equal to
PICO’s positive True-Up Amount for such partial year. The Parties agree that any
gain realized in connection with the exchange of PICO Membership Interests for
shares of Company Common Stock will not be treated as income of UCP, LLC for
purposes of Tax Distributions. The obligations in this Section 2(c) shall
survive any liquidation or dissolution of UCP, LLC.

3.    Representations and Warranties of Parent and Merger Sub. Parent and Merger
Sub each hereby jointly and severally represents and warrants to PICO as
follows:

(a)    Organization; Authority. Each of Parent and Merger Sub is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware. Each of Parent and Merger Sub has full power and authority to
execute and deliver this Agreement, and to perform and comply with each of its
obligations under this Agreement. The execution and delivery by

 

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each of Parent and Merger Sub of this Agreement, and the performance and
compliance by Parent and Merger Sub with its obligations herein, have been duly
authorized by all necessary corporate action on the part of Parent and Merger
Sub. Each of Parent and Merger Sub has duly executed and delivered this
Agreement, and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as may
be limited by Laws affecting the enforcement of creditors’ rights generally or
by general equitable principles.

4.    Representations and Warranties of PICO. PICO hereby represents and
warrants to Parent and Merger Sub as follows:

(a)    Organization; Authority. PICO is duly organized, validly existing and in
good standing under the Laws of the State of California. PICO has full power and
authority to execute and deliver this Agreement, and to perform and comply with
each of its obligations under this Agreement. The execution and delivery by PICO
of this Agreement, and the performance and compliance by PICO with each of its
obligations herein, have been duly authorized by all necessary corporate action
on the part of PICO. PICO has duly executed and delivered this Agreement, and
this Agreement constitutes the legal, valid and binding obligation of PICO,
enforceable against PICO in accordance with its terms, except as may be limited
by Laws affecting the enforcement of creditors’ rights generally or by general
equitable principles.

(b)    Consents and Approvals; No Violations. No Consents or Filings with, any
Governmental Entity or third party are necessary for the performance by PICO of
its obligations under this Agreement, except for filings required under the
Exchange Act with respect to PICO’s beneficial ownership of PICO Shares. Neither
the execution and delivery of this Agreement by PICO, nor the performance by
PICO with its obligations under this Agreement, will (i) conflict with or
violate any provision of the organizational documents of PICO or (ii) (x)
violate any Law, judgment, writ or injunction of any Governmental Entity
applicable to PICO or any of its subsidiaries or any of their respective
properties or assets, or (y) violate, conflict with, result in the loss of any
material benefit under, constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, accelerate the
performance required by, or result in the creation of any Lien upon any of the
respective properties or assets of, PICO or any of its Affiliates under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, permit, lease, agreement or other instrument or obligation to
which PICO or any of its Affiliates is a party, or by which they or any of their
respective properties or assets may be bound or affected, except, in the case of
clause (ii) of this Section 4(b), for such violations, conflicts, losses,
defaults, terminations, cancellations, accelerations or Liens as would not,
individually or in the aggregate, reasonably be expected to prevent or
materially delay the performance by PICO of any of its obligations under this
Agreement.

(c)    Ownership of Shares. PICO owns, beneficially, and is the record holder
of, all of the PICO Shares. PICO owns all of the PICO Shares free and clear of
any proxy, voting restriction, adverse claim or other Lien (other than (i) as
set forth in the Related Party Agreements or (ii) proxies and restrictions in
favor of Parent and Merger Sub expressly arising pursuant to this Agreement, and
except for such transfer restrictions of general applicability as may be
provided under the Securities Act and/or the “blue sky” Laws of the various
states of the United States). Without limiting the foregoing, except for proxies
and restrictions in favor of Parent and Merger Sub expressly arising pursuant to
this Agreement, except as described in a Schedule 13D or Schedule 13G filed with
the SEC prior to the date hereof (which filing is true and complete), and
(i) other than as set forth in the Related Party Agreements and (ii) except for
such transfer restrictions of general applicability as may be provided under the
Securities Act and/or the “blue sky” Laws of the various states of the United
States, PICO has sole voting power and sole power of disposition with respect to
all PICO Shares, with no restrictions on PICO’s rights of voting or

 

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disposition pertaining thereto and no Person other than PICO has any right to
direct or approve the voting or disposition of any PICO Shares. As of the date
hereof, except as disclosed in the Company SEC Documents, PICO does not own,
beneficially or of record, any securities of the Company other than the PICO
Shares.

(d)    Absence of Litigation. As of the date hereof, there is no Proceeding
pending against, or, to the knowledge of PICO, threatened against or affecting,
PICO or any of the PICO Shares that could reasonably be expected to impair the
ability of PICO to perform fully its obligations hereunder or to consummate the
transactions contemplated hereby on a timely basis.

(e)    Opportunity to Review; Reliance. PICO has had the opportunity to review
this Agreement and the Merger Agreement with counsel of its own choosing. PICO
understands and acknowledges that Parent is entering into the Merger Agreement
in reliance upon PICO’s execution, delivery and performance of this Agreement.

(f)    Brokers. No broker, investment banker, financial advisor or other Person
is entitled to any broker’s, finder’s, financial advisor’s or other similar fee
or commission that is payable by the Company, Parent or any of their respective
subsidiaries in connection with the Transactions based upon arrangements made by
or on behalf of PICO.

5.    Termination. This Agreement shall terminate automatically, without any
further action of the parties hereto on the first to occur of (a) the
termination of the Merger Agreement in accordance with its terms (including in
accordance with Section 8.01(h) of the Merger Agreement), and (b) the Effective
Time. Notwithstanding the foregoing, (A) nothing herein shall relieve any party
from liability for its breach of any of the provisions this Agreement, (B) if
the Merger is consummated, the provisions of Sections 1(j), 1(k) and 2 hereof
shall survive and continue in force and effect from and after the Effective Time
for the periods set forth in such Sections, and (C) the provisions of this
Section 5 and Section 6 hereof shall survive the termination of this Agreement.
Without limiting the generality of this Section 5, if a Company Recommendation
Change is made by the Company Board in response to an Intervening Event (to the
extent permitted by and in accordance with Section 5.02(e) of the Merger
Agreement) and in respect of such Company Recommendation Change Parent does not
exercise its unilateral right to terminate the Merger Agreement in accordance
with Section 8.01(d) of the Merger Agreement, PICO’s voting agreement and
obligations under Section 1(a)(ii)(a) of this Agreement and the Proxy granted by
Peak pursuant to Section 1(b) of this Agreement shall no longer be in respect of
all Shares then owned by Peak, but in lieu and stead thereof, Peak’s voting
agreement and obligations under Section 1(a)(ii)(a) of this Agreement and the
Proxy granted by Peak pursuant to Section 1(b) of this Agreement shall be in
respect of that number of Shares owned by Peak as shall equal 28% of the
aggregate voting power attributable to all outstanding shares of Company Capital
Stock.

6.    Miscellaneous.

(a)    Additional Shares. Until the termination of this Agreement in accordance
with its terms, PICO shall promptly notify Parent of the number of additional
shares of Company Capital Stock, if any, as to which PICO acquires record or
beneficial ownership after the date hereof. Any such shares as to which PICO
acquires record or beneficial ownership after the date hereof and prior to
termination of this Agreement shall be PICO Shares for purposes of this
Agreement. Without limiting the foregoing, in the event of any stock split,
reclassification, subdivision, recapitalization, stock dividend or other change
in the capital structure of the Company affecting the Company Capital Stock, the
number of shares of Company Capital Stock constituting PICO Shares shall be
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Company Capital Stock or other voting
securities of the Company issued to PICO in connection therewith.

 

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(b)    PICO Acting in its Stockholder Capacity Only. The parties acknowledge and
agree that this Agreement is entered into by PICO solely in its capacity as
beneficial owner and record holder of the PICO Shares and that nothing in this
Agreement is intended to or shall, to the extent that PICO has designees or
nominees that serve as directors of the Company, in any way affect or limit the
ability of any such director of the Company to act in his or her capacity as a
director of the Company.

(c)    Expenses. All costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such costs and expenses.

(d)    Definition of “Beneficial Ownership”. For purposes of this Agreement,
“beneficial ownership” with respect to (or to “own beneficially”) any securities
shall mean having “beneficial ownership” of such securities (as determined
pursuant to Rule 13d-3 under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in writing.

(e)    Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement is not intended to and
shall not confer upon any Person other than the parties hereto any rights
hereunder.

(f)    Assignment; Binding Effect. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other parties, except that (i) Merger Sub may assign its rights
and interests hereunder to Parent or to any wholly-owned subsidiary of Parent if
such assignment would not cause a delay in the consummation of any of the
Transactions, provided that no such assignment shall relieve Merger Sub of its
obligations hereunder if such assignee does not perform such obligations, and
(ii) PICO may assign its rights and interests hereunder by operation of law to a
successor Delaware corporation in connection with PICO’s proposed
reincorporation in the State of Delaware, if such reincorporation is approved by
the requisite stockholder vote at PICO’s 2017 Annual Meeting of Shareholders.
Subject to the preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Any purported assignment not permitted under this Section
shall be null and void.

(g)    Amendments; Waiver. This Agreement may not be amended or supplemented,
except by a written agreement executed by the parties hereto. Any party to this
Agreement may (i) waive any inaccuracies in the representations and warranties
of any other party hereto or extend the time for the performance of any of the
obligations or acts of any other party hereto, or (ii) waive compliance by the
other party with any of the agreements contained herein. Notwithstanding the
foregoing, no failure or delay by Parent or Merger Sub in exercising any right
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 hereunder. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.

(h)    Severability. If any term or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other
terms, provisions and conditions of this Agreement shall nevertheless remain in
full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law and public policy in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

 

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(i)    Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by the other parties hereto.

(j)    Descriptive Headings. Headings of Sections and subsections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.

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

if to Parent or Merger Sub, to

Century Communities, Inc.

8390 East Crescent Parkway, Suite 650

Greenwood Village, CO 80111

  Attention: Dale Francescon (Co-Chief Executive Officer)

    David Messenger (Chief Financial Officer)

Fax: 303-770-8320

  Email: DaleF@centurycommunities.com; and

    DaveM@centurycommunities.com

with copies (which shall not constitute notice) to:

Greenberg Traurig, LLP

1840 Century Park East, Suite 1900

Los Angeles, CA 90067

Attention: Mark J. Kelson, Esq.

Fax: 310-586-0556

Email: kelsonm@gtlaw.com

Greenberg Traurig, LLP

The MetLife Building

200 Park Avenue

New York, NY 10116

Attention: Clifford E. Neimeth, Esq.

Fax: 212-805-9383

Email: neimethc@gtlaw.com

if to PICO, to:

PICO Holdings, Inc.

7979 Ivanhoe Avenue, Suite 300

La Jolla, CA 92037

Attention: Chief Executive Officer

Fax: 858-652-4131

Email: mwebb@picoholdings.com

 

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with copies (which shall not constitute notice) to:

Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Attention: Jason L. Kent, Esq.

Fax: 858-550-6420

Email: jkent@cooley.com

or such other address, fax number or email address 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 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.

(l)    Governing Law; Enforcement; Jurisdiction; Waiver of Jury Trial.

(i)    This Agreement shall be governed by, and construed in accordance with,
the internal procedural and substantive Laws of the State of Delaware, without
regard to the choice of law rules thereof.

(ii)    All actions and proceedings arising out of or relating to this Agreement
shall be exclusively heard and determined in the Chancery Court of the State of
Delaware or any federal court sitting in the State of Delaware, and the parties
hereto hereby irrevocably submit to the exclusive jurisdiction of such courts
(and, in the case of appeals, appropriate appellate courts therefrom) in any
such action or proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding. The consents to
jurisdiction set forth in this paragraph shall not constitute general consents
to service of process in the State of Delaware and shall have no effect for any
purpose except as provided in this paragraph and shall not be deemed to confer
rights on any Person other than the parties hereto. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by applicable Law.

(iii)    Each of the parties hereto hereby irrevocably waives any and all rights
to trial by jury in any legal proceeding arising out of or related to this
Agreement.

(iv)    The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not timely performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to seek and obtain and injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the Chancery Court of the State of
Delaware or any federal court sitting in the State of Delaware, this being in
addition to any other remedy to which they are entitled at Law or in equity.

(m)    Company Acknowledgement and Agreements. The Company hereby represents to
Parent that (i) this Agreement and the transactions contemplated hereby have
been approved by all requisite corporate and other action of the Company and the
Company Board for purposes of Article XII of the Company Charter, and (ii) all
such other corporate action has been taken to render inapplicable to Parent,
Merger Sub, PICO, the Merger Agreement, this Agreement, the Merger and each of
the other

 

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Transactions, the provisions of any Anti-Takeover Law. The Company Board (or
other appropriate authorized officials of the Company) have notified the
Company’s transfer agent as to the provisions of Section 1(e) hereof and have
instructed the Company’s transfer agent, in writing, not to honor, record, give
effect to or respect any Transfer of PICO Shares in violation of this Agreement.

[Signature page follows]

 

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

 

CENTURY COMMUNITIES, INC.

By:  

/s/ Dale Francescon

  Name:   Dale Francescon   Title:  

Chairman of the Board and

Co-Chief Executive Officer

CASA ACQUISITION CORP.

By:  

/s/ Dale Francescon

  Name:   Dale Francescon   Title:   President

PICO Holdings, Inc.

By:  

/s/ Max Webb

  Name:   Max Webb   Title:   CEO & President

Solely, for the purpose of Sections 1(g) and 6(m) of this Agreement,

 

UCP, Inc. By:  

/s/ Dustin L. Bogue

  Name:   Dustin L. Bogue   Title:   President & CEO

Solely, for the purpose of Section 1(g) of this Agreement,

 

UCP, LLC By:   UCP, Inc., its Managing Member By:  

/s/ Dustin L. Bogue

  Name:   Dustin L. Bogue   Title:   President & CEO