PICO HOLDINGS, INC. (NASDAQ:PICO) Files An 8-K Entry into a Material Definitive Agreement

On April 10, 2017, Century Communities, Inc. (Century), Casa
Acquisition Corp, a wholly-owned subsidiary of Century (Merger
Sub), and UCP, Inc. (UCP) entered into an Agreement and Plan of
Merger (the Merger Agreement). A copy of the Merger Agreement was
filed as an exhibit to the Current Report on Form 8-K filed by
UCP on April 11, 2017.

Voting Agreement

Concurrently with the execution and delivery of the Merger
Agreement, on April 10, 2017, PICO Holdings, Inc. (the Company),
Century, Merger Sub, UCP and UCP, LLC entered into a voting
support and transfer restriction agreement (the Voting
Agreement). to the terms of the Voting Agreement, the Company
agreed, among other things, to vote all outstanding shares of
UCPs Class A Common Stock and Class B Common Stock currently held
or thereafter acquired by the Company (the PICO Shares) in favor
of the adoption of the Merger Agreement and against any proposal
by third parties to acquire UCP, and to take certain other
actions in furtherance of the transactions contemplated by the
Merger Agreement, in each case subject to the limitations set
forth in the Voting Agreement. Among other such limitations, the
Companys obligation to vote in favor of the adoption of the
Merger Agreement will be reduced to such number of PICO Shares as
is equal to 28% of the aggregate outstanding voting power of UCP
if the Board of Directors of UCP changes its recommendation in
respect of an Intervening Event (as defined in the Merger
Agreement), and the Voting Agreement automatically terminates if
the Merger Agreement is terminated (including if UCP terminates
the Merger Agreement to accept a superior proposal).

Subject to certain exceptions, the Voting Agreement prohibits
transfers by the Company of any of the PICO Shares and certain
other actions that would impair the ability of PICO to fulfill
its obligations under the Voting Agreement. The Voting Agreement
also contains non-solicitation covenants with respect to
alternative transactions generally similar to those contained in
the Merger Agreement with respect to UCP, including similar
exceptions to those covenants permitting the Company to take any
action, including holding discussions with third parties in
respect of potential alternative transactions, concurrently taken
by UCP and the Board of Directors of UCP under the circumstances
in which UCP is permitted to take such actions under the Merger
Agreement.

Century and the Company also agreed in the Voting Agreement to
certain post-closing covenants if the merger is consummated,
including with respect to the Companys ability to transfer the
shares of Centurys common stock it receives as consideration in
the merger or to acquire addition shares of Centurys common stock
and with respect to certain tax matters under UCP, LLCs operating
agreement.

Under the Voting Agreement, each of the Company, UCP and UCP,
LLC, as applicable, irrevocably agreed to terminate (without any
payments from, or any cost or expense to, UCP, Century or Merger
Sub) the following agreements, in each case subject to and
contingent upon the occurrence of the effective time of the
merger: (i) the Exchange Agreement, dated as of July 23, 2013
(the Exchange Agreement), by and among the Company, UCP, and UCP,
LLC, (ii) the Tax Receivable Agreement, dated as of July 23,
2013, by and among the Company, UCP, and UCP, LLC, (iii) the
Transition Services Agreement, dated as of July 23, 2013, by and
between the Company and UCP, and (iv) the Registration Rights
Agreement, dated July 23, 2013, by and between the Company and
UCP.

The Voting Agreement will terminate automatically on the first to
occur of (i) the termination of the Merger Agreement and (ii) the
effective time of the merger.

The foregoing description of the Voting Agreement is only a
summary, does not purport to be complete and is qualified in its
entirety by reference to the full text of the form of the Voting
Agreement, which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.

Agreement to Exchange

Concurrently with the execution and delivery of the Merger
Agreement, on April 10, 2017, the Company, UCP, and UCP, LLC
entered into an agreement to exchange (the Agreement to
Exchange), to which the Company exercised its right under the
Exchange Agreement to effect the exchange of all of its Series A
Units of UCP, LLC for shares of UCPs Class A Common Stock (the
Exchange). Under the Agreement to Exchange, the Exchange will
occur immediately prior to, and remain subject to the
consummation immediately thereafter of, the merger contemplated
by the Merger Agreement.

The foregoing description of the Agreement to Exchange is only a
summary, does not purport to be complete and is qualified in its
entirety by reference to the full text of the form of the
Agreement to Exchange, which is attached hereto as Exhibit 99.2
and incorporated herein by reference.

As a result of the above described transaction, the Company
anticipates recording an impairment loss in its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2017 to be filed on
or before May 10, 2017. Based on the Companys carrying value of
UCP as of December 31, 2016 the loss is estimated to be
approximately $9.3 million. The ultimate results recognized by
the Company could vary materially based on a number of factors.

On April 11, 2017, the Company issued a press release announcing
the Merger Agreement and related matters. A copy of the press
release is attached hereto as Exhibit 99.3 and incorporated
herein by reference.

Forward-Looking Statements

Statements contained in this Current Report on Form 8-K regarding
matters that are not historical facts are forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Because such statements are
subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such
forward-looking statements. Risks are described in the Companys
filings with the Securities and Exchange Commission (the SEC),
including without limitation the Companys most recent Annual
Report on Form 10-K and other documents subsequently filed with
or furnished to the SEC. All forward-looking statements contained
in this Current Report on Form 8-K speak only as of the date on
which they were made. The Company undertakes no obligation to
update such statements to reflect events that occur or
circumstances that exist after the date on which they were made.

(d) Exhibits.