AGREEMENT
This is an agreement dated June 10, 1997 between MFA
Limited Partnership, a Delaware limited partnership ("MFA"),
LMM Family Partnership, L.P. ("LMM"), Leonard Miller, an in-
dividual ("Miller," and together with MFA and LMM, the "Miller
Entities"), Pacific Greystone Corporation, a Delaware corpora-
tion ("Greystone") and Warburg, Pincus Investors, L.P.
("Warburg").
Whereas, Lennar Corporation ("Lennar") and Greystone
propose to enter into a Plan and Agreement of Merger on the
date of this Agreement (as it may be amended or supplemented,
the "Merger Agreement") providing for the merger of Lennar into
Greystone (the "Merger");
Whereas, the Miller Entities collectively own in the
aggregate 9,944,130 shares of Class B Common Stock, par value
$0.10 per share, of Lennar (the "Lennar Class B Stock"); those
shares of Lennar Class B Stock, as they may be adjusted by any
stock dividend, stock split, recapitalization, combination or
exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by Lennar, are referred to in
this Agreement as the "Miller Shares";
Whereas, as a condition to its willingness to enter
into the Merger Agreement, Greystone has requested that the
Miller Entities enter into this Agreement;
Now, therefore, to induce Lennar to enter into, and
in consideration of its entering into, the Merger Agreement,
and in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable con-
sideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE MILLER ENTITIES
1.1 MFA and LMM each represents and warrants as to itself
to Greystone and Warburg as follows:
(a) Authority. It is a limited partnership, duly
organized validly existing and in good standing under the laws
of the State of Delaware. It has all power and authority nec-
essary to enable it to enter into this Agreement and to carry
out the transactions contemplated by this Agreement. This
Agreement has been duly and validly authorized, executed and
delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its
terms.
(b) Non-Contravention. Neither its execution and
delivery of this Agreement nor consummation of the transactions
contemplated by this Agreement or by any document to be deliv-
ered in accordance with this Agreement will violate, result in
a breach of, or constitute a default
(or an event which, with notice or lapse of time or both would
constitute a default) under, its limited partnership agreement,
any agreement or instrument to which it is a party or by which
it is bound, any law, or any order, rule or regulation of any
court or governmental agency or other regulatory organization
having jurisdiction over it.
(c) Approvals and Consents. No governmental fil-
ings, authorizations, approvals or consents, or other govern-
mental action is required for the execution and delivery of
this Agreement by it, the performance by it of its obligations
under this Agreement or the consummation by it of the trans-
actions contemplated by this Agreement.
1.2 Miller represents and warrants to Greystone and
Warburg as follows:
(a) Authority. Miller has full capacity and author-
ity to enter into this Agreement and to carry out the trans-
actions contemplated by this Agreement. This Agreement has
been duly executed and delivered by Miller and constitutes a
legal, valid and binding obligation of Miller enforceable
against Miller in accordance with its terms. The representa-
tions and warranties in Section 1.1 are true and correct.
(b) Approvals and Consents. No governmental fil-
ings, authorizations, approvals or consents, or other govern-
mental action is necessary or required for the execution and
delivery of this Agreement by Miller, the performance by Miller
of its obligations under this Agreement or the consummation of
the transactions contemplated hereby.
1.3 Each of the Miller Entities represents and war-
rants to Greystone that (a) the Miller Shares constitute more
than 98% of the outstanding shares of Lennar Class B Stock and
have more than 50% of the voting power of all the outstanding
stock of Lennar of all classes; (b) the Miller Entities own the
Miller Shares, free and clear of any liens, claims, security
interests, proxies, voting trusts or agreements, understandings
or arrangements which would in any way restrict or impair the
Miller Entities' right to vote the Miller Shares in their sole
discretion or could require the Miller Entities to sell or
transfer any of the Miller Shares (whether upon default on a
loan or otherwise) before December 31, 1997; (c) the Miller
Entities have the sole voting power and sole power to issue
instructions with respect to the Miller Shares and (d) the ob-
ligations of the Miller Entities hereunder shall survive the
death, disability or incapacity of Miller.
1.4 Greystone hereby represents and warrants to the
Miller Entities and Warburg as follows:
(a) Authority. Greystone is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Greystone has all power and author-
ity necessary to enable it to enter into this Agreement and to
carry out the transactions contemplated by this Agreement.
This Agreement has been duly and validly authorized, executed
and delivered by Greystone and constitutes a legal, valid and
binding obligation of Greystone enforceable against Greystone
in accordance with its terms.
(b) Non-Contravention. Neither the execution
and delivery of this Agreement by Greystone nor the consumma-
tion of the transactions contemplated by this Agreement or by
any document to be delivered in accordance with this Agreement
will violate, result in a breach of, or constitute a default
(or an event which, with notice or lapse of time or both would
constitute a default) under, the certificate of incorporation
or by-laws of Greystone, any agreement
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or instrument to which Greystone is a party or by which it is
bound, any law, or any order, rule or regulation of any court
or governmental agency or other regulatory organization having
jurisdiction over Greystone.
(c) Approvals and Consents. No governmental
filings, authorizations, approvals or consents, or other gov-
ernmental action is required for the execution and delivery of
this Agreement by Greystone, the performance by Greystone of
its obligations under this Agreement or the consummation by
Greystone of the transactions contemplated by this Agreement.
ARTICLE II
COVENANTS OF THE MILLER ENTITIES
Each of the Miller Entities hereby covenants and agrees as
to itself with Greystone and Warburg as follows:
2.1 Vote for Merger. At any meeting of stockholders
of Lennar called to vote upon the Merger and the Merger Agree-
ment or any of the transactions contemplated thereby (including
the Spin Off, as defined in the Merger Agreement) or at any
adjournment or postponement thereof or in any other circum-
stances upon which a vote, consent or other approval with re-
spect to the Merger and the Merger Agreement is sought, each
Miller Entity shall vote (or cause to be voted) all of the out-
standing shares of Lennar Class B Stock owned by it in favor of
the Merger, the adoption by Lennar of the Merger Agreement,
other matters relating to the approval of the terms of the
Merger Agreement and each of the other transactions contem-
plated by the Merger Agreement (including the Spin Off).
2.2 Vote Against Alternative Proposals. At any
meeting of stockholders of Lennar or at any adjournment or
postponement thereof or in any other circumstances upon which
the Miller Entity's vote, consent or other approval is sought,
each Miller Entity shall vote (or cause to be voted) all of the
outstanding shares of Lennar Class B Stock owned by it against
(i) any proposal or offer with respect to any direct or in-
direct (A) acquisition or purchase of what would be 15% or more
of the outstanding common stock of Lennar, (B) acquisition or
purchase of any equity securities of any significant subsidiary
of Lennar (as the term "significant subsidiary is defined in
Securities and Exchange Commission Regulation S-X), (C) acqui-
sition or purchase of all or any significant portion of the
assets of Lennar or any subsidiary of Lennar, or (D) any
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving
Lennar or any of its subsidiaries, (ii) any change in the per-
sons who constitute the Board of Directors of Lennar or (iii)
any change in the present capitalization of Lennar or any
amendment of Lennar's certificate of incorporation or by-laws
or other proposal or transaction involving Lennar or any of its
subsidiaries, if in the case of clause (i), (ii) or (iii) such
transaction, change, amendment or other proposal or transaction
would in any manner impede, frustrate, prevent or nullify the
Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement (including the Spin Off)
or would reasonably be likely to result in any of the condi-
tions to Lennar's obligations under the Merger Agreement not
being fulfilled.
2.3 Transfers. Prior to the Effective Time (as
defined in the Merger Agreement), no Miller Entity will (i)
sell, transfer, pledge, assign or otherwise dispose of, or
enter into any contract, option or other arrangement with
respect to the sale, transfer, pledge, assignment or other
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disposition of, any Miller Shares to any person other than pur-
suant to the Merger and the Merger Agreement, unless such
transferee would be a "Permitted Transferee" under Lennar's
Certificate of Incorporation (a "Permitted Transferee") and
agrees in writing to be bound by the terms of this Agreement
with respect to the Miller Shares transferred to it or (ii)
enter into any voting arrangement, whether by proxy, voting
arrangement, voting agreement or otherwise, other than for the
purpose of voting the Miller Shares as required by this Agree-
ment.
2.4 No Solicitations. Prior to the Effective Time
(as defined in the Merger Agreement), no Miller Entity nor any
of its affiliates nor any of their respective officers, part-
ners or directors shall, and each Miller Entity will direct,
and use its best efforts to cause, its employees, agents and
representatives (including any investment banker, attorney or
accountant retained by it or any of its affiliates) not to,
directly or indirectly, initiate, solicit, encourage or other-
wise facilitate any inquiries or the making of any proposal or
offer with respect to a merger, reorganization, share exchange,
consolidation or similar transaction involving Lennar, or any
purchase of, or tender offer for, all or any significant por-
tion of any equity securities of Lennar or of all or any sig-
nificant portion of the assets of Lennar on a consolidated
basis (any such proposal or offer being hereinafter referred to
as an "Acquisition Proposal"); provided however that nothing in
this Agreement shall prevent any person from taking any action
permitted or required pursuant to the Merger Agreement to be
taken by such person in his capacity as a director of Lennar
and all such actions taken by any person who is a director of
Lennar shall be deemed to be taken by such person in his capac-
ity as a director. Each Miller Entity agrees that it will
promptly advise Greystone of the receipt of any Acquisition
Proposal.
2.5 Vote for Warburg Nominees. For as long as
Warburg is entitled, pursuant to the Agreement dated as of the
date hereof by and between Warburg, Lennar and Greystone (the
"Warburg Voting Agreement"), to nominate one or more persons
("Warburg Nominees") to serve as directors on the Board of
Directors of the surviving corporation of the Merger (the
"Company"), at any meeting of stockholders of the Company
called to vote upon the election of a Warburg Nominee to the
Company's Board of Directors or a Warburg Nominee's removal
therefrom, or at any adjournment or postponement thereof or in
any other circumstances upon which such a vote, consent or
other approval is sought, each Miller Entity shall vote (or
cause to be voted) all of the equity securities of the Company
owned by it in favor of the election of the Warburg nominees
and against their removal from the Board of Directors of the
Company. Each Miller Entity shall also vote (or cause to be
voted) all of the equity securities of the Company owned by it
in favor of, consent to, and take any and all other actions
reasonably necessary to effect, the changes to the structure of
the Company's Board of Directors set forth in Paragraph 4.1 of
the Warburg Voting Agreement.
2.6 Vote on Amendment. (a) Prior to the first to
occur of the second anniversary of the Merger or the effective-
ness of the Amendment (as such term is defined below), none of
the Miller Entities will vote any equity securities of the Com-
pany owned by them in favor of any merger, consolidation or
other business combination that, if the Amendment were effec-
tive, would require the Minority Vote (as defined below).
(b) Each Miller Entity will vote all of its
shares of common stock or Class B Common Stock of the Company
in favor of the Amendment.
For purposes of this Agreement, "Amendment" means an
amendment to the Company's Certificate of Incorporation to pro-
vide that, in addition to any other vote required by the cer-
tificate of incorporation, by law, by any rule of any securi-
ties exchange or otherwise, any merger,
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consolidation or other business combination involving the Company
shall require the affirmative vote of the holders of at least a
majority of the issued and outstanding shares of common stock
(other than the Class B Common Stock of the Company) of the Company
(the"Common Stock"), voting as a single class (the "Minority
Vote"), unless the type and amount of the consideration re-
ceived by the holder of a share of Common Stock of the Company
in such transaction is the same as that received by a holder
of, a share of Class B Common Stock of the Company; provided,
however that if shareholders are given the right to elect among
differing kinds of consideration in such business combination,
the foregoing requirement will be deemed satisfied if the
holders of shares of Common Stock are given the same rights of
election (including without limitation proration rights) as the
holders of shares of Class B Common Stock of the Company.
2.7 Restriction on Sale. Each Miller Entity agrees
that until November 30, 1999, it shall not sell or otherwise
dispose of any shares of stock of the Company which the Miller
Entity receives as a result of the Merger with regard to Miller
Shares unless (i) the transferee agrees to be bound by the pro-
visions of this Agreement or (ii) after the sale, the Miller
Entities hold in aggregate shares entitled to more than 50% of
the votes in an election of directors of the Company. Any sale
or other disposition in violation of the terms hereof shall be
null and void.
ARTICLE III
COVENANT OF COMPANY
3.1 Vote on Amendment. No later than the first an-
nual meeting of shareholders of the Company following the
Merger, the Company will recommend the Amendment to its share-
holders and shall take or cause to be taken all reasonable ac-
tions within its respective power and authority to cause the
Amendment to be approved by its shareholders.
ARTICLE IV
TERMINATION
4.1 Termination. The covenants and agreements con-
tained in Article II and Article III of this Agreement shall be
of no further force or effect in the event that at any time (i)
the Warburg Voting Agreement shall not be enforceable against
the holders of shares of Common Stock of Greystone party
thereto or covered thereby, (ii) the Merger Agreement is ter-
minated in accordance with its terms or (iii) the Merger has
occurred, the Miller Entities no longer have any obligations
under Paragraph 2.5 and the Miller Entities have voted all of
their shares of Common Stock in favor of the Amendment. The
covenants and agreements contained in this Agreement shall sur-
vive the Merger and after the Merger shall be binding upon and
inure to the benefit of the Company.
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ARTICLE V
GENERAL PROVISIONS
5.1 Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contem-
plated hereby shall be paid by the party incurring the expense.
5.2 Entire Agreement. This Agreement, the Merger
Agreement and the documents to be delivered in accordance with
this Agreement and the Merger Agreement contain the entire
agreement among the parties relating to the transactions which
are the subject of this Agreement and all prior negotiations,
understandings and agreements among the parties with regard to
the subject matter of this Agreement are superseded by this
Agreement and the Merger Agreement, and there are no represen-
tations, warranties, understandings or agreements concerning
the transactions which are the subject of this Agreement or
those other documents other than those expressly set forth in
this Agreement and the Merger Agreement.
5.3 Captions. The captions of the articles and
paragraphs of this Agreement are for reference only, and do not
affect the meaning or interpretation of this Agreement.
5.4 Prohibition Against Assignment. Neither this
Agreement nor any right or obligations of any party under it
may be assigned (except that after the Merger, this Agreement
shall be binding upon and inure to the benefit of the surviving
corporation of the Merger).
5.5 Notices and Other Communications. Any notice or
other communication under this Agreement must be in writing and
will be deemed given when delivered in person or sent by fac-
simile (with proof of receipt at the number to which it is re-
quired to be sent), or on the third business day after the day
on which mailed by first class mail from within the United
States of America, to the following addresses (or such other
address as may be specified after the date of this Agreement by
the party to which the notice or communication is sent):
If to Greystone:
Pacific Greystone Corporation
6767 Forest Lawn Drive
Los Angeles, California 90068-1027
Attention: Jack Harter
Facsimile No.: (213) 876-3866
with a copy to:
Andrew Brownstein, Esq.
Wachtell, Lipton, Rosen & Katz
New York, New York 10019
Facsimile No.: (212) 403-2000
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If to Warburg:
Warburg, Pincus Investors, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: Reuben Leibowitz
Facsimile No.: (212) 878-0861
with a copy to:
Andrew Brownstein, Esq.
Wachtell, Lipton, Rosen & Katz
New York, New York 10019
Facsimile No.: (212) 403-2000
If to any Miller Entity:
Leonard Miller
700 Northwest 107th Avenue
Miami, Florida 33172
Facsimile No.: (305) 227-7115
with a copy to:
David W. Bernstein, Esq.
Rogers & Wells
200 Park Avenue
New York, New York 10166
Facsimile No.: (212) 878-8375
5.6 Governing Law. This Agreement will be governed
by, and construed under, the substantive laws of the State of
Delaware.
5.7 Amendments. This Agreement may be amended only
by a document in writing signed by Lennar, Warburg, Greystone
and each Miller Entity, and no amendment to Paragraph 2.6 or
3.1 shall be effective unless it has been approved by both (i)
the unanimous vote of the members of the Company's Board who
are not Miller Entities, relatives of any Miller Entity or
affiliates of the Miller Entities and (ii) the affirmative vote
of the holders of at least a majority of the then outstanding
shares of Common Stock of the Company, and those holders shall
be deemed to be third party beneficiaries of the agreements
contained in Paragraph 2.6 and 3.1 solely for the purpose of
enforcing those agreements.
5.8 Counterparts. This Agreement may be executed in
two or more counterparts, some of which may contain the signa-
tures of some, but not all, the parties. Each of those coun-
terparts will be deemed an original, but all of them together
will constitute one and the same agreement.
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5.9 Severability. If any provision of this Agree-
ment is held to be illegal, invalid or unenforceable under any
present or future law, and if the rights or obligations of any
party hereto under this Agreement will not be materially and
adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced
as if such illegal, invalid or unenforceable provision had
never comprised a part hereof, (iii) the remaining provisions
of this Agreement will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable pro-
vision or by its severance herefrom and (iv) in lieu of such
illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid
and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
5.10 Enforcement. The parties agree that irrepa-
rable damage would occur in the event that any of the provi-
sions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accord-
ingly agreed that the parties shall be entitled to an injunc-
tion or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agree-
ment in any Federal court located in the State of Delaware or
in a Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to the per-
sonal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in any action or proceed-
ing relating to or arising out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party
will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court, (iii)
agrees that such parties will not seek to change the venue of
any such action or proceeding or otherwise to move any such
action or proceeding to another court, whether because of in-
convenience of the forum or otherwise (provided that nothing in
this Section will prevent a party from removing an action or
proceeding from a Delaware state court to a Federal Court
located in the State of Delaware), (iv) agrees that such party
will not bring any action relating to this Agreement or any of
the transactions contemplated hereby in any court other than a
Federal court sitting in the State of Delaware or a Delaware
state court and (v) waives any right to trial by jury with re-
spect to any claim or proceeding related to or arising out of
this Agreement or any of the transactions contemplated hereby.
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IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be signed by its officer thereunto duly authorized
as of the date in the first paragraph of this Agreement.
PACIFIC GREYSTONE CORPORATION
By: /s/ JACK HARTER
Name: Jack Harter
Title: President
LMM FAMILY PARTNERSHIP, L.P.
By LMM Family Corp., its
general partner
By: /s/ LEONARD MILLER
Name: Leonard Miller
Title: President
MFA LIMITED PARTNERSHIP
By LMM Family Corp., its
general partner
By: /s/ LEONARD MILLER
Name: Leonard Miller
Title: President
Leonard Miller
/s/ LEONARD MILLER
WARBURG, PINCUS INVESTORS, L.P.
By Warburg, Pincus & Co., its
general partner
By: /s/ JOHN D. SANTOLERI
Name: John D. Santoleri
Title: Partner
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