AGREEMENT
This is an agreement dated June 10, 1997 between Len-
nar Corporation, a Delaware corporation ("Lennar"), Warburg,
Xxxxxx Investors, L.P., a Delaware limited partnership (the
"Stockholder"), and Pacific Greystone Corporation, a Delaware
corporation ("Greystone").
Whereas, Lennar and Greystone ("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 Stockholder owns in the aggregate
8,411,854 shares of Common Stock, par value $0.01 per share, of
Greystone (the "Greystone Common Stock"); those shares of
Greystone Common Stock, as they may be adjusted by any stock
dividend, stock split, recapitalization, combination or ex-
change of shares, merger, consolidation, reorganization or
other change or transaction of or by Greystone, are referred to
in this Agreement as the "Warburg Shares";
Whereas, as a condition to its willingness to enter
into the Merger Agreement, Lennar has requested that the Stock-
holder 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
The Stockholder represents and warrants to Lennar as
follows:
1.1 Authority. The Stockholder is a limited part-
nership duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Stockholder has
all power and authority 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 the Stockholder and con-
stitutes a legal, valid and binding obligation of the Stock-
holder enforceable against the Stockholder in accordance with
its terms.
1.2 Non-Contravention. Neither the execution and
delivery of this Agreement by the Stockholder 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 limited partnership agreement
of the Stockholder, any agreement or instrument to which the
Stockholder 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 the Stockholder.
1.3 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 the Stockholder, the performance by the
Stockholder of its obligations under this Agreement or the con-
summation by the Stockholder of the transactions contemplated
by this Agreement.
1.4 Warburg Shares. Except as may arise pursuant to
the Agreement dated as of June 26, 1996 by and between Grey-
stone and the Stockholder (the "Prior Voting Agreement"), (a)
the Warburg Shares constitute more than 50% of the outstanding
shares of Greystone Common Stock and have more than 50% of the
voting power of all the outstanding stock of Greystone of all
classes, (b) the Stockholder owns the Warburg 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 Stockholder's right to
vote the Warburg Shares in the Stockholder's sole discretion or
could require the Stockholder to sell or transfer any of the
Warburg Shares (whether upon default on a loan or otherwise)
before December 31, 1997, and (c) the Stockholder has the sole
voting power and sole power to issue instructions with respect
to the Warburg Shares.
Each of Lennar and Greystone hereby represents and
warrants to the Stockholder as follows:
1.5 Authority. Such party is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Such party 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 such party and constitutes a legal, valid and
binding obligation of such party enforceable against such party
in accordance with its terms.
1.6 Non-Contravention. Neither the execution and
delivery of this Agreement by such party nor the consummation
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 consti-
tute a default) under, the certificate of incorporation or by-
laws of such party, any agreement or instrument to which such
party is a party or by which it is bound, any law, or any or-
der, rule or regulation of any court or governmental agency or
other regulatory organization having jurisdiction over such
party.
1.7 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 such party, the performance by such party of
its obligations under this Agreement or the consummation by
such party of the transactions contemplated by this Agreement.
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ARTICLE II
COVENANTS OF THE STOCKHOLDER
The Stockholder hereby covenants and agrees with Len-
nar as follows:
2.1 Vote for Merger. Except as provided in Para-
graph 2.5 or Article V, at any meeting of stockholders of
Greystone called to vote upon the Merger and the Merger Agree-
ment or at any adjournment or postponement thereof or in any
other circumstances upon which a vote, consent or other ap-
proval with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted) at
least 50% of the outstanding shares of Greystone Common Stock
in favor of the Merger, the adoption by Greystone of the Merger
Agreement, other matters relating to the approval of the terms
of the Merger Agreement and each of the other transactions con-
templated by the Merger Agreement.
2.2 Vote Against Alternative Proposals. Except as
provided in Paragraph 2.5 or Article V, at any meeting of
stockholders of Greystone or at any adjournment or postponement
thereof or in any other circumstances upon which the Stock-
holder's vote, consent or other approval is sought, the Stock-
holder shall vote (or cause to be voted) at least 50% of the
outstanding shares of Greystone Common Stock against (i) any
proposal or offer with respect to any direct or indirect (A)
acquisition or purchase of what would be 15% or more of the
outstanding Greystone Common Stock, (B) acquisition or purchase
of any equity securities of any significant subsidiary of
Greystone (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 Greystone or any subsidiary of Greystone, or (D) any
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving
Greystone or any of its subsidiaries, (ii) any change in the
persons who constitute the Board of Directors of Greystone or
(iii) any change in the present capitalization of Greystone or
any amendment of Greystone's certificate of incorporation or
by-laws or other proposal or transaction involving Greystone 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 or would
reasonably be likely to result in any of the conditions to
Greystone's obligations under the Merger Agreement not being
fulfilled.
2.3 Transfers. Except as provided in Paragraph 2.5
or Article V and except as may arise pursuant to the Prior Vot-
ing Agreement, prior to the Effective Time (as defined in the
Merger Agreement), the Stockholder will not (i) sell, transfer,
pledge, assign or otherwise dispose of, or enter into any con-
tract, option or other arrangement with respect to the sale,
transfer, pledge, assignment or other disposition of, any
Warburg Shares to any person other than pursuant to the Merger
and the Merger Agreement, unless such transferee agrees in
writing to be bound by the terms of this Agreement with respect
to the Warburg Shares transferred to it or (ii) enter into any
voting arrangement, whether by proxy, voting arrangement, vot-
ing agreement or otherwise, other than for the purpose of vot-
ing the Warburg Shares as required by this Agreement.
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2.4 No Solicitations. Except as provided in Para-
graph 2.5 or Article V, prior to the Effective Time, neither
the Stockholder nor any of its affiliates nor any of their
respective officers or directors shall, and the Stockholder
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
otherwise facilitate any inquiries or the making of any pro-
posal or offer with respect to a merger, reorganization, share
exchange, consolidation or similar transaction involving
Greystone, or any purchase of, or tender offer for, all or any
significant portion of any equity securities of Greystone or of
all or any significant portion of the assets of Greystone on a
consolidated basis (any such proposal or offer being herein-
after 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 Greystone and all such actions taken by any per-
son who is a director of Greystone shall be deemed to be taken
by such person in his capacity as a director. The Stockholder
agrees that it will promptly advise Lennar of the receipt of
any Acquisition Proposal.
2.5 Payment as a Result of Termination of Merger
Agreement. If Greystone terminates the Merger Agreement pursu-
ant to Paragraph 7.1(d) or (e) of the Merger Agreement as a
result of a Superior Proposal (as defined in the Merger Agree-
ment) (having complied with all the prerequisites to the termi-
nation of the Merger Agreement under the applicable one of
those Paragraphs),
(a) If, when the Merger Agreement is terminated pur-
suant to Paragraph 7.1(d) or (e) of the Merger Agreement,
the Stockholder confirms in writing to Lennar that it is
bound by the provisions of this Paragraph 2.5 as a result
of the termination of the Merger Agreement, Warburg will
be released from its obligations under this Article II.
(b) In the event that such Superior Proposal or any
other Superior Proposal shall be consummated on or prior
to the one year anniversary of the termination of the
Merger Agreement pursuant to Paragraph 7.1(d) or (e)
thereof (the "Final Date"), the Stockholder shall pay to
Lennar (the "Warburg Payment") an amount, net of any taxes
payable notwithstanding the provisions of this Agreement,
equal to (x) the product of (A) the excess, if any, of the
Superior Price (as defined below) over $17.50 and (B) the
number of shares of Greystone Common Stock owned by the
Stockholder as of the date of consummation of the Superior
Proposal, less (y) any payments made under Section 16(b)
of the Exchange Act as a result of the consummation of the
Superior Proposal or the satisfaction of its obligations
hereunder.
(c) The Warburg Payment shall be made within 10 days
following the consummation of the Superior Proposal. In
the event any portion of the consideration received by the
Stockholder in the Superior Proposal consists of securi-
ties or other property other than cash (the "Non-Cash Con-
sideration"), the Warburg Payment may consist in whole or
in part of the Non-Cash Consideration. To the extent that
the Warburg Payment consists of any Non-Cash Consider-
ation, for purposes of determining whether the Stockholder
has made the Warburg Payment, such Non-Cash Consideration
shall be valued in accordance with clause
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(e) hereof as of the date of the consummation of the Superior
Proposal and not as of the date of delivery of the Warburg
Payment.
(d) For purposes hereof, the term "Superior Price"
shall mean the value (determined in accordance with clause
(e) hereof) as of the date of consummation of the Superior
Proposal of the consideration actually received per share
of Greystone Common Stock by the Stockholder in the Supe-
rior Proposal (valued as described below).
(e) For purposes of this Section 2.5, the value of
any consideration as of any date shall be (i) to the ex-
tent consisting of cash, the amount thereof, (ii) to the
extent consisting of securities listed on a national secu-
rities exchange or on the over-the-counter market, as re-
ported by the National Association of Securities Dealers,
Inc. Automated Quotations System, the average daily clos-
ing price thereof on such exchange or market on the five
trading days prior to the date of determination, (iii) to
the extent consisting of other securities, the fair value
thereof as of such date as determined in good faith by the
parties hereto.
ARTICLE III
RESTRICTION ON SALE
3.1 Restriction on Sale. If the Merger shall occur,
the Stockholder shall not sell or otherwise dispose of any
shares of stock of the corporation which survives the Merger
(the "Company Stock") which the Stockholder receives as a
result of the Merger with regard to Warburg Shares ("Warburg
Company Stock") on or prior to the date which is six months
after the Effective Time of the Merger (as defined in the
Merger Agreement).
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Designation of Directors; Number. For as long
as the Stockholder and its affiliates shall in the aggregate
beneficially own a number of shares of Company Stock of the
surviving corporation of the Merger (the "Company") equal to 5%
or more of the Adjusted Outstanding Company Stock (as defined
below), the Company's Board of Directors shall consist of no
more than nine members, at least five of whom shall not be
officers or employees of the Company or any of its subsidiar-
ies, or officers, employees of directors of LPC, Inc. or any of
its subsidiaries. For as long as the Stockholder and its af-
filiates shall in the aggregate beneficially own a number of
shares of Company Stock equal to (i) 5% or more of the Adjusted
Outstanding Company Stock, but less than 10% of the Adjusted
Outstanding Company Stock, the Stockholder shall have the right
to nominate, and the Company will make its best efforts to
cause to be elected or appointed, one individual to serve as a
director on the Company's Board of Directors (a "Warburg Nomi-
nee") and (ii) 10% or more of the Adjusted Outstanding Company
Stock, the Stockholder shall have the right to nominate and the
Company will make its best efforts to cause to be elected or
appointed to serve as director on the Company's Board of Direc-
tors, two Warburg Nominees. Without limiting the foregoing,
the Company agrees that upon
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receipt from the Stockholder of the name(s) of the Warburg
Nominee(s) the Company shall nominate such nominee(s) for election
to the Company's Board of Directors and recommend to the Company's
stockholders that they vote for such Warburg Nominee(s). As long
as the Stockholder shall beneficially own a number of shares of
Company Stock equal to 5% or more of the Adjusted Outstanding
Company Stock, upon request of the Stockholder, one such nominee
shall be entitled to be a member of the Independent Directors
Committee established pursuant to the Company's by-laws and of each
other committee of the Board of Directors (other than the Executive
Committee) so requested by the Stockholder. In the case of
death, resignation or removal of any Warburg Nominee, the Com-
pany will use its best efforts to cause another Warburg Nominee
to replace the former Warburg Nominee as a Director as promptly
as practicable and to appoint a Warburg Nominee to replace the
former Warburg Nominee on the committees on which the former
Warburg Nominee has served. For purposes of this Agreement,
the term "Adjusted Outstanding Company Stock" shall mean the
number of shares of Common Stock and Class B Common Stock of
the Company outstanding immediately following the Merger, equi-
tably adjusted for any stock splits, reverse stock splits,
stock dividends or similar recapitalization transactions (but
excluding shares of Common Stock or Class B Common Stock other-
wise issued after the Merger).
The Company shall take or cause to be taken all ac-
tion within its respective power and authority as may be re-
quired to effect the foregoing.
4.2 Consent Required for Certain Actions. For as
long as the Stockholder and its affiliates shall in the aggre-
gate beneficially own a number of shares of Company Stock equal
to 5% or more of the Adjusted Outstanding Company Stock, with-
out the prior written consent of the Stockholder, the Company
shall not, and shall not permit any of its subsidiaries to,
directly or indirectly, (a) issue shares of Company Stock (or
securities convertible or exchangeable into or exercisable for
Company Stock) representing in the aggregate (when considered
with all such issuances on or after the Effective Time and
assuming the exercise of any right of conversion, exchange or
exercise) more than 20% of the Adjusted Outstanding Company
Stock in any three year period following the Effective Time or
(b) purchase or acquire in any transaction or series of related
transactions any assets or properties with an aggregate fair
market value (when considered with all such purchases or acqui-
sitions on or after the Effective Time) of more than $100
million (other than acquisitions of properties in the ordinary
course of business consistent with past practices in the states
in which the Company operates as of the Effective Time).
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4.3 Registration Rights Agreement. Lennar and
Greystone agree to cause the Registration Rights Agreement in
the form attached to the Merger Agreement to be executed on or
prior to the Effective Time.
ARTICLE V
TERMINATION
5.1 Termination. The covenants and agreements con-
tained in Article II of this Agreement will terminate at the
earliest of (i) 10 days after the Final Date, (ii) the time
when the Merger Agreement is terminated pursuant to any provi-
sion of Paragraph 7.1 of the Merger Agreement other than Para-
graph 7.1(d) or (e), or (iii) the Effective Time. In addition,
the covenants and agreements contained in Article II of this
Agreement shall be of no further force or effect in the event
that at any time the Agreement dated as of the date hereof by
and between Xxxxxxx Xxxxxx and Greystone (the "Xxxxxx Voting
Agreement") shall not be enforceable against the holders of
shares of Class B Common Stock of Lennar party thereto or cov-
ered thereby or if the vote or consent of any holder of secu-
rities of Lennar other than the parties to the Xxxxxx Voting
Agreement shall be required to approve and adopt the Merger
Agreement or to effect the transactions contemplated by the
Merger Agreement or the Spin-Off Agreement (as defined in the
Merger Agreement). The covenants and agreements contained in
Articles III and in Sections 4.1 and 4.2 of this Agreement
shall not become effective until the Merger but shall survive
the Merger and after the Merger shall be binding upon and inure
to the benefit of the surviving corporation of the Merger.
ARTICLE VI
GENERAL PROVISIONS
6.1 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.
6.2 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.
6.3 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.
6.4 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
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Agreement shall be binding upon and inure to the benefit of the
surviving corporation of the Merger).
6.5 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 Lennar:
Lennar Corporation
000 Xxxxxxxxx 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
If to Stockholder or Greystone:
Warburg, Xxxxxx Investors, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
6.6 Governing Law. This Agreement will be governed
by, and construed under, the substantive laws of the State of
Delaware.
6.7 Amendments. This Agreement may be amended only
by a document in writing signed by Lennar, Greystone and the
Stockholder.
6.8 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.
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Each of those counterparts will be deemed an original, but all
of them together will constitute one and the same agreement.
6.9 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 provi-
sion or by its severance herefrom and (iv) in lieu of such il-
legal, 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, in-
valid or unenforceable provision as may be possible.
6.10 Enforcement. The parties agree that irrepar-
able 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 en-
force specifically the terms and provisions of this Agreement
in any Federal court located in the State of Delaware or in a
Delaware state court, this being in addition to any other rem-
edy to which they are entitled at law or in equity. In addi-
tion, each of the parties hereto (i) consents to the personal
jurisdiction of any Federal court located in the State of Dela-
ware or any Delaware state court in any action or proceeding
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
inconvenience 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 lo-
cated 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.
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.
LENNAR CORPORATION
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President
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WARBURG, XXXXXX INVESTORS, L.P.
By Warburg, Xxxxxx & Co., its
general partner
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Partner
PACIFIC GREYSTONE CORPORATION
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
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