XXXXXX XXXXXX
000 XX 000XX XXXXXX
SUITE 400
MIAMI, FLORIDA 33172
August 29, 2004
Xxxxx Property Holdings LLC
c/o Cerberus Capital Management, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Reference is made to that certain Agreement and Plan of Merger (the
"Merger Agreement"), dated as of August 29, 2004, by and among LNR Property
Corporation (the "Company"), Xxxxx Property Holdings LLC ("Parent") and Xxxxx
Acquisition Sub Corp. ("Acquisition Sub") providing for the acquisition of all
of the outstanding stock of the Company (the "Acquisition").
1. This letter will confirm the commitment of Xxxxxx Xxxxxx, The LM
Xxxxxx Xxxxxx Irrevocable Trust u/a 10/6/94, MFA Limited Partnership and The
Xxxxxx Charitable Fund, L.P. (collectively, "Xxxxxx") to contribute capital to
Parent in the amount of $150 million (the "Capital Contribution") in exchange
for strips of membership interests in Parent, 95% of which shall be designated
as preferred units and 5% of which shall be designated as common units. Such
commitment may be satisfied by a payment of $150 million in cash or a transfer
to Parent of common stock of the Company having a value of $150 million based
upon the Merger Consideration, as defined in the Merger Agreement, or a
combination of the foregoing.
2. In connection with the Capital Contribution, Xxxxxx also agrees to
execute and deliver, as of the Merger Date (as defined in the Merger Agreement),
the Amended and Restated Limited Liability Company Agreement of Parent (the
"Limited Liability Company Agreement"), reflecting the terms set forth in the
Xxxxxx Equity Investment Term Sheet attached hereto and otherwise in such form
and having such provisions as Parent and Xxxxxx mutually agree.
3. Xxxxxx'x commitment to make the Capital Contribution and to take the
other actions set forth in paragraph 2 are subject to the satisfaction, or
waiver by Parent, of all of the conditions to its or Acquisition Sub's
obligations contained in the Merger Agreement, the concurrent closing of the
Acquisition and the execution and delivery of all of the parties thereto of the
Limited Liability Company Agreement of Parent.
4. Xxxxxx will not amend, modify or terminate this letter in any
respect that would adversely affect the probability that the Acquisition will
close or will delay the closing without the prior consent of Parent.
5. The Company is an intended third party beneficiary of paragraph 1 of
this letter agreement, and will have the right to enforce paragraph 1 of this
letter agreement, subject to the limitations set forth in paragraphs 2 and 3
above and 6 below.
6. Notwithstanding any other term or condition of this letter
agreement, under no circumstances shall Xxxxxx be liable for punitive, indirect
or consequential damages. There is no express or implied intention to benefit
any other third party and nothing contained in this letter agreement is
intended, nor shall anything herein be construed, to confer any rights, legal or
equitable, in any person other than Parent and the Company.
7. This letter agreement will be effective upon Xxxxxx's acceptance of
the terms and conditions of this letter agreement and will expire on the
earliest to occur of (i) the closing of the Merger and satisfaction of the
conditions set forth in paragraphs 1 and 2 or (ii) the termination of the Merger
Agreement pursuant to its terms. Any claim against Xxxxxx arising under this
letter agreement shall be barred if not brought in a court of competent
jurisdiction on or before the day that is 60 days following the termination of
the Merger Agreement.
8. This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to the
conflict of laws principles thereof that would apply the laws of any other
jurisdiction). Each party to this letter agreement hereby irrevocably and
unconditionally agrees that any action, suit or proceeding, at law or equity,
arising out of or relating to this letter agreement or any agreements or
transactions contemplated hereby shall only be brought in any federal court of
the Southern District of New York or any state court located in New York County,
State of New York, and hereby irrevocably and unconditionally expressly submits
to the personal jurisdiction and venue of such courts for the purposes thereof
and hereby irrevocably and unconditionally waives (by way of motion, as a
defense or otherwise) any and all jurisdictional, venue and convenience
objections or defenses that such party may have in such action, suit or
proceeding. Each party hereby irrevocably and unconditionally consents to the
service of process of any of the aforementioned courts. Nothing herein contained
shall be deemed to affect the right of any party to serve process in any manner
permitted by law or commence legal proceedings or otherwise proceed against any
other party in any other jurisdiction to enforce judgments obtained in any
action, suit or proceeding brought pursuant to this section.
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Sincerely,
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
THE LM XXXXXX XXXXXX IRREVOCABLE TRUST
U/A 10/6/94
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
MFA LIMITED PARTNERSHIP
By: LMM Family Corp., its General Partner
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: President
THE XXXXXX CHARITABLE FUND, L.P.
By: LMM Family Corp., its General Partner
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: President
ACCEPTED:
XXXXX PROPERTY HOLDINGS LLC
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
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