The Payment and Performance Guaranty is continuing, unlimited, absolute and unconditional and survives the termination of the Master Program Agreement, the Master Option Agreement, the Master Construction Agreement and any related project addenda until (i) termination of any such documents pursuant to its terms due to Millrose’s default thereunder or (ii) Lennar’s obligations described above are fully and indefeasibly paid and performed.
Recognition, Subordination and Non-Disturbance Agreement
On the Spin-Off Date, Lennar and Millrose entered into the Recognition, Subordination and Non-Disturbance Agreement (the “Recognition Agreement”), pursuant to which Lennar subordinates its rights, title, claims and interests in, to and under the Master Option Agreement and Master Construction Agreement to the lien of promissory notes, mortgages and pledge and security agreements (collectively, the “Loan Documents”) entered into by Millrose Holdings and MPH Parent in favor of Millrose.
Pursuant to the Recognition Agreement, Millrose has agreed, if Millrose acquires any property or collateral pledged under the Loan Documents as a result of Millrose’s exercise of any remedies thereunder: (i) to perform its subsidiaries’ obligations under the Loan Documents; (ii) to take no action that would prevent or be inconsistent with Lennar’s exercise of its rights under the Recognition Agreement, the Master Option Agreement and Master Construction Agreement and (iii) if requested by Lennar, to (a) execute any documents that are to be signed by a note borrower, (b) release any mortgage or security interest under the pledge and security agreement with respect to any common areas of streets created or dedicated in connection with the development of the property and (c) subordinate any mortgage or security interest under the pledge and security agreement to any easement or declaration granted or created in connection with the development of the property.
Millrose has agreed to notify Lennar at least ten business days before commencing a foreclosure with respect to a mortgage or the pledge and to grant Lennar the right to purchase the Millrose subsidiary’s obligation to pay Millrose pursuant to the promissory note.
The Recognition Agreement will terminate upon (a) the full, final and indefeasible payment of all amounts due under the Loan Documents and (b) the satisfaction in full of all of Millrose parties’ obligations under the Master Option Agreement and Master Construction Agreement.
Rausch Letter Agreement
On February 10, 2025, Millrose completed its acquisition of land assets consisting of approximately 25,000 homesites through the acquisition of 100% of the outstanding stock of RCH Holdings, Inc. for approximately $859 million in cash, which is net of option deposits funded by Lennar and other holdbacks. The Company funded the transaction using cash on hand. In connection therewith, the Company entered into a letter agreement, dated as of February 6, 2025 (the “Rausch Letter Agreement”), with Lennar pursuant to which Lennar directed Millrose to, and Millrose agreed to, acquire such homesites, which were optioned to Lennar and are subject to the same representations and protections consistent with the assets transferred by Lennar to Millrose in the Spin-Off.
Policy for Approval of Related Party Transactions
Our Board has adopted a related party transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of any transaction, arrangement or relationship in which we are a participant, the amount involved exceeds $120,000 and one of our executive officers, directors, director nominees or a person whom we know to beneficially own more than 5% of our outstanding shares of common stock (or their immediate family members), each of whom we refer to as a “related person,” has a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related party transaction,” the related person must report the proposed related party transaction to our General Counsel to determine whether the transaction or relationship does, in fact, constitute a related party transaction. Under the policy, the proposed related party
