This Cooperation Agreement (this " Agreement "), effective as of June 12, 2006, is by and between Meritage Homes Corporation, a Maryland corporation (together with any
successor, " Meritage ") and John R. Landon (" Landon ").
WHEREAS , Landon and Meritage are parties to that certain Employment Agreement effective as of July 1, 2003, as amended from time to time (the " Employment Agreement ");
WHEREAS , Landon92s service as an officer and employee of Meritage has been terminated;
WHEREAS , Landon and Meritage are entering into (i) a Stock Purchase Agreement, dated the date hereof (the " Stock Purchase Agreement "), pursuant to which Meritage will acquire shares
of common stock from Landon, and (ii) a Settlement Agreement and Mutual Release and Waiver of Claims, dated the date hereof (the " Settlement Agreement ");
WHEREAS , Landon owns or controls, and will continue to own and control, a substantial amount of Meritage common stock; and
WHEREAS , Meritage and Landon wish to provide a constructive and mutually beneficial relationship between themselves with respect to his Meritage securities.
NOW THEREFORE , Meritage and Landon, in consideration of the mutual covenants contained herein and other consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows:
1. Definitions . Capitalized terms used herein and not otherwise defined shall have the meanings set forth below:
" Affiliate " of a Person means such Person92s spouse and children and any other Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under
common control with such Person.
" Beneficial Ownership " shall be deemed to exist and securities shall be deemed "Beneficially Owned" under circumstances that would cause a Person to be deemed a beneficial owner of
securities in accordance with Rule 13d-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended, and including any capital stock that such Person or Affiliate of such Person has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise.
" Landon Group " means Landon and any Affiliate of Landon.
" Person " means and includes any natural person, company, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency,
department or political subdivision thereof.
" Proxy " means any proxy, consent or similar instrument.
" SEC " means the U.S. Securities and Exchange Commission.
" Voting Power " of any Voting Securities means the aggregate number of votes attributable to such Voting Securities that could generally be cast by the holders thereof for the election of
directors at the time of determination.
" Voting Securities " means (i) the outstanding shares of common stock of Meritage, (ii) any other outstanding securities of Meritage that are generally entitled to vote for the election
of directors at the time of determination, and (iii) any outstanding securities of Meritage that are convertible into, or exercisable or exchangeable for, securities as described in clauses (i) and (ii) above that are owned by the Person in question.
2. Term of Agreement . This Agreement shall terminate, and the covenants contained herein shall expire, upon the termination of the Restriction Period (as such term is
defined in the Employment Agreement).
3. Representations and Warranties of Landon . Landon hereby represents and warrants to Meritage that Landon has duly executed and delivered this Agreement, has the power
and authority to enter into and perform this Agreement (on behalf of himself and all persons with a beneficial interest in the Voting Securities he beneficially owns, whether by community or otherwise) and (assuming due execution and delivery by Meritage)
this Agreement is a legal, valid and binding obligation of Landon enforceable against Landon in accordance with its terms and that the execution and performance of this Agreement does not conflict with or result in any violation or default under any agreement
to which Landon is a party, including any voting agreement, trust agreement, voting trust, proxy, pledge agreement, loan or credit agreement, note, bond, indenture, mortgage, lease or other agreement or instrument.
4. Representations and Warranties of Meritage . Meritage hereby represents and warrants to Landon that Meritage has duly executed and delivered this Agreement, has the
corporate power and authority to enter into and perform this Agreement and has duly authorized by all requisite action the execution, delivery and performance of this Agreement, and (assuming due execution and delivery by Landon) this Agreement is a legal,
valid and binding obligation of Meritage enforceable against Meritage in accordance with its terms and that the execution and performance of this Agreement does not conflict with or result in any violation or default under any agreement to which Meritage
or any of its direct or indirect subsidiaries is a party, including any voting agreement, trust agreement, voting trust, proxy, pledge agreement, loan or credit agreement, note, bond, indenture, mortgage, lease or other agreement or instrument.
5. Covenants . In addition to his obligations under the Stock Purchase Agreement and the Settlement Agreement, Landon covenants and agrees as follows:
(a) Voting by Landon Group . Landon shall, and shall cause each other Person in the Landon Group to, vote all the Voting Securities, whether now existing
or hereinafter acquired, over which Landon or such Person exercises voting control: (i) with respect to any election of directors, in favor of the directors recommended by the Nominating/Corporate Governance Committee (the "
Governance Committee ") of the Board of Directors of Meritage and nominated by the Board of Directors of Meritage; and (ii) with respect to any other proposal before the shareholders of Meritage, in accordance with the recommendation
of the Board of Directors of Meritage.
(b) Standstill . Landon shall not, and shall cause each other Person in the Landon Group not to, without the prior written approval of the Governance Committee, acting alone
or as part of a group: (i) acquire, propose, or offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights to acquire any securities of Meritage (other than securities owned beneficially
by any Person in the Landon Group) or any of its subsidiaries or any material portion of the assets of Meritage or any of its subsidiaries or divisions, provided however, that if Landon sells shares that bring his beneficial ownership of Voting Securities
below 5% of the outstanding Voting Securities of Meritage, Landon or any Person in the Landon Group may reacquire Voting Securities from time to time provided that as a result of such acquisitions the aggregate beneficial ownership of Voting Securities
by the Landon Group does not increase and thereafter exceed 4.99% of the outstanding Voting Securities of Meritage; (ii) make, or in any way participate, directly or indirectly, in any "solicitation" of "proxies" (as such terms are