AGREEMENT AND PLAN OF MERGER

by and among

THE NEWHALL LAND AND FARMING COMPANY,

LENNAR CORPORATION,

LNR PROPERTY CORPORATION,

NWHL INVESTMENT LLC,

and

NWHL ACQUISITION, L.P.

Dated as of

July 21, 2003

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EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of July 21, 2003 (this Agreement), by and among The Newhall Land and Farming Company, a California limited partnership (the Company), Lennar Corporation, a Delaware corporation, and LNR Property Corporation, a Delaware corporation (collectively, Lima), NWHL Investment LLC, a Delaware limited liability company, a directly or indirectly owned subsidiary of Lima (Parent), and NWHL Acquisition, L.P., a California limited partnership (Acquisition).

RECITALS

The board of directors, board of managers, general partner or general partners, as the case may be, of each of Lima, Parent, Acquisition and the Company have approved, and deem it fair, advisable and in the best interests of each respective corporation, limited liability company or limited partnership and its shareholders, members or limited partners, as the case may be, to consummate the acquisition of the Company by Parent through the merger of Acquisition with and into the Company upon the terms and subject to the conditions set forth in this Agreement (the Merger).

The respective general partner or general partners of each of Acquisition and the Company have unanimously approved the Merger and the principal terms of this Agreement in accordance with the California Revised Limited Partnership Act (the RLPA) and the respective board of directors or members of each of Lima and Parent have approved the Merger and the Agreement.

The general partners of the Company have determined that this Agreement is advisable, and that the consideration to be paid for each Unit (as defined in Section 1.7) in the Merger is fair to the holders of such Units, and have resolved to recommend that the holders of such Units approve the principal terms of the Merger on the terms and subject to the conditions set forth in this Agreement.

As a condition and inducement to each partys entering into this Agreement and incurring the obligations set forth herein, (i) certain unitholders of the Company, concurrently with the execution and delivery of this Agreement, are entering into a voting agreement, substantially in the form attached to this Agreement as Exhibit A (the Voting Agreement), and (ii) Parent is delivering to the Company cash in the amount of $5.0 million.

AGREEMENT

In consideration of the foregoing and the mutual representations, warranties and covenants in this Agreement, the parties hereto, intending to be legally bound, agree as follows:

1

ARTICLE 1

MERGER OF ACQUISITION AND THE COMPANY

1.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the RLPA, at the Effective Time (as defined in Section 2.3), Acquisition will be merged with and into the Company, which will be the surviving limited partnership in the Merger (the Surviving Partnership). Except as specifically provided in this Agreement, when the Merger becomes effective, (a) the real and personal property, other assets, rights, privileges, immunities, powers, purposes and franchises of the Company will continue as those of the Surviving Partnership, unaffected and unimpaired by the Merger, (b) the separate existence of Acquisition will terminate, and Acquisitions real and personal property, other assets, rights, privileges, immunities, powers, purposes and franchises will be merged into the Surviving Partnership, which will succeed to and assume all the rights and obligations of Acquisition in accordance with the RLPA, and (c) the Merger will have the other effects specified in the RLPA (including Section 15678.6 of the RLPA).

1.2 Certificate of Limited Partnership. The certificate of limited partnership of the Company immediately before the Effective Time will be amended in its entirety to be identical to the certificate of limited partnership of Acquisition immediately before the Effective Time and shall be the certificate of limited partnership of Surviving Partnership from the Effective Time until subsequently amended in accordance with applicable law. The certificate of limited partnership of Company, as so amended, separate and apart from this Agreement, may be certified as the certificate of limited partnership of the Surviving Partnership.

1.3 Limited Partnership Agreement. The limited partnership agreement of the Company immediately before the Effective Time will be amended in its entirety to be identical to the limited partnership agreement of Acquisition immediately before the Effective Time and shall be the limited partnership agreement of the Surviving Partnership from the Effective Time until it is amended in accordance with its terms and applicable law.

1.4 General Partner. NWHL GP LLC, a Delaware limited liability company, a wholly owned subsidiary of Parent (Acquisition General Partner), as the sole general partner of Acquisition immediately prior to the Effective Time, will be the sole general partner of the Surviving Partnership after the Effective Time and will serve in accordance with the limited partnership agreement of the Surviving Partnership until its withdrawal or removal in accordance with the terms of the limited partnership agreement of the Surviving Partnership.

1.5 Limited Partner. Parent, the sole limited partner of Acquisition immediately prior to the Effective Time, will be the sole limited partner of the Surviving Partnership after the Effective Time.

1.6 Further Assurances. If at any time after the Effective Time, the Surviving Partnership determines or is advised that any deeds, bills of sale, assignments, assurances or other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Partnership its right, obligation, title or interest in, to or under any of the rights, properties or assets of either the Company or Acquisition acquired or to be acquired by the Surviving Partnership as a result of, or in connection with, the Merger or otherwise to

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