Exhibit 10.1

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”), dated as of December 14, 2017,
is entered into by and between William Lyon Homes, a Delaware corporation (the
“Company”), and Lyon Shareholder 2012, LLC, a Delaware limited liability company
(“Purchaser”).

WHEREAS, Section 7 of Article IV of the Third Amended and Restated Certificate
of Incorporation of the Company (the “Certificate of Incorporation”) grants
preemptive rights (the “Preemptive Rights”) to each holder of Class B Common
Stock, par value $0.01 per share (the “Class B Common Stock”), to purchase that
number of shares of Class B Common Stock in order to maintain such holder’s pro
rata portion (based on such holder’s holdings of the shares of Class B Common
Stock outstanding immediately prior to such issuance), as calculated in the
Certificate of Incorporation, following certain sales or issuances by the
Company of its Class A Common Stock, par value $0.01 per share (the “Class A
Common Stock”);

WHEREAS, in accordance with the terms of the Certificate of Incorporation,
shares of Class B Common Stock that may be purchased pursuant to the Preemptive
Rights will be purchased, in the case of shares of Class A Common Stock issued
upon the settlement of instruments evidencing rights or options to subscribe
for, purchase, or otherwise acquire shares of Class A Common Stock, at a
purchase price per share equal to the per share price of the Class A Common
Stock at the close of business on the date of such issuance;

WHEREAS, the Company previously issued an aggregate of 1,150,000 tangible equity
units, each of which was comprised of a senior subordinated amortizing note and
a prepaid stock purchase contract (each, a “Purchase Contract”);

WHEREAS, on November 27, 2017, in accordance with the early settlement of
certain of the Purchase Contracts in accordance with their terms, the Company
issued an aggregate of 670,811 shares of Class A Common Stock, thereby entitling
Purchaser, as the sole holder of Class B Common Stock, to purchase up to 131,645
shares of Class B Common Stock, at a price per share of $29.23 (equal to the per
share closing price of the Class A Common Stock on the New York Stock Exchange
on November 27, 2017), pursuant to the Preemptive Rights granted under the
Certificate of Incorporation;

WHEREAS, on December 1, 2017, in accordance with the mandatory settlement of the
remaining Purchase Contracts in accordance with their terms, the Company issued
an aggregate of 4,442,662 shares of Class A Common Stock, thereby entitling
Purchaser, as the sole holder of Class B Common Stock, to purchase up to 871,865
shares of Class B Common Stock, at a price per share of $29.89 (equal to the per
share closing price of the Class A Common Stock on the New York Stock Exchange
on December 1, 2017), pursuant to the Preemptive Rights granted under the
Certificate of Incorporation; and

WHEREAS, subject to the terms and conditions set forth herein and in accordance
with the Preemptive Rights granted under the Certificate of Incorporation,
Purchaser desires to purchase from the Company, and the Company desires to issue
and sell to Purchaser, the Shares (as defined below);

NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as follows:

1.    Authorization, Purchase and Sale of Shares.

1.1    Authorization, Purchase and Sale. The Company hereby agrees to issue and
sell to Purchaser, and Purchaser hereby agrees to purchase from the Company,
1,003,510 shares of Class B Common Stock of the Company (the “Shares”). The
aggregate purchase price for the Shares is $29,908,028.20 (the “Purchase
Price”).

 

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1.2    Closing. The closing of the purchase and sale of the Shares (the
“Transaction”) shall take place at the offices of the Company concurrently
herewith. At the closing, (a) the Company shall instruct American Stock Transfer
and Trust Company, the Company’s registrar and transfer agent, to issue the
Shares in book entry form in Purchaser’s name and to place an appropriate legend
referring to the fact that the Shares were sold in reliance upon an exemption
from registration under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the “Securities Act”), and shall deliver
to Purchaser any other documents as may be necessary or appropriate to vest in
Purchaser good and marketable title in the Shares, free and clear of all liens,
encumbrances and restrictions on transfer, other than liens or encumbrances
created by or imposed upon Purchaser, and other than restrictions on transfer
pursuant to applicable state and federal securities laws, against payment
therefor, and (b) Purchaser shall deliver the Purchase Price by wire transfer of
immediately available funds to the account designated in Annex A.

2.    Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser as follows:

2.1    Organization and Power. The Company is a legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization.

2.2    Authorization.

(a)    The Company has all requisite corporate or other power to enter into this
Agreement, to consummate the Transaction contemplated hereby and to carry out
and perform its obligations hereunder. All requisite action on the part of the
Company, its officers and directors necessary for the authorization, execution,
delivery and performance of this Agreement and the Transaction contemplated
hereby has been taken.

(b)    The rights, preferences, privileges and restrictions of the Shares are as
stated in the Certificate of Incorporation. The Shares have been duly authorized
by all necessary corporate action on the part of the Company, and upon payment
for and delivery of the Shares in accordance with this Agreement and the
book-entry of the Shares by the transfer agent for the Company’s Class B Common
Stock in the name of Purchaser, the Shares (i) will be validly issued, fully
paid and non-assessable; (ii) will be free and clear of all security interests,
liens, equities, claims, pledges, restrictions on transfer, limitations on
voting rights, charges or other encumbrances or restrictions of any nature
whatsoever (collectively, “Liens ”), except (A) as provided in the Certificate
of Incorporation, (B) for such restrictions on transfer as may be imposed under
applicable federal or state securities laws or related securities trading
policies of the Company applicable to its directors and officers or their
respective Affiliates (as defined for purposes of the Securities Act), or
(C) for any Liens created by or imposed upon Purchaser; and (iii) will not be
subject to, or will have been issued in compliance with, any preemptive or
similar rights.

(c)    The shares of Class A Common Stock issuable upon conversion of the Shares
(the “Conversion Shares”) have been duly and validly reserved for issuance and,
upon issuance following a conversion of any of the Shares in accordance with the
Certificate of Incorporation, (i) will be validly issued, fully paid and
non-assessable; (ii) will be free and clear of all Liens except (A) as provided
in the Certificate of Incorporation, (B) for such restrictions on transfer as
may be imposed under applicable federal or state securities laws or related
securities trading policies of the Company applicable to its directors and
officers or their respective Affiliates (as defined for purposes of the
Securities Act), or (C) any Liens created by or imposed upon Purchaser; and
(iii) will not be subject to, or will have been issued in compliance with, any
preemptive or similar rights.

 

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2.3    Enforceability. This Agreement has been duly executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
limited by bankruptcy, insolvency, or other laws of general application relating
to or affecting the enforcement of creditors’ rights generally and general
principles of equity.

2.4    No Conflict. The execution, delivery and performance of this Agreement by
the Company, including the issuance of the Shares and any Conversion Shares and
the consummation of the Transaction contemplated hereby, will not (a) conflict
with or result in any violation of any provision of the Certificate of
Incorporation or bylaws (or similar governing documents) of the Company,
(b) result in any breach or violation of, or default (with or without notice or
lapse of time, or both) under, or require consent under, any mortgage, contract,
purchase or sale order, instrument, permit, concession, franchise, right or
license binding upon the Company or any Shares or Conversion Shares, or any
settlement binding upon the Company or any Shares or Conversion Shares, or
result in the creation of any Lien upon any Shares or Conversion Shares, or
(c) conflict with or violate any applicable material law, statute, code,
ordinance, rule, regulation, or agency requirement of or undertaking to or
agreement with any governmental entity, including common law, or any judgment,
order, injunction or decree issued by any governmental entity against or binding
upon the Company or any Shares or Conversion Shares. Assuming the accuracy of
the representations and warranties of Purchaser set forth in Section 3 of this
Agreement, the issuance and sale of the Shares hereunder are exempt from the
registration and prospectus delivery requirements of the Securities Act, and any
registration or qualification requirements under applicable state securities
laws.

2.5    Consents. The Company has obtained or made, as applicable, all consents,
approvals, orders, or authorizations of, or filings or registrations with, or
notifications to, any governmental entity or other third-party required in
connection with the execution, delivery or performance of this Agreement and the
consummation of the Transaction.

2.6    Brokers. The Company has not retained, utilized or been represented by
any broker or finder in connection with the transactions contemplated by this
Agreement whose fees Purchaser would be required to pay.

3.    Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company as follows:

3.1    Private Offering; No General Solicitation. The Company did not offer or
agree to sell the Shares to Purchaser by any form of general solicitation or
general advertising, including by any advertisement, article, notice or other
communication regarding the Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

3.2    Investment Intent. Purchaser is acquiring the Shares for investment for
its own account, not as a nominee or agent, and not with a view to, or for sale
in connection with, any distribution, resale or public offering of such Shares
or any part thereof in violation of the Securities Act. Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to any person with respect to
the Shares.

 

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3.3    Restrictions on Transfer. Purchaser understands that (a) the Shares have
not been registered under the Securities Act or the securities or “blue-sky”
laws of any state, (b) the Shares may not be sold, pledged or otherwise
transferred unless such transfer is registered under the Securities Act and the
securities or “blue-sky” laws of any applicable state or there is an exemption
from registration thereunder, and (c) the documents evidencing the Shares will
bear a legend regarding the foregoing and transfer restrictions. Purchaser
understands that the Shares are subject to significant restrictions on transfer
and pledging, including the restrictions set forth on the legend to the Shares,
in the provisions of the Certificate of Incorporation governing the Shares, and
under the Company’s securities trading policies applicable to its directors and
officers or their respective Affiliates (as defined for purposes of the
Securities Act).

3.4    Financial Sophistication; Advice. Purchaser, either alone or together
with its representatives, has such knowledge and experience in financial and
business matters as to be capable of evaluating the risks inherent in, and make
an informed decision regarding, the Transaction. Purchaser has evaluated the
risks and merits of an investment in the Shares, has adequate net worth and
means of providing for Purchaser’s current needs and contingencies and is able
to sustain a complete loss of its investment in the Shares. Purchaser has
independently evaluated the merits of the decision to purchase the Shares, such
decision has been independently made by Purchaser, and Purchaser confirms that
it has only relied on the advice of Purchaser’s own business and/or legal
counsel in making such decision.

3.5    Accredited Investor. Purchaser is an “accredited investor” as that term
is defined in Rule 501(a) of Regulation D under the Securities Act, with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the Shares.

3.6    No Company Representations or Warranties. Purchaser confirms that neither
the Company nor any of its agents have made any representations or warranties
concerning the Company (except as expressly set forth in this Agreement and any
other documents executed in connection with the Transaction), including, without
limitation, any representations or warranties concerning anticipated financial
results of the operations of the Company. Purchaser understands and agrees that
any financial plans, summaries and projections provided or which are otherwise
available during the course of the transactions contemplated hereby do not
provide any assurance of the Company’s future performance and may prove to be
materially incomplete and inaccurate and are not to be relied upon in making
this investment decision. Purchaser further understands that any financial
projections, results or forecasts delivered to Purchaser should not be relied
upon to indicate the actual financial results that will be achieved by the
Company.

3.7    Access to Information. The Transaction is not and will not be prompted by
any material information concerning the Company. Purchaser acknowledges that the
Company may possess material non-public information not known to Purchaser that
regards or relates to the Company and/or the Shares, including, but not limited
to, information concerning the business, financial condition, results of
operations, prospects or restructuring plans of the Company, and Purchaser
acknowledges that Purchaser has received sufficient information to make an
informed decision regarding acceptance of the Shares and agrees the Company
shall have no liability whatsoever (and Purchaser hereby waives and releases all
claims that Purchaser may otherwise have against the Company) with respect to
the nondisclosure of any such information, whether before or after the date of
this letter.

3.8    Risks Related to Purchase. Purchaser acknowledges that the purchase of
the Shares involves certain risks, which include, among other factors, that:
(a) the successful operation of the Company may depend on factors beyond the
control of the management of the Company; (b) the purchase of the Shares is a
speculative investment and involves a high degree of risk of loss; (c) the
Company may

 

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issue additional equity securities (or securities that may be converted into or
exchanged for additional equity securities) in the future and, subject to and in
accordance with the Preemptive Rights, Purchaser’s investment in the Company may
be subject to dilution; and (d) absent a conversion of the Shares to shares of
Class A Common Stock, there are substantial restrictions on the transferability
of, and there currently is no public market for, the Shares and, accordingly, it
may not be possible for Purchaser to liquidate the Shares in case of the
imminent need of funds or any other emergency.

4.    Miscellaneous Provisions.

4.1    Interpretation. The words “hereof,” “herein” and “hereunder” and words of
similar import when used in this Agreement will refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
subsection references are to this Agreement unless otherwise specified. The
headings in this Agreement are included for convenience of reference only and
will not limit or otherwise affect the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they will be deemed to be followed by the words “without
limitation.” The phrases “the date of this Agreement,” “the date hereof” and
terms of similar import, unless the context otherwise requires, will be deemed
to refer to the date set forth in the first paragraph of this Agreement. The
meanings given to terms defined herein will be equally applicable to both the
singular and plural forms of such terms. All matters to be agreed to by any
party hereto must be agreed to in writing by such party unless otherwise
indicated herein. Except as specified otherwise herein, references to
agreements, policies, standards, guidelines or instruments, or to statutes or
regulations, are to such agreements, policies, standards, guidelines or
instruments, or statutes or regulations, as amended or supplemented from time to
time (or to successors thereto). The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

4.2    Notices. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed delivered (a) three (3)
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid (b) one (1) business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, (c) on the date of delivery if delivered personally, or (d) if by
email, upon written confirmation of receipt, in each case to the intended
recipient as set forth below:

(a)    if to the Company, addressed as follows:

William Lyon Homes

4695 MacArthur Court, 8th Floor

Newport Beach, CA 92660

Attention: Senior Vice President, General Counsel and Corporate Secretary

 

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with copies (which shall not constitute notice) to:

Latham & Watkins LLP

650 Town Center Drive, 20th Floor

Costa Mesa, CA 92626

Attention:        Cary K. Hyden; Michael A. Treska

Email:             michael.treska@lw.com

(b)    if to Purchaser, to:

Lyon Shareholder 2012, LLC

c/o William H. Lyon

4695 MacArthur Court, 8th Floor

Newport Beach, California 92660

with copies (which shall not constitute notice) to:

Manatt, Phelps & Phillips, LLP

695 Town Center Drive

Costa Mesa, CA 92626

Attention: Thomas J. Leary, Esq.

Email: tleary@manatt.com

Any party may change the address to which notices, requests, consents or other
communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section 4.2.

4.3    Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

4.4    Governing Law; Jurisdiction; WAIVER OF JURY TRIAL. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof. Each of the parties hereto irrevocably
(a) agrees that any legal suit, action or proceeding brought by any party hereto
arising out of or based upon this Agreement may be instituted in any United
States federal court or California court located in the County of Orange (a
“California Court”), (b) waives, to the fullest extent it may effectively do so,
any objection which it may now or hereafter have to the laying of venue of any
such proceeding, and (c) submits to the non-exclusive jurisdiction of a
California Court in any such suit, action or proceeding. Each party agrees that
the other parties shall be entitled to recover attorney’s fees and expenses for
any legal suit, action or proceeding arising out of any breach of the terms of
this Agreement from the breaching party. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE COMPANY OR PURCHASER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

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4.5    Delays or Omissions; Waiver. No delay or omission to exercise any right,
power, or remedy accruing to a party upon any breach or default of another party
under this Agreement shall impair any such right, power, or remedy of such
party, nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. No
waiver of any term, provision or condition of this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or be
construed as, a further or continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision or condition of this
Agreement. Any agreement on the part of a party or parties hereto to any waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party or parties, as applicable. Any delay in exercising any right under
this Agreement shall not constitute a waiver of such right.

4.6    Fees; Expenses. All fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party or
parties, as applicable, incurring such expenses, including any and all federal,
state and local taxes associated therewith.

4.7    Assignment. Except as in accordance with the provisions of the
Certificate of Incorporation, Purchaser may not assign its rights or obligations
under this Agreement.

4.8    No Third-Party Beneficiaries. This Agreement does not create any rights,
claims or benefits inuring to any person that is not a party hereto nor create
or establish any third-party beneficiary hereto. Without limiting the foregoing,
the representations and warranties in this Agreement are the product of
negotiations among the parties hereto and are for the sole benefit of the
parties hereto. In some instances, the representations and warranties in this
Agreement may represent an allocation among the parties hereto of risks
associated with particular matters regardless of the knowledge of any of the
parties hereto. Consequently, persons other than the parties hereto may not rely
upon the representations and warranties in this Agreement as characterizations
of actual facts or circumstances as of the date of this Agreement or as of any
other date.

4.9    Counterparts. This Agreement may be executed and delivered (including by
facsimile or electronic transmission) in any number of counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed an original, but all of which taken together shall constitute a
single instrument.

4.10    Entire Agreement; Amendments. This Agreement and the documents and
instruments and other agreements among the parties hereto as contemplated by or
referred to herein, including the Annex hereto, constitute the entire agreement
between the parties hereto respecting the subject matter hereof and supersede
all prior agreements, negotiations, understandings, representations and
statements respecting the subject matter hereof, whether written or oral. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the Company and Purchaser.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

COMPANY William Lyon Homes, a Delaware corporation By:  

/s/ Matthew R. Zaist

  Name:   Matthew R. Zaist   Title:   President and Chief Executive Officer
PURCHASER Lyon Shareholder 2012, LLC By:  

/s/ William H. Lyon

  Name:   William H. Lyon   Title:   Manager

 

Signature Page to Stock Purchase Agreement