Exhibit 10.23

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FOURTH AMENDMENT TO AMENDED AND

RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN
AGREEMENT (“Agreement”), dated as of January 17, 2008, by and between WILLIAM
LYON HOMES, INC., a California corporation (“Borrower”), and CALIFORNIA BANK &
TRUST, a California banking corporation (“Lender”), with reference to the
following facts:

RECITALS

A. Borrower originally agreed to borrow a sum not to exceed Fifty Million
Dollars ($50,000,000.00) (as the same has been and may be further amended from
time to time, “Loan”) from Lender for the purpose of providing Borrower with
funding for the acquisition and development of residential lots, the
construction of existing and future residential home projects, and the issuance
of letters of credit for the payment of costs incurred or associated with said
projects. The terms and conditions of the Loan are more particularly set forth
in that certain Amended and Restated Revolving Line of Credit Loan Agreement
(Borrowing Base Loan) dated as of September 16, 2004, by and between Borrower
and Lender (as the same has been and may be further amended from time to time,
“Loan Agreement”). All capitalized terms not specifically defined herein shall
have the meanings given to such terms in the Loan Agreement.

B. The Loan is evidenced by that certain Sixth Amended and Restated Construction
Loan Promissory Note (Construction Revolving Line of Credit) dated as of
December 28, 2007, given by Borrower to Lender (as the same has been and may be
further amended from time to time, “Note”).

C. The Loan is secured by, among other things, the “Deed of Trust” (as defined
in the Loan Agreement).

D. This Agreement, the Note and the other documents evidencing or relating to
the Loan collectively shall be referred to as the “Loan Documents.”

E. Borrower has requested that Lender modify the Loan by, among other things,
modifying the definition of “Maximum Aggregate Loan Allocation(s)” within the
Loan Agreement.

F. Lender is willing to consent to the modifications to the Loan Documents set
forth herein, subject to the conditions set forth below. The date on which all
conditions in this Agreement have been satisfied shall be referred to as the
“Modification Closing Date.”

 

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TERMS AND CONDITIONS

NOW, THEREFORE, in consideration of the foregoing premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1. Recitals. The preamble, recitals and any exhibits hereto are hereby
incorporated into this Agreement.

2. Maximum Aggregate Loan Allocation(s). New Definitions. The definition of
Maximum Aggregate Loan Allocation(s) in the Loan Agreement shall be replaced
with the following:

“Maximum Aggregate Loan Allocation(s)” shall mean each and every one of the
following:

(a) With respect to all Qualified Projects included in the Borrowing Base
(collectively or individually “Geographic Concentration Limitation”):

        (1) The aggregate Loan Allocations for all Lots and/or Homes for
Qualified Projects (whether Advances have been made and/or have been committed
but have not yet advanced) located in the State of Arizona shall not exceed the
sum of Fifteen Million Dollars ($15,000,000.00); and/or

        (2) The aggregate Loan Allocations for all Lots and/or Homes for
Qualified Projects (whether Advances have been made and/or have been committed
but have not yet advanced) located in the State of Nevada shall not exceed the
sum of Fifteen Million Dollars ($15,000,000.00).

(b) With respect to all Lots to be included in the Borrowing Base, the aggregate
Loan Allocations for all Entitled Land, Lots Under Development and Developed
Lots for all Qualified Projects (whether Advances have been made and/or have
been committed but have not yet advanced) shall not exceed the sum of Twenty
Million Dollars ($20,000,000.00) (“Lot Concentration Limitation”).

(c) With respect to all Spec Homes to be included in the Borrowing Base (“Spec
Home Concentration Limitation”):

        (1) For all Projects financed hereunder, the aggregate Loan Allocations
for all Spec Homes for all Projects (whether Advances have been made and/or have
been committed but have not yet advanced) shall not exceed the sum of Twelve
Million Dollars ($12,000,000.00); and/or

        (2) For each and every Project financed hereunder, the total number of
Spec Homes shall not exceed the greater of (A) eight (8), (B) four (4) months’
appraised absorption for the Project, or (C) four (4) months’ actual absorption
for the subject Project, as determined by Lender from time to time based upon
the actual prior six-month Home sales average for said Project.

3. Amendment to Deed of Trust. Each Deed of Trust shall be amended to secure the
obligations under the Note and the other Loan Documents, as amended herein.

 

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4. Conditions Precedent. In no event shall Lender have any obligation to close
this transaction unless and until all of the following conditions are satisfied:

4.1 No Defaults. There shall be no: (a) uncured, material default hereunder or
under the Loan Documents; (b) continuing representation, covenant or warranty
hereunder or under the Loan Documents that is false or misleading in any manner;
and (c) event currently existing which, with the passage of time, will result in
a material default or the falsity of any continuing representation, covenant or
warranty hereunder or under the Loan Documents.

4.2 No Financial Change. There has been no material adverse change in Borrower’s
financial condition since the closing of the Loan.

4.3 Payment Of Lender’s Costs. Borrower shall pay all of Lender’s costs and
expenses incurred in connection with the documentation and closing of the
modifications to the Loan Documents described herein, including without
limitation all attorneys’ fees and other closing fees and costs.

4.4 Additional Documents. Lender shall have received all additional documents
executed by Borrower, as required by Lender in connection with this Agreement,
including, without limitation, the Note.

5. Representations and Warranties. Borrower hereby represents and warrants to
Lender as follows:

5.1 No Default. No default or event of default under any of the Loan Documents
has occurred that remains uncured, and no event has occurred which, with the
giving of notice or the passage of time, or both, would constitute a default or
an event of default under any of the Loan Documents.

5.2 Representations and Warranties. As of the date hereof, all of the warranties
and representations contained in all of the Loan Documents remain true, correct,
complete and accurate.

5.3 No Claims or Defenses. As of the date hereof, neither Borrower nor its
managing member has any claims against Lender nor defenses to the enforcement of
any of the Loan Documents in accordance with their respective terms, as amended
by this Agreement.

5.4 Financial Covenants. Borrower acknowledges and agrees that the financial
covenants contained in the Loan Documents are in full force and effect and shall
be monitored by Lender based on the financial reports to be provided under the
Loan Agreement.

5.5 Satisfaction of Conditions. All of the conditions precedent set forth above
have been fully satisfied.

6. Further Assurances. Borrower agrees to perform such other and further acts,
and to execute such additional documents, agreements, notices or financing
statements, as Lender deems necessary or desirable from time to time to create,
preserve, continue, perfect, validate or carry out any of Lender’s rights under
this Agreement and the other Loan Documents.

7. Integration. All rights, remedies, powers and interest provided for Lender
herein are in addition to the rights, remedies, powers and interests provided
for Lender in the Loan Documents, the terms and provisions of which are
incorporated herein by this reference and made a

 

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part hereof. If and to the extent any term or provision hereof is inconsistent
with any term or provision of the Loan Documents, the term or provision of this
Agreement shall prevail.

8. Entire Agreement; Amendments. This Agreement and the other Loan Documents
contain the entire agreement between Borrower and Lender with respect to the
Loan Documents, and all prior negotiations, commitments, understandings and
agreements are superseded by this Agreement and the Loan Documents. No
amendment, modification, supplement, extension, termination or waiver of any
provision of this Agreement, any Loan Document, or any other agreement executed
in connection with any of the foregoing shall be effective unless in writing and
signed by Lender and Borrower, and then only in the specific instance and for
the specific purpose given.

9. Governing Law. The Loan Documents shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of California,
without regard to its conflict of laws principles.

10. Section Headings. The section headings of this Agreement are included for
convenience only, and shall not affect the construction or interpretation of any
provision of this Agreement.

11. Attorneys’ Fees. If any action or other proceeding is brought to interpret
or enforce any provision of this Agreement, the prevailing party shall be
entitled to recover attorneys’ fees and expenses.

12. Binding Effect. This Agreement and the other Loan Documents shall be binding
upon, and shall inure to the benefit of, Borrower and Lender and their
respective successors and assigns, or heirs and personal representatives, as
applicable, subject to any provision of the Loan Documents restricting transfers
of the Property.

13. Severability of Provisions. No provision of this Agreement or any other Loan
Document that is held to be inoperative, unenforceable and invalid shall affect
the remaining provisions, and this and all provisions of this Agreement and the
Loan Documents are hereby declared to be severable.

14. Miscellaneous. No reference to this Agreement is necessary in any instrument
or document at any time referring to the Loan Documents. A reference to the Loan
Documents shall be deemed a reference to such document as modified hereby.

15. No Commitment. The furnishing of this Agreement and other modification
documents shall in no way be construed as a commitment by Lender to modify,
amend, extend or otherwise alter the Loan Documents. Lender shall be under no
obligation to close the transaction evidenced by this Agreement unless this
Agreement and all related documents are returned to Lender fully executed by
Borrower, and unless this Agreement is actually executed by Lender and delivered
to Borrower.

16. No Other Amendments. Except as expressly amended herein, the Loan Agreement,
and all of the other Loan Documents remain unmodified and in full force and
effect.

17. Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which, when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.

 

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IN WITNESS WHEREOF, this Agreement has been executed by Borrower and Lender as
of the date first above written.

BORROWER:

WILLIAM LYON HOMES, INC., a California corporation

By: /s/ Douglas F. Bauer                            

Name: Douglas F. Bauer

Title: President

By: /s/ Michael D. Grubbs                        

Name: Michael D. Grubbs

Title: Senior Vice President

LENDER:

CALIFORNIA BANK & TRUST, a California banking corporation

By: /s/ Erin Johnsen                                    

Name: Erin Johnsen                                    

Its: Vice President                                       

 

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