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                                                                    EXHIBIT 10.1

                              INDEMNITY AGREEMENT

        This Indemnity Agreement (the "Agreement") is made as of ___________, by
and between WILLIAM LYON HOMES, a Delaware corporation (the "Company"), and
___________________ (the "Indemnitee"), a director and/or officer of the
Company.

                                    RECITALS

        A. The Company desires the benefits of having Indemnitee serve as an
officer and/or director of the Company secure in the knowledge that any
expenses, liability and/or losses incurred by him or her in his or her good
faith service to the Company will be borne by the Company or its successors and
assigns.

        B. The Indemnitee is currently serving as a director and/or officer of
the Company and/or a subsidiary and in such capacity is rendering valuable
services to the Company.

        C. The Company's Certificate of Incorporation and Bylaws allow and
require the Company to indemnify its directors, officers, employees and agents
to the maximum extent permitted under Delaware law.

        D. The Company has investigated the availability and sufficiency of
liability insurance and Delaware statutory indemnification provisions to provide
its directors and officers with adequate protection against various legal risks
and potential liabilities to which such individuals are subject due to their
positions with the Company and has concluded that such insurance and statutory
provisions may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and officers.

        E. In order to induce and encourage highly experienced and capable
persons such as the Indemnitee to continue to serve as a director and/or officer
of the Company, the Board of Directors has determined, after due consideration
and investigation of the terms and provisions of this Agreement and the various
other options available to the Company and the Indemnitee in lieu hereof, that
this Agreement is not only reasonable and prudent but necessary to promote and
ensure the best interests of the Company and its stockholders.

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the continued services of the
Indemnitee and in order to induce the Indemnitee to continue to serve as a
director and/or officer, the Company and the Indemnitee do hereby agree as
follows:



        1. Definitions. As used in this Agreement:

                (a) The term "Proceeding" shall include any threatened, pending
or completed action, suit or proceeding, whether brought in the name of the
Company or



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otherwise and whether of a civil, criminal or administrative or investigative
nature, by reason of the fact that the Indemnitee is or was a director or
officer of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another enterprise, whether or not he is
serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement is to be provided under this Agreement.

                (b) The term "Expenses" includes, without limitation, attorney's
fees, disbursements and retainers, accounting and witness fees, travel and
deposition costs, expenses of investigations, judicial or administrative
proceedings and appeals, amounts paid in settlement by or on behalf of
Indemnitee, and any expenses of establishing a right to indemnification,
pursuant to this Agreement or otherwise, including reasonable compensation for
time spent by the Indemnitee in connection with the investigation, defense or
appeal of a Proceeding or action for indemnification for which he is not
otherwise compensated by the Company or any third party. The term "Expenses"
does not include the amount of judgments, fines, penalties or ERISA excise taxes
actually levied against the Indemnitee.

        2. Indemnification in Third Party Actions. The Company shall indemnify
the Indemnitee in accordance with the provisions of this section if the
Indemnitee is a party to or threatened to be made a party to or is otherwise
involved in any Proceeding (other than a Proceeding by or in the name of the
Company to procure a judgment in its favor), by reason of the fact that the
Indemnitee is or was a director or officer of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another enterprise, against all Expenses, judgments, fines, penalties and ERISA
excise taxes actually and reasonably incurred by the Indemnitee in connection
with the defense or settlement of such a Proceeding, to the fullest extent
permitted by Delaware law and/or the provisions of the Certificate of
Incorporation, as may be amended to provide broader indemnification rights than
Delaware law; provided that any settlement of a Proceeding be approved in
writing by the Company. The right to indemnification conferred in the
Certificate of Incorporation shall be presumed to have been relied upon by
Indemnitee in serving or continuing to serve the Company as a director or
officer and shall be enforceable as a contract right. Without in any way
diminishing the scope of the indemnification provided by the Certificate of
Incorporation and this Section 2, the Company shall indemnify Indemnitee if and
whenever he or she is or was a witness, party or is threatened to be made a
witness or a party to any Proceeding, by reason of the fact that he or she is or
was an officer, director, employee or agent of the Company or is or was serving
at the request of the Company as a director, officer, employee or agent of
another enterprise by reason of anything done or not done, or alleged to have
been done or not done, by him in such capacity, against all Expenses actually
and reasonably incurred by Indemnitee or on his behalf in connection with the
investigation, defense, settlement or appeal of such Proceeding.

        3. Indemnification in Proceedings By or In the Name of the Company. The
Company shall indemnify the Indemnitee in accordance with the provisions of this
section if the Indemnitee is a party to or threatened to be made a party to or
is otherwise involved in any Proceeding by or in the name of the Company to
procure a judgment in its favor by reason of the fact that Indemnitee was or is
a director or officer of the Company, or was or is serving at



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the request of the Company as a director, officer, employee or agent of another
enterprise, against all Expenses actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such a Proceeding, to
the fullest extent permitted by Delaware law and/or the Certificate of
Incorporation.

        4. Conclusive Presumption Regarding Standards of Conduct. The Indemnitee
shall be conclusively presumed to have met the relevant standards of conduct, as
defined by Delaware law, for indemnification pursuant to this Agreement, unless
a determination is made that the Indemnitee has not met such standards (i) by
the Board of Directors by a majority vote of a quorum thereof consisting of
directors who were not parties to the Proceeding due to which a claim is made
under this Agreement, (ii) by the stockholders of the Company by majority vote
of a quorum thereof consisting of stockholders who are not parties to the
Proceeding due to which a claim is made under this Agreement, or (iii) in a
written opinion by independent legal counsel, selection of whom has been
approved by the Indemnitee in writing. No initial finding by the Board of
Directors, the stockholders of the Company or any independent legal counsel
shall be effective to deprive Indemnitee of the protection of this indemnity,
nor shall a court or other forum to which Indemnitee may apply for enforcement
of this indemnity give any weight to any such adverse finding in deciding any
issue before it. Upon making a request for indemnification, Indemnitee shall be
presumed to be entitled to indemnification under this Agreement and the Company
shall have the burden of proof to overcome that presumption in reaching any
contrary determination. The termination of any Proceeding by judgment, order,
settlement, arbitration award or conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, (a) adversely affect the rights of
Indemnitee to indemnification except as indemnification may be expressly
prohibited under this Agreement, (b) create a presumption that Indemnitee did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the Company or (c) with respect to
any criminal action or proceeding, create a presumption that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

        5. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise, including the dismissal of a
Proceeding without prejudice, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith to the fullest extent permitted by
Delaware law and/or the Certificate of Incorporation.

        6. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by Delaware law and/or the Certificate of
Incorporation; provided that as long as Delaware law requires such an
undertaking, the Indemnitee shall undertake in writing to repay any advances to
the extent that it is ultimately determined that the Indemnitee is not entitled
to indemnification.

        7. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines,



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penalties or ERISA excise taxes actually and reasonably incurred by him in the
investigation, defense, appeal or settlement of any Proceeding but not, however,
for the total amount of his Expenses, the Company shall nevertheless indemnify
the Indemnitee for the portion of Expenses, judgments, fines, penalties or ERISA
excise taxes to which the Indemnitee is entitled.

        8. Indemnification Procedure; Determination of Right to Indemnification.

                (a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof in writing. The omission to so notify the
Company will not relieve it from any liability which it may have to the
Indemnitee otherwise than under this Agreement.

                (b) If a claim for indemnification or advances under this
Agreement is not paid by the Company within sixty (60) days of receipt of
written notice, the rights provided by this Agreement shall be enforceable by
the Indemnitee in any court of competent jurisdiction. The burden of proving by
clear and convincing evidence that indemnification or advances are not
appropriate shall be on the Company. Neither the failure of the directors or
stockholders of the Company or its independent legal counsel to have made a
determination prior to the commencement of such action that indemnification or
advances are proper in the circumstances because the Indemnitee has met the
applicable standard of conduct, nor an actual determination by the directors or
stockholders of the Company or independent legal counsel that the Indemnitee has
not met the applicable standard of conduct, shall be a defense to the action or
create a presumption that the Indemnitee has not met the applicable standard of
conduct.

                (c) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning his right to indemnification or advances in whole or in
part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such a Proceeding, unless a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in the Proceeding was not made in good faith or was frivolous.

                (d) With respect to any Proceeding for which indemnification is
requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than as provided below.
The Company shall not settle any Proceeding in any manner which would impose any
penalty or limitation on the Indemnitee without the Indemnitee's written
consent. The Indemnitee shall have the right to employ his own counsel in any
Proceeding, but the fees and expenses of such counsel incurred after notice from
the Company of its assumption of the defense of the Proceeding shall be at the
expense of the Indemnitee, unless (i) the employment of counsel by the
Indemnitee has



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been authorized by the Company, (ii) the Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and the
Indemnitee in the conduct of the defense of a Proceeding, or (iii) the Company
shall not in fact have employed counsel to assume the defense of a Proceeding,
in each of which cases the fees and expenses of the Indemnitee's counsel shall
be advanced by the Company. The Company shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Company or as to which
the Indemnitee has made the conclusion that there may be a conflict of interest
between the Company and the Indemnitee.

        9. Limitations on Indemnification. No payments pursuant to this
Agreement shall be made by the Company:

                (a) To indemnify or advance funds to the Indemnitee for Expenses
with respect to Proceedings initiated or brought voluntarily by the Indemnitee
and not by way of defense, except with respect to Proceedings brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Delaware law, but such
indemnification or advancement of Expenses may be provided by the Company in
specific cases if the Board of Directors finds it to be appropriate;

                (b) To indemnify the Indemnitee for any Expenses, judgments,
fines, penalties or ERISA excise taxes sustained in any Proceeding for which
payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment
under such insurance;

                (c) To indemnify the Indemnitee for any Expenses, judgments,
fines or penalties sustained in any Proceeding for an accounting of profits made
for the purchase or sale by the Indemnitee of securities of the Company pursuant
to the provisions of Section 16(b) of the Securities Exchange Act of 1934, the
rules and regulations promulgated thereunder and amendments thereto or similar
provisions of any federal, state or local statutory law;

                (d) To indemnify the Indemnitee for any Expenses, judgments,
fines, penalties or ERISA excise taxes resulting from the Indemnitee's conduct
which is finally adjudged to have been willful misconduct, knowingly fraudulent
or deliberately dishonest; or

                (e) If a court of competent jurisdiction finally determines that
any indemnification hereunder is unlawful.

        10. Maintenance of Liability Insurance.

                (a) The Company hereby covenants and agrees that, as long as the
Indemnitee continues to serve as a director or officer of the Company and
thereafter as long as the Indemnitee may be subject to any possible Proceeding,
the Company, subject to subsection (c), shall promptly obtain and maintain in
full force and effect directors' and officers' liability insurance ("D&O
Insurance") in reasonable amounts from established and reputable insurers.



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                (b) In all D&O Insurance policies, the Indemnitee shall be named
as an insured in such a manner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's
directors and officers.

                (c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in good
faith that such insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the amount of coverage provided, the
coverage provided by such insurance is so limited by exclusions that it provides
an insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.

        11. Indemnification Hereunder Not Exclusive. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled under the Certificate of Incorporation,
Bylaws, any agreement, vote of stockholders or disinterested directors,
provision of Delaware law, or otherwise, both as to action in his or her
official capacity and as to action in another capacity on behalf of the Company
while holding such office.

        12. Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company) and shall inure to
the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees,
executors, administrators and other legal representatives.

        13. Separability. Each provision of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof. To the extent required, any provision of this
Agreement may be modified by a court of competent jurisdiction to preserve its
validity and to provide the Indemnitee with the broadest possible
indemnification permitted under Delaware law.

        14. Savings Clause. If this Agreement or any provision hereof is
invalidated on any ground by any court of competent jurisdiction, the Company
shall nevertheless indemnify the Indemnitee as to any Expenses, judgments,
fines, penalties or ERISA excise taxes incurred with respect to any Proceeding
to the fullest extent permitted by any applicable provision of this Agreement
that has not been invalidated or by any other applicable provision of Delaware
law.

        15. Interpretation; Governing Law. This Agreement shall be construed as
a whole and in accordance with its fair meaning. Headings are for convenience
only and shall not be used in construing meaning. This Agreement shall be
governed and interpreted in accordance with the internal laws of the State of
Delaware without regard to the rules relating to conflict of laws.



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        16. Amendments. No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
the party against whom enforcement is sought. The indemnification rights
afforded to the Indemnitee hereby are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Certificate of
Incorporation, Bylaws or by other agreements, including D&O Insurance policies.

        17. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.

        18. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties to this Agreement with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to this Agreement.

        19. Absence of Third Party Beneficiary Rights. No provision of this
Agreement is intended nor shall be interpreted to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder or partner of any party to this Agreement or
any other person; unless specifically provided otherwise herein, and except as
so provided, all provisions hereof shall be personal solely between the parties
to this Agreement.

        20. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure those rights and to enable the Company
to bring suit to enforce those rights.

        21. Duration and Scope of Agreement; Binding Effect. This Agreement
shall continue so long as Indemnitee shall be subject to any possible Proceeding
subject to indemnification by reason of the fact that he or she is or was a
director or officer of the Company and shall be applicable to any Proceeding
commenced or continued after execution of this Agreement, whether arising from
acts or omissions occurring before or after such execution.

        22. Notices. Any notice required to be given under this Agreement shall
be directed to William Lyon Homes, at 4490 Von Karman Avenue, Newport Beach,
California 92660, Telephone Number (949) 833-3600, Fax Number (949) 476-8604,
Attention: General Counsel and to Indemnitee at _______________________
__________________________, or to such other address as either party shall
designate in writing. A copy of any notice under this Agreement shall be
directed to Keith Bishop, Irell & Manella, LLP, 840 Newport Center Drive, Suite
400, Newport Beach, CA 92660, Telephone Number (949) 760-0991, Fax Number (949)
760-5200.



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                            [SIGNATURE PAGE FOLLOWS]



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        IN WITNESS WHEREOF, the parties have executed this Indemnity Agreement
as of the date first written above.



                                            WILLIAM LYON HOMES




                                            By:_____________________________



                                            Its:_____________________________



                                            INDEMNITEE





                                            ________________________________




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