Document:

Class B Common Stock and Warrant Purchase Agreement

 Exhibit 10.5 
 WILLIAM LYON HOMES 
 CLASS B COMMON STOCK 

AND WARRANT PURCHASE AGREEMENT 
 February 25, 2012 

 TABLE OF CONTENTS 

 

									
	  	  	 	  	 	  	Page	 
				
	 1.
	  		  	 Agreement to Sell and Purchase.
	  	 	2	  
				
		  	1.1.	  	 Authorization of Shares
	  	 	2	  
				
		  	1.2.	  	 Sale and Purchase
	  	 	2	  
				
	 2.
	  		  	 Closing, Delivery and Payment.
	  	 	2	  
				
		  	2.1.	  	 Closing
	  	 	2	  
				
		  	2.2.	  	 Delivery
	  	 	2	  
				
		  	2.3.	  	 Registration Rights
	  	 	2	  
				
	 3.
	  		  	 Representations and Warranties of the Company.
	  	 	3	  
				
		  	3.1.	  	 Organization, Good Standing and Qualification
	  	 	3	  
				
		  	3.2.	  	 Capitalization.
	  	 	3	  
				
		  	3.3.	  	 Authorization; Binding Obligations
	  	 	4	  
				
		  	3.4.	  	 No Contravention
	  	 	4	  
				
	 4.
	  		  	 Representations and Warranties of the Purchaser.
	  	 	5	  
				
		  	4.1.	  	 Requisite Power and Authority
	  	 	5	  
				
		  	4.2.	  	 Investment Representations
	  	 	5	  
				
	 5.
	  		  	 Conditions to Closing.
	  	 	6	  
				
		  	5.1.	  	 Conditions to Obligations of the Purchaser at Closing
	  	 	6	  
				
		  	5.2.	  	 Conditions to Obligations of the Company at Closing
	  	 	6	  
				
		  	5.3.	  	 Conditions to Obligations of the Company and of the Purchaser at Closing
	  	 	7	  
				
	 6.
	  		  	 Covenants.
	  	 	8	  
				
		  	6.1.	  	 Reasonable Assurances
	  	 	8	  
				
	 7.
	  		  	 Miscellaneous.
	  	 	8	  
				
		  	7.1.	  	 Governing Law
	  	 	8	  

  
 - i -

									
	  	  	 	  	 	  	Page	 
				
		  	7.2.	  	 Survival
	  	 	8	  
				
		  	7.3.	  	 Successors and Assigns
	  	 	8	  
				
		  	7.4.	  	 Entire Agreement
	  	 	8	  
				
		  	7.5.	  	 Severability
	  	 	8	  
				
		  	7.6.	  	 Amendment
	  	 	8	  
				
		  	7.7.	  	 Termination
	  	 	8	  
				
		  	7.8.	  	 Remedies
	  	 	9	  
				
		  	7.9.	  	 Delays or Omissions
	  	 	9	  
				
		  	7.10.	  	 Notices
	  	 	9	  
				
		  	7.11.	  	 Titles and Subtitles
	  	 	9	  
				
		  	7.12.	  	 Counterparts
	  	 	9	  
				
		  	7.13.	  	 Broker’s Fees
	  	 	9	  
				
		  	7.14.	  	 Pronouns
	  	 	9	  
				
		  	7.15.	  	 Taxes
	  	 	10	  
				
		  	7.16.	  	 No Presumption
	  	 	10	  

  
 - ii -

 WILLIAM LYON HOMES 

CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT 
 This CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this
“Agreement”) is made and entered into as of February 25, 2012, by and between WILLIAM LYON HOMES, a Delaware corporation (the “Company”) and
the person set forth on Schedule 1 hereto (the “Purchaser”). 
 RECITALS

 Whereas, the Company, in order to reorganize its capital structure pursuant to a prepackaged joint plan of
reorganization, contemplates engaging in an exchange offer of the Company’s outstanding senior notes, a rights offering, and an issuance of new stock to the Company’s current equity holders (the “Issuance”) pursuant to
which this Agreement is being executed, each as more precisely described in the Disclosure Statement for the Prepackaged Joint Plan of Reorganization for William Lyon Homes, et al. and the Prepackaged Joint Plan of Reorganization for William Lyon
Homes, et al., both dated as of November 17, 2011 and all schedules, exhibits and other documents attached thereto (collectively, the “Solicitation Package”, and such transactions constituting the “Capital
Restructuring”) (capitalized terms not otherwise defined herein shall have the meaning set forth in the Solicitation Package); and 
 Whereas, in connection with the Issuance, the Company has authorized the issuance and sale of (i) 31,464,548 shares of its Class B Common Stock, par value $0.01 per share (the “Class B
Shares”) and (ii) warrants to purchase up to 15,737,294 shares of Class B Shares (the “Warrants” and, together with the Class B Shares, the “Purchased Securities”) in exchange for an aggregate purchase
price of $25 million; 
 Whereas, the Purchase and Sale, and Security Agreement between William Lyon Homes, Inc.
(“WLHI”) (a California corporation and wholly-owned subsidiary of the Company) and Lyon Rancho, LLC (“Rancho”) (a Delaware limited liability company wholly owned by the Purchaser), provides, subject to the terms and
conditions therein, that WLHI shall purchase from Rancho the membership interests in the limited liability company that is the owner of the option to purchase the Rancho Mission Viejo Properties (the Rancho Purchase”); in the event the
Rancho Purchase occurs on the Effective Date, the cash portion of the purchase price payable under this Agreement shall be reduced by a credit in the amount equal to the purchase price for the Rancho Purchase. 

Whereas, the Purchaser and the Company have entered into a Stockholders Commitment Letter dated as of November 4, 2011, as
amended (the “Stockholders Commitment Letter”), pursuant to which the Purchaser has agreed to purchase the Purchased Securities; and 
 Whereas, the Purchaser desires to purchase the Purchased Securities indicated for such Purchaser on Schedule 1 hereto on the terms and conditions set forth herein; and the Company desires to
issue and sell the Purchased Securities to the Purchaser on the terms and conditions set forth herein. 

  
 - 1 -

 AGREEMENT 

Now, therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  

	 	1.	AGREEMENT TO SELL AND PURCHASE. 

1.1. Authorization of Shares. On or prior to Closing (as defined in Section 2.1 below), the Company shall have
authorized the issuance and sale to the Purchaser of the Purchased Securities upon the terms and conditions set forth in this Agreement, and the Company shall have authorized the issuance of and reserved for issuance the additional Class B Shares
issuable upon exercise of the Warrants (the “Additional Class B Shares”). The Class B Shares and the Additional Class B Shares, when issued, shall have the rights, preferences, privileges and restrictions set forth in the Amended
and Restated Certificate of Incorporation of the Company (the “Restated Charter”), a form of which is attached as Exhibit A. The Warrants, when issued, shall be subject to all the terms and conditions set forth in the form of
Warrant attached hereto as Exhibit B. 
 1.2. Sale and Purchase. Subject to the terms and conditions hereof, at
Closing, the Company hereby agrees to issue and sell to each Purchaser, and the Purchaser agrees to purchase from the Company, (i) the number of Class B Shares indicated for the Purchaser on Schedule 1 hereto and (ii) the number of
Warrants indicated for the Purchaser on Schedule 1 hereto in exchange for the aggregate purchase price set forth on Schedule 1 hereto (the “Purchase Price”). 

 

	 	2.	CLOSING, DELIVERY AND PAYMENT. 

2.1. Closing. The closing of the purchase and sale of the Purchased Securities (“the Closing”) shall take place
immediately following the satisfaction or waiver of all conditions precedent described in Section 5 at the offices of Irell & Manella LLP, 840 Newport Center Drive, Suite 400, Newport Beach, California 92660, or at such other
time or place as the Company and the Purchaser may mutually agree. 
 2.2. Delivery. At Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchaser a certificate representing the Purchased Securities to be purchased at Closing by the Purchaser as set forth in Section 1.2 and Schedule 1 hereto, and the Purchaser
shall pay to the Company the Purchase Price therefor by wire transfer of immediately available funds; provided, if the Rancho Purchase is consummated on the Effective Date, the cash portion of the Purchase Price shall be reduced by a credit in an
amount equal to the purchase price for the Rancho Purchase. 
 2.3. Registration Rights. At or prior to the Closing, the
Company shall enter into the Class B Common Stock Registration Rights Agreement (the “Registration Rights Agreement”) substantially in the form attached hereto as Exhibit C. 

  
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	 	3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 The Company hereby represents and warrants to the Purchaser as of the date of mutual execution of this
Agreement: 
 3.1. Organization, Good Standing and Qualification. The Company and each of the Debtors listed on Plan
Schedule 1 (each a “Subsidiary” and together the “Subsidiaries”) are entities duly organized, validly existing and in good standing under the laws of the state of their respective organization. The Company and each
of its Subsidiaries have all requisite corporate or entity power and authority to own, lease and operate their respective properties and assets, and to carry on their respective businesses as presently conducted and as presently proposed to be
conducted. The Company has all requisite corporate power and authority to own, lease and operate its properties and assets, to execute and deliver this Agreement, to issue and sell the Purchased Securities, to issue the Additional Class B Shares
upon the exercise of the Warrants and to carry out the provisions of this Agreement, the Warrants and the Registration Rights Agreement. The Company and each of its Subsidiaries are duly qualified in, and are authorized to do business and are in
good standing as a foreign corporation or entity in, all jurisdictions in which the nature of their respective activities and of their properties (both owned and leased) makes such qualification necessary, other than where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse Effect. For purposes of this Section 3.1, “Material Adverse Effect” shall mean a material adverse change in the assets, liabilities,
business, operations or condition (financial or otherwise) of the Company and its subsidiaries taken as a whole (provided, however, that the Chapter 11 Cases and the events leading to the Chapter 11 Cases or resulting directly or indirectly
therefrom, in and of themselves, shall not be deemed to give rise to a Material Adverse Effect). 
 3.2. Capitalization.

 (a) The authorized capital stock of the Company, immediately after giving effect to the transactions contemplated by
the Plan, shall be as set forth in the Restated Charter. 
 (b) All of the issued and outstanding shares of the capital
stock of the Company, as of the Closing, will have been duly authorized, validly issued, fully paid and non-assessable and not subject to, or were issued in compliance with, any preemptive or similar rights, including, but not limited to, those
created by statute, the Company’s organizational documents or any agreements to which the Company was or is party or is bound. 
 (c) Other than this Agreement or as described in the Solicitation Package or Plan Supplement, (i) there are no outstanding options, warrants, rights (including conversion rights, preemptive or
similar rights, rights of first refusal, and registration rights), proxy or shareholder agreements, or agreements, arrangements or commitments of any kind for the purchase or acquisition from the Company of any issued or unissued securities;
(ii) there are no obligations, contingent or otherwise, of the Company to repurchase, redeem or otherwise acquire any shares of the capital stock of, or other equity interests in, the Company; and (iii) there are no voting trusts, proxies
or other agreements or understandings to which the Company is a party or by which the Company is bound with respect to the voting of any shares of the capital stock of the Company. 

  
 - 3 -

 (d) The rights, preferences, privileges and restrictions of the Class B Shares and
the Additional Class B Shares are as stated in the Restated Charter. The Purchased Securities have been duly authorized and when issued, delivered and paid for in compliance with the provisions of this Agreement, the Warrants and the Restated
Charter, the Class B Shares and Additional Class B Shares will be validly issued, fully paid and non-assessable, and will be free and clear of all security interests, liens, claims, pledges, agreements, limitations on voting rights, charges or other
encumbrances of any nature whatsoever (collectively, “Liens”), except as contemplated by the Restated Charter, and will not be subject to, or will have been issued in compliance with, any preemptive or similar rights; provided,
however, that the Purchased Securities and Additional Class B Shares may be subject to restrictions on transfer under state or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed.

 (e) Assuming the accuracy of the representations and warranties and compliance with the covenants of the Purchaser
set forth in this Agreement, the Purchased Securities will not be issued in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable laws (including state “blue sky” laws).

 3.3. Authorization; Binding Obligations. All corporate action on the part of the Company, its officers, directors and
shareholders necessary for the authorization of this Agreement, the Warrants and the Registration Rights Agreement, the performance of all obligations of the Company hereunder, and under the Warrants and the Registration Rights Agreement, and the
authorization, sale, issuance and delivery of the Purchased Securities pursuant hereto have been taken or will be taken prior to Closing. This Agreement has been, and the Warrants and the Registration Rights Agreement will be, duly and validly
executed and delivered by the Company and, assuming the due authorization, execution and delivery hereof and thereof by the Purchaser, will be valid and binding obligations of the Company enforceable in accordance with their terms, except as limited
by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) general principles of equity that restrict the availability of equitable
remedies. 
 3.4. No Contravention. Except for the approvals required under the Chapter 11 Cases, the execution, delivery
and performance of this Agreement, the Warrants and the Registration Rights Agreement by the Company, including the issuance and sale of the Purchased Securities and the Additional Class B Shares and the consummation of the transactions contemplated
hereunder and thereunder, (i) do not contravene or result in the breach of any provision of the Company’s organizational documents; (ii) do not violate any law or order of any federal, state, local or foreign government or political
subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority, or any arbitrator, court or
tribunal of competent jurisdiction (“Governmental Authority”) applicable to the Company or to the Purchased Securities; and (iii) do not result in the creation of any Lien upon the Purchased Securities or Additional Class B
Shares. 

  
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	 	4.	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

 The Purchaser hereby represents and warrants to the Company as of the date of mutual execution of this
Agreement: 
 4.1. Requisite Power and Authority. All actions, corporate or otherwise, on the part of Purchaser necessary
for the authorization of this Agreement, the performance of all obligations of Purchaser hereunder, and the purchase of the Purchased Securities pursuant hereto have been taken or will be taken prior to Closing. Assuming the due authorization,
execution and delivery hereof by the Company, this Agreement has been duly and validly executed and delivered by Purchaser and, assuming the due authorization, execution and delivery thereof by the Company, will be valid and binding obligations of
Purchaser, enforceable in accordance with its terms, except as limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and
(b) general principles of equity that restrict the availability of equitable remedies. 
 4.2. Investment
Representations. Purchaser understands that none of the Purchased Securities or Additional Class B Shares have been registered under the Securities Act. Purchaser also understands that the Purchased Securities are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part upon Purchaser’s representations contained in this Agreement. Purchaser hereby represents and warrants as follows: 

(a) Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Purchaser understands that it may be required
to bear the economic risk of this investment indefinitely and may not transfer the Purchased Securities unless the Purchased Securities are registered pursuant to the Securities Act, or an exemption from registration is available. Purchaser also
understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow Purchaser to transfer all or any portion of the Purchased Securities
under the circumstances, in the amounts or at the times Purchaser might propose. The Warrants and the certificates representing the Class B Shares will bear appropriate legends reflecting such limitations on transfer. 

(b) Acquisition for Own Account. Purchaser is acquiring the Purchased Securities for Purchaser’s own account for investment
only, and not with a view towards distribution. 
 (c) Accredited Investor. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act. 

  
 - 5 -

 (d) Residence. The office of Purchaser in which its investment decision was made is
located at the address indicated for Purchaser on Purchaser’s signature page hereto. 
 (e) Company Information.
Purchaser has received a copy of the Solicitation Package and the Plan Supplement. 
  

	 	5.	CONDITIONS TO CLOSING. 

5.1. Conditions to Obligations of the Purchaser at Closing. Purchaser’s obligation to purchase the Purchased Securities is
subject to the satisfaction, at or prior to Closing, of the following conditions. 
 (a) Representations and Warranties
True; Performance of Obligations. The representations and warranties made by the Company in Section 3 hereof shall be true and correct in all material respects (except for representations and warranties qualified by materiality or
material adverse effect, which shall be true and correct) at the date of Closing (other than representations and warranties made as of a specific date, which shall have been true and correct as of such date), and the Company shall have performed all
obligations and conditions herein required to be performed or observed by it. 
 (b) Filing of Restated Charter. The
Restated Charter shall have been filed with the Secretary of State of the State of Delaware, shall have become effective and shall continue to be in full force and effect. 
 (c) Stock Certificates and Warrants. The Company shall have delivered to Purchaser validly executed share certificates representing the Class B Shares to be issued at Closing as well as duly
executed instruments representing the Warrants. 
 (d) Registration Rights. The Company shall have entered into and
delivered the Registration Rights Agreement. 
 (e) Material Adverse Change. No material adverse change (as defined or
otherwise referenced in the Backstop Commitment Agreement, the Noteholders RSA or the Colony RSA, as applicable, or any similar event giving rise to a right of termination under the Backstop Commitment Agreement, the Noteholders RSA or the Colony
RSA, as applicable) as a result of which the applicable party or parties under the Backstop Commitment Agreement, the Noteholders RSA or the Colony RSA, as the case may be, shall terminate its or their respective commitments under such agreement,
shall have occurred. 
 5.2. Conditions to Obligations of the Company at Closing. The Company’s obligation to issue
and sell the Purchased Securities is subject to the satisfaction, on or prior to Closing, of the following conditions: 

(a) Representations and Warranties True. The representations and warranties in Section 4 made by Purchaser shall be
true and correct in all material respects (except for representations and warranties qualified by materiality or material 

  
 - 6 -

 
adverse effect, which shall be true and correct) at the date of Closing (other than representations and warranties made as of a specific date, which shall have been true and correct as of such
date). 
 (b) Performance of Obligations. Purchaser shall have performed and complied with all agreements and conditions
herein required to be performed or complied with by Purchaser on or before Closing. 
 (c) Payment. Purchaser shall have
paid the entire Purchase Price for its Purchased Securities as set forth in Section 1.2 and Schedule 1. 
 (d) Registration Rights. Purchaser shall have entered into and delivered the Registration Rights Agreement. 
 5.3. Conditions to Obligations of the Company and of the Purchaser at Closing. The Company’s obligation to issue and sell the Purchased Securities, and the Purchaser’s obligation to
purchase the Purchased Securities, are subject to the satisfaction, on or prior to Closing, of the following conditions: 

(a) Closing of Other Subscription Transactions. Simultaneously with the Closing hereunder, the Company shall have received gross
proceeds from the sale of Class C Shares and Convertible Preferred Shares totaling $60 million. 
 (b) Closing of Other
Capital Restructuring Transactions. The Capital Restructuring transactions (other than the closing of the transactions contemplated by this Agreement) shall have been consummated substantially simultaneously with the Closing. 

(c) Amendment of Senior Secured Loan Agreement. In connection with the Capital Restructuring, CA Lyon and the Prepetition Agent
shall have entered into an amendment to the Prepetition Secured Loan Agreement in accordance with the terms set forth in the Colony Restructuring Term Sheet. 
 (d) Circle G Loan Agreement and Mountain Falls Loan Agreement. In connection with the Capital Restructuring, the maturity of the loan under the Circle G Loan Agreement shall have been extended, and
the loan under the Mountain Falls Loan Agreement shall have been restructured, both on terms and conditions satisfactory to CA Lyon and the Ad Hoc Noteholders Group. 
 (e) Plan Confirmation. The Plan shall have been confirmed by the Bankruptcy Court within 60 days after the Petition Date (the “Confirmation Deadline”), unless the Confirmation
Deadline is extended as contemplated by the Solicitation Package. 
 (f) No Legal Impediment. No Governmental Authority
shall have enacted, issued, promulgated, enforced or entered any order, writ, judgment, injunction, decree, stipulation, determination or award that has the effect of making the 

  
 - 7 -

 
transactions contemplated by this Agreement or the Capital Restructuring illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions
contemplated hereunder to be rescinded following completion thereof. 
  

	 	6.	COVENANTS. 

 6.1. Reasonable Assurances. Each of the Company and the Purchaser will use all commercially reasonable efforts to cause the conditions set forth in Section 5 to be satisfied, insofar as
such matters are within the control of the Company or the Purchaser, as applicable. 
  

	 	7.	MISCELLANEOUS. 

 7.1. Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware as such laws are applied to agreements between Delaware residents entered into and
performed entirely in Delaware. 
 7.2. Survival. The representations, warranties, covenants and agreements made herein
shall survive for a period of eighteen months following the Closing of the transactions contemplated hereby, except that the representations and warranties contained in Sections 3.1, 3.2 and 3.3 shall survive for a period of
three years. 
 7.3. Successors and Assigns. Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by either the Company or the Purchaser without the prior written consent of the other party. 
 7.4. Entire Agreement. This Agreement, the exhibits and schedules hereto, and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements, except as specifically set forth herein and therein. 

7.5. Severability. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
 7.6. Amendment. This
Agreement may be amended or modified only upon the written consent of the Company and the Purchaser. 
 7.7. Termination.
This Agreement may be terminated by the applicable party if the conditions to such party’s performance in Section 5 are not satisfied or waived prior to or on the “Outside Date” as defined in the Restructuring Support
Agreement dated as of November 4, 2011, by and among (i) the Company and WLHI on behalf of themselves and certain subsidiaries and (ii) the “Consenting Noteholders” (as defined therein). However, no such termination shall
limit any party’s rights with respect to any breach hereof that occurred prior to such termination, including enforcement of such party’s rights hereunder with respect to any events, actions or statements that occurred prior to such
termination. 

  
 - 8 -

 7.8. Remedies. The parties hereto understand and agree that money damages would not
be a sufficient remedy for any violation of this Agreement. Accordingly, each party agrees that in the event of a breach of this Agreement, the non-breaching party shall be entitled to seek equitable relief, including injunction and specific
performance. Such remedy shall be in addition to all other remedies available at law or in equity. 
 7.9. Delays or
Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement, the Restated
Charter, by law, or otherwise afforded to any party, shall be cumulative and not exclusive. 
 7.10. Notices. All notices
required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the
recipient, and if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address as set forth on the signature pages hereof and to the Purchaser at the address set forth
on the signature page hereof, or at such other address as the Company or the Purchaser may designate by ten (10) days advance written notice to the other party hereto. 
 7.11. Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 

7.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of
which, together, shall constitute one instrument. 
 7.13. Broker’s Fees. Each party hereto represents and warrants
that, except as set forth in the Solicitation Package and Plan Supplement, no agent, broker, investment banker, person or firm acting on behalf, or under the authority, of such party hereto is or will be entitled to any broker’s or
finder’s fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify the other party for any claims, losses or expenses incurred by such other party
as a result of the representation in this Section 7.13 being untrue. 
 7.14. Pronouns. All pronouns
contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular or plural, as the identity of the parties hereto may require. 

  
 - 9 -

 7.15. Taxes. For federal and state income tax purposes, the parties hereto agree to
report the transactions contemplated hereby consistently with the characterization of such transactions as described in this Agreement. 
 7.16. No Presumption. Any rule of law and any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and
is expressly waived. If any claim is made by a party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by, or at
the request of, any party or its counsel. 
 [Remainder of Page Intentionally Left Blank] 

  
 - 10 -

 IN WITNESS WHEREOF, the
Company has executed this CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

  

			
	COMPANY:
	
	WILLIAM LYON HOMES
		
	Signature:	 	 /s/ Matthew R. Zaist

			
		
	Name:	 	            Matthew R.
Zaist

			
		
	Title:	 	               Executive Vice
President

			
		
	Address:	 	  

		
		 	  

 [COMPANY SIGNATURE PAGE TO CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT] 

  
 - 11 -

 IN WITNESS WHEREOF, the
undersigning Purchaser has executed this CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof. 
  

			
	PURCHASER:
	 LYON SHAREHOLDER 2012, LLC
 a Delaware limited liability company

		
	By:	 	 /s/ William Lyon

		 	William Lyon
		 	Manager
		
	By:	 	 /s/ William H. Lyon

		 	William H. Lyon
		 	Manager

 [PURCHASER SIGNATURE PAGE TO CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT] 

  
 - 12 -

 SCHEDULE 1 
 PURCHASER 
  

									
	 Name and Address
	  	Purchase
Price ($)	  	Reduction in
Closing
Purchase Price
If
Rancho
Purchase
Occurs on
Effective Date	  	No. of Class
B Common
Shares
Issued	  	No. of
Warrants
Issued
		  		  		  		  	

  
 - 13 -

 EXHIBIT A 
 RESTATED CHARTER 

  
 - 14 -

 EXHIBIT B 
 FORM OF WARRANT 

  
 - 15 -

 EXHIBIT C 
 CLASS B COMMON STOCK REGISTRATION RIGHTS AGREEMENT 

  
 - 16 -Warrant to Purchase Shares of Class B Common Stock

 Exhibit 10.6 
 THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT AND THE RULES AND
REGULATIONS THEREUNDER 
 No. of Shares of Class B Common Stock: 15,737,294 

WARRANT 
 To
Purchase Shares of Class B Common Stock of 
 WILLIAM LYON HOMES 

THIS WARRANT (referred to herein as this “Warrant”) IS TO CERTIFY THAT LYON SHAREHOLDER 2012, LLC, a Delaware limited
liability company (“Holder”) is entitled, at any time prior to the Expiration Date (as hereinafter defined), to purchase from WILLIAM LYON HOMES, a Delaware corporation (the “Company”), up to 15,737,294 shares of
Class B Common Stock (as hereinafter defined and subject to adjustment as provided herein), in whole or in part, at the Current Warrant Price (as defined herein), all on the terms and conditions and pursuant to the provisions hereinafter set forth.

 WHEREAS, the Company and the Holder have entered into a securities purchase agreement dated as of February 25, 2012
pursuant to which the Company is issuing to the Holder (i) shares of Class B Common Stock and (ii) this Warrant to purchase Class B Common Stock; 
 NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the Company hereby issues this Warrant on the following terms and conditions: 

 

	1.	DEFINITIONS 

 As used in this
Warrant, the following terms have the respective meanings set forth below: 
 “Business Day” shall mean any day
that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of California. 

“Class A Common Stock” shall mean the Class A Common Stock, $0.01 par value, of the Company. 

“Class B Common Stock” shall mean (except where the context otherwise indicates) the Class B Common Stock, $0.01 par
value, of the Company as constituted on the Issue Date, and any capital stock into which such Class B Common Stock may thereafter be converted, and shall also include: (i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of Class B Common Stock upon any reclassification thereof that is not preferred as to dividends or assets over any other class of stock of the Company and that is not subject to redemption; and
(ii) shares of common stock of any successor or acquiring corporation (as defined in Section 4.2) received by, or distributed to, the holders of Class B Common Stock of the Company in the circumstances contemplated by
Section 4.2. 

 “Commission” shall mean the Securities and Exchange Commission or any
successor thereof. 
 “Current Warrant Price” as of any date shall mean, in respect of a share of Class B
Common Stock at any date herein specified, $2.07, as such price shall have been adjusted in accordance with Section 4 hereof. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to
time. 
 “Expiration Date” shall mean February 24, 2017. 

“Governmental Authority” means the government of any nation, state, city, locality or other political subdivision of any
thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government or any international regulatory body having or asserting jurisdiction over a Person, its business or its
properties. 
 “Holder” shall mean the Person in whose name this Warrant is registered on the books of the
Company maintained for such purpose or, collectively, each Holder of a Warrant, in the event of any division of this Warrant. 

“Issue Date” shall mean February 24, 2012. 

“Majority Holders” shall mean the holders of Warrants exercisable for an amount in excess of 50% of the aggregate number
of shares of Warrant Stock then purchasable upon exercise of all Warrants. 
 “Other Property” shall have the
meaning set forth in Section 4.2. 
 “Person” shall mean any individual, firm, corporation, limited
liability company, partnership or other entity, and shall include any successor by merger or otherwise of such entity. 

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. 
 “Warrants” shall mean this Warrant and all
warrants issued upon transfer, division or combination thereof, or in substitution for any thereof. All Warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Class B Common Stock for which
they may be exercised. 
 “Warrant Stock” shall mean the shares of Class B Common Stock purchased by Holder
upon the exercise of this Warrant. 

  
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	2.	EXERCISE OF WARRANT 

 2.1.
Manner of Exercise. At any time or from time to time from and after the Issue Date and until 5:00 P.M., Pacific Standard Time, on the Expiration Date, Holder may exercise this Warrant, on any Business Day, for all or any part of the number of
shares of Class B Common Stock purchasable hereunder. 
 In order to exercise this Warrant, in whole or in part, Holder shall
deliver to the Company at its principal office at 4490 Von Karman Avenue, Newport Beach, California 92660 (or any address subsequently indicated in writing by the Company): (i) a written notice of Holder’s election to exercise this
Warrant, which notice shall specify the number of shares of Class B Common Stock to be purchased; (ii) payment of the Current Warrant Price made by certified or official bank check; and (iii) this Warrant. Such notice shall be
substantially in the form appearing at the end of this Warrant as Exhibit A, duly executed by Holder. Upon receipt of the items specified in the preceding sentence, the Company shall execute or cause to be executed, and deliver or cause to be
delivered to Holder as soon as practicable, a certificate or certificates representing the aggregate number of full shares of Class B Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereinafter
provided. The stock certificate or certificates so delivered shall be in such denomination or denominations as Holder shall request in the notice and shall be registered in the name of Holder. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and Holder shall be deemed to have become a holder of record of such shares for all purposes, as of the date the notice, together with the Current Warrant Price and this Warrant,
are received by the Company as described above. If this Warrant shall have been exercised in part, appropriate notation may be made on this Warrant and the same returned to Holder. 

2.2. Conditions to Exercise. Notwithstanding anything contained herein to the contrary, if the sale of the Warrant Stock to be
received upon exercise of this Warrant has not been registered under the Securities Act, the issuance of such Warrant Stock shall be conditioned upon delivery to the Company of a written certification substantially in the form of the certification
attached hereto as Exhibit B, or, at Holder’s election, the delivery to the Company of an opinion of counsel, which opinion shall be reasonably satisfactory to the Company, that such Warrant Stock may be issued without registration under
the Securities Act. 
 2.3. Payment of Taxes. All shares of Class B Common Stock issuable upon the exercise of this
Warrant shall be validly issued, fully paid and nonassessable, and without any preemptive rights. The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issue or
delivery thereof, other than income taxes payable by Holder. 
 2.4. Fractional Shares. The Company shall not be required
to issue a fractional share of Class B Common Stock upon exercise of this Warrant. As to any fraction of a share that Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such
fraction in an amount equal to the fair market value of such fraction which fair market value shall be determined in good faith by the Company. 

  
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	3.	TRANSFER, DIVISION AND COMBINATION 

 3.1. Transfer. Neither this Warrant nor any rights hereunder shall be transferred, in whole or in part, unless such transfer is registered pursuant to the Securities Act, or pursuant to an
exemption from registration under the Securities Act. Any transfer of this Warrant and of rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company referred to in Section 2.1, together with a written assignment of this Warrant, duly executed by Holder, and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall, subject to Section 7, execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be canceled. A Warrant, if properly assigned in compliance with Section 7, may be exercised by a new
Holder for the purchase of shares of Common Stock without having a new Warrant issued. 
 3.2. Division and Combination.
Subject to Section 7, this Warrant may be divided into multiple Warrants or combined with other Warrants upon presentation hereof at the aforesaid office or agency of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by Holder. Subject to compliance with Section 3.1 and with Section 7, as to any transfer which may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. 
  

	4.	ADJUSTMENTS 

 The number of
shares of Class B Common Stock for which this Warrant is exercisable and the price at which such shares may be purchased upon exercise of this Warrant shall be subject to adjustment from time to time as set forth in this Section 4. The
Company shall give Holder notice of any event described below that requires an adjustment pursuant to this Section 4 at the time of such event. 
 4.1. Stock Dividends, Subdivisions and Combinations. If at any time the Company shall: 
 (a) take a record of the holders of its Class B Common Stock for the purpose of entitling them to receive a dividend payable in, or to receive any other distribution of, additional shares of Class B
Common Stock, 
 (b) subdivide its outstanding shares of Class B Common Stock into a larger number of shares of
Class B Common Stock, or 
 (c) combine its outstanding shares of Class B Common Stock into a smaller number of
shares of Class B Common Stock, 

  
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 then (i) the number of shares of Class B Common Stock for which this Warrant is exercisable immediately
after the occurrence of any such event shall be adjusted to equal the number of shares of Class B Common Stock that a record holder of the same number of shares of Class B Common Stock for which this Warrant is exercisable immediately prior to the
occurrence of such event would own or be entitled to receive after the happening of such event; and (ii) the Current Warrant Price per share shall be adjusted to equal (A) the Current Warrant Price, multiplied by the number of shares of
Class B Common Stock for which this Warrant is exercisable immediately prior to the adjustment, divided by (B) the number of shares for which this Warrant is exercisable immediately after such adjustment. 

4.2. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in, or distribution with respect to, the Class B Common Stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets,
shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to, or in lieu of,
common stock of the successor or acquiring corporation (“Other Property”), are to be received by, or distributed to, the holders of Class B Common Stock of the Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant and payment of the Current Warrant Price, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a
result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Class B Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each covenant and
condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed in good faith to be reasonably appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of shares of the Class B Common Stock for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this
Section 4. For purposes of this Section 4.2, “common stock of the successor or acquiring corporation” shall include stock of such corporation of any class that is not preferred as to dividends or assets over
any other class of stock of such corporation and that is not subject to redemption, and shall also include any evidences of indebtedness, shares of stock or other securities that are convertible into, or exchangeable for, any such stock, either
immediately or upon the arrival of a specified date or the happening of a specified event, and any warrants or other rights to purchase or subscribe for any such stock. The foregoing provisions of this Section 4.2 shall similarly apply
to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 
 4.3. Warrant
Exercisable for shares of Class A Common Stock Under Certain Circumstances. If all of the Company’s outstanding shares of Class B Common Stock have been 

  
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converted into Class A Common Stock, then shares of Class A Common Stock (rather than Class B Common Stock) shall be issued upon any exercise of this Warrant, and the other provisions
of this Warrant shall be applicable mutatis mutandis. In addition, if this Warrant (or any portion thereof) is transferred to any transferee that is not an Eligible Class B Common Stockholder (as defined in the Company’s Amended and
Restated Certificate of Incorporation), then shares of Class A Common Stock (rather than Class B Common Stock) shall be issued upon any exercise of this Warrant (or such portion), and the other provisions of this Warrant shall be applicable
mutatis mutandis. 
 4.4. Distributions. Without duplication of any adjustment pursuant to Section 4.1
or 4.2 hereof, if, while this Warrant or any portion hereof remains outstanding and unexpired, the holders of shares of Class B Common Stock shall have received, or, on or after the record date fixed for the determination of eligible
stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (including cash) of the Company by way of dividend or distribution, then, in each case, this Warrant shall
represent the right to acquire upon exercise hereof, but solely with respect to any portion of this Warrant that remains unexercised and unexpired as of the record date of any such dividend or distribution, in addition to the number of shares of
Class B Common Stock then receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (including cash) that Holder would have
received had it been the holder of record of the shares of Class B Common Stock receivable as of such record date upon exercise of this Warrant and all other dividends and distributions receivable with respect to such additional stock or other
securities or property after such record date and prior to the date of such exercise of this Warrant, giving effect to all adjustments called for during such period by the provisions of this Section 4. 

 

	5.	RIGHTS OF HOLDER 

 5.1. No
Impairment. The Company shall not by any action, including the amendment of its Certificate of Incorporation or comparable governing instruments or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times, and in good faith, assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder against impairment. 
 Upon the request of
Holder, the Company will, at any time during the period in which this Warrant is outstanding, acknowledge in writing, in form reasonably satisfactory to Holder, the continuing validity of this Warrant and the obligations of the Company hereunder.

  

	6.	RESERVATION AND AUTHORIZATION OF CLASS B COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY 

From and after the Closing Date, the Company shall at all times reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Class B Common Stock as will be sufficient to permit the exercise in full of this 

  
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Warrant. All shares of Class B Common Stock that shall be so issuable, when issued upon exercise of any Warrant and payment is made therefor in accordance with the terms of such Warrant, shall be
duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights. 
  

	7.	RESTRICTIVE LEGEND 

 7.1.
Legend Requirement. Except as otherwise provided in this Section 7, each Warrant and each certificate for Warrant Stock initially issued upon the exercise of this Warrant, and each certificate for Warrant Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form. 
 With respect to any Warrant. 
 “This Warrant has not been
registered under the Securities Act of 1933, as amended, and may not be transferred in violation of such Act or the rules and regulations thereunder.” 

With respect to each certificate for Warrant Stock: 

“The securities represented by this Certificate have not been registered under the Securities Act of 1933, as amended, and
may not be transferred in violation of such Act and the rules or regulations thereunder.” 
 7.2. Termination
of Legend Requirement. Notwithstanding the foregoing provisions of this Section 7, the legend requirements of Section 7.1 shall terminate as to any share of Warrant Stock (i) when and so long as such security shall
have been effectively registered under the Securities Act and disposed of pursuant thereto, or (ii) when the Company shall have received an opinion of counsel reasonably satisfactory to the Company that such shares may be transferred without
registration thereof under the Securities Act. 
  

	8.	REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934 

 With a view to making available to Holder the benefits of Rule 144 promulgated under the Securities Act or any other similar or successor rule or regulation of the Commission that may at any time permit
Holder to sell shares of Warrant Stock to the public without registration, the Company agrees, at all times when Holder may need to rely on Rule 144 to sell such securities to the public without registration, to furnish to Holder such information as
Holder may reasonably request to permit Holder to sell shares of Warrant Stock without registration. 
  

	9.	MISCELLANEOUS 

 9.1. Notice
Generally. Any notice, demand, request, consent, approval, declaration, delivery or other communication hereunder to be made pursuant to the provisions of this Warrant 

  
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shall be sufficiently given or made if in writing and either delivered in person with receipt acknowledged or sent by registered or certified mail, return receipt requested, postage prepaid, or
by telecopy and confirmed by telecopy answerback, addressed as follows: 
  

	 	(a)	If to Holder, at: 

 LYON
SHAREHOLDER 2012, LLC 
 4490 Von Karman Avenue 
 Newport Beach, CA 92660 
 Attention: William H. Lyon 

Facsimile: (949) 476-2178 
 Email: billh.lyon@lyonhomes.com 
  

	 	(b)	If to the Company, at 

 William
Lyon Homes 
 4490 Von Karman Avenue 
 Newport Beach, CA 92660 
 Attention: Matthew R. Zaist 

Facsimile: (949) 476-2178 
 Email: matt.zaist@lyonhomes.com 
 or at such other address as may be substituted by notice given
as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be
deemed to have been duly given or served on the date on which personally delivered, with receipt acknowledged, telecopied and confirmed by telecopy answerback, or three Business Days after the same shall have been deposited in the United States
mail. Failure or delay in delivering copies of any notice, demand, request, approval, declaration, delivery or other communication to the person designated above to receive a copy shall in no way adversely affect the effectiveness of such notice,
demand, request, approval, declaration, delivery or other communication. 
 9.2. Remedies. Each holder of a Warrant or
Warrant Stock, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under the terms of this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant, and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 

9.3. Successors and Assigns. Subject to the provisions of Section 3.1, this Warrant and the rights evidenced hereby
shall inure to the benefit of, and be binding upon, the successors of the Company and the successors and assigns of Holder. 

  
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 9.4. Amendment. This Warrant may be modified or amended, and the provisions hereof
waived, only with the written consent of the Company and the Majority Holders. 
 9.5. Severability. Wherever possible,
each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by, or invalid under, applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant. 
 9.6. Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 

9.7. Governing Law. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF, OR
RELATING TO, THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

  
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 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed. 

Dated: February 25, 2012 
  

			
	WILLIAM LYON HOMES

 
			
		
	By:	 	 /s/ Matthew R. Zaist

	Name:	 	Matthew R. Zaist
	Title:	 	Executive Vice President

  
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 Exhibit A – Exercise Notice 

William Lyon Homes 

4490 Von Karman Avenue 
 Newport Beach, CA 92660 
 Attention:
[                        ] 
 Facsimile: [                        ] 

Date:             , 20     

The undersigned hereby elects to exercise his/its Warrant and to purchase              shares
of Class B Common Stock of William Lyon Homes through the payment of $              by certified or bank cashier’s check tendered herewith. 

Please issue the shares as to which this Warrant is exercised in accordance with the instructions given below. 

 

	
	  

	Signature

 INSTRUCTIONS FOR REGISTRATION OF SECURITIES 

 

			
	Name:	 	  

			
	(Print in block letters)
	Address:	 	  

			
	Breakdown of Certificates (Denomination(s)):	 	  

  
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 Exhibit B – Certification Form 

The undersigned hereby certifies to William Lyon Homes, that he/it: 
  

	 	a.	is an “accredited investor” within the meaning of that term as defined in Rule 501(a) promulgated under the Securities Act, and is aware that the Warrant
Stock is being issued in reliance upon his/its representations herein. 

  

	 	b.	has a financial condition such that he/it is able to bear the risk of holding the Warrant Stock for an indefinite period of time and can bear the loss of its entire
investment in the Warrant Stock. 

  

	 	c.	has such knowledge and experience in financial and business matters and in making investments of this type that he/it is capable of evaluating the merits and risks of
any investment in the Company and has the capacity to protect his/its own interests. 

  

	 	d.	will acquire the Warrant Stock for investment for his/its own account and not with a view to any unlawful distribution of any part thereof and does not have any
contract, undertaking, agreement or arrangement with any Person to sell, transfer, or grant participations to such Person or to any third person, with respect to the Warrant Stock, except for such contract, undertakings, agreements or arrangements
which would not require registration under the Securities Act. 

  

	 	e.	understands that the Warrant Stock may not be sold, transferred, or otherwise disposed of without registration under the Securities Act, or pursuant to an exemption
therefrom, and that in the absence of an effective registration statement covering the Warrant Stock or an available exemption from registration under the Securities Act, the Warrant Stock must be held indefinitely. In the absence of an effective
registration statement covering the Warrant Stock, he/it will sell, transfer, or otherwise dispose of the Warrant Stock only in a manner consistent with its representations and agreements set forth herein. 

  
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 IN WITNESS WHEREOF, the undersigned has executed this CERTIFICATION this
     day of             , 20    . 
  

			
	Signature	 	  

	
	
                    
  

	(Print Name)
	  

	(Street Address)
	  

	(City) (State) (Zip Code)

  
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