Document:

Employment Agreement

 Exhibit 10.1 
  
 ACTIVCARD 
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered into by and between ActivCard, Inc., a California corporation, and Jason Hart (the “Executive”). ActivCard, Inc. together with its affiliates and parent, including
ActivCard Corp., a Delaware corporation, are referred to collectively in this Agreement as the “Company.” This Agreement shall be effective upon the Closing Date (the “Effective Date”) as defined in
that certain Stock Purchase Agreement dated as of July 26, 2005 (the “Stock Purchase Agreement”), by and among Jason Hart, Michael Smith, and Equity Partners Two Pty Ltd, a corporation organized under the laws of the
Commonwealth of Australia (collectively, the “Sellers”, and each, a “Seller”), Peter Johnson, as Sellers’ Representative, and ActivCard Corp., a Delaware corporation (the
“Purchaser”). Certain capitalized terms used by not otherwise defined herein shall have the meanings ascribed thereto or as otherwise defined in the Stock Purchase Agreement. 
  

	1	POSITION 

  
 a. Title; Office. Executive will serve as Senior Vice President of Sales and Marketing of the Company commencing on the Effective Date (the
“Employment Date”). Executive will be employed by ActivCard, Inc. and Executive’s office will be located at the Company’s headquarters at 6623 Dumbarton Circle, Fremont, California. 
  
 b. Duties. Executive shall be responsible for all of the duties
normally attributed to a Senior Vice President of the Company. Executive shall report to the Company’s Chief Executive Officer and shall perform such other duties as the Company may from time to time require, consistent with the general level
and type of duties and responsibilities customarily associated with the position of Senior Vice President. In addition, upon Executive’s election to the Company’s Board of Directors and during such period as he may serve on the Board of
Directors during the term of this Agreement, Executive shall serve without any additional compensation as a member of the Board of Directors. Upon termination of Executive’s employment due to termination by the Company for Cause or by the
Executive without Good Reason, should Executive still be a member of the Company’s Board of Directors, Executive shall resign as a member of the Board of Directors. 
  
 c. Other Obligations. Executive agrees to loyally and conscientiously perform all of the lawful duties and
obligations required of Executive pursuant to and consistent with the terms of this Agreement, and will do so to the reasonable satisfaction of the Company. During the term of Executive’s employment, Executive further agrees that Executive will
devote all of Executive’s business time and attention to the business of the Company, except that Executive may engage in a reasonable amount of related and complementary activities which are consistent with his position with the Company but do
not interfere with Executive’s duties to the Company. Executive will not render commercial or professional services of any nature to any person or organization other than the Company and its subsidiaries, whether or not for compensation,
without the prior written consent of the Company. 
  
 d. Work
Authorization. Executive agrees that his employment with the Company and the Company’s obligations under this Agreement are contingent upon (1) his providing appropriate legal proof of identity and proof of eligibility to be employed in the
United States within three days of the Employment Date and (2) to continue to be eligible to be employed with the Company in the United States. Executive further agrees to use his reasonable best efforts to maintain the requisite legal status to be
employed in the United States. 
  

	2	COMPENSATION 

  
 a. Base Salary. During Executive’s employment, Executive will be paid an annualized salary of no less than $200,000. Executive’s salary
will be payable in equal semi-monthly installments pursuant to the Company’s regular payroll practices (or in the same manner as other senior executives of the Company), and shall be subject to the usual, required withholding of income and
employment taxes. Executive’s annual salary of $200,000, together with any increases thereto, shall be referred to in this Agreement as “Base Salary.” Base Salary will be subject to annual review by, and increase at, the
sole discretion of the Company. 

 b. Bonus. During Executive’s employment, Executive will be eligible to receive an annual
target bonus of $50,000, subject to satisfaction of individual performance objectives to be established by the Board of Directors in the first quarter of each fiscal year, plus an annual target bonus of $75,000, subject to achieving certain revenue
targets to be established by the Board of Directors in the first quarter of each fiscal year. 
  

	3	EMPLOYEE BENEFITS 

  
 Executive Benefits. During Executive’s employment, Executive shall be eligible to participate in the employee benefits plans currently and
hereafter maintained by the Company of general applicability to other senior executives of the Company, including the Company group health insurance, dental insurance, long-term disability and 401(k) plans. The Company reserves the right to cancel
or change the employee benefit plans and programs it offers to its employees at any time. Executive will be given a copy of the Company’s employee handbook and employee benefit plan documents which will describe more fully these and other
benefits of Executive’s employment, as well as the personal policies and procedures which apply to employment with the Company. 
  

	4	EXPENSE REIMBURSEMENT 

  
 Executive will be authorized to incur ordinary, necessary and reasonable travel, entertainment and other business expenses, in line with the
Company’s travel policy and in connection with Executive’s duties. The Company shall reimburse Executive for such expenses upon presentation of appropriate supporting documentation in accordance with the Company’s standard
reimbursement policy. 
  

	5	SEVERANCE 

  
 a. Benefits. If Executive’s employment with the Company is terminated by the Company without Cause or by Executive with Good Reason, then
Executive shall be entitled to receive the following severance benefits: 
  
 (i). six months of Base Salary, less applicable withholding taxes, payable in a lump sum upon termination; and 
  
 (ii). continued group life, health and dental benefits for Executive, his spouse and dependents at the same level of coverage as in effect
for Executive on the day immediately preceding the day of termination of employment at no cost to Executive or his family for a period ending on the earlier of (a) six months after the date of termination of employment and (b) the date that
Executive is eligible to receive group life, health and dental benefits through a new employer. 
  
 b. Conditions. Payment by the Company of any severance benefits is conditioned upon (i) Executive’s execution of a general release in the form
of the Settlement Agreement and Release attached hereto as Exhibit B and (ii) should Executive be a member of the Board of Directors at the time his employment terminates and his employment is terminated by the Company for Cause or by the
Executive without Good Reason, Executive’s resignation as a member of the Board of Directors of ActivCard Corp. 
  
 c. No Benefits. Executive shall not be entitled to receive any severance payments or benefits upon termination of Executive’s employment by
the Company with Cause or by Executive without Good Reason, other than vested benefits under the Company’s employee benefit plans or programs. 
  
 d. No Mitigation; No Offset. Executive shall not be required to mitigate the amount of payments, if any, provided for in this Section 5 by seeking
other employment or otherwise, nor shall the amount of any payment or benefit provided for in Section 5(a)(i) and (ii) be reduced by any compensation earned by Executive as the result of employment by another employer after the date of termination.

  
 e. Cooperation. If Executive is entitled to receive
benefits pursuant to Section 5(a) hereof, Executive agrees that, for a period of six months following the date of termination of Executive’s employment, Executive shall cooperate and from time to time, on reasonable advance notice from the
Company, make himself available up to five 

  

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hours per week and subject to any obligations or duties of Executive to a new employer, to assist the Company with respect to general matters involving the
transition of a new Senior Vice President, strategic transactions upon which the Executive worked during his employment or any legal proceedings that are based on or directly related to events or transactions occurring during Executive’s
employment by the Company that reasonably require his personal testimony or involvement. The Company shall reimburse Executive for his out-of-pocket expenses relating to his compliance with his obligations set forth herein and Executive shall be
fully covered and protected under the Company’s indemnification policies with respect to his activities hereunder. 
  

	6	DEATH OR DISABILITY 

  
 Executive’s employment shall terminate automatically in the event of Executive’s death or “Disability” (as defined below). In the
event Executive’s employment terminates for death or Disability, Executive will receive death or disability benefits in accordance with Company standard benefit plans. 
  

	7	CERTAIN DEFINITIONS 

  
 a. “Good Reason.” As used in this Agreement, a resignation for “Good Reason” will occur if Executive resigns
Executive’s employment as follows: (i) within 45 days after a material reduction in Executive’s position, title or primary duties and responsibilities; (ii) within 45 days after any reduction of Executive’s starting Base Salary or
level of employee benefits as set forth herein; provided that a reduction of Executive’s Base Salary by not more than 15% or level of employee benefits, if similar reductions are made across the board to the salary or level of employee
benefits, as applicable, of other officers and employees of the Company, shall not constitute “Good Reason” under this clause (ii); (iii) within 45 days of a material breach of this Agreement by the Company following written notice to the
Company of such breach and a reasonable opportunity to cure such breach, if curable; (iv) within 60 days of the failure by any of the Company’s successors or assigns to assume the obligations to Executive under this Agreement; or (v) within 45
days after the Company relocates Executive to an office or location that is more than 60 miles from Fremont, California. 
  
 b. “Cause.” As used in this Agreement, “Cause” shall mean any of the following: 
  
 (i). Failure to Perform Duties. Executive willfully
refuses to use Executive’s reasonable best efforts to carry out the lawful material duties consistent with Executive’s position, and after written notice thereof which sets forth in detail the specific respects in which the Company
believes Executive has not substantially performed Executive’s duties as aforesaid, Executive fails to correct such behavior within 45 days after being served with such written notice; 
  
 (ii). Adverse Conduct. Executive is convicted of,
pleads “guilty” or “no contest” to a felony offense or commits any act of misconduct which is materially detrimental to the reputation of the Company, or intentionally commits an act of dishonesty, fraud, embezzlement,
misappropriation or financial dishonesty against the Company; or 
  
 (iii). Breach Agreement or Policy. Executive materially breaches this Agreement, the Confidentiality Agreement, or any other material written agreement between Executive and the Company (other than the Stock
Purchase Agreement, Escrow Agreement, the Seller Release, the Non-Competition Agreement or the Ancillary Escrow Agreements (defined below)), or Executive materially breaches or violates any lawful material employment policy of the Company, which is
detrimental to the Company, including those prohibiting harassment of another employee, and after written notice thereof which sets forth in detail the specific respects in which the Board of Directors believes Executive has breached an agreement or
violated a policy, Executive fails to correct such breach or violation within 30 days after being served with written notice. For purposes of this Section 7(b)(iii), the “Ancillary Escrow Agreements” shall mean (i) the
Retention Bonus Escrow Agreement, dated August 4, 2005 between the Executive, Protocom Development Systems Pty Ltd (“Protocom”) and Comerica Bank and (ii) the Earn-Out Escrow Agreement, dated August 4, 2005 between the
Executive, Protocom and Comerica Bank. 
  
 c.
“Disability.” As used in this Agreement, “Disability” shall mean that Executive has failed to perform Executive’s duties under this Agreement after reasonable accommodation by the Company for a period of
not less 

  

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than 180 consecutive days (or 180 days during any twelve-month period) as a result of Executive’s incapacity due to physical or mental injury,
disability, injury or illness. 
  

	8	CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT 

  
 Executive’s acceptance and commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company,
of the Company’s standard form of Employee Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) a copy of which attached hereto as Exhibit C, prior to or on Executive’s first day
of employment. 
  

	9	CERTAIN RESTRICTIONS 

  
 a. Competitive Activity During Employment. Executive agrees that, during the term of Executive’s employment, without the prior written consent
of the Board of Directors, Executive will not, directly or indirectly, as an employee, agent, consultant, advisor, owner, manager, lender, officer, director, partner, stockholder, or otherwise, engage in any Competitive Activity, or have any such
relationship with any person or entity that engages in any Competitive Activity; provided, however, that nothing in this Agreement will prohibit Executive from owning a passive investment of less than one percent of the outstanding equity securities
of any company listed on any national securities exchange or quotation system so long as Executive has no other relationship with such company in violation of this Agreement. “Competitive Activity” means developing,
manufacturing, licensing and selling products for authentication solutions and systems for the issuance, usage and management of digital identities. Executive’s post-employment obligations to the Company shall be governed by the Confidentiality
Agreement and by a separate Non-Competition Agreement to be executed between Executive and the Company. 
  
 b. Agreement Not to Solicit Employees. Executive agrees that, during the term of Executive’s employment with the Company, Executive will not,
either directly or indirectly, on Executive’s own behalf or in the service or on the behalf of others knowingly solicit, divert, or hire away, or attempt to solicit, divert, or hire away any person then employed by the Company, nor knowingly
encourage anyone to leave the Company’s employ. The foregoing shall not prohibit the hiring of Company employees as a result of a general solicitation to the public or unsolicited employment solicitation by a Company employee. 
  

	10	AT-WILL EMPLOYMENT 

  
 Executive’s employment with the Company shall be for no specified period or term and shall constitute “at-will” employment. Accordingly,
Executive is free to terminate Executive’s employment at any time, with or without Cause, for any or no reason, and the Company is free to terminate Executive’s employment at any time, with or without Cause, for any or no reason subject to
the provisions of Section 5 of this Agreement. Any contrary representations which may have been made or which may be made to Executive are superseded by this Agreement. 
  

	11	INDEMNIFICATION 

  
 Executive shall be entitled to be indemnified by the Company to the maximum extent provided under the Company’s by-laws and certificate of
incorporation and applicable law and to receive the benefits of any director and officer liability insurance obtained by the Company from time to time, subject to the terms, provisions and conditions of any such insurance. Expenses (including
reasonable legal fees and expenses) incurred by Executive in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Company of an undertaking by or on behalf of Executive to repay such amount if it shall be determined that Executive is not entitled to be indemnified under the Company’s by-laws or certificate of incorporation.

  

	12	APPLICABLE LAW; SEVERABILITY 

  
 This Agreement shall be governed by the laws of the State of California, without reference to rules relating to conflicts of law. In the event that any
provision of this Agreement becomes or is declared by a court of competent 

  

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jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision. 

 

	13	SUCCESSORS AND ASSIGNS 

  
 This Agreement shall be binding upon the Company’s successors and assigns and upon Executive’s heirs, executors, administrators, estate,
successors and assigns. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets, which becomes bound by this Agreement. Executive may not assign this Agreement.

  

	14	NO INCONSISTENT OBLIGATIONS 

  
 By signing this Agreement and accepting this offer of employment, Executive represents and warrants to the Company that Executive is under no obligations
or commitments, whether contractual or otherwise, that are inconsistent with Executive’s obligations set forth in this Agreement or otherwise restrict Executive’s ability to enter into this Agreement or fully perform the services required
hereunder. 
  

	15	EXPENSES 

  
 The Company and Executive shall bear their respective legal and other fees and expenses with respect to this Agreement. 
  

	16	DISPUTE RESOLUTION 

  
 Executive and the Company agree to arbitrate any dispute, claim, or controversy arising out of this Agreement or Executive’s employment or
termination of employment. The arbitration shall be conducted by a single neutral arbitrator in accordance with the rules issued by JAMS for resolution of employment disputes. The arbitration shall take place in the City of San Francisco. The
Company will pay the fee for the arbitration proceeding, as well as any other charges by JAMS. The arbitrator shall issue a written decision or award. The decision or award of the arbitrator shall be final and binding upon the Company and
Executive. The arbitrator shall have the power to award any type of relief that would be available in a court of competent jurisdiction. Any award may thereafter be entered as a judgment in any court of competent jurisdiction. Each party agrees that
any relief to which such party is entitled arising out of said arbitration shall be limited to that awarded by the arbitrator. Each party agrees to file any demand for arbitration within the time limit established by the applicable statute of
limitations for the asserted claims. Failure to demand arbitration within the prescribed time period shall result in waiver of any claims. Each party agrees to waive any right such party may have to a jury trial with respect to any dispute or claim
relating to this Agreement, Executive’s employment, Executive’s termination from employment, or any terms and conditions of Executive’s employment with the Company. Executive shall be responsible for his own attorney’s fees and
costs provided, however, the Company shall pay for Executive’s attorney’s fees and costs in the event Executive prevails on any substantive issue in the arbitration. 
  

	17	ENTIRE AGREEMENT 

  
 This Agreement and the Exhibits, including the Confidentiality Agreement and the Stock Purchase Agreement, set forth the full and complete agreement
between the Company and Executive regarding the subject matter hereof and supersede any and all prior representations or agreements between Executive and the Company, if any, whether written or oral, except for the Stock Purchase Agreement and
Non-Competition Agreement referenced above. This Agreement may not be modified or amended except by a written agreement, signed by Executive and the Company. No failure on the part of the Company or Executive to exercise any power, right or
privilege or remedy under this Agreement, and no delay on the part of the Company or Executive in such exercise shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other further exercise thereof or any other power, right, privilege or remedy. Any waiver must be in writing and executed by the parties. The captions contained in this Agreement are for convenience only and
shall not be considered part of this Agreement. All definitions used in this Agreement shall apply to the Exhibits to this Agreement. 
  
 [Remainder of this Page Intentional Left Blank] 
  

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 This Agreement may be executed in two or more counterparts and delivered by facsimile, each of which
shall be deemed an original, but both of which together shall constitute one and the same instrument. 
  

					
			
	 DATED: August 5, 2005
	 	 	 	 /s/ Jason Hart

	 	 	 	 	 Jason Hart

  

									
	 DATED: August 5, 2005
	 	 	 	 ACTIVCARD, INC.

					
	 	 	 	 	 	 	By:	 	 /s/ Ben C. Barnes

	 	 	 	 	 	 	 Title:
	 	 Ben C. Barnes, CEO

  
 [Signature Page
to Employment Agreement]Second Modification Agreement

 Exhibit 10.1 
  
 SECOND MODIFICATION AGREEMENT TO BORROWING BASE REVOLVING 
 LINE OF CREDIT AGREEMENT 
  

					
	DATE:	  	As of July 14, 2005	  	 
			
	PARTIES:	  	 	  	 
	 	  	Borrower:	  	WILLIAM LYON HOMES, INC., a California corporation
			
	 	  	Guarantor:	  	WILLIAM LYON HOMES, a Delaware corporation
			
	 	  	Bank:	  	JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA (Main Office Chicago, Illinois)), a national banking association

  
 JPMORGAN CHASE BANK, N.A. (successor
by merger to Bank One, NA (Main Office Chicago, Illinois)), a national banking association (“Bank”), and WILLIAM LYON HOMES, INC., a California corporation (“Borrower”), hereby enter into this Second Modification
Agreement (the “Modification”) to the Borrowing Base Revolving Line of Credit Agreement dated as of June 28, 2004, as modified by a Modification Agreement, dated as of December 7, 2004 (the “Loan Agreement”), with
the consent of guarantor WILLIAM LYON HOMES, a Delaware corporation (“Guarantor”). 
  
 RECITALS 
  
 A. Bank has extended to Borrower credit (“Loan”) up to the original maximum principal amount of Seventy Million Dollars ($70,000,000) pursuant to the Loan Agreement, as further evidenced by that certain Promissory Note
dated as of June 28, 2004 (the “Original Note”) executed by Borrower and payable to the order of Bank. 
  
 B. The Loan is secured by, among other things, (i) the duly recorded Construction Deed of Trust and Fixture Filing (With Assignment of Rents and Security
Agreement) executed by Borrower as Trustor for the benefit of Bank, dated as of July 7, 2004, and recorded on July 9, 2004 in the Official Records of Orange County, California as Instrument No. 2004000623341, (ii) the duly recorded Construction Deed
of Trust and Fixture Filing (With Assignment of Rents and Security Agreement) executed by Borrower as Trustor for the benefit of Bank, dated as of August 18, 2004, and recorded on September 28, 2004 in the Official Records of Orange County,
California as Instrument No. 2004000868716, (iii) the duly recorded Construction Deed of Trust and Fixture Filing (With Assignment of Rents and Security Agreement) executed by Borrower as Trustor for the benefit of Bank, dated as of January 18,
2005, and recorded on January 20, 2005 in the Official Records of Orange County, California as Instrument 

  

 1 

 
No. 2005000049025, (iv) the duly recorded Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, executed by Borrower as Trustor for the
benefit of Bank, dated as of March 7, 2005, and recorded on March 15, 2005 in the Official Records of Santa Clara County, California as Document No. 18273941, and (v) the duly recorded Construction Deed of Trust and Fixture Filing (With Assignment
of Rents and Security Agreement) executed by Borrower as Trustor for the benefit of Bank, dated as of March 24, 2005, and recorded on April 15, 2005 in the Official Records of Orange County, California as Instrument No. 2005000285427 (the foregoing
Deeds of Trust, as amended to dated, shall be hereinafter referred to, individually, as a “Deed of Trust” and, collectively, as the “Deeds of Trust”). The Loan is further secured by the personal property described
in certain UCC-1 Financing Statements relating to the property encumbered by the Deeds of Trust naming Borrower as Debtor and Bank as Secured Party (as amended to date, the “UCC Financing Statements”). The Deeds of Trust, the UCC
Financing Statements, and such other agreements, documents and instruments securing the Loan are referred to individually and collectively as the “Security Documents”). 
  
 C. Repayment of the Loan and the completion of the improvements have been, and continue to be, guaranteed by the Repayment
Guaranty dated as of June 28, 2004 and executed by Guarantor in favor of Bank (the “Guaranty”). The Guaranty and any other agreements, documents and instruments guarantying the Loan are referred to individually and collectively as
the “Guaranty Documents”. 
  
 D. The Loan
Agreement, Note, the Security Documents, the Guaranty Documents, any environmental certification and indemnity agreement, and all other agreements, documents, and instruments evidencing, securing, or otherwise relating to the Loan, as may be
amended, modified, extended or restated from time to time, are sometimes referred to individually and collectively as the “Loan Documents”. Hereinafter, the Loan Documents shall mean such documents as modified in this Modification.

  
 E. The Borrower has requested that the Bank agree to extend
the Revolving Credit Termination Date from June 28, 2006 to June 28, 2007, and to extend the Maturity Date from June 28, 2007, to June 28, 2008. Based on the representations of Borrower, Bank is willing to so extend the Revolving Credit Termination
Date and the Maturity Date, subject to the terms and conditions herein. 
  
 F. Pursuant to Section 2.1(d) of the Loan Agreement, the Borrower has also requested that the Bank increase the Commitment Amount from Seventy Million Dollars ($70,000,000) to One Hundred Million Dollars ($100,000,000). The Bank has
agreed to increase the Commitment Amount on certain conditions, including that all amounts disbursed under the Loan, as increased hereby, be secured by the Deeds of Trust. 
  
 G. All capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Loan
Agreement. 
  

 2 

 AGREEMENT 
  

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Bank agree as follows: 
  

	1.	ACCURACY OF RECITALS. 

  
 Borrower acknowledges the accuracy of the Recitals. 
  

	2.	MODIFICATION OF LOAN DOCUMENTS. 

  
 2.1 The Revolving Credit Termination Date is hereby extended from June 28, 2006 to June 28, 2007. In no event shall the Bank be required to make Advances
of the Loan to Borrower and to issue Facility LCs for the account of Borrower after the Revolving Credit Termination Date, as extended hereby. 
  
 2.2 The Maturity Date is hereby extended from June 28, 2007 to June 28, 2008. All principal, interest and Other Amounts shall be immediately due and
payable on the Maturity Date, as extended hereby. 
  
 2.3 The
Commitment Amount is hereby increased from $70,000,000 to $100,000,000. In no event shall the Bank be obligated to make any disbursement of the Loan which would cause the outstanding principal balance of the Loan to exceed the Commitment Amount, as
increased hereby. 
  
 2.4 The Borrower’s obligation to repay
the Loan, together with interest thereon, shall be evidenced by that certain Amended and Restated Promissory Note of even date herewith, executed by the Borrower and made payable to the Bank, in the maximum principal amount of $100,000,000 (the
“Amended and Restated Note”). All references in the Loan Agreement, the Deeds of Trust and the other Loan Documents to the term “Note” shall mean and be deemed to refer to the Amended and Restated Note. 

 
 2.5 There is hereby added to the Loan Agreement a new Section 2.13,
which shall read in its entirety as follows: 
  
 2.13
Electronic Notices. Conversion/Continuation Notices and notices of prepayments under Sections 2.3 and 2.4, may be made by electronic communication (including email and internet or intranet websites) pursuant to procedures
approved by the Bank. Such approval may be limited to particular notices or communications. Unless the Bank otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt
of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent
during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the “receipt” by 

  

 3 

 
the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and
identifying the website address therefor. Any party hereto may change its address or telecopier number or email address for notices and other communications hereunder by notice to the other parties hereto. 
  
 2.6 The Deeds of Trust are modified to secure payment and performance of the
Loan as amended to date, in addition to all other “Obligations” of Borrower as therein defined. The foregoing notwithstanding, certain obligations continue to be excluded from the Obligations, as provided in the Deeds of Trust.

  
 2.7 Each of the Loan Documents is modified to provide that it
shall be a default or an event of default thereunder if Borrower shall fail to comply with any of the covenants of Borrower herein or if any representation or warranty by Borrower herein or by any guarantor in any related Consent and Agreement of
Guarantor is materially incomplete, incorrect, or misleading as of the date hereof. 
  
 2.8 Each reference in the Loan Documents to any of the Loan Documents shall be a reference to such document as modified herein. 
  

	3.	RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL. 

  
 The Loan Documents are ratified and affirmed by Borrower and shall remain in full force and effect as modified herein. Any property or rights to or
interests in property granted as security in the Loan Documents shall remain as security for the Loan and the obligations of Borrower in the Loan Documents. 
  

	4.	CONDITIONS PRECEDENT. 

  
 Before this Agreement becomes effective and any party becomes obligated under it, all of the following conditions shall have been satisfied at
Borrower’s sole cost and expense in a manner acceptable to Bank in the exercise of Bank’s sole judgment: 
  
 4.1 Bank shall have received such assurance as Bank may require that the validity and priority of the Deeds of Trust have not been and will not be
impaired by this Agreement or the transactions contemplated by it, including the issuance by the title company of CLTA Endorsement Nos. 108.8 and 110.5 to be attached to Bank’s title policies insuring the liens of the Deeds of Trust.

  
 4.2 Bank shall have received fully executed and, where
appropriate, acknowledged originals of this Modification, the attached consents signed by Guarantor, the Amended and Restated Promissory Note, certain Amendments to Deed of Trust dated of even date herewith (the “Amendments to Deed of
Trust”) and any other documents which Bank may require or request in accordance with this Agreement or the other Loan Documents. 
  

 4 

 4.3 The Amendments to Deed of Trust shall have been recorded in the Official Records of the Counties in
which the Deeds of Trust were originally recorded, in addition to all other documents which Bank may require to be recorded. 
  
 4.4 Bank shall have received payment of the facility fee pursuant to Section 2.8(a) of the Loan Agreement hereof with respect to the increase in
the Commitment Amount in immediately available funds. 
  
 4.5 Bank
shall have received reimbursement, in immediately available funds, of all costs and expenses incurred by Bank in connection with this Agreement, including charges for title insurance (including endorsements), recording, filing and escrow charges,
fees for appraisal, architectural and engineering review, construction services and environmental services, mortgage taxes, and legal fees and expenses of Bank’s counsel. Such costs and expenses may include the allocated costs for services of
Bank’s in-house staffs, such as legal, appraisal, construction services and environmental services. Borrower acknowledges that any extension and modification fees payable in connection with this transaction do not include the amounts payable by
Borrower under this subsection. 
  

	5.	ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER. 

  
 The Loan Documents as modified herein contain the entire understanding and agreement of Borrower and Bank in respect of the Loan and supersede all prior
representations, warranties, agreements, arrangements, and understandings. No provision of the Loan Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in a writing signed by Bank and Borrower.

  

	6.	BINDING EFFECT. 

  
 The Loan Documents as modified herein shall be binding upon, and inure to the benefit of, Borrower and Bank and their respective successors and assigns.

  

	7.	CHOICE OF LAW. 

  
 This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to conflicts of law
principles. 
  

	8.	COUNTERPART EXECUTION. 

  
 This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and
the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically form one document. 
  
 [Signatures on following page] 
  

 5 

 DATED as of the date first above stated. 
  

									
	 BORROWER:
	 	 	 	WILLIAM LYON HOMES, INC.,
a California corporation
					
	 	 	 	 	 	 	By: 	 	 /s/ Richard S. Robinson

	 	 	 	 	 	 	 Name: 
	 	 Richard S. Robinson

	 	 	 	 	 	 	 Title: 
	 	 Senior Vice President

					
	 	 	 	 	 	 	By: 	 	 /s/ Michael D. Grubbs

	 	 	 	 	 	 	 Name: 
	 	 Michael D. Grubbs

	 	 	 	 	 	 	 Title: 
	 	 Senior Vice President

			
	 BANK:
	 	 	 	JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, NA (Main Office Chicago, Illinois)), a national banking association
					
	 	 	 	 	 	 	By: 	 	 /s/ Kimberlee E. Edwards

	 	 	 	 	 	 	 Name: 
	 	 Kimberlee E. Edwards

	 	 	 	 	 	 	 Title: 
	 	 First Vice President

  

 6 

 CONSENT AND AGREEMENT OF GUARANTOR 
  
 With respect to that certain Second Modification Agreement to the Borrowing Base Revolving Line of Credit Agreement
(hereinafter, the “Modification”) between WILLIAM LYON HOMES, INC., a California corporation (“Borrower”), and JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA (Main Office Chicago, Illinois)), a
national banking association (“Bank”), to which this Consent is attached, the undersigned (“Guarantor”), hereby (i) ratifies and reaffirms all of its obligations to Bank under the Guaranty, (ii) consents to the
execution and delivery by Borrower of the attached Modification, and (iii) confirms that the Guaranty remains in full force and effect notwithstanding Borrower’s execution of the attached Modification. The undersigned agrees that the execution
of this Consent and Reaffirmation of Guarantor (the “Consent”) is not necessary for the continued validity and enforceability of the Guaranty, but it is executed to induce Bank to enter into the Modification Agreement. 

 
 This Consent may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Consent to physically form one document. Facsimile
transmission of the signed original of this Consent or the retransmission of any signed facsimile transmission will be deemed the same as delivery of an original. 
  
 IN WITNESS WHEREOF, Guarantor has executed this Agreement as of the date set forth on the attached Second Modification
Agreement. 
  

									
	“Guarantor”	 	 	 	WILLIAM LYON HOMES,
a Delaware corporation
					
	 	 	 	 	 	 	By:	 	 /s/ Richard S. Robinson

	 	 	 	 	 	 	 Name: 
	 	 Richard S. Robinson

	 	 	 	 	 	 	 Title:
	 	 Senior Vice President

					
	 	 	 	 	 	 	By:	 	 /s/ Michael D. Grubbs

	 	 	 	 	 	 	 Name: 
	 	 Michael D. Grubbs

	 	 	 	 	 	 	 Title:
	 	 Senior Vice President

  

 7

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