Document:

Modification Agreement dated December 7, 2004

 Exhibit 10.19 
  
 MODIFICATION AGREEMENT 
  

					
	DATE:	  	 	  	 December 7, 2004
  

	PARTIES:	  	Borrower:	  	 WILLIAM LYON HOMES, INC., a California corporation.
  

	 	  	Bank:	  	JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA, a national banking association, with its main office in Chicago, Illinois)

  
 RECITALS: 
  
 A. Bank has extended to Borrower credit (“Loan”) in the
principal amount of $70,000,000.00 pursuant to the Borrowing Base Revolving Line of Credit Agreement, dated June 28, 2004 (“Loan Agreement”), and evidenced by the Promissory Note, dated June 28, 2004 (“Note”). The
unpaid principal of the Loan as of the date hereof is $23,840,355.40. 
  
 B. The Loan is secured by, among other things, various Deeds of Trust as defined in the Loan Agreement (“Deeds of Trust”), by Borrower, as trustor, for the benefit of Bank, as beneficiary (the agreements, documents, and
instruments securing the Loan and the Note are referred to individually and collectively as the “Security Documents”). 
  
 C. The Note, the Loan Agreement, the Security Documents, any environmental indemnity agreement, and all other agreements, documents, and instruments
evidencing, securing, or otherwise relating to the Loan are sometimes referred to individually and collectively as the “Loan Documents”. 
  
 D. Borrower has requested that Bank modify the Loan and the Loan Documents as provided herein. Bank is willing to so modify the Loan and the Loan
Documents, subject to the terms and conditions herein. 
  
 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 Loan Documents
are modified as follows: 
  
  2.1.1 Section
8.6 “Indebtedness and Other Financing” of the Loan Agreement shall be deleted in its entirety and replaced with the following: 
  
 Indebtedness and Other Financing. [INTENTIONALLY OMITTED] 
  
 2.2    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(s) is materially incomplete, incorrect, or misleading as
of the date hereof. 
  
 2.3    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. BORROWER REPRESENTATIONS AND WARRANTIES. 
  

Borrower represents and warrants to Bank: 
  
 4.1    No default or event of default under any of the Loan Documents as modified herein, nor any event, that, with the giving of
notice or the passage of time or both, would be a default or an event of default under the Loan Documents as modified herein has occurred and is continuing. 
  
 4.2    There has been no material adverse change in the financial condition of Borrower or any other person whose financial statement
has been delivered to Bank in connection with the Loan from the most recent financial statement received by Bank. 
  
 4.3    Each and all representations and warranties of Borrower in the Loan Documents are accurate on the date hereof. 
  
 4.4    Borrower has no claims, counterclaims, defenses,
or set-offs with respect to the Loan or the Loan Documents as modified herein. 
  
 4.5    The Loan Documents as modified herein are the legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with their terms. 
  
 4.6    Borrower is validly existing under the laws of the
State of its formation or organization and has the requisite power and authority to execute and deliver this Agreement and to perform the Loan Documents as modified herein. The execution and delivery of this Agreement and the performance of the Loan
Documents as modified herein have been duly authorized by all requisite action by or on behalf of Borrower. This Agreement has been duly executed and delivered on behalf of Borrower. 
  
 5. BORROWER COVENANTS. 
  
 Borrower covenants with Bank: 
  
 5.1    Borrower shall execute, deliver, and provide to Bank such additional agreements, documents, and instruments as reasonably
required by Bank to effectuate the intent of this Agreement. 
  
 5.2    Borrower fully, finally, and forever releases and discharges Bank and its successors, assigns, directors, officers, employees, agents, and representatives from any and all actions, causes of action, claims, debts,
demands, liabilities, obligations, and suits, of whatever kind or nature, in law or equity of Borrower, whether now known or unknown to Borrower, (i) in respect of the Loan, the Loan Documents, or the actions or omissions of Bank in respect of the
Loan or the Loan Documents and (ii) arising from events occurring prior to the date of this Agreement. 
  
 5.3    Contemporaneously with the execution and delivery of this Agreement, Borrower has paid to Bank: 
  
 5.3.1 All accrued and unpaid interest under the Note and all amounts, other
than interest and principal, due and payable by Borrower under the Loan Documents as of the date hereof. 
  
 5.3.2 All the internal and external costs and expenses incurred by Bank in connection with this Agreement (including, without limitation, inside and
outside attorneys, appraisal, appraisal review, processing, title, filing, and recording costs, expenses, and fees). 
  

 2 

 6. EXECUTION AND DELIVERY OF AGREEMENT BY BANK. 
  
 Bank shall not be bound by this Agreement until (i) Bank has executed and delivered this Agreement, (ii) Borrower has
performed all of the obligations of Borrower under this Agreement to be performed contemporaneously with the execution and delivery of this Agreement, if any, (iii) each guarantor of the Loan, if any, has executed and delivered to Bank a Consent and
Agreement of Guarantor(s), and (iv) if required by Bank, Borrower and any Guarantor have executed and delivered to Bank an environmental indemnity agreement. 
  
 7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER. 
  
 The Loan Documents as modified herein contain the complete understanding and agreement of Borrower and Bank in respect of
the Loan and supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except in
a writing signed by the parties thereto. 
  
 8. BINDING EFFECT. 

 
 The Loan Documents, as modified herein, shall be binding upon and shall
inure to the benefit of Borrower and Bank and their successors and assigns and the executors, legal administrators, personal representatives, heirs, devisees, and beneficiaries of Borrower; provided, however, Borrower may not assign any of its
rights or delegate any of its obligations under the Loan Documents and any purported assignment or delegation shall be void. 
  
 9. 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. 
  
 10. 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. 
  
 DATED as of the date first above stated. 
  
 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

  
 [SIGNATURE PAGE
CONTINUES ON FOLLOWING PAGE] 
  

 3 

 JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA, a national banking association, with its
main office in Chicago, Illinois) 
  

			
	By:	 	/s/    KIMBERLEE EDWARDS        
		
	Name:	 	Kimberlee Edwards
		
	Title:	 	Vice President

  

 4 

 CONSENT AND AGREEMENT OF GUARANTOR(S) 
  
 With respect to the Modification Agreement, dated December 7, 2004 (“Agreement”), between WILLIAM LYON HOMES, INC., a
California corporation (“Borrower”) and JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, NA, a national banking association, with its main office in Chicago, Illinois (“Bank”), the undersigned
(individually and, if more than one, collectively “Guarantor”) agrees for the benefit of Bank as follows: 
  
 1. Guarantor acknowledges (i) receiving a copy of and reading the Agreement, (ii) the accuracy of the Recitals in the Agreement, and (iii) the
effectiveness of (A) that certain Repayment Guaranty, dated June 28, 2004 (“Guaranty”) by the undersigned for the benefit of Bank, as modified herein, and (B) any other agreements, documents, or instruments securing or otherwise
relating to the Guaranty, (including, without limitation, any environmental indemnity agreement previously executed and delivered by the undersigned), as modified herein. The Guaranty and such other agreements, documents, and instruments, as
modified herein, are referred to individually and collectively as the “Guarantor Documents”. Capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the Agreement. 
  
 2. Guarantor consents to the modification of the Loan Documents and all other
matters in the Agreement. 
  
 3. Guarantor fully, finally, and
forever releases and discharges Bank and its successors, assigns, directors, officers, employees, agents, and representatives from any and all actions, causes of action, claims, debts, demands, liabilities, obligations, and suits of whatever kind or
nature, in law or equity, that Guarantor has or in the future may have, whether known or unknown, (i) in respect of the Loan, the Loan Documents, the Guarantor Documents, or the actions or omissions of Bank in respect of the Loan, the Loan
Documents, or the Guarantor Documents and (ii) arising from events occurring prior to the date hereof. 
  
 4. Guarantor agrees that all references, if any, to the Note, the Loan, the Deeds of Trust, the Security Documents, and the Loan Documents in the
Guarantor Documents shall be deemed to refer to such agreements, documents, and instruments as modified by the Agreement. 
  
 5. Guarantor reaffirms the Guarantor Documents and agrees that the Guarantor Documents continue in full force and effect and remain unchanged, except as
specifically modified by this Consent and Agreement of Guarantor(s). Any property or rights to or interests in property granted as security in the Guarantor Documents shall remain as security for the Guaranty and the obligations of Guarantor in the
Guaranty. 
  
 6. Guarantor agrees that the Loan Documents, as
modified by the Agreement, and the Guarantor Documents, as modified by this Consent and Agreement of Guarantor(s), are the legal, valid, and binding obligations of Borrower and the undersigned, respectively, enforceable in accordance with their
terms against Borrower and the undersigned, respectively. 
  
 7.
Guarantor agrees that Guarantor has no claims, counterclaims, defenses, or offsets with respect to the enforcement against Guarantor of the Guarantor Documents. 
  

8. Guarantor represents and warrants that there has been no material adverse change in the financial condition of any Guarantor from the most recent
financial statement received by Bank. 
  
 9. Guarantor agrees that
this Consent and Agreement of Guarantor(s) 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 and acknowledgment pages may be
detached from the counterparts and attached to a single copy of this Consent and Agreement of Guarantor(s) to physically form one document. 
  

 5 

 DATED as of the date of the Agreement. 
  
 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

  

 6Arrowhead Research Corporation Compensation Policy for Non-Employee Directors

 Exhibit 10.14 
  
 ARROWHEAD RESEARCH CORPORATION 
 Compensation Policy for Non-Employee Directors 
  
 (October 1, 2004) 
  
 This policy governs the compensation of non-employee directors of Arrowhead Research Corporation (the “Company”). For purposes of
this policy, a “non-employee director” means a director who (i) is not employed as an officer or other employee of the Company or any of its subsidiaries and (ii) does not receive more than $60,000 in compensation, directly or
indirectly, in the relevant year from the Company or any of its subsidiaries for services as a consultant or in any other capacity other than as a director. 
  
 I. Board Fees. 
  
 A. Annual Retainer. Non-employee directors will receive an annual retainer of $4,000 per year provided the director attends at least 75% of the
regular meetings of the Board. Attendance may be in person or by telephone, but attendance in person is encouraged. The Company will pay the retainer in quarterly installments of $1,000. To the extent the Company’s Chairman of the Board is a
non-employee director, he or she will receive an annual retainer of $6,000 per year. 
  
 B. Committee Service. The compensation for service on committees of the Board will consist entirely of stock option awards as specified below in Section II(C). 
  
 II. Stock Option Awards 
  
 A. Initial Grants. Non-employee directors will receive a stock option grant of 10,000 shares of common stock upon
their initial election or appointment to the Board. The exercise price will be the closing price of the Company’s common stock on the date of their appointment or election, as applicable. These options vest on the anniversary of the grant.,

  
 B. Annual Service Grants. Non-employee directors (other
than the Chairman of the Board) who have served for at least six months will receive an annual stock option grant of 10,000 shares of common stock on the date of each annual meeting of stockholders at which they are re-elected. These subsequent
options vest at the rate of fifty percent (50%) of the shares on each anniversary of the date of grant. The Chairman of the Board will receive an annual stock option grant of 15,000 shares of common stock on the same terms. The exercise price for
the annual option grants will be the closing price of the common stock on the date of the annual stockholder meeting. 
  
 C. Grant Date and Duration. Unless otherwise specified in this policy, all stock options awarded to non-employee directors under this policy will
(1) be non-qualified stock options, (2) have an effective grant date that is the same as the date used to determine the exercise price, and (3) have a duration of ten years from the date of grant. 
  
 III. Expense Reimbursement 
  
 Non-employee directors are entitled to reimbursement for all reasonable and
customary out of pocket and travel expenses incurred in the normal course of Company business. 
  
 IV. Administration and Interpretation 
  
 The Board will have complete discretion to resolve any questions relating to the administration or interpretation of this policy, and their decision will be final and binding on all non-employee directors. Unless
otherwise required by the context, all references in this policy to a “year” refer to the year between annual stockholder meetings. 
  
 V. Amendments 
  
 The Board has adopted this policy based on the business and economic conditions in existence at the time of adoption and intends to periodically review
the policy in light of changes in those conditions. Therefore, the Board reserves the right to amend this policy at any time and in any manner that it deems necessary, appropriate or desirable to reflect the best interests of the Company. The Board
also reserves the right to vary from the policy from time to time without amending it and shall do so by resolution of the Board.

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