Document:

Fourth Amendment to Amended and Restated Revolving Line of Credit Loan Agreement

 Exhibit 10.23 
 

 
 FOURTH AMENDMENT TO AMENDED AND 
 RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT 
 THIS FOURTH AMENDMENT TO
AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT (“Agreement”), dated as of January 17, 2008, by and between WILLIAM LYON HOMES, INC., a California corporation (“Borrower”), and CALIFORNIA
BANK & TRUST, a California banking corporation (“Lender”), with reference to the following facts: 
 RECITALS 
 A. Borrower originally agreed to borrow a sum not to exceed Fifty Million Dollars ($50,000,000.00)
(as the same has been and may be further amended from time to time, “Loan”) from Lender for the purpose of providing Borrower with funding for the acquisition and development of residential lots, the construction of existing and
future residential home projects, and the issuance of letters of credit for the payment of costs incurred or associated with said projects. The terms and conditions of the Loan are more particularly set forth in that certain Amended and Restated
Revolving Line of Credit Loan Agreement (Borrowing Base Loan) dated as of September 16, 2004, by and between Borrower and Lender (as the same has been and may be further amended from time to time, “Loan Agreement”). All
capitalized terms not specifically defined herein shall have the meanings given to such terms in the Loan Agreement. 
 B. The Loan is
evidenced by that certain Sixth Amended and Restated Construction Loan Promissory Note (Construction Revolving Line of Credit) dated as of December 28, 2007, given by Borrower to Lender (as the same has been and may be further amended from time
to time, “Note”). 
 C. The Loan is secured by, among other things, the “Deed of Trust” (as defined
in the Loan Agreement). 
 D. This Agreement, the Note and the other documents evidencing or relating to the Loan collectively shall
be referred to as the “Loan Documents.” 
 E. Borrower has requested that Lender modify the Loan by, among other
things, modifying the definition of “Maximum Aggregate Loan Allocation(s)” within the Loan Agreement. 
 F. Lender is
willing to consent to the modifications to the Loan Documents set forth herein, subject to the conditions set forth below. The date on which all conditions in this Agreement have been satisfied shall be referred to as the “Modification
Closing Date.” 
  

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 TERMS AND CONDITIONS 
 NOW, THEREFORE, in consideration of the foregoing premises and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: 
 1. Recitals. The preamble, recitals and any exhibits hereto are
hereby incorporated into this Agreement. 
 2. Maximum Aggregate Loan Allocation(s). New Definitions. The
definition of Maximum Aggregate Loan Allocation(s) in the Loan Agreement shall be replaced with the following: 
 “Maximum Aggregate Loan Allocation(s)” shall mean each and every one of the following: 
 (a)
With respect to all Qualified Projects included in the Borrowing Base (collectively or individually “Geographic Concentration Limitation”): 
         (1) The aggregate Loan Allocations for all Lots and/or Homes for Qualified Projects
(whether Advances have been made and/or have been committed but have not yet advanced) located in the State of Arizona shall not exceed the sum of Fifteen Million Dollars ($15,000,000.00); and/or 
         (2) The aggregate Loan Allocations for all Lots and/or Homes for Qualified Projects
(whether Advances have been made and/or have been committed but have not yet advanced) located in the State of Nevada shall not exceed the sum of Fifteen Million Dollars ($15,000,000.00). 
 (b) With respect to all Lots to be included in the Borrowing Base, the aggregate Loan Allocations for all Entitled Land, Lots Under
Development and Developed Lots for all Qualified Projects (whether Advances have been made and/or have been committed but have not yet advanced) shall not exceed the sum of Twenty Million Dollars ($20,000,000.00) (“Lot Concentration
Limitation”). 
 (c) With respect to all Spec Homes to be included in the Borrowing Base (“Spec Home
Concentration Limitation”): 
         (1) For all Projects financed
hereunder, the aggregate Loan Allocations for all Spec Homes for all Projects (whether Advances have been made and/or have been committed but have not yet advanced) shall not exceed the sum of Twelve Million Dollars ($12,000,000.00); and/or

         (2) For each and every Project financed hereunder, the total number
of Spec Homes shall not exceed the greater of (A) eight (8), (B) four (4) months’ appraised absorption for the Project, or (C) four (4) months’ actual absorption for the subject Project, as determined by Lender
from time to time based upon the actual prior six-month Home sales average for said Project. 
 3. Amendment to Deed of
Trust. Each Deed of Trust shall be amended to secure the obligations under the Note and the other Loan Documents, as amended herein. 
  

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 4. Conditions Precedent. In no event shall Lender have any obligation to close this
transaction unless and until all of the following conditions are satisfied: 
 4.1 No Defaults. There shall be no:
(a) uncured, material default hereunder or under the Loan Documents; (b) continuing representation, covenant or warranty hereunder or under the Loan Documents that is false or misleading in any manner; and (c) event currently existing
which, with the passage of time, will result in a material default or the falsity of any continuing representation, covenant or warranty hereunder or under the Loan Documents. 
 4.2 No Financial Change. There has been no material adverse change in Borrower’s financial condition since the closing of the Loan.

 4.3 Payment Of Lender’s Costs. Borrower shall pay all of Lender’s costs and expenses incurred in connection with
the documentation and closing of the modifications to the Loan Documents described herein, including without limitation all attorneys’ fees and other closing fees and costs. 
 4.4 Additional Documents. Lender shall have received all additional documents executed by Borrower, as required by Lender in connection
with this Agreement, including, without limitation, the Note. 
 5. Representations and Warranties. Borrower hereby represents
and warrants to Lender as follows: 
 5.1 No Default. No default or event of default under any of the Loan Documents has
occurred that remains uncured, and no event has occurred which, with the giving of notice or the passage of time, or both, would constitute a default or an event of default under any of the Loan Documents. 
 5.2 Representations and Warranties. As of the date hereof, all of the warranties and representations contained in all of the Loan Documents
remain true, correct, complete and accurate. 
 5.3 No Claims or Defenses. As of the date hereof, neither Borrower nor its
managing member has any claims against Lender nor defenses to the enforcement of any of the Loan Documents in accordance with their respective terms, as amended by this Agreement. 
 5.4 Financial Covenants. Borrower acknowledges and agrees that the financial covenants contained in the Loan Documents are in full force
and effect and shall be monitored by Lender based on the financial reports to be provided under the Loan Agreement. 
 5.5 Satisfaction
of Conditions. All of the conditions precedent set forth above have been fully satisfied. 
 6. Further Assurances.
Borrower agrees to perform such other and further acts, and to execute such additional documents, agreements, notices or financing statements, as Lender deems necessary or desirable from time to time to create, preserve, continue, perfect, validate
or carry out any of Lender’s rights under this Agreement and the other Loan Documents. 
 7. Integration. All rights,
remedies, powers and interest provided for Lender herein are in addition to the rights, remedies, powers and interests provided for Lender in the Loan Documents, the terms and provisions of which are incorporated herein by this reference and made a

  

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part hereof. If and to the extent any term or provision hereof is inconsistent with any term or provision of the Loan Documents, the term or provision of
this Agreement shall prevail. 
 8. Entire Agreement; Amendments. This Agreement and the other Loan Documents contain the
entire agreement between Borrower and Lender with respect to the Loan Documents, and all prior negotiations, commitments, understandings and agreements are superseded by this Agreement and the Loan Documents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement, any Loan Document, or any other agreement executed in connection with any of the foregoing shall be effective unless in writing and signed by Lender and Borrower, and then only in
the specific instance and for the specific purpose given. 
 9. Governing Law. The Loan Documents shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of California, without regard to its conflict of laws principles. 
 10. Section Headings. The section headings of this Agreement are included for convenience only, and shall not affect the construction or interpretation of any provision of this Agreement. 
 11. Attorneys’ Fees. If any action or other proceeding is brought to interpret or enforce any provision of this Agreement, the
prevailing party shall be entitled to recover attorneys’ fees and expenses. 
 12. Binding Effect. This Agreement and the
other Loan Documents shall be binding upon, and shall inure to the benefit of, Borrower and Lender and their respective successors and assigns, or heirs and personal representatives, as applicable, subject to any provision of the Loan Documents
restricting transfers of the Property. 
 13. Severability of Provisions. No provision of this Agreement or any other Loan
Document that is held to be inoperative, unenforceable and invalid shall affect the remaining provisions, and this and all provisions of this Agreement and the Loan Documents are hereby declared to be severable. 
 14. Miscellaneous. No reference to this Agreement is necessary in any instrument or document at any time referring to the Loan Documents. A
reference to the Loan Documents shall be deemed a reference to such document as modified hereby. 
 15. No Commitment. The
furnishing of this Agreement and other modification documents shall in no way be construed as a commitment by Lender to modify, amend, extend or otherwise alter the Loan Documents. Lender shall be under no obligation to close the transaction
evidenced by this Agreement unless this Agreement and all related documents are returned to Lender fully executed by Borrower, and unless this Agreement is actually executed by Lender and delivered to Borrower. 
 16. No Other Amendments. Except as expressly amended herein, the Loan Agreement, and all of the other Loan Documents remain unmodified and
in full force and effect. 
 17. Counterparts. This Agreement may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which, when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 
  

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 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

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 IN WITNESS WHEREOF, this Agreement has been executed by Borrower and Lender as of the date first above
written. 
 BORROWER: 
 WILLIAM LYON HOMES, INC., a California corporation 
 By: /s/ Douglas F.
Bauer                             
 Name: Douglas F. Bauer 
 Title: President 
 By: /s/ Michael D.
Grubbs                         
 Name: Michael D. Grubbs 
 Title: Senior Vice President 
 LENDER: 
 CALIFORNIA BANK & TRUST, a California banking corporation 
 By: /s/ Erin
Johnsen                                     
 Name: Erin
Johnsen                                     
 Its: Vice
President                                       

  

 6Sixth Modification Agreement to Borrowing Base Revolving Line of Credit AGMT.

 Exhibit 10.38 
 SIXTH MODIFICATION AGREEMENT TO BORROWING BASE REVOLVING 
 LINE OF CREDIT AGREEMENT 
  

							
	DATE:	 		  	As of February 20, 2008	  	
				
	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 Sixth 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, by a Second Modification to Borrowing Base Revolving Line of Credit Agreement, dated as of July 14,
2005, by a Third Modification to Borrowing Base Revolving Line of Credit Agreement, dated as of October 23, 2006, by a Fourth Modification to Borrowing Base Revolving Line of Credit Agreement, dated as of April 26, 2007, and by a Fifth
Modification to Borrowing Base Revolving Line of Credit Agreement, dated as of November 6, 2007 (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 maximum principal amount of One Hundred Million Dollars ($100,000,000) pursuant to the Loan Agreement, as presently evidenced by that certain Amended and Restated Promissory Note dated
as of July 14, 2005 (the “Note”) executed by Borrower and payable to the order of Bank. 
 B. The Loan is secured by,
among other things, certain Construction Deeds of Trust and Fixture Filing (With Assignment of Rents and Security Agreement) executed by Borrower as Trustor for the benefit of Bank (such 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 

  

 1 

 
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, the 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 modify the Loan as provided herein. Based on the representations of Borrower, Bank is willing to so modify the Loan, subject to the terms and conditions herein. 
 F. All capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Loan Agreement. 
 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 Commitment
Amount is hereby reduced from $100,000,000 to $70,000,000. 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 reduced
hereby. 
 2.2 Paragraph (b) of the definition of “Maximum Allowed Advance” set forth in Section 1.1 of the Loan
Agreement is deleted in its entirety and replaced with the following: 
 “(b) With respect to each SFR A&D Lot, the lesser of
(i) 65% of the “bulk wholesale as-if complete” value of the Approved Subdivision divided by the total 

  

 2 

 
number of Lots in the Approved Subdivision (regardless of whether such total number of Lots are Eligible Collateral), or (ii) 70% of the Total Lot Cost
for the Approved Subdivision divided by the total number of Lots in the Approved Subdivision (regardless of whether such total number of Lots are Eligible Collateral);” 
 2.3 Paragraph (c) of the definition of “Maximum Allowed Advance” set forth in Section 1.1 of the Loan Agreement is deleted in
its entirety and replaced with the following: 
 “(c) With respect to each MFR A&D Lot, the lesser of (i) 60% of the “bulk
wholesale as-if complete” value of the Approved Subdivision divided by the total number of Lots in the Approved Subdivision (regardless of whether such total number of Lots are Eligible Collateral), or (ii) 60% of the Total Lot Cost for
the Approved Subdivision divided by the total number of Lots in the Approved Subdivision (regardless of whether such total number of Lots are Eligible Collateral);” 
 2.4 Paragraph (d) of the definition of “Maximum Allowed Advance” set forth in Section 1.1 of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “(d) With respect to each High Density A&D Lot, the lesser of (i) 60% of the “bulk wholesale as-if complete” value of the Approved
Subdivision divided by the total number of Lots in the Approved Subdivision (regardless of whether such total number of Lots are Eligible Collateral), or (ii) 60% of the Total Lot Cost for the Approved Subdivision divided by the total number of
Lots in the Approved Subdivision (regardless of whether such total number of Lots are Eligible Collateral);” 
 2.5 Paragraph (e)(i) of
the definition of “Maximum Allowed Advance” set forth in Section 1.1 of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “(i) For each SFR Presold Unit, the lowest of (A) 80% of the Appraised Value for that Unit; (B) 80% of the sales price of such Unit
pursuant to the applicable Purchase Contract; and (C) 95% of the Unit Cost for that Unit;” 
 2.6 Paragraph (e)(ii) of the
definition of “Maximum Allowed Advance” set forth in Section 1.1 of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “(ii) For each Presold Unit which constitutes an MFR Unit, the lowest of (A) 75% of the Appraised Value for that Unit; (B) 75% of the sales price of such Unit pursuant to the applicable Purchase
Contract; and (C) 85% of the Unit Cost for that Unit;” 
  

 3 

 2.7 Paragraph (e)(iii) of the definition of “Maximum Allowed Advance” set forth in
Section 1.1 of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “(iii) For each Presold Unit which
constitutes a High Density Unit, the lowest of (A) 70% of the Appraised Value for that Unit; (B) 70% of the sales price of such Unit pursuant to the applicable Purchase Contract; and (C) 70% of the Unit Cost for that Unit;”

 2.8 Section 3.3(a)(i) of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “(i) Limitation on Lot Availability in Approved Subdivisions. The aggregate Maximum Allowed Advance for all Lots (other than Lots that have
been reclassified as Units) in all Approved Subdivisions included as Eligible Collateral in the Borrowing Base may not exceed forty-five percent (45%) of the Commitment Amount (the “Lot Sub-Limit”).” 
 2.9 Section 7.1 of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “7.1 Minimum Tangible Net Worth Covenant. Guarantor shall maintain a Tangible Net Worth of at least $175,000,000.00 plus fifty percent
(50%) of Guarantor’s net profit after tax on a cumulative basis, commencing as of December 31, 2007.” 
 2.10
Section 7.2 of the Loan Agreement is deleted in its entirety and replaced with the following: 
 “7.2 Maximum Total Debt to
Tangible Net Worth Covenant. Guarantor will maintain at all times a ratio of Indebtedness (exclusive of (i) Consolidated Indebtedness of Variable Interest Entities, and (ii) Indebtedness of Guarantor arising under its mortgage
warehouse lines of credit) to Tangible Net Worth that is equal to or less than (a) for any period prior to January 1, 2009, 5.00 to 1.00 for the period of calculation, and (c) for any period commencing on or after January 1, 2009
and thereafter, 3.25 to 1.00 for the period of calculation.” 
 2.11 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. 
 2.12 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. 
  

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 2.13 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 fully executed and, where appropriate, acknowledged originals of this Modification, the attached consents signed by
Guarantor, and any other documents which Bank may require or request in accordance with this Agreement or the other Loan Documents. 
 4.2
Bank shall have received payment of a modification fee of $25,000 in immediately available funds. 
 4.3 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. 
  

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 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] 
  

 6 

 DATED as of the date first above stated. 
  

									
	BORROWER:	 		 	 WILLIAM LYON HOMES, INC.,
 a California
corporation

					
		 		 		 	By:	 	/s/ Michael D. Grubbs
		 		 		 	Name:	 	Michael D. Grubbs
		 		 		 	Title:	 	Senior Vice President
					
		 		 		 	By:	 	/s/ Richard S. Robinson
		 		 		 	Name:	 	Richard S. Robinson
		 		 		 	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 Edwards
		 		 		 	Name:	 	Kimberlee Edwards
		 		 		 	Title:	 	Senior Vice President

  

 S-1 

 CONSENT AND AGREEMENT OF GUARANTOR 
 With respect to that certain Sixth 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. 
 Guarantor further agrees that the Guaranty is hereby modified and amended as follows: 
 1. Section 4.4.1 of the Guaranty is deleted in its entirety and replaced with the following: 
 “4.4.1 Minimum Tangible Net Worth Covenant. Guarantor shall maintain a Tangible Net Worth of at least $175,000,000.00 plus fifty percent
(50%) of Guarantor’s net profit after tax on a cumulative basis, commencing as of December 31, 2007.” 
 2.
Section 4.4.2 of the Guaranty is deleted in its entirety and replaced with the following: 
 “4.4.2 Maximum Total Debt to
Tangible Net Worth Covenant. Guarantor will maintain at all times a ratio of Indebtedness (exclusive of (i) Consolidated Indebtedness of Variable Interest Entities, and (ii) Indebtedness of Guarantor arising under its mortgage
warehouse lines of credit) to Tangible Net Worth that is equal to or less than (a) for any period prior to January 1, 2009, 5.00 to 1.00 for the period of calculation, and (c) for any period commencing on or after January 1, 2009
and thereafter, 3.25 to 1.00 for the period of calculation.” 
 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. 
  

 CONSENT 

 IN WITNESS WHEREOF, Guarantor has executed this Agreement as of the date set forth on the attached Sixth
Modification Agreement. 
  

									
	“Guarantor”	 		 	 WILLIAM LYON HOMES,
 a Delaware corporation

					
		 		 		 	By:	 	/s/ Michael D. Grubbs
		 		 		 	Name:	 	Michael D. Grubbs
		 		 		 	Title:	 	Senior Vice President
					
		 		 		 	By:	 	/s/ Richard S. Robinson
		 		 		 	Name:	 	Richard S. Robinson
		 		 		 	Title:	 	Senior Vice President

  

 CONSENT

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