Document:

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

 Exhibit 10.1 
 

 
 SECOND AMENDMENT TO AMENDED AND 
 RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT 
 THIS SECOND AMENDMENT TO
AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT (“Agreement”), dated as of September 1, 2006, 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. Lender currently has extended to Borrower a borrowing base revolving line of credit in the
maximum sum of Seventy Million Dollars ($70,000,000.00) (“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 dated as of September 16, 2004, by and between Borrower and Lender (as the same has been or may be amended or modified 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 currently is evidenced by a Fourth Amended
and Restated Construction Loan Promissory Note dated for reference purposes as of July 19, 2005, given by Borrower to Lender (as the same has been and may be amended from time to time, “Current Note”). 
 C. The Loan is secured by, among other things, the “Deed of Trust” (as defined in the Loan Agreement). 
 D. This Agreement, the Current 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, extending the
“Initial Line Term” to September 21, 2008, and extending the “Maturity Date” to September 21, 2009. 
 F. Lender is willing to consent to the modifications to the Loan Documents set forth herein, subject to the terms and conditions set forth below. 
 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. 
  

 1 

 2. Loan Extension. 
 2.1 New Definitions. As a result of the extension of the term of the Loan described above, the following definitions
in the Loan Agreement shall be revised as follows: 
 “Initial Line Maturity Date” shall mean
September 21, 2008. 
 “Initial Line Term” shall mean that period continuing from the date hereof and
ending on the Initial Line Maturity Date of September 21, 2008. 
 “Maturity Date” means
September 21, 2009, subject to the Loan reduction requirements set forth in Section 2.1.7 of the Loan Agreement, or (b) such earlier date upon the acceleration of the repayment of the Loan as provided in the Loan Documents after the
occurrence of the Event of Default. 
 “Reduction Period” shall mean, as set forth in Section 2.1.7 of
the Loan Agreement, that period commencing on September 21, 2008 (at the conclusion of the Initial Line Term) and continuing to September 21, 2009 (at the Maturity Date), during which period (a) all existing Qualified Projects entered
into the Borrowing Base as of the Initial Line Maturity Date shall remain in the Borrowing Base, but during which Lender’s obligation to include any new Qualified Projects into the Borrowing Base shall terminate, and (b) the
“Commitment Amount” shall be reduced on a quarterly basis to the applicable “Reduced Commitment Amount” (both as defined in the Loan Agreement). 
 2.2 Amendment and Restatement of the Current Note. Borrower shall execute and deliver to Lender a Fifth Amended and
Restated Promissory Note of even date herewith (the Current Note, as amended by said document, shall hereafter be referred to as the “Note”) evidencing the increase in the amount of the Loan and the maximum Commitment Amount as
described herein. All references in the Loan Documents to the Current Note shall be revised to refer to the Note, as amended and restated. 
 3. Loan and Letter of Credit Fees. During the extended term of the Loan, Borrower will continue to be required to pay to Lender the following fees: 
 3.1 Borrower shall pay to Lender during the remaining term of the Loan a “Commitment Fee” on a periodic basis to
be calculated as follows: 
 “Commitment Fee” means that certain facility fee (a) that is calculated,
during the Initial Line Term, at the rate of 0.35% per annum on the full Commitment Amount, and (b) that is calculated, during the Reduction Period, at the rate of 0.35% per annum based on the then-applicable Reduced Commitment
Amount, and all said fees shall be payable pursuant to Section 2.5.1 below. Said fees shall be paid in advance on a quarterly basis such that: (i) during the Initial Line term, each quarterly fee payment shall be based on 0.0875% of the
full Commitment Amount, and (ii) during the Reduction Period, each quarterly fee payment shall be based on 0.0875% of the then-applicable Reduced Commitment Amount. 
 3.2 Upon the issuance of each “Letter of Credit” (as defined in the Loan Agreement) during the remaining term of
the Loan, Borrower shall pay to Lender a “Letter of Credit Fee” to be calculated as follows: 
 “Letter of Credit Fee” means that certain fee due and payable by Borrower on each Letter of Credit issued hereunder, which fee shall be calculated at the rate of one percent (1.00%) per annum on the face amount of the
Letter of Credit, and said fee shall be 

  

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payable as a condition to the issuance of each Letter of Credit and on each twelve-month anniversary of the issuance date of said Letter of Credit, if said
Letter of Credit is to be extended beyond a twelve-month term. 
 4. Maximum Allowed Advances. As used in the Loan
Documents, during the extended term of the Loan, the term “Maximum Allowed Advance” shall have the following definition from and after the date hereof: 
 “Maximum Allowed Advance” shall have the following meanings: 
  

	 	•	 	Entitled Land: The sum of all Advances and Reserved Allocations committed but not disbursed for said Lots shall not exceed the lesser of (i) fifty percent (50%) of
Total Project Costs, or (ii) fifty percent (50%) of the Appraised Value for said Land, subject to Lender’s approval. 

  

	 	•	 	Lots Under Development: The sum of all Advances and Reserved Allocations committed but not disbursed for said Lots shall not exceed the lesser of (i) seventy percent
(70%) of Total Project Costs, or (ii) seventy percent (70%) of the Bulk Finished Lot Value for said Lots, subject to Lender’s approval. 

  

	 	•	 	Developed Lots: The sum of all Advances and Reserved Allocations committed but not disbursed for said Lots shall not exceed the lesser of (i) seventy percent
(70%) of Total Project Costs, or (ii) seventy percent (70%) of the Bulk Finished Lot Value for said Lots, subject to Lender’s approval. 

  

	 	•	 	Spec Homes: The sum of all Advances and Reserved Allocations committed but not disbursed for said Homes shall not exceed the lesser of (i) eighty-five percent
(85%) of Total Project Costs, or (ii) seventy-five percent (75%) of the Base Appraisal for said Homes, subject to Lender’s approval. 

  

	 	•	 	Presold Homes: The sum of all Advances and Reserved Allocations committed but not disbursed for said Homes shall not exceed the lesser of (i) ninety percent
(90%) of Total Project Costs, or (ii) eighty percent (80%) of the Base Appraisal for said Homes, subject to Lender’s approval. 

 5. 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. 
 6. Conditions Precedent. In no event shall Lender have any obligation to close this transaction unless and until all of the
following conditions are satisfied: 
 6.1 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. 
 6.2 No Financial Change. There has been no material adverse change in Borrower’s, financial condition since the closing of the Loan. 
 6.3 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 

  

 3 

 
Documents described herein, including without limitation all attorneys’ fees and other closing fees and costs. 
 6.4 Title Endorsement. If required by Lender, the issuance to Lender of a CLTA Form 110.5E endorsement (or any
substantially equivalent endorsement(s) as reasonably approved by Lender) to each ALTA Lender’s Title Policy for each Deed of Trust in form satisfactory to Lender and insuring the continued first lien priority of the Deed of Trust, except for
such exceptions as may be approved by Lender in its sole discretion. 
 6.5 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, an updated “Borrowing Base Certificate” (as defined in the Loan
Agreement), and, if reasonably required by Lender, any amendment to any existing Deed of Trust reflecting the extension of the Loan as provided herein. 
 7. Representations and Warranties. Borrower hereby represents and warrants to Lender as follows: 
 7.1 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. 
 7.2
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. 
 7.3 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. 
 7.4 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. 
 7.5 Satisfaction of Conditions. All of the
conditions precedent set forth above have been fully satisfied. 
 8. 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. 
 9. 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 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. 
 10. 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 

  

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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. 
 11. 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. 
 12. 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. 
 13. 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. 
 14. 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. 
 15. 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. 
 16. 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. 
 17. 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. 
 18. 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. 
 19. 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. 
 [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/    RICHARD S. ROBINSON
		 	Richard S. Robinson, Senior Vice President
		
	By:	 	/s/    MICHAEL D. GRUBBS
		 	 Michael D. Grubbs, Senior Vice President

	
	LENDER:
	
	CALIFORNIA BANK & TRUST, a California banking corporation
		
	By:	 	/s/    KIM JOHNSON

			
	Name:	 	Kim Johnson

			
	Its:	 	Vice President

  

 Signature Page 1First Amendment to Amended and Restated Loan Agreement

 Exhibit 10.2 
  

 FIRST AMENDMENT TO AMENDED AND RESTATED LOAN 
 AGREEMENT AND OTHER LOAN DOCUMENTS 
  

 THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”) dated as of
August 17, 2006 is entered into by and between WILLIAM LYON HOMES, INC., a California corporation, (the “Borrower”) and RFC CONSTRUCTION FUNDING CORP., a Delaware corporation (the “Lender”). 
 RECITALS 
 A. The Borrower and Lender
entered into that certain Amended and Restated Loan Agreement dated as of September 17, 2004 (as amended from time to time, the “Loan Agreement”), pursuant to which Lender made a revolving loan to Borrower (the “Loan”) to
finance various acquisition, development and construction projects. Capitalized terms used in this Amendment and not otherwise defined shall have the meanings given those terms in the Loan Agreement. 
 B. The Borrower has requested that the Lender amend the Loan Agreement to (i) extend the Maturity Date and the Approval Period Termination Date, and
(ii) make certain other changes to the Loan Agreement. 
 C. The Lender is willing to grant the Borrower’s requests pursuant to the
terms of this Amendment. 
 AGREEMENT 
 NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and conditions, representations and warranties contained herein, the parties hereto agree as follows: 
 Section 1 Amendment to Loan Agreement and Note 
 (a) The term “Maturity Date” as defined in Section 1.1 of the Loan Agreement is hereby amended to read as follows: 
 “Maturity Date” shall mean the first to occur of (i) September 24, 2010 (as such date may be extended in writing by the Lender and the Borrower from time to time), or (ii) the date on which the Loan is
required to be repaid pursuant to Section 8.2. 
  

					
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	 First Amendment to Amended and Restated Loan Agreement
	 		  	
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 (b) The term “Approval Period Termination Date” as defined in Section 1.1 of the
Loan Agreement is hereby amended to read as follows: 
 “Approval Period Termination Date” shall mean
September 24, 2008, as such date may be extended pursuant to the terms of Section 2.11. 
 (c) Section 3 of the
Revolving Promissory Note (the “Note”) dated September 17, 2004 between Borrower as Maker and Lender as Holder, is hereby amended to read as follows: 
 The unpaid principal balance hereof, together with all unpaid interest accrued thereon, and all other amounts payable by Maker under the terms of the Loan Documents shall be due and payable on the first to occur of
(i) September 24, 2010 (as such date may be extended in writing by Maker and Holder from time to time), or (ii) the date on which this Note is required to be repaid pursuant to Section 8.2 of the Loan Agreement (the
“Maturity Date”). If the Maturity Date should fall on a day other than a Business Day, payment of the outstanding principal and all unpaid interest due under the terms hereof shall be made on the next succeeding Business Day and such
extension of time shall be included in computing any interest in respect of such payment. 
 Section 2 Amendment to Financial Covenants

 Section 5.4(a) of the Loan Agreement is hereby deleted and replaced with the following: 
 Tangible Net Worth. The Guarantor and its Subsidiaries (including the Borrower) shall maintain at all times a Tangible Net Worth equal to or in
excess of the amount set forth below opposite the applicable period set forth below: 
  

			
	 Applicable Period
	  	 Minimum Tangible Net Worth Amount

		
	As of June 30, 2006	  	$385,000,000
		
	September 30, 2006 and each calendar quarter thereafter	  	The Required Tangible Net Worth Amount

 As used in this Section 5.4(a), the “Required Tangible Net Worth Amount” for
any given calendar quarter shall be an amount equal to the sum of the minimum Tangible Net Worth required under this Section 5.4(a) as of the immediately preceding calendar quarter plus fifty percent (50%) of the Net Income
realized by the Guarantor and its Subsidiaries (including the Borrower) during the then-ended calendar quarter (with any net loss counting as zero in such calculation). 
  

					
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	 	1	  	Execution Version
	 First Amendment to Amended and Restated Loan Agreement
	 		  	
	 William Lyon Homes
	 		  	

 Section 3 Maximum Sales Prices for a Unit in a Project in California 
 The Project Requirements set forth in Exhibit B to the Loan Agreement are amended to reflect that the maximum sales price for any Unit in a Project in
California shall not exceed One Million Two Hundred Fifty Thousand dollars ($1,250,000). 
 Section 4 Representations and Warranties of Borrower

 Borrower represents, warrants and agrees that (i) there exists no Event of Default under the Loan Agreement, (ii) the Loan
Agreement continues to be the legal, valid and binding agreement and obligation of Borrower enforceable in accordance with its terms, as modified herein, (iii) Lender is not in default under the Loan Agreement, (iv) Borrower has no offset
or defense to its performance or obligations under the Loan Agreement, (v) the representations contained in the Loan Agreement remain true and accurate in all respects, and (vi) there has been no Material Adverse Change from the date of
the Loan Agreement to the date of this Amendment. 
 Section 5 No Defenses 
 Borrower hereby agrees and stipulates that Borrower has no defenses, affirmative defenses, rights to offset, or counterclaims against the exercise of any
of the rights or remedies of Lender under the Loan Documents or under applicable law. 
 Section 6 Release of Claims Against Lender 

Borrower absolutely and unconditionally releases and forever discharges Lender and any and all of its parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns, together with all of its present and former directors, officers, agents and employees from any and all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which Borrower has had, now has or has made claim to have against any such party for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and cause of action are matured or unmatured or known or unknown. 
 Section 7 Effect on Loan Agreement 
 Except as hereby expressly modified, the Loan Agreement and
Note shall otherwise be unchanged and shall remain in full force and effect, and Borrower ratifies and reaffirms all of its obligations under the Loan Agreement. All references in other Loan Documents to the Loan Agreement will mean the Loan
Agreement as hereby amended. All references in other Loan Documents to the Note will mean the Note as hereby amended. 
  

					
	 2006-00287
	 	2	  	Execution Version
	 First Amendment to Amended and Restated Loan Agreement
	 		  	
	 William Lyon Homes
	 		  	

 Section 8 Execution in Counterpart 
 This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute one and the same instrument. 
  

					
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	 	3	  	Execution Version
	 First Amendment to Amended and Restated Loan Agreement
	 		  	
	 William Lyon Homes
	 		  	

 IN WITNESS WHEREOF, Lender and Borrower have executed this Amendment as of the date first written above
by and through their duly authorized representatives. 
  

			
	 LENDER;

	
	 RFC CONSTRUCTION FUNDING CORP.,

	 a Delaware corporation

		
	 By:
	 	 /s/     LORI L. HANSEN

	 Printed Name:
	 	 Lori L. Hansen

	 Title:
	 	 Assistant Vice President

  

			
	 BORROWER:

	
	 WILLIAM LYON HOMES, INC., a California
 corporation

		
	 By:
	 	 /s/    MICHAEL D. GRUBBS

	 Printed Name:
	 	 Michael D. Grubbs

	 Title:
	 	 Senior Vice President

  

			
	 By:
	 	/s/    RICHARD S. ROBINSON
	 Printed Name:
	 	 Richard S. Robinson

	 Title:
	 	 Senior Vice President

  

					
	 2006-00287
	 	4	  	Execution Version
	 First Amendment to Amended and Restated Loan Agreement
	 		  	
	 William Lyon Homes
	 		  	

 CONSENT OF GUARANTOR 
 The undersigned, as Guarantor under the Amended and Restated Guaranty Agreement dated as of September 17, 2004 (the “Guaranty”), hereby
consents to the foregoing amendment, ratifies and confirms its obligations under its Guaranty, and acknowledges that nothing contained in the foregoing Amendment will in any way alter its continuing liability under its Guaranty. 
  

			
	WILLIAM LYON HOMES, INC., a Delaware corporation
		
	By:	 	/s/    RICHARD S. ROBINSON
		 	Richard S. Robinson, Senior Vice President
		
	By:	 	/s/    MICHAEL D. GRUBBS
		 	 Michael D. Grubbs, Senior Vice President

  

					
	 2006-00287
	 	5	  	Execution Version
	 First Amendment to Amended and Restated Loan Agreement
	 		  	
	 William Lyon Homes

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