Articles of Incoporation of William Lyon Homes, Inc.

TWO: The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

THREE: The name and address of this corporation’s initial agent for service of process is:

FOUR: This corporation is authorized to issue one class of shares of stock; the total number of said shares is one million (1,000,000).

/s/ Robert W. Stedman

Robert W. Stedman,

Incorporator

THIS AGREEMENT OF MERGER dated as of September 15, 1987, is entered into between THE PRESLEY COMPANIES, a California corporation (“Presley”), and WLPC INC., a California corporation (“WLPC”). Presley and WLPC are sometimes hereinafter collectively referred to as the “Constituent Corporations.”

Presley is a California corporation with an authorized capital stock consisting of 10,666,667 shares of Common Stock, par value $18.75 per share, of which 10 shares are issued and outstanding as of the date hereof (the “Presley Common Stock”).

WLPC is a California corporation with an authorized capital stock of 1,000,000 shares of Common Stock, of which 100,000 shares of Common Stock, are issued and outstanding (the “WLPC Common Stock”).

The Board of Directors of each of the Constituent Corporations has approved this Agreement of Merger and directed that it be submitted to their respective shareholders for approval in order that Presley be merged with and into WLPC (the “Merger”) on the terms and conditions hereinafter set forth and in accordance with the provisions of the California General Corporation Law.

In consideration of the foregoing premises and the agreements, representations and other provisions contained herein, the parties hereto agree as follows:

At the Effective Time, as hereinafter defined, in accordance with the provisions of this Agreement of Merger and the California General Corporation Law, Presley shall be merged with and into WLPC. WLPC shall be the surviving corporation (the “Surviving Corporation”).

The separate existence and corporate organization of Presley shall cease at the Effective Time, and thereupon WLPC and Presley shall be a single corporation, WLPC, which shall continue its existence under California law.

The Merger shall become effective, subject to the terms and conditions hereof, at the time and on the date on which a copy of this Agreement of Merger together with an officer’s certificate of each of the Constituent Corporations as required by Section 1103 of the California General Corporation Law shall be filed with the Secretary of State of the State of California. The date and time when the Merger shall become effective as aforesaid is hereinafter called the “Effective Time”.

(a) Articles of Incorporation. The Articles of Incorporation of WLPC as in effect immediately prior to the Effective Time shall be the Articles of Incorporation of the Surviving Corporation, until changed as provided by law.

(b) Bylaws. The Bylaws of WLPC as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation, until changed as provided by law.

(a) Board of Directors. At the Effective Time, the directors of WLPC in office immediately prior to the Effective Time shall be the directors of the Surviving Corporation until their successors shall have been duly elected and qualified.

(b) Officers. The officers of the Surviving Corporation shall be elected by the Board of Directors of the Surviving Corporation at, or as soon as practicable after, the Effective Time.

At the Effective Time by virtue of the Merger and without further action on the part of either WLPC or Presley or any of WLPC or Presley’s shareholders:

(i) The 10 shares of Presley Common Stock which shall be outstanding immediately prior to the

Effective Time shall be cancelled and the holders thereof shall cease to have any rights with respect thereto and shall not become securityholders of the Surviving Corporation but shall be entitled only to receive, in lieu of shares or other securities of the Surviving Corporation, the aggregate sum of $245,000,000 ($245,500,000 per share) of which $7,500,000 was paid as a deposit prior to the Effective Date; and

(ii) Each share of WLPC Common Stock which shall be issued and outstanding at the Effective Time shall remain outstanding and shall not be affected by the Merger.

At the effective Time, the Surviving Corporation shall possess all the rights, properties, privileges, powers, immunities and franchises of each of the Constituent Corporations, and all debts due on whatever account to either of them, shall be taken and deemed to be transferred to and vested in the Surviving Corporation without further act or deed.

IN WITNESS WHEREOF, each of the Constituent Corporations has caused this Agreement of Merger to be signed in its corporate name by its Chairman of the Board, President or Vice President and by its Secretary or an Assistant Secretary all as of the day first written above.


THE PRESLEY COMPANIES,
a California corporation

By		/s/ Wade H. Cable
		Wade H. Cable,
		President

By		/s/ Linda Foster
		Linda Foster,
		Corporate Secretary

WLPC INC., a California corporation

By		/s/ William Lyon
		William Lyon,
		President and Secretary

1. He is the president and the secretary of WLPC Inc., a California corporation.

2. The Agreement of Merger in the form attached was duly approved by the board of directors and shareholders of the corporation.

3. The shareholder approval was by the holders of 100% of the outstanding shares of the corporation.

4. There is only one class of shares and the number of shares outstanding is 100,000.

I further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of my own knowledge. Executed at Newport Beach, California, on 9/15/1987.

/s/ William Lyon

William Lyon

President and Secretary

1. They are the president and the corporate secretary respectively, of The Presley Companies, a California corporation.

2. The Agreement of Merger in the form attached was duly approved by the board of directors and shareholders of the corporation.

3. The shareholder approval was by a vote of the holders of more than 50% of the outstanding shares of the corporation, which number of votes exceeds the vote require The percentage vote required was 50%.

4. There is only one class of shares and the number of shares outstanding is 10.

We further declare under penalty of perjury under the Laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge. Executed at Irvine, California, on 9/15/1987.

/s/ Wade H. Cable

Wade H. Cable,

President

/s/ Linda Foster

Linda Foster,

Corporate Secretary

I further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of my own knowledge.

/s/ WILLIAM LYON

WILLIAM LYON,

President and Secretary

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

/s/ Wade H. Cable

Wade H. Cable,

President

/s/ Linda L. Foster

Linda L. Foster,

Corporate Secretary

Pursuant to the provisions of the General Corporation Law of the State of California, the undersigned officers of the domestic parent corporation hereinafter named do hereby certify as follows:

1. The name of the parent corporation, which is a business corporation of the State of California, and which is to be the surviving corporation under the merger herein certified, is Presley Homes.

2. The name of the subsidiary corporation, which is a business corporation of the State of California, and which is to be the disappearing corporation under the merger herein certified, is William Lyon Homes, Inc.

3. Presley Homes, the surviving corporation, owns 100% of the outstanding shares of William Lyon Homes, Inc.

4. Upon the effective date of the merger, the name of the surviving corporation shall be changed to William Lyon Homes, Inc.

5. The following is a copy of the resolutions to merge William Lyon Homes, Inc. into Presley Homes as adopted and approved by the Board of Directors of Presley Homes:

(i) Presley Homes, which is a business corporation of the State of California and is the owner of all of the outstanding shares of William Lyon Homes, Inc., which is a business corporation of the State of California, does hereby merge William Lyon Homes, Inc. into itself pursuant to the provisions of the General Corporation Law of the State of California and does hereby assume all of the liabilities of William Lyon Homes, Inc.;

(ii) William Lyon Homes, Inc. shall be the disappearing corporation upon the effective date of the merger herein provided for pursuant to the provisions of the General Corporation Law of the State of California;

(iii) Upon the effectiveness of the merger, the name of the surviving corporation in the merger shall be changed to William Lyon Homes, Inc. and Article One of the Articles of Incorporation of the surviving corporation in the merger shall be amended to read as follows:

(iv) Except for the foregoing amendment to Article ONE, the Articles of Incorporation of the surviving corporation shall remain unchanged by the merger and Presley Homes, its name changed to William Lyon Homes, Inc., shall continue its existence as the surviving corporation pursuant to the provisions of the said General Corporation Law of the State of California;

(v) The issued shares of William Lyon Homes, Inc. shall not be converted any manner, nor shall any cash or other consideration be paid or delivered therefor, inasmuch as Presley Homes is the owner of all outstanding shares of William Lyon Homes, Inc., but each said share which is issued and outstanding as of the effective date of the merger shall be surrendered and extinguished; and

(vi) The Board of Directors and the proper officers of Presley Homes are hereby authorized, empowered and directed to do any and all acts and things, and to make, execute, deliver, file, and/or record any and all instruments, papers and documents which shall be or become necessary, proper or convenient to carry out or put into effect any of the provisions of the merger herein provided for.”

The undersigned do hereby declare under the penalty of perjury under the laws of the State of California that he or she signed the foregoing certificate in the official capacity set forth beneath his or her signature, and that the statements set forth in this certificate are true and correct of his or her own knowledge.

/s/ Wade H. Cable

Wade H. Cable

President and Chief Executive Officer

/s/ David M. Siegel

David M. Siegel,

Assistant Secretary and Chief Financial Officer


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