Exhibit 10.1
THIRD AMENDMENT TO SENIOR
SECURED
REVOLVING CREDIT
AGREEMENT
This Third Amendment to Senior
Secured Revolving Credit Agreement (this
“Amendment” ), made as of
September 30, 2008 among CALIFORNIA COASTAL COMMUNTIES, INC.,
a Delaware corporation ( “Borrower” ),
the undersigned Guarantors, KEYBANK NATIONAL ASSOCIATION, a
national banking association ( “KeyBank”
), the other financial institutions which are or may become lender
parties to the Credit Agreement (each individually a
“Lender” and collectively, the
“Lenders” ), and KEYBANK NATIONAL
ASSOCIATION, a national banking association, as Agent for the
Lenders (the “Agent” ).
W I T N E S S E T H:
WHEREAS, the parties entered into
that certain $100,000,000 Senior Secured Revolving Credit Agreement
dated as of September 15, 2006, as amended by First Amendment
to Senior Secured Revolving Credit Agreement dated as of
October 30, 2007, and by letter amendment dated as of
June 11, 2008 (as amended the “Credit
Agreement” ); and
WHEREAS, Borrower has requested that
certain terms of the Credit Agreement be modified and amended as
hereinafter set forth; and
WHEREAS, the Lenders and the Agent
have agreed to such amendments as set forth herein and subject to
the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of
the premises set forth above, the terms and conditions contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree
that all capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement,
and further agree as follows:
1.
Amendment to Section 1 of
Credit Agreement .
Section 1.1 of the Credit Agreement, Definitions , is
hereby amended as follows:
a.
A new definition, “
Availability ”, is hereby inserted in proper
alphabetical order as follows:
“ Availability .
The excess, if any, of the Borrowing Base over the
Outstanding.”
b.
A new definition, “
Cumulative Closed Plus Backlog ”, is hereby inserted
in proper alphabetical order as follows:
“ Cumulative Closed Plus
Backlog . The sum of (x) the cumulative number of
Homes sold and closed at the Project plus (y) fifty percent
(50%) of the number of Homes subject to a Housing Purchase Contract
but not closed at any time of measurement, with any fractional
number being rounded up to the next whole number.”
c.
A new definition “ Excess
Liquidity ”, is hereby inserted in proper alphabetical
order as follows:
“ Excess Liquidity
. At any time the amount by which the sum of the
Borrower’s cash, excluding restricted cash, plus Availability
exceeds $20,000,000.”
d.
A new definition, “ HHI
”, is hereby inserted in proper alphabetical order as
follows:
“ HHI .
Hearthside Homes, Inc., a California corporation.
e.
A new definition, “
Hellman ”, is hereby inserted in proper alphabetical
order as follows:
“ Hellman . HHI
Hellman, LLC, a California limited liability
company.”
f.
A new definition, “ Hellman
Project Debt ”, is hereby inserted in proper alphabetical
order as follows:
“ Hellman Project Debt
. The Indebtedness of Hellman that is non-recourse with
respect to the Borrower, including, but not limited to, that
certain Building Loan Agreement dated as of December 19, 2006
between Hellman and Indymac Bank, F.S.B., as modified or amended,
and any refinancing of such Indebtedness so long as it is
non-recourse with respect to the Borrower.”
g.
A new definition, “
Lancaster ”, is hereby inserted in proper alphabetical
order as follows:
“ Lancaster . HHI
Lancaster I, LLC, a California limited liability
company.”
h.
A new definition, “
Lancaster Project Debt ,” is hereby inserted in proper
alphabetical order as follows:
“ Lancaster Project
Debt . The Indebtedness of Lancaster that is non-recourse
with respect to the Borrower, including, but not limited to, that
certain Building Loan Agreement dated as of November 23, 2005
between Lancaster and Indymac Bank, F.S.B., as modified or amended,
and any refinancing of such Indebtedness so long as it is
non-recourse to the Borrower.”
i.
A new definition, “ Net
Sale Proceeds ”, is hereby inserted in proper
alphabetical order as follows:
“ Net Sale Proceeds
. With respect to the sale of any Unit, the gross sales price
payable by the purchaser thereof (net of any rebates or discounts),
less all customary and reasonable costs of sale that are charged to
sellers of property in the given jurisdiction, including, without
limitation, title insurance charges, escrow fees, legal fees, real
estate taxes, transfer taxes and real estate brokers’
commissions.”
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j.
The definition of Borrowing Base
Value is hereby amended by deleting the existing language
thereof in its entirety and substituting in lieu thereof the
following:
“ Borrowing Base Value
. The most recent Appraised Value for the Project plus
(x) Hard Costs incurred subsequent to the most recent
Appraisal allocated to the Project, minus (y) an amount equal
to seventy-two percent (72%) of the listed base price of any Spec
Homes the construction of which commenced more than eighteen (18)
months prior to the most recent Borrowing Base Report (except that
in the case of any Spec Home existing as of the date of the Third
Amendment to this Agreement, such aging period shall be twelve (12)
months from the date of such Third Amendment), and minus
(z) an amount equal to seventy-two percent (72%) of the gross
proceeds from the closing of any Unit, except that if such Unit was
a Spec Home subject to a deduction under clause (y), the amount
deducted under clause (y) shall first be added back to the
Borrowing Base Value before deduction under this clause (z);
provided however, if such gross sales proceeds are less than ninety
percent (90%) of the projected gross sales proceeds as set forth in
the Project Budget for such Unit, Agent may reset the percentages
set forth above for purposes of determining the Borrowing Base
Value in its commercially reasonable discretion.”
k.
The definition of Consolidated
Tangible Net Worth is hereby amended by adding a provision at
the end thereof as follows:
“; provided, however, that in
calculating Consolidated Tangible Net Worth and the components
thereof impairments realized by Borrower from and after the date of
the Third Amendment to this Agreement with respect to the Hellman
and Lancaster development projects and with respect to deferred tax
assets will not be taken into account.”
l.
The definition of Majority
Lenders is hereby deleted and the term Required Lenders
is substituted therefor throughout the Credit Agreement and is
defined as follows:
“ Required Lenders
. As of any date, the Lender or Lenders (not including any
Delinquent Lender who shall not be entitled to vote) whose
aggregate Commitment Percentage (as set forth on Schedule 1.0) is
greater than sixty-six and two-thirds percent (66
2 / 3
%), or if the Commitments have been
terminated or reduced to zero, Lenders (other than Delinquent
Lenders who shall not be entitled to vote) holding greater than
sixty-six and two-thirds percent (66 2 /
3 %) of the principal amount of the aggregate
outstanding Loans; provided that in the event that one Lender
(other than any Delinquent Lender) has an aggregate Commitment
Percentage or principal amount of the outstanding Loans equal to or
greater than such percentage (the “Sole Required
Lender”) then this definition of Required Lender shall
include the Sole Required Lender and a minimum of one other Lender
(other than a Delinquent Lender, if any) regardless of aggregate
Commitment Percentage; and provided further that with respect to
any waiver of the requirements for extension of the Maturity Date
under Section 4.1, the aggregate Commitment Percentage shall
be eighty-five percent (85%) or greater. Commitments held by
Delinquent Lenders shall be disregarded when determining the
Required Lenders. For purposes of this definition, a Lender
(other than the Swingline Lender) shall be deemed to hold
a
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Swingline Loan to the extent such
Lender has acquired a participation therein under the terms of this
Agreement and has not failed to perform its obligations in respect
of such participation.
m.
The definition of Maturity
Date is hereby amended by adding the following to the end
thereof as follows:
“; provided, however that the
Maturity Date may be extended pursuant to
Section 4.1”.
n.
The definition of Release
Price is hereby amended by deleting “50 Units” and
inserting in lieu thereof “70 Units.”
2.
Amendment to Section 2 of
the Credit Agreement . Section 2.2(d) of the Credit
Agreement, Automatic Reductions to the Total Commitment , is
hereby amended by deleting the existing language thereof in
entirety and inserting in lieu thereof the following:
“(d)
Reductions to the Total
Commitment (i) on
each Termination Date beginning December 31, 2008, the Total
Commitment shall automatically be reduced quarterly (and Borrower
shall make such mandatory payments on each Termination Date as
necessary to cause the Borrower to comply with the terms of
Section 4.2 herein) as follows:
|
Termination Date
|
|
Commitment Amount
|
|
|
December 31, 2008
|
|
$
|
95,000,000
|
|
|
June 30, 2009
|
|
$
|
90,000,000
|
|
|
September 30, 2009*
|
|
$
|
80,000,000
|
|
|
December 31, 2009*
|
|
$
|
70,000,000
|
|
|
March 31, 2010*
|
|
$
|
60,000,000
|
|
|
June 30, 2010*
|
|
-0-
|
|
*Only applicable if the Maturity
Date is extended pursuant to Section 4.1
(ii) the Total Commitment shall
be reduced from time to time by the Required Commitment Reduction;
and
(iii) the Total Commitment
shall be reduced from time to time by an amount equal to forty
percent (40%) of the amount of any Excess
Liquidity.”
3.
Amendment to Section 3 of
the Credit Agreement . Section 3.3 of the Credit
Agreement, Interest on Loans , is hereby amended by deleting
the third sentence thereof and the table included therein in its
entirety and inserting in lieu thereof the following:
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“The “Applicable
Margin” for a LIBOR Rate Loan or a Prime Rate Loan for each
Fiscal Quarter shall be the margin corresponding to the Project
Loan Indebtedness to Value Ratio for the prior Fiscal Quarter as
determined by reference to the following table:
|
Project Loan Indebtedness to
Value Ratio
|
|
LIBOR Applicable Margin
|
|
Prime Applicable Margin
|
|
|
<20%
|
|
3.00
|
%
|
1.50
|
%
|
|
|
|
|
|
|
|
|
> 20% to <30%
|
|
3.25
|
%
|
1.75
|
%
|
|
|
|
|
|
|
|
|
> 30% to <40%
|
|
3.50
|
%
|
2.00
|
%
|
4.
Amendments to Section 4 of
the Credit Agreement . Section 4 of the Credit Agreement,
Repayment and Certain General Provisions , is amended as
follows:
a.
Section 4.1 of the Credit
Agreement, Maturity , is hereby amended by adding the
following to the end thereof as follows:
“The Borrower may, at its
option, extend the Maturity Date to June 30, 2010 by giving
the Agent written Notice of such election to extend not earlier
than the date on which the Borrower demonstrates compliance with
the Financial Covenants as of December 31, 2008, and not later
than 10 days prior to the original Maturity Date, provided that the
following conditions are satisfied: (i) no Default or
Event of Default exists at the time of such Notice; (ii) the
Compliance Certificate required by Section 7.6(d) for the
most recently completed Fiscal Quarter or Fiscal Year, as
applicable, has been timely submitted and demonstrates compliance
with the Financial Covenants as of the end of such period, and
(iii) the Borrower has paid to the Agent, for the accounts of
the Lenders in accordance with their respective Commitment
Percentages, an extension fee equal to twenty-five hundredths of
one percent (.25%) of the Total Commitment amount in effect at the
time of such Notice.
b.
Section 4.2 of the Credit
Agreement, Mandatory Prepayments , is hereby amended by
deleting the existing language thereof in its entirety and
inserting in lieu thereof the following:
“4.2
Mandatory Prepayments
.
(a)
If at any time the aggregate
Outstanding Loans (including Swingline Loans) exceed the Total
Commitment (as the same may be reduced pursuant to §2.2(d)) or
the Borrowing Base, then Borrower shall immediately pay the amount
of such excess to the Agent for the respective accounts of the
Lenders for application to the Loans.
(b)
As provided in §5.4(c), the
Outstanding Loan
