**Exhibit 10.12a**

 

**FIRST AMENDMENT TO SENIOR SECURED**

**TERM LOAN AGREEMENT**

 

This FirstAmendment to Senior Secured Term Loan Agreement (this ***“Amendment”***),made as of October 30, 2007 among CALIFORNIA COASTAL COMMUNTIES, INC., aDelaware corporation (***“Borrower”***),the undersigned Guarantors, KEYBANK NATIONAL ASSOCIATION, a national banking association (***“KeyBank”***), the otherfinancial institutions which are or may become lender parties to the LoanAgreement (each individually a ***“Lender”***and collectively, the ***“Lenders”***),and KEYBANK NATIONAL ASSOCIATION, a national banking association, as Agent forthe Lenders (the ***“Agent”***).

 

W I T N E S S E T H:

 

WHEREAS,the parties entered into that certain $125,000,000 Senior Secured Term LoanAgreement dated as of September 15, 2006 (the ***“LoanAgreement”***); and

 

WHEREAS,Borrower has requested that certain terms of the Loan Agreement be modified andamended as hereinafter set forth; and

 

WHEREAS,the Lenders and the Agent have agreed to such amendments as set forth hereinand subject to the terms and conditions set forth herein; and

 

NOW,THEREFORE, in consideration of the premises set forth above, the terms andconditions contained herein and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties agreethat all capitalized terms used but not otherwise defined herein shall have themeanings ascribed thereto in the Loan Agreement, and further agree as follows:

 

1.             Amendment toSection 1 of Loan Agreement

 

a.             Section 1.1 of theLoan Agreement, Definitions, is hereby modified and amended by deletingthe existing definition of EBITDA in its entirety and inserting in lieuthereof the following:

 

“EBITDA. For anyperiod, the sum of the amounts for such period of Borrower’s Net Income on aConsolidated basis, plus (i) charges against income for foreign, federal, stateand local taxes, plus (ii) Interest Expense, plus (iii) depreciation, plus (iv)amortization expense, including, without limitation, amortization of goodwilland other intangible assets, plus (v) any non-cash or extraordinary losses orcharges, minus (vi) any non-cash or extraordinary gains.”

 

2.             Amendment toSection 9 of Loan Agreement.

 

a.             Section 9.2 of theLoan Agreement, Tangible Net Worth, is hereby modified and amended bychanging “$100,000,000” to “$80,000,000” effective as of and followingSeptember 30, 2007.

 

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b.             Section 9.4 of theLoan Agreement, Minimum EBITDA/Interest Incurred, is hereby deleted inits entirety and the following substituted in lieu thereof:

 

“9.4  Minimum EBITDA/Interest Incurred. Borrowershall maintain on a rolling four quarters basis (i) commencing as of September30, 2008, a minimum ratio of EBITDA to Interest Incurred equal to or greaterthan 1.00:1.00; (ii) commencing as of December 31, 2008, a minimum ratio ofEBITDA to Interest Incurred equal to or greater than 2.00:1.00; and (iii) commencingas of June 30, 2009 and for each Fiscal Quarter thereafter, a minimum ratio ofEBITDA to Interest Incurred equal to or greater than 2.50:1.00.”

 

3.             No otherAmendments. The execution, delivery and effectiveness of this Amendmentshall not, except as expressly provided above, operate as an amendment orwaiver of any right, power or remedy of Agent or Lenders under the LoanAgreement or any of the other Loan Documents, nor constitute an amendment orwaiver of any provision of the Loan Agreement or any of the other LoanDocuments. Except for the amendments and waiver expressly set forth above, thetext of the Loan Agreement and all other Loan Documents shall remain unchangedand in full force and effect and Borrower hereby ratifies and confirms itsobligations thereunder. This Amendment shall not constitute a modification ofthe Loan Agreement or a course of dealing with Agent or Lenders at variance withthe Loan Agreement such as to require further notice by Agent or Lenders torequire strict compliance with the terms of the Loan Agreement and the otherLoan Documents in the future.

 

4.             Conditions ofEffectiveness. This Amendment shall become effective as of the date hereofwhen, and only when, Agent, on behalf of Lenders, shall have received, in formand substance satisfactory to it, the following:

 

a.             Counterparts of thisAmendment duly executed by Borrower, the Guarantors and the Majority Lenders;and

 

b.             Payment of allreasonable and documented expenses incurred by Agent in connection with theexecution and delivery of this Amendment, together with fees and actuallyincurred expenses of Agent’s counsel with respect to this Amendment and otherpost-closing matters through the date of this Amendment.

 

5.             Representationsand Warranties. Each of Borrower and the Guarantors represents and warrantsas follows:

 

a.             The execution,delivery and performance by Borrower and each such Guarantor of this Amendmentand the Loan Documents, as amended hereby, are within each such party’s legalpowers, have been duly authorized by all necessary member action and do notcontravene (i) Borrower’s or any such Guarantor’s organizational documents,respectively, or (ii) any law or contractual restriction binding on oraffecting such Person;

 

b.             Except for approvalswhich have been obtained, no authorization, approval or other action by, and nonotice to or filing with, any governmental authority or regulatory body, isrequired for the due execution, delivery and performance by Borrower or any

 

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Guarantor of this Amendment or any of the LoanDocuments, as amended hereby, to which such Person is or will be a party;

 

c.             This Amendment andeach of the other Loan Documents, as amended hereby, to which Borrower and eachGuarantor is a party, respectively, constitute legal, valid and bindingobligations of each such party, enforceable against such Person in accordancewith their respective terms, provided that enforcement may be limited bybankruptcy, insolvency, liquidation, reorganization, reconstruction and othersimilar laws affecting enforcement of creditor’s rights generally; and

 

d.             No Default or Eventof Default is existing.

 

6.             Reference to andEffect on the Loan Documents. Upon the effectiveness of this Amendment, onand after the date hereof each reference in the Loan Agreement to “thisAgreement,” “hereunder,” “hereof” or words of like import referring to the LoanAgreement, and each reference in the other Loan Documents to the “LoanAgreement,” “thereunder,” “thereof” or words of like import referring to theLoan Agreement, shall mean and be a reference to the Loan Agreement as amendedhereby.

 

7.             Costs, Expensesand Taxes. Borrower agrees to pay on demand all reasonable out-of-pocketexpenses of Agent actually incurred in connection with the preparation,execution and delivery of this Amendment and the other instruments anddocuments to be delivered hereunder, including, without limitation, thereasonable fees and out-of-pocket expenses of Agent’s counsel with respectthereto and with respect to advising Agent as to its rights andresponsibilities hereunder and thereunder.

 

8.             Governing Law.This Amendment shall be governed by and construed in accordance with the lawsof the State of California, without regard to the conflict of laws principlesthereof.

 

9.             Loan Document.This Amendment shall be deemed to be a Loan Document for all purposes.

 

10.           Counterparts. ThisAmendment may be executed by one or more of the parties hereto on any number ofseparate counterparts, each of which shall be deemed an original and all ofwhich, taken together, shall be deemed to constitute one and the sameinstrument. Delivery of an executed counterpart of this Amendment by facsimiletransmission shall be as effective as delivery of a manually executedcounterpart hereof.

 

[The remainder ofthis page is intentionally left blank]

 

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IN WITNESS WHEREOF, theundersigned have duly executed this Amendment as a sealed instrument the datefirst set forth above.

 
|        | **BORROWER:**                                                  |
|--------|----------------------------------------------------------------|
|   |                                                           |
|   | CALIFORNIA COASTAL  COMMUNITIES, INC., a  Delaware corporation |
|   |                                                           |
|   |                                                           | By: | /s/ Raymond J. Pacini |   |
|   |                                                           | Name: | Raymond J. Pacini |   |
|   |                                                           | Its: | Chief Executive Officer |   |
|   |                                                           |   |   |   |
|   |                                                           |   | [SEAL] |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | **GUARANTORS:**                                         |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    |
|   | SIGNAL LANDMARK HOLDINGS  INC., a  Delaware corporation |
|   |                                                    |   |   |
|   | By:                                                     | /s/ Raymond J. Pacini |   |
|   | Name:                                                   | Raymond J. Pacini |   |
|   | Its:                                                    | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | SIGNAL LANDMARK,  a California corporation |
|--------|--------------------------------------------|
|   |                                       |   |   |
|   | By:                                        | /s/ Raymond J. Pacini |   |
|   | Name:                                      | Raymond J. Pacini |   |
|   | Its:                                       | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | HEARTHSIDE HOLDINGS,  INC., a Delaware  corporation |
|--------|-----------------------------------------------------|
|   |                                                |   |   |
|   | By:                                                 | /s/ Raymond J.  Pacini |   |
|   | Name:                                               | Raymond J.  Pacini |   |
|   | Its:                                                | Chief Executive  Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | HEARTHSIDE HOMES, INC.,  a California  corporation |
|--------|----------------------------------------------------|
|   |                                               |   |   |
|   | By:                                                | /s/ Raymond J. Pacini |   |
|   | Name:                                              | Raymond J. Pacini |   |
|   | Its:                                               | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | HHI CHANDLER, LLC, a  California limited  liability company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: Hearthside Homes,  Inc., its managing  member |
|   |                                                        |   |   |   |
|   |                                                        | By: | /s/ Raymond J. Pacini |   |
|   |                                                        | Name: | Raymond J. Pacini |   |
|   |                                                        | Its: | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | HHI CHINO II, LLC, a  California limited liability  company |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        | By: Hearthside Homes,  Inc., its managing  member |
|   |                                                        |   |   |   |
|   |                                                        | By: | /s/ Raymond J. Pacini |   |
|   |                                                        | Name: | Raymond J. Pacini |   |
|   |                                                        | Its: | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | HHI CROSBY, LLC, a  California limited liability  company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: Hearthside Homes,  Inc., its managing  member |
|   |                                                      |   |   |   |
|   |                                                      | By: | /s/ Raymond J. Pacini |   |
|   |                                                      | Name: | Raymond J. Pacini |   |
|   |                                                      | Its: | Chief Executive Officer |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | HHI HELLMAN, LLC, a  California limited liability  company |
|--------|------------------------------------------------------------|
|   |                                                       |
|   |                                                       | By: Hearthside Homes,  Inc., its managing  member |
|   |                                                       |   |   |   |
|   |                                                       | By: | /s/ Raymond J. Pacini |   |
|   |                                                       | Name: | Raymond J. Pacini |   |
|   |                                                       | Its: | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | HHI LANCASTER I, LLC, a  California limited  liability company |
|--------|----------------------------------------------------------------|
|   |                                                           |
|   |                                                           | By: Hearthside Homes,  Inc., its managing  member |
|   |                                                           |   |   |   |
|   |                                                           | By: | /s/ Raymond J. Pacini |   |
|   |                                                           | Name: | Raymond J. Pacini |   |
|   |                                                           | Its: | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | HHI SENECA, LLC, a  California limited liability  company |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   |                                                      | By: Hearthside Homes,  Inc., its managing  member |
|   |                                                      |   |   |   |
|   |                                                      | By: | /s/ Raymond J. Pacini |   |
|   |                                                      | Name: | Raymond J. Pacini |   |
|   |                                                      | Its: | Chief Executive Officer |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | **AGENT:**                                                                   |
|--------|------------------------------------------------------------------------------|
|   |                                                                         |
|   | KEYBANK NATIONAL  ASSOCIATION, a national  banking association, as the Agent |
|   |                                                                         |   |   |
|   | By:                                                                          | /s/ Andrew K. McKown |   |
|   | Name:                                                                        | Andrew K. McKown |   |
|   | Its:                                                                         | Vice President |   |
|   |                                                                         |   |   |
|   |                                                                         | [SEAL] |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | **LENDERS:**                                                                |
|--------|-----------------------------------------------------------------------------|
|   |                                                                        |
|   | KEYBANK NATIONAL  ASSOCIATION, a national  banking association, as a Lender |
|   |                                                                        |   |   |
|   | By:                                                                         | /s/ Andrew K. McKown |   |
|   | Name:                                                                       | Andrew K. McKown |   |
|   | Its:                                                                        | Vice President |   |
|   |                                                                        |   |   |
|   |                                                                        | [SEAL] |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | WACHOVIA BANK NATIONAL  ASSOCIATION,  as a Lender |
|--------|---------------------------------------------------|
|   |                                              |   |   |
|   | By:                                               | /s/ Kurt Huisman |   |
|   | Name:                                             | Kurt Huisman |   |
|   | Its:                                              | Vice President |   |
|   |                                              |   |   |
|   |                                              | [SEAL] |   |

 

 

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Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | LASALLE BANK, N.A., a  national banking  association, as a Lender |
|--------|-------------------------------------------------------------------|
|   |                                                              |   |   |
|   | By:                                                               | /s/ Donald G. Adams |   |
|   | Name:                                                             | Donald G. Adams |   |
|   | Its:                                                              | First Vice President |   |
|   |                                                              |   |   |
|   |                                                              | [SEAL] |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | PREFERRED BANK, as a  Lender |
|--------|------------------------------|
|   |                         |   |   |
|   | By:                          | /s/ Erika Chi |   |
|   | Name:                        | Erika Chi |   |
|   | Its:                         | Senior Vice President |   |
|   |                         |   |   |
|   |                         | [SEAL] |   |

 

 

[SIGNATURESCONTINUED ON FOLLOWING PAGE]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | GUARANTY BANK, as a  Lender |
|--------|-----------------------------|
|   |                        |   |   |
|   | By:                         | /s/ Kent Newberry |   |
|   | Name:                       | Kent Newberry |   |
|   | Its:                        | Senior Vice President |   |
|   |                        |   |   |
|   |                        | [SEAL] |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | VAN KAMPEN SENIOR  INCOME TRUST, as a  Lender |
|--------|-----------------------------------------------|
|   |                                          |   |   |
|   | By:                                           | Van Kampen Asset  Management |   |
|   | Its:                                          |   |   |
|   |                                          |   |   |
|   | By:                                           | /s/ Philip Yarrow |   |
|   | Name:                                         | Philip Yarrow |   |
|   | Its:                                          | Vice President |   |
|   |                                          |   |   |
|   |                                          | [SEAL] |   |

 

 

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Signature page for First Amendment to Senior Secured Term LoanAgreement

 

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|        | VAN KAMPEN SENIOR LOAN  FUND, as a Lender |
|--------|-------------------------------------------|
|   |                                      |   |   |
|   | By:                                       | Van Kampen Asset  Management |   |
|   |                                      |   |   |
|   | By:                                       | /s/ Philip Yarrow |   |
|   | Name:                                     | Philip Yarrow |   |
|   | Its:                                      | Vice President |   |
|   |                                      |   |   |
|   |                                      | [SEAL] |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | MORGAN STANLEY PRIME  INCOME TRUST, as  a Lender |
|--------|--------------------------------------------------|
|   |                                             |   |   |
|   | By:                                              | /s/ Robert P. Drobny |   |
|   | Name:                                            | Robert P. Drobny |   |
|   | Its:                                             | Vice President |   |
|   |                                             |   |   |
|   |                                             | [SEAL] |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | GRAND BANK, as a Lender |
|--------|-------------------------|
|   |                    |   |   |
|   | By:                     | /s/ Chris Jones |   |
|   | Name:                   | Chris Jones |   |
|   | Its:                    | Chief Executive Officer |   |
|   |                    |   |   |
|   |                    | [SEAL] |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | COMERICA BANK, as a  Lender |
|--------|-----------------------------|
|   |                        |   |   |
|   | By:                         | /s/ Anthony Lopilato |   |
|   | Name:                       | Anthony Lopilato |   |
|   | Its:                        | Sr. Vice President –  Western Market |   |
|   |                        |   |   |
|   |                        | [SEAL] |   |

 

 

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Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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|        | FRANKLIN BANK, SSB, as  a Lender |
|--------|----------------------------------|
|   |                             |   |   |
|   | By:                              | /s/ Susan Conrad |   |
|   | Name:                            | Susan Conrad |   |
|   | Its:                             | Sr. Vice President |   |
|   |                             |   |   |
|   |                             | [SEAL] |   |

 

 

[END OFSIGNATURES]

 

 

Signature page for FirstAmendment to Senior Secured Term Loan Agreement

 

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