Deal CUSIP 64536VAA8
Revolving Facility CUSIP 64536VAB6

THIRD MODIFICATION AGREEMENT
This Third Modification Agreement (“Agreement”) is made as of July 22, 2015, by
and between THE NEW HOME COMPANY INC., a Delaware corporation (“Borrower”), and
U.S. BANK NATIONAL ASSOCIATION D/B/A HOUSING CAPITAL COMPANY, in its capacity as
Administrative Agent (the “Administrative Agent”), for the benefit of Lenders
under the Credit Agreement described below, LC Issuer, Swing Line Lender and a
Lender.
RECITALS
A.Under that certain Credit Agreement dated as of June 26, 2014, by and among
Borrower, Administrative Agent and the financial institutions from time to time
party thereto (collectively, the “Lenders”), as modified by that certain
Modification Agreement dated as of December 3, 2014 and that certain Second
Modification Agreement dated as of May 7, 2015 (collectively, as further
amended, restated or otherwise modified, the “Credit Agreement”) Administrative
Agent and the Lenders agreed to make a loan to Borrower (the “Loan”).
Capitalized terms used herein without definition have the meanings ascribed to
them in the Credit Agreement.
B.    The Loan is evidenced by that certain promissory notes dated as of May 7,
2015, made by Borrower and payable to the order of a Lender, in the original
principal amount of One Hundred Seventy-Five Million and No/100 Dollars
($175,000,000.00) (as amended, restated, supplemented, substituted, or otherwise
modified, the “Note”).
C.    The Note, the Credit Agreement and the other Loan Documents (as defined in
the Credit Agreement) and any other documents executed in connection with the
Loan, including those which evidence, guarantee, secure or modify the Loan, as
any or all of them may have been amended to date, are sometimes referred to
herein as the “Loan Documents. This Agreement is a Loan Document.
D.    As of the date hereof, the outstanding principal balance of the Loan is
$164,923,559.83.
E.    Borrower has requested that Administrative Agent and the Lenders modify
the Loan to clarify the types of ordinary course agreements under which a Loan
Party may have outstanding Indebtedness. Administrative Agent and the Lenders
have agreed to modify the Loan on the terms and conditions set forth herein.
F.    Borrower, Administrative Agent and the Lenders now wish to modify the Loan
as set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, including the mutual covenants herein
contained, Borrower and Lender hereby agree to the following terms and
conditions:
1.Recitals. The recitals set forth above in the Recitals are true, accurate and
correct.

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2.    Reaffirmation of Loan. Borrower reaffirms all of its obligations under the
Loan Documents, and Borrower acknowledges that it has no claims, offsets or
defenses with respect to the payment of sums due under the Credit Agreement, the
Note or any other Loan Document.
3.    Modifications of Loan Documents re: Restrictions of Other Indebtedness.
Section 6.11(i) of the Credit Agreement is hereby amended and restated in its
entirety as follows:
“(i)    Indebtedness incurred in the ordinary course of business with respect to
(A) completion guaranties, (B) environmental indemnities, and (C) loan-to-value
maintenance agreements and other similar agreements;”
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
Administrative Agent in the exercise of Administrative Agent’s sole judgment:
(a)    Administrative Agent shall have received fully executed and where
appropriate, acknowledged originals of this Agreement and the attached
Guarantors’ Consent.
(b)    The representations and warranties contained in the Loan Documents and
this Agreement are true and correct as of the effective date of this Agreement.
(c)    All payments due and owing to Administrative Agent and the Lenders under
the Loan Documents have been paid current as of the effective date of this
Agreement.
(d)    Administrative Agent shall have received reimbursement, in immediately
available funds, of all costs and expenses incurred by Administrative Agent and
the Lenders in connection with this Agreement, including, legal fees and
expenses of Administrative Agent’s and Lenders’ counsel.
5.    Representations and Warranties. Borrower represents and warrants to
Administrative Agent and the Lenders as follows:
(a)    Loan Documents. All representations and warranties made and given by
Borrower in the Loan Documents are true, accurate and correct as of the date of
this Agreement.
(b)    No Event of Default. No Event of Default has occurred and is continuing
and no event has occurred and is continuing which, with notice or the passage of
time or both, would be an Event of Default.
(c)    Borrowing Entity. Borrower is a corporation which is duly organized and
validly existing under the laws of the State of Delaware. Except as otherwise
disclosed to Administrative Agent in writing prior to the date hereof, there
have been no changes in the organization, composition, ownership structure or
formation documents of Borrower since the inception of the Loan.

 
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6.    Remedies. Upon a default under this Agreement, the Note or any of the
other Loan Documents, Lender may enforce all rights and remedies under any
applicable law. The rights and remedies specified herein are cumulative and are
not exclusive of any rights or remedies which Lender would otherwise have under
the Loan Documents or applicable law.
7.    Incorporation. This Agreement shall form a part of each Loan Document, and
all references to a given Loan Document shall mean that document as hereby
modified.
8.    Effect of this Agreement. The terms and conditions of the Credit Agreement
and the other Loan Documents are modified only to the extent specifically set
forth herein and on the condition that such modification shall not prejudice any
other existing or future rights, remedies, benefits or powers belonging or
accruing to Administrative Agent and the Lenders under the terms of the Credit
Agreement and the other Loan Documents, as hereby modified.
9.    No Impairment; Reaffirmation and Ratification. Except as set forth herein,
the terms of the Note, the Credit Agreement and the other Loan Documents shall
remain in full force and effect and apply to this Agreement, and the Note and
the other Loan Documents are ratified and affirmed by the parties hereto.
10.    Indemnification. Borrower shall indemnify, defend, protect and hold
Administrative Agent and the Lenders (individually and collectively, the
“Indemnified Party”) harmless from and against any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature whatsoever, including, without
limitation, attorneys’ fees and other costs of defense, incurred or accruing by
reason of any acts performed by Indemnified Party pursuant to the provisions of
this Agreement regardless of whether legal action is commenced in any court,
including, without limitation, those arising from the joint, concurrent or
comparative negligence of Indemnified Party, except as a result of Indemnified
Party’s gross negligence or willful misconduct.
11.    Successors and Assigns. The terms and conditions of this Agreement are
binding upon Borrower and its representatives, successors, interests, and
assigns, and shall survive the termination of this Agreement, the Note and the
other Loan Documents.
12.    Purpose and Effect of Administrative Agent’s and Lenders’ Approval.
Administrative Agent’s and/or Lenders’ approval of any matter in connection with
the Loan shall be for the sole purpose of protecting Administrative Agent’s and
Lenders’ security and rights. Neither the execution and delivery of this
Agreement by Administrative Agent or any Lender, nor any approval by
Administrative Agent or any Lender of any matter in connection with the Loan
shall result in a waiver of any Event of Default. In no event shall
Administrative Agent’s or any Lender’s approval be a representation of any kind
with regard to the matter being approved.
13.    Integration. The Loan Documents, including this Agreement: (a) integrate
all the terms and conditions mentioned in or incidental to the Loan Documents;
(b) supersede all oral negotiations and prior and other writings with respect to
their subject matter; and (c) are intended by the parties as the final
expression of the agreement with respect to the terms and conditions set forth
in those documents and as the complete and exclusive statement of the terms
agreed to by the

 
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parties. If there is any conflict between the terms, conditions and provisions
of this Agreement and those of any other agreement or instrument, including any
of the other Loan Documents, the terms, conditions and provisions of this
Agreement shall prevail.
14.    Authorization. By signing below, each party hereto represents to the
other that the individual executing this Agreement on its behalf is the duly
appointed signatory of such party and that such individual is authorized to
execute this Agreement by or on behalf of such party and to take all action
required by the terms of this Agreement.
15.    Miscellaneous. This Agreement may be executed in counterparts, and all
counterparts shall constitute but one and the same document. If any court of
competent jurisdiction determines any provision of this Agreement or any of the
other Loan Documents to be invalid, illegal or unenforceable, that portion shall
be deemed severed from the rest, which shall remain in full force and effect as
though the invalid, illegal or unenforceable portion had never been a part of
the Loan Documents. This Agreement shall be governed by the laws of the State of
California, without regard to the choice of law rules of that State. As used
herein, the word “include(s)” means “includes(s), without limitation,” and the
word “including” means “including, but not limited to.”

[Signatures on the Following Page]

 
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IN WITNESS WHEREOF, Borrower, Administrative Agent, Swing Line Lender, LC Issuer
and Lenders have executed this Agreement as of the date first above written.

 
BORROWER:
 
 
 
 
THE NEW HOME COMPANY INC., a Delaware corporation
 
 
 
 
By:
/s/ H. Lawrence Webb
 
Name:
H. Lawrence Webb
 
Title:
Chief Executive Officer
 
 
 
 
By:
/s/ Wayne J. Stelmar
 
Name:
Wayne J. Stelmar
 
Title:
Chief Investment Officer
 
 
 
 
ADMINISTRATIVE AGENT, SWING LINE LENDER, LC ISSUER AND LENDER:
 
 
 
 
U.S. BANK NATIONAL ASSOCIATION, D/B/A HOUSING CAPITAL COMPANY, as a Lender,
Swing Line Lender, LC Issuer and Administrative Agent
 
 
 
 
By:
/s/ K. Goodbody
 
Name:
K. Goodbody
 
Title:
Vice President
 
 
 

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LENDER:
 
 
 
 
CITIBANK, N.A.
 
 
 
 
By:
/s/ Michael Chlopak
 
Name:
Michael Chlopak
 
Title:
Vice President
 
 
 

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LENDER:
 
 
 
 
JPMORGAN CHASE BANK, N.A.
 
 
 
 
By:
/s/ Nadeige Dang
 
Name:
Nadeige Dang
 
Title:
Vice President
 
 
 

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LENDER:
 
 
 
 
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
 
 
 
 
By:
/s/ Bill O'Daly
 
Name:
Bill O'Daly
 
Title:
Authorized Signatory
 
 
 
 
By:
/s/ Sean MacGregor
 
Name:
Sean MacGregor
 
Title:
Authorized Signatory

 
 
 

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LENDER:
 
 
 
 
BANK OF THE WEST
 
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 

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GUARANTORS’ CONSENT

The undersigned (collectively, “Guarantor”) consents to the foregoing Third
Modification Agreement and the transactions contemplated thereby and reaffirms
its obligations under the Guaranty dated as of June 26, 2014 (the “Guaranty”),
and its waivers, as set forth in the Guaranty, of each and every one of the
possible defenses to such obligations. Guarantor further reaffirms that its
obligations under the Guaranty are separate and distinct from Borrower’s
obligations.

Dated as of: July 22, 2015

GUARANTOR:
THE NEW HOME COMPANY SOUTHERN CALIFORNIA LLC, a Delaware limited liability
company
 
 
 
 
By:
/s/ Wayne Stelmar
 
Name:
Wayne Stelmar
 
Title:
Chief Investment Officer
 
 
 
 
By:
/s/ John M. Stephens
 
Name:
John M. Stephens
 
Title:
Chief Financial Officer
 
 
 
 

THE NEW HOME COMPANY NORTHERN CALIFORNIA LLC, a Delaware limited liability
company
 
 
 
 
By:
/s/ Wayne Stelmar
 
Name:
Wayne Stelmar
 
Title:
Chief Investment Officer
 
 
 
 
By:
/s/ John M. Stephens
 
Name:
John M. Stephens
 
Title:
Chief Financial Officer
 
 
 
 

GC-1    

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TNHC LAND COMPANY LLC, a Delaware limited liability company
 
 
 
 
By:
/s/ H. Lawrence Webb
 
Name:
H. Lawrence Webb
 
Title:
Chief Financial Officer
 
 
 
 
By:
/s/ Wayne Stelmar
 
Name:
Wayne Stelmar
 
Title:
Chief Investment Officer
 
 
 
 

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