Document:

Security Agreement

 Exhibit 10.2 
 EXECUTION COPY 
  
  

 
 SECURITY AGREEMENT 

dated as of 

May 10, 2011 

among 
 SHEA
HOMES LIMITED PARTNERSHIP, 
 SHEA HOMES FUNDING CORP., 
 THE GUARANTORS IDENTIFIED HEREIN, 
 CREDIT SUISSE AG, 

as Administrative Agent 
 and 
 WELLS FARGO BANK, NATIONAL ASSOCIATION, 

as Collateral Agent 

Reference is made to the Intercreditor Agreement (as defined in this Agreement). Notwithstanding any other provision contained herein, this Agreement,
the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the terms of the Intercreditor Agreement. In the event of any conflict or inconsistency between the provisions of this
Agreement and the terms of the Intercreditor Agreement, the terms of the Intercreditor Agreement shall control. 
  

 
  

 TABLE OF CONTENTS 

 

					
	ARTICLE I	  
	
	Definitions	  
		
	 SECTION 1.01. Defined Terms
	  	 	1	  
	 SECTION 1.02. Other Defined Terms
	  	 	1	  
	
	ARTICLE II	  
	
	Reserved.	  
	
	ARTICLE III	  
	
	Pledge of Securities	  
		
	 SECTION 3.01. Pledge
	  	 	8	  
	 SECTION 3.02. Delivery of the Pledged Collateral
	  	 	10	  
	 SECTION 3.03. Representations, Warranties and Covenants
	  	 	10	  
	 SECTION 3.04. Certification of Limited Liability Company and Limited Partnership Interests
	  	 	11	  
	 SECTION 3.05. Registration in Nominee Name; Denominations
	  	 	12	  
	 SECTION 3.06. Voting Rights; Dividends and Interest
	  	 	12	  
	
	ARTICLE IV	  
	
	Security Interests in Personal Property	  
		
	 SECTION 4.01. Security Interest
	  	 	14	  
	 SECTION 4.02. Representations and Warranties
	  	 	17	  
	 SECTION 4.03. Covenants
	  	 	19	  
	 SECTION 4.04. Other Actions
	  	 	22	  
	 SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral
	  	 	25	  
	
	ARTICLE V	  
	
	Remedies	  
		
	 SECTION 5.01. Remedies Upon Default
	  	 	26	  
	 SECTION 5.02. Application of Proceeds
	  	 	28	  
	 SECTION 5.03. Grant of License to Use Intellectual Property
	  	 	29	  
	 SECTION 5.04. Securities Act
	  	 	30	  

  
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	ARTICLE VI	  
	
	Indemnity, Subrogation and Subordination	  
		
	 SECTION 6.01. Indemnity and Subrogation
	  	 	30	  
	 SECTION 6.02. Contribution and Subrogation
	  	 	31	  
	 SECTION 6.03. Subordination
	  	 	31	  
	
	ARTICLE VII	  
	
	Miscellaneous	  
		
	 SECTION 7.01. Notices
	  	 	31	  
	 SECTION 7.02. Waivers; Amendment
	  	 	32	  
	 SECTION 7.03. Collateral Agent’s Fees and Expenses; Indemnification
	  	 	32	  
	 SECTION 7.04. Successors and Assigns
	  	 	33	  
	 SECTION 7.05. Survival of Agreement
	  	 	33	  
	 SECTION 7.06. Counterparts; Effectiveness; Several Agreement
	  	 	33	  
	 SECTION 7.07. Severability
	  	 	34	  
	 SECTION 7.08. Reserved.
	  	 	34	  
	 SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process
	  	 	34	  
	 SECTION 7.10. WAIVER OF JURY TRIAL
	  	 	35	  
	 SECTION 7.11. Headings
	  	 	35	  
	 SECTION 7.12. Security Interest Absolute
	  	 	35	  
	 SECTION 7.13. Termination or Release
	  	 	35	  
	 SECTION 7.14. Additional Guarantor
	  	 	36	  
	 SECTION 7.15. Collateral Agent Appointed Attorney-in-Fact
	  	 	36	  
	 SECTION 7.16. Intercreditor Agreement Govern
	  	 	37	  

  
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	Schedules	  	
		
	Schedule I	  	Guarantors
	Schedule II	  	Pledged Equity Interests; Pledged Debt Securities
	Schedule III	  	Intellectual Property
	Schedule IV	  	Commercial Tort Claims
		
	Exhibits	  	
		
	Exhibit I	  	Form of Supplement
	Exhibit II	  	Form of Perfection Certificate

  
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 SECURITY AGREEMENT dated as of May 10, 2011 (this
“Agreement”), among Shea Homes Limited Partnership, Shea Homes Funding Corp., the Guarantors from time to time party hereto, Credit Suisse AG, as Administrative Agent under the LC Facility Agreement and Wells Fargo Bank, National
Association, as Collateral Agent. 
 Reference is made to (i) the Indenture dated as of May 10, 2011 (as amended,
supplemented or otherwise modified from time to time, the “Indenture”), among Shea Homes Limited Partnership, a California limited partnership (the “Company”), Shea Homes Funding Corp., a Delaware corporation (the
“Corporate Issuer” and, together with the Company, the “Issuers”), the Guarantors party thereto and Wells Fargo Bank, National Association, as Trustee, (ii) the Letter of Credit Facility Agreement dated as of
May 10, 2011 (as amended, supplemented or otherwise modified from time to time, the “LC Facility Agreement”) among the Company, the Corporate Issuer, the guarantors party thereto, Credit Suisse AG, as administrative agent (in
such capacity, the “Administrative Agent”) and issuing bank and the participants from time to time party thereto and (iii) the Intercreditor Agreement dated as of May 10, 2011 (as amended, supplemented or otherwise
modified from time to time, the “Intercreditor Agreement”), among the Administrative Agent, the Collateral Agent, the Company, the Corporate Issuer, the Trustee and the other parties party thereto. As an inducement to the Holders to
purchase Notes from the Issuers, and the Issuing Bank and Participants to extend credit to the Issuers, the Restricted Subsidiaries and their respective joint ventures, the Issuers and the Guarantors have agreed to enter into this Agreement to grant
the Collateral Agent (for the benefit of the Secured Parties) a lien on the Collateral (as defined below). Accordingly, the parties hereto agree as follows: 
 ARTICLE I 
 Definitions 

SECTION 1.01. Defined Terms. (a) Each capitalized term used but not defined herein shall have the meaning specified in the
Intercreditor Agreement and, if not defined therein, then in the Indenture or the LC Facility Agreement, as applicable, as in effect on the date hereof. Terms defined here by reference to the Intercreditor Agreement, the Indenture or the LC Facility
Agreement have the meanings set forth in such documents, as in effect on the date hereof. Each term defined in the New York UCC and not defined in this Agreement shall have the meaning specified therein. The term “instrument” shall have
the meaning specified in Article 9 of the New York UCC. 
 (b) The rules of construction specified in Section 1.02 of
the Indenture and Section 1.02 of the LC Facility Agreement also apply to this Agreement. 
 SECTION 1.02. Other Defined
Terms. As used in this Agreement, the following terms have the meanings specified below: 
 “Account
Debtor” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account. 

 “Administrative Agent” has the meaning assigned to such term in the
introductory paragraph to this Agreement. 
 “Agreement” has the meaning assigned to such term in the
introductory paragraph to this Agreement. 
 “Applicable Authorized Representative” shall have the meaning
assigned to such term in the Intercreditor. 
 “Article 9 Collateral” has the meaning assigned to such
term in Section 4.01. 
 “Business Day” shall mean any day other than a Saturday, Sunday or day on which
banks in New York City are authorized or required to close by law. 
 “Claiming Party” has the meaning assigned
to such term in Section 6.02. 
 “Collateral” means Article 9 Collateral and Pledged Collateral and,
where the context requires, any assets of any Credit Party upon which a Lien is granted pursuant to any other Security Document to secure any Obligations. 
 “Collateral Accounts” shall mean the Controlled Deposit Accounts and the Controlled Securities Accounts. 
 “Collateral Agent” shall mean Wells Fargo Bank, National Association, in its capacity as collateral agent as appointed hereunder and under the Intercreditor Agreement, and its successors
and permitted assigns in such capacity. 
 “Commercial Tort Action” shall mean any action, other than an action
primarily seeking declaratory or injunctive relief with respect to claims asserted or expected to be asserted by Persons other than the Grantors, that is commenced by a Grantor in which such Grantor seeks damages arising out of commercial torts
committed against it that would reasonably be expected to result in a damage award to it exceeding $500,000. 

“Company” has the meaning assigned to such term in the introductory paragraph to this Agreement. 

“Contributing Party” has the meaning assigned to such term in Section 6.02. 

“Control” has the following meanings: 
 (a) when used with respect to any Security or Security Entitlement, the meaning specified in New York UCC Section 8-106; and 

  
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 (b) when used with respect to any Deposit Account, that the Collateral Agent shall have met
one of the requirements for control specified in New York UCC Section 9-104. 
 “Controlled Deposit
Account” means a Deposit Account of a Grantor (i) that is subject to a Deposit Account Control Agreement or (ii) as to which the Collateral Agent is the Depositary Bank’s “customer” (as defined in New York UCC
Section 4-104). 
 “Controlled Securities Account” means a Securities Account of a Grantor that is
maintained in the name of such Grantor at an office of a Securities Intermediary located in the United States and, together with all Financial Assets credited thereto and all related Security Entitlements, is subject to a Securities Account Control
Agreement among such Grantor, the Collateral Agent and such securities intermediary. 
 “Copyright License”
means any written agreement, now or hereafter in effect, granting to any third party any right now or hereafter under any Copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right
to any Grantor under any Copyright now or hereafter owned by any third party, or that a third party now or hereafter otherwise has the right to license and all rights of such Grantor under any such agreement. 

“Copyrights” means, with respect to any Person, all the following now owned or hereafter acquired by such Person:
(a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such
copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office (or any similar office in any other country),
including, in the case of clauses (a) and (b), those listed on Schedule III. 
 “Corporate Issuer”
has the meaning assigned to such term in the introductory paragraph to this Agreement. 
 “Credit Party” means,
the Company, the Corporate Issuer and the Guarantors. 
 “Deposit Account Control Agreement” means, with
respect to any Deposit Account of any Grantor, an agreement in form and substance reasonably satisfactory to the Administrative Agent and the Applicable Authorized Representative and such Grantor among such Grantor, the Collateral Agent and the
relevant Depositary Bank establishing the Collateral Agent’s Control with respect to such Deposit Account. 

“Depositary Bank” shall mean a bank at which a Controlled Deposit Account is maintained. 

“Event of Default” shall mean an “Event of Default” as defined in the Intercreditor Agreement which is
continuing. 

  
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 “Excluded Accounts” has the meaning assigned to such term in
Section 4.01(a). 
 “Excluded Collateral” has the meaning assigned to such term in Section 3.01(b).

 “Excluded Property” has the meaning assigned to such term in Section 4.01(a). 

“Federal Securities Laws” has the meaning assigned to such term in Section 5.04. 

“General Intangibles” shall mean “General Intangibles” as defined in the New York UCC and shall include
Intellectual Property. 
 “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank). 

“Grantors” means the Company, the Corporate Issuer and the Guarantors. 

“Guarantors” means the Persons set forth on Schedule I hereto and each other Person that becomes a Guarantor pursuant to
the Indenture or the LC Facility Agreement after the Issue Date. 
 “Indenture” has the meaning assigned to
such term in the introductory paragraph of this Agreement. 
 “Intellectual Property” means all intellectual
and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, domain names, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing. 
 “Intercompany Note” has the meaning
assigned to such term in Section 3.02(b). 
 “Intercreditor Agreement” has the meaning assigned to such
term in the introductory paragraph to this Agreement. 
 “Issue Date” has the meaning assigned to such term in
the Indenture. 

  
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 “Issuers” has the meaning assigned to such term in the introductory
paragraph to this Agreement. 
 “LC Facility Agreement” has the meaning assigned to such term in the
introductory paragraph to this Agreement. 
 “LC Facility Documents” means (a) the LC Facility Agreement,
this Agreement, the Security Documents (as defined in the LC Facility Agreement), the Intercreditor Agreement, the Real Property Collateral Management Agreement and any other document designated by the Administrative Agent as an LC Facility Document
and (b) any other related document or instrument executed and delivered pursuant to any LC Facility Document described in clause (a) evidencing or governing any LC Facility Obligations thereunder. 

“LC Facility Obligations” means (a)(i) the due and punctual payment by the Credit Parties of (1) each payment
required to be made by the Credit Parties or joint ventures under the LC Facility Agreement in respect of any Letter of Credit, when and as due (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such proceeding), including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral and (2) all other monetary
obligations of the Credit Parties to any of the Secured Parties under the LC Facility Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (ii) the due and punctual
performance of all other obligations of the Credit Parties under or pursuant to the LC Facility Documents, and (iii) the due and punctual payment and performance of all the obligations of each other Credit Party under or pursuant to the LC
Facility Documents (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) or (b) any one or more
refinancings of the then outstanding LC Facility Obligations, provided that all commitments under the predecessor letter of credit facility have been terminated, the Participants have no further obligation to issue or extend letters of credit
and all outstanding letters of credit have been cash collateralized or other arrangements reasonably satisfactory to the issuing bank or applicable Participant shall have been made with respect thereto. 

“Letter of Credit” shall mean a “Letter of Credit” issued under, and as defined in, the LC Facility Agreement.

 “License” means any Patent License, Trademark License, Copyright License or other license or sublicense
agreement to which any Grantor is a party, including those listed on Schedule III. 

  
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 “New York UCC” means the Uniform Commercial Code as from time to time in
effect in the State of New York. 
 “Note Documents” means (a) the Notes, the Indenture, this Agreement,
the Security Documents (as defined in the Indenture), the Intercreditor Agreement, the Real Property Collateral Management Agreement and (b) any other related document or instrument executed and delivered pursuant to any Note Document described
in clause (a) evidencing or governing any Notes Obligations thereunder. 
 “Notes Obligations” means
(a) the due and punctual payment by the Issuers of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of either Issuer to any of the Secured Parties
under the Indenture and each of the other Note Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of
the Issuers to any of the Secured Parties under or pursuant to the Indenture and each of the other Note Documents, and (c) the due and punctual payment and performance of all the obligations of each other Grantor to any of the Secured Parties
under or pursuant to this Agreement and each of the other Note Documents (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable
in such proceeding). 
 “Obligations” means, collectively, the LC Facility Obligations and the Notes
Obligations. 
 “Parallel Obligations” means the independent obligations of any of the Credit Parties arising
pursuant to the Intercreditor Agreement to pay to the Collateral Agent sums equal to the sums owed by such Credit Party to the Secured Parties (or any of them) under the Note Documents or the LC Facility Documents. 

“Patent License” means any written agreement, now or hereafter in effect, granting to any third party any right to make,
use or sell any invention on which a Patent, now or hereafter owned by any Grantor or that any Grantor now or hereafter otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on
which a patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement. 
 “Patents” means with respect to any Person all the following now owned or hereafter acquired by such Person: (a) all letters patent of the United States or the equivalent thereof in
any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other 

  
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country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on
Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or
claimed therein. 
 “Perfection Certificate” means a certificate substantially in the form of Exhibit II,
completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by the chief financial officer and the chief legal officer of the Issuers. 

“Pledged Collateral” has the meaning assigned to such term in Section 3.01(a). 

“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01(a). 

“Pledged Equity Interests” has the meaning assigned to such term in Section 3.01(a). 

“Pledged Securities” means any promissory notes, stock certificates, unit certificates, or other securities now or
hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral. 
 “Real Property Collateral Management Agreement” means the Real Property Collateral Management Agreement dated as of May 10, 2011, among the Issuers and the Collateral Agent.

 “Secured Parties” means (a) the Holders, (b) the Participants, (c) the Administrative Agent,
(d) the Issuing Bank, (e) the Collateral Agent, (f) the Trustee, (g) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Note Document or LC Facility Document and (h) the successors and
assigns of each of the foregoing. 
 “Securities Account Control Agreement” means, when used with respect to a
Securities Account of a Grantor, an agreement in form and substance reasonably satisfactory to the Administrative Agent and the Applicable Authorized Representative and such Grantor among the relevant securities intermediary, such Grantor and the
Collateral Agent establishing the Collateral Agent’s Control with respect to such Securities Account. 
 “Security
Documents” shall mean, this Agreement and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to any of the foregoing or otherwise executed and delivered to secure the Obligations.

  
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 “Security Interest” has the meaning assigned to such term in
Section 4.01(a). 
 “Trademark License” means any written agreement, now or hereafter in effect, granting
to any third party any right to use any Trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark now or hereafter owned by any third party or
that a third party now or hereafter otherwise has the right to license, and all rights of any Grantor under any such agreement. 

“Trademarks” means, with respect to any Person, all the following now owned or hereafter acquired by such Person:
(a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature,
now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent
and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule III, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill. 
 ARTICLE II 
 Reserved. 

ARTICLE III 

Pledge of Securities 
 SECTION 3.01. Pledge. (a) As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in, all such Grantor’s right, title and interest
in, to and under (i)(x) the shares of capital stock and other Equity Interests owned by it including those listed on Schedule II, (y) any other Equity Interests obtained in the future by such Grantor and (z) the certificates
representing all such Equity Interests (collectively, the “Pledged Equity Interests”); (ii)(x) the debt securities owned by it, including those listed opposite the name of such Grantor on Schedule II, (y) any debt
securities in the future issued to such Grantor and (z) the promissory notes and any other instruments evidencing all such debt securities (the “Pledged Debt Securities”); (iii) all other property that may be delivered to
and held by the Collateral Agent pursuant to the terms of this Section 3.01(a); (iv) subject to Section 3.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other 

  
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Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (v) subject to Section 3.06, all rights and privileges of such Grantor with respect
to the securities and other property referred to in clauses (i), (ii), (iii) and (iv) above; and (vi) all Proceeds of any of the foregoing (the items referred to in clauses (i) through (vi) above being collectively
referred to as the “Pledged Collateral”) 
 (b) Notwithstanding the foregoing, the capital stock and securities
of any Guarantor will constitute Pledged Collateral (or Article 9 Collateral, as the case may be) with respect to the Notes only to the extent that the securing of the Notes Obligations with such capital stock and securities would not require
such Guarantor to file separate financial statements with the SEC under Rule 3-16 of Regulation S-X under the Securities Act. Subject to 3.01(d), in the event that Rule 3-16 of Regulation S-X under the Securities Act requires or is amended, modified
or interpreted by the SEC to require (or is replaced with another rule or regulation that would require) the filing with the SEC of separate financial statements of any Guarantor due to the fact that such Guarantor’s capital stock and
securities secure the Notes Obligations, then the capital stock and securities of such Guarantor shall automatically be deemed not to be part of the Pledged Collateral and, to the extent previously delivered to the Collateral Agent, the certificates
evidencing all such capital stock and securities shall be returned to such Guarantor (but only to the extent necessary for such Guarantor to not be subject to such requirement to provide separate financial statements) and such excluded portion of
the capital stock and securities is referred to as the “Excluded Stock Collateral”. In such event, the Security Documents may be amended, modified or supplemented, without the consent of any Secured Party, to the extent necessary to
release the security interests on the Excluded Stock Collateral. In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation that
would permit) any Guarantor’s Excluded Stock Collateral to secure the Notes Obligations in excess of the amount then pledged without the filing with the SEC of separate financial statements of such Guarantor, then the capital stock and
securities of such Guarantor shall automatically be deemed to be a part of the Pledged Collateral (but only to the extent possible without such Guarantor becoming subject to any such filing requirement). In such event, the Security Documents may be
amended or modified, without the consent of any Secured Party, to the extent necessary to subject to the Liens under the Security Documents such additional capital stock and securities. 

(c) In addition, Pledged Collateral shall not include (and no security interest shall be granted in) (1) the Equity Interests in
Partners Insurance Company, a Hawaii corporation and (2) any right, title or interest in or under any capital stock or other Equity Interests in any Persons that are bona fide joint ventures with third parties to the extent, but only to the
extent, that such a grant is expressly prohibited by the organizational documents governing such Person. 
 (d) Notwithstanding
the foregoing, unless and until the Discharge of LC Facility Obligations has occurred, any Pledged Collateral (or Article 9 Collateral, as the case may be) that would otherwise become Excluded Stock Collateral pursuant to Section 3.01(b)
shall remain Pledged Collateral (or Article 9 Collateral, as the case may be) granted hereunder to secure the LC Facility Obligations. 

  
 9 

 SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities. 
 (b) Each Grantor will
(i) cause any Indebtedness that is owing to any Credit Party by another Credit Party to be evidenced by an intercompany note (the “Intercompany Note”) and (ii) in respect of any Indebtedness for borrowed money owed to such
Grantor by any Person that is evidenced by a promissory note, pledge and deliver such promissory note to the Collateral Agent pursuant to the terms hereof. 
 (c) Upon delivery to the Collateral Agent, (i) any certificated Pledged Securities shall be accompanied by stock powers duly executed in blank or other instruments of transfer satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be
attached hereto as Schedule II and made a part hereof, provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any
prior schedules so delivered. 
 SECTION 3.03. Representations, Warranties and Covenants. The Grantors jointly and
severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that: 
 (a) Schedule II correctly sets forth, as of the date hereof, the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged
Equity Interests and includes all Equity Interests, debt securities and promissory notes required to be pledged hereunder on the date hereof; 
 (b) the Pledged Equity Interests and Pledged Debt Securities have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Equity Interests, are fully paid
and nonassessable (except for such assessments and capital contributions as are required in connection with the organizational documents of any Person that is not a wholly owned Subsidiary and whose Equity Interests constitute Pledged Equity
Interests) and (ii) in the case of Pledged Debt Securities, are legal, valid and binding obligations of the issuers thereof; provided that, with respect to bona fide joint ventures with third parties, the representations made in this
paragraph (b) must only be true and correct to the extent the Grantors have knowledge thereof; 
 (c) except
for the security interests granted hereunder, each of the Grantors (i) is and will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Grantor

  
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except to the extent such Grantor ceases to own such Pledged Securities as a result of disposition or other transfer made in compliance with the Indenture and the LC Facility Agreement,
(ii) holds the same free and clear of all Liens, other than Liens created by this Agreement, Permitted Liens and transfers made in compliance with the Indenture and the LC Facility Agreement, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than Liens created by this Agreement, Permitted Liens and transfers made in compliance with the Indenture and the LC
Facility Agreement and (iv) will defend its title or interest thereto or therein against any and all Liens (other than the Liens created by this Agreement and Permitted Liens), however arising, of all Persons whomsoever; 

(d) except for restrictions and limitations imposed by the Note Documents and the LC Facility Documents or securities laws
generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter, by-law or other
organizational document provisions or contractual restriction of any nature that might reasonably be expected to prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Collateral Agent of rights and remedies hereunder; 
 (e) each of the Grantors has
the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated; 
 (f) no consent or approval of any Governmental Authority, any securities exchange or any other Person was or is necessary to the validity of the pledge effected hereby (other than such as have been
obtained and are in full force and effect); 
 (g) by virtue of the execution and delivery by the Grantors of
this Agreement, when any Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected lien upon and security interest in such Pledged Securities as security
for the payment and performance of the Obligations, prior to all other liens and security interests created and perfected by a method other than by control under Article 9 of the New York UCC; and 

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the
rights of the Collateral Agent in the Pledged Collateral as set forth herein. 
 SECTION 3.04. Certification of Limited
Liability Company and Limited Partnership Interests. Each Grantor agrees that interests in any wholly owned limited liability company or limited partnership owned by such Grantor and pledged hereunder shall be represented by a certificate, shall
be a “security” within the meaning of Article 8 

  
 11 

 
of the New York UCC and shall be governed by Article 8 of the New York UCC. Each Grantor acknowledges and agrees that (i) to the extent each interest in any non-wholly owned limited
liability company or limited partnership controlled now or in the future by such Grantor and pledged hereunder is a “security” within the meaning of Article 8 of the New York UCC and is governed by Article 8 of the New York UCC, such
interest shall be certificated and (ii) each such interest shall at all times hereafter continue to be such a security and represented by such certificate. Each Grantor further acknowledges and agrees that with respect to any interest in any
non-wholly owned limited liability company or limited partnership controlled now or in the future by such Grantor and pledged hereunder that is not a “security” within the meaning of Article 8 of the New York UCC, such Grantor shall at no
time elect to treat any such interest as a “security” within the meaning of Article 8 of the New York UCC, nor shall such interest be represented by a certificate, unless such Grantor provides prior written notification to the Collateral
Agent of such election and such interest is thereafter represented by a certificate that is promptly delivered to the Collateral Agent pursuant to the terms hereof. 
 SECTION 3.05. Registration in Nominee Name; Denominations. The Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged
Securities (i) in its own name as pledgee, (ii) the name of its nominee (as pledgee or as sub-agent) or (iii) the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent; provided that,
in the case of clause (ii), an Event of Default has occurred and is continuing. Each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the
name of such Grantor. The Collateral Agent shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement. 

SECTION 3.06. Voting Rights; Dividends and Interest. (a) Unless and until an Event of Default shall have occurred and be
continuing and the Collateral Agent shall have notified the Grantors that their rights under this Section 3.06 are being suspended: 
 (i) each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any part thereof for any purpose consistent with
the terms of this Agreement, the Note Documents and the LC Facility Documents, provided that such rights and powers shall not be exercised in any manner that could materially and adversely affect the rights inuring to a holder of any Pledged
Collateral or the rights and remedies of any of the Collateral Agent or the other Secured Parties under this Agreement or the Note Documents and the LC Facility Documents or the ability of the Secured Parties to exercise the same; 

(ii) the Collateral Agent shall execute and deliver to each Grantor, or cause to be executed and delivered to such
Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i) above; 

  
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 (iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Collateral to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise
paid or distributed in accordance with, the terms and conditions of the Note Documents and the LC Facility Documents and applicable laws, provided that any noncash dividends, interest, principal or other distributions that would constitute
Pledged Equity Interests or Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or
any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral and, if received by
any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary endorsement). 
 (b) Upon the occurrence and during the
continuance of an Event of Default, after the Collateral Agent shall have notified the Grantors of the suspension of their rights under paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor to dividends, interest, principal or
other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 3.06
shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral
Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 5.02. After all Events of Default have been cured or waived and the Issuers have delivered to the Collateral Agent a
certificate to that effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of this Section 3.06 and that remain in such account. 
 (c) Upon the occurrence and during the
continuance of an Event of Default, after the Collateral Agent shall have notified the Grantors of the suspension of their rights under paragraph (a)(i) of this Section 3.06, then all rights of any Grantor to

  
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exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the obligations of the Collateral Agent under
paragraph (a)(ii) of this Section 3.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and
powers, provided that, unless otherwise directed by requisite party pursuant to the Intercreditor Agreement, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights. 
 (d) Any notice given by the Collateral Agent to the Grantors suspending their rights under
paragraph (a) of this Section 3.06 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the
Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s right
to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing. 
 ARTICLE IV 
 Security Interests in Personal Property 

SECTION 4.01. Security Interest. (a) As security for the payment or performance, as the case may be, in full of the
Obligations, each Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “Security Interest”) in, all right, title and interest in and to any and
all the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9
Collateral”): 
 (i) all Accounts; 

(ii) all Chattel Paper; 
 (iii) all cash and Deposit Accounts; 
 (iv) all Documents;

 (v) all Equipment; 
 (vi) all General Intangibles; 
 (vii) all Instruments; 

(viii) all Inventory; 
 (ix) all Investment Property; 

  
 14 

 (x) Letter-of-Credit rights; 

(xi) Commercial Tort Claims (as described in the Perfection Certificate or a document provided pursuant to
Section 4.04(f)); 
 (xii) all books and records pertaining to the Article 9 Collateral; and

 (xiii) to the extent not otherwise included, all Proceeds and products of any and all the foregoing and all
collateral security and guarantees given by any Person with respect to any of the foregoing; 
 provided, however, that the
Article 9 Collateral shall not include the following (collectively, the “Excluded Property”): 

(A) personal property where the cost of obtaining a security interest or perfection thereof exceeds its benefits (as
reasonably determined by the Company’s Governing Body in a resolution delivered to the Collateral Agent); 

(B) assets, with respect to which any applicable law or the terms of any applicable contract prohibits the creation or
perfection of security interests therein or that otherwise results in a default, waiver or termination of rights or privileges arising under such law or contract (other than to the extent that any such law or contract term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or principles of equity); provided, however, that such security interest shall attach immediately at such time as the condition
causing such prohibition shall be remedied and, to the extent severable, shall attach immediately to any portion of any such contract that does not result in any such prohibition, including any Proceeds of any such contract; 

(C) all Trademarks and other Intellectual Property bearing the name “Shea” or a variant thereof; provided
that (x) the Collateral Agent, the Administrative Agent and the Applicable Authorized Representative (for the benefit of the Secured Parties) shall have a non-exclusive License to use such Intellectual Property in connection with the exercise
of remedies upon a Default or Event of Default and (y) the Grantors hereby grant to the Collateral Agent, the Administrative Agent and the Applicable Authorized Representative (for the benefit of the Secured Parties) such a License for such use
in any such event; 
 (D) any trademark applications filed in the United States Patent and Trademark Office on
the basis of such Grantor’s “intent-to-use” such trademark to the extent that granting a Security Interest in such trademark application prior to such filing would adversely affect the enforceability or validity or result in the
voiding of such trademark application, unless and until acceptable evidence of use of the trademark has been filed with and accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham
Act (15 U.S.C. 1051, et seq.), whereupon such trademark application will, without any further action taken on the part of such Grantor or the Collateral Agent, be deemed to constitute Collateral; 

  
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 (E) cash collateral supporting (i) deductible, retention and other
obligations to insurance carriers, (ii) reimbursement claims in respect of letters of credit and surety providers, (iii) contingent claims arising in respect of community facility district, metro-district, mello-roos, subdivision
improvement and similar obligations arising in the ordinary course of business of a homebuilder and (iv) cash management services; 
 (F) equity interests in joint ventures with respect to which the agreements governing such joint ventures prohibit the creation or perfection of security interests in such equity interests; 

(G) any leasehold interests in real property; 

(H) any real property in a community under development with a dollar amount of investment as of the most recent quarter
end (as determined in accordance with GAAP) of less than $2,000,000 or with less than 10 lots remaining unsold; 

(I) vehicles covered by a certificate of title; and 

(J) (i) any Deposit Account or Securities Account that is established solely for the purpose of funding payroll,
benefits, trust or other compensation benefits to employees and (ii) any other Deposit Account and Securities Account the aggregate balance in which does not exceed $2,000,000 for all such excluded accounts at any one time outstanding (the
accounts described in clauses (i) and (ii), collectively the “Excluded Accounts”). 
 (b) Each Grantor
hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof
and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued
to such Grantor and (B) in the case of a financing statement filed as a fixture filing or covering Article 9 Collateral constituting minerals or the like to be extracted or timber to be cut, a sufficient description of the real property to
which such Article 9 Collateral relates. Each Grantor agrees to promptly provide such information to the Collateral Agent. 

Each Grantor also ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof. 

  
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 The Collateral Agent is further authorized to file with the United States Patent and
Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting
the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party. 

(c) The Security Interest and the security interest granted pursuant to Article III are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Collateral. 

SECTION 4.02. Representations and Warranties. The Grantors jointly and severally represent and warrant to the Collateral Agent and
the Secured Parties that: 
 (a) Each Grantor has good and valid rights in and title to the Article 9 Collateral with
respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained. 
 (b)(i) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, including the exact legal name of each Grantor, is correct and complete as of the
Issue Date; (ii) the Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations prepared by the Collateral Agent based upon the information provided to the
Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in Schedule 6 to the Perfection Certificate (or specified by notice from the Issuers to the Collateral Agent after the Issue
Date in the case of filings, recordings or registrations required by Section 4.22 of the Indenture and Section 5.05 of the LC Facility Agreement), are all the filings, recordings and registrations (other than filings required to be made in
the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Article 9 Collateral consisting of United States Patents, Trademarks and Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security
Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of amended financing statements or continuation statements; (iii) each Grantor represents and warrants that a fully
executed agreement in the form hereof (or a fully executed short form agreement (A) in the case of Trademarks and Copyrights, in form and substance substantially similar to the short form agreements delivered on the Issue Date or (B) in
the case of Patents, in form and substance reasonably satisfactory to 

  
 17 

 
the Collateral Agent), and containing a description of all Article 9 Collateral consisting of Intellectual Property shall have been received and recorded within three months after the
execution of this Agreement with respect to United States Patents and United States registered Trademarks (and Trademarks for which United States registration applications are pending) and within one month after the execution of this Agreement with
respect to United States registered Copyrights has been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261,
15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and otherwise as may be required pursuant to the laws of any other necessary jurisdiction, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral consisting of Patents, Trademarks and Copyrights in which a security
interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof). 
 (c) The Security Interest constitutes (i) a legal and valid
security interest in all the Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to the filings described in Section 4.02(b), a perfected first-priority security interest in all Article 9
Collateral (subject only to Permitted Liens) in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) a first-priority security interest that shall be perfected in all Article 9 Collateral (subject only to Permitted
Liens) in which a security interest may be perfected upon the receipt and recording of this Agreement or the Short Form Agreement with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the
three-month period (commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C. § 1060 or the one month period (commencing as of the date hereof) pursuant to 17 U.S.C. § 205 and otherwise
as may be required pursuant to the laws of any other necessary jurisdiction. The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than Permitted Liens that have priority as a matter of law and
Permitted Liens expressly permitted to be prior to the Security Interest pursuant to the Indenture, the LC Facility Agreement and the other Security Documents. 
 (d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Permitted Liens. None of the Grantors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any assignment in which 

  
 18 

 
any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office,
which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Permitted Liens. 
 SECTION 4.03. Covenants. (a) Each Grantor agrees promptly to notify the Collateral Agent in writing of any change in (i) corporate name, (ii) the location of its chief executive
office, its principal place of business or its principal accounting office, (iii) its identity or type of organization or corporate structure, (iv) its Federal Taxpayer Identification Number or organizational identification number or
(v) its jurisdiction of organization. Each Grantor agrees to promptly provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the first sentence of this paragraph. Each Grantor agrees not
to effect or permit any change referred to in the preceding sentence unless all filings have been made (or provisions reasonably satisfactory to the Administrative Agent or Applicable Authorized Representative to make such filings prior to the lapse
of the perfected security interest granted herein shall have been made) under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and
perfected security interest, having the priority required by this Agreement, in all the Article 9 Collateral. Each Grantor agrees promptly to notify the Collateral Agent if (i) any material portion of the Article 9 Collateral owned or
held by such Grantor is damaged, destroyed, or subject to condemnation and (ii) such Article 9 Collateral is material to the business of the Company and the Subsidiary Guarantors as a whole. 

(b) Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to
Section 4.19(a) of the Indenture and Section 5.01 of the LC Facility Agreement, the Issuers shall deliver to the Collateral Agent a certificate executed by the chief financial officer and the chief legal officer of the Issuers
(i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant
to this Section 4.03(c) and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings recordings or registrations, including all refilings, rerecordings
and registrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (a) of this Section 4.03 to the extent
necessary to protect and perfect the Security Interest for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period). Each
certificate delivered pursuant to this Section 4.03(c) shall identify in the format of Schedule III all registered Intellectual Property and applications for registration (other than any Intellectual Property that is Excluded Property) of
any Grantor in existence on the date thereof and not then listed on such Schedules or previously so identified to the Collateral Agent. 

  
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 (c) Each Grantor shall, at its own expense, take any and all actions necessary to defend
title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not permitted pursuant to Section 4.08 of the
Indenture and Section 6.05 of the LC Facility Agreement. 
 (d) Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing
statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Article 9 Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be promptly pledged and delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the Collateral Agent. 
 Without limiting the generality of the foregoing, each Grantor hereby authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by supplementing
Schedule III or adding additional schedules hereto to identify specifically any asset or item that may constitute Copyrights, exclusive Licenses, Patents or Trademarks, provided that any Grantor shall have the right, exercisable within
10 days after it has been notified by the Collateral Agent of the specific identification of such Collateral, to advise the Collateral Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with
respect to such Collateral. Each Grantor agrees that it will use commercially reasonable efforts to take such action as shall be necessary in order that all representations and warranties hereunder shall be true and correct with respect to such
Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific identification of such Collateral. 
 (e) Upon the occurrence of an Event of Default, the Collateral Agent and such Persons as the Collateral Agent may reasonably designate shall have the right, at the Grantors’ own cost and expense, to
inspect the Article 9 Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Article 9 Collateral is located, to discuss the Grantors’ affairs with the
officers of the Grantors and their independent accountants and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in
the case of Accounts or Article 9 Collateral in the possession of any third party, by contacting Account Debtors or the third party possessing such Article 9 Collateral for the purpose of making such a verification; provided that,
in the event such Event of Default has been cured in accordance with the LC Facility Agreement or the Indenture, as applicable, (i) the Company shall notify the Collateral Agent of the date of such cure and (ii) the Collateral Agent may
only exercise the rights provided in this paragraph (e) for a period of 90 days following such cure. The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured
Party. 

  
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 (f) At its option following the occurrence and during the continuance of an Event of
Default, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 4.08 of
the Indenture and Section 6.05 of the LC Facility Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Indenture, the LC Facility Agreement or
this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization, provided that nothing in
this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein, in the Note Documents or in the LC Facility Documents. 
 (g) If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person to secure payment and performance of an Account, such Grantor shall promptly assign
such security interest to the Collateral Agent. Such assignment need not be documented or filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor
or other Person granting the security interest. 
 (h) Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance. 
 (i) None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9 Collateral, except as
permitted by the Indenture and the LC Facility Agreement. None of the Grantors shall make or permit to be made any transfer of the Article 9 Collateral and each Grantor shall remain at all times in possession of the Article 9 Collateral owned by it,
except that unless and until the Collateral Agent shall notify the Grantors that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Article 9 Collateral (which notice may be given by telephone if promptly confirmed in writing), the Grantors may use and dispose of the Article 9 Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Note Documents or the LC Facility Documents. 
 (j) Upon the occurrence and continuance of an Event of Default,
none of the Grantors will, without the Collateral Agent’s prior written consent, grant any 

  
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extension of the time of payment of any Accounts included in the Article 9 Collateral, compromise, compound or settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, compromises, settlements, releases, credits or discounts granted or made in the ordinary course of business and consistent
with its current practices and in accordance with such prudent and standard practice used in industries that are the same as or similar to those in which such Grantor is engaged. 

(k) The Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for
the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other
item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and
maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby. 

(l) Each Grantor shall maintain, in a manner consistent with the practices of similarly situated companies engaged in the same or similar
line of business, records of its Chattel Paper and its books, records and documents evidencing or pertaining thereto. 
 (m) As
promptly as practicable, and in any event within 30 days, after the Issue Date, the Company and each other Credit Party will deliver all Securities Account Control Agreements that would otherwise have been required to be delivered on the Issue Date.

 SECTION 4.04. Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of
the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral: 

(a) Instruments and Tangible Chattel Paper. If any Grantor shall at any time hold or acquire any Instruments or
Tangible Chattel Paper, such Grantor shall promptly endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time
reasonably request. 

  
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 (b) Deposit Accounts. For each Deposit Account that any Grantor at
any time opens or maintains, such Grantor shall, either (i) cause the depositary bank to agree to comply with instructions from the Collateral Agent to such depositary bank directing the disposition of funds from time to time credited to such
deposit account, without further consent of such Grantor or any other Person, pursuant to an agreement reasonably satisfactory to the Collateral Agent, or (ii) arrange for the Collateral Agent to become the customer of the depositary bank with
respect to such Deposit Account, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw funds from such deposit account. The Collateral Agent agrees with each Grantor that the Collateral Agent
shall not give any such instructions or withhold any withdrawal rights from any Grantor unless an Event of Default has occurred and is continuing or, after giving effect to any withdrawal would occur. The provisions of this paragraph shall not apply
to (A) any Deposit Account for which any Grantor, the depositary bank and the Collateral Agent have entered into a cash collateral agreement specially negotiated among such Grantor, the depositary bank and the Collateral Agent for the specific
purpose set forth therein, (B) Deposit Accounts for which the Collateral Agent is the depositary, (C) segregated Deposit Accounts holding exclusively cash collateral constituting Excluded Property and (D) Excluded Accounts.

 (c) Investment Property. Except to the extent otherwise provided in Article III, if any Grantor
shall at any time hold or acquire any certificated securities, such Grantor shall promptly endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify. If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the
Collateral Agent thereof and, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities,
without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other investment property now or
hereafter acquired by any Grantor are held by such Grantor or its nominee through a securities intermediary or commodity intermediary in a Securities Account that is not an Excluded Account, such Grantor shall immediately notify the Collateral Agent
thereof and, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause such securities intermediary or commodity intermediary, as the case may be, to agree to comply with entitlement orders
or other instructions from the Collateral Agent to such securities intermediary as to such security entitlements or to apply any value distributed on account of any commodity contract as directed by the Collateral Agent to such commodity
intermediary, as the case may be, in each case without further consent of any Grantor, such nominee, or any other Person, or (ii) in the case of Financial Assets or other Investment Property held through a securities intermediary, arrange for
the 

  
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Collateral Agent to become the entitlement holder with respect to such Investment Property, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to
withdraw or otherwise deal with such Investment Property. The Collateral Agent agrees with each of the Grantors that the Collateral Agent shall not give any such entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing, or, after giving effect to any such investment
and withdrawal rights, would occur. The provisions of this paragraph shall not apply to any Financial Assets credited to a securities account for which the Collateral Agent is the securities intermediary. 

(d) Electronic Chattel Paper and Transferable Records. If any Grantor at any time holds or acquires an
interest in any Electronic Chattel Paper or any “transferable record,” as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof and shall take such action necessary to vest in the Collateral Agent control under New York UCC Section 9-105 of
such Electronic Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Collateral Agent agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to the Collateral Agent and so long as such procedures will not result in
the Collateral Agent’s loss of control, for the Grantor to make alterations to the Electronic Chattel Paper or transferable record permitted under UCC Section 9-105 or, as the case may be, Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after
taking into account any action by such Grantor with respect to such Electronic Chattel Paper or transferable record. 
 (e) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor, such Grantor shall promptly notify the Collateral
Agent thereof and such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to
the Collateral Agent of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing. 

  
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 (f) Commercial Tort Claims. If any Grantor shall at any time
undertake a Commercial Tort Action, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor, including a summary description of such claim, and grant to the Collateral Agent in such writing a first-priority
security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance as necessary to perfect the security interest in such Commercial Tort Action. 

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Grantor agrees that it will not do any
act or omit do to any act (and will exercise commercially reasonable efforts to prevent its licensees from doing any act omitting to do any act) whereby any Patent material to the conduct of the businesses of a Grantor may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products covered by a Patent that is material to the conduct of such Grantor’s business with the relevant patent number as necessary and sufficient to establish and preserve
its maximum rights under applicable patent laws. 
 (b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor’s business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products
and services offered under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient to establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any third party rights. 
 (c) Each Grantor (either
itself or through its licensees or sublicensees) will, for each work covered by a Copyright material to the conduct of such Grantor’s business, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright
notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws. 
 (d) Each
Grantor shall notify the Collateral Agent promptly if it knows or has reason to know that any Patent, Trademark or Copyright that is material to the conduct of a Grantor’s business may become abandoned, lost or dedicated to the public, or of
any materially adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar
office of any country) regarding such Grantor’s ownership of any Patent, Trademark or Copyright material to the conduct of its business, its right to register the same, or its right to keep and maintain the same. 

(e) Contemporaneously with the delivery of quarterly financial statements to the Trustee pursuant to Section 4.19(a) of the
Indenture and to the Administrative Agent pursuant to Section 5.01 of the LC Facility Agreement, each Grantor shall (i) notify the Collateral Agent of any application for any Patent, Trademark or Copyright (or for the registration of any
Trademark or Copyright) with the United States Patent and 

  
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Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof since the
last such notification (or, in the case of the first quarter following the Issue Date, since the Issue Date), (ii) execute and deliver any and all agreements, instruments, documents and papers necessary to evidence the Collateral Agent’s
first-priority security interest in such Patent, Trademark or Copyright and (iii) each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable. 
 (f) Each Grantor will take
all necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of any Grantor’s business, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees,
and, if consistent with good business judgment, to initiate opposition, interference and cancelation proceedings against third parties. 
 (g) In the event that any Grantor has reason to believe that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor’s business has been or
is about to be infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the Collateral Agent and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Article 9 Collateral. 

(h) Upon and during the continuance of an Event of Default, each Grantor shall use commercially reasonable efforts to obtain all
requisite consents or approvals by the licensor of each Copyright License, Patent License or Trademark License under which such Grantor is a licensee to effect the assignment of all such Grantor’s right, title and interest thereunder to the
Collateral Agent or its designee. 
 ARTICLE V 
 Remedies 
 SECTION 5.01. Remedies Upon Default. Upon the occurrence
and during the continuance of an Event of Default, each Grantor agrees to deliver each item of tangible Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall, upon the occurrence and during the continuance of
an Event of Default, have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on

  
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demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable Grantors to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall
determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (b) with or without legal process and with or without prior notice or demand for performance, to take possession
of the Article 9 Collateral and without liability for trespass to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all
rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements
of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall
deem appropriate. The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights
of redemption, stay and appraisal that such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. 
 The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC
or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s
board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of
the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for

  
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future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law,
private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby
waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral
or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free (if such agreement cannot be reasonably rescinded) to consummate such sale pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative
to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a
court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 5.01 shall be deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions. 
 SECTION 5.02. Application of
Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of Collateral in accordance with the terms specified in Section 2.01(b) of the Intercreditor Agreement. In the event no Intercreditor Agreement is in effect
at any time, the Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash, as follows: 
 FIRST, to the payment of all agent’s fees and collateral management fees of the Collateral Agent and all fees, costs and expenses incurred by the Collateral Agent in connection with such collection
or sale or otherwise in connection with this Agreement, any other Note Document, any other LC Facility Document or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel, all amounts payable in
respect of Indemnified Liabilities (as defined in the Real Estate Collateral Management Agreement) to the extent such Indemnified Liabilities are matured, payable and owing to the Collateral Agent and its related Indemnified Parties (as defined in
the Real Estate Collateral Management Agreement), the repayment of all advances made by the Collateral Agent hereunder, under any other Note Document or under any other LC Facility Document on behalf of any Grantor and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder, under any other Note Document or under any other LC Facility Document; 

  
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 SECOND, to the payment in full of the LC Facility Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the LC Facility Obligations owed to them on the date of any such distribution); 

THIRD, to the payment in full of the Notes Obligations (the amounts so applied to be distributed among the Secured Parties
pro rata in accordance with the amounts of the Notes Obligations owed to them on the date of any such distribution); and 
 FOURTH, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. 
 The Collateral Agent is hereby authorized to establish and maintain as a blocked account under the sole dominion and control of the Collateral Agent, a restricted deposit account designated as
“Shea Homes Collateral Account” into which the Collateral Agent may deposit proceeds of Collateral. All amounts at any time held in the Collateral Account shall be beneficially owned by Grantors but shall be held in the name of the
Collateral Agent hereunder, as collateral security for the Obligations upon the terms and conditions set forth herein. Grantors shall have no right to withdraw, transfer or, except as expressly set forth herein or in the Intercreditor Agreement,
otherwise receive any funds deposited into the Collateral Account. Cash held by the Collateral Agent in the Collateral Account shall not be invested by the Collateral Agent but instead shall be maintained as a cash deposit in the Collateral Account
pending application thereof as elsewhere provided in this Agreement or in the Intercreditor Agreement. Subject to the Collateral Agent’s rights hereunder, any interest, if any, earned on deposits of cash in the Collateral Account shall be
deposited directly in, and held in, the Collateral Account. 
 The Collateral Agent is hereby authorized to establish and maintain accounts at
such banking institutions necessary or appropriate to receive and distribute proceeds in accordance with this Section 5.02, the Security Documents, the LC Facility Documents and the Notes Documents. 

SECTION 5.03. Grant of License to Use Intellectual Property. For the purpose of enabling the Collateral Agent to exercise rights
and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or sublicense any of the Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located,
and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the
Collateral Agent may be exercised, at the option of the Collateral Agent, upon the occurrence and during the continuation of an Event of Default, provided that any license, sublicense or other transaction entered into by the Collateral Agent
in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default. 

  
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 SECTION 5.04. Securities Act. In view of the position of the Grantors in relation to
the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and
any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the
Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner
in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral
under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees
that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or
part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential purchaser to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and
other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale
were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 5.04 will apply notwithstanding the existence of a public or private market upon which the quotations or
sales prices may exceed substantially the price at which the Collateral Agent sells. 
 ARTICLE VI 

Indemnity, Subrogation and Subordination 
 SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 6.03), the Issuers
agree that (a) in the event a payment in respect of any obligation shall be made by any Guarantor under the Indenture or the LC Facility Agreement, the Issuers shall indemnify such Guarantor for the full amount of such payment and such
Guarantor shall be subrogated to the rights of the Person to whom such 

  
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payment shall have been made to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold pursuant to this Agreement or any other Security Document to satisfy
in whole or in part any Obligation owed to any Secured Party, the Issuers shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold. 

SECTION 6.02. Contribution and Subrogation. Each Guarantor (a “Contributing Party”) agrees (subject to
Section 6.03) that, in the event a payment shall be made by any other Guarantor hereunder in respect of any Obligation or assets of any other Guarantor shall be sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor (the “Claiming Party”) shall not have been fully indemnified by the Issuers as provided in Section 6.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof and
the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 7.14, the date of the supplement hereto executed and delivered by such
Guarantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section 6.02 shall (subject to Section 6.03) be subrogated to the rights of such Claiming Party under Section 6.01 to the extent of such
payment. 
 SECTION 6.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all
rights of the Guarantors under Sections 6.01 and 6.02 and all other rights of the Guarantors of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the payment in full in cash of the
Obligations. No failure on the part of the Issuers or any Guarantor to make the payments required by Sections 6.01 and 6.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder. 

(b) Each Guarantor hereby agrees that all Indebtedness and other monetary obligations owed by it to, or to it by, any other Guarantor,
either of the Issuers or any other Subsidiary shall be fully subordinated to the payment in full in cash of the Obligations. 

ARTICLE VII 

Miscellaneous 
 SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 13.03 of the Indenture and
Section 9.01 of the LC Facility Agreement, as applicable. All communications and notices hereunder to any Guarantor shall be given to it in care of the Issuers as provided in Section 9.01 of the LC Facility Agreement or, if the LC Facility
is no longer in effect, as provided in Section 13.03 of the Indenture. 

  
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 SECTION 7.02. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent or Holder in exercising any right or power hereunder or under any other Note Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent, the Holders and the Participants hereunder, under the other Note Documents
and under the other LC Facility Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Grantor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this Section 7.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any
Grantor in any case shall entitle any Grantor to any other or further notice or demand in similar or other circumstances. 
 (b)
Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment
or modification is to apply, subject to any consent required in accordance with Sections 9.01 and 9.02 of the Indenture and Section 9.08 of the LC Facility Agreement. 

SECTION 7.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral
Agent shall be entitled to reimbursement of its fees, expenses and other amounts owed to it under this Agreement, Sections 7 and 8 of the Real Property Collateral Management Agreement and Section 2.01(b) of the Intercreditor Agreement.

 (b) Without limitation of its indemnification obligations under the other Note Documents and the other LC Facility Documents,
each Grantor jointly and severally agrees to indemnify the Secured Parties against, and hold each Secured Party harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of
any counsel for any Secured Party, incurred by or asserted against any Secured Party by any third party or by any Grantor arising out of, in connection with, or as a result of, the execution, delivery or performance of this Agreement or any claim,
litigation, investigation or proceeding relating to any of the foregoing agreement or instrument contemplated hereby, or to the Collateral, whether or not any Secured Party is a party thereto, provided that such indemnity shall not, as to any
Secured Party, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of
such Secured Party. 
 (c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by
the other Security Documents. The provisions of this 

  
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Section 7.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Note Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Note Document or any investigation made by or on behalf of the Collateral Agent or any other Secured Party.
All amounts due under this Section 7.03 shall be payable on written demand therefor. 
 SECTION 7.04. Successors and
Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor
or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. 
 SECTION 7.05. Survival of Agreement. All covenants, agreements, representations and warranties made by the Grantors in the Note Documents, the LC Facility Documents and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this Agreement, any other Note Document of any other LC Facility Document shall be considered to have been relied upon by the Holders’ and Participants and shall survive the
execution and delivery of the Note Documents, the LC Facility Documents and the issuance of the Notes and Letters of Credit, regardless of any investigation made by any Holder of Participant or on their behalf and notwithstanding that the Collateral
Agent or any Holder may have had notice or knowledge of any Default or incorrect representation or warranty at the time any Notes are issued under the Indenture or any Letters of Credit are issued under the LC Facility Agreement, and shall continue
in full force and effect as long as any Obligation is outstanding and unpaid. This Agreement shall survive and continue in full force and effect in any Insolvency or Liquidation Proceeding. 

SECTION 7.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of which shall
constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually signed counterpart of
this Agreement. This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except
as expressly contemplated by this Agreement, the Indenture or the LC Facility Agreement. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder. 

  
 33 

 SECTION 7.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 
 SECTION 7.08. Reserved. 
 SECTION 7.09. Governing Law; Jurisdiction; Consent to
Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. 
 (b) Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County
and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, any other Note Document, any other LC Facility Document
or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the Grantors hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement, any other Note Document or any other LC Facility Document shall affect any right that the Collateral Agent or any Holder or Participant may otherwise have to bring any action or proceeding relating
to this Agreement, any other Note Document or any other LC Facility Document against any Grantor or their respective properties in the courts of any jurisdiction. 
 (c) Each of the Grantors hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement, any other Note Document or any other LC Facility Document in any court referred to in paragraph (b) of this Section 7.09. Each of the Grantors hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 
 (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement, any other Note Document or any other LC
Facility Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 

  
 34 

 SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER NOTE DOCUMENT, ANY OTHER LC FACILITY DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10. 
 SECTION 7.11. Headings. Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
 SECTION 7.12. Security Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each
Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture, any other Note Document, the LC Facility Agreement, any other LC Facility Document, any agreement with respect to
any of the Obligations, or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Indenture, any other Note Document, the LC Facility Agreement, any other LC Facility Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations or (d) any other circumstance that might otherwise constitute a defense available to,
or a discharge of, any Grantor in respect of the Obligations or this Agreement. 
 SECTION 7.13. Termination or Release.
(a) This Agreement, the Security Interest and all other security interests granted hereby shall terminate when (i) all the Obligations have been paid in full or (ii) upon discharge of the Indenture or defeasance of the Notes as set
forth in Article VIII of the Indenture and the LC Facility Obligations have been paid in full in cash or immediately available funds and the Participants have no further commitment to extend credit under the LC Facility Agreement and the LC
Exposure has been reduced to zero (or cash-collateralized or 

  
 35 

 
supported by back-to-back letters of credit in form and substance and from an issuing bank reasonably satisfactory to the Issuing Bank and the Administrative Agent) and each Issuing Bank has no
further obligations to issue Letters of Credit under the LC Facility Agreement. 
 (b) A Guarantor shall automatically be
released from its obligations hereunder and the Security Interest in the Collateral of such Guarantor shall be automatically released when such Guarantor’s Guarantee is released in accordance with the terms of the Indenture and the LC Facility
Agreement, which terms shall include, if applicable, the obtaining of the consent of the requisite Secured Parties as provided for in the Indenture and the LC Facility agreement. 

(c) In connection with any disposition of Collateral to any Person other than the Company, the Corporate Issuer or any of the Restricted
Subsidiaries (but excluding any transaction subject to Section 4.10 of the Indenture and Section 6.04 of the LC Facility Agreement where the recipient is required to become the obligor on the Notes or a Guarantee) that is permitted by the
Indenture and the LC Facility Agreement, the security interest in such Collateral shall be automatically released. 
 (d) With
the consent of the requisite Secured Parties in accordance with Section 9.02 of the Indenture and Section 9.08 of the LC Facility Agreement including consents obtained in connection with a tender offer or exchange offer for, or purchase
of, Notes, the Security Interest in any Collateral, the release of which is the subject of such consents, shall be automatically released. 
 (e) In connection with any termination or release pursuant to paragraph (a), (b), (c) or (d) of this Section 7.13, the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 7.13 shall be without recourse to or warranty by the
Collateral Agent. 
 SECTION 7.14. Additional Guarantor. Pursuant to Section 4.22 of the Indenture and
Section 5.05 of the LC Facility Agreement, each Person that becomes a Guarantor under the Indenture or LC Facility Agreement after the Issue Date is required to enter into this Agreement as a Grantor upon becoming such a Guarantor. Upon
execution and delivery by the Collateral Agent and such a Guarantor of an instrument in the form of Exhibit I hereto, such Guarantor shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as
a party to this Agreement. 
 SECTION 7.15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the
Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and 

  
 36 

 
executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest; provided
that, unless otherwise provided for herein, such power of attorney may only be exercised upon the occurrence of an Event of Default. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign
the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the
Collateral for all purposes, provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by
the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and
the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if
such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property. 

SECTION 7.16. Intercreditor Agreement Govern. Reference is made to the Intercreditor Agreement. Notwithstanding any other
provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the terms of the Intercreditor Agreement. In the event of any conflict or
inconsistency between the provisions of this Agreement and the terms of the Intercreditor Agreement, the terms of the Intercreditor Agreement shall control. 
 [Signature Pages Follow] 

  
 37 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written. 
  

			
	 SHEA HOMES LIMITED PARTNERSHIP,
 a California limited partnership

		
	By:	 	/s/ James G. Shontere
		 	Name:  James G. Shontere
		 	Title:    Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name:  Robert R. O’Dell
		 	Title:    Treasurer
	
	 SHEA HOMES FUNDING CORP.,
 a Delaware corporation

		
	By:	 	/s/ James G. Shontere
		 	Name:  James G. Shontere
		 	Title:    Chief Financial Officer and Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name:  Robert R. O’Dell
		 	Title:    Vice President

  
 [Signature
Page to the Security Agreement] 

			
	GUARANTORS:
	
	HIGHLANDS RANCH DEVELOPMENT CORPORATION, a Colorado corporation
		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name:  Robert R. O’Dell
		 	Title: Treasurer
	
	 MONTY GREEN HOLDINGS, LLC,
 a Delaware limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer
	
	 MOUNTAINBROOK VILLAGE COMPANY,
 an Arizona corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

			
	 SAND CREEK CATTLE COMPANY,
 a Colorado corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  

					
	 SERENADE AT NATOMAS, LLC,
 a California limited liability company

		
	By:	 	 Shea Homes, Inc.,

a Delaware corporation,
 Its sole
Member

			
		 	By:	 	/s/ James G. Shontere
		 		 	Name: James G. Shontere
		 		 	Title: Secretary
			
		 	By:	 	/s/ Robert R. O’Dell
		 		 	Name: Robert R. O’Dell
		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

											
	 SEVILLE GOLF AND COUNTRY CLUB, LLC,
 an Arizona limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

											
	 SHEA BREA DEVELOPMENT, LLC,
 a Delaware limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

											
	 SHEA CAPITAL II, LLC,
 a Delaware limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Manager

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	 J.F. Shea Construction Management Inc.,
 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  

			
	 SHEA COMMUNITIES MARKETING COMPANY,
 a Delaware corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

			
	 SHEA FINANCIAL SERVICES, INC.,
 a California corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  

			
	 SHEA HOMES, INC.,

a Delaware corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  

			
	 SHEA HOMES AT MONTAGE, LLC,
 a California limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

			
	 SHEA HOMES SOUTHWEST, INC.,
 an Arizona corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  

			
	 SHEA HOMES VANTIS, LLC,
 a California limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  

			
	 SHEA INSURANCE SERVICES, INC.,
 a California corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

					
	 SHEA LA QUINTA LLC,

a California limited liability company

		
	By:	 	 Shea Homes, Inc.,

a Delaware corporation,
 Its sole
Member
  

		 	By:	 	/s/ James G. Shontere
		 		 	 Name: James G. Shontere

Title: Secretary
  

		 	By:	 	/s/ Robert R. O’Dell
		 		 	 Name: Robert R. O’Dell

Title: Treasurer

  

											
	 SHEA NINTH AND COLORADO, LLC,
 a Colorado limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

											
	 SHEA OTAY VILLAGE 11, LLC,
 a California limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

											
	 SHEA PROCTOR VALLEY, LLC,
 a California limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

			
	 SHEA PROPERTIES OF COLORADO, INC.,
 a Colorado corporation

		
	By:	 	/s/ James G. Shontere
		 	 Name: James G. Shontere

Title: Secretary

		
	By:	 	/s/ Robert R. O’Dell
		 	 Name: Robert R. O’Dell

Title: Treasurer

  

											
	 SHEA RIVERMARK VILLAGE, LLC,
 a California limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

											
	 SHEA TONNER HILLS, LLC,
 a California limited liability company

		
	By:	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:	 	J.F. Shea Construction Management Inc.,
		 		 		 		 	 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  

			
	 SHEA VICTORIA GARDENS, LLC,
 a Florida limited liability company

		
	By:	 	/s/ James G. Shontere
		 	 Name: James G. Shontere

Title: Secretary
  

	By:	 	/s/ Robert R. O’Dell
		 	 Name: Robert R. O’Dell

Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

					
	 SH JUBILEE, LLC,
 a
Delaware limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer
	
	 SH JUBILEE MANAGEMENT, LLC,
 a Delaware limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

					
	 SHI JV HOLDINGS, LLC,
 a Delaware limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer
	
	 SHLP JV HOLDINGS, LLC,
 a Delaware limited liability company

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

													
	 TOWER 104 GATHERING, LLC,
 a Colorado limited liability company

		
	By:    	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:    	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:    	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:    	 	 J.F. Shea Construction Management, Inc.,
 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

													
	 TOWER 104 OIL, LLC,

a Colorado limited liability company

		
	By:    	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Sole Member and Manager

			
		 	By:    	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

				
		 		 	By:    	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:    	 	 J.F. Shea Construction Management, Inc.,
 a California corporation,
 Its sole General Partner

						
		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 	Title: Secretary
						
		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

															
	 TRILOGY ANTIOCH, LLC,
 a California limited liability company

		
	By:    	 	 SHEA CAPITAL II, LLC,
 a Delaware limited liability company,
 Its sole Member

			
		 	By:    	 	 Shea Homes Limited Partnership,
 a California limited partnership,
 Its Manager

				
		 		 	By:    	 	 J.F. Shea, L.P.,
 a
Delaware limited partnership,
 Its sole General Partner

					
		 		 		 	By:    	 	 JFS Management, L.P.,
 a Delaware limited partnership,
 Its sole General Partner

						
		 		 		 		 	By:    	 	 J.F. Shea Construction Management, Inc.,
 a California corporation,
 Its sole General Partner

							
		 		 		 		 		 	By:	 	/s/ James G. Shontere
		 		 		 		 		 		 	Name: James G. Shontere
		 		 		 		 		 		 	Title: Secretary
							
		 		 		 		 		 	By:	 	/s/ Robert R. O’Dell
		 		 		 		 		 		 	Name: Robert R. O’Dell
		 		 		 		 		 		 	Title: Treasurer

  

					
	 UDC ADVISORY SERVICES, INC.,
 an Illinois corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

					
	 UDC HOMES CONSTRUCTION, INC.,
 an Arizona corporation

		
	By:	 	/s/ James G. Shontere
		 	Name: James G. Shontere
		 	Title: Secretary
		
	By:	 	/s/ Robert R. O’Dell
		 	Name: Robert R. O’Dell
		 	Title: Treasurer
	
	 VISTANCIA CONSTRUCTION, LLC,
 a Delaware limited liability company

		
	By:	 	 Shea Homes Southwest, Inc.,
 an Arizona corporation,
 Its Manager

			
		 	By:	 	/s/ James G. Shontere
		 		 	Name: James G. Shontere
		 		 	Title: Secretary
			
		 	By:	 	/s/ Robert R. O’Dell
		 		 	Name: Robert R. O’Dell
		 		 	Title: Treasurer

  

							
	 VISTANCIA MARKETING, LLC,
 a Delaware limited liability company

		
	By:	 	 Shea Homes Southwest, Inc.,
 an Arizona corporation,
 Its Manager

			
		 	By:	 	/s/ James G. Shontere
		 		 	Name: James G. Shontere
		 		 	Title: Secretary
			
		 	By:	 	/s/ Robert R. O’Dell
		 		 	Name: Robert R. O’Dell
		 		 	Title: Treasurer

  
 [Signature
Page to the Security Agreement] 

 
					
	 WELLS FARGO BANK, NATIONAL
 ASSOCIATION,
 as Collateral Agent,

		
	    by  	 	/s/ Julius R. Zamora
		 	Name:	 	Julius R. Zamora
		 	Title:	 	Vice President

  
 [Signature
Page to Security Agreement] 

 
					
	 CREDIT SUISSE AG, CAYMAN
 ISLANDS BRANCH, as
 Administrative Agent,

		
	    by  	 	/s/ BILL O’DALY
		 	Name:	 	BILL O’DALY
		 	Title:	 	DIRECTOR
		
	    by  	 	/s/ Sanja Gazahi
		 	Name:	 	Sanja Gazahi
		 	Title:	 	Associate

  
 [Signature
Page to the Security Agreement] 

 Schedule I 
 GUARANTORS 

 Schedule II 
 EQUITY INTERESTS 
  

									
	 Issuer
	 	 Number of

Certificate
	 	 Registered

Owner
	 	 Number and

Class of

Equity Interest
	 	 Percentage

of Equity Interests

 DEBT SECURITIES 
  

							
	 Issuer
	 	 Principal

Amount
	 	 Date of Note
	 	 Maturity Date

 Schedule III 
 U.S. COPYRIGHTS OWNED BY [NAME OF GRANTOR] 
 [Make a separate page of Schedule III for each
Grantor and state if no copyrights are owned. List in numerical order by Registration No.] 
 U.S. Copyright Registrations

  

					
	 Title
	 	 Reg. No.
	 	 Author

Pending U.S. Copyright Applications for Registration 

 

							
	 Title
	 	 Author
	 	 Class
	 	 Date Filed

Non-U.S. Copyright Registrations 
 [List in alphabetical order by country/numerical order by Registration No. within each country] 
  

							
	 Country
	 	 Title
	 	 Reg. No.
	 	 Author

Non-U.S. Pending Copyright Applications for Registration 
 [List in alphabetical order by country.] 
  

									
	 Country
	 	 Title
	 	 Author
	 	 Class
	 	 Date Filed

 EXCLUSIVE LICENSES 
 [Make a separate page of Schedule III for each Grantor, and state if any Grantor is not a party to a license/sublicense.] 
 I. Exclusive Licenses/Sublicensees of [Name of Grantor] as Licensor on Date Hereof 

A. Copyrights 
 [List U.S. copyrights
in numerical order by Registration No. List non-U.S. copyrights by country in alphabetical order with Registration Nos. within each country in numerical order.] 
 U.S. Copyrights 
  

									
	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Title of

U.S.

Copyright
	 	 Author
	 	 Reg. No.

Non-U.S. Copyrights 
  

											
	 Country
	 	 Licensee Name

and Address
	 	 Date of

License/

Sublicensee
	 	 Title of

Non-U.S.

Copyrights
	 	 Author
	 	 Reg. No.

B. Patents 
 [List U.S. patent nos.
and U.S. patent application nos. in numerical order. List non-U.S. patent nos. and non-U.S. application in alphabetical order by country, with numbers within each country in numerical order.] 

U.S. Patents 
  

							
	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Issue Date
	 	 Patent No.

  
 2 

 U.S. Patent Applications 

 

							
	 Licensee Name

and address
	 	 Date of License/

Sublicense
	 	 Date Filed
	 	 Application No.

Non-U.S. Patents 
  

									
	 Country
	 	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Issue

Date
	 	 Non-U.S.

Patent No.

 Non-U.S. Patent Applications 
  

									
	 Country
	 	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Date

Filed
	 	 Application

No.

C. Trademarks 
 [List U.S. trademark
nos. and U.S. trademark application nos. in numerical order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark nos. within each country in numerical order.] 

U.S. Trademarks 
  

									
	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 U.S. Mark
	 	 Reg. Date
	 	 Reg. No.

  
 3 

 U.S. Trademark Applications 

 

									
	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 U.S. Mark
	 	 Date Filed
	 	 Application

No.

 Non-U.S. Trademarks 
  

											
	 Country
	 	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Non-U.S.

Mark
	 	 Reg. Date
	 	 Reg. No.

Non-U.S. Trademark Applications 
  

											
	 Country
	 	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Non-U.S.

Mark
	 	 Date

Filed
	 	 Application

No.

D. Others 
  

					
	 Licensee Name

and Address
	 	 Date of License/

Sublicense
	 	 Subject

Matter

  
 4 

 II. Licensees/Sublicenses of [Name of Grantor] as Exclusive Licensee on Date Hereof 

A. Copyrights 
 [List U.S. copyrights
in numerical order by Registration No. List non-U.S. copyrights by country in alphabetical order, with Registration Nos. within each country in numerical order.] 
 U.S. Copyrights 
  

									
	 Licensor Name and

Address
	 	 Date of License/

Sublicense
	 	 Title of

U.S. Copyright
	 	 Author
	 	 Reg. No.

Non-U.S. Copyrights 
  

											
	 Country
	 	 Licensor Name

and Address
	 	 Date of

License/

Sublicensee
	 	 Title of

Non-U.S.

Copyrights
	 	 Author
	 	 Reg. No.

B. Patents 
 [List U.S. patent nos.
and U.S. patent application nos. in numerical order. List non-U.S. patent nos. and non-U.S. application nos. in alphabetical order by country with patent nos. within each country in numerical order.] 

U.S. Patents 
  

							
	 Licensor Name

and Address
	 	 Date of

License/

Sublicense
	 	 Issue Date
	 	 Patent No.

  
 5 

 U.S. Patent Applications 

 

							
	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 Date Filed
	 	 Application No.

Non-U.S. Patents 
  

									
	 Country
	 	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 Issue

Date
	 	 Non-U.S.

Patent No.

 Non-U.S. Patent Applications 
  

									
	 Country
	 	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 Date

Filed
	 	 Application

No.

C. Trademarks 
 [List U.S. trademark
nos. and U.S. trademark application nos. in numerical order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark nos. within each country in numerical order.] 

U.S. Trademarks 
  

									
	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 U.S. Mark
	 	 Reg. Date
	 	 Reg. No.

  
 6 

 U.S. Trademark Applications 

 

									
	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 U.S. Mark
	 	 Date

Filed
	 	 Application

No.

 Non-U.S. Trademarks 
  

											
	 Country
	 	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 Non-U.S.

Mark
	 	 Reg. Date
	 	 Reg. No.

Non-U.S. Trademark Applications 
  

											
	 Country
	 	 Licensor Name

and Address
	 	 Date of License/

Sublicense
	 	 Non-U.S.

Mark
	 	 Date

Filed
	 	 Application

No.

D. Others 
  

					
	 Licensor Name and Address
	 	 Date of License/

Sublicense
	 	 Subject Matter

  
 7 

 PATENTS OWNED BY [NAME OF GRANTOR] 
 [Make a separate page of Schedule III for each Grantor and state if no patents are owned. List in numerical order by Patent No./Patent Application No.] 

U.S. Patent Registrations 
  

			
	 Patent Numbers
	 	 Issue Date

U.S. Patent Applications 
  

			
	 Patent Application No.
	 	 Filing Date

Non-U.S. Patent Registrations 
 [List in alphabetical order by country/numerical order by Patent No. within each country] 
  

					
	 Country
	 	 Issue Date
	 	 Patent No.

Non-U.S. Patent Registrations 
 [List in alphabetical order by country/numerical order by Application No. within each country] 
  

					
	 Country
	 	 Filing Date
	 	 Patent Application No.

  
 8 

 TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR] 

[Make a separate page of Schedule III for each Grantor and state if no trademarks/trade names are owned. List in numerical order by trademark
registration/application no.] 
 U.S. Trademark Registrations 

 

					
	 Mark
	 	 Reg. Date
	 	 Reg. No.

U.S. Trademark Applications 
  

					
	 Mark
	 	 Filing Date
	 	 Application No.

State Trademark Registrations 
 [List in alphabetical order by state/numerical order by trademark no. within each state] 
  

							
	 State
	 	 Mark
	 	 Filing Date
	 	 Application No.

Non-U.S. Trademark Registrations 
 [List in alphabetical order by country/numerical order by trademark no. within each country] 
  

							
	 Country
	 	 Mark
	 	 Reg. Date
	 	 Reg. No.

  
 9 

 Non-U.S. Trademark Applications 

[List in alphabetical order by country/numerical order by application no.] 

 

							
	 Country
	 	 Mark
	 	 Application Date
	 	 Application No.

Trade Names 
  

			
	 Country(s) Where Used
	 	 Trade Names

  
 10 

 SCHEDULE IV 
 COMMERCIAL TORT CLAIMS 

 Exhibit I 

SUPPLEMENT NO.      dated as of [    ] (this “Supplement”), to
the Security Agreement dated as of May 10, 2011 (the “Security Agreement”), among Shea Homes Limited Partnership, a California limited partnership (the “Company”), Shea Homes Funding Corp., a Delaware
corporation (the “Corporate Issuer”, and together with the Company, the “Issuers”), each Guarantor listed on Schedule I thereto (each such Guarantor individually a “Guarantor” and, collectively, the
“Guarantors”; the Guarantors, the Company and the Corporate Issuer are referred to collectively herein as the “Grantors”), Credit Suisse AG as administrative agent under the LC Facility Agreement and Wells Fargo
Bank, National Association, as Collateral Agent (in such capacity, the “Collateral Agent”). 
 A. Reference is
made to (i) the Indenture dated as of May 10, 2011 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), among the Issuers, the Guarantors party thereto and Wells Fargo Bank, National
Association, as Trustee, (ii) the Letter of Credit Facility Agreement dated as of May 10, 2011 (as amended, supplemented or otherwise modified from time to time, the “LC Facility Agreement”) among the Company, the
Corporate Issuer, the guarantors party thereto, Credit Suisse AG, as administrative agent (in such capacity, the “Administrative Agent”) and issuing bank and the participants from time to time party thereto and (iii) the
Intercreditor Agreement dated as of May 10, 2011 (as amended, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Administrative Agent, the Collateral Agent, the Company, the
Corporate Issuer, the Trustee and the other parties party thereto. 
 B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Intercreditor Agreement, the Indenture, the LC Facility Agreement and the Security Agreement, as applicable. 
 C. The Grantors have entered into the Security Agreement in order to induce the Holders to purchase Notes from the Issuers and the Issuing Banks and Participants to extend credit to the Issuers, the
Restricted Subsidiaries and their respective joint ventures. Section 4.22 of the Indenture and Section 5.05 of the LC Facility Agreement provide that additional Subsidiaries of the Company may become Guarantors under the Indenture and the
LC Facility Agreement and may become party to the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the “New Guarantor”) is executing this Supplement in
accordance with the requirements of the Indenture and LC Facility Agreement to become a party to the Security Agreement as consideration for Notes previously purchased by the Issuers or extensions of credit to be granted pursuant the LC Facility
Agreement. 

 Accordingly, the Collateral Agent and the New Guarantor agree as follows: 

SECTION 1. In accordance with Section 7.14 of the Security Agreement, the New Guarantor by its signature below becomes a Grantor
under the Security Agreement with the same force and effect as if originally named therein as a Grantor and Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a
Grantor and Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor and Guarantor thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, the
New Guarantor, as security for the payment and performance in full of the Obligations, does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security
interest in and lien on all the New Guarantor’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Guarantor. Each reference to a “Guarantor” or “Grantor” in the Security
Agreement shall be deemed to include the New Guarantor. The Security Agreement is hereby incorporated herein by reference. 

SECTION 2. The New Guarantor represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. 
 SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Guarantor and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Supplement. 

SECTION 4. The New Guarantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a schedule with
the true and correct legal name of the New Guarantor, its jurisdiction of formation and the location of its chief executive office, (b) set forth on Schedule II attached hereto is a true and correct schedule of all the Pledged Securities
of the New Guarantor and (c) set forth on Schedule III attached hereto is a true and correct schedule of Intellectual Property consisting of Copyrights, Patents and Trademarks of the New Guarantor. 

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect. 

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, 

  
 2 

 
legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 
 SECTION 8. All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Security Agreement. 

SECTION 9. The New Guarantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. 
 IN WITNESS
WHEREOF, the New Guarantor and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written. 

 

					
	[NAME OF NEW GUARANTOR],
			
		 	by	 	
			
		 		 	  

		 		 	  Name:
		 		 	  Title:
			
		 		 	  Legal Name:
		 		 	  Jurisdiction of Formation:
		 		 	  Location of Chief Executive office:
	
	 [—],
 as Collateral Agent

			
		 	by	 	
			
		 		 	  

		 		 	  Name:
		 		 	  Title:

  
 3 

 Schedule I 
 to Supplement No.      to the 
 Security Agreement 

NEW GUARANTOR INFORMATION 
  

					
	 Name
	  	 Jurisdiction of Formation
	  	 Chief Executive Office

 Schedule II 
 to Supplement No.      to the 
 Security Agreement 

PLEDGED SECURITIES 
 Equity Interests 
  

									
	 Issuer
	  	 Number of

Certificate
	  	 Registered

Owner
	  	 Number and
 Class of

Equity Interests
	  	 Percentage

of Equity Interests

Debt Securities 
  

							
	 Issuer
	  	 Principal

Amount
	  	 Date of Note
	  	 Maturity Date

 Schedule III 
 to Supplement No.      to the 
 Security Agreement 

INTELLECTUAL PROPERTY 

 EXHIBIT II 
 PERFECTION CERTIFICATE 
 [Delivered separately.]Tax Distribution Agreement

 Exhibit 10.3 
 TAX DISTRIBUTION AGREEMENT 
 TAX DISTRIBUTION AGREEMENT dated as of May 10,
2011 (the “Agreement”) among the SHLP Taxpayers (as defined herein) party hereto, Shea Homes Limited Partnership, a California limited partnership (the “Company”), and each of the Persons party to the
Sixth Amended and Restated Agreement of Limited Partnership of Shea Homes Limited Partnership, dated as of April 1, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “SHLP Limited Partnership
Agreement”) as a general or limited partner thereof (the “SHLP Partners”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Section 1 of this Agreement.

 W I T N E S S E T H 
 WHEREAS, the Parties wish to provide for the payment of Income Taxes arising from Income Tax Liability, and provide for certain other matters relating to Income Taxes. 

NOW, THEREFORE, in consideration of the premises and the representations, covenants and agreements herein contained and intending to be
legally bound hereby, the Parties agree as follows: 
 1. Definitions. For purposes of this Agreement, the
following terms shall have the meanings set forth below: 
 “Adjusted Income Tax Liability” shall mean
the sum of the following amounts, with respect to each SHLP Taxpayer resulting from any adjustments to items of income, gain, loss or deduction of the Company (or any entity treated as a pass-through entity for U.S. federal income tax purposes in
which the Company has an ownership interest) pursuant to the Determination of the CCM Proceeding or any other Proceeding in respect of a taxable year ended before the Effective Date: 

(a) the increase in net taxable income attributable to “net capital gains” (as reduced under the Code (or comparable provision
of state tax law) by the total increase in net ordinary loss, if any) or the reduction of net loss attributable to “net capital losses,” in each case allocated to such SHLP Taxpayer in respect of a taxable year ended before the Effective
Date on account of such SHLP Taxpayer’s direct or indirect ownership interests in the Company, multiplied by the Applicable Rate on such net capital gains, plus 

(b) the increase in net taxable income attributable to “ordinary income” or the reduction of net loss attributable to
“ordinary losses”, in each case allocated to such SHLP Taxpayer in respect of a taxable year ended before the Effective Date on account of such SHLP Taxpayer’s direct or indirect ownership interests in the Company, multiplied
by the Applicable Rate on such ordinary income, minus 

 (c) the increase in tax credits that is allocated to any SHLP Taxpayer on account of its
direct or indirect ownership interest in SHLP. 
 “Applicable Rate” shall mean, with respect to each
SHLP Taxpayer and the determination of Income Tax Liability and Adjusted Income Tax Liability for each taxable year, the highest aggregate marginal combined federal, state and local income tax rates (including applicable surcharges, alternative
minimum taxes, self-employment taxes or other taxes payable as a result of the allocation of income contemplated hereby, if any) applicable to any SHLP Taxpayer after (a) giving effect to the deductibility, if any, for federal and state tax purposes
of state or local income taxes on the applicable income at the time of its recognition, (b) taking into account any limitations on such deductibility including, without limitation, those imposed pursuant to Section 68 of the Code, and (c) taking
into account the character (e.g., long-term or short-term capital gain, or ordinary or exempt income) of such applicable income and any preferential tax rates, including for “qualified dividend income” (as defined in Section
1(h)(11) of the Code). 
 “Business Day” shall mean any day, other than a Saturday, a Sunday, or day on
which banking institutions located in the State of California are authorized or obligated by law or executive order to close. 

“CCM Proceeding” shall mean the U.S. federal income tax proceeding regarding the completed contract method of
accounting (as defined in U.S. Treasury Regulation Section 1.460-4(d)) for taxable years prior to 2011. 

“Code” shall mean the Internal Revenue Code of 1986, as amended. 

“Determination” shall mean the final resolution of liability for any Income Tax as a result of (a) a
“determination” as defined in Section 1313(a) of the Code, (b) a final determination made by a competent Tax Authority or (c) the payment of Income Tax if the SHLP Taxpayers and the Company agree that the payment should be made.

 “Effective Date” shall mean January 1, 2011. 

“Income Taxes” shall mean, with respect to each SHLP Taxpayer, all taxes giving rise to any Income Tax Liability
or Adjusted Income Tax Liability. 
 “Income Tax Liability” shall mean, with respect to each SHLP
Taxpayer and each taxable year, an amount equal to: 
 (a) the aggregate net taxable income attributable to
“net capital gains” (as reduced under the Code (or comparable provision of state tax law) by the total amount of net ordinary loss, if any) allocated to such SHLP Taxpayer in the current and all preceding taxable years beginning on or
after the Effective Date on account of its direct or indirect ownership interests in the Company (taking into account any allocations to such SHLP Taxpayer pursuant to the Determination of any Proceeding in respect of a

  
 - 2 -

 
taxable year beginning on or after the Effective Date), multiplied by the Applicable Rate on such net capital gains, plus 

(b) the aggregate net taxable income attributable to “ordinary income” allocated to such SHLP Taxpayer in the
current and all preceding taxable years beginning on or after the Effective Date on account of its direct or indirect ownership interests in the Company (taking into account any allocations to such SHLP Taxpayer pursuant to the Determination of any
Proceeding in respect of a taxable year beginning on or after the Effective Date), multiplied by the Applicable Rate on such net capital gains, minus 
 (c) the amount of tax credits that is allocated to any SHLP Taxpayer on account of its direct or indirect ownership interest in SHLP for such taxable year. 

For purposes of calculating the Income Tax Liability of each SHLP Taxpayer under this Agreement, the aggregate net taxable income (or loss) of each SHLP
Taxpayer shall be assumed to consist solely of items of income or loss allocated to such SHLP Taxpayer by the Company. For the sake of clarity, in each case set forth in clauses (a) and (b) above, all or any portion of any net operating losses or
capital losses of an SHLP Taxpayer that arises in any taxable year beginning on or after the Effective Date and may be carried forward and used to offset income allocated to such SHLP Taxpayer by the Company for a subsequent taxable year under the
Code (or comparable provision of state tax law) shall be taken into account for purposes of calculating the aggregate net taxable income attributable to “net capital gains” and the aggregate net taxable income attributable to
“ordinary income” for such subsequent taxable year. 
 “Indenture” shall mean the Indenture
dated as of May 10, 2011 (as amended, restated, supplemented or otherwise modified from time to time) pursuant to which the Company and Shea Homes Funding Corp., a Delaware corporation, issued and sold, on a joint and several basis, $750.0 million
aggregate principal amount of their 8.625% Senior Secured Notes due 2019. 
 “Party” or
“Parties” shall mean each of the Persons party to this Agreement. 
 “Person”
shall mean any individual, partnership, joint venture, limited liability company, corporation, association, joint stock company, trust, unincorporated organization or similar entity or a governmental authority or any department or agency or other
unit thereof. 
 “Proceeding” shall mean any audit or other examination, or judicial or administrative
proceeding relating to liability for, or refunds or adjustments with respect to, Income Taxes of the Company (or any entity treated as a pass-through entity for U.S. federal income tax purposes in which the Company has an ownership interest),
whether arising before or after the Effective Date. 
 “SHLP Partners” shall have the meaning set forth
in the Preamble hereto. 

  
 - 3 -

 “SHLP Taxpayers” shall mean the direct and indirect holders of
ownership interests in the Company. 
 “Tax Authority” shall mean a governmental authority (foreign or
domestic) or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Income Taxes. 

2. Tax Distribution. 
 (a) Anything in the governing documents of SHLP to the contrary notwithstanding, if the Income Tax Liability of a SHLP Taxpayer with respect to its respective interests in the Company at any time exceeds
amounts previously distributed to the SHLP Partners after the Effective Date (excluding any distributions pursuant to (i) Section 4.07(a) and Section 4.07(b)(xi) of the Indenture and (ii) Section 2(b) of this Agreement), the Company shall distribute
to the SHLP Partners for further distribution to the SHLP Taxpayers an amount of cash equal to such excess. The Company may distribute such amount after the end of each taxable year, or may make quarterly distributions during such taxable year
(subject to adjustment after the end of such taxable year) to reflect estimated tax obligations of the SHLP Taxpayers; provided, however, that such quarterly distributions shall not, when taken together, exceed the amounts to which
such SHLP Taxpayer is entitled under the preceding sentence for a particular taxable year. 
 (b) During the taxable year of any
Determination of the CCM Proceeding or any other Proceeding in respect of a taxable year prior to the Effective Date, as applicable, the Company shall pay to the SHLP Partners for further distribution to each SHLP Taxpayer an amount of cash equal to
the Adjusted Income Tax Liability of each SHLP Taxpayer. 
 (c) All distributions made pursuant to this Section 2 shall be made
by the Company not less than five (5) Business Days prior to the date on which any Income Taxes giving rise to such Income Tax Liability or Adjusted Income Tax Liability are due to be paid by the SHLP Taxpayers, and shall include all interest,
penalties, and other amounts required to be paid to any Tax Authority on account of such Income Tax Liability or Adjusted Income Tax Liability. 
 (d) All distributions made pursuant to this Section 2 shall reduce on a dollar-for-dollar basis until fully recovered any distribution to which the SHLP Taxpayers are otherwise entitled under the
governing documents of the Company. 
 3. Determination of Income Tax Liability. 

For purposes of this Agreement, the Company shall be responsible for determining each SHLP Taxpayer’s Income Tax Liability and
Adjusted Income Tax Liability based upon the information reported to such SHLP Taxpayer by the Company. The Company shall be responsible for and shall deliver such information to the SHLP Partners with respect to

  
 - 4 -

 
each SHLP Taxpayer as is necessary for the appropriate calculation of the Income Tax Liability and Adjusted Income Tax Liability of each SHLP Taxpayer. 

4. Proceedings. 
 The SHLP Taxpayers shall notify the Company of any material written communication from any Tax Authority with respect to the CCM Proceeding or any other Proceeding within 30 days following the receipt
thereof, except to the extent any such communication would vitiate any applicable legal privilege, would otherwise violate any applicable law, or relates to the settlement of the CCM Proceeding or any such other Proceeding. 

5. Payments. 
 All payments required by this Agreement shall be made by (a) wire transfer to the appropriate bank account as may from time to time be designated by the Parties for such purpose; provided that, on the
date of such wire transfer, notice of the transfer is given to the recipient thereof in accordance with Section 8, or (b) any other method agreed to by the Parties. All payments due under this Agreement shall be deemed to be paid when available
funds are actually received by the payee. 
 6. Joinder of SHLP Partners and SHLP Taxpayers. 

The Company shall cause each SHLP Partner and SHLP Taxpayer that is not a party to this Agreement on the Effective Date to become a Party.
Each such joinder shall be effective upon the execution and delivery of a Joinder Agreement in the form of Annex I hereto. 
 7. Amendments to, and the Termination of, this Agreement. 

This Agreement shall supersede the Tax Distribution and Refund Agreement dated November 5, 2010 in all respects. No amendment,
modification, or waiver of any of the provisions of this Agreement shall be effective unless the same shall be in writing signed on behalf of each Party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to
the specific instance involved and shall in no way impair the rights of the Parties making such waiver or the obligations of the other Parties to such Party in any other respect or at any other time. 

8. Notices. 
 Notices, requests, permissions, waivers, and other communications hereunder shall be in writing and shall be deemed to have been duly given upon (a) a transmitter’s confirmation of a receipt of a
facsimile transmission (but only if followed by confirmed delivery of a standard overnight courier the following Business Day or if delivered by hand the following Business Day), or (b) confirmed delivery of a standard overnight courier or delivered

  
 - 5 -

 
by hand, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice): 

If to the Company, to: 
 Shea Homes Limited Partnership 
 P.O. Box 489 

655 Brea Canyon Road 
 Walnut, California 91788-0489 
 Facsimile:
(        )         -             

If to a SHLP Taxpayer: 
 At the address set forth below the executed signature page of such SHLP Taxpayer. 

Such names and addresses may be changed by notice given in accordance with this Section 8. 

9. Counterparts; Integration; Headings. 
 This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter
hereof. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or by email in pdf format shall be effective as delivery of a manually executed counterpart of this Agreement. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. 
 10. Severability. 
 Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction. 
 11. Third Parties Benefited. 

  
 - 6 -

 This Agreement is made and entered into for the protection and legal benefit of the Parties
and their respective successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement. 

12. Governing Law; Jurisdiction, Etc. 
 (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA. 

(b) SUBMISSION TO JURISDICTION. EACH PARTY HERETO UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA SITTING IN LOS ANGELES COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
CALIFORNIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. 
 (c) WAIVER OF VENUE. EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT. 
 (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 8. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. 
 [Signature Pages Follow] 

  
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	J.F. SHEA CO., INC.	 		 	J.F. SHEA, L.P.
					
	By:	 	 /s/ James G. Shontere
	 		 	By:	 	JFS Management, L.P., its sole General Partner
	Name:	 	James G. Shontere	 		 	By:	 	J.F. Shea Construction Management, Inc.,
	Title:	 	Secretary	 		 		 	its sole General Partner
					
	By:	 	 /s/ Robert O’Dell
	 		 	By:	 	 /s/ James G. Shontere

	Name:	 	Robert O’Dell	 		 	Name:	 	James G. Shontere
	Title:	 	Treasurer	 		 	Title:	 	Secretary
				
	SHEA HOMES LIMITED PARTNERSHIP	 		 		 	
		 		 		 	By:	 	 /s/ Robert O’Dell

	By:	 	J.F. Shea L.P., its sole General Partner	 		 	Name:	 	Robert O’Dell
	By:	 	JFS Management, L.P., its sole General Partner	 		 	Title:	 	Treasurer
				
	By:	 	J.F. Shea Construction Management, Inc., its sole General Partner	 		 	SHEA HOMES AT MONTAGE, LLC
					
		 		 		 	By:	 	 /s/ James G. Shontere

	By:	 	 /s/ James G. Shontere
	 		 	Name:	 	James G. Shontere
	Name:	 	James G. Shontere	 		 	Title:	 	Secretary
	Title:	 	Secretary	 		 		 	
		 		 		 	By:	 	 /s/ Robert O’Dell

	By:	 	 /s/ Robert O’Dell
	 		 	Name:	 	Robert O’Dell
	Name:	 	Robert O’Dell	 		 	Title:	 	Treasurer
	Title:	 	Treasurer	 		 		 	

 [Signature page to Tax Distribution Agreement] 

					
	 /s/ John F. Shea
	 		 	 /s/ Peter O. Shea

	John F. Shea	 		 	Peter O. Shea
			
	 /s/ Dorothy B. Shea
	 		 	 /s/ Carolyn H. Shea

	Dorothy B. Shea	 		 	Carolyn H. Shea
			
	 /s/ Mary Shea
	 		 	 /s/ Matthew Gilbert Shea

	Mary Shea	 		 	Matthew Gilbert Shea
			
	 /s/ Claire Shea
	 		 	 /s/ Colleen Shea Morrissey

	Claire Shea	 		 	Colleen Shea Morrissey
			
	 /s/ John F. Shea, Jr.
	 		 	 /s/ Edmund H. Shea, III

	John F. Shea, Jr.	 		 	Edmund H. Shea, III
			
	 /s/ Anne T. Shea
	 		 	 /s/ Mary Shea McConnell

	Anne T. Shea	 		 	Mary Shea McConnell
			
	 /s/ James W. Shea
	 		 	 /s/ Kathleen Shea

	James W. Shea	 		 	Kathleen Shea
			
	 /s/ Dorothy Shea Hobin
	 		 	 /s/ Timothy Shea

	Dorothy Shea Hobin	 		 	Timothy Shea
			
	 /s/ Carrie Shea Tilton
	 		 	 /s/ Ellen M. Shea

	Carrie Shea Tilton	 		 	Ellen M. Shea
			
	 /s/ Alison Shea Knoll
	 		 	 /s/ Catherine Shea Johnson

	Alison Shea Knoll	 		 	Catherine Shea Johnson
			
	 /s/ Maura Shea Flanagan
	 		 	 /s/ Peter O. Shea, Jr.

	Maura Shea Flanagan	 		 	Peter O. Shea, Jr.
			
	 /s/ John C. Morrissey
	 		 	 /s/ Sarah H. Shea

	John C. Morrissey	 		 	Sarah H. Shea
			
	THE E & M SHEA REVOCABLE TRUST	 		 	
			
	 /s/ Mary Shea
	 		 	
	 Mary Shea, Grantor and Trustee U/D/T Dated April 7,
 2009 (The E & M Shea Revocable Trust)
	 		 	
			
	 /s/ John C. Morrissey
	 		 	
	 John C. Morrissey, Trustee U/D/T Dated April 7,
 2009 (The E & M Shea Revocable Trust)
	 		 	

 [Signature page to Tax Distribution Agreement] 

 ANNEX I – [FORM OF] JOINDER AGREEMENT. 

Date:             , 20     

Number      
  

	To:	Shea Homes Limited Partnership 

 Ladies and
Gentlemen: 
 This Joinder Agreement is made and delivered pursuant to Section 6 of the Tax Distribution Agreement dated as of
            , 20     among Shea Homes Limited Partnership, a California limited partnership, and the SHLP Partners and SHLP Taxpayers referred to therein (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the “Tax Distribution Agreement”). Terms defined in the Tax Distribution Agreement and not otherwise defined herein are used herein as therein
defined. 
 The undersigned,
                            , hereby designates [himself][herself][itself] a [SHLP Partner/SHLP Taxpayer] in
accordance with Section 6 of the Tax Distribution Agreement, and hereby confirms, with effect from the date of this Joinder Agreement, [his][her][its] acceptance of, and consents to, all covenants and other terms and provisions of the Tax
Distribution Agreement. 
  

	
	  

	
	Address for notice purposes:

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