INVESTMENT AGREEMENT

Exhibit 10.1

INVESTMENT AGREEMENT

between

STANDARD PACIFIC CORP.

and

MP CA HOMES LLC

Dated May 26, 2008

TABLE OF CONTENTS

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TABLE OF CONTENTS

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TABLE OF CONTENTS

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TABLE OF CONTENTS

EXHIBITS

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Investment Agreement , dated as of May 26, 2008, between;

Capitalized terms used herein without definition are defined in Section 1.1 .

W I T N E S S E T H

Whereas:

Now, Therefore , in consideration of the mutual promises and covenants set forth below and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definition of Certain Terms

The following terms, as used herein, have the following meanings:

“ Action ” means any complaint, claim, prosecution, indictment, action, suit, arbitration or proceeding by or before any Governmental Authority or any arbitration tribunal asserted by any Person.

“ Active Joint Venture ” has the meaning given in Section 3.2(b) .

“ Affiliate ” of any Person means any other Person who either directly or indirectly through one or more intermediaries is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of securities, partnership interests or by contract, assignment, credit arrangement, as trustee or executor, or otherwise, and the terms “controls,” “controlling” and “controlled by” shall have correlative meanings. With respect to the Investor, the term “Affiliate” shall also include its general partner or investment manager or similar Person, and any other entity with the same general partner or investment manager or similar Persons as the Investor (as the case may be). With respect to the Company, the term “Affiliate” shall not include any Joint Venture, whether or not managed by the Company or one of its Subsidiaries.

“ Agreement ” means this Investment Agreement, including the Schedules and Exhibits hereto.

“ Benefit Plans ” means any material agreement, plan, program, fund, policy, contract, arrangement or understanding (either written or unwritten) providing compensation, benefits, pension, retirement, profit sharing, stock bonus, stock option, stock purchase, stock ownership, stock appreciation right, phantom or stock equivalent, bonus, incentive, deferred compensation, hospitalization, medical, dental, vision, retirement, vacation, insurance, sick pay, disability, death benefit, severance, worker’s compensation, supplementary unemployment benefits, or similar employee benefits, or any material salary reduction agreement, change-of-control agreement, retention agreement, employment agreement, or consulting agreement, covering any current or former employee, officer, director or independent contractor of the Company or any of its Subsidiaries and the beneficiaries and dependents thereof, and entered into, maintained or contributed to, as the case may be, by the Company or any of its Subsidiaries, including, (i) any “employee welfare benefit plan” (as defined in Section 3(2) of ERISA), and (ii) any “employee pension benefit plan” (as defined in Section 3(1) of ERISA).

“ Board of Directors ” means the Board of Directors of the Company.

“ Business ” means the business of homebuilding, mortgage financing, and title services as conducted by the Company, its Subsidiaries and the Joint Ventures, taken as a whole.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close.

“ Clayton Act ” means the Clayton Antitrust Act of 1914, as amended.

“ Closing Transaction Documents ” means this Agreement, the Stockholders Agreement, the Warrant, and the Rights Plan Amendment.

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“ Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“ Commitment Fee Shares ” has the meaning given in Section 2.1(c) .

“ Common Stock ” has the meaning given in the recitals to this Agreement.

“ Company ” has the meaning given in the recitals to this Agreement.

“ Company Interests ” has the meaning given in Section 3.11(a) .

“ Company Option ” means any option granted, whether or not exercisable, and not exercised or expired, to a current or former employee, director or independent contractor of the Company or any of its Subsidiaries or any predecessor thereof to purchase shares of Common Stock pursuant to the Option Plans.

“ Company Proxy Statement ” has the meaning given in Section 3.6(a) .

“ Company Registration Statement ” has the meaning given in Section 3.6(a) .

“ Company Securities ” means the Senior Preferred Stock, Warrants, Commitment Fee Shares and any other securities of the Company acquired or to be acquired by the Investor pursuant to this Agreement or upon exercise or conversion of the Company Securities acquired hereunder.

“ Company Stockholder Approval ” has the meaning given in Section 3.4(a) .

“ Company Stockholder Meeting ” has the meaning given in Section 6.1(a) .

“ Confidentiality Agreement ” means that certain Confidentiality Agreement, dated as of April 29, 2008, between MatlinPatterson Global Advisers LLC and the Company.

“ Consent ” means any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority.

“ Contract ” means any contract, agreement, arrangement, purchase order, note, mortgage, indenture, license, lease, sublease, plan, commitment or other instrument, whether written or oral.

“ Controlled Group Liability ” means any and all Liabilities under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, and (iv) the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code or the group health plan requirements of Sections 9801 et seq. of the Code and Sections 701 et seq. of ERISA, other than such Liabilities that arise solely out of, or relate solely to, the Benefit Plans.

“ Convertible Notes ” has the meaning given in Section 3.3 .

“ Copyrights ” means all copyrights, copyrights registrations and applications therefor throughout the world.

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“ Debt Documents ” means the Company’s Revolving Credit Agreement, dated as of August 31, 2005, the Term Loan A Credit Agreement, dated as of May 5, 2006, the Term Loan B Credit Agreement, dated as of May 5, 2006, and the “Loan Documents” as defined in such Credit Agreements and the Company’s public notes and the indentures and other documents, agreements and instruments relating thereto, in each case as amended, supplemented or otherwise modified.

“ DGCL ” means the General Corporation Law of the State of Delaware.

“ Entitlements ” has the meaning given in Section 3.8(d) .

“ Environmental Law ” means any administrative, civil or criminal Law in effect as of the date hereof regulating or relating to the pollution, preservation, remediation or protection of human health and safety, natural resources or the environment, including Laws relating to contamination and the use, generation, management, handling, transport, treatment, disposal, storage, Release or threatened Release of Hazardous Substances.

“Environmental Liability” means any direct, indirect, pending or threatened indebtedness, liability, claim, loss, damage, fine, penalty, cost, or expense, whether known or unknown, arising under or relating to any Environmental Law, Environmental Permit, or Release, whether based on negligence, strict liability or otherwise, including, without limitation, costs and liabilities for investigation, removal, remediation, restoration, abatement, monitoring, personal injury, property damage, natural resource damages, court costs, and reasonable attorneys’ fees.

“ Environmental Permits ” means all licenses, consents, approvals, authorizations, permit, plans, variances, exemptions, and agreements required, issued or granted by any public or private entity or person pursuant to or in relation to Environmental Law or Releases of Hazardous Substances.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ ERISA Affiliate ” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations promulgated thereunder, in each case as in effect from time to time.

“ Exchange Notes ” has the meaning given in Section 2.1(b) .

“ First Closing ” has the meaning given in Section 2.1 .

“ First Closing Date ” has the meaning given in Section 2.1 .

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“ First Closing Transactions ” has the meaning given in Section 2.1 .

“ Funds ” has the meaning given in the recitals to this Agreement.

“ GAAP ” means generally accepted accounting principles as in effect in the United States.

“ Gibson Dunn ” has the meaning given in Section 5.1(k) .

“ Governmental Approval ” means any Consent of, with or to any Governmental Authority.

“ Governmental Authority ” means any United States federal, state or local governmental, regulatory or administrative authority, agency or commission or any United States judicial or arbitral body.

“ Hazardous Substances ” means any substance that: (i) is or contains asbestos, urea formaldehyde insulation, polychlorinated biphenyls, petroleum or petroleum products, radon gas, microbiological contamination or related materials; (ii) requires Remedial Action pursuant to any Environmental Law, or is defined, listed or identified as a “hazardous waste,” “hazardous substance,” “toxic substance” or words of similar import thereunder or (iii) is regulated under any Environmental Law.

“Headquarters Campus” means the property leased by the Company under the Headquarters Campus Lease.

“Headquarters Campus Lease” means the lease related to the Company’s corporate and Orange County, California operations with respect to the real estate located at 15326 Alton Parkway, Irvine, California and 28 Technology, Irvine, California.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“ Inactive Joint Venture ” has the meaning given in Section 3.2(b) .

“ Indebtedness ” means, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, whether current or funded, secured or unsecured, or with respect to deposits or advances of any kind; (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments and all liabilities in respect of mandatorily redeemable capital stock or securities convertible into capital stock; (iii) all obligations of such Person upon which interest charges are paid (other than trade payables incurred in the Ordinary Course of Business); (iv) all obligations of such Person under conditional sale or other title retention agreements relating to any property purchased by such Person; (v) all obligations of such Person issued or assumed as the deferred purchase price of assets, property or services; (vi) all lease obligations of such Person capitalized on the books and records of such Person; (vii) all obligations of others secured by a Lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; (viii) all obligations of such Person under interest rate, currency or commodity derivatives or hedging transactions; (ix) all letters of credit or performance bonds issued for the account of such Person and (x) all guarantees and support and keepwell arrangements having the economic effect of a guarantee of such Person of any Indebtedness of any other Person.

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“ Investment Banks ” means collectively Miller Buckfire & Co., LLC and Credit Suisse Securities (USA) LLC.

“ Investment Proposal ” means any inquiry, proposal or offer from any Person other than the Investor (including any proposal or offer to stockholders of the Company by way of tender offer, exchange offer, share exchange or otherwise) with respect to a merger, consolidation or similar transaction involving the Company or its Subsidiaries, or any purchase of all or any significant portion of the assets of the Company and its Subsidiaries, taken as a whole (other than in the Ordinary Course of Business), or any purchase of 5% or more of any class of equity securities of, the Company or any of its Subsidiaries.

“ Investor ” has the meaning given in the preamble of this Agreement.

“ IRS ” means the Internal Revenue Service.

“ Joint Venture ” means any partnership, joint venture or similar business or entity in which the Company or any of its Subsidiaries directly or indirectly holds an equity interest less than or equal to 55% and any, direct or indirect, non-wholly owned Subsidiary of the Company.

“ Joint Venture Documents ” has the meaning given in Section 3.2(b)(ii) .

“ Joint Venture Financing Documents ” has the means any loan agreement, loan-to-value maintenance agreement, note, indemnity or guarantee of the Active Joint Ventures.

“ Junior Preferred Stock ” means the junior convertible preferred stock of the Company, par value $.01 per share, with terms substantially in the form of those set forth in the Certificate of Designations attached as Exhibit B hereto.

“ Knowledge ” of the Company means that one or more of the Company’s Section 16 executive officers (i) has or at any time had actual knowledge of the item or matter, or (ii) has or at any time had received written notice of the fact or matter.

“ Law ” means any federal, state, local, foreign, international or supranational law (including common law), statute, treaty, ordinance, rule, regulation, Order, code, governmental restriction or other legally binding requirement of a Governmental Authority.

“ Liabilities ” means any and all debts, losses, liabilities, claims, damages, fines, costs, royalties, proceedings, deficiencies or obligations of any nature, whether absolute, accrued, contingent or otherwise and whether due or to become due and any out-of-pocket costs and expenses (including attorneys’, accountants’ or other fees and expenses).

“ Lien ” means any mortgage, pledge, hypothecation, right of others, claim, security interest, adverse claim or interest, easement, license, covenant, encroachment, servitude, consent, option, lien, put or call right, right of first refusal, voting right, charge or other restrictions, limitations or encumbrances of any nature whatsoever.

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“ Litigation ” means any action, cause of action, claim, cease and desist letter, demand, suit, proceeding, arbitration, citation, summons, subpoena of any nature, civil, criminal, regulatory or otherwise, in law or in equity.

“ Material Adverse Effect ” means (i) a materially adverse effect on the business, assets, liabilities, results of operations and condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (ii) any material impairment of the ability of the Company to perform its obligations under this Agreement, in each case other than to the extent caused by, arising out of or attributable to any of the following: (a) the announcement or pendency of this Agreement or the transactions contemplated hereby, including the initiation of litigation by any Person with respect to this Agreement or the transactions contemplated hereby, (b) changes or proposed changes in Law or accounting standards or interpretations thereof applicable to the Company and its Subsidiaries, (c) changes in global, national or regional economic or political conditions (including acts of war (whether or not declared), armed hostilities, sabotage, military actions or the escalation thereof (whether underway on the date hereof or hereafter commenced), and terrorism) or in general financial, credit, business, or securities market conditions, including changes in interest rates or the availability of credit financing; (d) changes generally applicable in the industries in which the Company and its Subsidiaries operate, (e) changes resulting from compliance by the Company and its Subsidiaries with the terms of this Agreement, (f) any changes as a result of any action expressly approved by the Investor in writing, (g) any failure of the Company to meet internal or analysts’ estimates, projections or forecasts of revenues, earnings or other financial or business metrics (it being understood that any cause of any such failure may be taken into consideration when determining whether a Material Adverse Effect has occurred or would be reasonably likely to occur); (h) a decline in the market price, or a change in the trading volume, of the Common Stock (it being understood that any cause of any such decline or change may be taken into consideration when determining whether a Material Adverse Effect has occurred or would be reasonably likely to occur); or (i) any change or proposed change in the debt ratings of the Company or any of its Subsidiaries or any debt securities of the Company or any of its Subsidiaries (it being understood that any cause of any such failure may be taken into consideration when determining whether a Material Adverse Effect has occurred or would be reasonably likely to occur), provided, in the case of clauses (c) and (d), that such conditions or changes do not have a materially disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to other participants in such industries.

“ Material Contract ” has the meaning given in Section 3.18(a) .

“ NYSE ” means the New York Stock Exchange.

“ National Labor Relations Act ” means the National Labor Relations Act of 1935, as amended.

“ New Charter ” has the meaning given in Section 3.4(a) .

“ Notice ” has the meaning given in Section 11.2(a) .

“ Option Plans ” means the Company’s 1997 Employee Stock Incentive Plan, 1997 Stock Incentive Plan, 2000 Stock Incentive Plan, 2001 Non-Executive Officer Stock Incentive Plan, and 2005 Stock Incentive Plan, and 2008 Equity Incentive Plan, each as amended from time to time.

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“ Order ” means any judgment, order, administrative order, writ, stipulation, injunction (whether permanent or temporary), award, decree or similar legal restraint of, or binding settlement having the same effect with, any Governmental Authority.

“ Ordinary Course ” or “ Ordinary Course of Business ” means the conduct of the Business in accordance with the Company and its Subsidiaries’ normal day-to-day customs, practices and procedures, consistent with past practice.

“ Owned Property ” has the meaning given in Section 3.8(a) .

“ Parties ” means the Company and the Investor.

“ Performance Share Awards ” means performance share awards granted to certain executives of the Company, which can result in the issuance of restricted shares of Common Stock.

“ Permitted Liens ” means (i) Liens specifically reserved against in the latest audited financial statements included in the SEC Documents filed prior to the date hereof, to the extent so reserved; (ii) Liens for Taxes not yet due and payable; (iii) Liens of warehousemen, mechanics and materialmen and other similar Liens arising by operation of Law in the Ordinary Course of Business; (iv) zoning, entitlement, conservation restriction and other land use and environmental regulations by Governmental Authorities, (v) Liens permitted under, or created in connection with, the Debt Documents or the Joint Venture Financing Documents, or (vi) Liens that, individually and in the aggregate, do not materially interfere with the use thereof as currently used or contemplated to be used.

“ Person ” means any natural person, firm, limited liability company, general or limited partnership, association, corporation, company, joint venture, trust, Governmental Authority or other entity.

“ Preferred Stock ” means the preferred stock, $.01 par value per share, of the Company.

“ Proposed Project Development ” has the meaning given in Section 3.8(d) .

“ Purchase Agreements ” has the meaning given in Section 3.8(c) .

“ Qualified Plans ” has the meaning given in Section 3.16(b) .

“ Release ” means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, or emptying, of any materials into or upon, any land, soil, surface water, groundwater or air, or otherwise entering into the indoor or outdoor environment.

“ Remaining Offer Shares ” has the meaning given in Section 5.6(b)(iii) .

“ Remedial Action ” means all actions required to (i) respond to, clean up, remove, treat or in any other way remediate any Hazardous Substances; (ii) prevent the release of Hazardous Substances so that they do not migrate or endanger or threaten to endanger public health or welfare or the environment or (iii) perform studies, investigations and care related to any such Hazardous Substances.

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“ Representatives ” means, with respect to any Person, such Person’s accountants, counsel, financial and other advisers, representatives, consultants, directors, officers, employees, stockholders, partners, members and agents.

“ Restated Certificate of Incorporation ” means the Restated Certificate of Incorporation of the Company, dated as of December 12, 2007.

“ Rights Offering ” has the meaning given in the recitals to this Agreement.

“ Rights Offering Documents ” has the meaning given in Section 5.6(b)(i) .

“ Rights Offering Period ” has the meaning given in Section  5.6(b)(iii) .

“ Rights Offering Per Share Purchase Price ” has the meaning given in Section 5.6(a) .

“ Rights Offer Shares ” has the meaning given in Section 5.6(a) .

“ Rights Offering Supplement ” has the meaning given in Section 5.6(b)(i) .

“ Rights Plan ” means the Amended and Restated Rights Agreement, dated as of July 24, 2003, between the Company and Mellon Investor Services LLC.

“ Rights Plan Amendment ” has the meaning given in Section 7.2(e) .

“ Sarbanes-Oxley Act ” means the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated thereunder and under the Exchange Act.

“ SEC ” means the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

“ SEC Documents ” has the meaning given in Section 3.5(a) .

“ Second Closing ” has the meaning given in Section 2.2 .

“ Second Closing Date ” has the meaning given in Section 2.2 .

“ Second Closing Transactions ” has the meaning given in Section 2.2 .

“ Securities Act ” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations promulgated thereunder, in each case as in effect from time to time.

“ Senior Preferred Stock ” has the meaning given in the recitals to this Agreement.

“ Significant Subsidiary ” means any Subsidiary of the Company that constitutes a significant Subsidiary within the meaning of Rule 1-02 of Regulation S-X of the SEC.

“ Stockholders Agreement ” has the meaning given in Section 2.1(d) .

“ Special Offeree ” has the meaning given in Section 5.6(a) .

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“ Subject Senior Preferred Shares ” has the meaning given in Section 2.1(a) .

“ Subject Senior Preferred Share Purchase Price ” has the meaning given in Section 2.1(a) .

“ Subsidiaries ” means each corporation or other Person in which a Person (i) owns or controls, directly or indirectly, capital stock or other equity interests representing at least 51% of the outstanding voting stock or other equity interests or (ii) has the right to appoint or remove a majority of its board of directors or equivalent managing body.

“ Tax ” means any federal, state, local, foreign or other taxes, fees and charges of any nature whatsoever imposed by any jurisdiction or governmental or taxing authority thereof or therein (including income (net or gross), gross receipts, profits, alternative or add-on minimum, franchise, license, capital, capital stock, intangible, services, premium, mining, transfer, sales, use, ad valorem, payroll, wage, severance, windfall profits, import, excise, custom, stamp or withholding taxes), fees, duties, assessments, withholding or governmental charges of any kind whatsoever (including interest, penalties, additions to tax or additional amounts with respect to such items), including such amounts incurred with respect to another Person’s assets or operations for which liability exists under Law (including Treasury Regulation Section 1.1502-6) or by contract.

“ Tax Returns ” means any return or report, declaration, claim for refund, information return, or statement relating to Tax, including any related schedules, attachments, or other supporting information, and including any amendment thereto.

“ Transactions ” has the meaning given in Section 2.2 .

“ Warrant ” has the meaning given in Section 2.1(b) .

Section 1.2 Headings; Table of Contents

Headings and table of contents should be ignored in construing this Agreement.

Section 1.3 Singular, plural, gender

References to one gender include all genders and references to the singular include the plural and vice versa.

Section 1.4 Schedules

References to this Agreement shall include any Exhibits, Schedules and Recitals to it and references to Sections, Exhibits and Schedules are to Sections of, Exhibits to and Schedules to, this Agreement.

Section 1.5 Information

References to books, records or other information mean books, records or other information in any form including paper, electronically stored data, magnetic media, film and microfilm.

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Section 1.6 Interpretation

In this Agreement, unless the context otherwise requires, any reference to “including” or “in particular” shall be illustrative only and without limitation.

ARTICLE II

PURCHASE OF SUBJECT SHARES AND OFFERING OF OFFERED SHARES

Section 2.1 First Closing

Subject to the terms and conditions set forth in this Agreement, the Parties shall consummate (the “ First Closing ”) the following transactions (the “ First Closing Transactions ”) at the offices of Bracewell & Giuliani LLP, 1177 Avenue of the Americas, New York, New York on the third (3 ^rd ) Business Day following the date on which the conditions set forth in Section 7.1 , Section 7.2 and Section 7.3 have been satisfied (other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions) (the “ First Closing Date ”):

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Section 2.2 Second Closing

Subject to the terms and conditions set forth in this Agreement, the Parties hereto shall consummate (the “ Second Closing ”) the following transactions (the “ Second Closing Transactions ” and, together with the First Closing Transactions, the “ Transactions ”) at the offices of Bracewell & Giuliani LLP, 1177 Avenue of the Americas, New York, New York on the third (3rd) Business Day following the date on which the conditions set forth in Section 8.1 , 8.2 and 8.3 have been satisfied (other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions) (the “ Second Closing Date ”):

For purposes of this Agreement, the “per share equivalent ” shall be (i) for a share of Senior Preferred Stock, the number of shares of Common Stock issuable upon conversion of the number of shares of Junior Preferred Stock issuable upon conversion of such share of Senior Preferred Stock, and (ii) for a share of Junior Preferred Stock, the number of shares of Common Stock issuable upon conversion of such share of Junior Preferred Stock.

Section 2.3 Deliveries by each Party at the First Closing and at the Second Closing.

Each Party shall deliver, or cause to be delivered, to the other Party, as applicable, the following:

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Section 2.4 Additional Deliveries by the Company on the First Closing Date and the Second Closing Date.

In addition to the items listed in Section 2.3 above, the Company shall deliver to the Investor the following:

Section 2.5 Additional Deliveries by the Investor on the First Closing Date and the Second Closing Date.

In addition to the items listed in Section 2.3 above, the Investor shall deliver to the Company the following:

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor, except as set forth in the SEC Documents filed prior to the date hereof, and further subject to the exceptions and qualifications set forth on the Schedules delivered by the Company to the Investor as of the date hereof, as follows:

Section 3.1 Organization, Standing and Corporate Power

Each of the Company and its Significant Subsidiaries is (a) a corporation, limited liability company or partnership duly organized, validly existing and, where the concept is recognized, in good standing under the laws of the jurisdiction in which it is incorporated or formed, as applicable, and has the requisite power and authority (corporate, limited liability company or partnership, as applicable) to carry on its business as now being conducted, and (b) duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect. The Company has made available to the Investor complete and correct copies of its articles of incorporation and bylaws, in each case as amended to the date of this Agreement.

Section 3.2 Subsidiaries and Joint Ventures

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Section 3.3 Capital Structure

As of the date hereof, the authorized capital stock of the Company consists of 200,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock, 1,000,000 shares of which are designated as Series A Junior Participating Cumulative Preferred Stock. As of May 20, 2008 (or such other date noted below), (i) 72,925,649 shares of Common Stock were issued and outstanding, (ii) no shares of Common Stock were held by the Company or by any of the Company’s Subsidiaries, (iii) 6,058,051 shares of Common Stock were reserved for issuance pursuant to outstanding Company Options as of April 30, 2008, (iv) 1,530,776 shares of Common Stock were reserved for issuance pursuant to outstanding Performance Share Awards as of April 30, 2008, (v) 7,067,006 shares of Common Stock were reserved for issuance pursuant to the Option Plans, (vi) 13,142,855 shares of Common Stock were reserved for issuance upon the conversion of the Company’s 6% Convertible Senior Subordinated Notes due 2012 (the “ Convertible Notes ”) and (vii) no shares of Preferred Stock were issued, reserved for issuance or outstanding. Except as set forth above, as of such date, no shares of capital stock or other equity or voting securities of the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company are, and all shares of Common Stock which may be issued pursuant to the Option Plans, the Performance Share Awards and the Convertible Notes will, when issued, be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are not any bonds, debentures, notes or other Indebtedness or debt securities of the Company having the right to vote (or, except for the Convertible Notes, convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote. Except as required under this Agreement, there

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are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or of any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding rights, commitments, agreements, arrangements or undertakings of any kind obligating the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire or dispose of any shares of capital stock or other equity or voting securities of the Company or any of its Subsidiaries or any securities of the type described in the two immediately preceding sentences, except under employment arrangements entered into prior to the date hereof.

Section 3.4 Authority; Noncontravention

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Section 3.5 SEC Documents; Financial Statements; No Undisclosed Liabilities

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Section 3.6 Disclosure Documents

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Section 3.7 Licenses, Approvals, etc.

Each of the Company and its Subsidiaries possesses or has been granted all licenses necessary to entitle it to conduct the Business as conducted by it, except (i) for those licenses the Company or its Subsidiaries are seeking or expect to seek in the Ordinary Course of Business, and (ii) for those Governmental Authority Consents whose failure to possess or have granted (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect. No Action is pending or, to the Knowledge of the Company, threatened seeking the revocation or limitation of any such Governmental Authority consents necessary to entitle the Company and its Subsidiaries to conduct the Business, as conducted by them, and taken as a whole, that would reasonably be expected to have a Material Adverse Effect.

Section 3.8 Real Properties

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Section 3.9 Tangible Personal Property; Sufficiency of Assets

The Company and its Subsidiaries (1) have good and valid title to all the tangible personal property material to the Business conducted by them and reflected in the latest audited financial statements included in the SEC Documents as being owned by the Company or its Subsidiaries or acquired after the date thereof (except properties sold or otherwise disposed of in the Ordinary Course of Business since the date thereof), free and clear of all Liens except for Permitted Liens, and (2) are collectively the lessee of all tangible personal property material to the Business conducted by them and reflected as leased in the latest audited financial statements included in the SEC Documents (or on the books and records of the Company as of the date thereof) or acquired after the date thereof (except for leases that have expired by their terms) and are in possession of the properties purported to be leased thereunder, and each such lease is valid and in full force and effect without default thereunder by the lessee or the lessor, other than defaults that (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect. Each of the Company, its Subsidiaries and, to the Knowledge of the Company, the Joint Ventures enjoys peaceful and undisturbed possession under all such leases. Such owned and leased tangible personal property is in good working order, reasonable wear and tear excepted, and is suitable for the use for which it is intended, except as (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect.

Section 3.10 Intellectual Property

Each of the Company and its Subsidiaries owns or has a valid right to use, each patent, copyright, trademark, trade name, service mark, brand name, computer program, database and industrial design, owned or used in connection with the Business conducted by them, including any registrations thereof and pending applications therefor, and each license or other contract relating thereto that is material to the conduct of the Business, except where the failure to own or have a right to use such property (individually or in the aggregate) would not be reasonably expected to have a Material Adverse Effect. The ownership, operation and conduct by the

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Company and its Subsidiaries of the Business conducted by them does not, to the Knowledge of the Company, infringe upon or conflict in any respect with any patent, copyright, trademark, trade name, service mark, brand name, any related regulations or other intellectual property rights of any other Person, and, to the Knowledge of the Company, no other Person is infringing upon any such rights of the Company and its Subsidiaries, in each case, except as (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect.

Section 3.11 Environmental Matters

Except as (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect or as disclosed on Schedule 3.11 :

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Section 3.12 Absence of Certain Changes or Events

Except as set forth on Schedule 3.12 or as required under this Agreement, since December 31, 2007, the Company and its Subsidiaries have conducted the Business only in the Ordinary Course, and there has not been:

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Section 3.13 Litigation

Except as set forth on Schedule 3.13 , there is no Action or proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or their respective properties or assets that (individually or in the aggregate) would reasonably be expected to have a Material Adverse Effect, nor is there any judgment, decree, injunction, rule or order of any Governmental Authority outstanding against the Company or any of its Subsidiaries that (individually or in the aggregate) would reasonably be expected to have a Material Adverse Effect.

Section 3.14 Compliance with Laws

The conduct by the Company and its Subsidiaries of the Business as conducted by them is and has been in compliance with all Laws applicable thereto, except for violations or failures so to comply, if any, that (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect. To the Knowledge of the Company, the Company has not received any written notice relating to any alleged violation of any Law from any Governmental Authority, or

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of any investigation with respect thereto, applicable to the Company or its Subsidiaries, which has not been satisfactorily addressed, except for violations, if any, that (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect.

Section 3.15 Absence of Changes in Stock or Benefit Plans

Since December 31, 2007, there has not been:

Section 3.16 ERISA Compliance

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Section 3.17 Taxes

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Section 3.18 Contracts; Debt Instruments

Section 3.19 Insurance

The Company and its Subsidiaries are covered by valid and currently effective insurance policies issued in favor of the Company that are customary for companies of similar size and financial condition. To the Knowledge of the Company, all such policies are in full force and effect, all premiums due thereon have been paid.

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Section 3.20 Employment Matters

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Section 3.21 Restrictions on Business Activities

There is no contract (non-compete or otherwise), commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or impairing any business practice of the Company or its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries, or the conduct of the Business conducted by them in any geographic area or otherwise limit the freedom of the Company or any of its Subsidiaries, in each case that is material to the Company and its Subsidiaries, taken as a whole, or that would limit the freedom of the Investor or any of its Subsidiaries to conduct any line of business in any geographic area following the First Closing Date.

Section 3.22 Interested Party Transactions

Since January 1, 2007, no officer or director of the Company (nor, to the Knowledge of the Company, any spouse of any of such Persons, or any trust, partnership or corporation in which any of such Persons has or has had an interest) has entered into, directly or indirectly, any Contract with the Company or its Subsidiaries that is required to be disclosed under Item 404 of Regulation S-K under the Securities Act.

Section 3.23 Board Approval

The Board of Directors of the Company, at a meeting duly called and held, has by unanimous vote of those directors present, (i) determined that this Agreement and the transactions contemplated hereby are advisable and (ii) resolved to recommend that the holders of shares of Common Stock approve the Company Stockholder Approval.

Section 3.24 State Takeover Statutes; Rights Plan

The Board of Directors of the Company has taken all necessary action so that no “fair price,” “moratorium,” “control share acquisition,” or other anti-takeover statute or similar statute or regulation, including Section 203 of the DGCL and Article XI of the Restated Certificate of Incorporation, applies to this Agreement or any of the transactions contemplated hereby. The Board of Directors of the Company has taken all necessary action so that the Distribution Date (as defined in the Rights Plan) shall not occur by virtue of the execution of this Agreement.

Section 3.25 Brokers

No broker, investment banker, financial advisor or other Person, other than the Investment Banks, the fees and expenses of which shall be paid by the Company (and copies of whose engagement letters and a calculation of the fees that would be due thereunder has been provided to the Investor), is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

As of the date hereof and as of the First Closing Date, the Investor represents and warrants to the Company as follows:

Section 4.1 Corporate Status; Authorization; Binding Effect

The Investor is a corporation duly organized, validly existing and, where the concept is recognized, in good standing, under the laws of the jurisdiction of its incorporation with full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Investor of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all requisite corporate and stockholder action of the Investor. The Investor has duly executed and delivered this Agreement. This Agreement is a legal, valid, binding and enforceable obligation of the Investor, enforceable against the Investor in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

Section 4.2 Governmental Approvals

The execution, delivery and performance by the Investor of this Agreement and the consummation of the Transactions requires no Governmental Approvals other than compliance with any applicable requirements of the HSR Act.

Section 4.3 No Conflicts

The execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby does not and will not conflict with or result in a violation or breach of or default under (with or without the giving of notice or the lapse of time, or both) or give rise to a right of termination, cancellation, modification or acceleration of any obligation under (i) any applicable Law, (ii) the certificate of incorporation or by-laws or other organizational documents of the Investor or (iii) any Contract applicable to the Investor or any of its properties or assets, except, in the case of clause (iii), for violations and defaults that, individually and in the aggregate, have not and will not materially impair or delay the ability of the Investor to perform its obligations under this Agreement.

Section 4.4 Purchase for Investment

The Investor is acquiring the Company Securities for investment and not with a view toward any resale or distribution thereof except in compliance with the Securities Act. The Investor is an “accredited investor” as defined in Rule 501 under the Securities Act and has such knowledge

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and experience in financial and business matters and in investments of the type contemplated by this Agreement that it is capable of evaluating the merits and risks of its investment in the Company Securities and of making an informed investment decision with respect thereto. The Investor acknowledges that the Company Securities have not been registered pursuant to the Securities Act and may not be transferred in the absence of such registration or an exemption therefrom under the Securities Act. The Investor also acknowledges that it has received sufficient information regarding the Company to evaluate fully the merits of the transactions contemplated hereby.

Section 4.5 Ability to Consummate Transactions

The Investor has or will have at the time required hereunder an amount of cash on hand necessary to consummate the transactions contemplated by the Agreement. Investor owns the Exchange Notes free and clear of all Liens.

Section 4.6 Brokers and Finders

Except for Broadpoint Capital, Inc., the fees of which will be paid by the Investor, no investment banker, broker, finder or other Person has been retained by or is authorized to act on behalf of the Investor or any of its Affiliates, and no such Person is entitled to any fee or commission from the Company or any of its Affiliates in connection with the transactions contemplated by this Agreement.

Section 4.7 Ownership

The Investor and its Affiliates are not the beneficial owner (as defined in Section 13(d)(3) of the Exchange Act) of any shares of Common Stock or securities convertible into or exchangeable for Common Stock, other than $21,550,000 in aggregate principal amount of the Company’s 6% Convertible Subordinated Notes due 2012.

ARTICLE V

COVENANTS OF THE COMPANY

The Company agrees that:

Section 5.1 Conduct of Business

Except (i) as otherwise contemplated or permitted by this Agreement, (ii) as required by applicable Law, or (iii) with the prior written consent of the Investor, during the period from the date of this Agreement to the First Closing Date, the Company shall, and shall cause its Subsidiaries to, carry on their business in the Ordinary Course of Business in substantially the same manner as heretofore conducted and, to the extent consistent therewith, use commercially reasonable efforts to (A) preserve intact their current business organizations, (B) keep available the services of their current officers and employees (as a group) and (C) preserve their relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with them, provided, that nothing in this Section 5.1 shall limit any action that the Board of Directors may, in good faith determine, to be consistent with their duties to the Company or

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required by Law. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the First Closing Date, except as disclosed on Schedule 5.1 or as otherwise required or contemplated by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to:

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Section 5.2 Access to Information

From the date hereof until the Second Closing Date, the Company shall give the Investor, its counsel, financial advisors, auditors and other authorized representatives full access (during normal business hours and upon reasonable notice and in such manner as not to interfere unreasonably with the conduct of the Business) to the offices, properties, officers, employees, accountants, auditors, counsel and other representatives, and books and records of the Company and its Subsidiaries (including to perform any environmental studies), shall furnish to the Investor, its counsel, financial advisors, auditors and other authorized representatives such financial, operating and property related data and other information as such Persons may reasonably request, and shall instruct the Company’s and its Subsidiaries’ employees, counsel and financial advisors to cooperate with the Investor in its reasonable investigation of the Business. Nothing herein shall require the Company or any Subsidiary to disclose any information to the extent (i) prohibited by applicable Law, or (ii) that such disclosure would reasonably be expected to cause a violation of any Contract to which the Company or any Subsidiary is a party or would cause a risk of a loss of privilege to the Company or any Subsidiary.

Section 5.3 No Solicitation

The Company agrees that until the First Closing Date neither the Company nor any of its Subsidiaries nor any of the respective officers and directors shall, and the Company shall direct and use its best efforts to cause its employees, agents and representatives (including any

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investment banker, attorney or accountant retained by the Company or any of its Subsidiaries) not to, initiate, continue, solicit or knowingly encourage, directly or indirectly, any inquiries or the making of any Investment Proposal or engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with (other than to state that they are not permitted to have discussions), any Person relating to an Investment Proposal, or otherwise knowingly facilitate any effort or attempt to make or implement an Investment Proposal or, enter into any agreement or understanding with any other Person or entity with the intent to effect any Investment Proposal. The Company shall use its best efforts to inform the individuals or entities referred to in the first sentence hereof of its obligations undertaken in this Section 5.3 . The Company shall notify the Investor immediately, orally and in writing (including the names of any party making and the principal terms of any such proposal), if any such inquiries or proposals are received by, any such information is requested from, or any such negotiations or discussions are sought to be initiated with the Company. The Company shall keep the Investor fully informed of the status and details (including amendments or proposed amendments) of any such request, proposal or inquiry. Immediately following the execution of this Agreement, the Company shall request each Person which has heretofore executed a confidentiality agreement in connection with its consideration of acquiring the Company or any portion thereof or investing in the Company to return or destroy all confidential information heretofore furnished to such Person by or on behalf of the Company.

Section 5.4 Fair Price Structure

The Company shall take all actions necessary so that the Investor is an “Exempt Person” under the Rights Plan, so long as the Stockholders Agreement is in full force and effect and the Investor is in compliance with the Stockholders Agreement in all material respects. If any “fair price,” “control share acquisition” or “moratorium” statute or other anti-takeover or similar statute or regulation, including Section 203 of the DGCL and Article XI of the Restated Certificate of Incorporation, or any state “blue sky” statute shall become applicable to the transactions contemplated hereby, the Company and the members of the Board of Directors shall grant such approvals and take such actions as are necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to minimize the effects of such statute or regulation on the Transactions contemplated hereby.

Section 5.5 Consultation

In connection with the continuing operation of the business of the Company and its Subsidiaries between the date of this Agreement and the First Closing Date, the Company shall use reasonable efforts to consult in good faith on a regular basis with the representatives of the Investor to report material operational developments and the general status of ongoing operations pursuant to procedures reasonably requested in writing by the Investor or its representatives. The Investor acknowledges that it shall not have any approval rights under this Section 5.5 . The Company acknowledges that any such consultation shall not constitute a waiver by the Investor of any rights it may have under this Agreement and that the Investor shall not have any liability or responsibility for any actions of the Company, any of its Subsidiaries or any of their respective directors or officers with respect to matters that are the subject of such consultations.

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Section 5.6 Rights Offering

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Section 5.7 Amendment and Restatement of Bylaws

Upon receipt of the Company Stockholder Approval with respect to the New Charter, the Company and the Board shall take all necessary action to ensure that the Bylaws of the Company are amended substantially in the form attached hereto as Exhibit F , with such other changes as the Board of Directors approves, with the consent of the Investor, which consent shall not be unreasonably delayed or withheld.

ARTICLE VI

COVENANTS OF THE INVESTOR AND THE COMPANY

Section 6.1 Stockholder Meeting; Proxy Material

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Section 6.2 Reasonable Efforts; Notification

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Section 6.3 Employee Incentives

The Compensation Committee of the Board of Directors shall, as promptly as practicable, take all actions reasonably necessary to consider implementing new management and employee incentives that it determines, in the exercise of its fiduciary duties, are in the best interests of the Company and its stockholders.

Section 6.4 Public Announcements

The Investor and the Company shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the Transactions and shall not issue any such press release or make any such public statement prior to such consultation and without the prior approval of the other Party, which approval shall not be unreasonably withheld or delayed, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with the NYSE. The Parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement shall be in the form previously agreed to by the Parties.

ARTICLE VII

CONDITIONS PRECEDENT TO THE FIRST CLOSING

Section 7.1 Conditions to Obligations of Each Party

The obligations of the Parties to consummate the First Closing Transactions contemplated hereby shall be subject to the satisfaction or waiver by both Parties on or prior to the First Closing Date of the following conditions:

Section 7.2 Conditions to Obligations of the Investor

The obligations of the Investor to consummate the First Closing Transactions contemplated hereby shall be subject to the satisfaction (or waiver by the Investor) on or prior to the First Closing Date of the following additional conditions:

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Section 7.3 Conditions to Obligations of the Company

The obligation of the Company to consummate the transactions contemplated hereby shall be subject to the satisfaction (or waiver by the Company), on or prior to the First Closing Date, of the following additional conditions:

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ARTICLE VIII

CONDITIONS PRECEDENT TO THE SECOND CLOSING

Section 8.1 Conditions to Obligations of Each Party

The obligations of the Parties to consummate the Second Closing Transactions contemplated hereby shall be subject to the satisfaction or waiver by both Parties on or prior to the Second Closing Date of the following conditions:

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Section 8.2 Conditions to Obligations of the Investor

The obligations of the Investor to consummate the Second Closing Transactions contemplated hereby shall be subject to the satisfaction (or waiver by the Investor) on or prior to the Second Closing Date of the following additional conditions:

Section 8.3 Conditions to Obligations of the Company

The obligation of the Company to consummate the transactions contemplated hereby shall be subject to the satisfaction (or waiver by the Company), on or prior to the Second Closing Date, of the following additional conditions:

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ARTICLE IX

TERMINATION

Section 9.1 Termination

This Agreement may be terminated at any time prior to the First Closing:

Section 9.2 Effect of Termination

In the event of the termination of this Agreement pursuant to the provisions of Section 9.1 , this Agreement shall become void and have no effect, without any liability to any Person in respect hereof or of the transactions contemplated hereby on the part of any Party hereto, or any of its Affiliates or Representatives, except as specified in this Section 9.2 and Sections 11.1 , 11.5 , 11.12 and 11.13 and except for any liability resulting from such Party’s breach of this Agreement.

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ARTICLE X

SURVIVAL

Section 10.1 Survival of Representations and Warranties and Covenants

The representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement, any examination by or on behalf of the Parties hereto and the completion of the transactions contemplated herein, but only to the extent specified below (and the Parties expressly waive and disclaim any statute of limitation prescribing a longer period in which to bring suit):

Notwithstanding the expiration of any such survival period, if any Party has provided notice with respect to a breach of representation or warranty within the applicable survival period, the relevant representation or warranty shall survive, solely with respect to such claim as is asserted in such notice, until the claim has been finally resolved.

Except as set forth in the preceding paragraph, the Investor hereby waives, from and after the First Closing, any and all other remedies which may be available to it, at law or equity, for any breach or inaccuracy or alleged breach or inaccuracy of the representations and warranties or covenants of the Company that terminate at the First Closing, whether such remedies arise under claims in contract, tort or otherwise; provided , that nothing herein shall limit in any way the Investor’s remedies in respect of fraud or willful misconduct by the Company in connection herewith or the Transactions.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Fees and Expenses

Except as otherwise provided in this Agreement, the Company, on the one hand, and the Investor, on the other hand, shall bear their respective expenses, costs and fees (including

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attorneys’ and auditors’ fees) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and compliance herewith and therewith, whether or not the transactions contemplated hereby shall be consummated, except that, if the First Closing occurs, the Company shall pay the reasonable out-of-pocket fees and expenses of the Investor (including fees and expenses of counsel, accountants and financial and other advisors), incurred with respect to the negotiation, execution, delivery and performance of this Agreement and the exhibits hereto and the Transactions, provided , that the Company shall not be required to pay in excess of Six Hundred Million Five Hundred Ninety Thousand Dollars ($6,590,000) in the aggregate.

Section 11.2 Notices

MatlinPatterson Global Advisers LLC

520 Madison Avenue

35 ^th Floor

New York, NY 10022-4213

Phone: (212) 655-9500

Fax: (212) 651-4011

Attention: David Matlin

with a copy to:

Bracewell & Giuliani, LLP

1177 Avenue of the Americas

19th Floor

New York, NY 10036

Tel: (212) 508-6100

Fax: (212) 508-6101

Attention: Mark E. Palmer and Robb Tretter

Standard Pacific Corp.

15326 Alton Parkway

Irvine, CA 92618

Tel: (949) 789-1600

Fax: (949) 789-1608

Attention: Clay A. Halvorsen

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with a copy to:

Gibson, Dunn & Crutcher LLP

3161 Michelson Drive

Irvine, CA 92612

Tel: (949) 451-3800

Fax: (949) 451-4220

Attention: Michelle Hodges

provided that if a Notice would become effective under the above provisions after 5:30 p.m. on any Business Day, then it shall be deemed instead to become effective at 9:30 a.m. on the next Business Day. References in this Agreement to time are to local time at the location of the addressee as set out in the Notice.

Subject to the foregoing provisions of this Section 11.2 , in proving service of a Notice, it shall be sufficient to prove that the envelope containing such Notice was properly addressed and delivered by hand, registered post or courier to the relevant address pursuant to the above provisions or that the facsimile transmission report (call back verification) states that the communication was properly sent.

Section 11.3 Entire Agreement

This Agreement (including the Exhibits and Schedules hereto) and the Confidentiality Agreement constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, and all contemporaneous oral agreements and understandings, between the Parties with respect to the subject matter hereof and thereof.

Section 11.4 Schedules

The disclosure of any matter in the Schedules referenced by a particular Section shall be deemed to be disclosed with respect to any other Section as and to the extent that the relevance of such matter to such other Section is readily apparent on the face of such disclosure. The disclosure of any matter in the Schedules shall not be construed as an admission that such disclosed matter is material.

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Section 11.5 Confidentiality

The Parties hereto agree that with respect to the disclosure of information furnished hereunder or in connection herewith, the Parties shall continue to be bound by the Confidentiality Agreement, which shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

Section 11.6 Amendment; Waivers

No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the Party against whom enforcement of the amendment, modification, discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the Party granting such waiver in any other respect or at any other time. The waiver by any of the Parties of a breach of or a default under any of the provisions of this Agreement shall not be construed as a waiver of any other breach or default of a similar nature, and the failure by any of the Parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall not be construed as a waiver of any of such provisions, rights or privileges hereunder. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any Party may otherwise have at law or in equity.

Section 11.7 Severability

If any provision of this Agreement, including any phrase, sentence, clause, Section or subsection, is inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. If any provision of this Agreement shall be adjudged to be inoperative or unenforceable or excessively broad as to duration, geographical scope, activity or subject, the Parties hereto intend that such provision shall be deemed modified to the minimum degree necessary to make such provision valid and enforceable under applicable Law and that such modified provision shall thereafter be enforced to the fullest extent possible.

Section 11.8 Counterparts

This Agreement may be executed in several counterparts (including by facsimile or other electronic transmission), each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

Section 11.9 Binding Effect

This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

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Section 11.10 Assignment

This Agreement shall not be assignable or otherwise transferable by any Party hereto without the prior written consent of the other Party hereto, provided that the Investor may assign this Agreement to one or more of its Affiliates, provided further that any such assignment shall not release the Investor or the Funds from their respective obligations hereunder or relating hereto.

Section 11.11 No Third Party Beneficiaries

Nothing in this Agreement shall confer any rights upon any Person other than the Parties hereto and their respective successors and permitted assigns.

Section 11.12 Governing Law

This Agreement shall be governed in all respects by the laws of the State of New York, without giving effect to the conflict of laws rules thereof to the extent such rules would require or permit the application of the laws of another jurisdiction. The Parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the State, City and County of New York, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by said courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a New York State or Federal court. The Parties hereby consent to and grant any such court jurisdiction over the person of such Parties and over the subject matter of any such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 11.2 , or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof.

Section 11.13 Waiver of Jury Trial

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) 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, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.13 .

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Section 11.14 Time of Essence

Time is of the essence with regard to all dates and time periods set forth or referred to in this Agreement.

Section 11.15 Specific Performance

Subject to Section 10.1 , the parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any state or federal court of the State of New York, located in the State, City and County of New York (this being in addition to any other remedy to which they are entitled at law or in equity), and each Party hereto agrees to waive in any action for such enforcement the defense that a remedy at law would be adequate.

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In Witness Whereof , the Parties have duly executed this Agreement as of the date first above written.

[SIGNATURE PAGE TO INVESTMENT AGREEMENT]

EXHIBIT A

Form of Senior Preferred Stock Certificate of Designations

EXHIBIT A

CERTIFICATE OF DESIGNATIONS

OF

SENIOR CONVERTIBLE PREFERRED STOCK

OF STANDARD PACIFIC CORP.

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

Standard Pacific Corp., a Delaware corporation (the “ Corporation ”), certifies that pursuant to the authority conferred upon the Board of Directors of the Corporation (the “ Board of Directors ”) by the Amended and Restated Certificate of Incorporation of the Corporation (the “ Certificate of Incorporation ”), and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, as amended, the Board of Directors, on May [__], 2008, adopted the following resolution creating a series of its Preferred Stock, par value $.01 per share:

RESOLVED, that (1) pursuant to the authority conferred upon the Board of Directors of the Corporation by the Certificate of Incorporation, the Board of Directors hereby designates 1,500,000 shares of the preferred stock, par value $.01 per share, of the Corporation as “Senior Convertible Preferred Stock” (the “ Senior Preferred Stock ”), and the powers, designations, preferences and relative, participating, optional and other rights of the Senior Preferred Stock and the qualifications, limitations and restrictions thereof, be, and they hereby are, as set forth below (the “ Certificate of Designations ”), and (2) in connection therewith, the officers of the Corporation be, and each of them hereby is, authorized, empowered and directed on behalf of the Corporation and in its name to execute and to file the Certificate of Designations with the Delaware Secretary of State:

Section 1. Designation and Amount . There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as “Senior Convertible Preferred Stock”. The number of shares constituting such series shall be 1,500,000. The Senior Preferred Stock shall have par value $.01 per share and the liquidation preference of the Senior Preferred Stock shall initially be $1,000 per share.

Section 2. Ranking . The Senior Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank (i) on a parity with each other class or series of preferred stock established after the Effective Date by the Corporation, the terms of which expressly provide that such class or series will rank on a parity with the Senior Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “ Parity Securities ”) and (ii) senior to the Corporation’s common stock (the “ Common Stock ”), Series A Junior Participating Cumulative Preferred Stock, Series B Junior Participating Convertible Preferred Stock (the “ Series B Preferred Stock ”) and each other class or series of capital stock outstanding or established after the Effective Date by the

Corporation the terms of which do not expressly provide that it ranks on a parity with or senior to the Senior Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “ Junior Securities ”). The Corporation has the right to authorize and/or issue additional shares or classes or series of Junior Securities without the consent of the Holders.

Section 3. Definitions. Unless the context or use indicates another meaning or intent, the following terms shall have the following meanings, whether used in the singular or the plural:

(a) “ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such first Person. As used in this definition, “ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of securities, partnership interests or by contract or otherwise. Notwithstanding the foregoing, solely for purposes of this Certificate of Designations, the directors and officers of the Corporation or any of its Subsidiaries shall not, solely as a result of holding such office, be deemed Affiliates of the Investor. With respect to the Investor, the term “ Affiliate ” shall also include its general partner or investment manager or similar Person, and any other entity with the same general partner or investment manager or similar Persons. For the avoidance of doubt, no Person shall be deemed the Affiliate of any other Person merely by virtue of holding an ownership interest of 10% or more in such Person, or pursuant to any other presumption regarding “affiliate” status.

(b) “ Aggregate Share Cap ” has the meaning set forth in Section 14(f).

(c) “ Applicable Conversion Price ” means the Conversion Price in effect at any given time.

(d) “ As-Converted Basis ” means with respect to (i) any share of Senior Preferred Stock, such number of shares of Common Stock that such share of Senior Preferred Stock would be convertible into assuming that the Stockholder Approvals have been granted and that shares of Series B Preferred Stock received in exchange for such share of Senior Preferred Stock are contemporaneously converted into shares of Common Stock, and (ii) any share of Series B Preferred Stock, such number of shares of Common Stock that such share of Series B Preferred Stock would be convertible.

(e) “ Beneficial Owner ” has the meaning given such term in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this Certificate of Designations, such Person or Group shall be deemed to have “beneficial ownership” of all shares that any such Person or Group has the right to acquire, whether such right is exercisable immediately or only after the passage of time.

(f) “ Board of Directors ” has the meaning set forth in the preamble hereto.

(g) “ Business Day ” means any day other than a Saturday, Sunday or any other day on which banks in New York City, New York are generally required or authorized by law to be closed.

(h) “ Certificate of Designations ” has the meaning set forth in the preamble hereto.

(i) “ Certificate of Incorporation ” has the meaning set forth in the preamble hereto.

(j) “ Closing Price ” of the Common Stock on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock on the New York Stock Exchange on such date. If the Common Stock is not traded on the New York Stock Exchange on any date of determination, the Closing Price of the Common Stock on such date