10-Q

FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2003

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from N/A to ________
	Commission file number 1-10959

STANDARD PACIFIC CORP.
(Exact name of registrant as specified in its charter)

Delaware	33-0475989
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
15326 Alton Parkway, Irvine, CA	92618-2338
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number, including area code)     (949) 789-1600

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x No o.

APPLICABLE ONLY TO CORPORATE ISSUERS

Registrant’s shares of common stock outstanding at July 31, 2003:  32,549,693

STANDARD PACIFIC CORP.
FORM 10-Q
INDEX

					Page No.
PART I.		Financial Information
	ITEM 1.			Financial Statements
				Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2003 and 2002	2
				Condensed Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002	3
				Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002	4
				Notes to Unaudited Condensed Consolidated Financial Statements	5
	ITEM 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	ITEM 3.			Quantitative and Qualitative Disclosures About Market Risk	27
	ITEM 4.			Controls and Procedures	28
PART II.			Other Information		30
	ITEM 1.			Legal Proceedings	30
	ITEM 2.			Changes in Securities and Use of Proceeds	30
	ITEM 3.			Defaults Upon Senior Securities	30
	ITEM 4.			Submission of Matters to a Vote of Security Holders	30
	ITEM 5.			Other Information	30
	ITEM 6.			Exhibits and Reports on Form 8-K	30
SIGNATURES					32

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PART I.  FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
Homebuilding:
Revenues	$	515,197		$	444,731		$	914,930		$	730,648
Cost of sales		(408,800	)		(367,185	)		(730,707	)		(599,532	)
Gross margin		106,397			77,546			184,223			131,116
Selling, general and administrative expenses		(52,693	)		(38,612	)		(98,528	)		(66,317	)
Income from unconsolidated joint ventures		13,899			3,918			22,127			7,506
Interest expense		(1,831	)		(1,495	)		(3,487	)		(2,573	)
Other income		312			171			627			179
Homebuilding pretax income		66,084			41,528			104,962			69,911
Financial Services:
Revenues		5,545			3,092			9,818			5,698
Expenses		(3,554	)		(2,008	)		(6,677	)		(3,914	)
Income from unconsolidated joint ventures		735			433			1,389			826
Other income		68			37			103			96
Financial services pretax income		2,794			1,554			4,633			2,706
Income before taxes		68,878			43,082			109,595			72,617
Provision for income taxes		(26,915	)		(17,093	)		(42,843	)		(28,839	)
Net Income	$	41,963		$	25,989		$	66,752		$	43,778
Earnings Per Share:
Basic	$	1.30		$	0.84		$	2.07		$	1.45
Diluted	$	1.26		$	0.81		$	2.01		$	1.40
Weighted Average Common Shares Outstanding:
Basic		32,341,042			31,122,042			32,254,469			30,272,891
Diluted		33,347,970			32,219,686			33,188,967			31,302,050
Cash dividends per share	$	0.08		$	0.08		$	0.16		$	0.16

The accompanying notes are an integral part of these condensed consolidated statements

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STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	June 30, 2003		December 31, 2002
		(Unaudited)
ASSETS
Homebuilding:
Cash and equivalents	$	84,263	$	22,245
Mortgage notes receivable and accrued interest		5,258		3,682
Other notes and receivables		38,063		34,451
Inventories:
Owned		1,556,677		1,267,374
Not owned		90,041		108,389
Investments in and advances to unconsolidated joint ventures		130,813		122,460
Property and equipment, net		7,540		7,524
Deferred income taxes		13,449		18,611
Other assets		23,846		19,097
Goodwill		59,501		58,062
		2,009,451		1,661,895
Financial Services:
Cash and equivalents		12,908		5,406
Mortgage loans held for sale		72,671		109,861
Other assets		4,645		14,964
		90,224		130,231
Total Assets	$	2,099,675	$	1,792,126
LIABILITIES AND STOCKHOLDERS’ EQUITY
Homebuilding:
Accounts payable	$	68,762	$	71,439
Accrued liabilities		143,347		147,677
Liabilities from inventories not owned		27,897		46,155
Trust deed and other notes payable		14,814		16,670
Senior notes payable		772,536		473,469
Senior subordinated notes payable		148,894		148,854
		1,176,250		904,264
Financial Services:
Accounts payable and other liabilities		1,699		2,116
Mortgage credit facilities		69,258		111,988
		70,957		114,104
Total Liabilities		1,247,207		1,018,368
Minority interests		10,690		—
Stockholders’ Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued		—		—
Common stock, $0.01 par value; 100,000,000 shares authorized; 32,526,943 and 32,183,630 shares outstanding, respectively		325		322
Additional paid-in capital		376,148		369,723
Retained earnings		465,305		403,713
Total Stockholders’ Equity		841,778		773,758
Total Liabilities and Stockholders’ Equity	$	2,099,675	$	1,792,126

The accompanying notes are an integral part of these condensed consolidated balance sheets.

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STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)
(Unaudited)

	Six Months Ended June 30,
	2003			2002
Cash Flows From Operating Activities:
Net income	$	66,752		$	43,778
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Income from unconsolidated joint ventures		(23,516	)		(8,332	)
Cash distributions of income from unconsolidated joint ventures		22,445			10,416
Depreciation and amortization		1,694			1,175
Changes in cash and equivalents due to:
Mortgages, other notes and receivables		32,002			38,937
Inventories - owned		(278,020	)		(46,624	)
Inventories - not owned		36,591			1,406
Deferred income taxes		5,162			775
Other assets		8,194			1,649
Accounts payable		(2,677	)		(2,945	)
Accrued liabilities		4,120			(3,049	)
Liabilities from inventories not owned		(25,811	)		—
Net cash provided by (used in) operating activities		(153,064	)		37,186
Cash Flows From Investing Activities:
Net cash paid for acquisitions		(8,330	)		(110,605	)
Investments in and advances to unconsolidated homebuilding joint ventures		(45,086	)		(48,047	)
Capital distributions and repayments from unconsolidated homebuilding joint ventures		37,483			28,788
Net additions to property and equipment		(1,535	)		(102	)
Net cash provided by (used in) investing activities		(17,468	)		(129,966	)
Cash Flows From Financing Activities:
Net proceeds from (payments on) revolving credit facilities		—			(51,400	)
Principal payments on trust deed and other notes payable		(12,567	)		(20,141	)
Net proceeds from the issuance of senior notes payable		296,057			—
Net proceeds from the issuance of senior subordinated notes payable		—			146,963
Net proceeds from (payments on) mortgage credit facilities		(42,730	)		(47,929	)
Net proceeds from the issuance of common stock		—			80,538
Dividends paid		(5,160	)		(4,934	)
Repurchase of common shares		(1,607	)		—
Proceeds from the exercise of stock options		6,059			4,541
Net cash provided by (used in) financing activities		240,052			107,638
Net increase (decrease) in cash and equivalents		69,520			14,858
Cash and equivalents at beginning of period		27,651			9,202
Cash and equivalents at end of period	$	97,171		$	24,060
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	29,852		$	22,975
Income taxes		43,120			22,197
Supplemental Disclosure of Noncash Activities:
Inventory financed by trust deed and other notes payable	$	10,711		$	22,874
Net inventory received as distributions from unconsolidated homebuilding joint ventures		391			1,458
Deferred purchase price recorded in connection with acquisitions		1,469			—
Expenses capitalized in connection with the issuance of senior and senior subordinated notes		2,869			1,838
Issuance of common stock in connection with acquisition		—			4,000
Income tax benefit credited in connection with stock option exercises		1,976			1,650
Inventories not owned		7,568			57,972
Liabilities from inventories not owned		18,258			57,972
Minority interests		10,690			—

The accompanying notes are an integral part of these condensed consolidated statements.

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STANDARD PACIFIC CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003

1.       Basis of Presentation

          The condensed consolidated financial statements included herein have been prepared by Standard Pacific Corp., without audit, pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q.  Certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States has been omitted pursuant to applicable rules and regulations.  In the opinion of management, the unaudited financial statements included herein reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly our financial position as of June 30, 2003, and the results of operations and cash flows for the periods presented.

          Certain items in the prior period condensed consolidated financial statements have been reclassified to conform with current period presentation. 

          The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2002.  Unless the context otherwise requires, the terms “we,” “us” and “our” refer to Standard Pacific Corp. and its subsidiaries.  The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

2.       Variable Interest Entities

          In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities,” an interpretation of ARB No. 51 (“FIN 46”).  Under FIN 46, a variable interest entity (“VIE”) is created when (i) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or (ii) the entity’s equity holders as a group either (a) lack direct or indirect ability to make decisions about the entity, (b) are not obligated to absorb expected losses of the entity if they occur or (c) do not have the right to receive expected residual returns of the entity if they occur.  If an entity is deemed to be a VIE pursuant to FIN 46, the enterprise that absorbs a majority of the expected losses, receives a majority of the entity’s expected residual returns, or both, is considered the primary beneficiary and must consolidate the VIE.  Expected losses and residual returns for VIE’s are calculated based on the probability of estimated future cash flows as defined in FIN 46.  FIN 46 is effective immediately for arrangements entered into or modified after January 31, 2003 and will be applied to all arrangements entered into or modified before February 1, 2003 during our fiscal quarter ended September 30, 2003.  The initial adoption of FIN 46 for arrangements entered into or modified after January 31, 2003 did not have a material impact on our financial position or results of operations (see Notes 5 and 7 for further discussion).  We are still evaluating the impact of FIN 46 for all arrangements entered into prior to February 1, 2003.  However, we do not anticipate that the impact of these arrangements will have a material effect on our financial position or results of operations.

3.       Earnings Per Share

          We compute earnings per share in accordance with Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS 128”).  This statement requires the presentation of both basic and diluted earnings per share for financial statement purposes.  Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding.  Diluted earnings per share includes the effect of the potential shares outstanding, including

5

dilutive stock options using the treasury stock method.  The table set forth below reconciles the components of the basic earnings per share calculation to diluted earnings per share.

	Three Months Ended June 30,
	2003						2002
	Net Income		Shares		EPS		Net Income		Shares		EPS
	(Dollars in thousands, except per share amounts)
Basic earnings per share	$	41,963		32,341,042	$	1.30	$	25,989		31,122,042	$	0.84
Effect of dilutive stock options		—		1,006,928				—		1,097,644
Diluted earnings per share	$	41,963		33,347,970	$	1.26	$	25,989		32,219,686	$	0.81

	Six Months Ended June 30,
	2003						2002
	Net Income		Shares		EPS		Net Income		Shares		EPS
	(Dollars in thousands, except per share amounts)
Basic earnings per share	$	66,752		32,254,469	$	2.07	$	43,778		30,272,891	$	1.45
Effect of dilutive stock options		—		934,498				—		1,029,159
Diluted earnings per share	$	66,752		33,188,967	$	2.01	$	43,778		31,302,050	$	1.40

4.       Stock-Based Compensation

          We account for our stock option plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations.  In accordance with the intrinsic value method of accounting, no stock-based employee compensation expense is reflected in net income, as all options granted under those plans had an exercise price equal to the fair market value of the underlying common stock on the date of grant and the vesting of the options is not dependent on any future performance conditions.  In accordance with Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” the following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) to our stock option plans:

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
	(Dollars in thousands, except per share amounts)
Net income, as reported	$	41,963		$	25,989		$	66,752		$	43,778
Deduct: Total stock-based employee compensation  expense determined under the fair value method for all awards, net of related tax effects		(675	)		(744	)		(1,363	)		(1,482	)
Net income, as adjusted	$	41,288		$	25,245		$	65,389		$	42,296
Earnings per share:
Basic—as reported	$	1.30		$	0.84		$	2.07		$	1.45
Basic—as adjusted	$	1.28		$	0.81		$	2.03		$	1.40
Diluted—as reported	$	1.26		$	0.81		$	2.01		$	1.40
Diluted—as adjusted	$	1.24		$	0.78		$	1.97		$	1.35

          The effects of applying SFAS 123 in this pro forma disclosure are not indicative of future values.

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5.       Inventories

Inventories consisted of the following at:

	June 30, 2003		December 31, 2002
	(Dollars in thousands)
Inventories owned:
Land and land under development	$	882,819	$	731,780
Homes completed and under construction		584,824		449,600
Model homes		89,034		85,994
Total inventories owned	$	1,556,677	$	1,267,374
Inventories not owned:
Land purchase and land option deposits	$	51,454	$	62,234
Variable interest entities, net of deposits		12,340		—
Other land option contracts, net of deposits		26,247		46,155
Total inventories not owned	$	90,041	$	108,389

          Under FIN 46, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur.  Therefore, whenever we enter into an option or purchase contract with an entity and make a non-refundable deposit, a VIE may have been created.  If a VIE exists and we have a variable interest in that entity, FIN 46 may require us to calculate expected losses and residual returns for the VIE based on the probability of estimated future cash flows as described in FIN 46.  If we are deemed to be the primary beneficiary of a VIE we will be required to consolidate the VIE on our balance sheet. 

          At June 30, 2003, we consolidated four VIE’s as a result of our option to purchase land or lots from the selling entities.  We made cash deposits to these VIE’s totaling $565,000 which is included in land purchase and land option deposits in the table above.  Our option deposits represent our maximum exposure to loss if we elect not to purchase the optioned property.  Included in our condensed consolidated balance sheet at June 30, 2003 were inventories not owned related to these four VIE’s of approximately $12.3 million, liabilities from inventories not owned of approximately $1.6 million and minority interests of approximately $10.7 million.  We consolidated these VIE’s because we were considered the primary beneficiary in accordance with FIN 46.  These amounts were recorded based on their estimated fair values at June 30, 2003.  Creditors, if any, of these VIE’s have no recourse against us.

6.       Capitalization of Interest

          The following is a summary of homebuilding interest capitalized and expensed for the three and six months ended June 30, 2003 and 2002.

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
	(Dollars in thousands)
Total homebuilding interest incurred	$	18,864		$	14,744		$	34,865		$	27,003
Less: Homebuilding interest capitalized to inventories owned		(17,033	)		(13,249	)		(31,378	)		(24,430	)
Homebuilding interest expense	$	1,831		$	1,495		$	3,487		$	2,573
Homebuilding interest previously capitalized to inventories owned, included in cost of sales	$	14,590		$	12,512		$	24,109		$	21,598
Homebuilding interest capitalized in ending inventories owned							$	39,129		$	31,722

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7.       Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

          We enter into homebuilding and land development joint ventures from time to time as a means of accessing lot positions, expanding our market opportunities, establishing strategic alliances, managing our risk profile and leveraging our capital base.  Our homebuilding joint ventures are generally entered into with other homebuilders and developers to develop land and construct homes which are sold directly to third party homebuyers.  Our land development joint ventures are typically entered into with other homebuilders and developers to develop finished lots for sale to the joint venture’s members or other third parties.  The tables set forth below summarize the combined financial information related to our unconsolidated homebuilding and land development joint ventures which are accounted for under the equity method:

	June 30, 2003		December 31, 2002
	(Dollars in thousands)
Assets:
Cash	$	26,397	$	24,960
Inventories		599,884		481,247
Other assets		30,183		29,240
Total assets	$	656,464	$	535,447
Liabilities and Equity:
Accounts payable and accrued liabilities	$	80,043	$	81,394
Construction loans and trust deed notes payable		264,747		227,138
Equity		311,674		226,915
Total liabilities and equity	$	656,464	$	535,447

          Our share of equity shown above was approximately $121.6 million and $114.1 million at June 30, 2003 and December 31, 2002, respectively.  Additionally, as of June 30, 2003 and December 31, 2002, we had advances outstanding of approximately $9.2 million and $8.4 million to these unconsolidated joint ventures, which were included in the accounts payable and accrued liabilities balance in the table above.

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
	(Dollars in thousands)
Revenues	$	98,121		$	35,907		$	196,825		$	74,014
Cost of sales and expenses		(67,482	)		(26,224	)		(145,138	)		(54,028	)
Net income	$	30,639		$	9,683		$	51,687		$	19,986

          Income from homebuilding and land development joint ventures as presented in the accompanying condensed consolidated financial statements reflect our proportionate share of the income of these joint ventures.  Our ownership interests in the joint ventures detailed above vary, but are generally less than or equal to 50 percent. 

          There were no homebuilding or land development joint ventures entered into or modified after January 31, 2003 which were required to be consolidated by us in accordance with FIN 46.  We are still evaluating the impact of FIN 46 for all unconsolidated homebuilding and land development joint ventures entered into prior to February 1, 2003.  However, we do not anticipate that the impact of these arrangements will have a material effect on our financial position or results of operations.

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8.       Acquisitions

          On April 15, 2002, we acquired Westbrooke Homes for total consideration of approximately $39 million in cash, plus the repayment of approximately $55 million in indebtedness. In connection with this acquisition, we recorded goodwill of approximately $12.5 million. Westbrooke Homes is a longtime homebuilder in the Miami, Florida metropolitan area.

          On May 14, 2002, we acquired Colony Homes for total consideration of approximately $26 million in cash (including the estimated contingent payments described below) and stock, plus the repayment of approximately $9 million in indebtedness. In connection with this acquisition, we recorded an initial amount of goodwill of approximately $15.9 million. The stock component consisted of the issuance of 133,333 shares of Standard Pacific common stock valued under the agreement at $30 per share. The contingent payments are subject to an aggregate cap of $7 million and will be payable pursuant to an earnout arrangement based on pretax income of Colony Homes during the period 2003 through 2005. Contingent payments, if any, are recorded as goodwill as they are earned and are payable in cash annually following the relevant year end.  We recorded goodwill for the six month period ended June 30, 2003 of approximately $627,000 related to the earnout arrangement.  Colony Homes has been in business since 1991 in the Orlando, Florida metropolitan area.

          On August 13, 2002, we acquired Westfield Homes for total consideration of approximately $56.5 million in cash (including the estimated contingent payments described below) and stock, plus the repayment of approximately $46 million in indebtedness. In connection with this acquisition, we recorded an initial amount of goodwill of approximately $13.8 million.  The cash component of the purchase price consisted of an initial payment of approximately $20 million, a deferred payment of $7 million paid in January 2003 and contingent payments estimated to equal approximately $14.5 million.  The contingent payments are subject to an annual earnout arrangement based on a percentage of pretax income of Westfield Homes for the period subsequent to the acquisition through December 31, 2002 and for the years ended December 31, 2003 through December 31, 2005. Contingent payments, if any, are recorded as goodwill as they are earned and are payable in cash annually following the relevant year end.  We recorded additional goodwill for the 2002 earnout period and for the six month period ended June 30, 2003 of approximately $1.3 million and $842,000, respectively.  The stock component consisted of the issuance of 459,552 shares of Standard Pacific common stock valued under the agreement at $32.64 per share. Westfield Homes has been in business since 1980 and currently operates in Tampa and Southwest Florida, and in Raleigh-Durham and Charlotte in the Carolinas.  We did not acquire Westfield’s Illinois operations.

          All of these acquisitions were accounted for under the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.”  The purchase price of these acquisitions was allocated to the net assets acquired based upon their estimated fair values as of the date of acquisition. The results of operations of Westbrooke Homes, Colony Homes and Westfield Homes are included in the accompanying condensed consolidated financial statements beginning on their respective dates of acquisition.

          The following unaudited pro forma condensed combined financial data for the three and six month periods ended June 30, 2002 were derived from our historical consolidated financial statements and the historical financial statements of Westfield Homes, Colony Homes and Westbrooke Homes prior to acquisition. The unaudited pro forma condensed combined financial data gives effect to these acquisitions as if they had occurred at the beginning of each period presented.

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          The unaudited pro forma condensed combined financial data has been included for comparative purposes only and does not purport to show what the operating results would have been if the acquisitions had been consummated as of the dates indicated below and should not be construed as representative of future operating results.

	Three Months Ended June 30, 2002		Six Months Ended June 30, 2002
	(Dollars in thousands, except per share amounts)
Pro Forma:
Revenues	$	505,515	$	818,900
Net Income	$	28,970	$	50,579
Earnings Per Share:
Basic	$	0.92	$	1.64
Diluted	$	0.88	$	1.59
Weighted Average Common Shares Outstanding:
Basic		31,646,063		30,831,154
Diluted		32,743,707		31,860,313

9.       Warranty Costs

          Estimated future warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts accrued are based upon historical experience rates. Accrued warranty reserve is included in accrued liabilities in the accompanying condensed consolidated balance sheets. Changes in our accrued warranty reserve are detailed in the table set forth below:

	Six Months Ended June 30, 2003
	(Dollars in thousands)
Accrued warranty reserve, beginning of the  period	$	16,984
Warranty reserve accrued during the period		8,212
Warranty costs paid during the  period		(7,927	)
Accrued warranty reserve, end of the  period	$	17,269

10.       Senior Notes

          In March 2003, we issued $125 million of 7.75% Senior Notes which mature on March 15, 2013 (the “7.75% Senior Notes”).  These notes were issued at a discount to yield approximately 7.88 percent under the effective interest method and have been reflected net of the unamortized discount in the accompanying condensed consolidated balance sheet.  Interest on these notes is payable on March 15 and September 15 of each year until maturity, commencing September 15, 2003.  The notes are redeemable at our option, in whole or in part commencing March 15, 2008 at 103.875 percent of par, with the call price reducing ratably to par on March 15, 2011.  Prior to March 15, 2008 the notes are redeemable pursuant to a “make whole” formula.  Net proceeds were approximately $122.7 million and were used to repay borrowings outstanding under our revolving credit facility.

          In May 2003, we issued $175 million of 6.875% Senior Notes which mature on May 15, 2011 (the
“6.875% Senior Notes”).  These notes were issued at par in a transaction exempt from the registration requirements of federal and state securities laws.  The initial purchasers of these notes sold the unregistered notes to Qualified Institutional Buyers pursuant to Rule 144A.  In connection with the issuance, we entered into a registration rights agreement with the initial purchasers of the notes which requires us, among other things, to exchange the unregistered notes for substantially similar notes registered under the Securities Act of 1933, as amended.  On June 24, 2003, we filed with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 to register the exchange notes.  The registration statement has not yet been declared effective by the SEC.  However, following the SEC’s declaration of the effectiveness of the registration statement we plan to commence an exchange offer pursuant to which we will offer to exchange

10

the unregistered notes for registered notes, satisfying certain of our obligations under the registration rights agreement.  Interest is due and payable on May 15 and November 15 of each year until maturity, commencing November 15, 2003.  The notes are redeemable at our option pursuant to a “make whole” formula.  Net proceeds were approximately $173.4 million and were used to payoff borrowings outstanding under our revolving credit facility with the balance used for general corporate purposes.

          The 7.75% and 6.875% Senior Notes are unsecured obligations and rank equally with our other existing senior unsecured indebtedness, including borrowings under our revolving credit facility.  We will, under certain circumstances, be obligated to make an offer to purchase all or a portion of the notes in the event of certain asset sales.  In addition, these notes contain other restrictive covenants which, among other things, impose certain limitations on our ability to (1) incur additional indebtedness, (2) create liens, (3) make restricted payments (including payments of dividends, other distributions, and investments in unrestricted subsidiaries and unconsolidated joint ventures), and (4) sell assets.  Also, upon a change in control, as defined in the governing indentures, we are required to make an offer to purchase these notes at 101 percent of the principal amount.

11.       Commitments and Contingencies

          We are subject to customary obligations associated with entering into contracts for the purchase of land and improved homesites.  These purchase contracts typically require a cash deposit and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements by the sellers, including obtaining applicable property entitlements.  As of June 30, 2003, we had cash deposits and letters of credit outstanding of approximately $27.0 million on land purchase contracts having a total remaining purchase price of $265.7 million.

          In addition, we utilize option contracts with land sellers and third-party financial entities as a method of acquiring land.  Option contracts generally require the payment of a non-refundable cash deposit or the issuance of a letter of credit for the right to acquire lots over a specified period of time at predetermined prices.  We generally have the right at our discretion to terminate our obligations under these option agreements by forfeiting our cash deposit or by repaying amounts drawn under the letter of credit with no further financial responsibility.  As of June 30, 2003, we had cash deposits and letters of credit outstanding of approximately $37.1 million on option contracts having a total remaining purchase price of  approximately $216.2 million. 

          We also enter into land development and homebuilding joint ventures.  These joint ventures typically obtain secured acquisition, development and construction financing.  At June 30, 2003, our unconsolidated joint ventures had borrowings of approximately $264.7 million.  We and our joint venture partners generally provide credit enhancements to this financing in the form of loan-to-value maintenance agreements which require us under certain circumstances to repay the venture’s borrowings to the extent such borrowings plus estimated construction completion costs exceed a specified percentage of the value of the property securing the loan.  Either a decrease in the value of the property securing the loan or an increase in construction completion costs could trigger this payment obligation.  Typically, we share these obligations with our other partners and, in some instances, these obligations are subject to limitations on the amount that we could be required to pay down.  As of June 30, 2003, approximately $185.1 million of our unconsolidated joint venture borrowings were subject to these credit enhancements.

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          We and our joint venture partners are also generally obligated to the project lenders to complete land development improvements and the construction of planned homes if the joint venture does not perform the required construction.  Provided we and the other joint venture partners are in compliance with these completion obligations, the project lenders would be obligated to fund these improvements through any financing commitments available under the applicable joint venture development and construction loans.  In addition, we and our joint venture partners have from time to time provided unsecured environmental indemnities to joint venture project lenders.  In some instances these environmental indemnities are subject to caps.  In each case, we have performed due diligence on potential environmental risks including obtaining an independent environmental review from outside consultants.  These indemnities obligate us to reimburse the project lenders for claims related to environmental matters for which they are held responsible.

          Additionally, we and our joint venture partners have agreed to indemnify third party surety providers with respect to performance bonds issued on behalf of certain of our joint ventures.  If a joint venture does not perform its obligations, the surety bond could be called.  If these surety bonds are called, and the joint venture fails to reimburse the surety, we and our joint venture partners would be obligated to indemnify the surety.  These surety indemnity arrangements are generally joint and several obligations with our joint venture partners.  As of June 30, 2003, our joint ventures had approximately $142.7 million of surety bonds outstanding subject to these indemnity arrangements.

          We commit to making mortgage loans to our homebuyers through our mortgage financing subsidiary, Family Lending.  Mortgage loans in process for which interest rates were committed to borrowers totaled approximately $69.2 million at June 30, 2003, and carried a weighted average interest rate of approximately 5.1 percent. Interest rate risks related to these obligations are generally mitigated by Family Lending preselling the loans to its investors or through its interest rate hedging program. As of June 30, 2003, Family Lending had approximately $109.6 million of closed mortgage loans held for sale and loans in process that were originated on a non-presold basis, of which approximately $95.3 million were hedged by forward sale commitments of mortgage-backed securities. In addition, as of June 30, 2003, Family Lending held approximately $11.3 million in closed mortgage loans that were presold to third party investors subject to completion of the investors’ administrative review of the applicable loan documents.

12.       Accounting for Guarantees

          In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”).  The disclosure requirements of FIN 45 became effective as of December 31, 2002, and we adopted that portion of the pronouncement as of that date.  The initial recognition and measurement requirements of FIN 45 are effective on a prospective basis to guarantees issued or modified after December 31, 2002.  Recognition of a liability is required to be recorded at its estimated fair value based on the present value of the expected contingent payments under the guarantee arrangement.  The adoption of the initial recognition and measurement requirements of FIN 45 did not have a material impact on our financial condition or results of operations.

          The types of guarantees that we provide that are subject to FIN 45 generally are made to third parties on behalf of our unconsolidated homebuilding and land development joint ventures. As of June 30, 2003, these guarantees included, but were not limited to, loan-to-value maintenance agreements, construction completion guarantees, environmental indemnities and surety bond indemnities (see Note 11 for further discussion).

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13.       Recent Accounting Pronouncements

          In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145 “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections” (“SFAS 145”).  SFAS 145 provides that gains or losses resulting from the extinguishment of debt not be classified as an extraordinary item unless it meets the criteria of Accounting Principles Board Opinion No. 30.  SFAS 145 is effective for fiscal years beginning after May 15, 2002.  The adoption of SFAS 145 did not have any impact on our financial position or results of operations.

          In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”).  SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (“EITF”) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including certain costs incurred in a restructuring)”.  SFAS 146 requires recognition of a liability for a cost associated with an exit or disposal activity when the liability is incurred as opposed to when the entity commits to an exit plan as prescribed under EITF No. 94-3.  SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002.  The adoption of SFAS 146 did not have any impact on our financial position or results of operations.

          In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS 150”).  SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  The adoption of SFAS 150 did not have any impact on our financial position or results of operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Selected Financial Information

	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
	(Dollars in thousands)
Homebuilding:
Revenues	$	515,197		$	444,731		$	914,930		$	730,648
Cost of sales		(408,800	)		(367,185	)		(730,707	)		(599,532	)
Gross margin		106,397			77,546			184,223			131,116
Gross margin percentage		20.7	%		17.4	%		20.1	%		17.9	%
Selling, general and administrative expenses		(52,693	)		(38,612	)		(98,528	)		(66,317	)
Income from unconsolidated joint ventures		13,899			3,918			22,127			7,506
Interest expense		(1,831	)		(1,495	)		(3,487	)		(2,573	)
Other income		312			171			627			179
Homebuilding pretax income		66,084			41,528			104,962			69,911
Financial Services:
Revenues		5,545			3,092			9,818			5,698
Expenses		(3,554	)		(2,008	)		(6,677	)		(3,914	)
Income from unconsolidated joint ventures		735			433			1,389			826
Other income		68			37			103			96
Financial services pretax income		2,794			1,554			4,633			2,706
Income before taxes		68,878			43,082			109,595			72,617
Provision for income taxes		(26,915	)		(17,093	)		(42,843	)		(28,839	)
Net Income	$	41,963		$	25,989		$	66,752		$	43,778
Net cash provided by (used in) operating activities (1)	$	(63,742	)	$	39,733		$	(153,064	)	$	37,186
Net cash provided by (used in) investing activities (1)	$	8,648		$	(123,488	)	$	(17,468	)	$	(129,966	)
Net cash provided by (used in) financing activities (1)	$	131,986		$	95,042		$	240,052		$	107,638
Adjusted Homebuilding EBITDA (2)	$	80,252		$	57,392		$	134,517		$	98,178

(1)

Amounts were derived from our condensed consolidated statements of cash flows.

(2)

Adjusted Homebuilding EBITDA means net income (plus cash distributions of income from unconsolidated joint ventures) before  (a) income taxes, (b) homebuilding interest expense, (c) expensing of previously capitalized interest included in cost of sales, (d) noncash impairment charges, if any (e) homebuilding depreciation and amortization, (f) income from unconsolidated joint ventures, and (g) income from our financial services subsidiary.  Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently.  We believe Adjusted Homebuilding EBITDA information is useful to investors as a measure of our ability to service debt and obtain financing.  However, it should be noted that Adjusted Homebuilding EBITDA is a non-GAAP financial measure.  Due to the significance of the GAAP components excluded, Adjusted Homebuilding EBITDA should not be considered in isolation or as an alternative to net income, cash flow from operations, or any other operating or liquidity performance measure prescribed by accounting principles generally accepted in the United States.  The tables set forth below reconcile net cash provided by (used in) operating activities and net income, calculated and presented in accordance with accounting principles generally accepted in the United States, to Adjusted Homebuilding EBITDA:

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	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2002			2003			2002
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	(63,742	)	$	39,733		$	(153,064	)	$	37,186
Add:
Income taxes		26,915			17,093			42,843			28,839
Homebuilding interest expense		1,831			1,495			3,487			2,573
Expensing of previously capitalized interest included in cost of sales		14,590			12,512			24,109			21,598
Less:
Income from our financial services subsidiary		1,991			1,084			3,141			1,784
Depreciation and amortization from financial services subsidiary		79			41			156			85
Net changes in operating assets and liabilities:
Mortgages, other notes and receivables		(1,037	)		1,823			(32,002	)		(38,937	)
Inventories-owned		150,550			3,315			278,020			46,624
Inventories-not owned		(36,591	)		(1,406	)		(36,591	)		(1,406	)
Deferred income taxes		1,273			5,664			(5,162	)		(775	)
Other assets		2,110			(927	)		(8,194	)		(1,649	)
Accounts payable		(5,643	)		(4,751	)		2,677			2,945
Accrued liabilities		(33,745	)		(16,034	)		(4,120	)		3,049
Liabilities from inventories not owned		25,811			—			25,811			—
Adjusted Homebuilding EBITDA	$	80,252		$	57,392		$	134,517		$	98,178

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
	(Dollars in thousands)
Net income		41,963	$	25,989	$	66,752	$	43,778
Add:
Cash distributions of income from unconsolidated joint ventures		10,788		5,186		22,445		10,416
Income taxes		26,915		17,093		42,843		28,839
Homebuilding interest expense		1,831		1,495		3,487		2,573
Expensing of previously capitalized interest included in cost of sales		14,590		12,512		24,109		21,598
Homebuilding depreciation and amortization		790		552		1,538		1,090
Less:
Income from unconsolidated joint ventures		14,634		4,351		23,516		8,332
Income from our financial services subsidiary		1,991		1,084		3,141		1,784
Adjusted Homebuilding EBITDA	$	80,252	$	57,392	$	134,517	$	98,178

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Selected Operating Data

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
New homes delivered:
Southern California		406		419		739		714
Northern California		118		155		241		266
Total California		524		574		980		980
Texas		119		116		229		247
Arizona		315		372		643		653
Colorado		74		83		111		137
Florida		533		228		846		228
Carolinas		132		—		239		—
Consolidated total		1,697		1,373		3,048		2,245
Unconsolidated joint ventures(1):
Southern California		88		55		191		77
Northern California		37		—		53		—
Total unconsolidated joint ventures		125		55		244		77
Total		1,822		1,428		3,292		2,322
Average selling prices of homes delivered:
California (excluding joint ventures)	$	512,000	$	468,000	$	508,000	$	460,000
Texas	$	271,000	$	285,000	$	273,000	$	280,000
Arizona	$	185,000	$	172,000	$	179,000	$	174,000
Colorado	$	308,000	$	345,000	$	310,000	$	339,000
Florida	$	185,000	$	218,000	$	183,000	$	218,000
Carolinas	$	133,000	$	—	$	134,000	$	—
Consolidated (excluding joint ventures)	$	293,000	$	324,000	$	294,000	$	325,000
Unconsolidated joint ventures (California)(1)	$	553,000	$	498,000	$	543,000	$	516,000
Total (including joint ventures)	$	311,000	$	330,000	$	312,000	$	331,000
Net new orders:
Southern California		561		567		1,084		1,166
Northern California		184		223		331		432
Total California		745		790		1,415		1,598
Texas		128		150		246		290
Arizona		545		383		928		870
Colorado		82		68		170		162
Florida		760		281		1,473		281
Carolinas		144		—		309		—
Consolidated total		2,404		1,672		4,541		3,201
Unconsolidated joint ventures(1):
Southern California		105		123		216		192
Northern California		74		54		119		78
Total unconsolidated joint ventures		179		177		335		270
Total		2,583		1,849		4,876		3,471

(1) Numbers presented regarding unconsolidated joint venture deliveries, average selling prices, orders, average selling communities and backlog reflect total deliveries, average selling prices, orders, average selling communities and backlog of such joint ventures.

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Selected Operating Data – (continued)

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
Average number of selling communities during the period:
Southern California		21		22		22		23
Northern California		14		14		14		14
Texas		18		24		20		24
Arizona		23		20		23		21
Colorado		12		10		12		10
Florida		32		9		30		5
Carolinas		10		—		9		—
Consolidated total		130		99		130		97
Unconsolidated joint ventures(1):
Southern California		4		6		5		6
Northern California		5		3		4		2
Total unconsolidated joint ventures		9		9		9		8
Total		139		108		139		105

	At June 30,
	2003		2002
Backlog (in homes):
Southern California		1,201		1,016
Northern California		247		241
Total California		1,448		1,257
Texas		163		190
Arizona		852		743
Colorado		147		103
Florida		1,661		679
Carolinas		151		—
Consolidated total		4,422		2,972
Unconsolidated joint ventures(1):
Southern California		249		122
Northern California		109		78
Total unconsolidated joint ventures		358		200
Total		4,780		3,172
Backlog (estimated dollar value in thousands):
Consolidated total	$	1,333,850	$	968,894
Unconsolidated joint ventures (California)(1)		183,374		106,835
Total	$	1,517,224	$	1,075,729
Building sites owned or controlled:
Southern California		9,810		5,754
Northern California		3,532		3,015
Total California		13,342		8,769
Texas		2,758		2,591
Arizona		4,671		4,350
Colorado		1,681		1,817
Florida		10,216		3,818
Carolinas		3,300		—
Total		35,968		21,345
Total building sites owned		17,458		13,716
Total building sites optioned		12,267		4,978
Total joint venture lots		6,243		2,651
Total		35,968		21,345
Completed and unsold homes		145		163
Homes under construction		4,237		2,939

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Critical Accounting Policies

          The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those which impact our most critical accounting policies. We base our estimates and judgments on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies related to the following accounts or activities are those that are most critical to the portrayal of our financial condition and results of operations, and require the more significant judgments and estimates:

• Business combinations;

• Cost of sales;

• Inventories;

• Goodwill;

• Unconsolidated homebuilding joint ventures; and

• Variable interest entities.

          Variable Interest Entities

          Certain land purchase contracts and lot option contracts are accounted for in accordance with Financial Accounting Standards Board Interpretation No. 46 “Consolidation of Variable Interest Entities,” an interpretation of ARB No. 51 (“FIN 46”).  In addition, all joint ventures are reviewed and analyzed under FIN 46 to determine whether or not these arrangements are accounted for under the principles of FIN 46 or other accounting rules (see unconsolidated homebuilding joint ventures critical accounting policy in our Form 10-K for the year ended December 31, 2002).  Under FIN 46, a variable interest entity (“VIE”) is created when (i) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or (ii) the entity’s equity holders as a group either (a) lack direct or indirect ability to make decisions about the entity, (b) are not obligated to absorb expected losses of the entity if they occur or (c) do not have the right to receive expected residual returns of the entity if they occur.  If an entity is deemed to be a VIE pursuant to FIN 46, the enterprise that absorbs a majority of the expected losses, receives a majority of the entity’s expected residual returns, or both is considered the primary beneficiary and must consolidate the VIE.  Expected losses and residual returns for VIE’s are calculated based on the probability of estimated future cash flows as defined in FIN 46.  Based on the provisions of FIN 46, whenever we enter into a land purchase contract or an option contract for land or lots with an entity and make a non-refundable deposit, or enter into a homebuilding or land development joint venture, a VIE may be created and the arrangement is evaluated under FIN 46.  The assumptions used by us when we evaluate whether the equity investment at risk is not sufficient to permit the entity from financing its activities without additional subordinated financial support from other parties, the calculation of expected losses and expected residual returns, and the probability of estimated future cash flows require significant judgment and are based on future events that may or may not occur.

          For a more detailed description of our critical accounting policies please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2002.

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          The Three and Six Month Periods Ended June 30, 2003 Compared to The Three and Six Month Periods Ended June 30, 2002

          Overview

          Net income for the 2003 second quarter increased 61 percent to $42.0 million, or $1.26 per diluted share, compared to $26.0 million, or $0.81 per diluted share, for the year earlier period.  The increase in net income was driven by a 59 percent increase in homebuilding pretax income to $66.1 million, an 80 percent increase in financial services pretax income to $2.8 million and a 60 basis point reduction in our effective income tax rate to 39.1 percent.  For the six months ended June 30, 2003, net income increased 52 percent to $66.8 million, or $2.01 per diluted share, compared to $43.8 million, or $1.40 per diluted share, for the year earlier period.  The increase in net income was driven by a 50 percent increase in homebuilding pretax income to $105.0 million, a 71 percent increase in financial services pretax income to $4.6 million, and a 60 basis point reduction in our effective income tax rate to 39.1 percent.  Results of operations for the three and six month periods ended June 30, 2003 include the results of our new Florida and Carolina operations acquired during the second and third quarters of 2002.

          Homebuilding

          Homebuilding pretax income for the 2003 second quarter was up 59 percent to $66.1 million compared to $41.5 million last year.  The higher level of pretax income was driven by a 16 percent increase in homebuilding revenues, a 330 basis point improvement in our homebuilding gross margin percentage and a $10.0 million increase in joint venture income.  These increases were partially offset by a 150 basis point increase in our selling, general and administrative (“SG&A”) expenses as a percentage of homebuilding revenues.

          For the first six months of 2003, homebuilding pretax income increased 50 percent to $105.0 million compared to $69.9 million in the year earlier period.  This increase was primarily the result of a 25 percent increase in homebuilding revenues, a 220 basis point improvement in our homebuilding gross margin percentage and a $14.6 million increase in joint venture income.  These increases were offset in part by a 170 basis point increase in our SG&A rate.

          Homebuilding revenues for the 2003 second quarter were $515.2 million compared to $444.7 million in the year earlier period.  The 16 percent increase in revenues was driven by a 24 percent increase in new home deliveries (exclusive of joint ventures) and a $17 million increase in land sales to $17.5 million due primarily to the disposition of two land parcels in Texas.  Excluding the 665 homes delivered from our new Florida and Carolina operations, consolidated deliveries declined 10 percent. The impact of the higher delivery volume was offset in part by a 10 percent decrease in our average home price to $293,000. 

          During the 2003 second quarter we delivered 524 new homes in California (exclusive of joint ventures), a 9 percent decrease compared to the 2002 second quarter.  Including joint ventures, deliveries were up 3 percent in California to 649 homes, which reflects strong housing market conditions in most areas of the state.  Including joint ventures, deliveries were up 4 percent in Southern California to 494 new homes and were flat in Northern California at 155 new homes.  In Arizona, new home deliveries were off 15 percent to 315 new homes. The decrease was due to the timing of new home sales and project openings. Deliveries for the full year in Arizona are expected to be in line with the record 2002 volume levels. Deliveries were up 3 percent in Texas and down 11 percent in Colorado, to 119 homes and 74 homes, respectively, with these unit volume levels continuing to reflect slower demand for new housing in these markets.  In Florida and the Carolinas, we delivered 533 and 132 new homes, respectively, during the 2003 second quarter. These delivery levels reflect healthy demand for new homes in these markets.

19

          Homebuilding revenues for the six months ended June 30, 2003 were up 25 percent to $914.9 million compared to $730.6 million for the year earlier period.  The increase in revenues was due to a 36 percent increase in consolidated new home deliveries, including 1,085 deliveries from our new Florida and Carolina operations in 2003 compared to 228 deliveries for the same period last year.  The higher revenue levels were partially offset by a 10 percent decline in our consolidated average home price to $294,000.

          During the 2003 second quarter our average home price declined 10 percent to $293,000. Our consolidated average home price for the full year is expected to be around $300,000 compared to $314,000 in 2002 which reflects our efforts to broaden our price points in our existing markets as well as our expansion into the Southeastern United States where our average price is expected to be approximately $170,000. The average home price in California (exclusive of joint ventures) was up 9 percent to $512,000.  The higher price primarily reflects general increases in new home prices in the state.  The average home price in Arizona increased 8 percent to $185,000 reflecting a change in the mix of new homes delivered.  In Texas and Colorado our average home prices were down 5 percent and 11 percent, respectively, and primarily reflect a shift in our product mix to lower priced homes.  Our average home prices in Florida and the Carolinas during the quarter were $185,000 and $133,000, respectively, and reflect a product orientation towards the entry level and first-time move-up buyer. 

          For the quarter ended June 30, 2003, our homebuilding gross margin percentage was up 330 basis points over the year earlier period to 20.7 percent .  The increase in the year-over-year gross margin percentage was driven primarily by higher gross margin percentages in both Southern and Northern California and in Arizona, and the above average margins percentages generated in Florida.  Margins were off in Texas and Colorado reflecting the impact of slower economic conditions in those regions. For the full year, we expect our homebuilding gross margin percentage to be approximately 21.0 percent compared to 18.3 percent last year. The higher gross margin percentage reflects our ability to raise home prices in most of our California and Florida markets and improving margins in Arizona due to volume and cost efficiencies.  In addition, our 2002 gross margin percentage reflects the impact of purchase accounting adjustments recorded during the 2002 second quarter related to our Westbrooke and Colony acquisitions.  These adjustments consisted of writing-up the inventory of homes in our backlog to their estimated fair values, which resulted in a reduction in our gross margin percentage in the 2002 second quarter and for the full year.

          For the six months ended June 30, 2003, our homebuilding gross margin percentage increased 220 basis points to 20.1 percent  compared to 17.9 percent in the year earlier period.  This increase was primarily the result of improved gross margins in Southern California, Arizona and Florida.  To a lesser extent, the gross margin percentage in 2002 was negatively impacted by the purchase accounting adjustments described above.

          SG&A expenses (including corporate G&A) for the 2003 second quarter were 10.2 percent of homebuilding revenues compared to 8.7 percent for the same period last year.  SG&A expenses for the six months ended June 30, 2003 were 10.8 percent compared to 9.1 percent in the year earlier period.  The increase in SG&A expenses as a percentage of homebuilding revenues was due primarily to the increase in deliveries from markets outside of California, which generally incur higher levels of sales and marketing and G&A expenses, and to higher incentive compensation expense companywide as a result of our increased profitability.  We expect that our full year SG&A rate will be approximately 10 percent.

          Income from unconsolidated joint ventures for the 2003 second quarter was up 255 percent from the year earlier period to $13.9 million, driven primarily by an increase in joint venture deliveries from 55 last year to 125 this year and from an increase in joint venture income from land sales to other builders. For the full year we expect to generate approximately $50 million in joint venture income from approximately 575 new home deliveries and from land sales to other builders.

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          New orders for the 2003 second quarter were up 40 percent to 2,583 new homes on a 29 percent increase in average community count.  Excluding the contributions from our 2002 Florida and Carolina acquisitions, orders were up 7 percent.  Our cancellation rate for the 2003 second quarter declined to 15 percent versus 17 percent for the same period last year.  Orders were off 3 percent in Southern California on a 11 percent decline in average new home communities, down 7 percent in Northern California on a 12 percent higher average community count, up 42 percent in Arizona on a 15 percent higher average community count, down 15 percent in Texas on a 25 percent lower average community count and up 21 percent in Colorado on a 20 percent increase in average community count.  For the 2003 second quarter we generated 760 net new orders in Florida from 32 active selling communities and 144 orders in the Carolinas from 10 communities.  The order trends in California, Arizona, Florida and the Carolinas generally reflect healthy housing market conditions in those regions, while the order levels in Texas and Colorado still reflect the impact of generally weak economic conditions on the demand for new housing.  During the first half of 2003 we opened 39 percent fewer new communities in our existing markets compared to the same period last year.

          The record level of new home orders for the 2003 second quarter resulted in an all-time high quarter-end backlog of 4,780 presold homes (including 358 joint venture homes) valued at an estimated $1.5 billion (including $183 million of joint venture backlog), an increase of 41 percent over the June 30, 2002 backlog value.  The higher level of orders and backlog was driven primarily by our new Southeastern operations.

          We ended the 2003 second quarter with 143 active selling communities, a 31 percent increase over the year earlier period.  We plan on opening approximately 50 new communities over the second half of the year compared to 25 for the same period last year which would result in a total of approximately 90 new community openings for all of 2003, a 40 to 45 percent increase over the total number of communities opened in 2002.  By the end of 2003 we expect to have approximately 155 active subdivisions, which would be a 14 percent increase over the 2002 year-end community count level.

          Financial Services

          Revenues for our financial services segment for the 2003 second quarter, which represents our mortgage banking operations in California and South Florida, were up 79 percent to $5.5 million compared to $3.1 million for the same period last year.  The higher level of revenues was driven by a 76 percent increase in the volume of mortgage loans sold, a modest increase in the profit margin on loans sold and an increase in net interest income.  The higher level of loan volume was driven by an increase in our California capture rate to 63 percent from 59 percent for the same period last year and the commencement of loan originations in South Florida during the third quarter of last year. The higher margin on loans sold benefited from the favorable decreasing interest rate environment during the quarter.

          For the six months ended June 30, 2003, financial services revenues increased 72 percent to $9.8 million compared to $5.7 million during the year earlier period.  This increase was driven by a 61 percent increase in the volume of mortgages sold, increased profit margins on loans sold and an increase in net interest income.  The higher loan volume was attributable to an increase in the California capture rate to 65 percent and the commencement of lending operations in South Florida in the second half of 2002.

          For the three and six months ended June 30, 2003, expenses for the financial services segment were up 77 percent and 71 percent, respectively from the year earlier periods, and were the result of higher revenue and earnings levels, along with expenses incurred in connection with our expansion into the South Florida market.

          Financial services joint venture income, which is derived from mortgage banking joint ventures with third party financial institutions which operate in conjunction with our homebuilding divisions in Arizona, Texas, Colorado, the Carolinas, and Tampa and Southwestern Florida, was up 70 percent to $735,000.  The higher level of income was primarily due to the addition of the Florida and Carolina joint venture last year through the acquisition of Westfield Homes.

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          Liquidity and Capital Resources

          Our principal uses of cash have been for land acquisitions, construction and development expenditures, operating expenses, market expansion (including acquisitions), investments in land development and homebuilding joint ventures, principal and interest payments on debt, share repurchases and dividends to our stockholders.  Cash requirements have been met by internally generated funds, outside borrowings, including our bank revolving credit facility and public note offerings, land option contracts, joint venture financings, land seller notes, assessment district bond financing and through the sale of common equity through public offerings.  To a lesser extent, capital has been provided through the issuance of common stock as acquisition consideration as well as from proceeds received upon the exercise of company stock options.  In addition, our mortgage financing subsidiary requires funding to finance its mortgage lending operations.  Its cash needs are funded from mortgage credit facilities, internally generated funds and a parent line of credit.  Based on our current business plan and market conditions, and our desire to carefully manage our leverage, we believe that these sources of cash should be sufficient to finance our current working capital requirements and other needs.

          In January 2003, we entered into a new $450 million unsecured revolving credit facility.  The new facility matures on October 31, 2005 and contains provisions allowing us, at our option, to extend the maturity date of the facility to October 31, 2006.  In addition, the facility contains a provision allowing us to increase the total aggregate commitment under the facility up to $550 million, subject to the availability of additional bank lending commitments.  Certain of our wholly-owned subsidiaries guarantee our obligations under the facility.

          The facility includes financial covenants, including the following:

• a covenant that, as of June 30, 2003, requires us to maintain not less than $597.9 million of consolidated tangible net worth (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings);

• a leverage covenant that prohibits any of the following:

• our combined total homebuilding debt to adjusted consolidated tangible net worth from being in excess of 2.50 to 1.0;

• our ratio of combined senior homebuilding debt to adjusted consolidated tangible net worth from being in excess of 2.0 to 1.0; and

• our ratio of unsold land to adjusted consolidated tangible net worth from being in excess of 1.60 to 1.0; and

• an interest coverage covenant that prohibits our ratio of homebuilding EBITDA to consolidated homebuilding interest incurred for any period consisting of the preceding four consecutive fiscal quarters from being less than 1.75 to 1.0 (subject to certain exceptions).

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          The facility also limits, among other things, our investments in joint ventures and the amount of dividends we can pay.  These covenants, as well as a borrowing base provision, limit the amount we may borrow or keep outstanding under the facility and from other sources.  At June 30, 2003, we had no borrowings outstanding and had issued approximately $46.3 million of letters of credit under the facility.  As of June 30, 2003, and throughout the periods presented, we were in compliance with the covenants of the facility.  Our ability to renew and extend the facility in the future is dependent upon a number of factors including the state of the commercial lending environment, the willingness of banks to lend to homebuilders and our financial condition and strength.

          We utilize three mortgage credit facilities to fund mortgage loans originated by our financial services subsidiary with a total aggregate commitment of $140 million.  Mortgage loans are typically financed under the facilities for a short period of time, approximately 15 to 60 days, prior to completion of sale of such loans to third party investors.  The facilities, which have LIBOR based pricing, also contain certain financial covenants including leverage and net worth covenants, and have current maturity dates ranging from October 3, 2003 to June 28, 2004.  At June 30, 2003, we had approximately $69.3 million advanced under these facilities.

          In March 2003, we issued $125 million of 7.75% Senior Notes which mature on March 15, 2013.  These notes were issued at a discount to yield approximately 7.88 percent and are senior unsecured obligations.  Net proceeds were approximately $122.7 million and were used to repay borrowings outstanding under our revolving credit facility. 

          In May 2003, we issued $175 million of 6.875% Senior Notes which mature on May 15, 2011.  These notes were issued at par in a transaction exempt from the registration requirements of federal and state securities laws.  The initial purchasers of these notes sold the unregistered notes to Qualified Institutional Buyers pursuant to Rule 144A.  In connection with the issuance, we entered into a registration rights agreement with the initial purchasers of the notes which requires us, among other things, to exchange the unregistered notes for substantially similar notes registered under the Securities Act of 1933, as amended.  On June 24, 2003, we filed with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 to register the exchange notes.  The registration statement has not yet been declared effective by the SEC.  However, following the SEC’s declaration of the effectiveness of the registration statement we plan to commence an exchange offer pursuant to which we will offer to exchange the unregistered notes for registered notes, satisfying certain of our obligations under the registration rights agreement.  The notes are senior unsecured obligations.  Net proceeds were approximately $173.4 million and were used to pay off our borrowings outstanding under our revolving credit facility with the balance used for general corporate purposes.

          For both the 7.75% notes and 6.875% notes, we will, under certain circumstances, be obligated to make an offer to purchase all or a portion of the notes in the event of certain asset sales.  In addition, these notes contain other restrictive covenants which, among other things, impose certain limitations on our ability to (1) incur additional indebtedness, (2) create liens, (3) make restricted payments (including payments of dividends, other distributions, and investments in unrestricted subsidiaries and unconsolidated joint ventures), and (4) sell assets.  Also, upon a change in control we are required to make an offer to purchase these notes at 101 percent of the principal amount.

          We evaluate our capital needs and the public capital market conditions on a continual basis to determine if and when it may be advantageous to issue additional securities. There may be times when the public debt or equity markets lack sufficient liquidity or when our securities cannot be sold at attractive prices, in which case we may not be able to access capital from these sources and may need to seek additional capital from our bank group or other sources, or adjust our capital outlays and expenditures accordingly. In addition, a weakening of our financial condition or strength, including in particular a material increase in our leverage or decrease in our profitability or interest coverage ratio, could result in a credit ratings downgrade or change in outlook or otherwise increase our cost of borrowing and adversely affect our ability to obtain necessary funds.

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          From time to time, purchase money mortgage financing and community development district (“CDD”) or similar bond financing are used to finance land acquisitions and development costs.  At June 30, 2003, we had approximately $14.8 million outstanding in trust deed and other notes payable, including CDD bonds. 

          We are subject to customary obligations associated with entering into contracts for the purchase of land and improved homesites.  These purchase contracts typically require a cash deposit and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements by the sellers, including obtaining applicable property and development entitlements.  As of June 30, 2003, we had cash deposits and letters of credit outstanding of approximately $27.0 million on land purchase contracts having a total remaining purchase price of approximately $265.7 million.

          We also utilize option contracts with land sellers and third-party financial entities as a method of acquiring land in staged takedowns and minimizing the use of funds from our revolving credit facility and other corporate financing sources.  These option contracts also help us manage the financial and market risk associated with land holdings.  Option contracts generally require the payment of a non-refundable cash deposit or the issuance of a letter of credit for the right to acquire lots over a specified period of time at predetermined prices.  We generally have the right at our discretion to terminate our obligations under these option agreements by forfeiting our cash deposit or by repaying amounts drawn under the letter of credit with no further financial responsibility.  As of June 30, 2003, we had cash deposits and letters of credit outstanding of approximately $37.1 million on option contracts having a total remaining purchase price of approximately $216.2 million.  Our utilization of option contracts is dependent on, among other things, the availability of capital to the option provider, general housing market conditions and geographic preferences.  Options may be more difficult to procure from land sellers in strong housing market conditions and are more prevalent in certain geographic regions.

          We enter into land development and homebuilding joint ventures from time to time as a means of accessing lot positions, expanding our market opportunities, establishing strategic alliances, managing our risk profile and leveraging our capital base.  These joint ventures typically obtain secured acquisition, development and construction financing, which minimizes the use of funds from our revolving credit facility and other corporate financing sources.  We plan to continue using these types of arrangements to finance the development of properties as opportunities arise.  At June 30, 2003, these unconsolidated joint ventures had borrowings which totaled approximately $264.7 million which, in accordance with generally accepted accounting principles, are not recorded in our accompanying condensed consolidated balance sheet.  We and our joint venture partners generally provide credit enhancements to this financing in the form of loan-to-value maintenance agreements, which require us under certain circumstances to repay the venture’s borrowings to the extent such borrowings plus construction completion costs exceed a specified percentage of the value of the property securing the loan.  Either a decrease in the value of the property securing the loan or an increase in construction completion costs could trigger this payment obligation.  Typically, we share these obligations with our other partners and, in some instances, these obligations are subject to limitations on the amount that we could be required to pay down.  In addition, we and our joint venture partners are generally obligated to the project lenders to complete land development improvements and the construction of planned homes if the joint venture does not perform the required development and construction.  Provided we and the other joint venture partners are in compliance with these completion obligations, the project lenders would be obligated to fund these improvements through any financing commitments available under the applicable joint venture development and construction loans.

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          We paid approximately $5.2 million, or $0.16 per common share in dividends to our stockholders during the six months ended June 30, 2003.  Common stock dividends are paid at the discretion of our Board of Directors and are dependent upon various factors, including earnings, cash flows, capital requirements and operating and financial conditions, including our overall leverage.  Additionally, our revolving credit facility and public notes impose restrictions on the amount of dividends we may be able to pay.  On July 24, 2003, our Board of Directors declared a quarterly cash dividend of $0.08 per share of common stock.  This dividend is will be payable on August 28, 2003 to stockholders of record on August 14, 2003.

          During the six months ended June 30, 2003, we issued 406,613 shares of common stock pursuant to the exercise of stock options for cash consideration of approximately $6.1 million.

          In April 2001, our Board of Directors authorized a $35 million stock repurchase plan that replaced our previously authorized repurchase plan.  In October 2002, our Board increased the buyback limit to $50 million, and in January 2003 the Board increased the limit to $75 million.  Through July 31, 2003, we had repurchased 1,631,500 shares of common stock for approximately $34.4 million under the plan, leaving a balance of approximately $40.6 million for future share repurchases.

          As part of the repurchase program, in November 2002, we adopted a repurchase plan under Rule  10b5-1 of the Securities Exchange Act of 1934, as amended.  Rule 10b5-1 permits us to implement a repurchase plan that sets forth specific terms and conditions pursuant to which a broker designated by us will conduct stock repurchases on our behalf, even if such repurchases are to be carried out during time periods when we would ordinarily be prohibited from conducting repurchases because of our possession of material nonpublic information.  Our plan provides our broker with the authority to repurchase on our behalf up to an aggregate of $12.3 million of Standard Pacific common stock between December 1, 2002 and December 31, 2003, if the terms and conditions set forth in our plan are met.  As of July 31, 2003, no repurchases had been made pursuant to the plan.  During the term of the plan, we may also elect to make common stock repurchases outside the plan, if market conditions permit and we are not otherwise prohibited by our self-imposed trading blackout windows, possession of material nonpublic information, or any other applicable law, rule or regulation.

          We have no other material commitments or off-balance sheet financing arrangements that under current market conditions are expected to materially affect our future liquidity.

Recent Accounting Pronouncements

          In April 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 145 “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections” (“SFAS 145”).  SFAS 145 provides that gains or losses resulting from the extinguishment of debt not be classified as an extraordinary item unless it meets the criteria of Accounting Principles Board Opinion No. 30.  SFAS 145 is effective for fiscal years beginning after May 15, 2002.  The adoption of SFAS 145 did not have any impact on our financial position or results of operations.

          In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”).  SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (“EITF”) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including certain costs incurred in a restructuring)”.  SFAS 146 requires recognition of a liability for a cost associated with an exit or disposal activity when the liability is incurred as opposed to when the entity commits to an exit plan as prescribed under EITF No. 94-3.  SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002.  The adoption of SFAS 146 did not have any impact on our financial position or results of operations.

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          In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”).  The disclosure requirements of FIN 45 became effective as of December 31, 2002, and we adopted that portion of the pronouncement as of that date.  The initial recognition and measurement requirements of FIN 45 are effective on a prospective basis to guarantees issued or modified after December 31, 2002.  Recognition of a liability is recorded at its estimated fair value based on the present value of the expected contingent payments under the guarantee arrangement.  The adoption of the initial recognition and measurement requirements of FIN 45 did not have a material impact on our financial condition or results of operations.

          In January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities,” an interpretation of ARB No. 51 (“FIN 46”).  Under FIN 46, a variable interest entity (“VIE”) is created when (i) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or (ii) the entity’s equity holders as a group either (a) lack direct or indirect ability to make decisions about the entity, (b) are not obligated to absorb expected losses of the entity if they occur or (c) do not have the right to receive expected residual returns of the entity if they occur.  If an entity is deemed to be a VIE pursuant to FIN 46, the enterprise that absorbs a majority of the expected losses, receives a majority of the entity’s expected residual returns, or both, is considered the primary beneficiary and must consolidate the VIE.  Expected losses and residual returns for VIE’s are calculated based on the probability of estimated future cash flows as defined in FIN 46.  FIN 46 is effective immediately for arrangements entered into or modified after January 31, 2003 and will be applied to all arrangements entered into or modified before February 1, 2003 during our fiscal quarter ended September 30, 2003.  The initial adoption of FIN 46 for arrangements entered into or modified after January 31, 2003 did not have a material impact on our financial position or results of operations.  We are still evaluating the impact of FIN 46 for all arrangements entered into prior to February 1, 2003, however, we do not anticipate that the impact of these arrangements will have a material effect on our financial position or results of operations.

          In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS 150”).  SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  The adoption of SFAS 150 did not have any impact on our financial position or results of operations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          We are exposed to market risks related to fluctuations in interest rates on our mortgage loans receivable, mortgage loans held for sale and outstanding debt.  Other than forward sale commitments of mortgage-backed securities entered into by our financial services subsidiary for the purpose of hedging interest rate risk as described below, we did not utilize swaps, forward or option contracts on interest rates, foreign currencies or commodities or other types of derivative financial instruments as of or during the period ended June 30, 2003.  We do not enter into or hold derivatives for trading or speculative purposes. You should be aware that many of the statements contained in this section are forward looking and should be read in conjunction with our disclosures under the heading “Forward-Looking Statements.”

          As part of our ongoing operations, we provide mortgage loans to our homebuyers through our financial services subsidiary, Family Lending, and our joint ventures, SPH Mortgage, WRT Financial and Westfield Home Mortgage.  Our mortgage banking joint ventures, and to a lesser extent, Family Lending, manage the interest rate risk associated with making loan commitments and holding loans for sale by preselling loans.  Preselling loans consists of obtaining commitments (subject to certain conditions) from investors to purchase the mortgage loans while concurrently extending interest rate locks to loan applicants. In the case of our financial services joint ventures, these loans are presold and promptly transferred to their respective financial institution partners or third party investors.  In the case of Family Lending, these loans are presold to third party investors.  Before completing the sale to these investors, Family Lending finances these loans under its mortgage credit facilities for a short period of time (typically for 15 to 30 days), while the investors complete their administrative review of the applicable loan documents.  Due to the frequency of these loan sales and the commitments from its third party investors, we believe the market rate risk associated with loans originated on this basis by Family Lending is minimal.

          To enhance potential returns on the sale of mortgage loans, Family Lending also originates a substantial portion of its mortgage loans on a non-presold basis.  When originating on a non-presold basis, Family Lending locks interest rates with its customers and funds loans prior to obtaining purchase commitments from secondary market investors, thereby creating interest rate risk.  To hedge this interest rate risk, Family Lending enters into forward sale commitments of mortgage-backed securities. Loans originated in this manner are typically held by Family Lending and financed under its mortgage credit facility for 15 to 60 days before they are sold to third party investors.  Family Lending utilizes the services of a third party advisory firm to assist with the execution of its hedging strategy for loans originated on a non-presold basis.  While this hedging strategy is designed to assist Family Lending in mitigating risk associated with originating loans on a non-presold basis, these instruments involve elements of market risk which could result in losses on loans originated in this manner if not hedged properly.  As of June 30, 2003, Family Lending had approximately $109.6 million of closed mortgage loans and loans in process that were originated on a non-presold basis, of which approximately $95.3 million were hedged by forward sale commitments of mortgage-backed securities.

          Please see our Annual Report on Form 10-K for the year ended December 31, 2002 for further discussion related to our market risk exposure.

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ITEM 4. CONTROLS AND PROCEDURES 

          (a)   As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective in timely alerting them to material information relating to Standard Pacific (including its consolidated subsidiaries) required to be included in our periodic SEC filings.  

          (b)   There was no significant change in our internal control over financial reporting that occurred during our most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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FORWARD-LOOKING STATEMENTS

          This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which represent our expectations or beliefs concerning future events, including, but not limited to, statements regarding:

• housing market conditions;

• sales orders and our backlog of homes and their estimated sales value;

• our expected average home prices, deliveries, new and active community openings and margins;

• contingent earn-out payments in connection with acquisitions;

• our ability to continue to utilize joint venture vehicles;

• the sufficiency of our capital resources;

• the expected impact of new accounting pronouncements, including FIN 46;

• our expectation as to our year end SG&A rate;

• our expectation that our material commitments and off-balance sheet financing arrangements will not materially affect our liquidity;

• our exposure to market risks, including fluctuations in interest rates;

• the effectiveness and adequacy of our disclosure and internal controls;

• the potential value of and expense related to stock option grants;

• our intent to effect a registered exchange offer of our 6.875% Senior Notes; and

• joint venture deliveries, land sales and income.

          Forward-looking statements are based on current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors—many of which are out of our control and difficult to forecast—that may cause actual results to differ materially from those that may be described or implied.  Such factors include but are not limited to:

• local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations;

• the impact on economic conditions of terrorist attacks or the outbreak or escalation of armed conflict;

• the cost and availability of suitable undeveloped land, building materials and labor;

• the cost and availability of construction financing and corporate debt and equity capital;

• the significant amount of our debt and the impact of the restrictive covenants in our credit agreements and public notes;

• the demand for single-family homes;

• cancellations of purchase contracts by homebuyers;

• the cyclical and competitive nature of our business;

• governmental regulation, including the impact of “slow growth,” “no growth,” or similar initiatives;

• delays in the land entitlement and other approval processes, development, construction, or the opening of new home communities;

• adverse weather conditions and natural disasters;

• environmental matters;

• risks relating to our mortgage banking operations, including hedging activities;

• future business decisions and our ability to successfully implement our operational, growth and other strategies;

• risks relating to acquisitions;

• litigation and warranty claims; and

• other risks discussed in our filings with the Securities and Exchange Commission, including in our most recent Annual Report on Form 10-K.

          We assume no, and hereby disclaim any, obligation to update any of the foregoing or any other forward-looking statements. We nonetheless reserve the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this report.  No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

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PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

                              Not applicable

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

                              Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

                              Not applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          At our Annual Meeting held on May 14, 2003, Standard Pacific’s stockholders re-elected Michael C. Cortney, Ronald R. Foell and Jeffrey V. Peterson as Class III directors.  In addition, the term of office of the following Class I and II directors continued after the Annual Meeting: Stephen J. Scarborough, Dr. James Doti, Douglas C. Jacobs, Keith D. Koeller, Larry D. McNabb and Andrew H. Parnes.  Voting at the meeting was as follows:

Matter	Votes Cast For		Votes Cast Against		Votes Withheld		Broker Non-votes
Election of Michael C. Cortney		29,473,770		N/A		587,897		N/A
Election of Ronald R. Foell		23,934,939		N/A		6,126,728		N/A
Election of Jeffrey V. Peterson		29,625,375		N/A		436,292		N/A

ITEM 5. OTHER INFORMATION

                              Not applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits
	4.1	Amended and Restated Rights Agreement dated as of July 24, 2003, by and between the Registrant and Mellon Investor Services LLC.
	4.2	Fifth Supplemental Indenture relating to the Registrant’s 6.875% Senior Notes due 2011, dated as of May 12, 2003, by and between the Registrant and Bank One Trust Company, N.A., as Trustee.
	31.1	Certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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(b)	Current Reports on Form 8-K
	(i)	Form 8-K dated April 1, 2003 reporting the Registrant’s issuance of a press release announcing preliminary new home orders for the three month period ended March 31, 2003.
	(ii)	Form 8-K dated April 28, 2003 reporting the Registrant’s issuance of a press release announcing financial results for the quarter ended March 31, 2003.
	(iii)	Form 8-K dated May 12, 2003 reporting the Registrant’s issuance of a press release announcing the sale of $175,000,000 of 6.875% Senior Notes due 2011.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			STANDARD PACIFIC CORP.
			(Registrant)
Dated:	August 11, 2003	By:	/s/ STEPHEN J. SCARBOROUGH
			Stephen J. Scarborough Chief Executive Officer and Chairman of the Board
Dated:	August 11, 2003	By:	/s/ ANDREW H. PARNES
			Andrew H. Parnes Senior Vice President - Finance and Chief Financial Officer

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EX-4.1

Exhibit 4.1

EXECUTION COPY

AMENDED AND RESTATED

RIGHTS AGREEMENT

dated as of

July 24, 2003

by and between

STANDARD PACIFIC CORP.

and

MELLON INVESTOR SERVICES LLC

as Rights Agent

TABLE OF CONTENTS

		Page
Section 1.	Certain Definitions	1
Section 2.	Appointment of Rights Agent	5
Section 3.	Issuance of Rights Certificates	6
Section 4.	Form of Right Certificates	8
Section 5.	Countersignature and Registration	8
Section 6.	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	9
Section 7.	Exercise of Rights	9
Section 8.	Cancellation and Destruction of Right Certificates	11
Section 9.	Reservation and Availability of Capital Stock	12
Section 10.	Securities Record Date	12
Section 11.	Adjustment of Exercise Price, Number of Shares Issuable Upon Exercise of Rights or Number of Rights	13
Section 12.	Certificate of Adjusted Exercise Price or Number of Shares Issuable Upon Exercise of Rights	18
Section 13.	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	18
Section 14.	Fractional Rights and Fractional Shares	20
Section 15.	Rights of Action	21
Section 16.	Agreement of Right Holders	22
Section 17.	Right Holder and Right Certificate Holder Not Deemed a Stockholder	22
Section 18.	Concerning the Rights Agent	22
Section 19.	Merger or Consolidation or Change of Name of Rights Agent	23
Section 20.	Rights and Duties of Rights Agent	24

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Section 21.	Change of Rights Agent	26
Section 22.	Issuance of New Right Certificates	27
Section 23.	Redemption of Rights	27
Section 24.	Exchange of Rights	28
Section 25.	Notice of Certain Events	29
Section 26.	Notices	30
Section 27.	Supplements and Amendments	30
Section 28.	Certain Covenants	31
Section 29.	Successors	31
Section 30.	Benefits of this Agreement	31
Section 31.	Severability	32
Section 32.	Governing Law	32
Section 33.	Counterparts	32
Section 34.	Descriptive Headings	32
Section 35.	Determination and Actions by the Board of Directors	32

TABLE OF EXHIBITS

Exhibit A—Form of Right Certificate

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RIGHTS AGREEMENT

This Amended and Restated Rights Agreement (the “Agreement”) is made and entered into as of July 24, 2003, by and between STANDARD PACIFIC CORP., a Delaware corporation (the “Company”), and MELLON INVESTOR SERVICES LLC, a New Jersey limited liability company, as rights agent (the “Rights Agent”), and amends and restates the Rights Agreement (as amended, the “Original Agreement”), dated as of December 31, 2001, between the Company and Equiserve Trust Company, N.A., as amended by Amendment No. 1 to Rights Agreement, dated as of June 20, 2003.

WHEREAS, the Board of Directors of the Company has authorized and declared a dividend of one preferred stock purchase right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding on December 31, 2001 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the conditions set forth herein, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date or the Expiration Date (as such terms are hereinafter defined); and

WHEREAS, pursuant to the Original Agreement, the Board of Directors of the Company now wishes to amend and restate the Original Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties hereto hereby agree as follows:

Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

(a) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect on the date hereof.

(b) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own” any securities:

(i) that such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 promulgated under the Exchange Act, in each case as in effect on the date hereof;

(ii) that such Person or any of such Person’s Affiliates or Associates has the right to acquire (whether such right is exercisable immediately, or only after the passage of time, compliance with regulatory requirements, the fulfillment of a condition or otherwise) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise, provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender offer or exchange offer made by or on behalf of such Person or any of such Person’s

Affiliates or Associates until such tendered securities are accepted for purchase or exchange;

(iii) that such Person or any such Person’s Affiliates or Associates has the right to vote, whether alone or in concert with others, pursuant to any agreement, arrangement or understanding, provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement, arrangement or understanding to vote such security (A) arises solely from a revocable proxy given to such Person or any of such Person’s Affiliates or Associates in response to a public proxy solicitation made pursuant to and in accordance with the applicable rules and regulations promulgated under the Exchange Act, and (B) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report);

(iv) that are Beneficially Owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (other than voting pursuant to a revocable proxy as described in the proviso to clause (iii) of this definition of “Beneficial Owner”) or disposing of any securities of the Company; and

(v) that, on any day on or after the Distribution Date, evidence Rights that prior to such date were represented by certificates for Common Shares that such Person Beneficially Owns on such day.

Notwithstanding anything to the contrary in this Section l(b), a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition.

(c) “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the States of New Jersey or California are authorized or obligated by law or executive order to close.

(d) “Certificate of Designations” shall mean the certificate of designations specifying the powers, designations, preferences and rights of the Preferred Shares in accordance with the Delaware General Corporation Law.

(e) “Close of Business” on any given date shall mean 5:00 p.m., Pacific time, on such date; provided, however, that if such date is not a Business Day, it shall mean 5:00 p.m., Pacific time, on the next succeeding Business Day.

(f) “Closing Price” of a stock or other security on any day shall be the last sale price, regular way, per share of such stock or unit of such other security on such day or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if such stock or other security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the

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principal national securities exchange on which such stock or other security is listed or admitted to trading or, if such stock or other security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported on the Nasdaq National Market (“NASDAQ”) or such other system then in use or, if on any such date such stock or other security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker that makes a market in such stock or other security and that is selected by the Board of Directors of the Company.

(g) “Common Share” when used in reference to the Company, shall mean one share of the common stock, par value $.01 per share, of the Company, unless used with reference to a Person other than the Company, in which case it shall mean one share of the capital stock (or equity interest) of such other Person having the greatest voting power per share or, if such Person is a Subsidiary of another Person, of the Person or Persons that ultimately controls such Person.

(h) “Common Share Equivalent” shall have the meaning ascribed to it in Section 11(a)(iii) hereof.

(i) “Current Market Price” per share of a stock or unit of any other security on any date shall mean the average of the daily Closing Prices of such stock or other security for the 30 consecutive Trading Days through and including the Trading Day immediately preceding the date in question; provided, however, that if any event shall have caused the Closing Price on any Trading Day during such 30-day period not to be fully comparable with the Closing Price on the date in question (or, if no Closing Price is available on the date in question, on the Trading Day immediately preceding the date in question), then each such non-comparable Closing Price so used shall be appropriately adjusted by the Board of Directors in order to make the Closing Price on each Trading Day during the period used for the determination of the Current Market Price fully comparable with the Closing Price on such date in question (or, if applicable, the immediately preceding Trading Day). “Current Market Price” per share of any stock or unit of such other security that is not publicly held or so listed or traded, and “Current Market Price” of any other property, shall mean the fair value per share of such stock or unit of such other security, or the fair value of such other property, respectively, as determined in good faith by the Board of Directors of the Company based upon such appraisals or valuation reports of such independent experts as the Board of Directors shall in good faith determine appropriate, which determination shall be described in a statement filed by the Company with the Rights Agent.

(j) “Distribution Date” shall have the meaning ascribed to it in Section 3 hereof.

(k) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(l) “Exempt Person” shall mean (i) the Company, (ii) any wholly-owned Subsidiary of the Company and (iii) any employee benefit plan of the Company or of a Subsidiary of the Company and any Person holding Voting Shares for or pursuant to the terms of any such employee benefit plan.

(m) “Exercise Price” shall have the meaning ascribed to it in Section 7(c) hereof.

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(n) “Expiration Date” shall mean the Close of Business on December 31, 2011.

(o) “Person” shall mean any individual, firm, partnership, corporation, association, trust, joint venture, limited liability company, unincorporated organization, group (as such term is used in Rule 13d-5 promulgated under the Exchange Act as in effect on the date hereof) or other entity, and shall include any successor (by merger or otherwise) of such entity.

(p) “Preferred Share” shall mean one share of the Series A Junior Participating Cumulative Preferred Stock, par value $.01 per share, of the Company, which shall have the rights and preferences set forth in the Certificate of Designations for the Preferred Shares.

(q) “Preferred Share Equivalent” shall have the meaning ascribed to it in Section 11(b) hereof.

(r) “Record Date” shall have the meaning ascribed to it in the recitals hereto.

(s) “Redemption Date” shall mean the date of the action of the Board of Directors of the Company authorizing and directing the redemption of the Rights pursuant to Section 23(a) hereof or the exchange of the Rights pursuant to Section 24(a) hereof.

(t) “Redemption Price” shall have the meaning ascribed to it in Section 23(a) hereof.

(u) “Right Certificate”, as that term is used with respect to any period prior to the Distribution Date, shall have the meaning ascribed to it in Section 3(b) hereof, and, as that term is used with respect to any period on or after the Distribution Date, shall have the meaning ascribed to it in Section 3(c) hereof.

(v) “Rights Expiration Date” shall mean the Expiration Date, except if there has been a Distribution Date, then it shall mean the tenth anniversary of the Distribution Date.

(w) “Section 11(a)(ii) Event” shall have the meaning ascribed to it in Section 11(a)(ii) hereof.

(x) “Section 13(a) Event” shall have the meaning ascribed to it in Section 13(a) hereof.

(y) “Securities Act” shall mean the Securities Act of 1933, as amended.

(z) “Subsidiary” of any Person shall mean any Person of which equity securities or equity interests representing a majority of the voting power are owned, directly or indirectly, or which is effectively controlled, by such Person.

(aa) “Surviving Person” shall have the meaning ascribed to it in Section 13(a) hereof.

(bb) “Trading Day” shall mean, as to any stock or other security, a day on which the principal national securities exchange on which such stock or other security is listed or admitted to trading is open for the transaction of business or, if such stock or other security is not listed or admitted to trading on any national securities exchange, a Business Day.

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(cc) “Voting Share” shall mean (i) a Common Share of the Company and (ii) any other share of capital stock of the Company entitled to vote generally in the election of directors or entitled to vote together with the Common Shares in respect of any merger, consolidation, sale of all or substantially all of the Company’s assets, liquidation, dissolution or winding up. References in this Agreement to a percentage or portion of the outstanding Voting Shares shall be deemed a reference to the percentage or portion of the total votes entitled to be cast by the holders of the outstanding Voting Shares.

(dd) “15% Ownership Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or a 15% Stockholder containing the facts by virtue of which a Person has become a 15% Stockholder.

(ee) “15% Stockholder” shall mean any Person that Beneficially Owns 15% or more of the Voting Shares of the Company then outstanding; provided, however, that the term “15% Stockholder” shall not include: (i) an Exempt Person; (ii) any Person that would not otherwise be a 15% Stockholder but for a reduction in the number of outstanding Voting Shares after the date hereof resulting from a stock repurchase program or other similar plan of the Company or from a self tender offer of the Company, provided, however, that the term “15% Stockholder” shall include such Person from and after the first date upon which (A) such Person, since the date of the relevant reduction in the number of outstanding Voting Shares of the Company, shall have acquired Beneficial Ownership of, in the aggregate, a number of Voting Shares of the Company equal to 1% or more of the Voting Shares of the Company then outstanding and (B) such Person, together with all Affiliates and Associates of such Person, shall Beneficially Own 15% or more of the Voting Shares of the Company then outstanding; or (iii) any Person that would not otherwise be a 15% Stockholder but for its Beneficial Ownership of Rights. In calculating the percentage of the outstanding Voting Shares that are Beneficially Owned by a Person for purposes of this definition, Voting Shares that are Beneficially Owned by such Person shall be deemed outstanding, and Voting Shares that are not Beneficially Owned by such Person and that are subject to issuance upon the exercise or conversion of outstanding conversion rights, exchange rights, rights, warrants or options shall not be deemed outstanding. Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person that would otherwise be a 15% Stockholder pursuant to the foregoing provisions of this definition has become such inadvertently, and such Person, as promptly as practicable after discovery of the foregoing, has ceased to be a 15% Stockholder, or has entered into such agreement or arrangement as the Board of Directors of the Company may approve or the Board of Directors of the Company is otherwise satisfied that such determination is in the best interests of the Company and its stockholders, then such Person shall not be deemed to be a 15% Stockholder for any purposes of this Agreement, and no 15% Ownership Date shall be deemed to have occurred. Any determination made by the Board of Directors of the Company as to whether any Person is or is not a 15% Stockholder shall be conclusive and binding upon all holders of Rights.

Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, upon ten days prior written

5

notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-Rights Agent.

Section 3. Issuance of Rights Certificates.

(a) “Distribution Date” shall mean the date, after the date hereof, that is the earliest of (i) the tenth Business Day (or such later day as shall be designated by the Board of Directors of the Company) following the date of the commencement of, or the first public announcement of the intent of any Person, other than an Exempt Person, to commence a tender offer or exchange offer, the consummation of which would cause any Person to become a 15% Stockholder, (ii) the date of the first Section 11(a)(ii) Event or (iii) the date of the first Section 13(a) Event.

(b) Until the Distribution Date, (i) the Rights shall be represented by certificates for Common Shares (all of which certificates for Common Shares shall be deemed to be Right Certificates) and not by separate Right Certificates, (ii) the record holder of the Common Shares represented by each of such certificates shall be the record holder of the Rights represented thereby and (iii) the Rights shall be transferable only in connection with the transfer of Common Shares representing the corresponding Rights. Until the earliest of the Distribution Date, the Redemption Date or the Expiration Date, the surrender for transfer of such certificates for Common Shares shall also constitute the surrender for transfer of the corresponding Rights represented thereby.

(c) As soon as practicable after the Distribution Date, and after the Company has notified the Rights Agent of the occurrence of the Distribution Date, the Rights Agent will, if requested and provided with all necessary information, send, at the expense of the Company, by first-class, postage-prepaid mail to each record holder of Common Shares, as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate substantially in the form of Exhibit A hereto representing one Right for each Common Share so held. From and after the Distribution Date, the Rights shall be represented solely by such Right Certificates and may only be transferred by the transfer of such Right Certificates, and the holders of such Right Certificates, as listed in the records of the Company or any transfer agent or registrar for such Rights, shall be the record holders of such Rights.

The Company shall promptly notify the Rights Agent in writing upon the occurrence of the Distribution Date and, if such notification is given orally, the Company shall confirm same in writing on or prior to the Business Day next following. Until such notice is received by the Rights Agent, the Rights Agent may presume conclusively for all purposes that the Distribution Date has not occurred.

(d) Certificates for Common Shares issued at any time after the Record Date and prior to the earliest of the Distribution Date, the Redemption Date or the Expiration Date, shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form:

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Amended and Restated Rights Agreement dated as of July 24,

6

2003 by and between Standard Pacific Corp. and Mellon Investor Services LLC, a New Jersey limited liability company, as Rights Agent (the “Rights Agreement”), the terms and conditions of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Standard Pacific Corp. Under certain circumstances specified in the Rights Agreement, such Rights will be represented by separate certificates and will no longer be represented by this certificate. Under certain circumstances specified in the Rights Agreement, Rights beneficially owned by certain Persons may become null and void. Standard Pacific Corp. will mail to the record holder of this certificate a copy of the Rights Agreement without charge promptly following receipt of a written request therefor.

(e) Certificates for Common Shares issued at any time on or after the Distribution Date and prior to the earlier of the Redemption Date or the Rights Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form:

This certificate does not represent any Right issued pursuant to the terms of an Amended and Restated Rights Agreement, dated as of July 24, 2003, by and between Standard Pacific Corp. and Mellon Investor Services LLC, a New Jersey limited liability company, as Rights Agent.

(f) In the event that at any time on or after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of the Redemption Date or the Rights Expiration Date, the Company shall issue any Common Shares pursuant to the exercise of conversion rights, exchange rights, rights (other than Rights), warrants or options that shall have been issued or granted prior to the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event, then, unless the Board of Directors of the Company shall have provided otherwise at the time of the issuance or grant of such conversion rights, exchange rights, rights (other than Rights), warrants or options, the Rights Agent shall, as soon as practicable after the Company has notified it of any such occurrence, if requested and provided with all necessary information (including, but not limited to, the identity of any 15% Stockholder or any of its Affiliates or Associates or to any Person if the Rights held by such Person are Beneficially Owned by a 15% Stockholder or any of its Affiliates or Associates), send, at the expense of the Company, by first-class, postage-prepaid mail to the record holder of such Common Shares, at the address of such holder as shown on the records of the Company, a Right Certificate substantially in the form of Exhibit A hereto representing one Right for each Common Share so issued.

(g) Notwithstanding the foregoing provisions of this Section 3, the Rights Agent shall not send any Right Certificate to any 15% Stockholder or any of its Affiliates or Associates or to any Person if the Rights held by such Person are Beneficially Owned by a 15% Stockholder or any of its Affiliates or Associates, provided that the Rights Agent has been informed by the Company of the identity of such 15% Stockholder or Affiliates or Associates thereof, or of the identity of such Person whose Rights are Beneficially Owned by a 15% Stockholder or of the identity of the Affiliates or Associates of such Person. Any determination made by the Company or the Board of Directors of the Company as to whether any Common Shares are or were

7

Beneficially Owned at any time by a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder shall be conclusive for all purposes and binding upon the Rights Agent and all holders of Rights.

Section 4. Form of Right Certificates. The Right Certificates and the form of assignment, including certificate, and the form of election to purchase, including certificate, printed on the reverse thereof, when, as and if issued, shall be substantially the same as Exhibit A hereto, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange upon which the Rights or the securities of the Company issuable upon exercise of the Rights may from time to time be listed, or to conform to usage. Subject to Section 22 hereof, Right Certificates, whenever issued, that are issued in respect of Common Shares that were issued and outstanding as of the Close of Business on the Distribution Date, shall be dated as of the Distribution Date.

Section 5. Countersignature and Registration.

(a) The Right Certificates shall be executed on behalf of the Company by any of its Chairman of the Board, its Chief Executive Officer, its President or any Vice President, either manually or by facsimile signature, and may have affixed thereto the Company’s seal or a facsimile thereof attested by its Secretary or any Assistant Secretary, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates may nevertheless be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company. Any Right Certificate may be signed on behalf of the Company by any person who at the actual date of such execution shall be a proper officer of the Company to sign such Right Certificate, even though such person was not such an officer at the date of the execution of this Agreement.

(b) In case any authorized signatory of the Rights Agent who shall have countersigned any of the Right Certificates shall cease to be such signatory before delivery by the Company, such Right Certificates, nevertheless, may be issued and delivered by the Company with the same force and effect as though the person who countersigned such Right Certificates had not ceased to be such signatory; and any Right Certificate may be countersigned on behalf of the Rights Agent by any person who, at the actual date of the countersignature of such Right Certificate, shall be a proper signatory of the Rights Agent to countersign such Right Certificate, although at the date of the execution of this Rights Agreement any such person was not such a signatory.

(c) Following the Distribution Date, receipt by the Rights Agent of notice to that effect and all other relevant information referred to in Section 3, the Rights Agent will keep or

8

cause to be kept, at its office designated for such purpose, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of Right Certificates, the number of Rights represented on its face by each Right Certificate and the date of each Right Certificate.

Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.

(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof, at any time after the Close of Business on the Distribution Date, and so long as any Rights represented thereby remain outstanding, any one or more Right Certificates (other than Right Certificates that have become null and void pursuant to Section 7(d) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split-up, combined or exchanged for one or more Right Certificates representing the same aggregate number of Rights as the Right Certificates surrendered. Any registered holder desiring to transfer, split up, combine or exchange one or more Right Certificates shall deliver such request in writing to the Rights Agent, and shall surrender the Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for such purpose with the form of assignment, including certificate, on the reverse side thereof properly completed and duly executed, with signature guaranteed, and, if requested by the Company or the Rights Agent, shall provide such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof and of the Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner), and of the Rights evidenced thereby. Thereupon, the Rights Agent shall countersign and deliver to the Person entitled thereto one or more Right Certificates, as so requested. The Company or the Rights Agent may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. The Rights Agent shall have no duty or obligation under any Section of this Agreement which requires the payment by a Right holder of applicable taxes or governmental charges unless and until it is satisfied that all such taxes and/or governmental charges have been paid.

(b) Upon receipt by the Company and the Rights Agent of evidence satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security satisfactory to them and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of such Right Certificate if mutilated, the Company shall issue and deliver to the Rights Agent for delivery to the record holder of such Right Certificate a new Right Certificate of like tenor in lieu of such lost, stolen, destroyed or mutilated Right Certificate.

Section 7. Exercise of Rights.

(a) Until the Distribution Date, no Right may be exercised.

(b) Subject to Section 7(d) and (g) hereof and the other provisions of this Agreement, at any time after the Close of Business on the Distribution Date and prior to the Close of Business on the earlier of the Redemption Date or the Rights Expiration Date, the registered holder of any Right Certificate may exercise the Rights represented thereby in whole or in part

9

upon surrender of such Right Certificate, with the form of election to purchase, including certificate, on the reverse side thereof properly completed and duly executed, with signature guaranteed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Exercise Price for each Right exercised. Upon the exercise of an exercisable Right and payment of the Exercise Price in accordance with the provisions of this Agreement, the holder of such Right shall be entitled to receive, subject to adjustment as provided herein, one one-hundredth of a Preferred Share (or Common Shares, other securities, cash and/or other property in accordance with the provisions of this Agreement).

(c) The “Exercise Price” for the exercise of each Right shall initially be $115 and shall be payable in lawful money of the United States of America in accordance with Section 7(f) hereof. The Exercise Price and the number of Preferred Shares (or Common Shares, or other securities) to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement.

(d) Notwithstanding anything in this Agreement to the contrary, from and after the earlier of the date of the first Section 11(a)(ii) Event and the date of the first Section 13(a) Event, any Rights that are or were Beneficially Owned by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at any time on or after the Distribution Date shall be null and void, and for all purposes of this Agreement such Rights shall thereafter be deemed not to be outstanding, and any holder of such Rights (whether or not such holder is a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder) shall thereafter have no right to exercise or exchange such Rights.

(e) Prior to the Distribution Date, if the Board of Directors of the Company shall have determined that such action adequately protects the interests of the holders of Rights, the Company may, in its discretion, substitute for all or any portion of the Preferred Shares that would otherwise be issuable (after the Close of Business on the Distribution Date) upon the exercise of each Right and payment of the Exercise Price (i) cash, (ii) other equity securities of the Company, (iii) debt securities of the Company, (iv) other property or (v) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Preferred Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 7(e), such action shall apply uniformly to all outstanding Rights.

(f) Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase, including certificate, properly completed and duly executed, with signature guaranteed, accompanied by payment of the Exercise Price for each Right to be exercised and an amount equal to any applicable tax or charge required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified check or cashier’s check payable to the order of the Company, the Rights Agent shall thereupon promptly (i) requisition from the transfer agent of the Preferred Shares (or Common Shares and/or other securities in accordance with this Agreement) certificates for the number of Preferred Shares (or such other securities) to be purchased, and the Company hereby irrevocably authorizes such transfer agent to comply with all such requests, and/or, as provided in Section 14 hereof, requisition from the depositary agent described therein depositary receipts representing such number of one-hundredths of a Preferred Share (or such other securities) as are to be purchased

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(in which case certificates for the Preferred Shares (or such other securities) represented by such receipts shall be deposited by the transfer agent with such depositary agent) and the Company hereby directs such depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional Preferred Shares (or such other securities) in accordance with Section 14 hereof or such other cash or property to be issued upon exercise of the Rights in accordance with the provisions of this Agreement, (iii) after receipt of such certificates, depositary receipts, property or cash, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt thereof, deliver such cash to or upon the order of the registered holder of such Right Certificate.

(g) Notwithstanding the foregoing provisions of this Section 7, the exercisability of the Rights shall be suspended for such period as shall reasonably be necessary for the Company to register and qualify the Preferred Shares and/or Common Shares or other securities to be issued pursuant to the exercise of the Rights under the Securities Act and any applicable securities law of any jurisdiction; provided, however, that nothing contained in this Section 7 shall relieve the Company of its obligations under Section 9(c) hereof.

(h) In case the registered holder of any Right Certificate shall exercise less than all of the Rights represented thereby, a new Right Certificate representing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions of Section 14 hereof.

(i) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action whatsoever with respect to a registered holder of Rights upon the occurrence of any purported exercise as set forth in this Section 7, unless the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise shall have been duly and properly completed and signed by the registered holder thereof and the Company shall have been provided with such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof, and of the Rights evidenced thereby, as the Company or the Rights Agent shall request.

(j) Neither the Company nor the Rights Agent shall have any liability to any holder of Rights or any other Person as a result of the Company’s failure to make any determination under this Section 7 or any other section with respect to a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder.

Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, (i) if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, (ii) if surrendered to the Rights Agent, shall be canceled by the Rights Agent, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall promptly cancel and retire, any other Right Certificate

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purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

Section 9. Reservation and Availability of Capital Stock.

(a) Subject to Sections 7(e) and 9(f) hereof, the Company shall cause to be reserved and kept available out of its authorized and unissued equity securities (or out of its authorized and issued equity securities held in its treasury), the number of such equity securities that will from time to time be sufficient to permit the exercise in full of all outstanding Rights in accordance with this Agreement.

(b) In the event that any securities issuable upon exercise of the Rights are listed on any national securities exchange, the Company shall use its best efforts, from and after such time as the Rights become exercisable, to cause all such securities issued or reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise.

(c) If necessary to permit the issuance of securities upon exercise of the Rights, the Company shall use its best efforts, from and after the Distribution Date, to register and qualify such securities under the Securities Act, the Exchange Act and any other applicable securities laws and to keep such registration effective so long as required under such laws.

(d) The Company shall take all such action as may be necessary to ensure that all securities delivered upon exercise of the Rights shall, at the time of delivery of the certificates for such securities (subject to payment of the Exercise Price), be duly and validly authorized and issued and fully paid and nonassessable securities.

(e) The Company shall pay when due and payable any and all taxes and governmental charges that may be payable in respect of the issuance or delivery of the Right Certificates or of any securities upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge that may be payable in respect of any transfer or delivery of a Right Certificate to a Person other than, or the issuance or delivery of a certificate for securities in respect of a name other than that of, the registered holder of the Right Certificate representing Rights surrendered for exercise, or to issue or deliver any certificate for securities upon the exercise of any Right until any such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax or charge is due.

(f) With respect to the Common Shares and/or other securities issuable pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants of this Section 9 shall be applicable only upon and following the occurrence of a Section 11(a)(ii) Event.

Section 10. Securities Record Date. Each Person in whose name any certificate for securities of the Company is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the securities represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate representing such Rights was duly surrendered and payment of the Exercise Price (and any applicable taxes or charges) was made;

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provided, however, that if the date of such surrender and payment is a date upon which the securities transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such securities on, and such certificate shall be dated, the next succeeding Business Day on which the securities transfer books of the Company are open.

Section 11. Adjustment of Exercise Price, Number of Shares Issuable Upon Exercise of Rights or Number of Rights. The Exercise Price, the number and kind of securities that may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

(a)(i) In the event that the Company shall at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date or the Rights Expiration Date (A) declare or pay any dividend on the Preferred Shares payable in Preferred Shares or Voting Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue Preferred Shares or other securities of the Company (other than those issuances for which an adjustment is required under Section 11(b) hereof) in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) or in a reorganization of the Company, then, and upon each such event, the number and kind of Preferred Shares or other securities issuable upon the exercise of a Right on the date of such event shall be proportionately adjusted so that the holder of any Right exercised on or after such date shall be entitled to receive, upon the exercise thereof and payment of the Exercise Price, the aggregate number and kind of Preferred Shares or other securities or other property, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when such Right was exercisable and the transfer books of the Company were open, such holder would have owned upon such exercise and would have been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

(ii) In the event that a 15% Ownership Date shall have occurred and neither the Redemption Date nor the Expiration Date shall have occurred prior to the tenth Business Day following such 15% Ownership Date (a “Section 11(a)(ii) Event”), then, and upon each such Section 11(a)(ii) Event, proper provision shall be made so that, except as provided in Section 7(d) hereof, each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in accordance with the terms of this Agreement and payment of the then current Exercise Price, such number of Common Shares of the Company as shall equal the result obtained by (A) multiplying the then current Exercise Price by the then number of one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such Section 11(a)(ii) Event (or, if the Distribution Date shall not have occurred prior to the date of such Section 11(a)(ii) Event, the number of one-hundredths of a Preferred Share for which a Right would have been exercisable if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 11(a)(ii) Event), and (B) dividing that product by 50% of the Current

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Market Price of a Common Share on the date of occurrence of the relevant Section 11(a)(ii) Event (such number of shares being hereinafter referred to as the “Adjustment Shares”). Successive adjustments shall be made pursuant to this paragraph each time a Section 11(a)(ii) Event occurs.

(iii) In the event that on the date of a Section 11(a)(ii) Event the aggregate number of Common Shares that are authorized by the Company’s Certificate of Incorporation, as amended from time to time, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is less than the aggregate number of Adjustment Shares thereafter issuable upon the exercise in full of the Rights in accordance with Section 11(a)(ii) hereof (the excess of such number of Adjustment Shares over and above such number of Common Shares being hereinafter referred to as the “Unavailable Adjustment Shares”), then, and upon each such event, the Company shall substitute for the pro rata portion of the Unavailable Adjustment Shares that would otherwise be issuable thereafter upon the exercise of each Right and payment of the Exercise Price (A) cash, (B) other equity securities of the Company (including, without limitation, shares of preferred stock of the Company or units of such shares having the same Current Market Price as one Common Share (a “Common Share Equivalent”)), (C) debt securities of the Company, (D) other property or (E) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Unavailable Adjustment Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 11(a)(iii), such action shall apply uniformly to all outstanding Rights.

(b) In the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date or the Rights Expiration Date, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling such holders initially to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares (“Preferred Share Equivalents”)) or securities convertible into Preferred Shares or Preferred Share Equivalents, at a price per Preferred Share or Preferred Share Equivalent (or having a conversion price per share, if a security convertible into Preferred Shares or Preferred Share Equivalents) less than the Current Market Price per Preferred Share on such record date, then, and upon each such event, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equal to the sum of the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares that the aggregate offering price of the total number of Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the aggregate initial conversion price of the convertible securities to be so offered) would purchase at such Current Market Price, and the denominator of which shall be equal to the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities to be so offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right; and provided, further, that if such rights, options or warrants are not

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exercisable immediately upon issuance but become exercisable only upon the occurrence of a specified event or the passage of a specified period of time, then the adjustment to the Exercise Price shall be made and become effective only upon the occurrence of such event or such passage of time, and such adjustment shall be made as if the record date for the issuance of such rights, options or warrants had been the Business Day immediately preceding the date upon which such rights, options or warrants became exercisable. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment to the Exercise Price shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price that would then be in effect if such record date had not been fixed.

(c) In the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date or the Rights Expiration Date, fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the surviving corporation) of assets (other than a distribution for which an adjustment is required under Section 11(a)(i) or (b) hereof or a regular quarterly cash dividend), then the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equal to the excess of the Current Market Price per Preferred Share on such record date over and above the fair market value of the portion of the securities or assets to be so distributed with respect to one Preferred Share, and the denominator of which shall be equal to such Current Market Price per Preferred Share; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such a distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would then be in effect if such record date had not been fixed.

(d) For the purpose of any computation under this Section 11, if the Preferred Shares are not publicly held or traded, the “Current Market Price” per Preferred Share shall be conclusively deemed to be the Current Market Price per Common Share multiplied by 100.

(e) No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the then current Exercise Price; provided, however, that any adjustments that by reason of this Section 11(e) are not required to be made shall be cumulated and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one-thousandth of a Common Share or other share or one-millionth of a Preferred Share, as the case may be.

(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right shall be entitled to receive any securities of the Company other than Preferred Shares upon exercise of such Right, and if an event occurs in respect of such securities that, if it were to occur in respect of Preferred Shares, would require an adjustment under this Section 11 in respect of Preferred Shares, then the number of such other securities so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms

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as nearly equivalent as practicable to the provisions with respect to Preferred Shares contained in this Section 11, and the other provisions of this Agreement with respect to Preferred Shares shall apply on like terms to any such other securities.

(g) All Rights originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall represent the right to purchase, at the adjusted Exercise Price, the number of one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

(h) Unless the Company shall have exercised its election as provided in Section 11(i) below, upon each adjustment of the Exercise Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter represent the right to purchase, at the adjusted Exercise Price, that number of one-hundredths of a Preferred Share (calculated to the nearest one-millionth of a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a Preferred Share purchasable upon the exercise of one Right immediately prior to such adjustment of the Exercise Price by (ii) the Exercise Price in effect immediately prior to such adjustment, and dividing the product so obtained by the Exercise Price in effect immediately after such adjustment.

(i) The Company may elect, on or after the date of any adjustment of the Exercise Price, to adjust the number of Rights instead of making any adjustment in the number of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one one-thousandth of a Right) obtained by dividing the Exercise Price in effect immediately prior to the adjustment of the Exercise Price by the Exercise Price in effect immediately after such adjustment of the Exercise Price. The Company shall make a public announcement (with prompt written notice thereof to the Rights Agent) of its election to adjust the number of Rights pursuant to this Section 11(i), indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the Exercise Price is adjusted or any day thereafter, but, if separate Right Certificates have been issued, it shall be at least 10 days after the date of such public announcement. If separate Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates representing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment or, at the option of the Company, cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of such adjustment, and upon surrender thereof if required by the Company, new Right Certificates representing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

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(j) Irrespective of any adjustment or change in the Exercise Price or the number of one-hundredths of a Preferred Share issuable upon the exercise of one Right, the Right Certificates theretofore and thereafter issued may continue to express the Exercise Price per one one-hundredth of a Preferred Share and the number of Preferred Shares issuable upon the exercise of one Right that were expressed in the initial Right Certificates issued hereunder.

(k) Before taking any action that would cause an adjustment reducing the Exercise Price below one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action that may, in the advice or opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise Price.

(l) In any case in which this Section 11 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer, until the occurrence of such event, the issuance to the holder of any Right exercised after such record date of the number of one-hundredths of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one-hundredths of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument representing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

(m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such further adjustments in the number of one-hundredths of a Preferred Share that may be purchased upon exercise of one Right, and such further adjustments in the Exercise Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that the Company in its sole discretion shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the Current Market Price thereof, (iii) issuance wholly for cash of Preferred Shares or securities that by their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares or (v) issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such stockholders.

(n) In the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earliest of the date of the first Section 11(a)(ii) Event, the date of the first Section 13(a) Event, the Redemption Date or the Rights Expiration Date, (i) pay any dividend on the Common Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the outstanding Common Shares into a smaller number of Common Shares or (iv) issue Common Shares in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and upon each such event, the Exercise Price to be in effect after such event shall be determined by multiplying the Exercise Price in effect immediately prior to but not including such event by a fraction, the numerator of which shall be equal to the number of Common Shares outstanding immediately

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prior to such event and the denominator of which shall be equal to the number of Common Shares outstanding immediately after such event. Successive adjustments shall be made pursuant to this Section 11(n) each time such a dividend is paid or such a subdivision, combination or reclassification is effected. If an event occurs that would require an adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

Section 12. Certificate of Adjusted Exercise Price or Number of Shares Issuable Upon Exercise of Rights. Whenever an adjustment is made as provided in Section 11 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief, reasonably detailed statement of the facts, computations and methodology giving rise to such adjustment, (b) file with the Rights Agent and with each transfer agent for the securities issuable upon exercise of the Rights a copy of such certificate and (c) mail a brief summary thereof to each holder of Rights in accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the Company to make such certification or to give such notice shall not affect the validity or the force and effect of such adjustment. Any adjustment to be made pursuant to Sections 11 or 13 hereof shall be effective as of the date of the event giving rise to such adjustment. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained, and shall not be obligated or responsible for calculating any adjustment nor shall it have any duty or liability with respect to, or be deemed to have knowledge of, such an adjustment unless and until it shall have received such certificate.

Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.

(a) In the event (a “Section 13(a) Event”) that, at any time on or after the 15% Ownership Date and prior to the earlier of the Redemption Date or the Rights Expiration Date, (1) the Company shall, directly or indirectly, consolidate with or merge with and into any other Person and the Company shall not be the continuing or surviving corporation in such consolidation or merger, (2) any Person shall, directly or indirectly, consolidate with or merge with and into the Company and the Company shall be the continuing or surviving corporation in such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any Person or cash or any other property, or (3) the Company and/or any one or more of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer, in one or more transactions (other than transactions in the ordinary course of business), assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other than the Company or one or more of its wholly-owned Subsidiaries (such Persons, together with the Persons described in clauses (1) and (2) above shall be collectively referred to in this Section as the “Surviving Person”), then, and in each such case, proper provision shall be made so that:

(i) except as provided in Section 7(d) hereof, each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in accordance with the terms of this Agreement and payment of the then current Exercise Price, in lieu of the securities or other property otherwise purchasable upon such exercise, such number of

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validly authorized and issued, fully paid and nonassessable Common Shares of the Surviving Person as shall be equal to a fraction, the numerator of which is:

(A) if a Section 11(a)(ii) Event has not occurred prior to such Section 13(a) Event, the product of the then current Exercise Price multiplied by the number of one-hundredths of a Preferred Share purchasable upon the exercise of one Right immediately prior to the first Section 13(a) Event (or, if the Distribution Date shall not have occurred prior to the date of such Section 13(a) Event, the number of one-hundredths of a Preferred Share that would have been so purchasable if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 13(a) Event), or

(B) if a Section 11(a)(ii) Event has occurred prior to such Section 13(a) Event, the product of the Exercise Price in effect immediately prior to such Section 11(a)(ii) Event multiplied by the number of one-hundredths of a Preferred Share purchasable upon the exercise of one Right immediately prior to such Section 11(a)(ii) Event (or, if the Distribution Date shall not have occurred prior to the date of such Section 11(a)(ii) Event, the number of one-hundredths of a Preferred Share that would have been so purchasable if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 11(a)(ii) Event),

and the denominator of which is 50% of the Current Market Price per Common Share of the Surviving Person on the date of consummation of such Section 13(a) Event;

(ii) the Surviving Person shall thereafter be liable for and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement;

(iii) the term “Company” shall thereafter be deemed to refer to the Surviving Person; and

(iv) the Surviving Person shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to ensure that the provisions hereof shall thereafter be applicable to its Common Shares thereafter deliverable upon the exercise of Rights.

(b) Notwithstanding the foregoing, if the Section 13(a) Event is the sale or transfer in one or more transactions of assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole), but less than 100% thereof, then each Person acquiring all or a portion thereof shall assume the obligations of the Company as to a fraction of each of the Rights equal to the fraction of the assets of the Company and its Subsidiaries (taken as a whole) acquired by such Person, and the obligations of the Company as to the remaining fraction of each of the Rights shall continue to be the obligations of the Company.

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(c) The Company shall not consummate a Section 13(a) Event unless prior thereto the Company and the Surviving Person shall have executed and delivered to the Rights Agent a supplemental agreement confirming that such Surviving Person shall, upon consummation of such Section 13(a) Event, assume this Agreement in accordance with Section 13 hereof, that all rights of first refusal or preemptive rights in respect of the issuance of Common Shares of such Surviving Person upon exercise of outstanding Rights have been waived and that such Section 13(a) Event shall not result in a default by such Surviving Person under this Agreement, and further providing that, as soon as practicable after the date of consummation of such Section 13(a) Event, such Surviving Person shall:

(i) prepare and file a registration statement under the Securities Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing, use its best efforts to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Rights Expiration Date, and similarly comply with all applicable state securities laws;

(ii) use its best efforts to list (or continue the listing of) the Rights and the Common Shares of the Surviving Person purchasable upon exercise of the Rights on a national securities exchange, or use its best efforts to cause the Rights and such Common Shares to meet the eligibility requirements for quotation on NASDAQ; and

(iii) deliver to holders of the Rights historical financial statements for such Surviving Person that comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act.

(d) In the event that at any time after the occurrence of a Section 11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights shall thereafter be exercisable only in the manner described in Section 13(a) hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11 hereof but shall instead be exercisable pursuant to, and only pursuant to, this Section 13.

(e) The provisions of this Section 13 shall apply to each successive merger, consolidation, sale or other transfer constituting a Section 13(a) Event.

Section 14. Fractional Rights and Fractional Shares.

(a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates that represent fractional Rights. If the Company shall determine not to issue such fractional Rights, the Company shall pay to the registered holders of the Right Certificates with respect to which such fractional Rights would otherwise be issuable, at the time such fractional Rights would otherwise have been issued as provided herein, an amount in cash equal to the same fraction of the Current Market Price of a whole Right on the Business Day immediately prior to the date upon which such fractional Rights would otherwise have been issuable.

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(b) The Company shall not be required to issue fractions of Common Shares or Preferred Shares upon exercise of Rights (other than fractions that are integral multiples of one one-hundredth of a Preferred Share), or to distribute certificates that represent fractional Common Shares or Preferred Shares (other than fractions that are integral multiples of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be represented by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of Preferred Shares. If the Company shall determine not to issue fractional Common Shares or Preferred Shares (or depositary receipts in lieu of Preferred Shares), the Company shall pay to the registered holders of Right Certificates to whom such fractional Common Shares or Preferred Shares would otherwise be issuable, at the time such Rights are exercised as provided herein, an amount in cash equal to the same fraction of the Current Market Price of a whole Common Share or Preferred Share, as the case may be. For purposes of this Section 14(b), the Current Market Price of a whole Common Share or Preferred Share shall be the Closing Price per share for the Trading Day immediately prior to the date of such exercise.

(c) The holder of a Right, by the acceptance of such Right, expressly waives such holder’s right to receive any fractional Rights or any fractional Common Shares or Preferred Shares upon exercise of such Right, except as permitted by this Section 14.

(d) Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares under any Section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.

Section 15. Rights of Action. All rights of action in respect of this Agreement, except the rights of action given to the Rights Agent hereunder, are vested in the respective registered holders of the Right Certificates and certificates for Common Shares representing Rights, and any registered holder of any Right Certificate or of such certificate for Common Shares, without the consent of the Rights Agent or of the holder of any other Right Certificate or any other certificate for Common Shares may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s right to exercise the Rights represented by such Right Certificate or by such certificate for Common Shares in the manner provided in such Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach by the Company of this Agreement and shall be entitled to specific performance, and injunctive relief against actual or threatened violations by the Company, of the obligations of any Person under this Agreement.

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Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and every other holder of a Right that:

(a) prior to the Distribution Date, the Rights shall be represented by certificates for Common Shares registered in the name of the holders of such Common Shares (which certificates for Common Shares shall also constitute Right Certificates), and each such Right shall be transferable only in connection with the transfer of such Common Shares;

(b) after the Distribution Date, the Right Certificates shall only be transferable on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and

(c) the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate is registered as the absolute owner thereof and of the Rights represented thereby for all purposes whatsoever (notwithstanding any notations of ownership or writing on the Right Certificate by anyone other than the Company or the Rights Agent), and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; and

(d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree, judgment or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, that the Company must use commercially reasonable efforts to have any such injunction, order, decree, judgment or ruling lifted, rescinded or otherwise overturned as soon as possible.

Section 17. Right Holder and Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right or Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the securities of the Company that may at any time be issuable upon the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right or Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, in each case until such Right or the Rights represented by such Right Certificate shall have been exercised in accordance with the provisions hereof.

Section 18. Concerning the Rights Agent.

(a) The Company shall pay to the Rights Agent as compensation for all services rendered by the Rights Agent hereunder, and from time to time, on demand of the Rights Agent, its reasonable fees, expenses, counsel fees and other disbursements incurred in the preparation,

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negotiation, delivery, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold the Rights Agent harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel), incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), for any action, taken, suffered or omitted by the Rights Agent in connection with the acceptance, administration, exercise and performance of its duties under this Agreement, including, without limitation, the costs and expenses of defending against and appealing any claim of liability arising under this Agreement, directly or indirectly. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. The provisions of this Section 18 and Section 20 below shall survive the exercise or expiration of the Rights, the resignation, removal or replacement of the Rights Agent and the termination of this Agreement.

(b) The Rights Agent may conclusively rely upon and shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder, in reliance upon any Right Certificate or certificate for Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of its counsel as set forth in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take any action in connection therewith unless and until it has received such notice.

Section 19. Merger or Consolidation or Change of Name of Rights Agent.

(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. If, at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and if at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in such Right Certificate and in this Agreement.

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(b) If at any time the name of the Rights Agent shall be changed, and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force and effect provided in such Right Certificate and in this Agreement.

Section 20. Rights and Duties of Rights Agent. The Rights Agent undertakes only the duties and obligations expressly imposed by this Agreement (and no implied duties or obligations shall be read into this Agreement against the Rights Agent) upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance of the Rights, shall be bound:

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in accordance with such advice or opinion.

(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of a 15% Stockholder and the determination of the Current Market Price of any security) be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it under the provisions of this Agreement in reliance upon such certificate.

(c) The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct. Notwithstanding anything in this Agreement to the contrary, in no event shall the Rights Agent be liable for special, punitive, indirect, incidental or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of the action. Any liability of the Rights Agent under this Agreement will be limited to the amount of fees paid hereunder by the Company to the Rights Agent.

(d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement, or in the Right Certificates (except its countersignature thereof), or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

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(e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall the Rights Agent be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall the Rights Agent be responsible for any change in the exercisability of the Rights (including any Rights becoming null and void pursuant to Section 7(d) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Sections 7, 11, 13 and 23 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights represented by Right Certificates after actual notice that such change or adjustment is required, upon which notice the Rights Agent may rely); nor shall the Rights Agent by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares or Common Shares or other securities to be issued pursuant to this Agreement or any Right Certificate, or as to whether any Preferred Shares or Common Shares or other securities will, when issued, be validly authorized and issued, fully paid and nonassessable.

(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties under this Agreement, and such instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall not be liable for or in respect of any action taken, suffered or omitted to be taken by it in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. The Rights Agent shall be fully authorized and protected in relying upon the most recent instruction received from any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent under this Agreement and the date on or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which date shall not be less than ten Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking or suffering any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions from the Company in response to such application to the contrary.

(h) The Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or take a pecuniary interest in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though the Rights

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Agent were not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder, affiliate, director, officer, or employee from acting in any other capacity for the Company or for any other Person.

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through its directors, officers or employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, omission, default, neglect or misconduct, absent gross negligence or bad faith (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) in the selection and continued employment thereof.

(j) The Rights Agent shall not be required to take notice or be deemed to have notice of any fact, event or determination (including, without limitation, any dates or events defined in this Agreement or the designation of any Person as a 15% Stockholder, Affiliate or Associate) under this Agreement unless and until the Rights Agent is specifically notified in writing by the Company of such fact, event or determination.

(k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has not been completed, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

(l) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not assured to it.

Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30-days’ advance notice in writing mailed to the Company and to each transfer agent of the Common Shares and Preferred Shares known to the Rights Agent by registered or certified mail, and, at the expense of the Company to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30-days’ advance notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares and Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting as such, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit such holder’s Right Certificate for inspection by the Company), then the Company shall become the Rights Agent and the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the

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Company or by such a court, shall be (a) a Person organized, in good standing, and doing business under the laws of the United States or of the States of New York or California (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the States of New York or California), with an office in New York or California, that is subject to supervision or examination by federal or state authority and that has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a Person described in clause (a). After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by the predecessor Rights Agent hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose of this Agreement and so that the successor Rights Agent may appropriately act as Rights Agent hereunder. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares and Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the predecessor Rights Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Right Certificates to the contrary, the Company may, at its option, issue new Right Certificates in such form as may be approved by the Board of Directors in order to reflect any adjustment or change in the Exercise Price and the number or kind or class of shares or other securities or property purchasable upon exercise of the Rights in accordance with the provisions of this Agreement.

Section 23. Redemption of Rights.

(a) Until the earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or (iii) the Rights Expiration Date, the Board of Directors of the Company may, at its option, authorize and direct the redemption of all, but not less than all, of the then outstanding Rights at a redemption price of $.001 per Right, as such redemption price shall be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption Price”), and the Company shall so redeem the Rights.

(b) Immediately upon the action of the Board of Directors of the Company authorizing and directing the redemption of the Rights pursuant to subsection (a) of this Section 23, or at such time and date thereafter as the Board of Directors of the Company may specify, and without any further action and without any notice, the right to exercise Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. Within ten Business Days after the date of such action, the Company shall give notice of such redemption to the Rights Agent, and shall give notice of such redemption to the holders of Rights by mailing such notice to all holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent or, if prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice that is mailed in the manner herein

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provided shall be deemed given, whether or not the holder receives such notice, provided, however, that neither the failure to give any such notice nor any defect therein shall affect the legality or validity of such redemption. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may, directly or indirectly, redeem, acquire or purchase for value any Rights in any manner other than (i) in the manner specifically set forth in Section 24 hereof, (ii) in the manner specifically set forth in this Section 23, or (iii) in connection with the purchase of Common Shares prior to the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event.

(c) The Company may, at its option, pay the Redemption Price in cash, Common Shares, Preferred Shares, other equity securities of the Company, debt securities of the Company, other property or any combination of the foregoing, in each case having an aggregate Current Market Price on the Redemption Date equal to the Redemption Price.

Section 24. Exchange of Rights.

(a) At any time during the period of 180 days after a Section 11(a)(ii) Event, the Board of Directors of the Company may, at its option, authorize and direct the exchange of all, but not less than all, of the then outstanding Rights (other than Rights that have become null and void pursuant to Section 7(d)) for Common Shares, one one-hundredths of Preferred Shares, debt securities of the Company, other property, or any combination of the foregoing, in each case having an aggregate Current Market Price per Right equal to the result obtained by (i) multiplying the Current Market Price per Common Share on the record date for such exchange by the number of Common Shares for which a Right is exercisable on such record date and (ii) subtracting from such product the Exercise Price on such Record Date (the “Exchange Ratio”), and the Company shall so exchange the Rights.

(b) Immediately upon the action of the Board of Directors of the Company authorizing and directing the exchange of the Rights pursuant to Section 24(a), or at such time and date thereafter as the Board of Directors of the Company may specify, and without any further action and without any notice, the right to exercise Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the securities and other property described in Section 24(a) in accordance with the Exchange Ratio. Within ten Business Days after the date of such action, the Company shall give notice of such exchange to the Rights Agent, and shall give notice of such exchange to the holders of Rights by mailing such notice to all holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent or, if prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives such notice, but neither the failure to give any such notice nor any defect therein shall affect the legality or validity of such exchange. Each such notice of exchange shall state the method by which the Rights will be exchanged.

(c) Notwithstanding the foregoing, in the event that the Board of Directors directs the exchange of the outstanding Rights for Common Shares but the aggregate number of Common Shares that are authorized by the Company’s Certificate of Incorporation, as amended from time to time, but not outstanding or reserved for issuance for purposes other than upon exercise or

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exchange of the Rights is less than the aggregate number of Common Shares issuable upon the exchange of the Rights in accordance with this Section 24 (the excess of such number of authorized Common Shares over and above such number of issuable Common Shares being hereinafter referred to as the “Unavailable Exchange Shares”), then the Company shall substitute for the pro rata portion of the Unavailable Exchange Shares that would otherwise be issuable upon the exchange of the Rights in accordance with this Section 24 (i) cash, (ii) other equity securities of the Company (including, without limitation, Common Share Equivalents), (iii) debt securities of the Company, (iv) other property or (v) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Unavailable Exchange Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 24, such action shall apply uniformly to all outstanding Rights.

Section 25. Notice of Certain Events.

(a) In the event that the Company shall propose (i) to declare or pay any dividend on or make any distribution with respect to its Common Shares or Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Common Shares or Preferred Shares options, rights or warrants to subscribe for or to purchase any additional shares thereof or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Common Shares or Preferred Shares (other than a reclassification involving only the subdivision of outstanding shares), (iv) to effect any consolidation or merger with or into, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to effect the liquidation, dissolution or winding up of the Company, then and in each such case, the Company shall give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action that shall specify the record date for the purpose of such dividend or distribution, or the date upon which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of record of the Common Shares or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 20 days prior to the record date for determining holders of the Common Shares or Preferred Shares for purposes of such action, and in the case of any such other action, at least 20 days prior to the earlier of the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares or Preferred Shares. The failure to give the notice required by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action.

(b) Upon the occurrence of each Section 11(a)(ii) Event and each Section 13(a) Event, the Company shall as soon as practicable thereafter give to the Rights Agent and to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, specifying the event and the consequences of the event to holders of Rights under Sections 11 and 13 hereof.

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Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent), as follows:

Standard Pacific Corp.

15326 Alton Parkway

Irvine, CA 92618

Attention: Corporate Secretary

Facsimile No.: (949) 789-1609

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made to or on the Rights Agent (i) by the Company shall be sufficiently given or made if sent, postage prepaid, by registered or certified mail, addressed to the office of the Rights Agent as set forth below (until another address is filed in writing with the Company), or by facsimile transmission as set forth below, or (ii) by the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to the office of the Rights Agent as set forth below (until another address is filed in writing with the Company), and shall be deemed given upon actual receipt:

Mellon Investor Services LLC

400 South Hope Street, 4th Floor

Los Angeles, California 90071

Attention: Client Service Manager

Facsimile No.: (213) 553-9735

with a copy to:

Mellon Investor Services LLC

85 Challenger Road

Ridgefield Park, New Jersey 07660-2108

Attention: General Counsel

Facsimile No.: (201) 296-4004

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

Section 27. Supplements and Amendments.

(a) The Board of Directors of the Company may, from time to time, without the approval of any holders of Rights, supplement or amend any provision of this Agreement in any manner, whether or not such supplement or amendment is adverse to any holder of Rights, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided, however, that from and after the earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event, (iii) the Redemption Date or

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(iv) the Expiration Date, this Agreement shall not be supplemented or amended in any manner that would materially and adversely affect any holder of outstanding Rights other than a 15% Stockholder or a Surviving Person. Upon the delivery of a certificate from an appropriate officer of the Company and, if requested by the Rights Agent, an opinion of counsel to the Company that states that the proposed supplement or amendment complies with this Section 27, the Rights Agent shall execute such supplement or amendment. Notwithstanding anything in this Agreement to the contrary, the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Agreement and the Rights Agent shall not be bound by such supplements or amendments not executed by it.

(b) From and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the Rights Expiration Date, the Company shall not effect any amendment to the Certificate of Designations for the Preferred Shares that would materially and adversely affect the rights, privileges or preferences of the Preferred Shares without the prior approval of the holders of two-thirds or more of the then outstanding Rights. Notwithstanding anything in this Agreement to the contrary, no supplement or amendment that changes the rights and duties of the Rights Agent under this Agreement in any manner adverse to the Rights Agent will be effective against the Rights Agent without the execution of such supplement or amendment by the Rights Agent.

Section 28. Certain Covenants. Subject to Section 27 hereof and the other provisions of this Agreement, from and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of the Redemption Date or the Rights Expiration Date, the Company shall not (a) issue or sell, or permit any Subsidiary to issue or sell, to a 15% Stockholder or a Surviving Person, or any Affiliate or Associate of a 15% Stockholder or a Surviving Person, or any Person holding Voting Shares of the Company that are Beneficially Owned by a 15% Stockholder or a Surviving Person, (i) any rights, options, warrants or convertible securities on terms similar to, or that materially adversely affect the value of, the Rights or (ii) Preferred Shares, Common Shares or shares of any other class of capital stock, if such sale is intended to or would materially adversely affect the value of the Rights, or (b) take any other action that is intended to or would materially adversely affect the value of the Rights.

Section 29. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and permitted assigns hereunder.

Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (other than those representing Rights that have become null and void) and the certificates for Common Shares representing Rights (other than those Rights that have become null and void) any legal or equitable right, remedy or claim under this Agreement, and this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and such registered holders of Right Certificates and certificates for Common Shares representing Rights.

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Section 31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Section 32. Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts made and performed entirely within such state, provided, however, that all provisions regarding the rights, duties, obligations and immunities of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

Section 33. Counterparts. This Agreement may be executed by facsimile and in two or more counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument.

Section 34. Descriptive Headings. Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 35. Determination and Actions by the Board of Directors. The Board of Directors shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board of Directors or to the Company (subject to any express limitations of or conditions to such power, authority and rights set forth in this Agreement) hereunder. All such actions, calculations, interpretations and determinations that are done or made by the Board of Directors in good faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other applicable Persons. The Rights Agent is entitled always to assume the Company’s Board of Directors acted in good faith and shall be fully protected and incur no liability in reliance theron.

[signature page follows]

32

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

STANDARD PACIFIC CORP.

Attest:
By:	/s/    ANDREW H. PARNES		By:	/s/    JOHN M. STEPHENS
	Name: Title:			Name: Title:	John M. Stephens Vice President and Corporate Controller
MELLON INVESTOR SERVICES LLC, as Rights Agent
By:	/s/    MARTHA MIJANGO
	Name: Title:	Martha Mijango Assistant Vice President

33

EXHIBIT A

Form of Right Certificate

Certificate No.                                   Rights

THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE NOT EXERCISABLE AFTER THE LATER OF (1) DECEMBER 31, 2011 OR (2) THE TENTH ANNIVERSARY OF THE DISTRIBUTION DATE (AS THAT TERM IS DEFINED IN THE RIGHTS AGREEMENT). IN ADDITION, THE RIGHTS ARE SUBJECT TO REDEMPTION (AFTER WHICH TIME THEY WILL NOT BE EXERCISABLE) AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY A 15% STOCKHOLDER OR AN AFFILIATE OR ASSOCIATE OF A 15% STOCKHOLDER (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT AND AS THOSE CIRCUMSTANCES ARE SPECIFIED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON WHO WAS A 15% STOCKHOLDER OR AN AFFILIATE OR ASSOCIATE OF A 15% STOCKHOLDER. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT.]^*

Right Certificate

STANDARD PACIFIC CORP.

(a Delaware corporation)

This certifies that                                         , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of December 31, 2001 (the “Rights Agreement”) between Standard Pacific Corp., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such

* That portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence.

term is defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on the later of December 31, 2011 or the tenth anniversary of the Distribution Date at the office or agency of the Rights Agent designated for such purpose, or at the office of its successors as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Cumulative Preferred Stock, $.01 par value (the “Preferred Shares”), of the Company, at an exercise price of $115 per Right (the “Exercise Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase properly completed and duly executed. The number of Rights evidenced by this Right Certificate (and the number of Preferred Shares that may be purchased upon exercise thereof) set forth above, and the Exercise Price per share set forth above, are the number and Exercise Price as of December 31, 2001, based on the Preferred Shares as constituted at such date.

As provided in the Rights Agreement, the Exercise Price and the number of Preferred Shares that may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates. Copies of the Rights Agreement are on file at the principal executive offices of Standard Pacific Corp. and the above-mentioned offices of the Rights Agent.

This Right Certificate, with or without other Right Certificates, upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may, but are not required to, be redeemed by the Company at a redemption price of $.001 per Right.

No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions that are integral multiples of one one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof, a cash payment will be made, as provided in the Rights Agreement.

No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company that may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or

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otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement.

This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of                         .

STANDARD PACIFIC CORP.

ATTEST:

Secretary President

Countersigned:

MELLON INVESTOR SERVICES LLC,

as Rights Agent

By:

Title:

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Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

FOR VALUE RECEIVED                                                                                                            hereby sells, assigns and transfers unto                                                                                                                                                                             

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                                          Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

Dated:                                     ,         

Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States.

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or Associate thereof (as defined in the Rights Agreement).

Signature

(Signature must conform in all respects to name of holder as specified on the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever)

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Form of Reverse Side of Right Certificate—continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to

exercise the Right Certificate.)

TO STANDARD PACIFIC CORP.:

The undersigned hereby irrevocably elects to exercise                                          Rights represented by this Right Certificate to purchase the Preferred Shares or other securities issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares or other securities be issued in the following name:

(please print name, address and social security, tax

identification or other identifying number:

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:

(please print name, address and social security,

tax identification or other identifying number:

Dated:                                          

Signature

(Signature must conform in all respects to name of holder as specified on the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever)

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Form of Reverse Side of Right Certificate—continued

Signature Guarantee:

Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States.

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or Associate thereof (as defined in the Rights Agreement).

Signature

(Signature must conform in all respects to name of holder as specified on the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever)

NOTICE

The signatures in the foregoing Forms of Assignment and Election must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

In the event the certification set forth above in the Forms of Assignment and Election is not completed, the Company will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be a 15% Stockholder or an Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an Assignment, will affix a legend to that effect on any Right Certificates issued in exchange for this Right Certificate.

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EX-4.2

EXHIBIT 4.2

FIFTH SUPPLEMENTAL INDENTURE

by and between

STANDARD PACIFIC CORP.

and

BANK ONE TRUST COMPANY, N.A.,

as Trustee

Dated as of May 12, 2003

AUTHORIZING THE ISSUANCE OF

6 ⁷/8% SENIOR NOTES DUE 2011

(Supplemental to the Indenture dated as of April 1, 1999)

TABLE OF CONTENTS

		Page
ARTICLE ONE SCOPE OF FIFTH SUPPLEMENTAL INDENTURE		1
ARTICLE TWO DEFINITIONS		2
Section 2.01	Definitions	2
ARTICLE THREE AUTHORIZATION AND TERMS		11
Section 3.01	Authorization	11
Section 3.02	Terms	11
ARTICLE FOUR REDEMPTION		19
Section 4.01	Optional Redemption	19
Section 4.02	Acceleration	20
Section 4.03	Change of Control	20
ARTICLE FIVE REGISTRAR OF SECURITIES; PAYING AGENT		22
ARTICLE SIX CERTAIN COVENANTS		22
Section 6.01	Compliance with Securities Laws	22
Section 6.02	Limitation on Additional Indebtedness	22
Section 6.03	Limitations on Liens	23
Section 6.04	Limitation on Restricted Payments	24
Section 6.05	Limitation on Asset Sales	25
Section 6.06	Transactions with Affiliates	27
Section 6.07	Limitation on Payment Restrictions Affecting Restricted Subsidiaries	27
Section 6.08	Restricted and Unrestricted Subsidiaries	28
Section 6.09	Mergers and Sales of Assets by the Company	28
Section 6.10	Reports to Holders of the Notes	29
Section 6.11	Future Subsidiary Guarantees	29
ARTICLE SEVEN EVENTS OF DEFAULT		29
Section 7.01	Additional Events of Default	29
Section 7.02	Inapplicability of Cure Provisions to Certain Events of Default	30
ARTICLE EIGHT DEFEASANCE		30
Section 8.01	Defeasance	30
ARTICLE NINE MISCELLANEOUS		30
Section 9.01	Governing Law	30

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TABLE OF CONTENTS

(continued)

		Page
Section 9.02.	No Adverse Interpretation of Other Agreements	30
Section 9.03.	No Recourse Against Others	30
Section 9.04.	Successors and Assigns	30
Section 9.05	Duplicate Originals	31
Section 9.06	Severability	31
EXHIBIT A- FORM OF NOTE		A-1
EXHIBIT B- REGULATION S TEMPORARY GLOBAL NOTE LEGEND		B-1
EXHIBIT C - RESTRICTED LEGEND		C-1
EXHIBIT D - DTC LEGEND		D-1
EXHIBIT E - REGULATION S CERTIFICATE		E-1
EXHIBIT F - RULE 144A CERTIFICATE		F-1
EXHIBIT G - INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE		G-1
EXHIBIT H - CERTIFICATE OF BENEFICIAL OWNERSHIP		H-1

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STANDARD PACIFIC CORP.

FIFTH SUPPLEMENTAL INDENTURE

This Fifth Supplemental Indenture, dated as of May 12, 2003 (the “Fifth Supplemental Indenture”), is entered into between Standard Pacific Corp., a Delaware corporation (the “Company”), and Bank One Trust Company, N.A., as trustee (the “Trustee”);

W I T N E S S E T H:

WHEREAS, this Fifth Supplemental Indenture is supplemental to the Indenture, dated as of April 1, 1999 (the “Original Indenture”), as previously supplemented by that certain First Supplemental Indenture dated as of April 13, 1999, Second Supplemental Indenture dated as of September 5, 2000, Third Supplemental Indenture dated as of December 28, 2001 and Fourth Supplemental Indenture dated as of March 4, 2003 (the Original Indenture, as supplemented, the “Indenture”), by and between the Company and the Trustee;

WHEREAS, the Company has determined to authorize the creation of its 6 ⁷/8% Senior Notes due 2011 (the “Notes”), and currently desires to issue Notes in the aggregate amount of $175,000,000;

WHEREAS, pursuant to Section 2.01 of the Original Indenture, the Company may establish one or more Series of Securities from time to time as authorized by a supplemental indenture; and

WHEREAS, all things necessary to make this Fifth Supplemental Indenture a valid agreement of the Company and the Trustee, in accordance with its terms, and a valid amendment of, and supplement to, the Indenture have been done.

NOW, THEREFORE, the parties hereto agree, as follows:

ARTICLE ONE

SCOPE OF FIFTH SUPPLEMENTAL INDENTURE

The changes, modifications and supplements to the Original Indenture affected by this Fifth Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Notes, which shall be unlimited in aggregate principal amount outstanding at any time and which may be issued from time to time, and shall not apply to any other Securities that may be issued under the Original Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements.

In the event that the Company shall issue and the Trustee shall authenticate any Additional Notes or Exchange Notes under this Fifth Supplemental Indenture, the Company may use one or more “CUSIP” number or numbers for such Notes as is printed on the Notes outstanding at such time; provided, however, that if any Additional Notes or Exchange Notes issued under this Fifth Supplemental Indenture are (a) determined, pursuant to an Opinion of

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Counsel for the Company in a form reasonably satisfactory to the Trustee, to be a different class of security than the Notes outstanding at such time for federal income tax purposes or (b) issued without the Restricted Legend (as defined below) in exchange for outstanding Notes that bear the Restricted Legend, then the Company may obtain a “CUSIP” number for such Notes that is different than the “CUSIP” number printed on the Notes then outstanding. Notwithstanding the foregoing, all Notes issued under this Fifth Supplemental Indenture shall vote and consent together on all matters as one class and no Notes will have the right to vote or consent as a separate class on any matter.

ARTICLE TWO

DEFINITIONS

Section 2.01 Definitions. The following terms shall have the meaning set forth below in this Fifth Supplemental Indenture. Except as otherwise provided in this Fifth Supplemental Indenture, all words, terms and phrases defined in the Original Indenture (but not otherwise defined herein) shall have the same meaning herein as in the Original Indenture. To the extent terms defined herein differ from terms defined in the Original Indenture the terms defined herein will govern for purposes of this Fifth Supplemental Indenture and the Notes.

“Additional Assets” means (i) any property or assets (other than Indebtedness and Capital Stock) in a Related Business; or (ii) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; provided, however, that any such Restricted Subsidiary is primarily engaged in a Related Business. For purposes of this definition, “Related Business” means any business related, ancillary or complementary (as defined in good faith by the Board of Directors) to the business of the Company and the Restricted Subsidiaries on the Original Issue Date.

“Additional Interest” has the meaning provided for such term in the Registration Rights Agreement.

“Additional Notes” means any newly issued Notes, other than Exchange Notes, issued after the Original Issue Date of the Initial Notes from time to time in accordance with the terms of the Indenture.

“Agent Member” means a member of, or a participant in, the Depositary.

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of (i) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares and, to the extent required by local ownership laws in foreign countries, shares owned by foreign shareholders); (ii) all or substantially all the assets of any division, business segment or comparable line of business of the Company or any Restricted Subsidiary; or (iii) any other assets of the Company or any Restricted Subsidiary having a fair market value (as determined in good faith by the Board of Directors) in excess of $1,000,000 disposed of in a single transaction or series of

2

related transactions outside of the ordinary course of business of the Company or such Restricted Subsidiary (other than, in the case of (i), (ii) and (iii) above, a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary).

“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing (i) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment (assuming the exercise by the obligor of such Indebtedness of all unconditional (other than as to the giving of notice) extension options of each such scheduled payment date) of such Indebtedness multiplied by the amount of such principal payment by (ii) the sum of all such principal payments.

“Certificated Note” means a Note in registered individual form without interest coupons.

“Change of Control” means the occurrence of any of the following events:

(i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause 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), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company;

(ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a majority vote of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; or

(iii) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company to another Person, other than any such sale to one or more Restricted Subsidiaries, and in the case of any such merger or consolidation, the securities of the Company that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of the Company are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving corporation, or a parent corporation that owns all of the Capital Stock of such surviving corporation, that represent immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving corporation or such parent corporation, as the case may be.

“Clearstream” means Clearstream Banking, société anonyme, Luxembourg, formerly Cedelbank.

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“Consolidated Coverage Ratio” with respect to the Company as of any date of determination means the ratio of the Company’s EBITDA to its Consolidated Interest Incurred for the four fiscal quarters ending immediately prior to the date of determination. If the Indebtedness which is being Incurred is Incurred in connection with an acquisition by the Company or a Restricted Subsidiary, the Consolidated Coverage Ratio shall be determined after giving effect to both the Consolidated Interest Incurred related to the Incurrence of such Indebtedness and the EBITDA as if the acquisition had occurred at the beginning of the four fiscal quarter period (x) of the Person becoming a Restricted Subsidiary, or (y) in the case of an acquisition of assets that constitute substantially all of an operating unit or business, relating to the assets being acquired by the Company or a Restricted Subsidiary.

“Consolidated Interest Expense” of the Company means, for any period, the aggregate amount of interest which, in accordance with generally accepted accounting principles as in effect on the Original Issue Date, would be included on an income statement for the Company and its Restricted Subsidiaries on a consolidated basis, whether expensed directly, or included as a component of cost of goods sold, or allocated to joint ventures or otherwise (including, but not limited to, imputed interest included on Capitalized Lease Obligations, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, the net costs associated with Hedging Obligations, amortization of other financing fees and expenses, the interest portion of any deferred payment obligation, amortization of discount or premium, if any, and all other non-cash interest expense), excluding interest expense related to mortgage banking operations plus the product of (i) cash dividends paid on any Preferred Stock of the Company times (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective aggregate federal, state and local tax rate of the Company, expressed as a decimal.

“Consolidated Interest Incurred” of the Company means, for any period, Consolidated Interest Expense, plus or minus without duplication, the difference between capitalized interest for such period and the interest component of cost of goods sold for such period.

“Consolidated Net Income” for any period, means the aggregate of the Net Income of the Company and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with generally accepted accounting principles as in effect on the Original Issue Date, provided that (i) the Net Income of any Person in which the Company or any Restricted Subsidiary has a joint interest with a third party (other than an Unrestricted Subsidiary) shall be included only to the extent of the lesser of (A) the amount of dividends or distributions actually paid to the Company or a Restricted Subsidiary or (B) the Company’s direct or indirect proportionate interest in the Net Income of such Person, provided that, so long as the Company or a Restricted Subsidiary has an unqualified legal right to require the payment of a dividend or distribution, Net Income shall be determined solely pursuant to this clause (B); (ii) the Net Income of any Unrestricted Subsidiary shall be included only to the extent of the amount of dividends or distributions (the fair value of which, if other than in cash, to be determined by the Board of Directors, in good faith) by such Subsidiary to the Company or to any of its consolidated Restricted Subsidiaries; and (iii) the Net Income of any Unrestricted Subsidiary, any Homebuilding Joint Venture or any other Person in which the Company or any Restricted Subsidiary has a joint interest with a third party that is not existing on December 31, 2002 shall be included only to the extent that the aggregate amount of dividends or distributions (the fair

4

value of which, if other than cash, to be determined by the Board of Directors, in good faith) by such Subsidiary or Homebuilding Joint Venture to the Company or to any of its consolidated Restricted Subsidiaries exceeds the aggregate amount of unpaid loans or advances and unreturned capital contributions made by the Company or any Restricted Subsidiary in or to such Subsidiary or Homebuilding Joint Venture.

“Consolidated Net Worth” of the Company means consolidated stockholders’ equity of the Company, less any increase in stockholders’ equity of each of the Unrestricted Subsidiaries subsequent to December 31, 2002 attributable to the Company or any of its Restricted Subsidiaries, as determined in accordance with generally accepted accounting principles as in effect on the Original Issue Date.

“Consolidated Tangible Net Worth” with respect to the Company means the consolidated stockholders’ equity of the Company, as determined in accordance with generally accepted accounting principles, as in effect on the Original Issue Date, less (i) that portion of any increase in each of the Unrestricted Subsidiaries’ stockholders’ equity subsequent to December 31, 2002 attributable to the Company or any of its Restricted Subsidiaries, as determined in accordance with generally accepted accounting principles as in effect on the Original Issue Date, and (ii) the Intangible Assets of the Company and the Restricted Subsidiaries. “Intangible Assets” means the amount (to the extent reflected in determining consolidated stockholders’ equity) of (A) all write-ups (other than write-ups of tangible assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by the Company or any Restricted Subsidiary, and (B) all goodwill, trade names, trademarks, patents and other like intangibles.

“Depositary” means the depositary for each Global Note, which will initially be DTC.

“Disqualified Stock” means “Disqualified Stock” as defined in the Original Indenture, except that for the purposes of this Series, “Disqualified Stock” shall not include Capital Stock which is redeemable solely pursuant to a change in control provision that does not (A) cause such Capital Stock to become redeemable in circumstances which would not constitute a Change of Control and (B) require the Company to pay the redemption price therefor prior to the repurchase date specified under Section 4.03 herein.

“DTC” means The Depository Trust Company, a New York corporation.

“DTC Legend” means the legend set forth in Exhibit D.

“EBITDA” of the Company for any period means the sum of Consolidated Net Income plus Consolidated Interest Expense plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income: (i) income tax expense, (ii) depreciation expense, (iii) amortization expense and (iv) all other non-cash items reducing Consolidated Net Income (other than items that will require cash payments in the future and for which an accrual or reserve is, or is required by generally accepted accounting principles as in effect on the Original Issue Date to be, made), less all non-cash items increasing Consolidated Net Income, in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization of, a Subsidiary of the Company shall

5

be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Subsidiary was included in calculating Consolidated Net Income.

“Euroclear” means Euroclear Bank S.A./N.V., and its successors or assigns, as operator of the Euroclear System.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Notes” means the Notes of the Company issued pursuant to the Indenture in exchange for, and in an aggregate principal amount equal to, the Initial Notes or any Additional Notes in compliance with the terms of a Registration Rights Agreement and containing terms substantially identical to the Notes issued in exchange therefor (except that (i) such Exchange Notes will be registered under the Securities Act and will not be subject to transfer restrictions or bear the Restricted Legend, and (ii) the provisions relating to Additional Interest will be eliminated).

“Exchange Offer” means an offer by the Company to the Holders of the Initial Notes or any Additional Notes to exchange such outstanding Notes for Exchange Notes, as provided for in a Registration Rights Agreement.

“Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as defined in a Registration Rights Agreement.

“Guarantor” means any Restricted Subsidiary guaranteeing payment of the notes pursuant to Section 6.11 hereof.

“Global Note” means a Note in registered global form without interest coupons.

“Homebuilding Joint Venture” means (i) any Unrestricted Subsidiary and (ii) any Person in which the Company or any of its Subsidiaries has an ownership interest but less than an 80% ownership interest that, in each case, was formed for and is engaged in homebuilding operations.

“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary; provided further, however, that in the case of a discount security, neither the accrual of interest nor the accretion of original issue discount shall be considered an Incurrence of Indebtedness. The term “Incurrence” when used as a noun shall have a correlative meaning.

“Indebtedness” means “Indebtedness” as defined in the Original Indenture, except that:

(A) clause (i) of the definition is amended by deleting it in its entirety, and inserting in lieu thereof the following:

(i) the principal of and premium (if any) in respect of:

6

(A) indebtedness of such Person for money borrowed and

(B) indebtedness for borrowed money evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable;

(B) in the case of any loan to value maintenance agreement (or similar agreement) by which the Company or any Restricted Subsidiary agrees to maintain for a joint venture a minimum ratio of Indebtedness outstanding to value of collateral property, only amounts owing by the Company or the Restricted Subsidiary (or which would be owing upon demand of the lender) at such date under such agreements will be included in Indebtedness.

“Initial Notes” means Notes issued on May 19, 2003 and any Notes issued in replacement therefor, but not including any Exchange Notes issued in exchange therefor.

“Institutional Accredited Investor Certificate” means a certificate in substantially the form of Exhibit G hereto.

“Interest Payment Date” means the Stated Maturity of an installment of interest on the Notes.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement designed to protect the Company or any Restricted Subsidiary against fluctuations in interest rates.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of such Person) or other extensions of credit (including by way of guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person.

“Maturity” means the date on which the principal of the Notes becomes due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

“Mortgage” means a first priority mortgage or first priority deed of trust on improved real property.

“Net Income” of any Person means the net income (loss) of such Person, determined in accordance with generally accepted accounting principles, as in effect on the Original Issue Date; excluding, however, from the determination of Net Income all gains (to the extent that they exceed all losses) realized upon the sale or other disposition (including, without limitation, dispositions pursuant to sale leaseback transactions) of any real property or equipment of such Person, which is not sold or otherwise disposed of in the ordinary course of business, or of any Capital Stock of such Person or its subsidiaries owned by such Person.

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“Net Proceeds” means with respect to any sale, assignment, exchange, lease, transfer or other disposition of assets, the consideration received by the Company (or a Restricted Subsidiary, as the case may be) for such disposition after (i) provision for all income and other taxes resulting from such asset disposition, (ii) payment of all brokerage commissions, underwriting, legal, accounting, appraisal and other fees and expenses related to such asset sale and (iii) deduction of appropriate amounts to be provided by the Company or a Restricted Subsidiary as a reserve, in accordance with GAAP, against any liabilities associated with the assets sold or disposed of in such asset disposition and retained by the Company or a Restricted Subsidiary after such asset sale, including, without limitation, pension and other post-employment benefit liabilities and against any indemnification obligations associated with the assets sold or disposed of in such asset sale.

“Non-Recourse Indebtedness” means Indebtedness or other obligations secured by a lien on property to the extent that the liability for such Indebtedness or other obligations is limited to the security of the property without liability on the part of the Company or any Subsidiary (other than the Subsidiary which holds title to such property) for any deficiency.

“Non-U.S. Person” means a Person that is not a U.S. person, as defined in Regulation S.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Original Issue Date” means the first date of the original issue of any of the Notes pursuant to the Indenture.

“Outstanding Notes” means the Company’s 7 ³/4% Senior Notes due 2013, the Company’s 9 ¹/4% Senior Subordinated Notes due 2012, the Company’s 9 ¹/2% Senior Notes due 2010, the Company’s 8 ¹/2% Senior Notes due 2009, the Company’s 8% Senior Notes due 2008 and the Company’s 8 ¹/2% Senior Notes due 2007.

“Permanent Regulation S Global Note” means a Regulation S Global Note that does not bear the Regulation S Temporary Global Note Legend.

“Qualified Institutional Buyers” or “QIBs” shall have the meaning given to such term by Rule 144A of the Securities Act.

“Regular Record Date” for the interest payable on any Interest Payment Date on the Notes means the dates specified in Section 3.02(f)(iii).

“Registration Rights Agreement” means (i) the Registration Rights Agreement dated as of May 12, 2003 among the Company and Credit Suisse First Boston LLC, Banc of America Securities LLC, Banc One Capital Markets, Inc. and SunTrust Capital Markets, Inc., as the initial purchasers of the Notes, and (ii) with respect to any Additional Notes, any registration rights agreement between the Company and the initial purchasers party thereto relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes or exchange them for Notes registered under the Securities Act.

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“Refinance” means, in respect of Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. “Refinancing” shall have a correlative meaning.

“Regulation S” means Regulation S under the Securities Act.

“Regulation S Certificate” means a certificate substantially in the form of Exhibit E hereto.

“Regulation S Global Note” means a Global Note representing Notes issued and sold pursuant to Regulation S.

“Regulation S Temporary Global Note Legend” means the legend set forth in Exhibit B.

“Restricted Investment” means any loan, advance, capital contribution or transfer (including by way of guaranty or other similar arrangement) in or to any Unrestricted Subsidiary, Homebuilding Joint Venture or any Person in which the Company, directly or indirectly, has an ownership interest but less than an 80% ownership interest; provided, however, that loans, advances, capital contributions or transfers (including by way of guaranty or other similar arrangement) to a Homebuilding Joint Venture shall be counted as a Restricted Investment only to the extent that the aggregate at any one time outstanding of all such amounts expended (or with respect to guaranties or similar arrangements the amounts then guaranteed) exceed, subsequent to December 31, 1996, $30 million for any one Homebuilding Joint Venture or 25% of Consolidated Tangible Net Worth in the aggregate for all Homebuilding Joint Ventures. In the case of any loan to value maintenance agreement (or similar agreement) by which the Company or any Restricted Subsidiary agrees to maintain for a joint venture a minimum ratio of indebtedness outstanding to value of collateral property, only amounts owing by the Company or the Restricted Subsidiary (or which would be owing upon demand of the lender) under such agreements will be counted as a Restricted Investment. Restricted Investment shall include the fair market value of the net assets of any Restricted Subsidiary that at any time is designated an Unrestricted Subsidiary. Any property transferred to an Unrestricted Subsidiary, and the net assets of a Restricted Subsidiary that is designated an Unrestricted Subsidiary, shall be valued at fair market value at the time of such transfer, in each case as determined by the Board of Directors of the Company in good faith.

“Restricted Legend” means the legend set forth in Exhibit C hereto.

“Restricted Period” means the relevant 40-day distribution compliance period as defined in Regulation S which, for each relevant Note, commences on the date such Note is issued.

“Restricted Subsidiary” means any 80% or more owned Subsidiary that has not been designated an Unrestricted Subsidiary.

“Revolving Credit Facility” means that certain Revolving Credit Agreement (the “Credit Agreement”), dated as of January 29, 2003 among the Company, Bank of America, N.A., Bank One, NA, Guaranty Bank, Washington Mutual Bank, FA, Fleet National Bank, PNC Bank, National Association, U.S. Bank, National Association, Comerica Bank, Bank of the West, Union Bank of California, SunTrust Bank, AmSouth Bank, Credit Suisse First Boston, Cayman

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Islands Branch, Wells Fargo Bank, National Association and California Bank & Trust and the other Loan Documents (as defined in the Credit Agreement) or other analogous documents entered into in connection with any refinancing, restructuring, renewal, extension, refunding, replacement or increase thereof, as any of the foregoing has been or may from time to time be amended, renewed, supplemented or otherwise modified at the option of the parties thereto (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) and to add any Subsidiary as additional direct obligors thereunder.

“Rule 144A” means Rule 144A under the Securities Act.

“Rule 144A Certificate” means (i) a certificate substantially in the form of Exhibit F hereto or (ii) a written certification addressed to the Company and the Trustee to the effect that the Person making such certification (x) is acquiring such Note (or beneficial interest) for its own account or one or more accounts with respect to which it exercises sole investment discretion and that it and each such account is a qualified institutional buyer within the meaning of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z) acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A(d)(4) or has determined not to request such information.

“Rule 144A Global Note” means a Global Note that bears the Restricted Legend representing Notes issued and sold pursuant to Rule 144A.

“Securities Act” means the Securities Act of 1933, as amended.

“Stated Maturity” means the date specified in the Notes as the fixed date on which an amount equal to the principal of or interest on the Notes is due and payable.

“Subordinated Notes “ means the Company’s 9¼ % Senior Subordinated Notes due 2012.

“Unrestricted Subsidiary” means (i) any Subsidiary in which the Company, directly or indirectly, has less than an 80% ownership interest; (ii) any 80% or more owned Subsidiary which in accordance with Section 6.08 herein has been designated in a resolution adopted by the Board of Directors of the Company as an Unrestricted Subsidiary, in each case unless and until such Subsidiary shall, in accordance with Section 6.08 herein, be designated by a resolution of the Board of Directors of the Company as a Restricted Subsidiary; and (iii) any 80% or more owned Subsidiary a majority of the Voting Stock of which shall at the time be owned directly or indirectly by one or more Unrestricted Subsidiaries. The Company hereby designates Family Lending Services, Standard Pacific Financing Inc. and Standard Pacific Financing L.P. as Unrestricted Subsidiaries.

“Voting Stock” means with respect to any Person, securities of any class of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the board of directors of such Person.

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“Warehouse Facility” means any bank credit agreement, repurchase agreement or other credit facility entered into to finance the making of Mortgage loans originated by the Company or any of its Subsidiaries.

“Wholly-Owned Subsidiary” means a Subsidiary, all of the Capital Stock (whether or not voting, but exclusive of directors’ qualifying shares) of which is owned by the Company or a Wholly-Owned Subsidiary.

ARTICLE THREE

AUTHORIZATION AND TERMS

Section 3.01 Authorization. The Company hereby establishes the 6 ⁷/8% Senior Notes due 2011 as a Series of Securities of the Company. The form of Note attached hereto as Exhibit A is hereby approved and authorized in accordance with the provisions of the Indenture.

Section 3.02 Terms. The terms of the Series of Securities established pursuant to this Fifth Supplemental Indenture shall be as follows:

(a) Title. The title of the Series of Securities established hereby is the “6 ⁷/8% Senior Notes due 2011.”

(b) Aggregate Principal Amount. On May 19, 2003, which shall be the Original Issue Date, the Company will deliver Notes for original issue in aggregate principal amount not to exceed $175,000,000 executed by the Company to the Trustee for authentication. The aggregate principal amount of the Notes which may be authenticated and delivered under the Indenture is unlimited.

(c) Form; Legends; Book-Entry Provision For Global Notes; Special Transfer Provisions.

(i) Form, Dating and Denominations; Legends. The Notes and the Trustee’s certificate of authentication will be substantially in the form attached as Exhibit A. The terms and provisions contained in the form of the Notes attached as Exhibit A constitute, and are hereby expressly made, a part of the Indenture. The Notes may have notations, legends or endorsements required by law, rules of or agreements with national securities exchanges to which the Company is subject, or usage. Each Note will be dated the date of its authentication. The Notes will be issuable in denominations of $1,000 in principal amount and any multiple of $1,000 in excess thereof.

(ii) Legends.

(A) Except as otherwise provided in subparagraph (ii)(G), (iv)(B)(3) or (iv)(C) below, each Note will bear the Restricted Legend.

(B) Each Global Note will bear the DTC Legend.

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(C) Each Regulation S Temporary Global Note will bear the Regulation S Temporary Global Note Legend.

(D) Notes offered and sold in reliance on Regulation S will be issued as provided in subparagraph (v)(A) below.

(E) Notes offered and sold in reliance on any exemption under the Securities Act other than Regulation S and Rule 144A will be issued, and upon the request of the Company to the Trustee, Notes offered and sold in reliance on Rule 144A may be issued, in the form of Certificated Notes.

(F) Exchange Notes will be issued, subject to subparagraph (iii)(A) below, in the form of one or more Global Notes.

(G) If (1) the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision) and that the Restricted Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, or (2) after a Note is sold pursuant to an effective registration statement under the Securities Act, pursuant to a Registration Rights Agreement or otherwise, or is validly tendered and accepted for exchange into an Exchange Note pursuant to an Exchange Offer, then the Company may instruct the Trustee to cancel the Note and issue to the Holder thereof (or to its transferee) a new Note of like tenor and amount, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will comply with such instruction.

(H) By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in the Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with the Indenture and such legend.

(iii) Registration, Transfer and Exchange. The Notes will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the “Register”) of the Notes, for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes.

(A) (1) Each Global Note will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.

(2) Each Global Note will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except as set forth in subparagraph (iii)(A)(4) below.

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(3) Agent Members will have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under the Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.

(4) If (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note or if the Depositary ceases to be a clearing agency under the Exchange Act and, in either case, a successor depositary is not appointed by the Company within 90 days of the notice, (y) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Certificated Notes or (z) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, the Trustee will promptly exchange each beneficial interest in the Global Note for one or more Certificated Notes in authorized denominations having an equal aggregate principal amount registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global Note will be deemed canceled. If such Note does not bear the Restricted Legend, then the Certificated Notes issued in exchange therefor will not bear the Restricted Legend. If such Note bears the Restricted Legend, then the Certificated Notes issued in exchange therefor will bear the Restricted Legend.

(B) Each Certificated Note will be registered in the name of the holder thereof or its nominee.

(C) A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by subparagraph (iv) below. The Trustee will promptly register any transfer or exchange that meets the requirements of this subparagraph (iii)(C) by noting the same in the register maintained by the Trustee for the purpose; provided that

(1) no transfer or exchange will be effective until it is registered in such register; and

(2) the Trustee will not be required (x) to issue, register the transfer of or exchange any Note for a period of 15 days before a selection of Notes to be redeemed, (y) to register the transfer of or exchange any Note so selected for redemption in whole or in part, except, in the case of a partial redemption, that portion of any Note not being redeemed, or (z) if a redemption is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange any Note on or after the Regular Record Date and before the date of redemption. Prior to the registration of any

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transfer, the Company, the Trustee and their agents will treat the Person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and will not be affected by notice to the contrary. From time to time the Company will execute and the Trustee will authenticate additional Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this subparagraph (iii)(C)(2). No service charge will be imposed in connection with any transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to subparagraph (iii)(A)(4) above).

(D) (1) Global Note to Global Note. If a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Trustee will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

(2) Global Note to Certificated Note. If a beneficial interest in a Global Note is transferred or exchanged for a Certificated Note, the Trustee will (x) record a decrease in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (y) deliver one or more new Certificated Notes in authorized denominations having an equal aggregate principal amount to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an exchange), registered in the name of such transferee or owner, as applicable.

(3) Certificated Note to Global Note. If a Certificated Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Certificated Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

(4) Certificated Note to Certificated Note. If a Certificated Note is transferred or exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more

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Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

(iv) Restrictions on Transfer and Exchange.

(A) The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this subparagraph (iv) and subparagraph (iii) above and, in the case of a Global Note (or a beneficial interest therein), the applicable rules and procedures of the Depositary. The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence.

(B) Subject to subparagraph (iv)(C) below, the transfer or exchange of any Note (or a beneficial interest therein) of the type set forth in column A below for a Note (or a beneficial interest therein) of the type set forth opposite in column B below may only be made in compliance with the certification requirements (if any) described in the clause of this paragraph set forth opposite in column C below:

A	B	C
Rule 144A Global Note	Rule 144A Global Note	(1)
Rule 144A Global Note	Regulation S Global Note	(2)
Rule 144A Global Note	Certificated Note	(3)
Regulation S Global Note	Rule 144A Global Note	(4)
Regulation S Global Note	Regulation S Global Note	(2)
Regulation S Global Note	Certificated Note	(3)
Certificated Note	Rule 144A Global Note	(4)
Certificated Note	Regulation S Global Note	(2)
Certificated Note	Certificated Note	(3)

(1) No certification is required.

(2) The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Regulation S Certificate; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required.

(3) The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a

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duly completed Regulation S Certificate or (z) a duly completed Institutional Accredited Investor Certificate and/or an opinion of counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer or exchange is being made in compliance with the Securities Act and any applicable securities laws of any state of the United States; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required and upon transfer or exchange of such Certificated Note the Trustee will deliver a Certificated Note that does not bear the Restricted Legend.

(4) The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Rule 144A Certificate.

Notwithstanding anything to the contrary contained herein, no exchange of a beneficial interest in a Regulation S Temporary Global Note for a Certificated Note is permitted.

(C) No certification is required in connection with any transfer or exchange of any Note (or a beneficial interest therein):

(1) after such Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision); provided that the Company has provided the Trustee with a certificate to that effect and an opinion of counsel and, if the Company so requests, any other reasonable certifications and evidence in order to support such certificate; or

(2) (x) sold pursuant to an effective registration statement, pursuant to a Registration Rights Agreement or otherwise or (y) which is validly tendered for exchange into an Exchange Note pursuant to an Exchange Offer.

Any Certificated Note delivered in reliance upon this subparagraph (iv)(C) will not bear the Restricted Legend.

(D) The Trustee will retain copies of all certificates, opinions and other documents received in connection with the transfer or exchange of a Note (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice to the Trustee.

(v) Regulation S Temporary Global Notes.

(A) Each Note originally sold by the initial purchasers of the Notes in reliance upon Regulation S will be evidenced by one or more Regulation S Global Notes that bear the Regulation S Temporary Global Note Legend.

(B) An owner of a beneficial interest in a Regulation S Temporary Global Note (or a Person acting on behalf of such an owner) may provide to the Trustee (and the Trustee will accept) a duly completed Certificate of Beneficial Ownership at any time after the Restricted Period (it being understood that the Trustee will not accept any such certificate during the Restricted Period). Promptly after acceptance of a Certificate of Beneficial Ownership with

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respect to such a beneficial interest, the Trustee will cause such beneficial interest to be exchanged for an equivalent beneficial interest in a Permanent Regulation S Global Note, and will (x) permanently reduce the principal amount of such Regulation S Temporary Global Note by the amount of such beneficial interest and (y) increase the principal amount of such Permanent Regulation S Global Note by the amount of such beneficial interest.

(C) Notwithstanding anything to the contrary contained herein, beneficial interests in a Regulation S Temporary Global Note may be held through the Depositary only through Euroclear and Clearstream and their respective direct and indirect participants.

(D) Notwithstanding paragraph (v)(B) above, if after the Restricted Period any initial purchaser of the Notes owns a beneficial interest in a Regulation S Temporary Global Note, such initial purchaser may, upon written request to the Trustee accompanied by a certification as to its status as an initial purchaser, exchange such beneficial interest for an equivalent beneficial interest in a Permanent Regulation S Global Note, and the Trustee will comply with such request and will (x) permanently reduce the principal amount of such Regulation S Temporary Global Note by the amount of such beneficial interest and (y) increase the principal amount of such Permanent Regulation S Global Note by the amount of such beneficial interest.

(d) Persons to Whom Interest Payable. Interest on the Notes shall be payable to the Person in whose name a Note is registered at the close of business (whether or not a Business Day) on the Regular Record Date (as set forth in Section 3.02(f)(iii) below), for such interest payment, except (i) that interest payable on May 15, 2011 shall be payable to the Person to whom principal is payable, and (ii) that default interest shall be payable in the manner provided in Section 2.11 of the Original Indenture.

(e) Stated Maturity. The date on which the principal of the Notes shall be payable, unless accelerated pursuant to the Indenture, is May 15, 2011.

(f) Rate of Interest; Interest Payment Dates; Regular Record Dates; Overdue Principal and Interest.

(i) Rate of Interest. The principal amount of each of the Notes shall bear simple interest at the rate of 6 ⁷/8% per annum. The date from which interest shall accrue for each of the Notes shall be May 19, 2003 or the Interest Payment Date next preceding the date of issuance of such Notes. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

(ii) Interest Payment Dates. Interest on the Notes shall be payable semiannually in arrears on May 15 and November 15 of each year, commencing November 15, 2003. If any Interest Payment Date or Maturity of the Notes falls on a day that is not a Business Day, the payment due on such Interest Payment Date or at Maturity will be made on the following day that is a Business Day as if it were made on the date such payment was due and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or Maturity, as the case may be.

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(iii) Regular Record Dates. The Regular Record Dates for interest payable on each May 15 and November 15 will be the immediately preceding May 1 and November 1 (whether or not a Business Day), respectively.

(iv) Overdue Principal and Interest. Overdue principal and, to the extent payment of such interest shall be legally enforceable, overdue installments of interest shall bear interest at the rate of 6 ⁷/8% per annum.

(v) Additional Interest. All accrued Additional Interest, if any, shall be paid on each Interest Payment Date at the same time and in the same manner as interest on the Notes.

(g) Place of Payment; Registration of Transfer and Exchange; Notices to Company.

(i) Place of Payment. Notes may be presented for payment of the principal of and interest and Additional Interest, if any, due thereon at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at any other office or agency designated by the Company for such purpose; provided, however, that any such payments with respect to Global Notes or Certificated Notes shall be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof and provided, further, that if no such account is specified by Holders of Certificated Notes any such payments with respect to such Notes shall be made by mailing a check to each such Holder’s registered address.

(ii) Registration of Exchange and Transfer. Notes may be presented for exchange and registration of transfer at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at the office of any transfer agent hereafter designated by the Company for such purpose.

(iii) Notices to Company. Notices and demands to or upon the Company in respect to the Notes and the Indenture may be served at Standard Pacific Corp., 15326 Alton Parkway, Irvine, California 92618, Attention: Secretary.

(h) Issuance of Additional Notes and Exchange Notes. The Company shall be entitled to issue Additional Notes under the Indenture which shall have substantially identical terms as the Notes, other than with respect to the date of issuance, issue price, amount of interest payable on the first payment date applicable thereto or upon a registration default as provided under a Registration Rights Agreement related thereto, if any (and, if such Additional Notes shall be issued without the Restricted Legend, other than with respect to transfer restrictions). The Initial Notes, any Additional Notes and any Exchange Notes shall be treated as a single class for all purposes under the Indenture.

With respect to any Additional Notes, the Company shall set forth in an Officers’ Certificate, a copy of which shall be delivered to the Trustee, the following information:

(1) the aggregate principal amount of Notes outstanding immediately prior to the issuance of such Additional Notes;

(2) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;

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(3) the issue price and the issue date of such Additional Notes and the amount of interest payable on the first payment date applicable thereto;

(4) the “CUSIP”, “ISIN” or “Common Code” number, as applicable, of such Additional Notes; and

(5) whether such Additional Notes shall be subject to transfer restrictions or bear the Restricted Legend or other restrictive legend.

At any time and from time to time after the execution of this Fifth Supplemental Indenture, the Company may execute and deliver, and the Trustee will authenticate and deliver, Exchange Notes in exchange for a like principal amount of Initial Notes or Additional Notes exchanged therefor.

ARTICLE FOUR

REDEMPTION

Section 4.01 Optional Redemption. The Notes will be redeemable at the option of the Company, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days prior written notice mailed by first class mail to each Holder of Notes to be redeemed, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed or (ii) the sum, as determined by the Quotation Agent, as defined below, of the present values of the principal amount of the notes to be redeemed and the remaining scheduled payments of interest thereon from the redemption date to May 15, 2011 for the notes to be redeemed, exclusive of interest accrued to the redemption date (the “Remaining Life”) discounted from their respective scheduled payment dates to the redemption date on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Treasury Rate, as defined below, plus 50 basis points, plus, in either case, accrued and unpaid interest, and any Additional Interest, on the principal amount being redeemed to the date of redemption.

If less than all of the Notes are to be redeemed, the Trustee will select the Notes to be redeemed on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate.

As used in this Section 4.01:

(a) “Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the Remaining Life that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity with the Remaining Life.

(b) “Comparable Treasury Price means, with respect to any redemption date, the average of the Reference Treasury Dealer Quotations for such redemption date.

(c) “Quotation Agent” means the Reference Treasury Dealer appointed by the Company.

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(d) “Reference Treasury Dealer” means each of Credit Suisse First Boston LLC, Banc of America Securities LLC, Banc One Capital Markets, Inc. and SunTrust Capital Markets, Inc. and their successors; provided, however, that if any of the foregoing ceases to be a primary U.S. Government securities dealer in New York City, a “primary treasury dealer,” the Company will substitute therefor another primary treasury dealer.

(e) “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

(f) “Treasury Rate” means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the stated maturity, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate shall be calculated on the third business day preceding the redemption date.

Notes in denominations larger than $1,000 may be redeemed in part. If money sufficient to pay the redemption price of and accrued interest on all of the Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Trustee or paying agent on or before 11:00 a.m. (New York City time) on the redemption date, then on and after the redemption date interest shall cease to accrue on Notes or portions of them called for redemption.

Section 4.02 Acceleration. The principal amount of the Notes shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02 of the Original Indenture.

Section 4.03 Change of Control. Upon the occurrence of a Change of Control, each Holder shall have the right to require that the Company repurchase all or a portion of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest (including any Additional Interest), if any, to the date of repurchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the provisions of the next paragraph.

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Within 30 days following any Change of Control, the Company shall mail a notice to each Holder with a copy to the Trustee stating:

(a) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount outstanding at the repurchase date plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date) (the “Repurchase Price”);

(b) the circumstances and relevant facts and relevant financial information regarding such Change of Control;

(c) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Repurchase Date”);

(d) that any Note not tendered or accepted for payment will continue to accrue interest;

(e) that any Note accepted for payment shall cease to accrue interest after the Repurchase Date;

(f) that Holders electing to have a Note purchased will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse side of the Note completed, to the Paying Agent at the address specified in the Notice at least five days before the Repurchase Date;

(g) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than three days prior to the Repurchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have the Note purchased; and

(h) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.

On the Repurchase Date, the Company shall (i) accept for payment Notes or portions thereof properly tendered, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted and (iii) deliver to the Trustee Notes so accepted together with an Officers’ Certificate stating the Notes or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so accepted, payment in an amount equal to the Repurchase Price, and the Trustee shall promptly authenticate and mail or deliver to such Holders a new Note equal in principal amount of any unpurchased portion of the Note surrendered. The Company will publicly announce the results on or as soon after as practical the Repurchase Date. For purposes of this Section 4.03, the Trustee shall act as the Paying Agent.

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ARTICLE FIVE

REGISTRAR OF SECURITIES; PAYING AGENT

The Company hereby appoints the Trustee as the Registrar and initial Paying Agent. The books of the Registrar of the Securities for the Notes will be initially maintained at the Corporate Trust Office of the Trustee.

ARTICLE SIX

CERTAIN COVENANTS

The Company covenants as follows:

Section 6.01 Compliance with Securities Laws. The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to Section 4.03 or 6.05 hereunder. To the extent that the provisions of any securities laws or regulations conflict with said provisions hereunder, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under said provisions hereunder by virtue thereof.

Section 6.02 Limitation on Additional Indebtedness. The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness unless, after giving effect thereto, either (i) the ratio of Indebtedness of the Company and the Restricted Subsidiaries (excluding, for purposes of this calculation only, purchase money mortgages that are Non-Recourse Indebtedness), to Consolidated Tangible Net Worth of the Company is less than 2.25 to 1; or (ii) the Consolidated Coverage Ratio exceeds 2.0 to 1.

Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may Incur: (i) Indebtedness under one or more Bank Credit Facilities in an amount not in excess of $550 million outstanding in the aggregate at any one time; (ii) purchase money mortgages that are Non-Recourse Indebtedness; (iii) Indebtedness Incurred under a Warehouse Facility, provided that the amount of such Indebtedness (excluding funding drafts issued thereunder) outstanding at any time pursuant to this clause (iii) may not exceed 98% of the value of the Mortgages pledged to secure Indebtedness thereunder; (iv) Indebtedness Incurred solely for the purpose of refinancing or repaying any existing Indebtedness so long as (A) the principal amount of such new Indebtedness does not exceed the principal amount of the existing Indebtedness refinanced or repaid (plus the premiums or other payments required to be paid in connection with such refinancing or repayment and the expenses incurred in connection therewith), (B) the maturity of such new Indebtedness is not earlier than that of the existing Indebtedness to be refinanced or repaid, (C) such new Indebtedness, determined as of the date of Incurrence, has an Average Life at least equal to the remaining Average Life of the Indebtedness to be refinanced or repaid, (D) the new Indebtedness is pari passu with or subordinate to the Indebtedness being refinanced or repaid, and (E) the existing and new Indebtedness are obligations of the same entity; and (v) if any Restricted Subsidiary guarantees payment of the Notes pursuant to Section 6.11, Indebtedness of the Company owed to a Guarantor and Indebtedness of any Guarantor owed to the Company or any other Guarantor; provided that upon any Guarantor

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ceasing to be a Guarantor or such Indebtedness being owed to any Person other than the Company or a Guarantor, the Company or such Restricted Subsidiary, as applicable, shall be deemed to have Incurred Indebtedness not permitted by this clause (v).

For purposes of determining compliance with this Section 6.02, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Indebtedness permitted in clauses (i) through (v) above, or is entitled to be incurred pursuant to the first paragraph of this Section 6.02, the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this covenant.

Section 6.03 Limitations on Liens. The Company will not, and will not permit any Restricted Subsidiary to, issue, assume, guarantee or suffer to exist any Indebtedness secured by any mortgage, pledge, lien or other encumbrance of any nature (herein collectively referred to as a “lien” or “liens”) upon any property of the Company or any Restricted Subsidiary, or on any shares of stock of any Restricted Subsidiary, without in any such case effectively providing that the Notes (together with, if the Company shall so determine, any other Indebtedness of the Company or such Restricted Subsidiary ranking pari passu with the Notes) shall be secured equally and ratably with such Indebtedness, except that the foregoing restrictions shall not apply to: (i) liens existing on December 31, 2002; (ii) pledges, guarantees and deposits under workers’ compensation laws, unemployment insurance laws or similar legislation, good faith deposits under bids, tenders or contracts, deposits to secure public or statutory obligations or appeal or similar bonds, and liens created by special assessment districts used to finance infrastructure improvements; (iii) liens existing on property or assets of any entity on the date on which it becomes a Restricted Subsidiary, which secured Indebtedness is not Incurred in contemplation of such entity becoming a Restricted Subsidiary; (iv) liens on or leases of model home units; (v) Capitalized Lease Obligations entered into in the ordinary course of business in amounts not in excess of $25,000,000 outstanding in the aggregate at any one time; (vi) the replacement of any of the items set forth in clauses (i) through (v) above, provided that (A) the principal amount of the Indebtedness secured by liens shall not be increased, (B) such Indebtedness, determined as of the date of Incurrence, has an Average Life at least equal to the remaining Average Life of the Indebtedness to be refinanced, (C) the maturity of such Indebtedness is not earlier than that of the Indebtedness to be refinanced, and (D) the liens shall be limited to the property or part thereof which secured the lien so replaced or property substituted therefor as a result of the destruction, condemnation or damage of such property; (vii) liens on property acquired, constructed or improved by the Company or any Restricted Subsidiary, which liens are either existing at the time of such acquisition or at the time of completion of construction or improvement or created within 120 days after such acquisition, completion or improvement, to secure Indebtedness Incurred or assumed to finance all or part of such property, including any increase in the principal amount of such Indebtedness and any extension of the repayment schedule and maturity of such Indebtedness Incurred or entered into in the ordinary course of business; (viii) liens or priorities incurred in the ordinary course of business, such as laborers’, employees’, carriers’, mechanics’, vendors’ and landlords’ liens or priorities; (ix) liens for certain taxes and certain survey and title exceptions; (x) liens arising out of judgments or awards against the Company or any Restricted Subsidiary with respect to which the Company or such Restricted Subsidiary is in good faith prosecuting an appeal or proceeding for review and with respect to which it has secured a stay of execution pending such appeal or proceeding for review; (xi) liens

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on property owned by any Homebuilding Joint Venture; (xii) liens securing a Warehouse Facility, provided that such liens shall not extend to any assets other than the mortgages, promissory notes and other collateral that secures mortgage loans made by the Company or any of its Restricted Subsidiaries; (xiii) liens securing the Notes and, if any Restricted Subsidiary guarantees payment of the Notes pursuant to Section 6.11 hereof, liens securing any such guarantee; (xiv) liens which would otherwise be subject to the foregoing restrictions which, when the Indebtedness relating to those liens is added to all other then outstanding Indebtedness of the Company and the Restricted Subsidiaries secured by liens and not listed in clauses (i) through (xiii) above, does not exceed $75,000,000.

Section 6.04 Limitation on Restricted Payments. The Company will not, nor will it permit any Restricted Subsidiary to, directly or indirectly, (i) declare or pay any dividend on, or make any distribution in respect of, or purchase, redeem or otherwise acquire or retire for value, any Capital Stock of the Company other than through the issuance solely of the Company’s own Capital Stock (other than Disqualified Stock), or rights thereto; (ii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value prior to scheduled principal payments or maturity, Indebtedness of the Company or any Restricted Subsidiary which is expressly subordinated in right of payment to the Notes (other than Indebtedness Incurred after the issuance of the Notes provided that such repayment, redemption, repurchase, defeasance or other retirement is made substantially concurrent with the receipt of proceeds from the Incurrence of Indebtedness that by its terms is both subordinated in right of payment to the Notes and matures, by sinking fund or otherwise, after the earlier of (A) May 15, 2011, and (B) the maturity date of the Subordinated Indebtedness being repaid, redeemed, repurchased, defeased or otherwise retired); or (iii) make any Restricted Investment (such payments or any other actions described in (i), (ii) and (iii) being referred to herein collectively as, “Restricted Payments”) unless (A) at the time of, and after giving effect to, the proposed Restricted Payment, no Event of Default (and no event that, after notice or lapse of time, or both, would become an Event of Default) shall have occurred and be continuing, (B) the Company is able to Incur an additional $1.00 of Indebtedness pursuant to the first paragraph of the covenant described under Section 6.02 herein, and (C) at the time of, and after giving effect thereto, the sum of the aggregate amount expended (or with respect to guaranties or similar arrangements the amount then guaranteed) for all such Restricted Payments (the amount expended for such purposes, if other than in cash, to be determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a resolution of such Board of Directors filed with the Trustee) subsequent to June 30, 1997 shall not exceed the sum of (I) 50% of the aggregate Consolidated Net Income (or, in case such aggregate Consolidated Net Income shall be a deficit, minus 100% of such deficit) of the Company accrued on a cumulative basis subsequent to June 30, 1997, (II) the aggregate net proceeds, including the fair market value of property other than cash (as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a resolution of such Board of Directors filed with the Trustee), received by the Company from the issuance or sale, after the Original Issue Date, of Capital Stock (other than Disqualified Stock) of the Company, including Capital Stock (other than Disqualified Stock) of the Company issued subsequent to the Original Issue Date upon the conversion of Indebtedness of the Company initially issued for cash, (III) 100% of dividends or distributions (the fair value of which, if other than cash, to be determined by the Board of Directors, in good faith) paid to the Company (or any Restricted Subsidiary) by an Unrestricted Subsidiary, Homebuilding Joint Venture or any other Person in which the Company

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(or any Restricted Subsidiary), directly or indirectly, has an ownership interest but less than an 80% ownership interest to the extent that such dividends or distributions do not exceed the amount of loans, advances or capital contributions made to any such entity or Person subsequent to the Original Issue Date and included in the calculation of Restricted Payments, and (IV) $40,000,000; provided, however, that the foregoing shall not prevent (aa) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration the making of such payment would have complied with the provisions of this limitation on dividends; provided, however, that such dividend shall be included in future calculations of Restricted Payments, (bb) the retirement of any shares of the Company’s Capital Stock by exchange for, or out of proceeds of the substantially concurrent sale of, other shares of its Capital Stock (other than Disqualified Stock); provided, however, that the aggregate net proceeds from such sale shall be excluded from the calculation of the amounts under subclause (II) above, or (cc) the redemption, repayment, repurchase, defeasance or other retirement of Indebtedness with proceeds received from the substantially concurrent sale of shares of the Company’s Capital Stock (other than Disqualified Stock); provided however, that the aggregate net proceeds from such sale shall be excluded from the calculation of the amounts under subclause (II) above.

Section 6.05 Limitation on Asset Sales. The Company will not, and will not permit any Restricted Subsidiary to, make an Asset Disposition, other than for fair market value and in the ordinary course of business, with an aggregate net book value as of the end of the immediately preceding fiscal quarter greater than 10% of the Company’s total consolidated assets as of that date, unless (i) the consideration received by the Company (or a Restricted Subsidiary, as the case may be) for such disposition consists of at least 70% cash; provided, however, that for purposes of this provision (i), the amount of any liabilities assumed by the transferee and any Notes or other Obligations received by the Company or a Restricted Subsidiary which are immediately converted into cash shall be deemed to be cash, and (ii) the Company shall within 390 days after the date of such sale or sales, apply the Net Proceeds from such sale or sales in excess of an amount equal to 10% of the Company’s total consolidated assets to (A) a purchase of or an Investment in Additional Assets (other than cash or cash equivalents), (B) repayments, redemptions or repurchases of Indebtedness of the Company which ranks pari passu with the Notes, and/or (C) make an offer to acquire all or part of the Notes (or Indebtedness of the Company which is pari passu with the Notes) at a purchase price equal to the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, thereon to the purchase date.

In the event the Company shall be required to offer to redeem Notes pursuant to the provisions of this Section 6.05, the Company shall deliver to the Trustee an Officers’ Certificate specifying the Asset Sale Offer Amount (as defined below) and the proposed date of purchase of the Notes by the Company (the “Asset Sale Purchase Date”). Not less than 30 days nor more than 60 days prior to the Asset Sale Purchase Date, the Company shall mail or cause the Trustee to mail (in the Company’s name and at its expense) an offer to redeem (the “Asset Sale Offer”) to each Holder of Notes. The redemption price shall be 100% of the principal amount of the Notes plus accrued interest to the redemption date and upon surrender to the Trustee or the Paying Agent, the Holders of such Notes shall be paid the redemption price. The Asset Sale Offer is to be and shall be mailed by the Company or the Trustee to the Holders of the Notes at their last registered address. The Asset Sale Offer shall remain open from the time of mailing until 5 days before the Asset Sale Purchase Date. The Notice shall contain all instructions and materials

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necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Notice, which shall govern the terms of the Asset Sale Offer, shall state:

(a) that the Asset Sale Offer is being made pursuant to this Section 6.05;

(b) the amount of Notes offered to be redeemed (the “Asset Sale Offer Amount”), the purchase price and the Asset Sale Purchase Date;

(c) that any Note not tendered or accepted for payment will continue to accrue interest;

(d) that any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Purchase Date;

(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse side of the Note completed, to the Paying Agent at the address specified in the Notice at least five days before the Asset Sale Purchase Date;

(f) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than three days prior to the Asset Sale Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have the Note purchased;

(g) that if Notes and or Indebtedness of the Company which is pari passu with the Notes in a principal amount in excess of the Asset Sale Offer Amount are tendered pursuant to the Asset Sale Offer, the Company shall purchase Notes and Indebtedness of the Company which ranks pari passu with the Notes on a pro rata basis or by lot or in such other manner as the Trustee shall deem fair and appropriate; and

(h) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.

On the Asset Sale Purchase Date, the Company shall (i) accept for payment Notes or portions thereof properly tendered pursuant to the Asset Sale Offer (on a pro rata basis, by lot or in such other manner specified by the Trustee if required pursuant to paragraph (g) above), (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted and (iii) deliver to the Trustee Notes so accepted together with an Officers’ Certificate stating the Notes or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so accepted, payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail or deliver to such Holders a new Note equal in principal amount of any unpurchased portion of the Note surrendered. Any Notes not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer on or as soon after as practical the Asset Sale Purchase Date. For avoidance of doubt, any amount of Net Proceeds remaining after the Asset Sale Purchase Date shall be returned by the Paying Agent to the Company and may be used by the Company for any purpose not

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inconsistent with this Indenture. For purposes of this Section 6.05, the Trustee shall act as the Paying Agent.

Section 6.06 Transactions with Affiliates.

(a) The Company shall not, and shall not permit any Restricted Subsidiary to, enter into or permit to exist any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless the terms thereof (i) are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of such transaction in arm’s-length dealings with a Person who is not such an Affiliate; and (ii) if such Affiliate Transaction (or series of related Affiliate Transactions) involve aggregate payments in an amount in excess of $10 million in any one year, (A) are set forth in writing and (B) have been approved by a majority of the disinterested members of the Board of Directors.

(b) The provisions of the foregoing paragraph shall not prohibit (i) any Restricted Payment permitted to be paid pursuant to the covenant described under Section 6.04 herein; (ii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise, pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans in the ordinary course of business and approved by the Board of Directors or a committee thereof; (iii) the grant of stock options or similar rights to employees and directors of the Company in the ordinary course of business and pursuant to plans approved by the Board of Directors or a committee thereof; (iv) loans or advances to employees in the ordinary course of business of the Company or its Restricted Subsidiaries; (v) fees, compensation or employee benefit arrangements paid to and indemnity provided for the benefit of directors, officers or employees of the Company or any Subsidiary in the ordinary course of business; or (vi) any Affiliate Transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries.

Section 6.07 Limitation on Payment Restrictions Affecting Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective, any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary (i) to pay dividends or make any other distributions on its Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company, (ii) to make any loans or advances to the Company or (iii) transfer any of its property or assets to the Company, except for: (a) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Original Issue Date; (b) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary which was entered into on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company) and outstanding on such date; (c) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (a) or (b) of this covenant (or effecting a Refinancing of such Refinancing Indebtedness

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pursuant to this clause (c)) or contained in any amendment to an agreement referred to in clause (a) or (b) of this covenant or this clause (c); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment are no more restrictive in any material respect than the encumbrances and restrictions with respect to such Restricted Subsidiary contained in such agreements; (d) any such encumbrance or restriction consisting of customary contractual non-assignment provisions to the extent such provisions restrict the transfer of rights, duties or obligations under such contract; (e) in the case of clause (iii) above, restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements or mortgages; (f) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and (g) any restriction imposed by applicable law.

Section 6.08 Restricted and Unrestricted Subsidiaries. The Company will not permit any Restricted Subsidiary to be designated as an Unrestricted Subsidiary unless the Company and its Restricted Subsidiaries would thereafter be permitted to (i) Incur at least $1.00 of Indebtedness under the first paragraph of the covenant described in Section 6.02 herein and (ii) make a Restricted Payment of at least $1.00 under Section 6.04 herein.

The Company will not permit any Unrestricted Subsidiary to be designated as a Restricted Subsidiary unless such Subsidiary has outstanding no Indebtedness except such Indebtedness as the Company could permit it to become liable for immediately after becoming a Restricted Subsidiary under Section 6.02 herein.

Promptly after the adoption of any Board Resolution designating a Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted Subsidiary, a copy thereof shall be filed with the Trustee, together with an Officers’ Certificate stating that the provisions of this Section 6.08 have been complied with in connection with such designation.

The Company will not permit Standard Pacific of Texas, L.P., Standard Pacific of Arizona, Inc., The Writer Corporation, Westbrooke Homes, Colony Communities, Westfield Homes of the Carolinas, LLC, Westfield Homes of Florida Partnership or Westfield Homes of Southwest Florida Partnership to be designated as an Unrestricted Subsidiary or permit the assets of the Company or any Subsidiary employed in the homebuilding operations to be transferred to an Unrestricted Subsidiary, except in amounts permitted under Section 6.04 herein. At such time, if any, as Standard Pacific of Texas L.P. is converted or merged back into a corporation named Standard Pacific of Texas, Inc., the reference in the prior sentence to Standard Pacific of Texas, L.P. shall be read as a reference to Standard Pacific of Texas, Inc.

Section 6.09 Mergers and Sales of Assets by the Company. The Company will not consolidate with, merge into or transfer all or substantially all of its assets to another Person unless (i) such Person (if other than the Company) is a corporation organized under the laws of the United States or any state thereof or the District of Columbia and expressly assumes all the obligations of the Company under the Indenture and the Notes; (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

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(iii) the Consolidated Net Worth of the obligor of the Notes immediately after giving effect to such transaction (exclusive of any adjustments to Consolidated Net Worth relating to transaction costs and accounting adjustments resulting from such transaction) is not less than the Consolidated Net Worth of the Company immediately prior to such transaction; and (iv) the surviving corporation would be able to Incur at least an additional $1.00 of Indebtedness pursuant to the first paragraph of the covenant described under Section 6.02.

Section 6.10 Reports to Holders of the Notes. So long as the Company is subject to the periodic reporting requirements of the Exchange Act, it shall continue to furnish the information required thereby to the SEC. Even if the Company is entitled under the Exchange Act not to furnish such information to the SEC or to the holders of the Notes, it will nonetheless continue to furnish information under Section 13 or 15(d) of the Exchange Act to the SEC and the Trustee as if it were subject to such periodic reporting requirements.

Section 6.11 Future Subsidiary Guarantees. The Company shall not permit any of its Restricted Subsidiaries, directly or indirectly, to guarantee, assume or in any manner become liable with respect to any of the Outstanding Notes or other notes issued by the Company under an indenture or comparable documents to indentures used in jurisdictions outside of the United States (other than guarantees in existence on the date of this Fifth Supplemental Indenture) unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the Indenture providing for the guarantee of the Notes on the same terms as the guarantee of such Outstanding Notes or other notes issued under an indenture or comparable documents used in jurisdictions outside of the United States, except that the guarantee of the Subordinated Notes shall be subordinated to the guarantee of the Notes to the same extent as the Subordinated Notes are subordinated to the Notes.

ARTICLE SEVEN

EVENTS OF DEFAULT

Section 7.01 Additional Events of Default. In addition to the Events of Default specified in the Original Indenture, the following shall constitute Events of Default under Section 6.01 of the Original Indenture with respect to the Notes:

(i) default under any mortgage, indenture (including the Indenture) or instrument under which is issued or which secures or evidences Indebtedness of the Company or any Restricted Subsidiary (other than Non-Recourse Indebtedness) which default constitutes a failure to pay principal of such Indebtedness in an amount of $25,000,000 or more when due and payable (other than as a result of acceleration) or results in Indebtedness (other than Non-Recourse Indebtedness) in the aggregate of $25,000,000 or more becoming or being declared due and payable before it would otherwise become due and payable,

(ii) entry of a final judgment for the payment of money against the Company or any Restricted Subsidiary in an amount of $5,000,000 or more which remains undischarged or unstayed for a period of 60 days after the date on which the right to appeal such judgment has expired or becomes subject to an enforcement proceeding, and

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(iii) failure by the Company to pay interest or Additional Interest, if any, on the Notes when the same becomes due and payable and the continuance of any such failure for a period of 30 days.

Section 7.02 Inapplicability of Cure Provisions to Certain Events of Default. With respect to Section 6.01(3) of the Original Indenture, the failure of the Company to comply with the covenant described under Section 6.09 herein will constitute an Event of Default with notice as provided in Section 6.01 of the Original Indenture, but without passage of time.

ARTICLE EIGHT

DEFEASANCE

Section 8.01 Defeasance The provisions of Article Eight of the Original Indenture shall be applicable to the Notes, except that Section 8.01(d)(1) of the Original Indenture shall be deleted in its entirety and be replaced by the following:

“The Company shall have irrevocably deposited with the Trustee, pursuant to an irrevocable trust and security agreement in form and substance reasonably satisfactory to the Trustee, money in U.S. dollars or U.S. government obligations or a combination thereof in such amounts and at such times as are sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of and interest (including Additional Interest, if any) on the outstanding Notes to maturity or redemption; provided, however, that the Trustee (or other qualifying trustee) shall have received an irrevocable written order from the Company instructing the Trustee (or other qualifying trustee) to apply such money or the proceeds of such U.S. governmental obligations to said payments with respect to the Notes to maturity or redemption.”

ARTICLE NINE

MISCELLANEOUS

Section 9.01 Governing Law. The laws of the State of New York shall govern this Fifth Supplemental Indenture and the Notes.

Section 9.02. No Adverse Interpretation of Other Agreements. This Fifth Supplemental Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Fifth Supplemental Indenture.

Section 9.03. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or this Fifth Supplemental Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Securityholder by accepting the Notes waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.

Section 9.04. Successors and Assigns. All covenants and agreements of the Company in this Fifth Supplemental Indenture and the Notes shall bind its successors and assigns. All

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agreements of the Trustee in this Fifth Supplemental Indenture shall bind its successors and assigns.

Section 9.05 Duplicate Originals. The parties may sign any number of copies of this Fifth Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 9.06 Severability. In case any one or more of the provisions contained in this Fifth Supplemental Indenture or in the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Fifth Supplemental Indenture or the Notes.

(Remainder of page intentionally left blank)

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IN WITNESS WHEREOF, the parties hereto have executed this Fifth Supplemental Indenture by their officers thereunto as of this 12^th day of May, 2003.

STANDARD PACIFIC CORP.
By:	/s/    ANDREW H. PARNES
	Andrew H. Parnes
	Senior Vice President-Finance and
	Chief Financial Officer
By:	/s/  CLAY A. HALVORSEN
	Clay A. Halvorsen
	Senior Vice President, General Counsel
	and Secretary
BANK ONE TRUST COMPANY, N.A., as Trustee
By:	/s/    SHARON MCGRATH
	Sharon McGrath
	Vice President

EXHIBIT A

FORM OF NOTE

[LEGENDS]¹

No.              CUSIP No.:                     

6 ⁷/8% Senior Notes due 2011

STANDARD PACIFIC CORP., a Delaware corporation, promises to pay to CEDE & CO., or registered assigns, the principal sum of One-Hundred Seventy-Five Million Dollars ($175,000,000) on May 15, 2011.

Interest Payment Dates: May 15 and November 15, commencing November 15, 2003

Record Dates: May 1 and November 1

Authenticated: May 19, 2003

Dated: May 19, 2003	Standard Pacific Corp.
	By:
	Title:
	By:
	Title:

The Bank One Trust Company, N.A., as Trustee, certifies that this is one of the Notes referred to in the within mentioned Indenture.

By:

Authorized Signatory

¹ Include applicable legend(s) as required by the Indenture.

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STANDARD PACIFIC CORP.

6 ⁷/8% Senior Notes due 2011

1. Interest. STANDARD PACIFIC CORP., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at the rate per annum shown above. The Company will pay interest semiannually on May 15 and November 15 of each year (each an “Interest Payment Date”), commencing November 15, 2003 until the principal is paid or made available for payment. Interest on the Notes will accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid, from May 19, 2003, provided that, if there is no existing default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment. The Company will pay interest and Additional Interest, if any, on the Notes (except defaulted interest, if any, which will be paid on such special payment date to Holders of record on such special record date as may be fixed by the Company) to the persons who are registered Holders of Notes at the close of business on the May 1 or November 1 immediately preceding the Interest Payment Date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay principal, interest and any Additional Interest in money of the United States that at the time of payment is legal tender for payment of public and private debts; provided, that any such payments with respect to Global Notes or Certificated Notes shall be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof and provided, further, that if no such account is specified by Holders of Certificated Notes any such payments with respect to such Notes shall be made by mailing a check to each such Holder’s registered address.

3. Paying Agent and Registrar. Initially, Bank One Trust Company, N.A. (the “Trustee”) will act as Paying Agent and Registrar. The Company may change or appoint any Paying Agent, Registrar or co-Registrar without notice. The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-Registrar.

4. Indenture. The Company issued the Notes under an Indenture dated as of April 1, 1999, between the Company and the Trustee (the “Original Indenture,” as supplemented by the First Supplemental Indenture dated as of April 13, 1999, the Second Supplemental Indenture dated as of September 5, 2000, the Third Supplemental Indenture dated as of December 28, 2001, the Fourth Supplemental Indenture dated as of March 4, 2003, and the Fifth Supplemental Indenture dated as of May 12, 2003, the “Indenture”). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (“TIA”) as in effect on the date of the Indenture. The Notes are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of them.

The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Requests may be made to: Standard Pacific Corp., 15326 Alton Parkway, Irvine, California 92618, Attention: Secretary.

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5. Optional Redemption. The Notes will be redeemable at the option of the Company, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior written notice mailed by first class mail to each Holder’s registered address.

The Notes will be redeemable at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed, or (ii) the sum, as determined by the Quotation Agent, as defined in the Indenture, of the present values of the principal amount of the Notes to be redeemed and the remaining scheduled payments of interest thereon from the redemption date to May 15, 2011 for the Notes to be redeemed, exclusive of interest accrued to the redemption date, discounted from their respective scheduled payment dates to the redemption date on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Treasury Rate, as defined in the Indenture, plus 50 basis points, plus, in either case, accrued and unpaid interest and Additional Interest, if any, on the principal amount being redeemed to the date of redemption.

If less than all of the Notes are to be redeemed, the Trustee will select the Notes to be redeemed on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate. If money sufficient to pay the redemption price of and accrued interest on all of the Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Trustee or paying agent on or before the redemption date and certain other conditions are satisfied, then on and after such redemption date, interest will cease to accrue on such Notes (or such portion thereof) called for redemption. Notes in denominations larger than $1,000 may be redeemed in part.

6. Mandatory Repurchase Obligation. If there is a Change of Control of the Company, the Holder of this Note shall have the right to require the Company to repurchase all or a portion of this Note at a purchase price equal to 101% of the principal amount hereof plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase, as provided in, and subject to the terms of, the Indenture.

7. Registration Rights. Pursuant to a Registration Rights Agreement, the Company will be obligated to (A) consummate an exchange offer pursuant to which the Holder of this Note, if this Note was issued on the Original Issue Date, shall have the right to exchange this Note for an Exchange Note registered under the Securities Act, in like principal amount and having terms identical in all material respects to this Note and/or (B) file, and have declared effective, a shelf registration statement under the Securities Act for the resale of this Note, if this Note was issued on the Original Issue Date. The Holder of this Note, if this Note was issued on the Original Issue Date, shall be entitled to receive certain Additional Interest payments in the event of a Registration Default (as such term is defined in the Registration Rights Agreement), all pursuant to and in accordance with the terms of the Registration Rights Agreement.

8. Denominations, Transfer, Exchange. If this Note is issued in global form, and contains a legend on the face hereof to such effect, the provisions of this Section 8 shall be deemed superseded by such legend and Section 3.02(c) of the Fifth Supplemental Indenture, to the extent the provisions of this Section 8 are inconsistent with such legend or Section 3.02(c).

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The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes by presentation of such Notes to the Registrar or a co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of Notes of other denominations. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Note selected for redemption, except the unredeemed part thereof if the Note is redeemed in part, or transfer or exchange any Notes for a period of 15 days before a selection of Notes to be redeemed.

9. Persons Deemed Owners. The registered Holder of this Note shall be treated as the owner of it for all purposes.

10. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent will pay the money back to the Company at its request. After that, Holders entitled to the money must look to the Company for payment unless an abandoned property law designates another person.

11. Amendment, Supplement, Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the outstanding Notes of each Series affected by the amendment, and any past default or compliance with any provision relating to any Series of the Notes may be waived in a particular instance with the consent of the Holders of a majority in principal amount of the outstanding Notes of such Series. Without the consent of any Securityholder, the Company and the Trustee may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to create a Series and establish its terms or to make any other change that does not adversely affect the rights of any Securityholder.

12. Defaults and Remedies. The following are Events of Default: (i) failure by the Company to pay the principal of any Note when due; (ii) failure by the Company to pay any interest or Additional Interest on any Note when due, continuing for 30 days; (iii) failure by the Company to comply with its other agreements or covenants in the Notes or the Indenture for the benefit of the Holders of the Notes upon the receipt by the Company of notice of such Default by the Trustee, or upon the receipt by the Company and the Trustee of notice of such Default by the Holders of at least 25% in aggregate principal amount of the Notes, and (except in the case of a Default with respect to certain covenants described in the Indenture) the Company’s failure to cure such Default within 60 days after receipt of such notice; (iv) certain events of bankruptcy or insolvency; (v) default under any mortgage, indenture (including the Indenture) or instrument under which is issued or which secures or evidences Indebtedness of the Company or any Restricted Subsidiary (other than Non-Recourse Indebtedness) which default constitutes a failure to pay principal of such Indebtedness in an amount of $25 million or more when due and payable (other than as a result of acceleration) or results in Indebtedness (other than Non-Recourse Indebtedness) in the aggregate of $25 million or more becoming or being declared due and payable before it would otherwise become due and payable; and (vi) entry of a final judgment for the payment of money against the Company or any Restricted Subsidiary in an

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amount of $5 million or more which remains undischarged or unstayed for a period of 60 days after the date on which the right to appeal such judgment has expired or becomes subject to an enforcement proceeding.

In case an Event of Default (other than arising out of certain events of bankruptcy or insolvency) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes at the time outstanding, by notice in writing to the Company (and to the Trustee if given by the Holders), may declare to be due and payable immediately that portion of the principal amount of the Notes at the time outstanding and accrued and unpaid interest, if any, to the date of acceleration and upon such declaration the same shall become and be immediately due and payable. In case an Event of Default arising out of certain events of bankruptcy or insolvency occurs and is continuing, the outstanding principal of and accrued and unpaid interest, if any, on the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any of the Holders.

Such declaration or acceleration and its consequences may be rescinded by Holders of a majority in aggregate principal amount of Notes at the time outstanding if all existing Events of Default have been cured or waived (except non-payment of principal that has become due solely because of the acceleration) and if the rescission would not conflict with any judgment or decree.

An existing Default (other than a Default in payment of principal of or interest on the Notes or Default with respect to a provision which cannot be modified under the terms of the Indenture without the consent of each Holder affected) may be waived by the Holders of a majority in aggregate principal amount of Notes at the time outstanding upon the conditions provided in the Indenture.

13. Successor Corporation. When a successor corporation assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor corporation will be released from those obligations.

14. Trustee Dealings With Company. Bank One Trust Company, N.A., the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its affiliates, and may otherwise deal with the Company or its affiliates, as if it were not Trustee.

15. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.

16. Discharge of Indenture. The Indenture contains certain provisions pertaining to defeasance, which provisions shall for all purposes have the same effect as if set forth herein.

17. Authentication. This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.

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18. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

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ASSIGNMENT FORM

If you the Holder want to assign this Note, fill in the form below:

I or we assign and transfer this Note to

(Insert assignee’s social security or tax ID number)

(Print or type assignee’s name, address, and zip code)

and irrevocably appoint                                                                                                                                                ,

agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:                    

Your signature:

(Sign exactly as your name appears

on the other side of this Note)

Signature

Guarantee:                                             

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[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL CERTIFICATES BEARING A RESTRICTED LEGEND]

CERTIFICATE OF TRANSFER

In connection with the transfer of this Note occurring prior to the date which is the earlier of (i) the date of the declaration by the Securities and Exchange Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) covering resale of this Note (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) May 20, 2005, the undersigned confirms that it has not utilized any general solicitation or general advertisement in connection with this transfer and that this Note is being transferred:

[Check One]

(1)	_____	to the Company or a subsidiary thereof; or
(2)	_____	to a transferee whom the undersigned reasonably believes to be a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act and certification in the form of Exhibit F to the Indenture is being furnished herewith; or
(3)	_____	in an offshore transaction meeting the requirements of Rule 903 or 904 of Regulation S of the Securities Act and certification in the form of Exhibit E to the Indenture is being furnished herewith; or
(4)	_____	to an institutional “accredited investor” (as defined in Rule 501(a)(1),(2),(3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which can be obtained from the Trustee); or
(5)	_____	pursuant to an exemption from registration provided by Rule 144 under the Securities Act; or
(6)	_____	pursuant to another available exemption from the registration requirements of the Securities Act; or
(7)	_____	pursuant to an effective registration statement under the Securities Act.

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Unless one of the above items is checked and unless and until the conditions to any such transfer of registration set forth herein, including in any legend on the face of this Note, or in the Indenture have been satisfied, the Trustee will refuse to register any of the interests evidenced by this Note in the name of any person other than the registered Holder thereof.

Date:
	Seller
	By

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

Signature Guarantee:2
	By

² Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company check the Box:  ¨

If you want to elect to have only a part of this Note purchased by the Company state the amount:

$                                         

Date:                    

(Sign exactly as your name appears

on the other side of this Note)

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SCHEDULE OF EXCHANGES OF NOTES¹

The following exchanges of a part of this Global Note for Certificated Notes or a part of another Global Note have been made:

Date of Exchange Amount of decrease in principal amount of this Global Note Amount of increase in principal amount of this Global Note Principal amount of this Global Note following such decrease (or increase) Signature of authorized officer of Trustee

¹ For Global Notes

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EXHIBIT B

REGULATION S TEMPORARY GLOBAL NOTE LEGEND

THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

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EXHIBIT C

RESTRICTED LEGEND

THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN “IAI”),

(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

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AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTIONS” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.

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EXHIBIT D

DTC LEGEND

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.

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EXHIBIT E

REGULATION S CERTIFICATE

                ,        

Bank One Trust Company, N.A.

1 North State Street

9th Floor

Chicago, IL 60670-0126

Attention: Corporate Trust Administration

Re:    Standard Pacific Corp.

6 ⁷/8% Senior Notes due 2011 (the “Notes”)

Issued under the Indenture dated as of April 1, 1999

(as amended through the Fifth Supplemental Indenture

dated as of May 12, 2003, the “Indenture”) relating to the Notes

Dear Sirs:

Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.

[CHECK A OR B AS APPLICABLE.]

¨      A. This Certificate relates to our proposed transfer of $             principal amount of Notes issued under the Indenture. We hereby certify as follows:

1. The offer and sale of the Notes was not and will not be made to a person in the United States (unless such person is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is acting is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(g)(3)) and such offer and sale was not and will not be specifically targeted at an identifiable group of U.S. citizens abroad.

2. Unless the circumstances described in the parenthetical in paragraph 1 above are applicable, either (a) at the time the buy order was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably believed that the buyer was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and neither we nor any person acting on our behalf knows that the transaction was pre-arranged with a buyer in the United States.

3. Neither we, any of our affiliates, nor any person acting on our or their behalf has made any directed selling efforts in the United States with respect to the Notes.

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4. The proposed transfer of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

5. If we are a dealer or a person receiving a selling concession, fee or other remuneration in respect of the Notes, and the proposed transfer takes place during the Restricted Period (as defined in the Indenture), or we are an officer or director of the Company or an Initial Purchaser (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with the provisions of Rule 904(b) of Regulation S.

¨      B. This Certificate relates to our proposed exchange of $             principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us. We hereby certify as follows:

1. At the time the offer and sale of the Notes was made to us, either (i) we were not in the United States or (ii) we were excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by us for which we were acting was excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(g)(3); and we were not a member of an identifiable group of U.S. citizens abroad.

2. Unless the circumstances described in paragraph 1(ii) above are applicable, either (a) at the time our buy order was originated, we were outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and we did not pre-arrange the transaction in the United States.

3. The proposed exchange of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

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You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

	Very truly yours,
	[NAME OF SELLER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]
	By:
	Name:
	Title:
	Address:
Date:

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EXHIBIT F

RULE 144A CERTIFICATE

                ,        

Bank One Trust Company, N.A.

1 North State Street

9th Floor

Chicago, IL 60670-0126

Attention: Corporate Trust Administration

Re:    Standard Pacific Corp.

6 ⁷/8% Senior Notes due 2011 (the “Notes”)

Issued under the Indenture dated as of April 1, 1999

(as amended through the Fifth Supplemental Indenture

dated as of May 12, 2003, the “Indenture”) relating to the Notes

Ladies and Gentlemen:

This Certificate relates to:

[CHECK A OR B AS APPLICABLE.]

¨      A. Our proposed purchase of $             principal amount of Notes issued under the Indenture.

¨      B. Our proposed exchange of $             principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and in accordance with all applicable securities laws of the states of the United States and other jurisdictions and the undersigned is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that, prior to the date of this Certificate, it has received such information, regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

You and the Company are entitled to rely upon this Certificate and are irrevocably

F-1

authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

	Very truly yours,
	[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]
	By:
	Name:
	Title:
	Address:
Date:

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EXHIBIT G

INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE

Bank One Trust Company, N.A.

1 North State Street

9th Floor

Chicago, IL 60670-0126

Attention: Corporate Trust Administration

Re:    Standard Pacific Corp.

6 ⁷/8% Senior Notes due 2011 (the “Notes”)

Issued under the Indenture dated as of April 1, 1999

(as amended through the Fifth Supplemental Indenture

dated as of May 12, 2003, the “Indenture”) relating to the Notes

Ladies and Gentlemen:

This Certificate relates to:

[CHECK A, B OR C AS APPLICABLE.]

¨      A. Our proposed purchase of $             principal amount of Notes issued under the Indenture.

¨      B. Our proposed purchase of $             principal amount of a beneficial interest in a Global Note.

¨      C. Our proposed exchange of $             principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

We hereby confirm that:

1. We are an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”) (an “Institutional Accredited Investor”).

2. Any acquisition of Notes by us will be for our own account or for the account of one or more other Institutional Accredited Investors as to which we exercise sole investment discretion.

3. We have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Notes and we and any accounts for which we are acting are able to bear the economic risks of and an entire loss of our or their investment in the Notes.

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4. We are not acquiring the Notes or beneficial interest therein with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any State of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary will remain at all times within our and their control.

5 We acknowledge that the Notes have not been registered under the Securities Act and that the Notes may not be offered or sold within the United States or to or for the benefit of U.S. persons except as set forth below.

6. The principal amount of Notes to which this Certificate relates is at least equal to $250,000.

Terms used herein and not otherwise defined shall have the meanings given to them in the Indenture.

We agree for the benefit of the Company, on our own behalf and on behalf of each account for which we are acting, that we will not resell or otherwise transfer this note or any beneficial interest herein, except (A) to the Company or any of its subsidiaries, (B) to a person whom the we reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (C) in an offshore transaction meeting the requirements of Rule 903 or 904 of Regulation S of the Securities Act, (D) in a transaction meeting the requirements of Rule 144 under the Securities Act, (E) to an IAI that, prior to such transfer, furnishes the Trustee a signed letter containing certain representations and agreements relating to the transfer of this Note (the form of which can be obtained from the Trustee) and, if such transfer is in respect of an aggregate principal amount of less than $250,000, an opinion of counsel acceptable to the company that such transfer is in compliance with the Securities Act, (F) in accordance with another exemption form the registration requirements of the Securities Act (and based upon an opinion of counsel acceptable to the Company) or (G) pursuant to an effective Registration Statement, and in each case, in accordance with the applicable securities laws of any state of the United States or any other applicable jurisdiction. Prior to the registration of any transfer, we acknowledge that the Company reserves the right to require the delivery of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that the proposed transfer is being made in compliance with the Securities Act and applicable state securities laws. We acknowledge that no representation is made as to the availability of any Rule 144 exemption from the registration requirements of the Securities Act. We understand that the Trustee will not be required to accept for registration of transfer any Notes acquired by us, except upon presentation of evidence satisfactory to the Company and the Trustee that the foregoing restrictions on transfer have been complied with. We further agree to provide to any person acquiring any of the Notes or any beneficial interest therein from us a notice advising such person that resales of the Notes are restricted as stated herein. We agree to notify you promptly in writing if any of our acknowledgments, representations or agreements herein ceases to be accurate and complete. We represent to you that we have full power to make the foregoing acknowledgments, representations and agreements on our own behalf and on behalf of any

G-2

account for which we are acting. You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

	Very truly yours,
	[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]
	By:
	Name:
	Title:
	Address:
Date:

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Upon transfer of certificated Notes, the Notes would be registered in the name of the new beneficial owner as follows:

By:                                                                                 

Date:                                                                             

Taxpayer ID number:                                                 

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EXHIBIT H

CERTIFICATE OF BENEFICIAL OWNERSHIP

[COMPLETE FORM I OR FORM II AS APPLICABLE]

[FORM I]

Certificate of Beneficial Ownership

To: Bank One Trust Company, N.A.

1 North State Street

9th Floor

Chicago, IL 60670-0126

Attention: Corporate Trust Administration

[Euroclear Bank S.A./N.V., as operator of the Euroclear System] OR

[Clearstream Banking, société anonyme]

Re: Standard Pacific Corp.

6 ⁷/8% Senior Notes due 2011 (the “Notes”)

Issued under the Indenture dated as of April 1, 1999

(as amended through the Fifth Supplemental Indenture

dated as of May 12, 2003, the “Indenture”) relating to the Notes

Ladies and Gentlemen:

We are the beneficial owner of $             principal amount of Notes issued under the Indenture and represented by a Regulation S Temporary Global Note (as defined in the Indenture).

We hereby certify as follows:

[CHECK A OR B AS APPLICABLE.]

¨ A. We are a non-U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended).

¨ B. We are a U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended) that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended.

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You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,

[NAME OF BENEFICIAL OWNER]

By:                                                                                  

Name:                                                                            

Title:                                                                              

Address:                                                                       

Date:                     

[FORM II]

Certificate of Beneficial Ownership

To: Bank One Trust Company, N.A.

1 North State Street

9th Floor

Chicago, IL 60670-0126

Attention: Corporate Trust Administration

Re:   Standard Pacific Corp.

6 ⁷/8% Senior Notes due 2011 (the “Notes”)

Issued under the Indenture dated as of April 1, 1999

(as amended through the Fifth Supplemental Indenture

dated as of May 12, 2003, the “Indenture”) relating to the Notes

Ladies and Gentlemen:

This is to certify that based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations (“Member Organizations”) appearing in our records as persons being entitled to a portion of the principal amount of Notes represented by a Regulation S Temporary Global Note issued under the above-referenced Indenture, that as of the date hereof, $             principal amount of Notes represented by the Regulation S Temporary Global Note being submitted herewith for exchange is beneficially owned by persons that are either (i) non-U.S. persons (within the meaning of Regulation S under the Securities Act of 1933, as amended) or (ii) U.S. persons that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended.

We further certify that (i) we are not submitting herewith for exchange any portion of such Regulation S Temporary Global Note excepted in such Member Organization certifications and (ii) as of the date hereof we have not received any notification from any Member Organization to the effect that the statements made by such Member Organization with respect to

H-2

any portion of such Regulation S Temporary Global Note submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof.

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

	Yours faithfully,
	[EUROCLEAR BANK S.A./N.V., as operator of the Euroclear System]
	OR
	[CLEARSTREAM BANKING, société anonyme]
	By:
	Name:
	Title:
	Address:
Date:

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

Certification of Chief Executive Officer

I, Stephen J. Scarborough, certify that:
	1.	I have reviewed this report on Form 10-Q of Standard Pacific Corp.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
		(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Dated: August 11, 2003

/s/ STEPHEN J. SCARBOROUGH

Stephen J. Scarborough
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

Certification of Chief Financial Officer

I, Andrew H. Parnes, certify that:
	1.	I have reviewed this report on Form 10-Q of Standard Pacific Corp.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
		(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		(b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		(c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
		(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Dated: August 11, 2003

/s/ ANDREW H. PARNES

Andrew H. Parnes
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of Standard Pacific Corp., a Delaware corporation (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• the Company’s Quarterly Report on Form 10-Q for the quarter June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934, as amended; and

• the information contained in such report fairly presents, in all materials respects, the financial condition and results of operations of the Company.

Dated:  August 11, 2003

/s/ STEPHEN J. SCARBOROUGH

Stephen J. Scarborough
Chairman and
Chief Executive Officer

/s/ ANDREW H. PARNES

Andrew H. Parnes
Senior Vice President – Finance and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Standard Pacific Corp. and will be retained by Standard Pacific Corp. and furnished to the Securities and Exchange Commission or its staff upon request.