Exhibit 10.10.2.3
 
LIMITED WAIVER AGREEMENT
 
THIS LIMITED WAIVER AGREEMENT (this “Waiver”), dated as of May 14, 2009, is made
among (i) BUILDING MATERIALS HOLDING CORPORATION, a Delaware corporation
(“Holdings”), as borrower, (ii) BMC WEST CORPORATION, a Delaware corporation
(the “Company”), and certain other affiliates of Holdings, as guarantors,
(iii) the Lenders party to the Credit Agreement referenced below, and (iv) WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as the L/C Issuer, the
Swingline Lender and the administrative agent for the Lenders (in such capacity,
the “Administrative Agent”).
 
A.           WHEREAS, Holdings, the Company and the other Guarantors, the
Lenders and the Administrative Agent are parties to a Second Amended and
Restated Credit Agreement, dated as of November 10, 2006, as amended by that
certain First Amendment to Second Amended and Restated Credit Agreement, dated
as of February 29, 2008, and that certain Second Amendment to Second Amended and
Restated Credit Agreement, dated as of September 30, 2008 (as so amended and as
further amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”).
 
B.           WHEREAS, by written notice dated April 6, 2009 (the “Notice
Letter”), Holdings notified the Administrative Agent of certain potential or
actual Defaults under the Credit Agreement as more specifically described in
such Notice Letter, a copy of which is attached hereto as Exhibit A (such
Defaults specified in the Notice Letter, the “Specified Defaults”).
 
C.           WHEREAS, as a result of such Specified Defaults, (i) Holdings may
be unable to request additional Credit Extensions under the Credit Agreement,
inasmuch as Holdings may be unable to satisfy the conditions precedent to such
Credit Extensions under Section 5.03 of the Credit Agreement, and (ii) Holdings
may be unable to dispose of assets as may otherwise be permitted under Section
8.02(h) of the Credit Agreement, inasmuch as clause (i) of such Section 8.02(h)
requires that at the time of any such disposition no Event of Default shall
exist.
 
D.           WHEREAS, pursuant to the terms and conditions of that certain
Limited Waiver Agreement dated as of April 13, 2009 (the “Limited Waiver
Agreement”), the Majority Lenders agreed to a limited waiver until June 1, 2009,
of, among other things, (i) the conditions precedent to additional Credit
Extensions set forth in Sections 5.03(b), 5.03(c) and 5.03(d) of the Credit
Agreement, so that, subject to availability under the Borrowing Base, Holdings
may continue to have access to Revolving Loans of up to a maximum aggregate
principal amount of $20,000,000, notwithstanding the existence of the Specified
Defaults, (ii) the requirement under clause (i) of Section 8.02(h) of the Credit
Agreement that no Event of Default shall exist at the time of any disposition
otherwise permitted under such Section 8.02(h) so that Holdings may continue to
pursue asset sales, notwithstanding the existence of the Specified Defaults, the
proceeds of which shall be applied to prepay the Term B Loans in accordance with
Section 2.08(a)(iii) of the Credit Agreement, and (iii) the requirement under
Section 8.19(b) of the Credit Agreement that Holdings shall have certain minimum
EBITDA from Continuing Operations for the months ended or ending February 28,
2009, March 31, 2009, April 30, 2009, and May 31, 2009.

EXECUTION VERSION

 
 

--------------------------------------------------------------------------------

 
 
E.           WHEREAS, in order to allow further discussions with the
Administrative Agent and the Lenders with respect to the Specified Defaults,
Holdings has asked that the Waiver Termination Date be extended to June 29,
2009.
 
F.           WHEREAS, the Majority Lenders have agreed to such request, subject
to the terms and conditions hereof.
 
Accordingly, the parties hereto agree as follows:
 
SECTION 1    Definitions; Interpretation.
 
(a)           Terms Defined in Credit Agreement.  All capitalized terms used in
this Waiver (including in the preamble and recitals hereof) and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement.
 
(b)           Interpretation.  The rules of interpretation set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Waiver and are
incorporated herein by this reference.
 
SECTION 2    Limited Waiver.
 
(a)           Waiver.  Subject to the terms and conditions of this Waiver, the
Majority Lenders hereby temporarily waive (i) the requirements of Section
7.01(a) of the Credit Agreement with respect to the audited consolidated
financial statements of Holdings and its Subsidiaries as at December 31, 2008,
insofar as such Section requires that such financial statements be accompanied
by an audit report and opinion that is not subject to any “going concern” or
like qualification or exception, (ii) the requirements of Sections 7.01(d) and
7.02(b) of the Credit Agreement to deliver by the dates specified in such
Sections certain updated business plans, financial forecasts and projections of
Holdings, (iii) the requirements of Section 8.02(h)(i) of the Credit Agreement,
(iv) the requirements of Section 8.19(b) of the Credit Agreement for the month
ended February 28, 2009, the month ended March 31, 2009, the month ended April
30, 2009, and the month ending May 31, 2009, (v) the requirements of
Sections 5.03(b), 5.03(c) and 5.03(d) of the Credit Agreement with respect to
additional Revolving Loans requested by Holdings on or after the Effective Date
(as defined in Section 3 below), (vi) the certifications required under
paragraphs (a), (b) and (c) of any Notice of Borrowing with respect to
additional Revolving Loans requested by Holdings on or after the Effective Date
(as defined in Section 3 below), in the case of each of the preceding clauses
(i), (ii), (iii), (iv), (v) and (vi), insofar as such requirements or
certifications cannot be satisfied due solely to the occurrence of the Specified
Defaults, and (vii) the right to exercise default remedies pursuant to the Loan
Documents or applicable law arising solely as a result of the existence of the
Specified Defaults; provided, that (1) such temporary waiver shall terminate on
the earlier to occur of (A) the occurrence of an Event of Default (other than
the Specified Defaults) and (B) 5:00 p.m. (Pacific time) on June 29, 2009 (the
earliest to occur of (A) and (B), the “Waiver Termination Date”), (2) the
Effective Amount of all Revolving Loans shall not exceed $20,000,000 in the
aggregate at any time outstanding, subject to availability under the Borrowing
Base, and (3) Holdings shall not, and shall not permit any of its Subsidiaries
to, make any Capital Expenditures in excess of, on a consolidated basis,
$100,000 from and after the Effective Date through the Waiver Termination Date.

 
2

--------------------------------------------------------------------------------

 

(b)           References Within Credit Agreement.  Each reference in the Credit
Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or
words of like import, shall mean and be a reference to the Credit Agreement as
supplemented by this Waiver.
 
SECTION 3    Conditions of Effectiveness.  The effectiveness of Section 2 of
this Waiver shall be subject to the satisfaction of each of the following
conditions precedent (the date on which such conditions are satisfied, the
“Effective Date”):
 
(a)           Execution.  The Administrative Agent shall have received (i) from
Holdings, the Company and each other Guarantor a duly executed original of this
Waiver (or, if elected by the Administrative Agent, a facsimile or PDF copy of
such executed Waiver), and (ii) from the Majority Lenders duly executed original
written consents to this Waiver (or, if elected by the Administrative Agent,
facsimile or PDF copies of such executed consents) authorizing the
Administrative Agent to execute and deliver this Waiver on the Majority Lenders’
behalf.
 
(b)           Fees and Expenses.  Holdings shall have paid (i) the Waiver Fee
referenced below, and (ii) all invoiced costs and expenses then due in
accordance with Section 8(d) of this Waiver.
 
(c)           Additional Closing Documents and Actions.  The Administrative
Agent shall have received the following, in form and substance satisfactory to
it: a certificate of a Responsible Officer of Holdings and the Company, stating
that (i) the representations and warranties contained in Section 4 of this
Waiver are true and correct on and as of the Effective Date, and (ii) on and as
of the Effective Date, no Default shall have occurred and be continuing other
than the Specified Defaults.
 
(d)           Representations and Warranties; No Default.  On the Effective
Date (i) the representations and warranties contained in Section 4 of this
Waiver shall be true and correct on and as of the Effective Date as though made
on and as of such date; and (ii) no Default shall have occurred and be
continuing other than the Specified Defaults.
 
(e)           Additional Documents.  The Administrative Agent shall have
received, in form and substance satisfactory to it, such additional approvals,
opinions, documents and other information as the Administrative Agent or the
Majority Lenders (through the Administrative Agent) may reasonably request.
 
SECTION 4    Representations and Warranties.  To induce the Lenders to enter
into this Waiver, Holdings, the Company and each other Loan Party hereby
represents and warrants to the Administrative Agent and the Lenders that all
representations and warranties made by each such Person in Article VI of the
Credit Agreement and in the other Loan Documents are true and correct on and as
of the date hereof, except for any inaccuracy of the representations and
warranties in Section 6.06 or Section 6.11(b) of the Credit Agreement resulting
from the existence of the Specified Defaults.  For the purposes of this
Section 4, (i) each reference in Article VI of the Credit Agreement to “this
Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like
import in such Article, shall mean and be a reference to the Credit Agreement as
supplemented by this Waiver, and each reference in such Article to “the Loan
Documents” shall mean and be a reference to the Loan Documents as supplemented
as contemplated hereby, (ii) Section 6.11 of the Credit Agreement shall be
deemed instead to refer to the last day of the most recent fiscal quarter and
fiscal year for which financial statements have then been delivered, and
(iii) any representations and warranties which relate solely to an earlier date
shall not be deemed confirmed and restated as of the date hereof (provided that
such representations and warranties shall be true and correct as of such earlier
date).

 
3

--------------------------------------------------------------------------------

 

SECTION 5    Waiver Fee.  Holdings shall pay to Administrative Agent, for the
account of each Lender that approves this Waiver, a waiver fee in the amount of
(x) 10 basis points multiplied by (y) (1) the Revolving Commitment plus (2) the
outstanding principal amount of Term B Loans of each such Lender that approves
this Waiver (the “Waiver Fee”), measured as of the Effective Date.  Such Waiver
Fee shall be fully earned on the Effective Date and shall be paid only to those
Lenders that approve this Waiver by returning to the Administrative Agent a
written consent to this Waiver by no later than 5:00 p.m. New York time on May
14, 2009.
 
SECTION 6    Reaffirmation of Liens and Guarantees.
 
(a)           Each Loan Party hereby reaffirms that the Liens granted to the
Administrative Agent, for itself and on behalf of and for the ratable benefit of
the other Secured Parties, under the Security Agreement and the other Collateral
Documents remain in full force and effect and constitute, and shall constitute
on and after the Effective Date, valid and perfected Liens on the Collateral
(subject only to Permitted Liens) to secure the Secured Obligations.  As used
herein, “Secured Parties” and “Secured Obligations” shall have the meanings
given to such terms in the Security Agreement.
 
(b)           Each of the undersigned Guarantors, in its capacity as a
Guarantor, does hereby consent to this Waiver and to the documents and
agreements referred to herein, and nothing herein shall in any way limit any of
the terms or provisions of the Guaranty of such Guarantor or the Collateral
Documents executed by such Guarantor or any other Loan Document executed by such
Guarantor (as the same may be amended from time to time), all of which are
hereby ratified and affirmed in all respects.
 
SECTION 7    Release.
 
(a)           Holdings and each other Loan Party hereby absolutely and
unconditionally waives, releases, remises and forever discharges the
Administrative Agent and the Lenders, and any and all of their respective
participants, members, related funds, parent corporations, subsidiary
corporations, affiliated corporations, insurers, indemnitors, successors and
assigns thereof, together with all of the present and former directors,
officers, agents and employees of any of the foregoing (each a “Released
Party”), from any and all claims, suits, investigations, proceedings, demands,
obligations, liabilities, damages, losses, costs, expenses, or causes of action
of any kind, nature or description, whether based in law, equity, contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
common law, or under any state or federal law or otherwise, of any kind or
character, known or unknown, past or present, liquidated or unliquidated,
suspected or unsuspected, matured or unmatured, known or unknown, in each case,
which Holdings or such other Loan Party has had, now has, or has made claim to
have against any such Released Party for or by reason of any act, omission,
matter, cause or thing whatsoever which relates, directly or indirectly to the
Credit Agreement or any other Loan Document, provided, however, that the
foregoing shall not effect or otherwise constitute a release of any duties or
obligations set forth in this Waiver, the Credit Agreement or the other Loan
Documents.  It is the intention of Holdings and each other Loan Party in
providing this release that the same shall be effective as a bar to each and
every claim, demand and cause of action specified, and in furtherance of this
intention it waives and relinquishes all rights and benefits under Section 1542
of the Civil Code of the State of California (or any comparable provision of any
other applicable law), which provides:

 
4

--------------------------------------------------------------------------------

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
 
Holdings and each other Loan Party acknowledges that it may hereafter discover
facts different from or in addition to those now known or believed to be true
with respect to such claims, demands, or causes of action and agrees that this
instrument shall be and remain effective in all respects notwithstanding any
such differences or additional facts.  Holdings and each other Loan Party
understands, acknowledges and agrees that the release set forth above may be
pleaded as a full and complete defense and may be used as a basis for an
injunction against any action, suit or other proceeding which may be instituted,
prosecuted or attempted in breach of the provisions of such release.
 
(b)           Holdings and each other Loan Party, on behalf of itself and its
successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with and in favor of each
Released Party above that it will not sue (at law, in equity, in any regulatory
proceeding or otherwise) any Released Party on the basis of any claim released,
remised and discharged by such Person pursuant to the above release.  Holdings
and each other Loan Party further agrees that it shall not dispute the validity
or enforceability of the Credit Agreement or any of the other Loan Documents or
any of its obligations thereunder, or the validity, priority, enforceability or
the extent of Administrative Agent’s Lien on any item of Collateral under the
Credit Agreement or the other Loan Documents.  If Holdings or any other Loan
Party or any of its successors, assigns or other legal representations violates
the foregoing covenant, such Person, for itself and its successors, assigns and
legal representatives, agrees to pay, in addition to such other damages as any
Released Party may sustain as a result of such violation, all reasonable
attorneys’ fees and costs incurred by such Released Party as a result of such
violation.
 
SECTION 8    Miscellaneous.
 
(a)           Notice.  Subject to Section 11.07 of the Credit Agreement, the
Administrative Agent shall notify Holdings, the Company and the Lenders of the
occurrence of the Effective Date and promptly thereafter distribute to Holdings,
the Company and the Lenders copies of all documents delivered under Section 3 of
this Waiver.

 
5

--------------------------------------------------------------------------------

 

(b)           Credit Agreement Otherwise Not Affected.  Except as expressly
waived pursuant hereto, the Credit Agreement and the other Loan Documents shall
remain unchanged and in full force and effect and are hereby ratified and
confirmed in all respects.  The Lenders’ and the Administrative Agent’s
execution and delivery of, or acceptance of, this Waiver and any other documents
and instruments in connection herewith (collectively, the “Waiver Documents”)
shall not be deemed to create a course of dealing or otherwise create any
express or implied duty by any of them to provide any other or further
amendments, consents or waivers in the future.
 
(c)           No Reliance.  Each of Holdings, the Company and each other
Guarantor hereby acknowledges and confirms to the Administrative Agent and the
Lenders that it is executing this Waiver and the other Waiver Documents on the
basis of its own investigation and for its own reasons without reliance upon any
agreement, representation, understanding or communication by or on behalf of any
other Person.
 
(d)           Costs and Expenses.  Holdings agrees to pay to the Administrative
Agent on demand the reasonable out-of-pocket costs and expenses of the
Administrative Agent, and the reasonable fees and disbursements of counsel to
the Administrative Agent, in connection with the negotiation, preparation,
execution and delivery of this Waiver and any other documents to be delivered in
connection herewith.
 
(e)           Binding Effect.  This Waiver shall be binding upon, inure to the
benefit of and be enforceable by Holdings, the Company and each other Guarantor,
the Administrative Agent and each Lender and their respective successors and
assigns.
 
(f)           Governing Law.  THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
 
(g)           Complete Agreement; Amendments.  This Waiver, together with the
other Waiver Documents and the other Loan Documents, contains the entire and
exclusive agreement of the parties hereto and thereto with reference to the
matters discussed herein and therein.  This Waiver supersedes all prior
commitments, drafts, communications, discussion and understandings, oral or
written, with respect thereto.  This Waiver may not be modified, amended or
otherwise altered except in accordance with the terms of Section 11.01 of the
Credit Agreement.
 
(h)           Severability. Whenever possible, each provision of this Waiver
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations.  If, however, any provision of this Waiver
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Waiver, or the validity or effectiveness of such provision in
any other jurisdiction.

 
6

--------------------------------------------------------------------------------

 

(i)           Counterparts.  This Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
 
(j)           Loan Documents.  This Waiver and the other Waiver Documents shall
constitute Loan Documents.
 
(k)          Reservation of Rights.  The Administrative Agent and the Lenders
continue to evaluate their response to the Specified Defaults, and, except as
specifically set forth in Section 2 above, nothing contained in this Waiver is
intended to or shall be construed as a waiver or forbearance of any of the
rights, remedies, and powers of the Administrative Agent or any Lender or
against the Borrower, any Guarantor or the Collateral, or a waiver of any
Defaults or Events of Default, whether specified herein or otherwise, as an
agreement to continue to make Credit Extensions to the Borrower under the Credit
Agreement except as specifically set forth in Section 2 above, or a consent to
any departure by the Borrower or any Guarantor from the express provisions of
the Credit Agreement and the other Loan Documents.  The Administrative Agent and
each Lender hereby expressly reserves all of its remedies, powers, rights and
privileges under the Credit Agreement and the other Loan Documents, at law
(including under the Uniform Commercial Code), in equity or otherwise.  Please
be advised that neither the Administrative Agent nor the Lenders has any
obligation to forbear from enforcing its rights and remedies with respect to any
Default or Event of Default, other than in respect of the Specified Defaults
(but then only until the Waiver Termination Date).  Any forbearance must be in
writing and agreed to by the Administrative Agent and the requisite Lenders.
 
[Signature Pages Follow]

 
7

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Waiver, as of the
date first above written.
 
THE BORROWER
 
BUILDING MATERIALS HOLDING CORPORATION
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President &
              Chief Financial Officer
   
THE GUARANTORS
 
BMC WEST CORPORATION
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President &
              Chief Financial Officer
   
SELECTBUILD CONSTRUCTION, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President &
              Chief Financial Officer
   
SELECTBUILD NORTHERN CALIFORNIA, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD DISTRIBUTION, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President

 
[SIGNATURE PAGE 1 TO MAY 2009 LIMITED WAIVER AGREEMENT]
 
 

--------------------------------------------------------------------------------

 
 
C CONSTRUCTION, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
TWF CONSTRUCTION, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
H.N.R. FRAMING SYSTEMS INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD, L.P.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD SOUTHERN CALIFORNIA, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD NEVADA, INC.
   
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President

 
[SIGNATURE PAGE 2 TO MAY 2009 LIMITED WAIVER AGREEMENT]

--------------------------------------------------------------------------------

 
SELECTBUILD ARIZONA, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD MID-ATLANTIC, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD FLORIDA, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD TRIM, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
KBI STUCCO, INC.
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President

 
[SIGNATURE PAGE 3 TO MAY 2009 LIMITED WAIVER AGREEMENT]

 
 

--------------------------------------------------------------------------------

 
 
KBI WINDOWS, INC.
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
A-1 BUILDING COMPONENTS, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD MECHANICAL, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
SELECTBUILD ILLINOIS, LLC
 
By
 /s/ William M Smartt
 
Name:  William M Smartt
 
Title:     Senior Vice President
   
ILLINOIS FRAMING, INC.
 
By
 /s/ PAUL S. STREET
 
Name: PAUL S. STREET
  
Title:   Sr. Vice President, Cheif Administrative Officer 
                 General Counsel and Corporate Secretary

 
[SIGNATURE PAGE 4 TO MAY 2009 LIMITED WAIVER AGREEMENT]

 
 

--------------------------------------------------------------------------------

 
 
THE ADMINISTRATIVE AGENT
 
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent
   
By
   
Name:
 
Title:

 
[SIGNATURE PAGE 5 TO MAY 2009 LIMITED WAIVER AGREEMENT]

 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
Notice Letter
 
[Please see attached]
 
 
 
 

--------------------------------------------------------------------------------

 
[letterx1x1.jpg]

 
 

--------------------------------------------------------------------------------