SECOND AMENDMENT TO CREDIT AGREEMENT
 
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of March
17, 2005, 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 financial institutions listed on the signature pages
hereof under the heading “LENDERS” (individually, each a “Lender” and,
collectively, the “Lenders”), (iv) GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Lead Arranger, (v) U.S. BANK NATIONAL ASSOCIATION, as Syndication Agent,
(vi) UNION BANK OF CALIFORNIA, N.A., as Documentation Agent and (vii) WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as the L/C Issuer, the
Swingline Lender, the administrative agent for the Lenders (in such capacity,
the “Administrative Agent”) and Co-Lead Arranger.
 
Holdings, the Company and the other Guarantors, the Lenders and the
Administrative Agent are parties to a Credit Agreement dated as of
August 13, 2003 (as heretofore amended, supplemented or otherwise modified, the
“Credit Agreement”). Holdings has requested that the Lenders agree to certain
amendments to the Credit Agreement. The 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
Amendment (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 Amendment and are incorporated
herein by this reference.

 
SECTION 2  Amendments to the Credit Agreement.
 

(a) Amendments. The Credit Agreement shall be amended as follows, effective as
of the date of satisfaction of the conditions set forth in Section 3 (the
“Second Amendment Effective Date”):

 

(i) Section 1.01 of the Credit Agreement shall be amended as follows:

 

(A) The defined term “Applicable Margin” shall be amended by deleting clause
(ii) thereof in its entirety and substituting in lieu thereof the following new
clause (ii):

 

“(ii) with respect to Term B Loans which are Base Rate Loans, 1.25%, and with
respect to Term B Loans which are Offshore Rate Loans, 2.00%”.

 

(B) A new defined term “Second Amendment” shall be inserted in proper
alphabetical order as follows:

 
 

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“‘Second Amendment’ means the Second Amendment to Credit Agreement dated as of
March 17, 2005, by and among Holdings, the Company and each other Guarantor, the
Lenders and the Administrative Agent.”
 

(ii) Annex I to the Credit Agreement (captioned “Pricing Grid”) shall be amended
and restated in its entirety in the form of Annex I attached hereto.

 

(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 amended by
this Amendment.

 
SECTION 3  Conditions of Effectiveness. The effectiveness of Section 2 of this
Amendment shall be subject to the satisfaction of each of the following
conditions precedent:
 

(a) Execution. The Administrative Agent shall have received (i) from Holdings,
the Company and each other Guarantor a duly executed original (or, if elected by
the Administrative Agent, an executed facsimile copy) of this Amendment, (ii)
from Holdings a duly executed original of the Amendment Fee Letter and (iii)
from each Lender a duly executed written consent to this Amendment authorizing
the Administrative Agent to execute and deliver this Amendment on such Lender’s
behalf and the Administrative Agent shall have duly executed this Amendment.

 

(b) Fees and Expenses. Holdings shall have paid all invoiced costs and expenses
then due in accordance with Section 5(d).

 

(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 Amendment
are true and correct on and as of the date of such certificate as though made on
and as of the Second Amendment Effective Date, and (ii) on and as of the Second
Amendment Effective Date, after and giving effect to this Amendment, no Default
shall have occurred and be continuing.

 

(d) Representations and Warranties; No Default. On the Second Amendment
Effective Date, after giving effect to the amendment of the Credit Agreement
contemplated hereby:

 

(i) the representations and warranties contained in Section 4 shall be true and
correct on and as of the Second Amendment Effective Date as though made on and
as of such date; and

 

(ii) no Default shall have occurred and be continuing.

 

(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 any Lender (through the
Administrative Agent) may reasonably request.

 
2.

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SECTION 4  Representations and Warranties. To induce the Lenders to enter into
this Amendment, Holdings hereby confirms and restates, as of the date hereof,
the representations and warranties made by it in Article VI of the Credit
Agreement and in the other Loan Documents; provided, however, any
representations and warranties which relate solely to an earlier date shall not
be deemed confirmed and restated as of the date hereof; provided,  further,
however, that such representations and warranties shall be true, correct and
complete as of such earlier date. 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 Section,
shall mean and be a reference to the Credit Agreement as amended by this
Amendment and shall take into account any amendments to the Schedules and other
disclosures made in writing by Holdings to the Administrative Agent and the
Lenders after the Closing Date and approved by the Administrative Agent and the
Majority Lenders, and (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.
 
SECTION 5  Miscellaneous.
 

(a) Notice. The Administrative Agent shall notify Holdings, the Company and the
Lenders of the occurrence of the Second Amendment Effective Date and promptly
thereafter distribute to Holdings, the Company and the Lenders copies of all
documents delivered under Section 3.

 

(b) Credit Agreement Otherwise Not Affected. Except as expressly amended
pursuant hereto, the Credit Agreement shall remain unchanged and in full force
and effect and is hereby ratified and confirmed in all respects. The Lenders’
and the Administrative Agent’s execution and delivery of, or acceptance of, this
Amendment and any other documents and instruments in connection herewith
(collectively, the “Amendment 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 Amendment and the other Amendment 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 other than the reliance of Holdings, the Company and each other Guarantor
as contemplated by clause (iii) of the second paragraph of the written consent
of each Lender delivered to the Administrative Agent in accordance with Section
3(a) of this Amendment.

 

(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 Amendment and any other documents to be delivered in
connection herewith.

 

(e) Binding Effect. This Amendment 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.

 
 
3.

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(f) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.

 

(g) Complete Agreement; Amendments. This Amendment, together with the other
Amendment 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 Amendment supersedes all prior
commitments, drafts, communications, discussion and understandings, oral or
written, with respect thereto. This Amendment 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 Amendment shall be
interpreted in such manner as to be effective and valid under all applicable
laws and regulations. If, however, any provision of this Amendment 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
Amendment, or the validity or effectiveness of such provision in any other
jurisdiction.

 

(i) Counterparts. This Amendment 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 Amendment and the other Amendment Documents shall
constitute Loan Documents.

 
[Signature Pages Follow.]
 

 
4.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of
the date first above written.
 

        THE BORROWER
 
BUILDING MATERIALS HOLDING
CORPORATION  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        THE GUARANTORS
 
BMC WEST CORPORATION  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        BMC WEST CORPORATION
SOUTHCENTRAL  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        BMCW SOUTHCENTRAL, L.P.
 

By: BMC WEST CORPORATION
SOUTHCENTRAL, its General Partner
 
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 
SIGNATURE PAGE 1 TO SECOND AMENDMENT TO CREDIT AGREEMENT

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        BMCW, LLC
 

By: BMC WEST CORPORATION, its
Managing Member
 
   
   
  By   /s/ Lesa D. Thomas  

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Name: Lesa D. Thomas   Title:  Manager

 
 

        BMC CONSTRUCTION, INC.  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        KBI CONSTRUCTION, LLC
 
By: BMC Construction, Inc., its Managing
Member  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        KB INDUSTRIES LIMITED
PARTNERSHIP
 
By: BUILDING MATERIALS HOLDING
CORPORATION, its General Partner  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 
SIGNATURE PAGE 2 TO SECOND AMENDMENT TO CREDIT AGREEMENT

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        VAUGHN ROAD, LLC 
 
By: BMC CONSTRUCTION, INC., its
Managing Member  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        KBI CONCRETE, LLC 
 
By: BMC CONSTRUCTION, INC., its
Managing Member  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        TOTAL CONCRETE, LLC 
 
By: KBI CONCRETE, LLC, its Managing
Member  
   
   
  By   /s/ Mark R. Kailer  

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Name: Mark R. Kailer  
Title: Vice President and Treasurer

 
 

        THE ADMINISTRATIVE AGENT
 
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent,
on behalf of itself and each Lender  
   
   
  By   /s/ Thomas M. Gloger  

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Name: Thomas M. Gloger   Title:  Vice President

 
SIGNATURE PAGE 3 TO SECOND AMENDMENT TO CREDIT AGREEMENT

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ANNEX I
 
PRICING GRID
 
From and after the Second Amendment Effective Date (as defined in the Second
Amendment), the Applicable Margin for Revolving Loans and the Applicable Fee
Amount for any day shall be the amount per annum set forth below based on the
EBITDA Ratio set forth in the most recently delivered Compliance Certificate
delivered by Holdings pursuant to Section 7.02(c) of the Credit Agreement.
Changes in the Applicable Margin for Revolving Loans and the Applicable Fee
Amount resulting from a change in the EBITDA Ratio shall become effective on the
date of delivery by Holdings to the Administrative Agent of a new Compliance
Certificate pursuant to Section 7.02(c). If Holdings shall fail to deliver a
Compliance Certificate and accompanying financial statements within the number
of days after the end of any fiscal quarter or fiscal year as required pursuant
to Section 7.02(c), the parties agree that the Applicable Margin and the
Applicable Fee Amount shall be fixed at Level 4 until such time as Holdings
delivers such new Compliance Certificate and accompanying financial statements
pursuant to Section 7.02(c).
 

           
 
Level
 
EBITDA Ratio
 
Offshore
Rate Spread
 
Base Rate
Spread
 
Letter of
Credit Fee
 
Commitment
Fee
 
Level 5
 
greater than or equal to 3.00:1.00
 
2.000%
 
0.750%
 
2.000%
 
0.375%
 
Level 4
 
greater than or equal to 2.50:1.00 but less than 3.00:1.00
 
1.625%
 
0.375%
 
1.625%
 
0.300%
 
Level 3
 
greater than or equal to 2.00:1.00 but less than 2.50:1.00
 
1.250%
 
0.000%
 
1.250%
 
0.250%
 
Level 2
 
greater than or equal to 1.50:1.00 but less than 2.00:1.00
 
1.000%
 
0.000%
 
1.000%
 
0.200%
 
Level 1
 
less than 1.50:1.00
 
0.750%
 
0.000%
 
0.750%
 
0.175%

 

               
ANNEX I
1.

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