DRS

As submitted confidentially to the Securities and Exchange Commission on May 7, 2013 pursuant to the Jumpstart Our Business Startups Act

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

STOCK BUILDING SUPPLY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	5211	26-4687975
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

8020 Arco Corporate Drive, Suite 400

Raleigh, North Carolina 27617

Phone: (919) 431-1000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Bryan J. Yeazel

Executive Vice President, Chief Administrative Officer and General Counsel

8020 Arco Corporate Drive, Suite 400

Raleigh, North Carolina 27617

Phone: (919) 431-1000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Carol Anne Huff Kirkland & Ellis LLP 300 North LaSalle Chicago, Illinois 60654 (312) 862-2000 Michael Kaplan Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer   ¨	Non-accelerated filer   x	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated                     , 2013.

             Shares

Stock Building Supply Holdings, Inc.

Common Stock

This is an initial public offering of shares of common stock of Stock Building Supply Holdings, Inc. We are offering              shares of common stock. The selling stockholders identified in this prospectus are selling an additional              shares of common stock. We will not receive any proceeds from the sale of shares of common stock by the selling stockholders.

Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $         and $        . We intend to list the common stock on                      under the symbol “    .”

We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, and, as such, are allowed to provide in this prospectus more limited disclosures than an issuer that would not so qualify. In addition, for so long as we remain an emerging growth company, we will qualify for certain limited exceptions from investor protection laws such as the Sarbanes-Oxley Act of 2002. Please read “Risk Factors—Risks Related to this Offering and Our Common Stock—We are an ‘emerging growth company’ and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.”

See “Risk Factors” on page 17 to read about factors you should consider before buying shares of the common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to us	$	$
Proceeds, before expenses, to the selling stockholders	$	$

To the extent that the underwriters sell more than              shares of common stock, the underwriters have the option to purchase up to an additional              shares from us and the selling stockholders at the initial public offering price less the underwriting discount.

The underwriters expect to deliver the shares against payment in New York, New York on                     , 2013.

Goldman, Sachs & Co.
	Barclays
		Citigroup

Prospectus dated                     , 2013.

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	17
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	36
USE OF PROCEEDS	38
DIVIDEND POLICY	39
CAPITALIZATION	40
DILUTION	42
SELECTED CONSOLIDATED FINANCIAL DATA	44
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	48
BUSINESS	74
MANAGEMENT	91
EXECUTIVE COMPENSATION	98
PRINCIPAL AND SELLING STOCKHOLDERS	108
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	110
DESCRIPTION OF CAPITAL STOCK	115
SHARES ELIGIBLE FOR FUTURE SALE	120
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS	122
UNDERWRITING	126
LEGAL MATTERS	131
EXPERTS	131
WHERE YOU CAN FIND MORE INFORMATION	131
INDEX TO FINANCIAL STATEMENTS	F-1

Through and including                     , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Persons who come into possession of this prospectus and any such free writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

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Market and industry data

We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research as well as from industry publications and research, surveys and studies conducted by third-parties. Third-party industry publications include the Home Improvement Research Institute’s (“HIRI”) Home Improvement Products Market Forecast Update (published in March 2013), the National Association of Homebuilders’ (“NAHB”) Housing and Interest Rate Forecast (published in April 2013), the Harvard Joint Center for Housing Studies’ (“HJCHS”) The U.S. Housing Stock: Ready for Renewal (published in January 2013), McGraw-Hill Construction’s (“McGraw-Hill Construction”) Market Forecasting Service Report (published in January 2013), Random Lengths’ Yardstick (published in December 2012), as well as data published by Standard & Poor’s Financial Services LLC as of February 2013, the Bureau of Labor Statistics as of December 2012 and January 2013, and the U.S. Census Bureau as of December 2012 and March 2013. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. The information derived from the sources cited in this prospectus represents the most recently available data and, therefore, we believe such data remain reliable. While we believe our internal company research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that may be important to you and your investment decision. You should carefully read the following summary together with the entire prospectus. In this prospectus, unless the context otherwise requires, references to the “Company,” “we,” “us” and “our” refer to Stock Building Supply Holdings, Inc., together with its consolidated subsidiaries.

Overview

We are a large, diversified lumber and building materials (“LBM”) distributor and solutions provider that sells to new construction and repair and remodel contractors. We carry a broad line of products and have operations throughout the United States. Our primary products are lumber & lumber sheet goods, millwork, doors, flooring, windows, structural components, such as engineered wood products (“EWP”), trusses, wall panels and other exterior products. Additionally, we provide solution-based services to our customers, including design, product specification and installation management services. We serve a broad customer base, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors, and we believe we are among the top three LBM suppliers for residential construction in 80% of the geographic markets in which we operate. We offer over 39,000 products sourced through our strategic network of suppliers, which together with our various solution-based services, represent approximately 50% of the construction cost of a typical new home. By enabling our customers to source a significant portion of their materials and services from one supplier, we have positioned ourselves as the supply partner of choice for many of our customers.

We have operations in 13 states that accounted for approximately 48% of 2012 U.S. single-family housing permits according to the U.S. Census Bureau. Following our acquisition by an affiliate of The Gores Group, LLC (“Gores”) in 2009, we aggressively and strategically reduced our footprint to improve our profitability. Today, our facilities are strategically located in 20 metropolitan areas in these 13 states that we believe have an attractive potential for economic growth based on population trends, increasing business activity and above-average employment growth. The following map shows our current operating footprint.

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We serve our customers from 64 locations within our markets, which include 48 distribution and retail operations, 19 millwork fabrication operations, 14 structural components fabrication operations and 13 flooring operations. Given the local nature of our business, we locate our facilities in close proximity to our key customers and often co-locate multiple operations in one facility to increase customer service and efficiency.

We provide a balanced mix of products and services to U.S. production and custom homebuilders and repair and remodel, multi-family and commercial contractors. The charts below summarize our 2012 revenues by product category and customer segment.

2012 revenues
by product category 2012 revenues
by customer segment

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The following table demonstrates the favorable demographic trends in the metropolitan areas in which we operate and the capabilities of our facilities.

Market	2012 single family permits		Year over year single family permit change			December 2012 unemployment rate			2012 total employment year over year change			Distribution & retail operations		Millwork fabrication		Structural components fabrication		Flooring operations
Houston, TX		28,628		25.1	%		6.0	%		4.0	%		4		1		2
Washington, DC		10,980		13.9	%		5.3	%		1.1	%		3		2				3	(7)
Atlanta, GA		9,167		47.5	%		8.4	%		2.3	%		3		2		2
Austin, TX		8,229		32.1	%		5.0	%		3.9	%		1		1		1
Raleigh-Durham, NC(1)		8,020		27.7	%		7.4	%		2.8	%		4		1		1		3	(8)
Charlotte, NC		6,703		36.5	%		9.4	%		3.2	%		1				2		1
Eastern PA(2)		5,956		14.8	%		8.2	%		1.0	%		1				1		1
San Antonio, TX		5,102		15.7	%		5.7	%		2.6	%		1
Salt Lake City, UT(3)		5,052		40.6	%		4.9	%		4.4	%		5		3		2
Los Angeles, CA		4,946		20.7	%		9.4	%		2.2	%		11		2		1
Richmond, VA		2,840		20.7	%		6.0	%		1.1	%		1		1		1
Columbia, SC		2,791		16.8	%		7.5	%		1.2	%		2		1				2	(9)
Greenville, SC		2,246		37.0	%		7.0	%		1.4	%		1						1
Greensboro, NC(4)		2,014		2.0	%		9.4	%		0.9	%		1						1
Northwest AR(5)		1,763		52.2	%		5.1	%		3.3	%		1		1				1
Southern Utah(6)		1,317		54.2	%		6.6	%		5.1	%		1		1
Albuquerque, NM		1,259		(7.0	%)		6.7	%		0.2	%		1		1		1
Spokane, WA		963		30.1	%		8.4	%		1.9	%		2		1
Lubbock, TX		752		8.7	%		4.7	%		1.6	%		2		1
Amarillo, TX		653		(0.5	%)		4.3	%		0.4	%		2
Total for Stock Building Supply markets		109,381		25.3	%		7.5	%		2.2	%		48		19		14		13
U.S. Total		518,695		23.9	%		7.8	%		1.7	%

Source: U.S. Census Bureau and Bureau of Labor Statistics

(1) Durham-Chapel Hill, NC and Raleigh-Cary, NC metropolitan statistical areas (“MSAs”)

(2) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD and Lancaster, PA MSAs

(3) Salt Lake City, UT and Provo-Orem, UT MSAs

(4) Greensboro-High Point, NC and Winston-Salem, NC MSAs

(5) Fayetteville-Springdale-Rogers, AR-MO MSA

(6) St. George, UT MSA

(7) Includes flooring location in Baltimore, MD

(8) Includes flooring location in Fayetteville, NC

(9) Includes flooring location in Charleston, SC

We continue to make capital investments in our local businesses to bolster our market share, expand our distribution network, improve our service offerings and streamline our business processes. Since 2010, we have acquired four businesses and, through investments in a proprietary information technology (“IT”) and operational platform, have improved our distribution service capability. We have also integrated each of our local branches with our headquarters in Raleigh, North Carolina, which provides value-added support to our local businesses, including accounting, IT and a central sourcing and procurement function. Additionally, we have undertaken efforts to streamline and improve significantly our business processes by adopting a “LEAN” business philosophy to reduce waste and add value. These initiatives allowed us to reduce selling, general and administrative expense by $25.7 million while net sales increased 25.4% from 2010 to 2012. We believe that, as we continue to pursue these initiatives, we will further improve the service and support we provide to our customers, increase the effectiveness of our employees and contractors and improve efficiency across all aspects of our business.

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In 2006, our current footprint of facilities generated approximately $1.8 billion in net sales, and we believe that we will achieve attractive growth as our markets recover to normalized levels of new home construction. From 2010 to 2012, our net sales increased $190.7 million, from $751.7 million to $942.4 million. Over the same period, our Adjusted EBITDA increased $60.0 million, from $(58.0) million to $2.0 million. For a reconciliation of net loss to Adjusted EBITDA, see “—Summary consolidated financial data.” We believe that the housing recovery in our markets will continue to drive significant increases in demand for our products and the significant growth in net sales and Adjusted EBITDA that we have experienced since 2010.

Our industry

The LBM distribution industry in the United States is highly competitive, with a number of retailers and distributors offering a broad range of products and services. Demand for our products is principally influenced by new residential construction and residential repair and remodeling activity. Following several challenging years, single-family housing starts increased in 2012 to 0.54 million and, as a result, demand for the products we distribute and for our services has also increased. From 2005 to 2011, single-family housing starts in the United States declined by approximately 75%. According to the U.S. Census Bureau, single-family housing starts in 2009, 2010 and 2011 were 0.44 million, 0.47 million and 0.43 million, respectively, which are significantly less than the 50-year average rate of 1.0 million. Many economists expect housing starts to continue to increase, and recent national housing statistics confirm that a robust housing recovery is already underway. For example, U.S. single-family housing starts increased 28.6% year-over-year in March 2013. Additionally, the Case-Shiller Index, a leading measure of pricing for the U.S. residential housing market, has increased for 13 straight months and is at its highest levels since December 2008.

We believe that these trends are supported by the following positive economic and demographic indicators, which are typically indicative of housing market strength:

Ÿ declining unemployment rates;

Ÿ rising home values and improving household finances;

Ÿ increases in total households;

Ÿ improving sentiment towards ownership of residential real estate;

Ÿ declining levels of new and existing for-sale home inventory; and

Ÿ a favorable consumer interest rate environment supporting affordability and home ownership.

We believe that there is considerable growth potential in the U.S. housing sector. As of February 2013, McGraw-Hill Construction forecasts that U.S. single-family housing starts will increase to 1.1 million by 2015. Many publicly-traded homebuilders, including some of our largest customers, have reported strong earnings results and positive financial outlooks in the near-term, confirming the momentum of the housing recovery. For example, net new orders for publicly-traded homebuilders increased 33% year-over-year in the three months ended December 31, 2012, with some publicly-traded homebuilders reporting order increases of over 60%.

The products we distribute are also used in professional remodeling projects. According to the HJCHS, the U.S. remodeling market reached a peak of $328 billion in 2007 before declining approximately 16% to $275 billion in 2011. Despite this decline, factors, including the overall age of the U.S. housing stock, heightened focus on energy efficiency, rising home prices and availability of consumer capital at low interest rates, are expected to drive long-term growth in repair and remodeling

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expenditures. As of March 2013, HIRI estimates that total U.S. sales of home maintenance, repair and improvement products to the professional market will grow at a rate of 5.0% in 2013, 6.2% in 2014 and 4.9% in 2015.

Our competitive strengths

We believe the following key competitive strengths have contributed to our success and will position us for significant growth as part of a multi-year recovery in our end markets.

Leading distributor of building products to U.S. residential construction markets

We believe we are one of the leading LBM distributors in the United States. We serve all segments of the residential construction industry, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors. Our portfolio of 64 strategically-located facilities supplies products and services to many major markets in the United States and provides us with significant scale and capacity for growth. We believe that scale, strong customer relationships, and superior product and service offerings in each of our markets provide competitive advantages, enabling us to drive market share gains over time. We believe that we are among the top three LBM participants in 80% of the geographic markets in which we operate based on net sales. Because of our leading market position, we believe we are well-positioned to take advantage of the projected recovery in the residential construction market.

Low cost distribution platform with strong operating leverage

Through aggressive cost management and strategic restructuring activities implemented during the global economic downturn, we have driven significant productivity gains and positioned our company for profitable growth. Since 2009, we have closed or sold over 100 facilities in locations that we determined would not provide us with sufficient scale, or where we would otherwise not be able to compete effectively and profitably.

Beginning in 2011, our management team began implementing LEAN business practices to improve customer service, reduce waste and increase productivity. These LEAN initiatives have improved our sourcing practices and streamlined our supply chain and, along with other cost reduction efforts, have reduced our selling, general and administrative expenses as a percent of net sales from 32.8% for the fiscal year ended December 31, 2010 to 23.4% for the fiscal year ended December 31, 2012. Over the same period we have significantly increased productivity and operating leverage as net sales increased by $190.7 million, while selling, general and administrative expenses decreased by $25.7 million. We believe that our current low fixed cost position will help us to generate increased profitability as the market continues to recover.

We have also developed several innovative and proprietary eBusiness systems. Stock Logistics Solutions, a system designed to enhance the customer experience and reduce waste, was implemented in 2011, and Stock Installation Solutions, a system designed to improve the execution and customer communication of our installation services, is scheduled for implementation in 2013. Due to the implementation of Stock Logistics Solutions, we have reduced our shipping and handling costs as a percent of net sales from 6.6% in 2010 to 5.4% in 2012. These services have enabled us to track our supply chain more accurately, significantly improve customer service and reduce waste. Due in part to our LEAN initiatives and focus on efficiency, our Adjusted EBITDA has increased $60.0 million from ($58.0) million in 2010 to $2.0 million in 2012. We believe that our Adjusted EBITDA will continue to increase as a percent of net sales as the residential construction sector rebounds.

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Leading local businesses in attractive geographic markets

We operate in 20 metropolitan areas in 13 states that we believe have attractive potential for economic growth, with strong LBM product capabilities in each market we serve. We believe we are one of the top three LBM suppliers in 80% of these markets, based on net sales, with strong customer relationships and a professional team to serve our customers as they grow. Today, we serve our customers from 64 locations, which include 48 distribution and retail operations, 19 millwork fabrication operations, 14 structural components fabrication operations and 13 flooring operations. We often co-locate multiple operations in one facility to increase customer service and efficiency. Our primary operating regions include the South and West regions of the United States (as defined by the U.S. Census Bureau), which we believe are markets that are well-positioned to grow as the residential construction market recovers. McGraw-Hill Construction forecasts that the compounded annual growth rate for single-family housing starts in our 20 markets will be 23.8% from 2012 to 2015.

Proven ability to acquire and integrate complementary businesses

Our management has demonstrated a core competency in identifying, acquiring and successfully integrating businesses to provide us greater scale in our current markets and opportunities to grow in new markets. Since 2010, we have acquired the assets of four businesses with core LBM capabilities, three of which were in our current markets and one of which provided us with a strategic position in a new market.

Ÿ Bison Building Materials, LLC (“Bison”), which we acquired in 2010, is located in Houston, Texas and enhanced our scale in the attractive Texas Gulf Coast market;

Ÿ National Home Centers, Inc. (“NHC”), which we acquired in 2010, is located in Northwest Arkansas and established a strong position in the Arkansas market;

Ÿ Total Building Services Group, LLC (“TBSG”), which we acquired in December 2012, is located in Marietta, Georgia and is a provider of residential structural solutions and provided us with greater scale in the local Atlanta market, which is expected to grow significantly as the residential construction market recovers; and

Ÿ Chesapeake Structural Systems, Inc. (“Chesapeake”), which we acquired in April 2013, is located outside Richmond, Virginia, and provides us with component manufacturing capability to serve our customers in our Central and Northern Virginia markets.

While we have significant growth potential in our current operational footprint, we plan to continue to evaluate and acquire attractive businesses in our current geographic markets as well as new geographies to expand service capabilities and customer share to accelerate increases in profitability.

Extensive offering of building materials and services

We offer a comprehensive line of residential building products that are used in the construction of homes, including windows, doors and trim, and many of the products used in the interior and exterior finishing of homes. We also provide manufactured products such as roof and floor trusses, wall panels and various millwork products. We offer over 39,000 different products sourced through our strategic network of suppliers and have access to a wide range of special order products. Additionally, we provide solution-based services to our customers as needed, including design, product specification and installation management services. Furthermore, many of our facilities include product showrooms, which customers use to develop a better appreciation for our product and service offerings. Products and services that we offer represent approximately 50% of the cost of a typical new home. Because of our ability to supply a significant share of the building materials for a new home, customers look to us

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for both new construction and remodeling solutions. We believe that the breadth of the products we offer our customers provides us with a strategic advantage and enables us to forge deeper relationships with customers than smaller competitors who may be unable to supply a similar product range and lack access to the broad resources of a national company.

Superior customer service and value-added capabilities

We complement our line of building products with superior customer service and value-added capabilities. Our experienced customer service professionals provide a full range of services, including customized design and installation services specific to each job site and type. Installation services are managed by our employees, but are normally provided by third parties. Other services that we provide include job estimating, take-off, structural components or millwork design, product selection and customization. We also provide order management services for in-stock and special order products or services, manage inventory, deliver and/or load materials, and provide building products and construction trend insights for our customers. We believe that the breadth of our services, our focus on individual customer needs and the integration of our supply chain and fulfillment capabilities set us apart from many of our competitors.

We offer training programs and advanced service tools for our employees in order to assist them in providing solutions for our customers. Our innovative Stock Logistics Solutions capability, in which we provide real-time delivery information and confirmation via the Internet and to mobile devices, is one example of customer service capabilities that have increased customer loyalty and helped us drive growth in our markets.

Integrated supply chain that increases efficiency and benefits customers and suppliers

Although we operate facilities in 20 metropolitan areas across 13 states, we maintain an integrated, national supply chain that we believe enables us to provide our customers with superior services, timely delivery and more favorable pricing. We have integrated our sourcing and purchasing operations into a central procurement function. Over the last ten years, we have invested in an Enterprise Resource Planning (“ERP”) system that integrates each of our local branches with our headquarters operation. Our ERP system allows us to manage customer orders and deliver efficiently across our entire organization. It also enables central product replenishment and optimizes inventory management to improve working capital requirements. Through Stock Logistics Solutions, which includes a mobile Global Positioning System (“GPS”) application on our delivery trucks that is integrated with our ERP software, our sales and service professionals can better schedule, dispatch and manage customer deliveries.

Our integrated sourcing and purchasing operations have enabled us to develop cost-effective national sourcing agreements with key suppliers that provide us with product delivery certainty and favorable terms. We believe our suppliers value our extensive footprint, experienced sales force and advanced service capabilities and, as a result of these operational strengths, often consider us to be a preferred distribution partner. We believe that customers also benefit greatly from our ability to source products on a national level through improved pricing and availability. Through these sourcing agreements we are also able to realize stronger gross margins and achieve superior inventory management, especially during periods of market growth as product supply in the industry becomes more limited. Additionally, our broad reach, efficient operations and significant growth potential offer our suppliers an opportunity to strategically partner with us for growth, which further strengthens their loyalty to us.

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Experienced management team and principal equity holder

Our senior management team has more than 120 years of combined experience in manufacturing and distribution with a track record of financial and operational excellence in both favorable and challenging market conditions. Since 2010, our management team has successfully acquired and integrated businesses that have helped us gain scale in our current markets. Since 1987, our equity sponsor Gores has successfully acquired and operated more than 80 companies while employing a consistent, operationally-oriented approach to create value in its businesses.

Our strategy

We intend to capitalize on our strong market position in LBM distribution to increase revenues and profits and maximize operating cash flow as the U.S. housing market recovers. We seek to achieve this by executing on the following strategies:

Expand our business with existing customers by offering additional value

We plan to continue to grow our net sales by increasing our share of our existing customers’ business. By growing our scale and expanding the products and services we offer in each of our local markets, we believe that we can continue to enhance the value offering for, and relationships with, our existing customers and grow our revenues and profitability. Several of our existing facilities provide only a portion of the value-added solutions our customers need to optimize their construction projects. Products and services we intend to expand organically include millwork and structural components manufacturing, enhanced specification and design services, and additional LEAN eBusiness solutions for our customers and our sales and service professionals. By continuing to invest systematically in our core LBM capabilities and in technologies that streamline our processes and improve customer service, we believe we can provide a broader range of products and services at each of our locations and that more customers will look to us as the key solution provider for their building needs.

Expand in existing, adjacent and new geographies

We plan to expand our business through organic and acquisitive means in order to take advantage of our national supply chain and broad LBM capabilities. We intend to expand our reach and service capabilities in our current metropolitan areas by opening new locations, relocating facilities as needed and increasing capacity at existing facilities. In addition, while we have operations in 13 states that accounted for approximately 48% of 2012 U.S. single-family housing permits, our markets within those states accounted for less than half of those permits according to the U.S. Census Bureau, providing significant opportunity for growth into adjacent markets. We believe that our scale, integrated supply chain, product knowledge, eBusiness solutions and professional customer service will enable us to grow significantly as we expand into existing, adjacent and new geographies. We believe that our balance sheet and liquidity position will support our growth strategy.

Deliver leading customer service, productivity and operational excellence as our business grows

We strive for continued operational excellence. We have implemented a talent training and development program focused on specific skills training, business development and LEAN initiatives. Using these skills, our branch managers, regional management and senior leadership team continually

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examine customer service, operating and financial metrics and use this information to optimize regional and local strategies to increase customer service and operating expense productivity. Our management team has also implemented, and will continue to pursue, LEAN business practices to increase productivity. We believe that the customer service and productivity gains we realized from these initiatives will continue to improve as they are implemented more broadly across our organization.

We completed an ERP implementation across all branches, and our proprietary eBusiness system, which includes Stock Logistics Solutions, will provide the platform for continued service improvements. In addition, we intend to implement our Stock Installation Solutions system in 2013, which is designed to track the timing and completion of installation work and will provide further enhancements to our customer service. We will continue to leverage operational best practices and optimize our supplier network in order to improve efficiency and profitability. We believe that there is an opportunity for further margin improvement as we expand our business and continue to implement LEAN initiatives that bring value to our customers.

Selectively pursue strategic acquisitions

Our industry remains highly fragmented. We believe a significant number of small and larger acquisition opportunities will offer attractive growth characteristics and favorable synergy potential. We intend to focus on using our operating platform and proven integration capabilities to pursue additional acquisition opportunities while minimizing execution risk. We will focus on investments in markets adjacent to our existing operations or acquisitions that enhance our presence and capabilities in our 20 existing metropolitan areas. Additionally, we will consider acquiring operations or companies to enter new geographic regions. We believe our planned capital structure positions us to acquire businesses we find strategically attractive.

Selected risks associated with our business

There are a number of risks and uncertainties that may affect our financial and operating performance and our growth prospects. You should carefully consider all of the risks discussed in “Risk Factors” before investing in our common stock. These risks include, but are not limited to, the following:

Ÿ the state of the homebuilding industry and repair and remodeling activity;

Ÿ seasonality and cyclicality of the building products supply and services industry;

Ÿ competitive industry pressures and competitive pricing pressure from our customers;

Ÿ inflation or deflation of commodity prices;

Ÿ litigation or warranty claims relating to our products and services;

Ÿ our ability to maintain profitability;

Ÿ our ability to attract and retain key employees; and

Ÿ product shortages and relationships with key suppliers.

Corporate changes

On May 2, 2013, we converted from a Delaware limited liability company into a Delaware corporation by filing a certificate of conversion in Delaware and changed our name from Saturn Acquisition Holdings, LLC to Stock Building Supply Holdings, Inc.

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Upon consummation of this offering and the effectiveness of our amended and restated certificate of incorporation, our authorized capital stock will consist of              shares of preferred stock and             shares of a single class of common stock. At such time, all outstanding shares of our convertible Class C preferred stock will convert into an aggregate of              shares of common stock, all outstanding shares of our Class A voting common stock and Class B non-voting common stock will convert into an aggregate of              shares of a single class of common stock, and all outstanding options to purchase Class B non-voting common stock held by certain members of our management will convert into              options to purchase common stock. See “—The offering” and “Capitalization.”

In addition, we will use a portion of the net proceeds from this offering to redeem all outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock. See “Use of Proceeds.”

Company background and corporate information

The Company’s predecessor was founded as Carolina Builders Corporation in Raleigh, North Carolina in 1922 and began operating under the Stock Building Supply name in 2003.

In May 2009, Gores Building Holdings, LLC (“Gores Holdings”), an affiliate of Gores, acquired 51% of the voting interests of our subsidiary, Stock Building Supply Holdings, LLC through a newly formed subsidiary, Saturn Acquisition Holdings, LLC from an affiliate of Wolseley plc (“Wolseley”) and we immediately entered a prepackaged reorganization. In November 2011, Gores Holdings purchased the remaining minority interest in us from Wolseley. On May 2, 2013, Saturn Acquisition Holdings, LLC converted to a corporation and changed its name to Stock Building Supply Holdings, Inc. We are currently owned by Gores Holdings and its affiliates and members of our senior management.

Our principal executive offices are located at 8020 Arco Corporate Drive, Suite 400, Raleigh, North Carolina 27617. Our telephone number at that location is (919) 431-1000. Our website address is www.stockbuildingsupply.com. The reference to our website is a textual reference only. We do not incorporate the information on or accessible through our website into this prospectus and you should not consider any information on, or that can be accessed through our website as part of this prospectus.

Our equity sponsor

Gores is a control oriented private equity firm specializing in acquiring and partnering with businesses that can benefit from its operational expertise and flexible capital base. Gores combines the operational and due diligence capabilities of a strategic buyer with the seasoned mergers and acquisitions team of a traditional financial buyer. Since 1987, Gores has successfully acquired and operated more than 80 companies while employing a consistent, operationally-oriented approach to create value in its businesses alongside management. Its current portfolio includes companies across diverse industries in which its partners have considerable experience, including technology, telecommunications, business services, industrial, healthcare, media and entertainment, and consumer products. Headquartered in Los Angeles, as of December 31, 2012, Gores had approximately $3.6 billion in assets under management.

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The offering

Common stock offered by us	shares
Common stock offered by the selling stockholders	shares
Common stock outstanding immediately after this offering	shares
Option to purchase additional shares	We and the selling stockholders have agreed to allow the underwriters to purchase up to an additional              shares, at the public offering price, less the underwriting discount, within 30 days of the date of this prospectus.
Use of proceeds	We expect to receive net proceeds from this offering of approximately $          million, based upon an assumed initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover of this prospectus, and after deducting underwriting discounts and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders. We intend to use a portion of the net proceeds from this offering to redeem all outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock for an aggregate of approximately $             . We intend to use a portion of the net proceeds to pay a portion of the outstanding balances under our revolving line of credit (the “Revolver”) under our secured credit agreement (the “Credit Agreement”) and for working capital and general corporate purposes. We have not allocated the remainder of the net proceeds from this offering for any specific purpose at this time. See “Use of Proceeds.”
Dividend policy	We do not plan to pay dividends on our common stock. The declaration and payment of all future dividends, if any, will be at the discretion of our board of directors and will depend upon our financial condition, earnings, contractual conditions, restrictions imposed by our Credit Agreement and other factors that our board of directors may deem relevant. See “Dividend Policy.”

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Risk factors	See “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before you decide to invest in our common stock.
Directed share program	At our request, the underwriters have reserved up to          % of the shares for sale at the initial public offering price to persons who are directors, officers or other employees, or who are otherwise associated with us, through a directed share program. The number of shares available for sale to the general public will be reduced by the number of directed shares purchased by participants in the program. See “Underwriting.”
Proposed symbol for trading on	We intend to apply to list our common stock on                      under the symbol “    .”

Unless otherwise indicated, all information in this prospectus relating to the number of shares of our common stock to be outstanding immediately after this offering:

Ÿ gives effect to the conversion of Saturn Acquisition Holdings, LLC into Stock Building Supply Holdings, Inc. on May 2, 2013;

Ÿ assumes the effectiveness of our amended and restated certificate of incorporation, which we will adopt in connection with the completion of this offering;

Ÿ gives effect to the conversion of all outstanding shares of our convertible Class C preferred stock into an aggregate of              shares of common stock upon the completion of this offering;

Ÿ gives effect to the conversion of all outstanding shares of our Class A voting common stock and Class B non-voting common stock into an aggregate of              shares of a single class of common stock upon the completion of this offering;

Ÿ gives effect to the redemption of all outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock upon the completion of this offering;

Ÿ assumes (i) no exercise of the underwriters of their option to purchase up to              additional shares and (ii) an initial public offering price of $          per share, which is the midpoint of the price range set forth on the cover of this prospectus; and

Ÿ excludes options to purchase              shares of common stock that will be outstanding upon completion of this offering and excludes an aggregate of              shares of our common stock reserved for issuance under the new management equity incentive plan we intend to adopt in connection with this offering (the “2013 Incentive Plan”) as described in “Executive Compensation—2013 Incentive Plan.”

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Summary consolidated financial data

The following tables set forth our summary consolidated financial data. The summary consolidated financial data as of December 31, 2011 and 2012 and for the years ended December 31, 2010, 2011 and 2012 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated financial data as of December 31, 2010 have been derived from our audited consolidated financial statements, which are not included in this prospectus.

You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our historical consolidated financial data may not be indicative of our future performance.

	Year ended December 31,
(in thousands, except shares and per share data)	2010			2011			2012
Statement of operations information:
Net sales	$	751,706		$	759,982		$	942,398
Cost of goods sold(1)		587,692			591,017			727,670
Gross profit		164,014			168,965			214,728
Operating expenses:
Selling, general and administrative expenses(2)		246,338			213,036			220,686
Depreciation expense		29,337			11,844			7,759
Amortization expense		1,140			1,457			1,470
Impairment of assets held for sale(3)		2,944			580			361
Restructuring expense(4)		7,089			1,349			2,853
Loss from operations		(122,834	)		(59,301	)		(18,401	)
Other income (expenses):
Bargain purchase gain(5)		11,223			—			—
Interest expense, net		(1,575	)		(2,842	)		(4,037	)
Other income (expense), net(6)		(57	)		(2,120	)		278
Loss from continuing operations before income taxes		(113,243	)		(64,263	)		(22,160	)
Income tax benefit(6)		47,463			22,332			7,907
Loss from continuing operations		(65,780	)		(41,931	)		(14,253	)
Income (loss) from discontinued operations, net of tax benefit (provision) of $4,038, $(658) and $(52), respectively(7)		(4,214	)		(202	)		49
Net loss		(69,994	)		(42,133	)		(14,204	)
Redeemable Class B Senior Preferred stock dividend		(5,079	)		(4,188	)		(4,480	)
Loss attributable to common shareholders	$	(75,073	)	$	(46,321	)	$	(18,684	)
Basic and diluted loss per common share(8):
Loss from continuing operations	$	(78.67	)	$	(54.48	)	$	(37.77	)
Income (loss) from discontinued operations		(4.68	)		(0.24	)		0.10
Net loss	$	(83.35	)	$	(54.72	)	$	(37.67	)
Weighted average number of common shares outstanding, basic and diluted(8)		900,738			846,469			496,002
Statements of cash flows data:
Net cash provided by (used in):
Operating activities	$	(57,999	)	$	(7,001	)	$	(12,243	)
Investing activities		8,093			7,322			(4,861	)
Financing activities		(20,415	)		138			14,838

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	Year ended December 31,
(in thousands, except shares and per share data)	2010			2011			2012
Other financial data:
Depreciation and amortization	$	36,149		$	16,188		$	11,718
Capital expenditures		2,506			1,339			2,741
EBITDA(9)		(79,733	)		(45,435	)		(6,356	)
Adjusted EBITDA(9)		(57,987	)		(30,799	)		1,993
Balance sheet data (at period end):
Cash and cash equivalents	$	4,498		$	4,957		$	2,691
Total current assets		188,227			155,455			194,345
Property and equipment, net of accumulated depreciation		72,821			57,759			55,076
Total assets		294,970			254,641			286,012
Total debt		15,174			35,915			79,182
Redeemable preferred stock		50,809			54,997			41,477
Total stockholders’ equity(8)		122,229			51,426			33,987

(1) Includes depreciation expense of $5.7 million, $2.9 million and $2.5 million for the years ended December 31, 2010, 2011 and 2012, respectively.

(2) Includes severance expense of $1.6 million, $2.0 million and $0.5 million for the years ended December 31, 2010, 2011 and 2012, respectively.

(3) Impairment of assets held for sale represents the write down of such assets to the lower of depreciated cost or estimated fair value less expected disposition costs. See note (8) to our audited financial statements included elsewhere in this prospectus.

(4) Relates to store closures and workforce reductions in continuing markets.

(5) Represents the excess of the net assets acquired over the purchase price of certain assets and liabilities of NHC in April 2010. See note (3) to our audited financial statements included elsewhere in this prospectus.

(6) Includes $3.1 million, $1.9 million and $0.4 million of expense related to the reduction of a tax indemnification asset, with a corresponding increase in income tax benefit, for the years ended December 31, 2010, 2011 and 2012, respectively. This indemnification asset corresponds to the long-term liability related to uncertain tax positions for which Wolseley had indemnified the Company, which was reduced upon the expiration of the statute of limitations for certain tax periods. See note (14) to our audited financial statements included elsewhere in this prospectus.

(7) During the years ended December 31, 2010, 2011 and 2012, we ceased operations in certain geographic markets due to declines in residential homebuilding throughout the United States. The cessation of operations in these markets has been treated as discontinued operations as the markets had distinguishable cash flows and operations that have been eliminated from ongoing operations. See note (4) to our audited financial statements included elsewhere in this prospectus.

(8) We have adjusted our historical financial statements to retroactively reflect the conversion from a limited liability company to a corporation and the change of members’ equity to stockholders’ equity.

(9) EBITDA is defined as net loss before interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus impairment of assets held for sale, restructuring, severance and other expenses related to store closures and business optimization, bargain purchase gain, discontinued operations, management fees, non-cash compensation, acquisition costs, other expense resulting from the reduction of a tax indemnification asset and certain other items. Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). We believe that EBITDA and Adjusted EBITDA provide useful

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information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. Our management uses EBITDA and Adjusted EBITDA to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining management incentive compensation, and for budgeting and planning purposes. These measures are used in monthly financial reports prepared for management and our board of directors. We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other distribution and retail companies, which may present similar non-GAAP financial measures to investors. Our management does not consider EBITDA or Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of EBITDA and Adjusted EBITDA is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; (ii) EBITDA and Adjusted EBITDA do not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt; (iii) EBITDA and Adjusted EBITDA do not reflect our income tax expenses or the cash requirements to pay our taxes; (iv) EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditure or contractual commitments; and (v) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. In order to compensate for these limitations, management presents EBITDA and Adjusted EBITDA in connection with GAAP results. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below, and not rely on any single financial measure to evaluate our business.

The following is a reconciliation of net loss to EBITDA and Adjusted EBITDA:

	Year ended December 31,
(dollars in thousands)	2010			2011			2012
Net loss	$	(69,994	)	$	(42,133	)	$	(14,204	)
Interest expense		1,575			2,842			4,037
Income tax benefit		(47,463	)		(22,332	)		(7,907	)
Depreciation and amortization		36,149			16,188			11,718
EBITDA	$	(79,733	)	$	(45,435	)	$	(6,356	)
Impairment of assets held for sale(a)		2,944			580			361
Restructuring, severance, other expense related to store closures and business optimization(b)		19,731			8,110			5,228
Bargain purchase gain(c)		(11,223	)		—			—
Discontinued operations, net of tax benefit(d)		4,214			202			(49	)
Management fees(e)		2,597			2,406			1,379
Non-cash compensation expense		288			384			799
Acquisition costs(f)		4,086			1,017			284
Reduction of tax indemnification asset(g)		3,056			1,937			347
Other items(h)		(3,947	)		—			—
Adjusted EBITDA	$	(57,987	)	$	(30,799	)	$	1,993

(a) See note (3) above.

(b) See notes (2) and (4) above. Also includes (i) $7.7 million, $3.9 million and $1.8 million for the year ended December 31, 2010, 2011 and 2012, respectively, related to closed

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locations, consisting of pre-tax losses incurred during closure and post-closure expenses, (ii) a $1.4 million loss on the sale of land and buildings in the year ended December 31, 2010, and (iii) $1.9 million, $0.9 million and $0 of business optimization expenses, primarily consulting fees related to cost saving initiatives, for the years ended December 31, 2010, 2011 and 2012, respectively.

(c) See note (5) above.

(d) See note (7) above.

(e) Represents the expense for management services provided by Gores and its affiliates and by Wolseley through November 2011, other than $0.5 million that is included in income (loss) from discontinued operations the year ended December 31, 2010.

(f) Represents (i) $2.1 million and $2.0 million in the year ended December 31, 2010 related to the acquisition of NHC and Bison, respectively, (ii) $0.8 million and $0.2 million in the year ended December 31, 2011 related to an abandoned acquisition and the acquisition of Bison, respectively, and (iii) $0.2 million and $0.1 million in the year ended December 31, 2012 related to the acquisitions of TBSG and Chesapeake, respectively.

(g) See note (6) above.

(h) Represents (i) $0.7 million of expenses related to the Company’s prepackaged reorganization and (ii) $4.6 million received as proceeds from the settlement of a legal proceeding.

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before making an investment decision. If any of the following risks actually occurs, our business, financial condition and operating results could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks related to our business

The industry in which we operate is dependent upon the homebuilding industry and repair and remodeling activity, the economy, the credit markets and other important factors.

The building products supply and services industry is highly dependent on new home construction and repair and remodeling activity, which in turn are dependent upon a number of factors, including interest rates, consumer confidence, employment rates, foreclosure rates, housing inventory levels, housing demand, the availability of land, the availability of construction financing and the health of the economy and mortgage markets. Unfavorable changes in demographics, credit markets, consumer confidence, health care costs, housing affordability, housing inventory levels, a weakening of the national economy or of any regional or local economy in which we operate, and other factors beyond our control could adversely affect consumer spending, result in decreased demand for homes, and adversely affect our business. Changes in federal income tax laws may also affect demand for new homes. Various proposals have been publicly discussed to limit mortgage interest deductions and to limit the exclusion of gain from the sale of a principal residence. Enactment of such proposals may have an adverse effect on the homebuilding industry in general. No meaningful prediction can be made as to whether any such proposals will be enacted and, if enacted, the particular form such laws would take. Because we have substantial fixed costs, relatively modest declines in our customers’ production levels could have a significant adverse effect on our financial condition, operating results and cash flows.

The homebuilding industry underwent a significant downturn that began in mid-2006 and began to stabilize in late 2011. The downturn in the homebuilding industry resulted in a substantial reduction in demand for our products and services, which in turn had a significant adverse effect on our business during fiscal years 2007 through 2012 and led to our filing for bankruptcy in 2009. The NAHB is forecasting approximately 664,000 U.S. single-family housing starts for 2013, which is an increase of 24% from 2012, but still well below historical averages. There is significant uncertainty regarding the timing and extent of any recovery in construction and repair and remodel activity and resulting product demand levels. The positive impact of a recovery on our business may also be dampened to the extent the average selling price or average size of new single family homes decreases, which could cause homebuilders to decrease spending on our products and services.

In addition, beginning in 2007, the mortgage markets experienced substantial disruption due to increased defaults, primarily as a result of credit quality deterioration. The disruption resulted in a stricter regulatory environment and reduced availability of mortgages for potential home buyers due to a tight credit market and stricter standards to qualify for mortgages. Mortgage financing and commercial credit for smaller homebuilders, as well as for the development of new residential lots, continue to be constrained. As the housing industry is dependent upon the economy and employment levels as well as potential home buyers’ access to mortgage financing and homebuilders’ access to commercial credit, it is likely that the housing industry will not fully recover until conditions in the economy and the credit markets improve and unemployment rates decline. Prolonged weakness in the homebuilding industry would have a significant adverse effect on our business, financial condition and operating results.

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In addition, as a result of the homebuilding industry downturn, there has been a trend of significant consolidation as smaller, private homebuilders have gone out of business. We refer to the large homebuilders as “production homebuilders.” While we generate significant business from these homebuilders, our margins on sales to them tend to be lower than our margins on sales to other market segments. This could impact our margins as homebuilding recovers if the market share held by the production homebuilders increases.

The building products supply and services industry is seasonal and cyclical.

Our industry is seasonal. Although weather patterns affect our operating results throughout the year, our first and fourth quarters have historically been, and are generally expected to continue to be, adversely affected by weather patterns in some of our markets, causing reduced construction activity. To the extent that hurricanes, severe storms, earthquakes, floods, fires, other natural disasters or similar events occur in the markets in which we operate, our business may be adversely affected.

The building products supply and services industry is also subject to cyclical market pressures. Quarterly results historically have reflected, and are expected to continue to reflect, fluctuations from period to period arising from the following: the volatility of lumber prices; the cyclical nature of the homebuilding industry; general economic conditions in the markets in which we compete; the pricing policies of our competitors; and the production schedules of our customers.

Our industry is highly fragmented and competitive, and increased competitive pressure may adversely affect our results.

The building products supply and services industry is highly fragmented and competitive. We face significant competition from local, regional and national building materials chains, as well as from privately-owned single site enterprises. Any of these competitors may (i) foresee the course of market development more accurately than we do, (ii) provide superior service and sell superior products, (iii) have the ability to produce or supply similar products and services at a lower cost, (iv) develop stronger relationships with our customers, (v) adapt more quickly to new technologies or evolving customer requirements than we do, (vi) develop a superior branch network in our markets or (vii) have access to financing on more favorable terms that we can obtain. As a result, we may not be able to compete successfully with them. In addition, home center retailers, which have historically concentrated their sales efforts on retail consumers and small contractors, may in the future intensify their marketing efforts to professional homebuilders. Furthermore, certain product manufacturers sell and distribute their products directly to production homebuilders. The volume of such direct sales could increase in the future. Additionally, manufacturers and specialty distributors who sell products to us may elect to sell and distribute directly to homebuilders in the future or enter into exclusive supplier arrangements with other distributors. Consolidation of production homebuilders may result in increased competition for their business. Finally, we may not be able to maintain our operating costs or product prices at a level sufficiently low for us to compete effectively. If we are unable to compete effectively, our financial condition, operating results and cash flows may be adversely affected.

Certain of our products are commodities and fluctuations in prices of these commodities could affect our operating results.

Many of the building products we distribute, including oriented strand board (“OSB”), plywood, lumber and particleboard, are commodities that are widely available from other manufacturers or distributors with prices and volumes determined frequently based on participants’ perceptions of short-term supply and demand factors. A shortage of capacity or excess capacity in the industry can result in significant increases or declines in market prices for those products, often within a short period of time.

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Prices of commodity products can also change as a result of national and international economic conditions, labor and freight costs, competition, market speculation, government regulation, and trade policies, as well as from periodic delays in the delivery of lumber and other products. Short-term changes in the cost of these materials, some of which are subject to significant fluctuations, are sometimes passed on to our customers, but our pricing quotation periods and pricing pressure from our competitors may limit our ability to pass on such price changes. For example, we frequently enter into extended pricing commitments, which may compress our margins in periods of inflation. At times, the price at which we can charge our customers for any one or more products may even fall below the price at which we can purchase such products, requiring us to incur short-term losses on product sales. We may also be limited in our ability to pass on increases in freight costs on our products due to the price of fuel.

Periods of generally increasing prices provide the opportunity for higher sales and increased gross profit (subject to the extended pricing commitments described above), while generally declining price environments may result in declines in sales and profitability. In particular, low market prices for wood products over a sustained period can adversely affect our financial condition, operating results and cash flows, as can excessive spikes in market prices. We have generally experienced increasing prices as the homebuilding market has recovered. For the year ended December 31, 2012, average composite framing lumber prices and average composite structural panel prices (a composite calculation based on index prices for OSB and plywood) as reflected by Random Lengths were 18% and 32% higher than the prior year. Our lumber & lumber sheet goods product category represented 35.5% of net sales for that period. However, if lumber or structural panel prices were to decline significantly from current levels, our sales and profits would be negatively affected.

We are exposed to product liability, product warranty, casualty, construction defect and other claims and legal proceedings related to our products and services as well as services provided for us through third parties.

We are from time to time involved in product liability, product warranty, casualty, construction defect, and other claims relating to the products we manufacture, distribute or install, and services we provide, either directly or through third parties, that, if adversely determined, could adversely affect our financial condition, operating results and cash flows if we were unable to seek indemnification for such claims or were not adequately insured for such claims. We rely on manufacturers and other suppliers to provide us with many of the products we sell, distribute or install. Because we do not have direct control over the quality of such products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of such products. In addition, we are exposed to potential claims arising from the conduct of our employees, homebuilders and their subcontractors, and third-party installers for which we may be liable. We and they are subject to regulatory requirements and risks applicable to general contractors, which include management of licensing, permitting and quality of our third-party installers. If we fail to manage these processes effectively or provide proper oversight of these services, we could suffer lost sales, fines and lawsuits, as well as damage to our reputation, which could adversely affect our business.

Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured amounts, there can be no assurance that we will be able to maintain such insurance on acceptable terms or that such insurance will provide adequate protection against potential liabilities. Product liability, product warranty, casualty, construction defect, and other claims can be expensive to defend and can divert the attention of management and other personnel for significant periods, regardless of the ultimate outcome. Claims of this nature could also have a negative impact on customer confidence in our products and our Company. We cannot assure you that any current or future claims will not adversely affect our financial condition, operating results and cash flows.

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Pursuant to the restructuring and investment agreement, Wolseley agreed to indemnify us for, among other things, losses arising from any third-party claim (i) existing as of May 5, 2009 or (ii) brought or asserted against the Company arising from actions taken by Wolseley or the Company prior to May 5, 2009. In the event Wolseley is unable or unwilling to satisfy its indemnification obligations to us, we would be responsible for any liabilities arising from actions taken prior to May 5, 2009 and the costs of defending claims related thereto. The resulting increase in our liabilities or litigation expenses could have a material adverse effect on our financial results.

We may be unable to achieve or maintain profitability.

We have set goals to progressively improve our profitability over time by growing our sales, increasing our gross margin and reducing our expenses as a percentage of sales. For the fiscal years 2011 and 2012 we had net losses of $42.1 million and $14.2 million, respectively, and used cash from operations of $7.0 million and $12.2 million, respectively. There can be no assurance that we will achieve our enhanced profitability goals. Factors that could significantly adversely affect our efforts to achieve these goals include, but are not limited to, the failure to:

Ÿ grow our revenue through organic growth or through acquisitions;

Ÿ improve our revenue mix by investing (including through acquisitions) in businesses that provide higher margins than we have been able to generate historically;

Ÿ achieve improvements in purchasing or to maintain or increase our rebates from suppliers through our supplier consolidation and/or low-cost country initiatives;

Ÿ improve our gross margins through the utilization of improved pricing practices and technology and sourcing savings;

Ÿ maintain or reduce our overhead and support expenses as we grow;

Ÿ effectively evaluate future inventory reserves;

Ÿ collect monies owed from customers;

Ÿ maintain relationships with our significant customers; and

Ÿ integrate any businesses acquired.

Any of these failures or delays may adversely affect our ability to increase our profitability.

Residential renovation and improvement activity levels may not return to historic levels which may negatively impact our business, liquidity and results of operations.

Our business relies on residential renovation and improvement (including repair and remodeling) activity levels. Unlike most previous cyclical declines in new home construction in which we did not experience comparable declines in our sales related to home improvement, the recent economic decline adversely affected our home improvement business as well. According to the U.S. Census Bureau, residential improvement project spending in the United States increased 10% in 2012, but remains 14% below its peak in 2007. Continued high unemployment levels, high mortgage delinquency and foreclosure rates, limitations in the availability of mortgage and home improvement financing and significantly lower housing turnover, may continue to limit consumers’ spending, particularly on discretionary items, and affect their confidence level leading to continued reduced spending on home improvement projects.

We cannot predict the timing or strength of a significant recovery, if any, in these markets. Continued depressed activity levels in consumer spending for home improvement and new home construction will continue to adversely affect our results of operations and our financial position.

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Furthermore, continued economic weakness may cause unanticipated shifts in consumer preferences and purchasing practices and in the business models and strategies of our customers. Such shifts may alter the nature and prices of products demanded by the end consumer and our customers and could adversely affect our operating performance.

Our continued success will depend on our ability to retain our key employees and to attract and retain new qualified employees, while controlling our labor costs.

Our success depends in part on our ability to attract, hire, train, and retain qualified managerial, operational, sales, and other personnel, while at the same time controlling our labor costs. We face significant competition for these types of employees in our industry and from other industries. We may be unsuccessful in attracting and retaining the personnel we require to conduct and expand our operations successfully. In addition, key personnel, including sales force employees with key customer relationships, may leave us and compete against us. Our success also depends to a significant extent on the continued service of our senior management team. We may be unsuccessful in replacing key managers who either resign or retire. The loss of any member of our senior management team or other experienced, senior employees or sales force employees could impair our ability to execute our business plan, cause us to lose customers and reduce our net sales, or lead to employee morale problems and/or the loss of other key employees. In any such event, our financial condition, operating results and cash flows could be adversely affected.

Our ability to control labor costs is subject to numerous external factors, including prevailing wage rates, the impact of legislation or regulations governing labor relations or healthcare benefits, and health and other insurance costs. In addition, we compete with other companies for many of our employees in hourly positions, and we invest significant resources in training and motivating them to maintain a high level of job satisfaction. These positions have historically had high turnover rates, which can lead to increased training and retention costs. If we are unable to attract or retain highly qualified employees in the future, it could adversely impact our operating results.

Product shortages, loss of key suppliers or failure to develop relationships with qualified suppliers, and our dependence on third-party suppliers and manufacturers could affect our financial health.

Our ability to offer a wide variety of products to our customers is dependent upon our ability to obtain adequate product supply from manufacturers and other suppliers. Generally, our products are obtainable from various sources and in sufficient quantities. Our ability to continue to identify and develop relationships with qualified suppliers who can satisfy our high standards for quality and our need to access products in a timely and efficient manner is a significant challenge. Our ability to access products also can be adversely affected by the financial instability of suppliers (particularly in light of continuing economic difficulties in various regions of the United States and the world), suppliers’ noncompliance with applicable laws, supply disruptions, shipping interruptions or costs, and other factors beyond our control. The loss of, or a substantial decrease in the availability of, products from our suppliers or the loss of key supplier arrangements could adversely impact our financial condition, operating results and cash flows.

Although in many instances we have agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Many of our suppliers also offer us favorable terms based on the volume of our purchases. If market conditions change, suppliers may stop offering us favorable terms. Failure by our suppliers to continue to supply us with products on favorable terms, commercially reasonable terms, or at all, could put pressure on our operating margins or have a material adverse effect on our financial condition, operating results and cash flows.

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A portion of the workforces of many of our suppliers, particularly our foreign suppliers, are represented by labor unions. Workforce disputes at these suppliers may result in work stoppages or slowdowns. For example, in recent years our suppliers in Chile (who provide a significant portion of certain of our products) have been subject to numerous labor stoppages. Such disruptions could have a material adverse effect on these suppliers ability to continue meeting our needs. Our ability to source products from foreign suppliers is also subject to other risks and uncertainties, including regulatory requirements, taxes, political and economic instability, exchange rate fluctuations and disruptions in the shipping of imported and exported products.

The implementation of our supply chain and technology initiatives could disrupt our operations, and these initiatives might not provide the anticipated benefits or might fail.

We have made, and we plan to continue to make, significant investments in our supply chain and technology. These initiatives are designed to streamline our operations to allow our employees to continue to provide high quality service to our customers, while simplifying customer interaction and providing our customers with a more interconnected purchasing experience. The cost and potential problems and interruptions associated with the implementation of these initiatives, including those associated with managing third-party service providers and employing new web-based tools and services, could disrupt or reduce the efficiency of our operations. In the event that we grow very rapidly, there can be no assurance that we will be able to keep up, expand or adapt our website infrastructure to meet evolving demand on a timely basis and at a commercially reasonable cost, or at all. In addition, our improved supply chain and new or upgraded technology might not provide the anticipated benefits, it might take longer than expected to realize the anticipated benefits, or the initiatives might fail altogether.

We occupy most of our facilities under long-term non-cancelable leases. We may be unable to renew leases at the end of their terms. If we close a facility, we are still obligated under the applicable lease.

Most of our facilities are located in leased premises. Many of our current leases are non-cancelable and typically have initial terms ranging from five to ten years and most provide options to renew for specified periods of time. We believe that leases we enter into in the future will likely be long-term and non-cancelable and have similar renewal options. If we close or idle a facility, most likely we remain committed to perform our obligations under the applicable lease, which would include, among other things, payment of the base rent, insurance, taxes, and other expenses on the leased property for the balance of the lease term. The inability to terminate leases when idling a facility or exiting a geographic market can have a significant adverse impact on our financial condition, operating results and cash flows. For example, in response to the significant downturn in the homebuilding industry that began in 2006, we determined that it was necessary to discontinue operations in certain unprofitable markets. Because we were unable to terminate leases in these locations and were no longer able to make required payments under the leases, we undertook a prepackaged reorganization under the bankruptcy code in order to terminate the real property leases in those markets in exchange for payment of a statutory amount of damages.

In addition, at the end of the lease term and any renewal period for a facility, we may be unable to renew the lease without substantial additional cost, if at all. If we are unable to renew our facility leases, we may close or relocate a facility, which could subject us to construction and other costs and risks, which in turn could have a material adverse effect on our business and operating results. In addition, we may not be able to secure a replacement facility in a location that is as commercially viable, including access to rail service, as the lease we are unable to renew. For example, closing a facility, even during the time of relocation, will reduce the sales that the facility would have contributed to our revenues. Additionally, the revenue and profit, if any, generated at a relocated facility may not equal the revenue and profit generated at the existing one.

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Homebuilding activities in the Texas, North Carolina, California and Utah markets have a large impact on our results of operations because we conduct a significant portion of our business in these markets.

We presently conduct a significant portion of our business in the Texas, North Carolina, California and Utah markets. Home prices and sales activities in these markets and in most of the other markets in which we operate have declined from time to time, particularly as a result of slow economic growth. In the last several years, these markets have benefited from better than average employment growth, which has aided homebuilding activities, but we cannot assure you that these conditions will continue. Local economic conditions can depend on a variety of factors, including national economic conditions, local and state budget situations and the impact of federal cutbacks. If homebuilding activity declines in one or more of the markets in which we operate, our costs may not decline at all or at the same rate and may negatively impact our operating results.

We may be unable to manage effectively our inventory and working capital as our sales volume increases or material prices fluctuate, which could have a material adverse effect on our business, financial condition and operating results.

We purchase certain materials, including lumber products, which are then sold to customers as well as used as direct production inputs for our manufactured and prefabricated products. We must maintain, and have adequate working capital to purchase, sufficient inventory to meet customer demand. Due to the lead times required by our suppliers, we order products in advance of expected sales. This requires us to forecast our sales and purchase accordingly. In periods of growth, it can be especially difficult to accurately forecast sales. We must also manage our working capital to fund our inventory purchases. Excessive spikes in the market prices of certain building products, such as lumber, can put negative pressure on our operating cash flows by requiring us to invest more in inventory. In the future, if we are unable to manage effectively our inventory and working capital as we attempt to grow our business, our cash flows may be negatively affected, which could have a material adverse effect on our business, financial condition and operating results.

The majority of our net sales are credit sales which are made primarily to customers whose ability to pay is dependent, in part, upon the economic strength of the industry and geographic areas in which they operate, and the failure to collect or timely collect monies owed from customers could adversely affect our financial condition.

The majority of our net sales volume in fiscal 2012 was facilitated through the extension of credit to our customers whose ability to pay is dependent, in part, upon the economic strength of the industry in the areas where they operate. We offer credit to customers, either through unsecured credit that is based solely upon the creditworthiness of the customer, or secured credit for materials sold for a specific job where the security lies in lien rights associated with the material going into the job. The type of credit offered depends both on the financial strength of the customer and the nature of the business in which the customer is involved. End users, resellers and other non-contractor customers generally purchase more on unsecured credit than secured credit. The inability of our customers to pay off their credit lines in a timely manner, or at all, would adversely affect our financial condition, operating results and cash flows. Furthermore, our collections efforts with respect to non-paying or slow-paying customers could negatively impact our customer relations going forward.

Because we depend on the creditworthiness of certain of our customers, if the financial condition of our customers declines, our credit risk could increase. Significant contraction in our markets, coupled with tightened credit availability and financial institution underwriting standards, could adversely affect certain of our customers. Should one or more of our larger customers declare bankruptcy as has occurred in the past, it could adversely affect the collectability of our accounts receivable, bad debt reserves and net income.

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We are subject to competitive pricing pressure from our customers.

Production homebuilders historically have exerted significant pressure on their outside suppliers to keep prices low because of their market share and ability to leverage such market share in the highly fragmented building products supply and services industry. The housing industry downturn resulted in significantly increased pricing pressures from production homebuilders and other customers. These pricing pressures have adversely affected our operating results and cash flows. In addition, continued consolidation among homebuilders, and changes in homebuilders’ purchasing policies or payment practices, could result in additional pricing pressure. Moreover, during the housing downturn, several of our homebuilder customers defaulted on amounts owed to us or extended their payable days as a result of their financial condition. If such payment failures or delays were to recur, it could significantly adversely affect our financial condition, operating results and cash flows.

We may not timely identify or effectively respond to consumer needs, expectations or trends, which could adversely affect our relationship with customers, the demand for our products and services and our market share.

It is difficult to predict successfully the products and services our customers will demand. The success of our business depends in part on our ability to identify and respond promptly to changes in demographics, consumer preferences, expectations, needs and weather conditions, while also managing inventory levels. For example, an increased consumer focus on making homes energy efficient could require us to offer more energy efficient building materials and there can be no assurance that we would be able to identify appropriate suppliers on acceptable terms. Failure to identify timely or effectively respond to changing consumer preferences, expectations and building product needs could adversely affect our relationship with customers, the demand for our products and services and our market share.

We may be unable to implement successfully our growth strategy, which includes pursuing strategic acquisitions and opening new facilities.

Our long-term business plan provides for continued growth through strategic acquisitions and organic growth through the construction of new facilities or the expansion of existing facilities. Failure to identify and acquire suitable acquisition candidates on appropriate terms could have a material adverse effect on our growth strategy. Moreover, our reduced operating results during the housing downturn, our liquidity position, or the requirements of our Credit Agreement, could prevent us from obtaining the capital required to effect new acquisitions or expansions of existing facilities. Our failure to make successful acquisitions or to build or expand facilities, including manufacturing facilities, produce saleable product, or meet customer demand in a timely manner could result in damage to or loss of customer relationships, which could adversely affect our financial condition, operating results and cash flows.

In addition, we may not be able to integrate the operations of future acquired businesses in an efficient and cost-effective manner or without significant disruption to our existing operations. Acquisitions involve significant risks and uncertainties, including uncertainties as to the future financial performance of the acquired business, difficulties integrating acquired personnel and corporate cultures into our business, the potential loss of key employees, customers or suppliers, difficulties in integrating different computer and accounting systems, exposure to unknown or unforeseen liabilities of acquired companies, and the diversion of management attention and resources from existing operations. We may be unable to complete successfully potential acquisitions due to multiple factors, such as issues related to regulatory review of the proposed transactions. We may also be required to incur additional debt in order to consummate acquisitions in the future, which debt may be substantial and may limit our flexibility in using our cash flow from operations. Our failure to integrate future

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acquired businesses effectively or to manage other consequences of our acquisitions, including increased indebtedness, could prevent us from remaining competitive and, ultimately, could adversely affect our financial condition, operating results and cash flows.

Federal, state, local and other regulations could impose substantial costs and/or restrictions on our operations that would reduce our net income.

We are subject to various federal, state, local, and other regulations, including, among other things, regulations promulgated by the Department of Transportation (“DOT”), work safety regulations promulgated by the Department of Labor’s Occupational Safety and Health Administration (“OSHA”), employment regulations promulgated by the United States Equal Employment Opportunity Commission, accounting standards issued by the Financial Accounting Standards Board or similar entities, and state and local zoning restrictions, building codes and contractors’ licensing boards. More burdensome regulatory requirements in these or other areas may increase our general and administrative costs and adversely affect our financial condition, operating results and cash flows. Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to substantial penalties that could adversely affect our financial condition, operating results and cash flows.

Our transportation operations are subject to the regulatory jurisdiction of the DOT. The DOT has broad administrative powers with respect to our transportation operations. If we fail to comply adequately with DOT regulations or regulations become more stringent, we could experience increased inspections, regulatory authorities could take remedial action including imposing fines or shutting down our operations or we could be subject to increased audit and compliance costs. If any of these events were to occur, our financial condition, operating results and cash flows would be adversely affected.

In addition, the homebuilding industry is subject to various local, state and federal statutes, ordinances, rules and regulations concerning zoning, building design and safety, construction, energy conservation, environmental protection and similar matters, including regulations that impose restrictive zoning and density requirements on our business or that limit the number of homes that can be built within the boundaries of a particular area. Regulatory restrictions may increase our operating expenses and limit the availability of suitable building lots for our customers, which could negatively affect our sales and earnings.

The loss of any of our significant customers could affect our financial health.

Our ten largest customers generated approximately 18.6% and 20.5% of our net sales for the years ended December 31, 2011 and 2012, respectively. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will continue to supply these customers at historical levels. Due to the weak housing market over the past several years, many of our homebuilder customers substantially reduced their construction activity. Some homebuilder customers exited or severely curtailed building activity in certain of our markets.

In addition, production homebuilders and other customers may: (i) seek to purchase some of the products that we currently sell directly from manufacturers; (ii) elect to establish their own building products manufacturing and distribution facilities or (iii) give advantages to manufacturing or distribution intermediaries in which they have an economic stake. Continued consolidation among production homebuilders could also result in a loss of some of our present customers to our competitors. The loss of one or more of our significant customers or deterioration in our relations with any of them could adversely affect our financial condition, operating results and cash flows. Furthermore, our customers typically are not required to purchase any minimum amount of products from us. The contracts into which we have entered with most of our professional customers typically

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provide that we supply particular products or services for a certain period of time when and if ordered by the customer. Should our customers purchase our products in significantly lower quantities than they have in the past, such decreased purchases could have a material adverse effect on our financial condition, operating results and cash flows.

We may have future capital needs that require us to incur additional debt and may not be able to obtain additional financing on acceptable terms, if at all.

We are substantially reliant on liquidity provided by our Credit Agreement and cash on hand to provide working capital and fund our operations. Our working capital and capital expenditure requirements are likely to grow as the housing market improves. Economic and credit market conditions, the performance of the homebuilding industry, and our financial performance, as well as other factors, may constrain our financing abilities. Our ability to secure additional financing, if available, and to satisfy our financial obligations under indebtedness outstanding from time to time will depend upon our future operating performance, the availability of credit, economic conditions, and financial, business, and other factors, many of which are beyond our control. The prolonged continuation or worsening of current housing market conditions and the macroeconomic factors that affect our industry could require us to seek additional capital and have a material adverse effect on our ability to secure such capital on favorable terms, if at all.

We may be unable to secure additional financing or financing on favorable terms or our operating cash flow may be insufficient to satisfy our financial obligations under our outstanding indebtedness. If additional funds are raised through the issuance of additional equity or convertible debt securities, our stockholders may experience significant dilution. We may also incur additional indebtedness in the future, including collateralized debt, subject to the restrictions contained in the Credit Agreement. If new debt is added to our current debt levels, the related risks that we now face could intensify.

The Credit Agreement contains various financial covenants that could limit our ability to operate our business.

The Credit Agreement includes a financial covenant that requires us to maintain a minimum Fixed Charge Coverage Ratio of 1.0 as defined therein. However, the covenant is only applicable if the sum of availability under the Revolver plus Qualified Cash (which includes cash and cash equivalents in deposit accounts or securities accounts or any combination thereof that are subject to a control agreement) falls below $15 million at any time or is between $15 million and $20 million for a period of 5 consecutive business days, and remains in effect until the sum of availability under the Revolver plus Qualified Cash exceeds $20 million for 30 consecutive days. While there can be no assurances, based upon our forecast, we do not expect the covenant to become applicable during the year ended December 31, 2013. However, while we would currently satisfy this covenant if it were applicable, should this not be the case, we would evaluate our liquidity options including amending the Credit Agreement, seeking alternative financing arrangements of debt and/or equity and/or selling assets. No assurances can be given that such alternative financing would be available, or if available, under terms similar to our existing Credit Agreement or that we would be able to sell assets on a timely basis.

We may be adversely affected by any disruption in our information technology systems.

Our operations are dependent upon our information technology systems, which encompass all of our major business functions. Our ERP system, which we use for operations representing virtually all of our sales, is a proprietary system that has been highly customized by our computer programmers. Our centralized financial reporting system currently draws data from our ERP system. We rely upon such information technology systems to manage and replenish inventory, to fill and ship customer orders on a timely basis, and to coordinate our sales and distribution activities across all of our products and

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services. A substantial disruption in our information technology systems for any prolonged time period (arising from, for example, system capacity limits from unexpected increases in our volume of business, outages, computer viruses, unauthorized access, or delays in our service) could result in delays in receiving inventory and supplies or filling customer orders and adversely affect our customer service and relationships. Our systems might be damaged or interrupted by natural or man-made events or by computer viruses, physical or electronic break-ins, or similar disruptions affecting the global Internet. There can be no assurance that such delays, problems, or costs will not have a material adverse effect on our financial condition, operating results and cash flows.

We may be adversely affected by any natural or man-made disruptions to our distribution and manufacturing facilities.

We currently maintain a broad network of distribution and manufacturing facilities throughout the eastern, southern and western United States. Any widespread disruption to our facilities resulting from fire, earthquake, weather-related events, an act of terrorism, or any other cause could damage a significant portion of our inventory and could materially impair our ability to distribute our products to customers. We could incur significantly higher costs and longer lead times associated with distributing our products to our customers during the time that it takes for us to reopen or replace a damaged facility. In addition, any shortages of fuel or significant fuel cost increases could disrupt our ability to distribute products to our customers. Disruptions to the national or local transportation infrastructure systems including those related to a domestic terrorist attack may also affect our ability to keep our operations and services functioning properly. If any of these events were to occur, our financial condition, operating results and cash flows could be materially adversely affected.

We are subject to exposure to environmental liabilities and are subject to environmental regulation.

We are subject to various federal, state and local environmental laws, ordinances, rules and regulations including those promulgated by the United States Environmental Protection Agency and analogous state agencies. As current and former owners, lessees and operators of real property, we can be held liable for the investigation or remediation of contamination at or from such properties, in some circumstances irrespective of whether we knew of or caused such contamination. No assurance can be provided that investigation and remediation will not be required in the future as a result of spills or releases of petroleum products or hazardous substances, the discovery of currently unknown environmental conditions, more stringent standards regarding existing contamination, or changes in legislation, laws, ordinances, rules or regulations or their interpretation or enforcement. More burdensome environmental regulatory requirements may increase our costs and adversely affect our financial condition, operating results and cash flows.

We are subject to cybersecurity risks and may incur increasing costs in an effort to minimize those risks.

Our business employs systems and a website that allow for the secure storage and transmission of customers’ proprietary information. Security breaches could expose us to a risk of loss or misuse of this information, litigation and potential liability. We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber attacks. Any compromise of our security could result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, and a loss of confidence in our security measures, which could harm our business. The regulatory environment related to information security and privacy is increasingly rigorous, with new and constantly changing requirements applicable to our business, and compliance with those requirements could result in additional costs. As cyber attacks become more

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sophisticated generally, and as we implement changes giving customers greater electronic access to our systems, we may be required to incur significant costs to strengthen our systems from outside intrusions and/or obtain insurance coverage related to the threat of such attacks.

Risks related to this offering and our common stock

Prior to this offering, there has been no public market for our common stock, and we do not know if one will develop to provide you with adequate liquidity to sell our common stock at prices equal to, or greater than, the price you paid in this offering.

Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in our Company will lead to the development of an active trading market on the exchange on which we list our common stock or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the common stock has been determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our common stock at prices equal to or greater than the price you paid in this offering, or at all.

The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

Volatility in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for them. The market price for our common stock could fluctuate significantly for various reasons, including:

Ÿ our operating and financial performance and prospects;

Ÿ our quarterly or annual earnings or those of other companies in our industry;

Ÿ the public’s reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission (the “SEC”);

Ÿ changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our common stock or the stock of other companies in our industry;

Ÿ the failure of research analysts to cover our common stock;

Ÿ general economic, industry and market conditions;

Ÿ strategic actions by us, our customers or our competitors, such as acquisitions or restructurings;

Ÿ new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

Ÿ changes in accounting standards, policies, guidance, interpretations or principles;

Ÿ material litigation or government investigations;

Ÿ changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events;

Ÿ changes in key personnel;

Ÿ sales of common stock by us, our principal stockholder or members of our management team;

Ÿ termination of lock-up agreements with our management team and principal stockholder;

Ÿ the granting or exercise of employee stock options;

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Ÿ payment of liabilities for which we are self-insured;

Ÿ volume of trading in our common stock;

Ÿ threats to, or impairments of, our intellectual property; and

Ÿ the impact of the factors described elsewhere in “Risk Factors.”

In addition, in recent years, the stock market has regularly experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with us and these fluctuations could materially reduce our share price.

The requirements of being a public company will increase certain of our costs and require significant management focus.

As a public company, our legal, accounting and other expenses associated with compliance-related and other activities will increase. For example, in connection with this offering, we will create new board of directors committees and appoint one or more independent directors to comply with the corporate governance requirements of the exchange on which we will list our common stock. Costs to obtain director and officer liability insurance will contribute to our increased costs. As a result of the associated liability, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. Advocacy efforts by stockholders and third parties may also prompt even more changes in governance and reporting requirements, which could further increase our compliance costs.

We are exempt from certain corporate governance requirements since we are a “controlled company” within the meaning of the rules of the exchange on which we will list our common stock and, as a result, you will not have the protections afforded by these corporate governance requirements.

Following the consummation of this offering, Gores Holdings will hold a majority of our common stock. As a result of the completion of this offering, we will be considered a “controlled company” for the purposes of the listing requirements of the exchange on which we will list our common stock. Under these rules, a company of which more than 50% of the voting power is held by a group is a “controlled company” and may elect not to comply with certain corporate governance requirements of the exchange on which we will list our common stock, including the requirements that our board of directors, our Compensation Committee and our Corporate Governance and Nominating Committee meet the standard of independence established by those corporate governance requirements. The independence standards are intended to ensure that directors who meet the independence standard are free of any conflicting interest that could influence their actions as directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the exchange on which we will list our common stock.

We are an ‘‘emerging growth company’’ and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an ‘‘emerging growth company’’ and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not ‘‘emerging growth companies.’’ We will remain an ‘‘emerging growth company’’ for up to five years following the completion of this offering or until we achieve total annual gross revenues in excess of $1 billion during

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a fiscal year or become a large accelerated filer as a result of achieving a public float of at least $700 million as of the end of a second fiscal quarter. If the housing market continues to strengthen, we could exceed annual gross revenues of $1 billion shortly after the date of this prospectus, as we had $942 million of total gross revenues in 2012. The exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If we choose not to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, our auditors will not be required to attest to the effectiveness of our internal controls over financial reporting. As a result, investors may become less comfortable with the effectiveness of our internal controls and the risk that material weaknesses or other deficiencies in our internal control go undetected may increase. If we choose to provide reduced disclosures in our periodic reports and proxy statements while we are an emerging growth company, investors would have access to less information and analysis about our executive compensation, which may make it difficult for investors to evaluate our executive compensation practices. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions and provide reduced disclosure. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Our majority stockholder will have the ability to control significant corporate activities after the completion of this offering and our majority stockholder’s interests may not coincide with yours.

After the consummation of this offering, Gores Holdings and its affiliates will beneficially own approximately     % of our common stock, assuming the underwriters do not exercise their option to purchase additional shares. If the underwriters exercise in full their option to purchase additional shares, Gores Holdings will beneficially own approximately     % of our common stock. As a result of its ownership, Gores Holdings (and indirectly, Gores, given its control of Gores Holdings), so long as it holds a majority of our outstanding shares, will have the ability to control the outcome of matters submitted to a vote of stockholders and, through our board of directors, the ability to control decision-making with respect to our business direction and policies.

Matters over which Gores Holdings (and indirectly, Gores, given its control of Gores Holdings) will exercise control following this offering include:

Ÿ election of directors;

Ÿ mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares;

Ÿ other acquisitions or dispositions of businesses or assets;

Ÿ incurrence of indebtedness and the issuance of equity securities;

Ÿ repurchase of stock and payment of dividends; and

Ÿ the issuance of shares to management under the 2013 Incentive Plan.

Even if Gores Holdings’ ownership of our shares falls below a majority, it may continue to be able to strongly influence or effectively control our decisions. In addition, Gores Holdings’ will have a contractual right to designate a number of directors proportionate to its stock ownership. See “Certain Relationships and Related Party Transactions—Director Nomination Agreement.”

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Conflicts of interest may arise because some of our directors are affiliated with our largest stockholder.

Messrs. Freedman, Meyer, Wald and Yager, who are officers or employees of Gores or its affiliates, serve on our board of directors. Gores controls Gores Holdings, our majority stockholder (after giving effect to this offering). Gores or its affiliates may hold equity interests in entities that directly or indirectly compete with us, and companies in which it or one of its affiliates is an investor or may invest in the future may begin competing with us or become customers of or vendors to the Company. As a result of these relationships, when conflicts between the interests of Gores, on the one hand, and of our other stockholders, on the other hand, arise, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our amended and restated certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (i) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (ii) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (iii) the transaction is otherwise fair to us. Our amended and restated certificate of incorporation also provides that any principal, officer, member, manager and/or employee of Gores or any entity that controls, is controlled by or under common control with Gores or any investment funds managed by Gores will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them solely in their capacities as our directors.

If you purchase shares of common stock sold in this offering, you will incur immediate and substantial dilution.

If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $         per share, because the assumed initial public offering price of $        , which is the midpoint of the price range set forth on the cover of this prospectus, is substantially higher than the pro forma net tangible book value per share of our outstanding common stock. This dilution is due in large part to the fact that Gores Holdings paid substantially less than the initial public offering price when it acquired its shares of our capital stock in 2009. In addition, you may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our employees, directors and consultants under our stock option and equity incentive plans. For additional information, see “Dilution.”

We do not currently intend to pay dividends on our common stock following the offering.

We do not anticipate paying any cash dividends on our common stock for the foreseeable future. Instead, we intend to retain future earnings to fund our growth. In addition, our existing indebtedness restricts, and we anticipate our future indebtedness may restrict, our ability to pay dividends. Therefore, you may not receive a return on your investment in our common stock by receiving a payment of dividends. See “Dividend Policy.”

The issuer of common stock in this offering does not conduct any substantive operations and, as a result, its ability to pay dividends will be dependent upon the financial results and cash flows of its operating subsidiaries and the distribution or other payment of cash to it in the form of dividends or otherwise. The direct and indirect subsidiaries of the issuer are separate and distinct legal entities and have no obligation to make any funds available to the issuer.

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Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, there will be              shares of our common stock outstanding (or              if the underwriters exercise their option to purchase additional shares in full). Of these, the              shares being sold in this offering (or              shares if the underwriters exercise their option to purchase additional shares in full) will be freely tradable immediately after this offering (except for any shares purchased by affiliates, if any) and approximately              shares may be sold upon expiration of lock-up agreements 180 days after the date of this prospectus (subject in some cases to volume limitations). Sales by Gores Holdings of a substantial number of shares after this offering could significantly reduce the market price of our common stock. Gores Holdings and our other stockholders prior to this offering have the right to require us to register their shares of our common stock. See “Certain Relationships and Related Party Transactions—Plan of conversion and certificate of incorporation.”

We also intend to register all common stock that we may issue under the 2013 Incentive Plan, as described in “Executive Compensation—2013 Incentive Plan.” Effective upon the completion of this offering, an aggregate of              shares of our common stock will be reserved for future issuance under the 2013 Incentive Plan. Once we register these shares, which we plan to do shortly after the completion of this offering, they can be freely sold in the public market upon issuance, subject to the lock-up agreements referred to above. If a large number of these shares are sold in the public market, the sales could reduce the trading price of our common stock.

Our future operating results may fluctuate significantly and our current operating results may not be a good indication of our future performance. Fluctuations in our quarterly financial results could affect our stock price in the future.

Our revenues and operating results have historically varied from period-to-period and we expect that they will continue to do so as a result of a number of factors, many of which are outside of our control. If our quarterly financial results or our predictions of future financial results fail to meet the expectations of securities analysts and investors, our stock price could be negatively affected. Any volatility in our quarterly financial results may make it more difficult for us to raise capital in the future or pursue acquisitions that involve issuances of our stock. Our operating results for prior periods may not be effective predictors of future performance.

Factors associated with our industry, the operation of our business and the markets for our products and services may cause our quarterly financial results to fluctuate, including:

Ÿ the seasonal and cyclical nature of the homebuilding industry;

Ÿ the highly competitive nature of our industry;

Ÿ the volatility of prices, availability and affordability of raw materials, including lumber, wood products and other building products;

Ÿ shortages of skilled and technical labor, increased labor costs and labor disruptions;

Ÿ the production schedules of our customers;

Ÿ general economic conditions, including but not limited to housing starts, repair and remodel activity and light commercial construction, inventory levels of new and existing homes for sale, foreclosure rates, interest rates, unemployment rates, relative currency values, mortgage availability and pricing, as well as other consumer financing mechanisms, that ultimately affect demand for our products;

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Ÿ actions of suppliers, customers and competitors, including merger and acquisition activities, plant closures and financial failures;

Ÿ the financial condition and creditworthiness of our customers;

Ÿ cost of compliance with government laws and regulations;

Ÿ weather patterns; and

Ÿ severe weather phenomena such as drought, hurricanes, tornadoes and fire.

Any one of the factors above or the cumulative effect of some of the factors referred to above may result in significant fluctuations in our quarterly financial and other operating results, including fluctuations in our key metrics. The variability and unpredictability could result in our failing to meet our internal operating plan or the expectations of securities analysts or investors for any period. If we fail to meet or exceed such expectations for these or any other reasons, the market price of our shares could fall substantially and we could face costly lawsuits, including securities class action suits.

Certain provisions of our organizational documents and other contractual provisions may make it difficult for stockholders to change the composition of our board of directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial.

Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of us and our stockholders. The provisions in our amended and restated certificate of incorporation and amended and restated bylaws include, among other things, the following:

Ÿ a classified board of directors with three-year staggered terms;

Ÿ the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval;

Ÿ stockholder action can only be taken at a special or regular meeting and not by written consent following the time that Gores Holdings and its affiliates cease to beneficially own a majority of our common stock;

Ÿ advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings;

Ÿ removal of directors only for cause following the time that Gores Holdings and its affiliates cease to beneficially own a majority of our common stock;

Ÿ allowing only our board of directors to fill vacancies on our board of directors; and

Ÿ following the time that Gores Holdings and its affiliates cease to beneficially own a majority of our common stock, super-majority voting requirements to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation.

In addition, in connection with this offering, we will enter into a Director Nomination Agreement with Gores Holdings that provides Gores Holdings the right to designate nominees for election to our board of directors for so long as Gores Holdings beneficially owns 10% or more of the total number of shares of our common stock then outstanding. For a description of the terms of the Director Nomination Agreement, see “Certain Relationships and Related Party Transactions—Director Nomination Agreement.”

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We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law (“DGCL”), an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we are not subject to any anti-takeover effects of Section 203. However, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that Gores Holdings, its affiliates (including any investment funds managed by Gores) and any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person are excluded from the “interested stockholder” definition in our amended and restated certificate of incorporation and are therefore not subject to the restrictions set forth therein that have the same effect as Section 203. See “Description of Capital Stock—Anti-takeover effects of Delaware law and our amended and restated certificate of incorporation and amended and restated bylaws.”

While these provisions have the effect of encouraging persons seeking to acquire control of our Company to negotiate with our board of directors, they could enable the board of directors to hinder or frustrate a transaction that some, or a majority, of the stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. For more information, see “Description of Capital Stock.”

Any issuance of preferred stock could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.

Our board of directors has the authority to issue preferred stock and to determine the preferences, limitations and relative rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium over the market price, and adversely affect the market price and the voting and other rights of the holders of our common stock.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and therefore are not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Section 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Though we will be required to disclose changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual

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assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff. Testing and maintaining internal control could divert our management’s attention from other matters that are important to the operation of our business.

Our business and stock price may suffer as a result of our lack of public company operating experience. In addition, if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

Prior to the completion of this offering, we have been a privately-held company. Our lack of public company operating experience may make it difficult to forecast and evaluate our future prospects. If we are unable to execute our business strategy, either as a result of our inability to manage effectively our business in a public company environment or for any other reason, our business, prospects, financial condition and operating results may be harmed. In addition, as a new public company we do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our Company, the trading price for our stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

We are a holding company and conduct all of our operations through our subsidiaries.

We are a holding company that derives all of our operating income from our subsidiaries. All of our assets are held by our direct and indirect subsidiaries. We rely on the earnings and cash flows of our subsidiaries, which are paid to us by our subsidiaries in the form of dividends and other payments or distributions, to meet our debt service obligations. The ability of our subsidiaries to pay dividends or make other payments or distributions to us will depend on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends and other distributions to us), the terms of existing and future indebtedness and other agreements of our subsidiaries and the covenants of any future outstanding indebtedness we or our subsidiaries incur.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus constitute forward-looking statements, including in the sections captioned “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts or present facts or conditions. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology.

The forward-looking statements contained in this prospectus reflect our views as of the date of this prospectus about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, those factors described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These factors include without limitation:

Ÿ the state of the homebuilding industry and repair and remodeling activity, the economy and the credit markets;

Ÿ seasonality and cyclicality of the building products supply and services industry;

Ÿ competitive industry pressures and competitive pricing pressure from our customers;

Ÿ inflation or deflation of prices of our products;

Ÿ our exposure to product liability, product warranty, casualty, construction defect and other claims and legal proceedings;

Ÿ our ability to maintain profitability;

Ÿ failure of the residential renovation and improvement activities to return to historic levels;

Ÿ our ability to retain our key employees and to attract and retain new qualified employees while controlling our labor costs;

Ÿ product shortages, loss of key suppliers or failure to develop relationships with qualified suppliers, and our dependence on third-party suppliers and manufacturers;

Ÿ the implementation of our supply chain and technology initiatives;

Ÿ the impact of long-term non-cancelable leases at our facilities;

Ÿ our concentration of business in the Texas, North Carolina, California and Utah markets;

Ÿ our ability to manage effectively inventory and working capital;

Ÿ the credit risk from our customers;

Ÿ pricing pressure from our customers and competitors;

Ÿ our ability to identify or respond effectively to consumer needs, expectations or trends;

Ÿ our ability to implement successfully our growth strategy;

Ÿ the impact of federal, state, local and other laws and regulations;

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Ÿ the potential loss of significant customers;

Ÿ our ability to obtain additional financing on acceptable terms;

Ÿ the various financial covenants in our Credit Agreement;

Ÿ disruptions in our information technology systems;

Ÿ natural or man-made disruptions to our distribution and manufacturing facilities;

Ÿ our exposure to environmental liabilities and subjection to environmental laws and regulation; and

Ÿ cybersecurity risks.

Certain of these and other factors are discussed in more detail in “Risk Factors” in this prospectus. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. The forward-looking statements included in this prospectus are made only as of the date of this prospectus and we undertake no obligation to publicly update or review any forward-looking statement made by us or on our behalf, whether as a result of new information, future developments, subsequent events or circumstances or otherwise.

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USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of              shares of common stock in this offering will be approximately $         million, assuming an initial public offering price of $        per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders.

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) our net proceeds from this offering by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares in full, we estimate that the net proceeds to us from this offering will be approximately $         million, assuming an initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use a portion of the net proceeds from this offering to redeem all outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock for an aggregate of approximately $        . We intend to use a portion of the net proceeds to pay a portion of the outstanding balances under our Revolver and for working capital and general corporate purposes. Our management will retain broad discretion over the allocation of the remaining net proceeds from this offering.

Borrowings under the Revolver bear interest, at our option, at either a base rate (which means the higher of (i) the federal funds rate plus 0.5% or (ii) the prime rate) plus a base rate margin (which ranges from 1.25% to 1.75% based on Revolver availability) or LIBOR plus a LIBOR rate margin (which ranges from 2.25% to 2.75% based on Revolver availability). The Revolver matures in December 2015.

Pending use of the remaining proceeds from this offering, we intend to invest the proceeds in a variety of capital preservation investments, including short-term, investment-grade and interest-bearing instruments.

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DIVIDEND POLICY

Following the consummation of this offering, we do not plan to pay a regular dividend on our common stock. The declaration and payment of all future dividends, if any, will be at the discretion of our board of directors and will depend upon our financial condition, earnings, contractual conditions, restrictions imposed by the Credit Agreement or applicable laws and other factors that our board of directors may deem relevant.

Additionally, because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and capital resources—Revolving credit facility.” Any future determination to pay dividends will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our operating results, financial condition, capital requirements and other factors that our board of directors deems relevant.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and our consolidated capitalization as of December 31, 2012 on:

Ÿ an actual basis, as adjusted to retroactively reflect the change of members’ equity to stockholders’ equity following our conversion to a corporation;

Ÿ a pro forma basis, to give effect to (i) the conversion of all outstanding shares of our convertible Class C preferred stock into an aggregate of              shares of common stock upon the completion of this offering and (ii) the conversion of all outstanding shares of our Class A voting common stock and Class B non-voting common stock into an aggregate of              shares of a single class of common stock upon the completion of this offering; and

Ÿ a pro forma, as adjusted basis, to give further effect to (i) our receipt of the estimated net proceeds from the issuance and sale of              shares of common stock in this offering at an assumed initial public offering of $         per share, which is the midpoint of the price range set forth on the cover of this prospectus, and after deducting underwriting discounts and estimated offering expenses, (ii) the redemption of all outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock, upon the completion of this offering with a portion of the net proceeds from this offering and (iii) the payment of a portion of the outstanding balances under our Revolver with a portion of the net proceeds from this offering.

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You should read this table together with the sections entitled “Use of Proceeds,” “Selected Historical Consolidated Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included elsewhere in this prospectus.

	As of December 31, 2012
	Actual			Pro forma		Pro forma, as          adjusted
(in thousands, except share and per share amounts)
Cash and cash equivalents	$	2,691		$		$
Long-term debt (including current maturities):
Revolving line of credit		72,218
Capital lease obligations		6,964
Total debt		79,182
Redeemable Class A Junior Preferred stock, $0.01 par value, 10,000 shares authorized and issued and 5,100 shares outstanding, actual and pro forma; no shares authorized, issued and outstanding, pro forma, as adjusted		—			—		—
Redeemable Class B Senior Preferred stock, $0.01 par value, 500,000 shares authorized, 75,000 shares issued, 36,388 shares outstanding, actual and pro forma; no shares authorized, issued and outstanding, pro forma, as adjusted		36,477			36,477		—
Convertible Class C Preferred stock, $0.01 par value, 5,000 shares authorized, issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma, as adjusted		5,000			—		—
Stockholders’ equity:
Class A voting common stock, $0.01 par value, 875,000 shares authorized and issued, 446,250 shares outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma, as adjusted		5			—		—
Class B non-voting common stock, $0.01 par value, 125,000 shares authorized and 110,531 issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma, as adjusted		1			—		—
Preferred stock, $0.01 par value, no shares authorized, issued and outstanding, actual and pro forma;              authorized and              issued and outstanding, pro forma, as adjusted		—			—		—
Common stock, $0.01 par value, no shares authorized, issued and outstanding, actual and pro forma;              authorized and              issued and outstanding, pro forma, as adjusted		—
Additional paid-in capital		46,167
Retained deficit		(12,186	)
Total stockholders’ equity		33,987
Total capitalization	$	154,646		$		$

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) the pro forma, as adjusted amount for each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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DILUTION

Our pro forma net tangible book value as of December 31, 2012 was approximately $         million, or approximately $         per share. Pro forma net tangible book value per share represents the amount of our total tangible assets less the amount of our total liabilities, divided by the number of shares of common stock outstanding, prior to the sale of              shares of common stock offered in this offering. Pro forma net tangible book value as of December 31, 2012 gives pro forma effect to (i) our conversion from a limited liability company to a corporation, (ii) the conversion of all outstanding shares of our convertible Class C preferred stock into an aggregate of              shares of common stock upon the completion of this offering and (iii) the conversion of all outstanding shares of our Class A voting common and Class B non-voting common stock into an aggregate of              shares of a single class of common stock upon the completion of this offering. Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by investors in this offering and the net tangible book value per share of our common stock outstanding immediately after this offering.

After giving effect to the items discussed above and the sale of              shares of common stock in this offering, based upon an assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover of this prospectus, and after deducting underwriting discounts and commissions and estimated expenses payable by us in connection with this offering and the application of the proceeds therefrom (including to fund the redemption of all outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock), our pro forma as adjusted net tangible book value as of December 31, 2012 would have been approximately $         million, or $         per share of common stock. This represents an immediate increase in pro forma net tangible book value of $         per share to existing stockholders and immediate dilution of $         per share to new investors purchasing shares of common stock in this offering at the initial public offering price.

The following table illustrates this per share dilution.

Assumed initial public offering price per share		$
Net tangible book value per share as of December 31, 2012	$
Increase in pro forma net tangible book value per share attributable to new investors in this offering
Pro forma net tangible book value per share as of December 31, 2012 (after giving effect to this offering)
Dilution per share to new investors		$

The following table summarizes, as of December 31, 2012, on a pro forma basis giving effect to the items discussed above and the sale of              shares of common stock in this offering, the number of shares of our common stock purchased from us, the aggregate cash consideration paid to us and the average price per share paid to us by existing stockholders and to be paid by new investors purchasing shares of our common stock from us in this offering. The table assumes an initial public offering price of $        per share, which the midpoint of the price range set forth on the cover of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares purchased				Total consideration				Average price per shares
	Number	Percent			Amount	Percent
	(millions)				(millions)
Existing stockholders	$			%	$			%	$
New investors
Total	$		100	%	$		100	%

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A $1.00 increase (decrease) in the assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) the total consideration paid by investors participating in this offering by $         million, or increase (decrease) the percent of total consideration paid by investors participating in this offering by     % and     %, respectively, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters’ option to purchase additional shares. If the underwriters’ option to purchase additional shares is exercised in full, our existing stockholders would own approximately     % and our new investors would own approximately     % of the total number of shares of our common stock outstanding after this offering.

The number of shares outstanding as of December 31, 2012, after giving effect to this offering, excludes options to purchase              shares of common stock that will be outstanding upon completion of this offering and excludes an aggregate of              shares of our common stock reserved for issuance under the 2013 Incentive Plan.

To the extent that any options or other equity incentive grants are exercised or issued in the future (including pursuant to the 2013 Incentive Plan) with an exercise price or purchase price below the initial public offering price, new investors will experience further dilution.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth our selected consolidated financial data. The selected consolidated financial data as of December 31, 2011 and 2012 and for the years ended December 31, 2010, 2011 and 2012 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected consolidated financial data as of December 31, 2010 have been derived from our audited consolidated financial statements which are not included in this prospectus.

You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our historical consolidated financial data may not be indicative of our future performance.

	Year ended December 31,
(in thousands, except shares and per share data)	2010			2011			2012
Statement of operations information:
Net sales	$	751,706		$	759,982		$	942,398
Cost of goods sold(1)		587,692			591,017			727,670
Gross profit		164,014			168,965			214,728
Operating expenses:
Selling, general and administrative expenses(2)		246,338			213,036			220,686
Depreciation expense		29,337			11,844			7,759
Amortization expense		1,140			1,457			1,470
Impairment of assets held for sale(3)		2,944			580			361
Restructuring expense(4)		7,089			1,349			2,853
Loss from operations		(122,834	)		(59,301	)		(18,401	)
Other income (expenses):
Bargain purchase gain(5)		11,223			—			—
Interest expense, net		(1,575	)		(2,842	)		(4,037	)
Other income (expense), net(6)		(57	)		(2,120	)		278
Loss from continuing operations before income taxes		(113,243	)		(64,263	)		(22,160	)
Income tax benefit(6)		47,463			22,332			7,907
Loss from continuing operations		(65,780	)		(41,931	)		(14,253	)
Income (loss) from discontinued operations, net of tax benefit (provision) of $4,038, $(658) and $(52), respectively(7)		(4,214	)		(202	)		49
Net loss		(69,994	)		(42,133	)		(14,204	)
Redeemable Class B Senior Preferred stock dividend		(5,079	)		(4,188	)		(4,480	)
Loss attributable to common shareholders	$	(75,073	)	$	(46,321	)	$	(18,684	)
Basic and diluted loss per common share(8):
Loss from continuing operations	$	(78.67	)	$	(54.48	)	$	(37.77	)
Income (loss) from discontinued operations		(4.68	)		(0.24	)		0.10
Net loss	$	(83.35	)	$	(54.72	)	$	(37.67	)
Weighted average number of common shares outstanding, basic and diluted(8)		900,738			846,469			496,002
Statements of cash flows data:
Net cash provided by (used in):
Operating activities	$	(57,999	)	$	(7,001	)	$	(12,243	)
Investing activities		8,093			7,322			(4,861	)
Financing activities		(20,415	)		138			14,838

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	Year ended December 31,
(in thousands, except shares and per share data)	2010			2011			2012
Other financial data:
Depreciation and amortization	$	36,149		$	16,188		$	11,718
Capital expenditures		2,506			1,339			2,741
EBITDA(9)		(79,733	)		(45,435	)		(6,356	)
Adjusted EBITDA(9)		(57,987	)		(30,799	)		1,993
Balance sheet data (at period end):
Cash and cash equivalents	$	4,498		$	4,957		$	2,691
Total current assets		188,227			155,455			194,345
Property and equipment, net of accumulated depreciation		72,821			57,759			55,076
Total assets		294,970			254,641			286,012
Total debt		15,174			35,915			79,182
Redeemable preferred stock		50,809			54,997			41,477
Total stockholders’ equity(8)		122,229			51,426			33,987

(1) Includes depreciation expense of $5.7 million, $2.9 million and $2.5 million for the years ended December 31, 2010, 2011 and 2012, respectively.

(2) Includes severance expense of $1.6 million, $2.0 million and $0.5 million for the years ended December 31, 2010, 2011 and 2012, respectively.

(3) Impairment of assets held for sale represents the write down of such assets to the lower of depreciated cost or estimated fair value less expected disposition costs. See note (8) to our audited financial statements included elsewhere in this prospectus.

(4) Relates to store closures and workforce reductions in continuing markets.

(5) Represents the excess of the net assets acquired over the purchase price of certain assets and liabilities of NHC in April 2010. See note (3) to our audited financial statements included elsewhere in this prospectus.

(6) Includes $3.1 million, $1.9 million and $0.4 million of expense related to the reduction of a tax indemnification asset, with a corresponding increase in income tax benefit, for the years ended December 31, 2010, 2011 and 2012, respectively. This indemnification asset corresponds to the long-term liability related to uncertain tax positions for which Wolseley had indemnified the Company, which was reduced upon the expiration of the statute of limitations for certain tax periods. See note (14) to our audited financial statements included elsewhere in this prospectus.

(7) During the years ended December 31, 2010, 2011 and 2012, we ceased operations in certain geographic markets due to declines in residential homebuilding throughout the United States. The cessation of operations in these markets has been treated as discontinued operations as the markets had distinguishable cash flows and operations that have been eliminated from ongoing operations. See note (4) to our audited financial statements included elsewhere in this prospectus.

(8) We have adjusted our historical financial statements to retroactively reflect the conversion from a limited liability company to a corporation and the change of members’ equity to stockholders’ equity.

(9) EBITDA is defined as net loss before interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus impairment of assets held for sale, restructuring, severance and other expenses related to store closures and business optimization, bargain purchase gain, discontinued operations, management fees, non-cash compensation, acquisition costs, other expense resulting from the reduction of a tax indemnification asset and certain other items. Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. We believe that EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. Our management uses EBITDA and Adjusted EBITDA to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining management incentive compensation, and for

45

budgeting and planning purposes. These measures are used in monthly financial reports prepared for management and our board of directors. We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other distribution and retail companies, which may present similar non-GAAP financial measures to investors. Our management does not consider EBITDA or Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of EBITDA and Adjusted EBITDA is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; (ii) EBITDA and Adjusted EBITDA do not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt; (iii) EBITDA and Adjusted EBITDA do not reflect our income tax expenses or the cash requirements to pay our taxes; (iv) EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditure or contractual commitments; and (v) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. In order to compensate for these limitations, management presents EBITDA and Adjusted EBITDA in connection with GAAP results. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below, and not rely on any single financial measure to evaluate our business.

The following is a reconciliation of net loss to EBITDA and Adjusted EBITDA.

	Year ended December 31,
(dollars in thousands)	2010			2011			2012
Net loss	$	(69,994	)	$	(42,133	)	$	(14,204	)
Interest expense		1,575			2,842			4,037
Income tax benefit		(47,463	)		(22,332	)		(7,907	)
Depreciation and amortization		36,149			16,188			11,718
EBITDA	$	(79,733	)	$	(45,435	)	$	(6,356	)
Impairment of assets held for sale(a)		2,944			580			361
Restructuring, severance, other expense related to store closures and business optimization(b)		19,731			8,110			5,228
Bargain purchase gain(c)		(11,223	)		—			—
Discontinued operations, net of tax benefit(d)		4,214			202			(49	)
Management fees(e)		2,597			2,406			1,379
Non-cash compensation expense		288			384			799
Acquisition costs(f)		4,086			1,017			284
Reduction of tax indemnification asset(g)		3,056			1,937			347
Other items(h)		(3,947	)		—			—
Adjusted EBITDA	$	(57,987	)	$	(30,799	)	$	1,993

(a) See note (3) above.

(b) See notes (2) and (4) above. Also includes (i) $7.7 million, $3.9 million and $1.8 million for the year ended December 31, 2010, 2011 and 2012, respectively, related to closed locations, consisting of pre-tax losses incurred during closure and post-closure expenses, (ii) a $1.4 million loss on the sale of land and buildings in the year ended December 31, 2010, and (iii) $1.9 million, $0.9 million and $0 of business optimization expenses, primarily consulting fees related to cost saving initiatives, for the years ended December 31, 2010, 2011 and 2012, respectively.

(c) See note (5) above.

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(d) See note (7) above.

(e) Represents the expense for management services provided by Gores and its affiliates and by Wolseley through November 2011, other than $0.5 million that is included in income (loss) from discontinued operations the year ended December 31, 2010.

(f) Represents (i) $2.1 million and $2.0 million in the year ended December 31, 2010 related to the acquisition of NHC and Bison, respectively, (ii) $0.8 million and $0.2 million in the year ended December 31, 2011 related to an abandoned acquisition and the acquisition of Bison, respectively, and (iii) $0.2 million and $0.1 million in the year ended December 31, 2012 related to the acquisitions of TBSG and Chesapeake, respectively.

(g) See note (6) above.

(h) Represents (i) $0.7 million of expenses related to the Company’s prepackaged reorganization and (ii) $4.6 million received as proceeds from the settlement of a legal proceeding.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read this discussion and analysis in conjunction with our historical consolidated financial statements and the notes thereto included elsewhere in this prospectus. This discussion and analysis covers periods prior to this offering and related transactions. As a result, the discussion and analysis of historical periods does not reflect the impact that this offering, such conversion and other related transactions will have on us. Our historical results may not be indicative of our future performance. This discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those discussed in “Risk Factors.” Our actual results may differ materially from those contained in any forward-looking statements.

Overview

We are a large, diversified LBM distributor and solutions provider that sells to new construction and repair and remodel contractors. We carry a broad line of products and have operations throughout the United States. Our primary products are lumber & lumber sheet goods and structural components, including engineered wood, trusses and wall panels, millwork, doors, flooring, windows & other exterior products. Additionally, we provide solution-based services to our customers, including design, product specification and installation management services. We serve a broad customer base, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors, and we believe we are among the top three LBM suppliers for residential construction in 80% of the geographic markets in which we operate, based on net sales. We offer over 39,000 products sourced through our strategic network of suppliers, which together with our various solution-based services represent approximately 50% of the construction cost of a typical new home. By enabling our customers to source a significant portion of their materials and services from one supplier, we have positioned ourselves as the supply partner of choice for many of our customers.

We have operations in 13 states that accounted for approximately 48% of 2012 U.S. single-family housing permits according to the U.S. Census Bureau. We operate in 20 metropolitan areas in these 13 states that we believe have an attractive potential for economic growth based on population trends, increasing business activity and above-average employment growth.

Factors affecting our operating results

Our operating results and financial performance are influenced by a variety of factors, including conditions in the housing market and economic conditions generally, changes in the cost of the products we sell (particularly commodity products), pricing policies of our competitors, production schedules of our customers and seasonality. Some of the more important factors are briefly discussed below.

Conditions in the housing and construction market

The building products supply and services industry is highly dependent on new home construction and repair and remodeling activity, which in turn are dependent upon a number of factors, including interest rates, consumer confidence, employment rates, foreclosure rates, housing inventory levels, housing demand, the availability of land, the availability of construction financing and the health of the economy and mortgage markets. The homebuilding industry underwent a significant downturn that began in mid-2006 and began to stabilize in late 2011. The downturn in the homebuilding industry resulted in a substantial reduction in demand for our products and services, which in turn had a significant adverse effect on our business and operating results during fiscal years 2007 through 2012 and led to our filing for bankruptcy in 2009. As of February 2013, McGraw-Hill Construction forecasts

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that U.S. single-family housing starts will increase to 1.1 million by 2015. There is significant uncertainty regarding the timing and extent of any recovery in construction and repair and remodel activity and resulting product demand levels. The positive impact of a recovery on our business may also be dampened to the extent the average selling price or size of new single family homes decreases, which could cause homebuilders to decrease spending. We believe that, over the long-term, there is considerable growth potential in the U.S. housing sector.

We view single-family housing starts as a leading indicator of future business, but an additional driver of our results in any period is the number of housing units under construction (“HUC”). HUC has increased in the last year as a result of the increase in housing starts, although the HUC at the end of 2012 was roughly comparable to 2010 levels and growth in this metric has lagged the growth in housing starts during the early stages of the recent housing recovery.

Due to the low levels of housing starts and HUC relative to historical averages, continued competition for homebuilder business and growth in share of production homebuilders (see “—Consolidation of large homebuilders”), we have and may continue to experience pressure on our gross margins. Many industry forecasters expect to see continued improvement in housing demand over the next few years. We believe there are several trends that indicate U.S. housing demand will likely recover in the long term and that the recent downturn in the housing industry is likely a trough in the cyclical nature of the residential construction industry. We believe that these trends are supported by positive economic and demographic indicators that are beginning to take hold in many of the markets in which we operate. These indicators, which are typically indicative of housing market strength, include:

Ÿ declining unemployment rates;

Ÿ rising home values and improving household finances;

Ÿ rebounding household formations;

Ÿ improving sentiment towards ownership of residential real estate;

Ÿ declining levels of new and existing for-sale home inventory; and

Ÿ a favorable consumer interest rate environment supporting affordability and home ownership.

Overall economic conditions in the markets where we operate

Economic changes both nationally and locally in our markets impact our financial performance. Unfavorable changes in demographics, credit markets, consumer confidence, health care costs, housing affordability, housing inventory levels, a weakening of the national economy or of any regional or local economy in which we operate, and other factors beyond our control could adversely affect consumer spending, result in decreased demand for homes, and adversely affect our business. We believe continued employment growth, prospective home buyers’ access to financing, and improved consumer confidence will be necessary to increase household formation rates. Improved household formation rates in turn will increase demand for housing and stimulate new construction.

In addition, beginning in 2007, the mortgage markets experienced substantial disruption due to increased defaults, primarily as a result of credit quality deterioration. The disruption resulted in a stricter regulatory environment and reduced availability of mortgages for potential home buyers due to a tight credit market and stricter standards to qualify for mortgages. Mortgage financing and commercial credit for smaller homebuilders as well as for the development of new residential lots continue to be constrained. As the housing industry is dependent upon the economy and employment levels as well as potential home buyers’ access to mortgage financing and homebuilders’ access to commercial credit, it is likely that the housing industry will not fully recover until conditions in the economy and the credit markets improve and unemployment rates decline.

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Commodity nature of our products

Many of the building products we distribute, including lumber, OSB, plywood and particleboard, are commodities that are widely available from other manufacturers or distributors with prices and volumes determined frequently based on participants’ perceptions of short-term supply and demand factors. A shortage of capacity or excess capacity in the industry can result in significant increases or declines in market prices for those products, often within a short period of time. Prices of commodity products can also change as a result of national and international economic conditions, labor and freight costs, competition, market speculation, government regulation, and trade policies, as well as from periodic delays in the delivery of lumber and other products. Short-term changes in the cost of these materials, some of which are subject to significant fluctuations, are sometimes passed on to our customers, but our pricing quotation periods and pricing pressure from our competitors may limit our ability to pass on such price changes. For example, from time to time we enter into extended pricing commitments, which could compress our margins in periods of inflation.

The following table provides changes in the average composite framing lumber prices and average composite structural panel (a composite calculation based on index prices for OSB and plywood) as reflected by Random Lengths for the periods noted below.

	Year ended December 31,
	2010 versus 2009			2010 average price		2011 versus 2010			2011 average price		2012 versus 2011			2012 average price
Increase (decrease) in framing lumber prices		28	%	$	284		(4	)%	$	272		18	%	$	322
Increase (decrease) in structural panel prices		25	%	$	324		(10	)%	$	292		32	%	$	384

Periods of increasing prices provide the opportunity for higher sales and increased gross profit, while periods of declining prices may result in declines in sales and profitability. In particular, low market prices for wood products over a sustained period can adversely affect our financial condition, operating results and cash flows, as can excessive spikes in market prices. The increase in lumber and panel prices during the year ended December 31, 2012, compared with the same period in 2011, was one component of our improved net sales and gross profit for the year ended December 31, 2012, which increased $182.4 million and $45.8 million, respectively. For further discussion of the impact of commodity prices on historical periods, see “—Results of Operations.”

Consolidation of large homebuilders

Over the past ten years, the homebuilding industry has undergone consolidation, and many larger homebuilders have increased their market share. We expect that trend to continue as larger homebuilders have better liquidity and land positions relative to the smaller, less capitalized homebuilders. Our focus is on maintaining relationships and market share with these customers while balancing the competitive pressures we face in our markets with certain profitability expectations. Our sales to production homebuilders, which include many of the country’s largest 100 homebuilders, increased 36.0% during 2012, compared to a 24.3% increase in actual U.S. single-family housing starts for the year. We expect that our ability to maintain strong relationships with the largest builders will be vital to our ability to expand into new markets as well as grow our market share. While we generate significant sales from these homebuilders, our margins on sales to them tend to be lower than our margins on sales to other market segments, which would impact our margins as homebuilding recovers if the market share held by the production homebuilders continues to increase.

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Seasonality

Our first and fourth quarters have historically been, and are generally expected to continue to be, adversely affected by weather patterns in some of our markets, causing reduced construction activity. In addition, quarterly results historically have reflected, and are expected to continue to reflect, fluctuations from period to period arising from the following:

Ÿ the volatility of lumber prices;

Ÿ the cyclical nature of the homebuilding industry;

Ÿ general economic conditions in the markets in which we compete;

Ÿ the pricing policies of our competitors;

Ÿ the production schedules of our customers; and

Ÿ the effects of weather.

The composition and level of working capital typically change during periods of increasing sales as we carry more inventory and receivables, although this is generally offset in part by higher trade payables to our suppliers. Working capital levels typically increase in the second and third quarters of the year due to higher sales during the peak residential construction season. These increases have in the past resulted in negative operating cash flows during this peak season, which historically have been financed through available cash or excess availability on our Revolver. Collection of receivables and reduction in inventory levels following the peak building and construction season have in the past positively impacted cash flow. In the past, we have also utilized our borrowing availability under credit facilities to cover working capital needs.

Our ability to control expenses

We pay close attention to managing our working capital and operating expenses. We employ a LEAN process operating philosophy, which encourages continuous improvement in our core processes to minimize waste, improve customer service, increase expense productivity, improve working capital, and maximize profitability and cash flow. We regularly analyze our workforce productivity to achieve the optimum, cost-efficient labor mix for our facilities. Further, we pay careful attention to our logistics function and have implemented GPS-based technology to improve customer service and improve productivity of our shipping and handling costs.

Mix of products sold

We typically realize greater gross margins on more highly engineered and customized products, or ancillary products that are often purchased based on convenience and are therefore less price sensitive to our customers. For example, sales of lumber & lumber sheet goods tend to generate lower gross margins due to their commodity nature and the relatively low switching costs of sourcing those products from different suppliers. Structural components and millwork & other interior products often generate higher gross profit dollars relative to other products. Prior to the housing downturn, homebuilders were increasingly using structural components in order to realize increased efficiency and improved quality. Shortening cycle time from start to completion was a key imperative of homebuilders during periods of strong consumer demand. During the housing downturn, that trend decelerated as cycle time had less relevance. Customers who traditionally used structural components, for the most part, still do. However, the conversion of customers to this product offering has slowed. We expect this trend to reverse as the residential new construction market continues to strengthen.

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Changes in sales mix among construction segments

Our operating results may vary according to the amount and type of products we sell to each of our four primary construction segments: new single-family construction, remodeling, multi-family and light commercial. We tend to realize higher margins on sales to the remodeling segment due to the smaller product volumes purchased by those customers, as well as the more customized nature of the projects those customers generally undertake. Gross margins within the new single-family, multi-family and light commercial construction segments can vary based on a variety of factors, including the purchase volumes of the individual customer, the mix of products sold to that customer, the size and selling price of the project being constructed, and the number of upgrades added to the project before or during its construction.

Freight costs and fuel charges

A portion of our shipping and handling costs is comprised of diesel or other fuels purchased for our delivery fleet. According to the U.S. Energy Information Administration, the average retail price per gallon for No. 2 diesel fuel was $2.99, $3.85 and $3.97 during 2010, 2011 and 2012, respectively. For the year ended December 31, 2012, we incurred costs of approximately $8.9 million within selling, general and administrative expenses for diesel and other fuels. Future increases in the cost of fuel, or inbound freight costs for the products we purchase, could impact our operating results and cash flows if we are unable to pass along these cost increases to our customers through increased prices.

Certain factors affecting our financial statements

Discontinued operations and divestitures

During the years ended December 31, 2010, 2011 and 2012, we ceased operations in certain geographic markets due to declines in residential homebuilding throughout the United States and other strategic reasons. We will have no further significant continuing operations in the sold operations and exited geographic markets. The cessation of operations in these markets has been treated as discontinued operations as the markets had distinguishable cash flows and operations that have been eliminated from ongoing operations.

On April 30, 2010, we sold our Commercial Door and Hardware operations (“CDH”) to an external party for proceeds of $26.1 million. CDH consisted of twelve locations in six states and was sold in order to focus on our core residential building materials business. We recognized a loss on the sale of CDH of $0.8 million, net of transaction fees of $1.4 million.

On January 11, 2010, we sold our subsidiary, Universal Supply, LLC (“US”), to an external party for proceeds of $20.8 million. US consisted of eight roofing and siding stores in New Jersey, and was sold in order to focus on our core residential building materials business. We recognized a gain on the sale of US of $1.5 million, net of transaction fees of $1.0 million.

Restructuring expenses

During each of 2010, 2011 and 2012, in addition to discontinuing operations in certain markets as described above, we instituted several store closures and reductions in headcount in continuing markets (the “Restructurings”) in an effort to: (i) strengthen our competitive position; (ii) reduce costs and (iii) improve operating margins within existing markets that management believes have favorable long-term growth demographics.

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For the year ended December 31, 2012, we recognized restructuring charges of $2.9 million from continuing operations and $0.1 million from discontinued operations. For the year ended December 31, 2011, we recognized restructuring charges of $1.3 million from continuing operations and $1.0 million from discontinued operations. For the year ended December 31, 2010, we recognized restructuring charges of $7.1 million from continuing operations and $0.1 million from discontinued operations. No additional costs are expected to be incurred related to the Restructurings for future periods.

Acquisitions

During 2010 and 2012, we acquired three businesses: Bison and NHC in 2010, and TBSG in 2012. As a result of these acquisitions, our revenues for the year ended December 31, 2011 increased by approximately $43.2 million compared to the year ended December 31, 2010. TBSG was acquired on December 21, 2012 and did not have a material impact on our 2012 operating results.

Operating results

The following tables set forth our operating results in dollars and as a percentage of net sales for the periods indicated.

(dollars in thousands)	2010					2011					2012
Net sales	$	751,706		100.0	%	$	759,982		100.0	%	$	942,398		100.0	%
Cost of goods sold		587,692		78.2			591,017		77.8			727,670		77.2
Gross profit		164,014		21.8			168,965		22.2			214,728		22.8
Operating expenses:
Selling, general and administrative expenses		246,338		32.8			213,036		28.0			220,686		23.4
Depreciation expense		29,337		3.9			11,844		1.5			7,759		0.9
Amortization expense		1,140		0.2			1,457		0.2			1,470		0.2
Impairment of assets held for sale		2,944		0.4			580		0.1			361		0.0
Restructuring expense		7,089		0.9			1,349		0.2			2,853		0.3
Loss from operations		(122,834	)	(16.4	)		(59,301	)	(7.8	)		(18,401	)	(2.0	)
Other income (expenses):
Bargain purchase gain		11,223		1.5			—		—			—		—
Interest expense, net		(1,575	)	(0.2	)		(2,842	)	(0.4	)		(4,037	)	(0.4	)
Other income (expense), net		(57	)	(0.0	)		(2,120	)	(0.3	)		278		0.0
Loss from continuing operations before income taxes		(113,243	)	(15.1	)		(64,263	)	(8.5	)		(22,160	)	(2.4	)
Income tax benefit		47,463		6.3			22,332		2.9			7,907		0.8
Loss from continuing operations		(65,780	)	(8.8	)		(41,931	)	(5.5	)		(14,253	)	(1.5	)
Income (loss) from discontinued operations, net of tax benefit (provision) of $(52), $(658) and $4,038, respectively		(4,214	)	(0.6	)		(202	)	(0.0	)		49		0.0
Net loss	$	(69,994	)	(9.3	)%	$	(42,133	)	(5.5	)%	$	(14,204	)	(1.5	)%

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2012 compared to 2011

Net sales

For the year ended December 31, 2012, net sales increased $182.4 million, or 24.0%, to $942.4 million from $760.0 million during the year ended December 31, 2011, driven primarily by increases in housing starts in the markets we serve, as well as inflation in commodity products. According to the U.S. Census Bureau, single-family housing starts, which were the primary driver for approximately 75% of our 2012 net sales, increased 24.3% for the year, compared with 2011. We estimate our sales volume increased approximately 19.5%, while commodity price inflation resulted in an additional 4.5% increase in net sales during 2012 compared to 2011.

The following table shows net sales classified by major product category.

	2011					2012
(dollars in thousands)	Sales		% of Sales			Sales		% of Sales			% Change
Structural components	$	87,542		11.5	%	$	106,745		11.3	%		21.9	%
Millwork & other interior products		143,128		18.8			178,449		18.9			24.7
Lumber & lumber sheet goods		247,299		32.6			333,952		35.5			35.0
Windows & other exterior products		178,361		23.5			202,532		21.5			13.6
Other building products & services		103,652		13.6			120,720		12.8			16.5
Total net sales	$	759,982		100.0	%	$	942,398		100.0	%		24.0	%

Increased sales volume was achieved across all product categories. Average selling prices for lumber & lumber sheet goods were approximately 13.9% higher in 2012, compared to 2011. During 2012, prices rose to a level not seen on a consistent basis since 2005 and 2006. This commodity price inflation has resulted in net sales growth for lumber & lumber sheet goods exceeding that of our other product categories. Windows & other exterior products, and other building products & services include subcategories, such as roofing, siding and hardware, which are driven more by the repair and remodeling market and therefore experienced slower growth in net sales volumes than other product categories.

Cost of goods sold

For the year ended December 31, 2012, cost of goods sold increased $136.7 million, or 23.1%, to $727.7 million from $591.0 million during the year ended December 31, 2011, driven primarily by increased sales volumes and material cost inflation.

Gross profit

For the year ended December 31, 2012, gross profit increased $45.8 million, or 27.1%, to $214.7 million from $169.0 million during the year ended December 31, 2011, driven primarily by increased sales volumes. Our gross profit as a percentage of net sales increased to 22.8% in 2012 from 22.2% in 2011, primarily as a result of spreading fixed costs over a larger sales base and operational improvements.

Operating expenses

For the year ended December 31, 2012, selling, general and administrative expenses increased $7.7 million, or 3.6%, to $220.7 million from $213.0 million during the year ended December 31, 2011. This was driven primarily by variable costs to serve higher sales volumes, such as sales commissions, shipping and handling costs and other variable compensation, which increased by $7.3 million in the aggregate in 2012 as compared to the prior year.

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For the year ended December 31, 2012, depreciation expense decreased $4.1 million, or 34.5%, to $7.8 million from $11.8 million during the year ended December 31, 2011, driven primarily by a reduction in the size of our distribution fleet and the full depreciation of certain fixed assets.

For the year ended December 31, 2012, amortization expense of $1.5 million was unchanged from $1.5 million during the year ended December 31, 2011, and represented the amortization of intangible assets arising from the acquisitions of certain businesses in prior years.

For the year ended December 31, 2012, impairment of assets held for sale of $0.4 million decreased from $0.6 million during the year ended December 31, 2011, driven primarily by a reduction in the number of assets identified as excess or underutilized and offered for sale.

For the year ended December 31, 2012, restructuring expense of $2.9 million increased from $1.3 million during the year ended December 31, 2011. This increase resulted primarily from management’s determination that subleasing closed properties could no longer be reasonably assumed, which resulted in a revised estimate of our restructuring reserves.

Other income (expenses)

Interest expense.    For the year ended December 31, 2012, interest expense increased $1.2 million, or 42.0%, to $4.0 million from $2.8 million during the year ended December 31, 2011, driven primarily by increased average daily borrowings under our revolving line of credit. The increase in average daily borrowings was primarily the result of cash used by operations of $7.0 million and $12.2 million in 2011 and 2012, respectively, the redemption of Class A preferred shares and Class A common shares for $25.0 million in 2011, and the redemption of Class B preferred shares and payment of dividends totaling $23.0 million in 2012. These uses, partially offset by cash provided from other activities, increased the balance on the Revolver by $20.9 million in 2011 and $38.4 million in 2012.

Other income (expense), net.    For the year ended December 31, 2012, other income, net was $0.3 million, compared to other expense, net of $2.1 million during the year ended December 31, 2011. This change was driven primarily by a reduction in expense associated with the write-off of a tax indemnification asset.

Income tax benefit from continuing operations

For the year ended December 31, 2012, income tax benefit from continuing operations decreased $14.4 million, or 64.6%, to $7.9 million from $22.3 million during the year ended December 31, 2011, driven primarily by a reduction in our loss from continuing operations before income taxes. Our effective tax rate for 2012 was 35.7% compared to 34.8% for 2011.

2011 compared to 2010

Net sales

For the year ended December 31, 2011, net sales increased $8.3 million, or 1.1%, to $760.0 million from $751.7 million during the year ended December 31, 2010. According to the U.S. Census Bureau, single-family housing starts, which were the primary driver for approximately 71% of our 2011 net sales, decreased 8.6% for the year, compared with 2010. We estimate our sales volume increased approximately 3.0%, including approximately $43.2 million in net sales from 2010 acquisitions, while commodity price deflation resulted in a 1.9% decrease in net sales during 2011 compared to 2010.

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The following table shows net sales classified by major product category.

	2010					2011
(dollars in thousands)	Sales		% of sales			Sales		% of sales			% change
Structural components	$	89,885		12.0	%	$	87,542		11.5	%		(2.6	)%
Millwork & other interior products		137,315		18.3			143,128		18.8			4.2
Lumber & lumber sheet goods		237,003		31.5			247,299		32.6			4.3
Windows & other exterior products		184,007		24.4			178,361		23.5			(3.1	)
Other building products & services		103,496		13.8			103,652		13.6			0.2
Total net sales	$	751,706		100.0	%	$	759,982		100.0	%		1.1	%

Sales volumes for millwork & other interior products, lumber & lumber sheet goods and other building products & services increased primarily as a result of incremental net sales from 2010 acquisitions. Sales for structural components and windows & other exterior products declined primarily as a result of the decline in single-family housing starts from 2010 to 2011.

Cost of goods sold

For the year ended December 31, 2011, cost of goods sold increased $3.3 million, or 0.6%, to $591.0 million from $587.7 million during the year ended December 31, 2010, driven primarily by increased sales volumes.

Gross profit

For the year ended December 31, 2011, gross profit increased $5.0 million, or 3.0%, to $169.0 million from $164.0 million during the year ended December 31, 2010, driven primarily by increased sales volumes and a reduction in depreciation expense within our cost of goods sold. Our gross profit as a percentage of net sales increased to 22.2% in 2011 from 21.8% in 2010, primarily due to a decrease in depreciation expense within cost of goods sold of $2.9 million, resulting from the full depreciation of certain fixed assets and a reduction in the number of manufacturing operations during 2010.

Operating expenses

For the year ended December 31, 2011, selling, general and administrative expenses decreased $33.3 million, or 13.5%, to $213.0 million from $246.3 million during the year ended December 31, 2010, driven primarily by the benefits from restructuring and other cost reduction initiatives undertaken in 2010 and 2011.

For the year ended December 31, 2011, depreciation expense decreased $17.5 million, or 59.6%, to $11.8 million from $29.3 million during the year ended December 31, 2010, driven primarily by the full depreciation of certain fixed assets and to a lesser extent, the reduction in the size of our distribution fleet.

For the year ended December 31, 2011, amortization expense increased $0.3 million, or 27.8%, to $1.5 million from $1.1 million during the year ended December 31, 2010, driven primarily by the full year impact of the amortization of intangible assets arising from the acquisitions of NHC and Bison in 2010.

For the year ended December 31, 2011, impairment of assets held for sale of $0.6 million decreased from $2.9 million during the year ended December 31, 2010, driven primarily by a reduction in the number of new assets identified as excess or underutilized and offered for sale.

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For the year ended December 31, 2011, restructuring expense of $1.3 million decreased from $7.1 million during the year ended December 31, 2010. This decrease resulted primarily from a reduction in the number of store closures and workforce reductions that give rise to restructuring expense.

Other income (expenses)

Interest expense.    For the year ended December 31, 2011, interest expense increased $1.3 million, or 80.4%, to $2.8 million from $1.6 million during the year ended December 31, 2010, driven primarily by increased average daily borrowings under our revolving line of credit. The increase in average daily borrowings was primarily the result of cash used by operations of $58.0 million and $7.0 million in 2010 and 2011, respectively, the redemption of Class B preferred shares and payment of dividends totaling $32.3 million in 2010, and the redemption of Class A preferred shares and Class A common shares for $25.0 million in 2011. These uses, partially offset by cash provided by other activities, reduced cash and cash equivalents by $70.3 million in 2010, and increased the balance on the Revolver by $13.0 million in 2010 and $20.9 million in 2011.

Other income (expense), net.    For the year ended December 31, 2011, other expense, net increased $2.0 million, to $2.1 million from $0.1 million during the year ended December 31, 2010. This was driven primarily by a decrease in other income associated with legal settlement proceeds received in 2010, and partially offset by a decrease in other expense associated with the write-off of a tax indemnification asset.

Income tax benefit from continuing operations

For the year ended December 31, 2011, income tax benefit decreased $25.1 million, or 52.9%, to $22.3 million from $47.5 million during the year ended December 31, 2010, driven primarily by a reduction in our losses from continuing operations before income taxes. Our effective tax rate for 2011 was 34.8% compared to 41.9% for 2010. The decrease in our effective tax rate was primarily due to an increase in our valuation allowance and certain nondeductible (permanent) items in 2011 as compared to 2010.

Liquidity and capital resources

Our primary capital requirements are to fund working capital needs and operating expenses, meet required interest and principal payments, and fund capital expenditures. Since 2010, our capital resources have primarily consisted of cash and cash equivalents and borrowings under our Revolver.

The homebuilding industry, and therefore our business, experienced a significant downturn that started in 2006. However, activity improved as 2012 saw the first meaningful increase in housing starts since the downturn began. We are expecting increased stability and continued improvement in the housing industry in 2013. Beyond 2013, it is difficult for us to predict what will happen as our industry is dependent on a number of factors, including national economic conditions, employment levels, the availability of credit for homebuilders and potential home buyers, the level of foreclosures, existing home inventory, and interest rates. Due to the effects of the significant housing industry downturn, our operations incurred operating losses and used cash for operations for the years ended December 31, 2010, 2011 and 2012. We are not expecting our cash flows from operations to be positive in 2013 due primarily to increased working capital requirements related to increasing revenues.

Our liquidity at December 31, 2012 was $34.0 million, which includes $2.7 million in cash and cash equivalents and $31.3 million of unused borrowing capacity under our Revolver.

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We believe that our cash flows from operations, combined with our current cash levels, the proceeds from this offering and available borrowing capacity, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations and working capital for at least the next 12 months.

Historical cash flow information

Working capital

Working capital (current assets excluding cash and cash equivalents and restricted assets minus current liabilities excluding our Revolver) was $97.9 million, $68.6 million and $81.1 million as of December 31, 2010, 2011 and 2012, respectively, as summarized in the following table.

	As of December 31,
	2010			2011			2012
(dollars in thousands)
Working capital:
Accounts receivable, net	$	66,283		$	65,206		$	90,297
Inventories, net		64,275			49,682			73,918
Income taxes receivable (payable)		18,091			9,171			(3,116	)
Accounts payable		(46,181	)		(45,019	)		(74,231	)
Other current assets (liabilities), net		(4,585	)		(10,399	)		(5,740	)
Total	$	97,883		$	68,641		$	81,128

Accounts receivable, net, declined $1.1 million from December 31, 2010 to December 31, 2011 and increased $25.1 million from December 31, 2011 to December 31, 2012, primarily as a result of changes in net sales. Days sales outstanding at December 31, 2010, 2011 and 2012 (measured against net sales in the fourth fiscal quarter of each year) were approximately 36, 33 and 33 days, respectively.

Inventories, net, declined $14.6 million from December 31, 2010 to December 31, 2011 due to a reduction in the number of days of inventory on hand and an approximately 3% decline in the Random Lengths composite lumber index in the fourth quarter of 2011 compared to the fourth quarter of 2010. Inventories, net increased $24.2 million from December 31, 2011 to December 31, 2012 due to increases in net sales and an approximately 33% and 44% increase in the Random Lengths composite lumber and structural panel indices, respectively, in the fourth quarter of 2012 compared to the fourth quarter of 2011. In response to rising commodity costs, during the fourth quarter of 2012, the Company purchased additional commodity inventory in excess of immediate needs in order to maintain a lower inventory cost basis. Inventory days on hand at December 31, 2010, 2011 and 2012 (measured against cost of goods sold in the fourth fiscal quarter of each year) were approximately 43, 32 and 35 days, respectively.

Income taxes receivable declined $8.9 million from December 31, 2010 to December 31, 2011 due to the collection of tax refunds related to net operating loss carrybacks totaling $24.8 million in 2011 and a reduction in the taxable losses generated by the Company in the tax year ended March 31, 2012 as compared to the tax year ended March 31, 2011. The change from income taxes receivable of $9.2 million at December 31, 2011 to income taxes payable of $3.1 million at December 31, 2012 primarily resulted from the collection of tax refunds totaling $16.4 million in 2012 and a $2.9 million liability as of December 31, 2012 for taxes, interest and penalties related to certain IRS audits. See note 14 to our audited financial statements included elsewhere in this prospectus.

Accounts payable declined $1.2 million from December 31, 2010 to December 31, 2011 and increased $29.2 million from December 31, 2011 to December 31, 2012, primarily as a result of changes in inventory purchases in the fourth quarter of each fiscal year.

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Other current assets (liabilities), net, increased $5.8 million from December 31, 2010 to December 31, 2011 and declined $4.7 million from December 31, 2011 to December 31, 2012 primarily as a result of a $5.0 million reserve for future share issuance to Gores Holdings at December 31, 2011. On January 26, 2012, the Company issued Gores Holdings 5,000 Class C Convertible Preferred shares to satisfy this liability. See notes 10, 13 and 16 to our audited financial statements included elsewhere in this prospectus.

Cash flows from operating activities

Net cash used by operating activities was $58.0 million during 2010, $7.0 million during 2011 and $12.2 million during 2012, as summarized in the following table.

	Year ended December 31,
	2010			2011			2012
(dollars in thousands)
Operating cash flows:
Net loss	$	(69,994	)	$	(42,133	)	$	(14,204	)
Non-cash expenses		47,691			21,014			16,284
(Gain) loss on bargain purchase and sale of assets and operations		(12,351	)		(2,609	)		169
Change in deferred income taxes		(25,046	)		(5,926	)		(3,633	)
Change in working capital and other		1,701			22,653			(10,859	)
Total	$	(57,999	)	$	(7,001	)	$	(12,243	)

Net cash used by operating activities declined by $51.0 million in 2011 as compared to 2010 primarily due to the following:

Ÿ Net loss declined by $27.9 million as discussed in “Operating results” above.

Ÿ Non-cash expenses declined by $26.7 million due to a reduction in depreciation expense of $23.6 million resulting from the full depreciation of certain fixed assets and a reduction in the impairment of assets held for sale of $3.0 million, which occurred primarily in 2010 due to declines in the value of certain real estate held for sale and the discontinuation of certain operations.

Ÿ Gain on bargain purchase of $11.2 million and gain on sale of operations of $3.1 million occurred in 2010 resulting from the purchase of NHC and the sale of certain operations. See notes 3 and 4 to our audited financial statements included elsewhere in this prospectus. Gain on the sale of assets of $2.6 million in 2011 primarily resulted from the sale of excess equipment and delivery vehicles.

Ÿ Change in deferred income taxes declined by $19.1 million due to a reduction in the timing differences between our losses before income taxes under GAAP and our taxable income. The reduction in timing differences primarily resulted from the decrease in depreciation expense as well as the sale of certain operations in 2010.

Ÿ Changes in working capital and other increased by $21.0 million due primarily to the decrease in working capital during 2011 discussed above.

Net cash used by operating activities increased by $5.2 million in 2012 as compared to 2011 primarily due to the following:

Ÿ Net loss declined by $27.9 million as discussed in “Operating Results” above.

Ÿ Non-cash expenses declined by $4.7 million due primarily to a reduction in depreciation expense of $5.0 million primarily resulting from the full depreciation of certain fixed assets.

Ÿ Loss on sales of assets of $0.2 million in 2012 declined from a gain of $2.6 million in 2011 as a result of fewer disposals of excess equipment and vehicles.

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Ÿ Change in deferred income taxes declined by $2.3 million due to a reduction in the timing differences between our losses before income taxes under GAAP and our taxable income. The reduction in timing differences primarily resulted from the decrease in depreciation expense from 2011 to 2012.

Ÿ Changes in working capital and other decreased by $33.5 million due primarily to the increase in working capital during 2012 discussed above.

Cash flows from investing activities

Net cash provided by (used in) investing activities was $8.1 million during 2010, $7.3 million during 2011 and ($4.9) million during 2012, as summarized in the following table.

	Year ended December 31,
	2010			2011			2012
(dollars in thousands)
Investing cash flows:
Purchases of property and equipment	$	(2,506	)	$	(1,339	)	$	(2,741	)
Purchases of businesses		(49,848	)		—			(6,582	)
Proceeds from real estate, property and equipment		23,513			6,106			1,393
Proceeds from sale of operations		46,831			—			—
Change in restricted assets		(9,897	)		2,555			3,069
Total	$	8,093		$	7,322		$	(4,861	)

Cash used for the purchase of property and equipment in 2010, 2011 and 2012 primarily resulted from the replacement of certain aged vehicles and equipment in order to minimize maintenance costs and asset down time.

Cash used for the purchase of businesses resulted from the acquisitions of Bison and NHC in 2010 and TBSG in 2012, and also included an advance of $0.9 million to the sellers of TBSG against future earnout payments. See note 3 of our audited financial statements included elsewhere in this prospectus.

Cash provided by the sale of real estate, property and equipment declined by $17.4 million from 2010 to 2011 and declined by $4.7 million from 2011 to 2012. The proceeds generated in 2010 primarily resulted from the sale of excess or underutilized assets arising from our restructuring and business optimization activities. In 2011 and 2012, as restructuring activities declined and sales volumes increased, fewer excess or underutilized assets were identified for disposal.

Cash provided by the sale of operations resulted from the disposal of CDH and US. See note 4 of our audited financial statements included elsewhere in this prospectus.

Cash used by restricted assets in 2010 resulted primarily from cash deposits to pre-fund expected losses for self-insured casualty and health claims, deposits for surety bonds, and proceeds from the sale of operations which were held in escrow. Cash provided by restricted assets in 2011 and 2012 resulted from the use of those deposits to pay claims and the release of excess deposits and escrow funds to the Company. See note 2 of our audited financial statements included elsewhere in this prospectus.

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Cash flows from financing activities

Net cash provided by (used in) financing activities was ($20.4) million during 2010, $0.1 million during 2011 and $14.8 million during 2012, as summarized in the following table.

	Year ended December 31,
	2010			2011			2012
(dollars in thousands)
Financing cash flows:
Proceeds from Revolver, net of repayments	$	13,000		$	20,850		$	38,368
Redemption of Class A junior preferred and Class A common stock		—			(25,000	)		—
Dividends paid and redemption of Class B senior preferred stock		(32,300	)		—			(23,000	)
Cash received for Class C convertible preferred stock		—			5,000			—
Payments on capital leases and other		(1,115	)		(712	)		(530	)
Total	$	(20,415	)	$	138		$	14,838

Proceeds from the Revolver were primarily used to fund cash used by operating activities in 2010, 2011 and 2012, cash used by investing activities in 2012 and other uses of cash from financing activities.

In 2011, we redeemed the Class A junior preferred and Class A common shares owned by Wolseley for $25.0 million. See note 1 of our audited financial statements included elsewhere in this prospectus.

In 2010 and 2012, the Company paid accrued dividends of $6.1 million and $10.6 million, respectively, and redeemed 26,240 and 12,372 shares of Class B senior preferred stock for $26.2 million and $12.4 million, respectively.

In 2011, the Company received $5.0 million from Gores Holdings, which was included in current liabilities at December 31, 2011 and in January 2012 issued 5,000 shares of Class C convertible preferred stock to settle this liability.

Payments on capital leases and other relate primarily to principal payments due under capital leases.

Capital expenditures

Capital expenditures vary depending on prevailing business factors, including current and anticipated market conditions. Historically, capital expenditures have for the most part remained at relatively low levels in comparison to the operating cash flows generated during the corresponding periods. We expect our 2013 capital expenditures to be approximately $10.0 to $20.0 million (including the incurrence of capital lease obligations) primarily related to rolling stock and equipment, including lease buyouts, and facility improvements to support our operations.

Revolving credit facility

On June 30, 2009, we entered into the Credit Agreement with WFCF which includes the Revolver. The Credit Agreement was amended during 2010, 2011 and 2012. The Revolver matures on December 11, 2015, and has a maximum availability of $150.0 million, subject to an asset borrowing formula based on eligible accounts receivable and inventory. The Company was in compliance with all debt covenants for the year ended December 31, 2012.

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Borrowings under the Revolver bear interest, at our option, at either the Base Rate (which means the higher of (i) the Federal Funds Rate plus 0.5% or (ii) the prime rate) plus a Base Rate Margin (which ranges from 1.25% to 1.75% based on Revolver availability) or LIBOR plus a LIBOR Rate Margin (which ranges from 2.25% to 2.75% based on Revolver availability).

The Credit Agreement provides that we can use the Revolver availability to issue letters of credit. The fees on any outstanding letters of credit issued under the Revolver include a participation fee equal to the LIBOR Rate Margin. The fee on the unused portion of the Revolver is 0.375% if the average daily usage is $75 million or below and 0.25% if the average daily usage is above $75 million. The Credit Agreement contains customary nonfinancial covenants, including restrictions on new indebtedness, issuance of liens, investments, distributions to equityholders, asset sales and affiliate transactions. The Credit Agreement also includes financial covenants that require us to maintain a minimum Fixed Charge Coverage Ratio of 1.0x, as defined in the Credit Agreement. However, the covenants are only applicable if the sum of availability under the Revolver plus Qualified Cash falls below $15 million at any time or is between $15 million and $20 million for a period of 5 consecutive business days, and remains in effect until the sum of availability under the Revolver plus Qualified Cash exceeds $20 million for 30 consecutive days. While there can be no assurances, based upon the Company’s forecast, the Company does not expect the covenant to become applicable during the year ended December 31, 2013. However, while we would currently satisfy this covenant if it were applicable, should this not be the case, we would evaluate our liquidity options including, amending the Credit Agreement, seeking alternative financing arrangements of debt and/or equity, and/or sale of assets. No assurances can be given that such alternative financing would be available, or if available, under terms similar to our existing Credit Agreement or that we would be able to sell assets on a timely basis.

We had outstanding borrowings of $72.2 million with net availability of $31.3 million as of December 31, 2012. The interest rate on outstanding borrowings was 5.0% for base rate borrowings of $7.2 million and ranged from 3.1% to 3.3% on LIBOR borrowings of $65.0 million as of December 31, 2012. We had $7.6 million in letters of credit outstanding under the Credit Agreement as of December 31, 2012. The Revolver is collateralized by substantially all of our assets.

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Contractual obligations and commercial commitments

In the table below, we set forth our enforceable and legally binding obligations as of December 31, 2012. Some of the amounts included in the table are based on management’s estimates and assumptions about these obligations, including their duration, the possibility of renewal, anticipated actions by third parties and other factors. Because these estimates and assumptions are necessarily subjective, our actual payments may vary from those reflected in the table. Purchase orders made in the ordinary course of business and commitments that are cancellable on 30 days’ notice are excluded from the table below. Any amounts for which we are liable under purchase orders are reflected on the consolidated balance sheets as accounts payable and accrued liabilities.

	Payments due by period
Contractual obligations	Total		2013		2014-2015		2016-2017		Thereafter
Revolver obligations(1)	$	72.6	$	0.4	$	72.2	$	—	$	—
Capital lease obligations(2)		9.1		1.7		2.0		1.4		4.0
Operating lease obligations(3)		77.7		18.9		29.1		17.3		12.4
Purchase commitments(4)		1.3		0.2		0.5		0.4		0.2
Earn-out obligations(5)		0.2		—		0.2		—		—
Total	$	160.9	$	21.2	$	104.0	$	19.1	$	16.6

(1) Represents principal of $72.2 million and interest payments outstanding on our Revolver of $0.4 million on December 31, 2012, based on interest rates in effect on December 31, 2012, which ranged from 3.1% to 5.0%. To the extent that a decrease in eligible accounts receivable and inventory reduces the maximum availability under the Revolver below the amount then outstanding, amounts outstanding could become due sooner than reflected in the table.

(2) Consists of payments under our capital leases for fleet vehicles and various equipment. For further information refer to note 15 to our audited financial statements included elsewhere in this prospectus.

(3) Represents payments under our operating leases, primarily for buildings, improvements, and equipment. For further information refer to note 15 to our audited financial statements included elsewhere in this prospectus.

(4) Consists of obligations to purchase vehicles and office equipment under capital leases, which are enforceable and legally binding on us. Excludes purchase orders made in the ordinary course of business that are short-term or cancellable.

(5) Under the asset purchase agreement to acquire the assets of TBSG, we agreed to pay the sellers a cash earn-out based on the performance of the business acquired. As of December 31, 2012, the Company estimated the undiscounted value of the earn-out to be $1.1 million, which has been reduced by $0.9 million that the Company advanced to the sellers against future earn-out payments. For further information refer to note 3 to our audited financial statements for the year ended December 31, 2012 included elsewhere in this prospectus.

Off-balance sheet arrangements

At December 31, 2012 and 2011, other than operating leases described above and letters of credit issued under the Credit Agreement, we had no material off-balance sheet arrangements with unconsolidated entities.

Seasonal and inflationary influences

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors. These seasonal factors are common in the building products industry. Seasonal changes in levels of building activity affect our building products businesses, which are dependent on housing starts, repair

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and remodel activities and light commercial construction activities. We typically report lower sales in the first and fourth quarters due to the impact of poor weather on the construction market and we generally have higher sales in the second and third quarters, reflecting an increase in construction due to more favorable weather conditions. We typically have higher working capital in the second and third quarters due to the summer building season. Seasonally cold weather increases costs, especially energy consumption, at most of our manufacturing facilities.

Quantitative and qualitative disclosures about market risk

In the normal course of business, we are exposed to financial risks such as changes in interest rates and commodity price risk.

Interest rate risk

When we have loan amounts outstanding on our Revolver, we are exposed to interest rate risk arising from fluctuations in interest rates. During 2010, 2011 and 2012 we did not use any interest rate swap contracts to manage this risk. A 1% increase in interest rates on our variable-rate debt would increase our annual forecasted interest expense by approximately $0.7 million (based on our borrowings as of December 31, 2012).

Commodity price risk

Many of the products we purchase and resell are commodities whose price is determined by the market’s supply and demand for such products. Price fluctuations in our selling prices and key costs have a significant effect on our financial performance. The markets for most of these commodities are cyclical and are affected by factors such as global economic conditions, including the strength of the U.S. housing market, changes in, or disruptions to, industry production capacity, changes in inventory levels and other factors beyond our control. During 2010, 2011 and 2012, we did not manage commodity price risk with derivative instruments, except for certain immaterial lumber futures contracts that we entered into during 2011 and 2012.

Critical accounting policies and pronouncements

Our discussion and analysis of operating results and financial condition are based upon our audited financial statements. The preparation of our financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our critical accounting policies are those that materially affect our financial statements and involve difficult, subjective or complex judgments by management. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be materially different from the estimates.

We believe the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our consolidated financial statements and that the judgments and estimates are reasonable.

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Revenue recognition

We recognize revenue when products are shipped and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. All sales recognized are net of allowances for discounts and estimated returns, based on historical experience.

We generally recognize revenues from contracts with service elements on the completed contract basis, as these contracts generally are completed within 30 days. Revenues from certain contracts with service elements, which are generally greater than 30 days, are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated costs for each contract. Costs of goods sold related to contracts with service elements include all direct material, subcontractor and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. General and administrative costs are charged to expense as incurred. We record provisions for estimated losses on uncompleted contracts in the period in which such losses are determined, which are generally completed within 30 days.

The Company has accounted for revenue and costs for contracts with service elements, which are generally completed within 30 days, by the completed contract method in 2012, whereas in all prior years all revenue and costs were determined by the percentage-of-completion method. The new method of accounting for contracts with service elements was determined to be preferable due to the short-term nature of most contracts, and revenues and costs in the aggregate resulting in consistent economics compared to what resulted from the use of the percentage-of-completion method.

The change in accounting method for presentation of contracts with service elements was completed in accordance with ASC 250, ‘‘Accounting Changes and Error Corrections.’’ Accordingly, the change in accounting principle has been applied retrospectively by adjusting the financial statement amounts for the prior periods presented.

Allowance for doubtful accounts

We maintain an allowance for doubtful accounts for estimated losses due to the failure of our customers to make required payments. Management believes the accounting estimate related to the allowance for doubtful accounts is a “critical accounting estimate” as it involves complex judgments about our customers’ ability to pay. The allowance for doubtful accounts is based on an assessment of individual past due accounts, historical write-off experience, accounts receivable aging, customer disputes and the business environment. Account balances are charged off when the potential for recovery is considered remote.

Management believes the allowance amounts recorded, in each instance, represents its best estimate of future outcomes. If there is a deterioration of a major customer’s financial condition, if the Company becomes aware of additional information related to the credit-worthiness of a major customer, or if future actual default rates on trade receivables in general differ from those currently anticipated, the Company may have to adjust its allowance for doubtful accounts, which would affect earnings in the period the adjustments were made.

Inventories

Inventories consist primarily of materials purchased for resale, including lumber and sheet goods, millwork, windows and doors as well as certain manufactured products and are carried at the lower of cost or market. The cost of substantially all of our inventories is determined by the average cost method, which approximates the first-in, first-out approach. We evaluate our inventory value at the end of each quarter to ensure that it is carried at the lower of cost or market. This evaluation includes an analysis of historical physical inventory results, a review of potential excess and obsolete inventories

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based on inventory aging and anticipated future demand. At least quarterly, each branch’s perpetual inventory records are adjusted to reflect any declines in net realizable value below inventory carrying cost. To the extent historical physical inventory results are not indicative of future results and if future events impact, either favorably or unfavorably, the salability of our products or our relationships with certain key suppliers, our inventory reserves could differ significantly, resulting in either higher or lower future inventory provisions.

Valuation of goodwill, long-lived assets and amortizable other intangible assets

Our long-lived assets consist primarily of property, equipment, purchased intangible assets and goodwill. The valuation and the impairment testing of these long-lived assets involve significant judgments and assumptions, particularly as it relates to the identification of reporting units, asset groups and the determination of fair market value.

We test our tangible and intangible long-lived assets subject to amortization for impairment whenever facts and circumstances indicate that the carrying amount of an asset may not be recoverable. We test goodwill for impairment annually, or more frequently if triggering events occur indicating that there may be impairment.

We have recorded goodwill and perform testing for potential goodwill impairment at a reporting unit level. A reporting unit is an operating segment, or a business unit one level below an operating segment for which discrete financial information is available, and for which management regularly reviews the operating results. Additionally, components within an operating segment are aggregated as a single reporting unit if they have similar economic characteristics. We have determined that our reporting units are equivalent to our four operating segments and consist of our East, South and West divisional regions and Coleman Flooring. During the third quarter of 2012 and 2011, we performed our annual impairment assessment of goodwill which did not indicate that an impairment existed.

For impairment testing of long-lived assets, we identify asset groups at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset.

As discussed above, changes in management intentions, market events or conditions, projected future net sales, operating results, cash flow of our reporting units and other similar circumstances could affect the assumptions used in the impairment tests. Although management currently believes that the estimates used in the evaluation of goodwill and other long-lived assets are reasonable, differences between actual and expected net sales, operating results and cash flow could cause these assets to be impaired. If any asset were determined to be impaired, this could have a material adverse effect on our results of operations and financial position, but not our cash flow from operations.

Equity based compensation

We account for our nonvested stock awards granted to certain employees by recording compensation expense based on the award’s fair value at the date of grant. We account for our stock options granted to employees and directors by recording compensation expense based on the award’s fair value, estimated on the date of grant using the Black-Scholes option-pricing model. Share-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which generally equals the vesting period.

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Our share-based compensation included in selling, general and administrative expense is as follows:

	Years ended December 31,
(dollars in thousands)	2010		2011		2012
Nonvested stock	$	228	$	127	$	251
Stock options		60		257		548
Share-based compensation	$	288	$	384	$	799

The following table summarizes the nonvested stock awards and stock options granted from January 1, 2010 through the date of this prospectus and discusses our methodology to determine the fair value of our common stock at each grant date.

	Nonvested stock				Stock options
Date of grant	Number of shares outstanding		Fair value at Issuance		Number of options granted		Exercise price		Fair value at issuance		Modified exercise price		Incremental fair value of option at modification
June 2010		1,750	$	67.40		2,500	$	67.40	$	47.47	$	25.25	$	6.36
November 2010		—		—		21,032	$	52.06	$	24.21	$	25.25	$	4.90
November 2011		—		—		2,500	$	49.98	$	23.62	$	25.25	$	4.66
January 2012		—		—		3,725	$	25.25	$	11.01		—		—
		1,750				29,757

During the year ended December 31, 2012, the exercise price on all stock option agreements with exercise prices in excess of $25.25 was revised to $25.25. These transactions were accounted for as modifications under ASC 718, “Stock Compensation.” This includes 21,032 options included above, which were legally exercised but were not considered exercised for accounting purposes.

As of the date hereof, the intrinsic value of all vested and unvested stock options is $         million, based on an assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

Determining the fair value of stock options under the Black-Scholes option-pricing model requires judgment, including estimating the fair value per share of our common stock as a private company, volatility, expected term of the awards, dividend yield and the risk-free interest rate. The assumptions used in calculating the fair value of stock options represent our best estimates, based on management’s judgment and subjective future expectations. These estimates involve inherent uncertainties. If any of the assumptions used in the model change significantly, share-based compensation recorded for future awards may differ materially from that recorded for awards granted previously.

We developed our assumptions as follows:

Ÿ Fair value of common stock.    Because our common stock is not publicly traded, we must estimate the fair value of our common stock, as discussed in “Valuation of Common Stock” below.

Ÿ Volatility.    The expected price volatility for our common stock was estimated by taking the median historic price volatility for industry peers.

Ÿ Expected term.    The expected term was estimated to be the mid-point between the vesting date and the expiration date of the award. We believe use of this approach is appropriate as we have no prior history of option exercises upon which to base an expected term.

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Ÿ Risk-free interest rate.    The risk free interest rate is based on the yields of United States Treasury securities with maturities similar to the expected term of the options.

Ÿ Dividend yield.    We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.

We estimate potential forfeitures of stock options and adjust share-based compensation expense accordingly. The estimate of forfeitures is adjusted over the requisite service period to the extent that actual forfeitures differ from the prior estimates. We estimate forfeitures based upon our historical experience, and, at each period, review the estimated forfeiture rate and make changes as factors affecting the forfeiture rate calculations and assumptions change.

The fair value of employee stock options was estimated using the following weighted-average assumptions.

	Years ended December 31,
	2010			2011			2012
Expected dividend yield		0	%		0	%		0	%
Expected volatility factor		59	%		59	%		58	%
Risk-free interest rate		1.51% - 2.06	%		0.96	%		0.77% - 0.89	%
Expected term (in years)		4.1 - 4.7			4.3			3.7 - 3.9

Valuation of common stock

In the absence of a public trading market, our board of directors, with input from management, determined a reasonable estimate of the then-current fair value of our common stock for purposes of granting stock-based compensation. We determined the fair value of our common stock utilizing methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Practice Aid, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation.” In addition, we exercised judgment in evaluating and assessing the foregoing based on several factors including:

Ÿ the nature and history of our business;

Ÿ our current and historical operating performance;

Ÿ our expected future operating performance;

Ÿ prices for our convertible preferred stock issued to Gores Holding;

Ÿ rights, preferences and privileges of our convertible preferred stock relative to those of our common stock;

Ÿ our financial condition at the grant date;

Ÿ the lack of marketability of our common stock;

Ÿ the likelihood of achieving different liquidity events or remaining a private company;

Ÿ industry information such as market size and growth; and

Ÿ macroeconomic conditions.

We relied upon the probability-weighted expected return method (“PWERM”), and the option pricing model (“OPM”), to allocate our company value to each of our classes of stock.

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Probability-weighted expected return method.    PWERM values each class of equity based on an analysis of the range of potential future enterprise values of the Company and the manner in which those values would accrue to the owners of the different classes of equity. This method involves estimating the overall value of the subject company under various projected operating results scenarios and allocating the value to the various share classes based on their respective claim on the proceeds as of the date of each event. These different scenarios typically include a base case scenario and two to four additional scenarios of projected operating results, each resulting in a different value. For each scenario, the future value of each share class is calculated and discounted to a present value. The results of each scenario are then probability-weighted in order to arrive at an estimate of fair value for each share class as of a current date.

We used PWERM to allocate our estimated enterprise value between our preferred stock and common stock. At certain periods, we also utilized OPM as described below. Under PWERM, we analyzed the value of our company using several scenarios, which included a base case scenario (“Base Case Scenario”), upside scenario (“Upside Scenario”), downside scenario (“Downside Scenario”), and in certain valuations a base case + initiatives scenario (“Base + Initiatives Scenario”) and a flat case scenario (“Flat Case Scenario”). For all scenarios, we assumed an exit date on December 31 of the fourth full fiscal year following the date being valued, and we applied an exit multiple to the projected EBITDA of the exit year.

The Base Case Scenario was based on consensus housing start forecasts and other forecasted business drivers being applied to our current operating results and financial position to determine a projection of future operating results and cash flows. The Upside Scenario applied a more optimistic set of housing start and business assumptions than the Base Case Scenario to project our future operating results and cash flows, while the Downside Scenario applied a more pessimistic set of assumptions than the Base Case Scenario to project our future operating results and cash flows. In the April 2010 and November 2010 valuations, we also developed the Base + Initiatives Scenario, which utilized the same economic assumptions as the Base Case Scenario, but also included the value of certain operational improvement initiatives when projecting our future operating results and cash flows. In the April 2010 valuation, we also utilized the Flat Case Scenario, which assumed that then-current economic conditions would persist for the entirety of the forecast period.

We determined the value of our preferred stock and common stock under each scenario by allocating the equity value to each class of stock and discounting the value back to the present using a risk-adjusted discount rate. In certain scenarios, a large portion of the equity value is allocated to the convertible preferred stock to incorporate higher aggregate liquidation preferences. We then weighted the present value of the common stock under each scenario based upon the probability of each scenario occurring in order to determine a final indication of value for the common stock.

Option pricing model.    OPM uses option theory to value the various classes of a company’s securities in light of their respective claims to the enterprise value. Total members’ equity value is allocated to the various share classes based upon their respective claims on a series of call options with strike prices at various value levels depending upon the rights and preferences of each class. A Black-Scholes closed-form option pricing model is typically employed in this analysis, with an option-term assumption that is consistent with our expected time to a liquidity event and a volatility assumption based on the estimated stock price volatility of a peer group of comparable public companies over a similar term.

In January 2012, we issued 5,000 shares of our Convertible Class C preferred shares to Gores Holdings for $5 million. The Convertible Class C preferred shares can be converted to 171,500 Class A Common Shares. Therefore, in the 2012 valuation, we relied 100% on the OPM using the backsolve method to derive the value of common stock. The backsolve method is used for inferring the equity

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value implied by a recent financing transaction and involves making assumptions for the time of liquidity, volatility, and risk-free rate and then solving for the value of equity such that value for the most recent financing equals the amount paid. We estimated the volatility of our shares at 57.5% based on the expected term to a liquidity event.

The following table summarizes the significant assumptions we used in our valuations to determine the fair value of our common stock as of the dates indicated.

	Grant date
	June 2010			November 2010			November 2011			January 2012
Option pricing model		50.0	%		50.0	%		50.0	%		100.0	%
Probability weighted expected return method		50.0	%		50.0	%		50.0	%		0.0	%
Weighting of scenarios:
Base		25.0	%		45.0	%		65.0	%		N/A
Upside		7.5	%		10.0	%		10.0	%		N/A
Downside		25.0	%		20.0	%		25.0	%		N/A
Base + Initiatives		10.0	%		25.0	%		N/A			N/A
Flat		32.5	%		N/A			N/A			N/A
Exit date		12/31/2014			12/31/2014			12/31/2015			N/A
Terminal multiple of EBITDA		5.25x			4.50x			5.75x			N/A
Stock value	$	67.40		$	52.06		$	49.98		$	25.25

Our board of directors considered contemporaneous common stock valuations in determining or confirming the grant date fair value of common stock. No single event caused the valuation of our common stock to decrease from April 2010 to January 2012. Rather, it has been a combination of the following factors that led to the changes in the fair value of the underlying common stock:

Ÿ Single-family housing starts, a primary driver of the Company’s results, reached a new all-time low in 2011. This negatively impacted expectations for a housing construction recovery, and reduced projections of future results;

Ÿ The continuing history of losses and negative operating cash flows increased net borrowings and increased the specific company risk premium applied to the Company’s equity discount rate and increased the Company’s overall cost of capital;

Ÿ The book value of members’ equity declined from $197.0 million at December 31, 2009 to $51.4 million at December 31, 2011;

Ÿ Cash and cash equivalents declined from $74.8 million at December 31, 2009 to $5.0 million at December 31, 2011;

Ÿ Net borrowings under the revolving line of credit increased $13.0 million in 2010 and $20.8 million in 2011; and

Ÿ Accretion of dividends on preferred shares was $5.1 million in 2010 and $4.2 million in 2011.

Casualty and health insurance

We are self insured for general liability, auto liability and workers’ compensation exposures, as well as employee and eligible dependent health care claims, with specific excess insurance purchased from independent carriers to cover individual traumatic claims in excess of the self-insured limits. The expected liability for unpaid claims, including incurred but not reported losses, is determined using the assistance of third-party actuaries and is reflected on the consolidated balance sheets as a liability with current and long-term components. The amount recoverable from insurance providers is reflected on

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the consolidated balance sheets in prepaid expenses and other current assets. Our accounting policy includes an internal evaluation and adjustment of our reserve for all insured losses on a quarterly basis. At least on an annual basis, we engage external actuarial professionals to independently assess and estimate the total liability outstanding, which is compared to the actual reserve balance at that time and adjusted accordingly.

Deferred income taxes

In accordance with ASC 740 “Income Taxes,” we evaluate our deferred tax assets to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The primary negative evidence considered includes the cumulative operating losses generated in prior periods. The primary positive evidence considered includes the reversal of deferred tax liabilities related to depreciation and amortization that would occur within the same jurisdiction and during the carry-forward period necessary to absorb the Federal and state net operating losses and other deferred tax assets. The reversal of such liabilities would utilize the Federal and state net operating losses and other deferred tax assets.

Based upon the positive and negative evidence considered, we believe it is more likely than not that we will realize the benefit of the deferred tax assets, net of the existing valuation allowances of $0.1 million, $1.4 million and $1.9 million as of December 31, 2010, 2011 and 2012, respectively. To the extent we generate sufficient taxable income in the future to fully utilize the tax benefits of the net deferred tax assets on which a valuation allowance was recorded, our effective tax rate may decrease as the valuation allowance is reversed.

ASC 740 also prescribes a recognition threshold and certain measurement principles for the financial statements related to tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on an income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties associated with income taxes, accounting in interim periods, disclosures and transition requirements.

At December 31, 2011 and 2012, we have recognized $0.3 and $0 million, respectively, within other long-term liabilities on the consolidated balance sheets related to state uncertain tax positions with equal, corresponding amounts related to the Wolseley indemnification within other assets. All of these uncertain tax position liabilities are subject to indemnification by Wolseley. During 2012, the statute of limitations expired for certain tax periods where we had previously recognized a long-term liability related to uncertain tax positions. As a result, we increased the current income tax benefit for the year ending December 31, 2012 by $0.3 million and decreased the long-term liability related to the uncertain tax positions. We also recognized $0.3 million within other income (expense), net, on the consolidated statement of operations due to the reduction in the related Wolseley indemnity asset.

Consideration received from suppliers

We enter into arrangements with many of our suppliers providing for inventory purchase rebates (“supplier rebates”) upon achievement of specified volume purchasing levels. We accrue estimated supplier rebates monthly as part of cost of goods sold based on progress toward earning the supplier rebates, taking into consideration cumulative purchases of inventory to date and projected purchases through the end of the year. We estimate the rebates applicable to inventory on-hand at each period end based on the inventory turns of the related items.

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Under certain circumstances, including if market conditions were to change, suppliers may change the terms of some or all of these programs. Although these changes would not affect the amounts which we have recorded related to product already purchased, it may impact our gross margins in future periods.

New accounting pronouncements

Under the JOBS Act, “emerging growth companies” can delay adopting new or revised accounting standards until such time as those standards apply to private companies. However, we do not intend to elect to take advantage of this extended transition period provided in Section 7(a)(2)(B) of the Securities Act as allowed by Section 107(b)(1) of the JOBS Act. Additionally, we are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an ‘‘emerging growth company’’, we intend to rely on certain of these exemptions, including without limitation, (i) an exemption from providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) an exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), (iii) an exemption from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved and (iv) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will remain an ‘‘emerging growth company’’ for up to five years following the completion of this offering or until we achieve total annual gross revenues in excess of $1 billion during a fiscal year or become a large accelerated filer as a result of achieving a public float of at least $700 million as of the end of a second fiscal quarter. If the housing market continues to strengthen, we could exceed annual gross revenues of $1 billion shortly after the date of this prospectus, as we had $942 million of total gross revenues in 2012.

Fair value measurement

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”). The amendments in this ASU are intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards (“IFRS”). The amendments in this ASU explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. We adopted the provisions of ASU 2011-04 on January 1, 2012. The adoption did not have an impact on our financial position or results of operations.

Comprehensive income: presentation

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), to increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. GAAP and IFRS. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. We adopted the provisions of ASU 2011-05 on January 1, 2012. The adoption of ASU 2011-05 did not have an impact on our financial position or results of operations.

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Comprehensive income: reclassifications

In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”), to supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASU 2011-05, which were deferred indefinitely under ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”), issued in December 2011. The amendments in ASU 2013-02 would require an entity to provide additional information about reclassifications out of accumulated other comprehensive income by the respective line items of net income. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The adoption of ASU 2013-02 will not have an impact on our financial position or results of operations.

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BUSINESS

Overview

We are a large, diversified LBM distributor and solutions provider that sells to new construction and repair and remodel contractors. We carry a broad line of products and have operations throughout the United States. Our primary products are lumber & lumber sheet goods, millwork, doors, flooring, windows, structural components, such as EWP, trusses, wall panels and other exterior products. Additionally, we provide solution-based services to our customers, including design, product specification and installation management services. We serve a broad customer base, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors, and we believe we are among the top three LBM suppliers for residential construction in 80% of the geographic markets in which we operate. We offer over 39,000 products sourced through our strategic network of suppliers, which together with our various solution-based services, represent approximately 50% of the construction cost of a typical new home. By enabling our customers to source a significant portion of their materials and services from one supplier, we have positioned ourselves as the supply partner of choice for many of our customers.

We have operations in 13 states that accounted for approximately 48% of 2012 U.S. single-family housing permits according to the U.S. Census Bureau. Following our acquisition by an affiliate of Gores in 2009, we aggressively and strategically reduced our footprint to improve our profitability. Today, our facilities are strategically located in 20 metropolitan areas in these 13 states that we believe have an attractive potential for economic growth based on population trends, increasing business activity and above-average employment growth. The following map shows our current operating footprint.

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We serve our customers from 64 locations within our markets, which include 48 distribution and retail operations, 19 millwork fabrication operations, 14 structural components fabrication operations and 13 flooring operations. Given the local nature of our business, we locate our facilities in close proximity to our key customers and often co-locate multiple operations in one facility to increase customer service and efficiency.

We provide a balanced mix of products and services to U.S. production and custom homebuilders and repair and remodel, multi-family and commercial contractors. The charts below summarize our 2012 revenues by product category and customer segment.

2012 revenues
by product category 2012 revenues
by customer segment

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The following table demonstrates the favorable demographic trends in the metropolitan areas in which we operate and the capabilities of our facilities.

Market	2012 single family permits		Year over year single family permit change			December 2012 unemployment rate			2012 total employment year over year change			Distribution & retail operations		Millwork fabrication		Structural components fabrication		Flooring operations
Houston, TX		28,628		25.1	%		6.0	%		4.0	%		4		1		2
Washington, DC		10,980		13.9	%		5.3	%		1.1	%		3		2				3	(7)
Atlanta, GA		9,167		47.5	%		8.4	%		2.3	%		3		2		2
Austin, TX		8,229		32.1	%		5.0	%		3.9	%		1		1		1
Raleigh-Durham, NC(1)		8,020		27.7	%		7.4	%		2.8	%		4		1		1		3	(8)
Charlotte, NC		6,703		36.5	%		9.4	%		3.2	%		1				2		1
Eastern PA(2)		5,956		14.8	%		8.2	%		1.0	%		1				1		1
San Antonio, TX		5,102		15.7	%		5.7	%		2.6	%		1
Salt Lake City, UT(3)		5,052		40.6	%		4.9	%		4.4	%		5		3		2
Los Angeles, CA		4,946		20.7	%		9.4	%		2.2	%		11		2		1
Richmond, VA		2,840		20.7	%		6.0	%		1.1	%		1		1		1
Columbia, SC		2,791		16.8	%		7.5	%		1.2	%		2		1				2	(9)
Greenville, SC		2,246		37.0	%		7.0	%		1.4	%		1						1
Greensboro, NC(4)		2,014		2.0	%		9.4	%		0.9	%		1						1
Northwest AR(5)		1,763		52.2	%		5.1	%		3.3	%		1		1				1
Southern Utah(6)		1,317		54.2	%		6.6	%		5.1	%		1		1
Albuquerque, NM		1,259		(7.0	%)		6.7	%		0.2	%		1		1		1
Spokane, WA		963		30.1	%		8.4	%		1.9	%		2		1
Lubbock, TX		752		8.7	%		4.7	%		1.6	%		2		1
Amarillo, TX		653		(0.5	%)		4.3	%		0.4	%		2
Total for Stock Building Supply markets		109,381		25.3	%		7.5	%		2.2	%		48		19		14		13
U.S. total		518,695		23.9	%		7.8	%		1.7	%

Source: U.S. Census Bureau and Bureau of Labor Statistics

(1) Durham-Chapel Hill, NC and Raleigh-Cary, NC MSAs

(2) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD and Lancaster, PA MSAs.

(3) Salt Lake City, UT and Provo-Orem, UT MSAs

(4) Greensboro-High Point, NC and Winston-Salem, NC MSAs

(5) Fayetteville-Springdale-Rogers, AR-MO MSA

(6) St. George, UT MSA

(7) Includes flooring location in Baltimore, MD

(8) Includes flooring location in Fayetteville, NC

(9) Includes flooring location in Charleston, SC

We continue to make capital investments in our local businesses to bolster our market share, expand our distribution network, improve our service offerings and streamline our business processes. Since 2010, we have acquired four businesses and, through investments in a proprietary IT and operational platform, have improved our distribution service capability. We have also integrated each of our local branches with our headquarters in Raleigh, North Carolina, which provides centralized value-added support to our local businesses, including accounting, IT and a central sourcing and procurement function. Additionally, we have undertaken efforts to streamline and improve significantly our business processes by adopting a “LEAN” business philosophy to reduce waste and add value. These initiatives allowed us to reduce selling, general and administrative expense by $25.7 million while net sales increased 25.4% from 2010 to 2012. We believe that, as we continue to pursue these initiatives, we will further improve the service and support we provide to our customers, increase the effectiveness of our employees and contractors and improve efficiency across all aspects of our business.

In 2006, our current footprint of facilities generated approximately $1.8 billion in sales, and we believe that we will achieve attractive growth as our markets recover to normalized levels of new home construction.

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From 2010 to 2012, our net sales increased $190.7 million, from $751.7 million to $942.4 million. Over the same period, our Adjusted EBITDA increased $60.0 million, from $(58.0) million to $2.0 million. For a reconciliation of net loss to Adjusted EBITDA, see “Prospectus Summary—Summary consolidated financial data.” We believe that the housing recovery in our markets will continue to drive significant increases in demand for our products and the significant growth in net sales and Adjusted EBITDA that we have experienced since 2010.

Our industry

The LBM distribution industry in the United States is highly competitive, with a number of retailers and distributors offering a broad range of products and services. Demand for our products is principally influenced by new residential construction and residential repair and remodeling activity. Following several challenging years, single-family housing starts increased in 2012 to 0.54 million and, as a result, demand for the products we distribute and for our services has also increased. From 2005 to 2011, single-family housing starts in the United States declined by approximately 75%. According to the U.S. Census Bureau, single-family housing starts in 2009, 2010 and 2011 were 0.44 million, 0.47 million and 0.43 million, respectively, which are significantly less than the 50-year average rate of 1.0 million. Many economists expect housing starts to continue to increase, and recent national housing statistics confirm that a robust housing recovery is already underway. For example, U.S. single-family housing starts increased 28.6% year-over-year in March 2013. Additionally, the Case-Shiller Index, a leading measure of pricing for the U.S. residential housing market, has increased for 13 straight months and is at its highest levels since December 2008.

We believe that these trends are supported by the following positive economic and demographic indicators, which are typically indicative of housing market strength:

Ÿ declining unemployment rates;

Ÿ rising home values and improving household finances;

Ÿ increases in total households;

Ÿ improving sentiment towards ownership of residential real estate;

Ÿ declining levels of new and existing for-sale home inventory; and

Ÿ a favorable consumer interest rate environment supporting affordability and home ownership.

We believe that there is considerable growth potential in the U.S. housing sector. As of February 2013, McGraw-Hill Construction forecasts that U.S. single-family housing starts will increase to 1.1 million by 2015. Many publicly-traded homebuilders, including some of our largest customers, have reported strong earnings results and positive financial outlooks in the near-term, confirming the momentum of the housing recovery. For example, net new orders for publicly-traded homebuilders increased 33% year-over-year in the three months ended December 31, 2012, with some publicly-traded homebuilders reporting order increases of over 60%.

The products we distribute are also used in professional remodeling projects. According to the HJCHS, the U.S. remodeling market reached a peak of $328 billion in 2007 before declining approximately 16% to $275 billion in 2011. Despite this decline, factors, including the overall age of the U.S. housing stock, heightened focus on energy efficiency, rising home prices and availability of consumer capital at low interest rates, are expected to drive long-term growth in repair and remodeling expenditures. As of March 2013, HIRI estimates that total U.S. sales of home maintenance, repair and improvement products to the professional market will grow at a rate of 5.0% in 2013, 6.2% in 2014 and 4.9% in 2015.

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Our competitive strengths

We believe the following key competitive strengths have contributed to our success and will position us for significant growth as part of a multi-year recovery in our end markets.

Leading distributor of building products to U.S. residential construction markets

We believe we are one of the leading LBM distributors in the United States. We serve all segments of the residential construction industry, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors. Our portfolio of 64 strategically-located facilities supplies products and services to many major markets in the United States and provides us with significant scale and capacity for growth. We believe that scale, strong customer relationships, and superior product and service offerings in each of our markets provide competitive advantages, enabling us to drive market share gains over time. We believe that we are among the top three LBM participants in 80% of the geographic markets in which we operate based on net sales. Because of our leading market position, we believe we are well-positioned to take advantage of the projected recovery in the residential construction market.

Low cost distribution platform with strong operating leverage

Through aggressive cost management and strategic restructuring activities implemented during the global economic downturn, we have driven significant productivity gains and positioned our company for profitable growth. Since 2009, we have closed or sold over 100 facilities in locations that we determined would not provide us with sufficient scale, or where we would otherwise not be able to compete effectively and profitably.

Beginning in 2011, our management team began implementing LEAN business practices to improve customer service, reduce waste and increase productivity. These LEAN initiatives have improved our sourcing practices and streamlined our supply chain and, along with other cost reduction efforts, have reduced our selling, general and administrative expenses as a percent of net sales from 32.8% for the fiscal year ended December 31, 2010 to 23.4% for the fiscal year ended December 31, 2012. Over the same period we have significantly increased productivity and operating leverage as net sales increased by $190.7 million, while selling, general and administrative expenses decreased by $25.7 million. We believe that our current low fixed cost position will help us to generate increased profitability as the market continues to recover.

We have also developed several innovative and proprietary eBusiness systems. Stock Logistics Solutions, a system designed to enhance the customer experience and reduce waste, was implemented in 2011, and Stock Installation Solutions, a system designed to improve the execution and customer communication of our installation services, is scheduled for implementation in 2013. Due to the implementation of Stock Logistics Solutions, we have reduced our shipping and handling costs as a percent of net sales from 6.6% in 2010 to 5.4% in 2012. These services have enabled us to track our supply chain more accurately, significantly improve customer service and reduce waste. Due in part to our LEAN initiatives and focus on efficiency, our Adjusted EBITDA has increased $60.0 million from ($58.0) million in 2010 to $2.0 million in 2012. We believe that our Adjusted EBITDA will continue to increase as a percent of net sales as the residential construction sector rebounds.

Leading local businesses in attractive geographic markets

We operate in 20 metropolitan areas in 13 states that we believe have attractive potential for economic growth, with strong LBM product capabilities in each market we serve. We believe we are one of the top three LBM suppliers in 80% of these markets, based on net sales, with strong customer

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relationships and a professional team to serve our customers as they grow. Today, we serve our customers from 64 locations, which include 48 distribution and retail operations, 19 millwork fabrication operations, 14 structural components fabrication operations and 13 flooring operations. We often co-locate multiple operations in one facility to increase customer service and efficiency. Our primary operating regions include the South and West regions of the United States (as defined by the U.S. Census Bureau), which we believe are markets that are well-positioned to grow as the residential construction market recovers. McGraw-Hill Construction forecasts that the compounded annual growth rate for single-family housing starts in our 20 markets will be 23.8% from 2012 to 2015.

Proven ability to acquire and integrate complementary businesses

Our management has demonstrated a core competency in identifying, acquiring and successfully integrating businesses to provide us greater scale in our current markets and opportunities to grow in new markets. Since 2010, we have acquired the assets of four businesses with core LBM capabilities, three of which were in our current markets and one of which provided us with a strategic position in a new market.

Ÿ Bison, which we acquired in 2010, is located in Houston, Texas and enhanced our scale in the attractive Texas Gulf Coast market;

Ÿ NHC, which we acquired in 2010, is located in Northwest Arkansas and established a strong position in the Arkansas market;

Ÿ TBSG, which we acquired in December 2012, is located in Marietta, Georgia and is a provider of residential structural solutions and provides us with greater scale in the local Atlanta market, which is expected to grow significantly as the residential construction market recovers; and

Ÿ Chesapeake, which we acquired in April 2013, is located outside Richmond, Virginia, and provided us with component manufacturing capability to serve our customers in our Central and Northern Virginia markets.

While we have significant growth potential in our current operational footprint, we plan to continue to evaluate and acquire attractive businesses in our current geographic markets as well as new geographies to expand service capabilities and customer share to accelerate increases in profitability.

Extensive offering of building materials and services

We offer a comprehensive line of residential building products that are used in the construction of homes, including windows, doors and trim, and many of the products used in the interior and exterior finishing of homes. We also provide manufactured products such as roof and floor trusses, wall panels and various millwork products. We offer over 39,000 different products sourced through our strategic network of suppliers and have access to a wide range of special order products. Additionally, we provide solution-based services to our customers as needed, including design, product specification and installation management services. Furthermore, many of our facilities include product showrooms, which customers use to develop a better appreciation for our product and service offerings. Products and services that we offer represent approximately 50% of the cost of a typical new home. Because of our ability to supply a significant share of the building materials for a new home, customers look to us for both new construction and remodeling solutions. We believe that the breadth of the products we offer our customers provides us with a strategic advantage and enables us to forge deeper relationships with customers than smaller competitors who may be unable to supply a similar product range and lack access to the broad resources of a national company.

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Superior customer service and value-added capabilities

We complement our line of building products with superior customer service and value-added capabilities. Our experienced customer service professionals provide a full range of services, including customized design and installation services specific to each job site and type. Installation services are managed by our employees, but are normally provided by third parties. Other services that we provide include job estimating, take-off, structural components or millwork design, product selection and customization. We also provide order management services for in-stock and special order products or services, manage inventory, deliver and/or load materials, and provide building products and construction trend insights for our customers. We believe that the breadth of our services, our focus on individual customer needs and the integration of our supply chain and fulfillment capabilities set us apart from many of our competitors.

We offer training programs and advanced service tools for our employees in order to assist them in providing solutions for our customers. Our innovative Stock Logistics Solutions capability, in which we provide real-time delivery information and confirmation via the Internet and to mobile devices, is one example of customer service capabilities that have increased customer loyalty and helped us drive growth in our markets.

Integrated supply chain that increases efficiency and benefits customers and suppliers

Although we operate facilities in 20 metropolitan areas across 13 states, we maintain an integrated, national supply chain that we believe enables us to provide our customers with superior services, timely delivery and more favorable pricing. We have integrated our sourcing and purchasing operations into a central procurement function. Over the last ten years, we have invested in an ERP system that integrates each of our local branches with our headquarters operation. Our ERP system allows us to manage customer orders and deliver efficiently across our entire organization. It also enables central product replenishment and optimizes inventory management to improve working capital requirements. Through Stock Logistics Solutions, which includes a mobile GPS application on our delivery trucks that is integrated with our ERP software, our sales and service professionals can better schedule, dispatch and manage customer deliveries.

Our integrated sourcing and purchasing operations have enabled us to develop cost-effective national sourcing agreements with key suppliers that provide us with product delivery certainty and favorable terms. We believe our suppliers value our extensive footprint, experienced sales force and advanced service capabilities and, as a result of these operational strengths, often consider us to be a preferred distribution partner. We believe that customers also benefit greatly from our ability to source products on a national level through improved pricing and availability. Through these sourcing agreements we are also able to realize stronger gross margins and achieve superior inventory management, especially during periods of market growth as product supply in the industry becomes more limited. Additionally, our broad reach, efficient operations and significant growth potential offer our suppliers an opportunity to strategically partner with us for growth, which further strengthens their loyalty to us.

Experienced management team and principal equity holder

Our senior management team has more than 120 years of combined experience in manufacturing and distribution with a track record of financial and operational excellence in both favorable and challenging market conditions. Since 2010, our management team has successfully acquired and integrated businesses that have helped us gain scale in our current markets. Since 1987, our equity sponsor Gores has successfully acquired and operated more than 80 companies while employing a consistent, operationally-oriented approach to create value in its businesses.

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Our strategy

We intend to capitalize on our strong market position in LBM distribution to increase revenues and profits and maximize operating cash flow as the U.S. housing market recovers. We seek to achieve this by executing on the following strategies:

Expand our business with existing customers by offering additional value

We plan to continue to grow our net sales by increasing our share of our existing customers’ business. By growing our scale and expanding the products and services we offer in each of our local markets, we believe that we can continue to enhance the value offering for, and relationships with, our existing customers and grow our revenues and profitability. Several of our existing facilities provide only a portion of the value-added solutions our customers need to optimize their construction projects. Products and services we intend to expand organically include millwork and structural components manufacturing, enhanced specification and design services, and additional LEAN eBusiness solutions for our customers and our sales and service professionals. By continuing to invest systematically in our core LBM capabilities and in technologies that streamline our processes and improve customer service, we believe we can provide a broader range of products and services at each of our locations and that more customers will look to us as the key solution provider for their building needs.

Expand in existing, adjacent and new geographies

We plan to expand our business through organic and acquisitive means in order to take advantage of our national supply chain and broad LBM capabilities. We intend to expand our reach and service capabilities in our current metropolitan areas by opening new locations, relocating facilities as needed and increasing capacity at existing facilities. In addition, while we have operations in 13 states that accounted for approximately 48% of 2012 U.S. single-family housing permits, our markets within those states accounted for less than half of those permits according to the U.S. Census Bureau, providing significant opportunity for growth into adjacent markets. We believe that our scale, integrated supply chain, product knowledge, eBusiness solutions and professional customer service will enable us to grow significantly as we expand into existing, adjacent and new geographies. We believe that our balance sheet and liquidity position will support our growth strategy.

Deliver leading customer service, productivity and operational excellence as our business grows

We strive for continued operational excellence. We have implemented a talent training and development program focused on specific skills training, business development and LEAN initiatives. Using these skills, our branch managers, regional management and senior leadership team continually examine customer service, operating and financial metrics and use this information to optimize regional and local strategies to increase customer service and operating expense productivity. Our management team has also implemented, and will continue to pursue, LEAN business practices to increase productivity. We believe that the customer service and productivity gains we realized from these initiatives will continue to improve as they are implemented more broadly across our organization.

We completed an ERP implementation across all branches, and our proprietary eBusiness system, which includes Stock Logistics Solutions, will provide the platform for continued service improvements. In addition, we intend to implement our Stock Installation Solutions system in 2013, which is designed to track the timing and completion of installation work and will provide further enhancements to our customer service. We will continue to leverage operational best practices and

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optimize our supplier network in order to improve efficiency and profitability. We believe that there is an opportunity for further margin improvement as we expand our business and continue to implement LEAN initiatives that bring value to our customers.

Selectively pursue strategic acquisitions

Our industry remains highly fragmented. We believe a significant number of small and larger acquisition opportunities will offer attractive growth characteristics and favorable synergy potential. We intend to focus on using our operating platform and proven integration capabilities to pursue additional acquisition opportunities while minimizing execution risk. We will focus on investments in markets adjacent to our existing operations or acquisitions that enhance our presence and capabilities in our 20 existing metropolitan areas. Additionally, we will consider acquiring operations or companies to enter new geographic regions. We believe our planned capital structure positions us to acquire businesses we find strategically attractive.

History

The Company’s predecessor was founded as Carolina Builders Corporation in Raleigh, North Carolina in 1922 and began operating under the Stock Building Supply name in 2003. In addition, certain companies acquired by us were founded as early as 1822.

In May 2009, Gores Holdings, an affiliate of Gores, acquired 51% of the voting interests of our subsidiary, Stock Building Supply Holdings, LLC through a newly formed subsidiary, Saturn Acquisition Holdings, LLC, from an affiliate of Wolseley. Immediately after the acquisition, we entered into a prepackaged reorganization under the bankruptcy code. The restructuring allowed us to terminate real property leases in unprofitable markets where we decided to discontinue operations. The reorganization, which was undertaken in less than two months, did not include a compromise of any claims of any suppliers, creditors or employees. In November 2011, Gores Holdings purchased the remaining minority interest in us from Wolseley. On May 2, 2013, Saturn Acquisition Holdings, LLC converted to a corporation and changed its name to Stock Building Supply Holdings, Inc. We are currently owned by Gores Holdings and members of our senior management.

Our customers

We serve a broad customer base which is a balanced mix of large-scale production homebuilders, custom homebuilders and repair and remodeling contractors. We believe we have a diverse geographic footprint as we serve 20 metropolitan areas in 13 states. Approximately 48% of U.S. housing permits in 2012 were issued in states in which we operate. We believe the 20 metropolitan areas we serve are in states that have attractive potential for economic growth based on population migration trends, increasing business activity and above-average employment growth.

Our customer base is also highly diversified. As an example, for the year ended December 31, 2012, we had over 12,000 buying accounts and our largest 100 customers accounted for approximately 47% of our net 2012 sales, with no single customer accounting for more than 6% of our 2012 net sales.

Our largest customers are comprised primarily of the large production homebuilders, including publicly traded companies such as Beazer Homes USA, Inc., D.R. Horton, Inc., Hovnanian Enterprises, Inc., Lennar Corporation, M.D.C. Holdings, Inc., PulteGroup, Inc., and Weyerhaeuser Real Estate Company (a subsidiary of Weyerhaeuser Company). In addition to these large production homebuilders, we also service and supply regional and local custom homebuilders. Many of our homebuilder customers require and value significantly higher levels of support from our employees and utilize many of the service

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and product offerings we provide. Our capabilities allow us to also serve residential remodeling contractors, multi-family and light commercial contractors in each of our markets, which diversifies our customer base. Our sales and service professionals must work very closely with our customers on a day-to-day basis in order to help them scope, specify, bid, construct and complete their projects in a timely and successful manner. These customers have valued and, we believe, will continue to value and utilize the offerings we provide the U.S. residential and light-commercial construction industry.

Our products and services

We provide a wide variety of building products and services directly to homebuilder and professional contractor customers. We have a comprehensive offering of over 39,000 products which are available through our distribution locations and, in many instances, delivered to the job site. We manufacture floor trusses, roof trusses, wall panels, stairs, specialty millwork, windows, and doors. We also provide an extensive range of installation services and special order products. We believe our broad product and service offering, combined with our scale and experienced sales force, positions our company well to grow significantly as the U.S. housing market recovers.

We group our building products and services into five product categories: structural components, millwork & other interior products, lumber & lumber sheet goods, windows & other exterior products, and other building products & services. For the year ended December 31, 2012, our combined sales of structural components, millwork & other interior products, and windows & other exterior products represented 52% of net sales. Each of these categories includes both manufactured and distributed products. Products in these categories typically carry a higher margin and provide us with opportunities to cross-sell other products and services, thereby increasing sales to each customer. Sales by product category for the years ended December 31, 2010, 2011 and 2012 can be found under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating results—2012 compared to 2011—Net sales” and “—2011 compared to 2010—Net sales.”

Structural components.    Structural components are factory-built substitutes for job-site framing and include floor trusses, roof trusses, wall panels, and engineered wood that we design and cut for each home. Our manufactured structural components allow builders to build higher quality homes more efficiently. Roof trusses, floor trusses, and wall panels are built in a factory controlled environment. Engineered floors and beams are cut to the required size and packaged for the given application at many of our locations. Without structural components, builders construct these items on site, where weather and variable labor quality can negatively impact construction cost, quality and installation time.

In addition to increased efficiency and improved quality, a primary benefit of using structural components is shortening cycle time from start to completion, eliminating job-site waste and clutter and minimizing the amount of skilled labor that must be sourced for a job site. As the housing market recovers, we believe these factors will increase demand for structural components relative to total housing starts and provide opportunities for incremental revenue and gross profit growth.

Millwork & other interior products.    The millwork & other interior products category includes interior doors, interior trim, custom millwork, moldings, stairs and stair parts, flooring, cabinets, gypsum and other products that are used primarily inside the structure of the home. We pre-hang interior doors in many of our markets, which consists of attaching hinges and door jambs to a door slab, thereby reducing on-site installation time and providing a higher quality finished door unit than those constructed on site. We also sell and install flooring products, primarily as a subcontractor for the professional homebuilder, through our Coleman Floor and several other Company locations. These and other interior products typically require a higher degree of product knowledge and training to sell. As we continue to emphasize higher value-added product lines, we expect the millwork & other interior products category to contribute increasingly to our overall sales and profitability.

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Lumber & lumber sheet goods.    Lumber & lumber sheet goods include dimensional lumber, plywood and OSB products used in on-site house framing. In 2012, this product line was 35.5% of our net sales, and revenue dollars increased 35.0% from 2011, partly due to increases in the cost of these goods.

Windows & other exterior products.    The windows & other exterior products category includes exterior door units, as well as exterior products such as roofing and siding. Selecting, designing and managing the procurement of the proper window package for performance and architectural reasons is a key service provided by our skilled employees. Additionally, our pre-hung exterior doors consist of a door slab with hinges and door jambs attached, thereby reducing on-site installation time and providing higher quality finished door units than those constructed on site.

Other building products & services.    Other building products & services consist of various products, including hardware, boards and insulation. This category also includes design assistance and professional installation services of products spanning most of our product categories. Through our installation services program, we help homebuilders realize efficiencies through improved scheduling, supplier and subcontractor management, and other services resulting in reduced cycle time, simplified administration and better cost controls.

We also provide professional estimating, product advisory and product display services that assist homebuilders and their clients in selecting the appropriate mix of products to meet their needs. We believe these services require scale, capital and sophistication that smaller competitors often do not possess.

Manufacturing

Our manufacturing facilities and related design capabilities are utilized to improve quality, cost and service to our homebuilder and repair and remodel customers. We utilize specialized assembly and manufacturing technology, building science-based material selection and various design software packages to improve product quality, increase efficiency, reduce lead times and provide cost-effective products for our customers. We manufacture and assemble products within three of our product categories: structural components, millwork & other interior products, and windows & other exterior products. As the housing recovery continues, we expect the services provided by our manufacturing and design capabilities to become more important in helping our customers to meet their client and customer commitments and improve their operations. In 2012, manufactured products represented approximately 12% of our net sales.

Sales and marketing

We seek to attract and retain customers through exceptional customer service, leading product quality, broad product and service offerings, and competitive pricing. This strategy is centered on building and maintaining strong customer relationships rather than traditional marketing and advertising. We strive to add value for homebuilders through solution-based selling, improved product selection and acquisition processes, lower material costs and general project coordination and support. By executing this strategy, we believe we will continue to generate incremental sales volumes with new and existing customers.

Our experienced sales and service professionals are at the core of our customer growth and expansion efforts. We deploy salespeople who are skilled in housing construction to meet with a homebuilder’s construction superintendent, contractor, local purchasing agent or local executive with the goal of becoming the primary product supplier. If selected by the homebuilder or contractor, the salesperson and his or her team review blueprints for the contracted homes and advise the homebuilder or contractor in areas such as opportunities for cost optimization, increased building or

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project efficiencies, and regional product preferences. Next, the team determines the specific package of products that are needed to complete the project and schedules a sequence of site deliveries. Our large delivery fleet and comprehensive inventory management system enable us to provide “just-in-time” product delivery, ensuring a smoother and faster production cycle for the homebuilder. Throughout the construction process, our employees make frequent site visits to ensure timely delivery and proper installation and to provide general service support. We believe this level of service is highly valued by our customers and generates significant customer loyalty. At December 31, 2012, we employed approximately 450 sales professionals.

Materials and supplier relationships

We purchase inventory primarily for distribution, some of which is also utilized in our manufacturing plants. The key materials we purchase include dimensional lumber, OSB, engineered wood, windows, doors and millwork. Our largest suppliers are national lumber and wood products producers and distributors such as BlueLinx Holdings Inc., Boise Cascade Company, Louisiana Pacific and Weyerhaeuser Company and building products manufacturers such as Jeld-Wen, inc., Moulding and Millwork Inc., MI Windows and Doors, Inc., James Hardie and Norbord, Inc. We believe there is sufficient supply in the marketplace to competitively source most of our requirements without reliance on any particular supplier and that our diversity of suppliers affords us purchasing flexibility. We also work with our suppliers to ensure that we have sufficient adaptability and flexibility to service our customer needs as they evolve and as their markets grow. Due to our centralized oversight of purchasing and our large lumber and OSB purchasing volumes, we believe we are better able to maximize the advantages of both our, and our suppliers’, broad footprints and negotiate purchases in multiple markets to achieve more favorable contracts with respect to price, terms of sale, and supply than our regional competitors. Additionally, for certain customers, we institute purchasing programs on raw materials such as OSB to align portions of our procurement costs with our customer pricing commitments. We balance our lumber and OSB purchases with a mix of contract and spot market purchases to ensure consistent quantities of product necessary to fulfill customer contracts, to source products at the lowest possible cost, and to minimize our exposure to the volatility of commodity lumber prices.

We currently source products from over 1,000 suppliers in order to reduce our dependence on any single company and to maximize purchasing leverage. Although no materials purchases from any single supplier represented more than 10% of our total materials purchases in 2012, we believe we are one of the largest customers for many suppliers, and therefore have significant purchasing leverage. We have found that using multiple suppliers ensures a stable source of products and the best purchasing terms as the suppliers compete to gain and maintain our business.

We seek to maintain strong relationships with our suppliers, and we believe opportunities exist to improve purchasing terms in the future, including inventory storage or “just-in-time” delivery to reduce our inventory carrying costs. We will continue to pursue additional procurement cost savings and purchasing synergies which would further enhance our margins and cash flow.

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Competition

We compete in the professional building contractor segment of the U.S. residential new construction building products supply market (the “Pro Segment”). Our customers primarily consist of professional homebuilders and those that provide construction services to them. We focus on a distinctly different target market than home center retailers such as The Home Depot and Lowe’s, which currently primarily serve do-it-yourself and remodeling customers. The principal methods of competition in the Pro Segment are the development of long-term relationships with professional builders and retaining such customers by delivering a full range of high-quality products on time and offering trade credit, competitive pricing, flexibility in transaction processing, and integrated service and product packages, as well as offering value-added products and services such as structural components and installation. Our leading market positions in the highly competitive Pro Segment create economies of scale that allow us to supply our customers cost-effectively, which both enhances profitability and reduces the risk of losing customers to competitors.

Due to the current market conditions, we have and will continue to experience competition for homebuilder business. Many of our competitors are predominantly small, privately owned companies, local and regional materials distributors, single or multi-site lumberyards, and truss manufacturing and millwork operations. Most of these companies have limited access to capital and lack sophisticated information technology systems and large-scale procurement capabilities. We believe we have substantial competitive advantages over these smaller competitors due to our long-standing customer relationships, local market knowledge, integrated supply chain and competitive pricing. Our largest competitors in our markets include 84 Lumber Co., Builders FirstSource, Inc., Building Materials Holding Corporation and Pro-Build Holdings, Inc.

Employees

At December 31, 2012, we had approximately 2,460 full-time equivalent employees, none of whom were represented by a union. We believe that we have good relations with our employees. Additionally, we believe that the training provided through our ongoing development programs to our professional employees and an entrepreneurial, performance-based culture provide significant benefits to our customers.

Information technology systems

Our primary ERP system, which we use for all of our operations, was purchased from NxTrend (now a division of Infor) and has been highly customized for our needs. The system has been designed to operate our businesses in a highly efficient manner. The materials required for thousands of standard builder plans are stored by the system for rapid quoting or order entry. Hundreds of price lists are maintained on thousands of SKUs, facilitating rapid price changes in a changing product cost environment. A customer’s order can be tracked at each stage of the process and billing can be customized to reduce a customer’s administrative costs and speed payment. As this ERP platform supported our business in 2006 when our volumes, locations and revenues were significantly larger, we believe this platform to be scalable and able to support our growth.

We have a single financial reporting system that has been highly customized for our business. Consolidated financial, sales and workforce reporting is integrated using Oracle Business Intelligence system and custom databases, which aggregates data from our ERP systems along with workforce information from our third-party payroll administrator. This technology platform provides management with robust corporate and location level performance management by leveraging standardized metrics and analytics allowing us to plan, track and report performance and compensation measures.

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We utilize proprietary software, Stock Logistics Solutions, in our distribution operations, which schedules orders from our ERP for delivery, utilizes GPS and mobile technology in our delivery fleet and provides customers with real-time information on their order status, including notification and pictures of completed deliveries. In addition, we have purchased several software products that have been integrated with our primary ERP system. These programs assist in the design and manufacture of structural components, analyzing blueprints to generate material lists and in purchasing lumber products at the lowest cost.

Seasonality and other factors

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors affecting our operating results—Seasonality” for a discussion of seasonality and other factors contributing to variability in our quarterly results.

Intellectual property

We possess an array of intellectual property rights, including patents, trademarks, trade names, proprietary technology and know-how and other proprietary rights that are important to our brand and marketing strategy. In particular, we maintain registered trademarks for Stock Building Supply^® and our logo, as well as for Fortis^® and Artrim^®, two of our private label lines. In addition, we maintain registered trademarks for the trade names under which many of our local branches operate. While we do not believe our business is dependent on any one of our trademarks, we believe that our trademarks are important to the development and conduct of our business as well as the marketing of our products. We vigorously protect all of our intellectual property rights.

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Properties

We have a broad network of distribution and manufacturing operations across 64 facilities in 13 states throughout the eastern, southern and western United States. These branches are supported from our headquarters in Raleigh, North Carolina. Many of our operations are co-located within a single facility: we have 48 distribution and retail operations, 19 millwork fabrication operations, 14 structural component fabrication operations, and 13 flooring distribution operations. Our distribution and manufacturing facilities and their related uses are summarized in the table below.

					Facility use
State	Total # of properties		Approximate aggregate square footage of buildings (millions)		Distribution & retail operations		Millwork fabrication		Structural components fabrication		Flooring operations
Arkansas		1		0.27		1		1				1
California		13		0.34		11		2		1
Georgia		4		0.29		3		2		2
Idaho		1		0.04		1
Maryland		1		0.01								1
New Mexico		2		0.10		1		1		1
North Carolina		10		0.83		5		1		2		5
Pennsylvania		1		0.17		1				1		1
South Carolina		7		0.30		4		1		1		3
Texas		10		1.42		10		3		3
Utah		7		0.31		6		4		2
Virginia		6		0.33		4		3		1		2
Washington		1		0.05		1		1
Raleigh, NC Corporate Office		1		0.04
Total		65		4.50		48		19		14		13

Distribution and retail facilities generally include five to 25 acres of outside storage, a 30,000 to 60,000 square foot warehouse, office and product display space, and 15,000 to 30,000 square feet of covered storage. The outside area provides space for lumber storage and a staging area for delivery while the warehouse stores millwork, windows and doors. The distribution facilities are usually located in industrial areas with low cost real estate and easy access to freeways to maximize distribution efficiency and convenience. In most markets, at least one of the distribution and retail facilities is situated on a rail line to facilitate the procurement of dimensional lumber in rail car quantities and minimize our cost of goods.

Our fabrication operations produce roof and floor trusses, wall panels, pre-cut engineered wood, stairs, windows, pre-hung interior and exterior doors and custom millwork. In most cases, they are located on the same premises as our distribution and retail facilities, which facilitates the efficient distribution of product to customers. Millwork fabrication operations typically vary in size from 5,000 square feet to 50,000 square feet of warehouse space to accommodate fabrication lines and the storage of base components and finished goods. Structural component fabrication operations vary in size from 20,000 square feet to 50,000 square feet with 5 to 25 acres of outside storage for lumber and for finished goods.

We lease 54 facilities and own 11 facilities. Our leases typically have an initial operating lease term of five to ten years and most provide options to renew for specified periods of time. A majority of our leases

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provide for fixed annual rentals. Certain of our leases include provisions for escalating rent, as an example, based on changes in the consumer price index. Most of the leases require us to pay taxes, insurance and maintenance expenses associated with the properties.

As of December 31, 2012, we operate a fleet of approximately 565 trucks to deliver products from our distribution and manufacturing centers to job sites. Through our emphasis on efficient scheduling and material handling processes and strategically placed locations, we minimize shipping and freight costs while maintaining a high degree of local market expertise. We also employ a sales, inventory and operations planning process to forecast local customer demand and adjust product replenishment levels, thereby minimizing working capital requirements while guarding against out-of-stock products. We believe that this reliability is highly valued by our customers and reinforces customer relationships.

Regulation and legislation

We are subject to extensive and varied federal, state and local government regulation in the jurisdictions in which we operate, including laws and regulations relating to our relationships with our employees, public health and safety, zoning and fire codes. We strive to operate each of our distribution, manufacturing, retail and service facilities in accordance with applicable laws, codes and regulations.

Our operations and properties are also subject to federal, state and local laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, release, discharge and disposal of hazardous materials, substances and wastes and relating to the investigation and cleanup of contaminated properties, including off-site disposal locations. We have not incurred material costs in the past to comply with environmental laws and regulations. However, we could be subject to material costs, liabilities or claims relating to environmental compliance in the future, especially in the event of changes in existing laws and regulations or in their interpretation or enforcement.

As owners, lessees and operators of current and former real property, we can be held liable for the investigation or remediation of contamination on or from such properties, in some circumstances irrespective of whether we knew of or caused such contamination. Our current expenditures with respect to environmental investigation and remediation at our facilities are immaterial, although no assurance can be provided that more significant investigation and remediation will not be required in the future as a result of spills or releases of petroleum products or other hazardous substances or the discovery of currently unknown environmental conditions, or changes in legislation, laws, rules or regulations or their interpretation or enforcement.

Our suppliers are subject to various laws and regulations, including in particular laws and regulations regulating labor, forestry and the environment. We consult with our suppliers as appropriate to confirm they have determined they are in material compliance with applicable laws and regulations. Generally, our suppliers agree contractually to comply with our expectations concerning environmental, labor and health and safety matters.

Products that we import into the United States are subject to laws and regulations imposed in conjunction with such importation, including those issued and/or enforced by U.S. Customs and Border Protection. In addition, certain of our products are subject to laws and regulations relating to the importation, acquisition or sale of illegally harvested agricultural products and the emissions of hazardous materials. We work closely with our suppliers to help ensure material compliance with the applicable laws and regulations in these areas.

To date, costs to comply with applicable laws and regulations relating to the protection of the environment and natural resources have not had a material adverse effect on our financial condition or

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operating results. However, there can be no assurance that such laws and regulations will not become more stringent in the future or that we will not incur costs in the future in order to comply with such laws and regulations. We do not anticipate material capital expenditures for environmental controls in the current or subsequent fiscal year.

Legal proceedings

We are currently involved in various claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts in excess of our self-insured coverage as we believe to be reasonable under the circumstances, although insurance may or may not cover any or all of our liabilities in respect of claims and lawsuits. We do not believe that the ultimate resolution of these matters will have a material adverse effect on our consolidated financial position, cash flows or operating results.

We are a defendant in various pending lawsuits and warranty claims arising from assertions of alleged product liability, product warranty, casualty, construction defects and other claims.

We and our subsidiaries may be indemnified against certain losses to the extent arising from actions taken by the Company prior to May 5, 2009. See “Certain Relationship and Related Party Transactions—Restructuring and investment agreement.”

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MANAGEMENT

Below is a list of names, ages and a brief account of the business experience of our executive officers and directors, each as of May 1, 2013.

Name	Age	Position/title
Executive officers
Jeffrey G. Rea	48	President and Chief Executive Officer and Director
James F. Major, Jr.	41	Executive Vice President, Chief Financial Officer and Treasurer
Bryan J. Yeazel	37	Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary
Directors
Timothy P. Meyer	46	Director and Chairman of the Board
Andrew Freedman	50	Director
Robert E. Mellor	69	Director
Ryan Wald	38	Director
Steven C. Yager	59	Director

Jeffrey G. Rea, President and Chief Executive Officer and Director

Mr. Rea became our president and chief executive officer and a director in November 2010. Before joining our Company, he served as president of the specialty products group at TE Connectivity Ltd. (“TEL”) from 2008 to 2010. Prior to TEL, Mr. Rea was the senior vice president of the building products group at Johns Manville, a global manufacturer of highly engineered materials and building products, which is owned by Berkshire Hathaway Company, a position he held in 2006 and 2007. Mr. Rea joined Johns Manville in 2002 as a vice president and general manager of its building insulation business. Before joining Johns Manville, Mr. Rea served 15 years in various leadership roles at General Electric Company, including five years with its corporate audit staff. Mr. Rea received a degree in mechanical engineering from Rose-Hulman Institute of Technology. Mr. Rea’s position as our president and chief executive officer allows him to advise the board of directors on management’s perspective over a full range of issues affecting our Company.

James F. Major, Jr., Executive Vice President, Chief Financial Officer and Treasurer

Mr. Major has been an executive officer of the Company since 2005 and is currently our executive vice president, chief financial officer and treasurer, and is responsible for finance, credit and information technology activities. Mr. Major has substantial expertise in financial planning, analysis and reporting, tax planning and compliance. Mr. Major joined our Company in 1998 as assistant controller. Prior to that, he was an audit manager with PricewaterhouseCoopers LLP. Mr. Major received a bachelor’s degree from Wake Forest University in 1993. He is a certified public accountant and has attended management programs at the Darden School of Business of the University of Virginia and the International Institute for Management Development in Lausanne, Switzerland.

Bryan J. Yeazel, Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary

Mr. Yeazel has been an executive officer of the Company since 2005 and is currently our executive vice president, chief administrative officer, general counsel and corporate secretary. Mr. Yeazel manages key administrative functions including legal, human resources, marketing, health

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and safety, and integrated supply chain. Prior to joining our Company, he was with Hunton & Williams LLP in its global capital markets and mergers and acquisitions practice group, and with Capital One Financial. Mr. Yeazel holds a bachelor’s degree from Wake Forest University and a juris doctor from the University of Notre Dame. In addition, he has attended executive education programs at the International Institute for Management Development in Lausanne, Switzerland and Harvard Business School.

Andrew Freedman, Director

Mr. Freedman has served as one of our directors since July 2010. Mr. Freedman has been a managing director at Glendon Partners, Inc. (“Glendon”), an affiliate of Gores, since January 2010. At Glendon, Mr. Freedman is responsible for portfolio company financial oversight and control, and leading financial due-diligence activities. Mr. Freedman also served at Gores as senior vice president finance from June 2003 until January 2010. Prior to joining Gores, Mr. Freedman was the chief financial officer of The Learning Company. From 1994 to 2002, he held various financial management roles at The Learning Company, Broderbund Software, Inc. and Mindscape Inc. From 1988 to 1994, Mr. Freedman held various financial management positions at Paramount Communications Group. Prior to that, Mr. Freedman spent four years in public accounting. Mr. Freedman serves on the boards of directors of Cosmo Specialty Fibers, Inc., Norment Security Group, Inc., National Envelope Company, ELO Touch Solutions, Inc., Sage Automotive Group and Scovill Fasteners, Inc. Mr. Freedman received a bachelor’s degree in finance and accounting from the State University of New York at Binghamton. Mr. Freedman provides strong finance skills to our board of directors and valuable experience gained from previous and current board service.

Robert E. Mellor, Director

Mr. Mellor has served as one of our directors since March 2010. Mr. Mellor served as the chief executive officer of Building Materials Holding Corporation from 1997 to January 2010 and as a director from 1991 to January 2010. As a result of the downturn in the building materials industry, Building Materials Holding Corporation went through a Chapter 11 restructuring in 2009 and emerged from the restructuring in 2010. Prior to joining Building Materials Holding Corporation, Mr. Mellor served as the executive vice president and director of Di Giorgio Corp. and as of counsel at Gibson, Dunn & Crutcher LLP, a law firm, from 1990 to February 1997. He currently serves as the non-executive chairman of Coeur d’Alene Mines Corporation and the lead director of Monro Muffler Brake Inc. He is also a director of The Ryland Group, Inc. and serves on the board of councilors of Save-the-Redwoods League. He received a bachelor’s degree in economics from Westminster College and a juris doctor from the Southern Methodist University School of Law. Mr. Mellor provides strong executive and managerial skills to our board of directors and valuable experience gained from previous and current board service.

Timothy P. Meyer, Chairman of the Board

Mr. Meyer has served as chairman of our board of directors since May 2009. Mr. Meyer is a member of the investment committee of Gores and a managing director of Glendon, an affiliate of Gores. He is responsible for portfolio company oversight and leading operational due diligence efforts. Mr. Meyer joined Gores in August 2005 and subsequently joined Glendon in July 2007. Prior to joining Gores, Mr. Meyer was vice president of sales operations at Gateway, Inc., where he was responsible for business unit operations, indirect channel program development and execution, and business unit strategy development and execution. Before his role in sales operations, Mr. Meyer served as vice president and general manager of business services. Prior to Gateway, Inc., Mr. Meyer spent five years with Bain & Company in the United States and Australia. From 1990 to 1993, Mr. Meyer served as a large systems account client representative

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at IBM. After IBM, he spent four years with AT&T in Europe and the United States in various sales leadership positions. Mr. Meyer serves on the boards of directors of Norment Security Group, Inc., Sage Automotive Group, Scovill Fasteners, Inc. and Cosmo Specialty Fibers, Inc. He is also chairman of National Envelope Company, and previously chairman of Lineage Power Corporation and Vincotech Gmbh and director for United Road Services, Inc. Mr. Meyer received a bachelor’s degree in finance from Texas A&M University and a master’s degree in business administration with concentration in entrepreneurial finance from The Wharton School of the University of Pennsylvania. Mr. Meyer provides strong executive and managerial skills to our board of directors and valuable experience gained from previous and current board service.

Ryan Wald, Director

Mr. Wald has served as one of our directors since November 2010. Mr. Wald is a managing director and member of the investment committee of Gores, and responsible for leading the execution and negotiation of certain acquisitions and divestitures for Gores in the United States. Mr. Wald joined Gores in 1999. Prior to joining Gores, Mr. Wald was in CBIC Openheimer’s investment banking group, where he worked on a variety of assignments, including public equity, debt security underwritings, mergers and acquisitions, and other financial advisory assignments. Mr. Wald currently serves on the boards of directors of Alpheus Communications, ELO Touch Solutions, Inc., Harris Broadcast Communications, and Equinox Payments, LLC. Mr. Wald received a bachelor’s degree in finance from the McCombs School of Business at the University of Texas at Austin. Mr. Wald provides strong executive and managerial skills to our board of directors and valuable experience gained from previous and current board service.

Steven C. Yager, Director

Mr. Yager has served as one of our directors since December 2009. Mr. Yager is senior managing director and a member of the investment committee of Gores, and is responsible for overseeing the day-to-day management of the Gores private equity funds. Mr. Yager joined Gores in 2002. Prior to joining Gores, Mr. Yager served as the president and chief executive officer of Artemis International Solutions Corporation (“Artemis”) from 1997 to 2002. At Artemis, he led a turnaround and restructuring initiative and was responsible for the sale of Artemis to Proha Oyj, a publicly-traded Finnish software company. He was subsequently responsible for the reverse merger of Artemis into Opus360 Corporation and served as its chairman until 2005. From 1994 to 1996, Mr. Yager served as the executive vice president of business development for Medaphis Physician Services Corp. Mr. Yager serves on the boards of directors of Siemens Enterprise Communications, Tiburon, Inc., Sage Automotive Group, National Envelope Company and Therakos, Inc. Mr. Yager received a bachelor’s degree in business administration and economics from the University of Michigan. Mr. Yager provides strong executive and managerial skills to our board of directors and valuable experience gained from previous and current board service.

Controlled company

For purposes of                              rules, we expect to be a “controlled company” after completion of this offering. Controlled companies under those rules are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. We expect that Gores Holdings, which is controlled by Gores, will continue to control more than 50% of the combined voting power of our common stock upon completion of this offering and will continue to have the right to designate a majority of the members of our board of directors for nomination for election and the voting power to elect such directors following this offering. Accordingly, we expect to be eligible to, and we intend to, take advantage of certain exemptions from corporate governance requirements provided in the                              rules. Specifically, as a controlled company, we would not be required

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to have (i) a majority of independent directors, (ii) a Corporate Governance and Nominating Committee composed entirely of independent directors, (iii) a Compensation Committee composed entirely of independent directors or (iv) an annual performance evaluation of the Nominating and Corporate Governance and Compensation Committees. Therefore, following this offering if we are able to rely on the “controlled company” exemption, we may not have a majority of independent directors, our Nominating and Corporate Governance and Compensation Committees may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the applicable                              rules.

The controlled company exemption does not modify the independence requirements for the Audit Committee, and we intend to comply with the requirements of the Sarbanes-Oxley Act and the                              rules, which require that our Audit Committee be composed of at least three members, one of whom will be independent upon the listing of our common stock on the                             , a majority of whom will be independent within 90 days of the date of this prospectus, and each of whom will be independent within one year of the date of this prospectus.

Composition of the board of directors

Our board of directors will initially consist of seven directors. The authorized number of directors may be changed by resolution of our board of directors. Vacancies on our board of directors can be filled by resolution of our board of directors. Upon the completion of this offering, our board of directors will be divided into three classes, each serving staggered, three-year terms:

Ÿ Our Class I directors will be              and             , and their terms will expire at the first annual meeting of stockholders following the date of this prospectus;

Ÿ Our Class II directors will be              and             , and their terms will expire at the second annual meeting of stockholders following the date of this prospectus; and

Ÿ Our Class III directors will be             ,             and             , and their terms will expire at the third annual meeting of stockholders following the date of this prospectus.

As a result, only one class of directors will be elected at each annual meeting of stockholders, with the other classes continuing for the remainder of their respective terms.

In connection with this offering, we will enter into a Director Nomination Agreement with Gores Holdings that provides Gores Holdings the right to designate nominees for election to our board of directors for so long as Gores Holdings beneficially owns 10% or more of the total number of shares of our common stock then outstanding. Gores may cause Gores Holdings to assign its designation rights under the Director Nomination Agreement to Gores or to a Gores affiliate so long as Gores and its affiliates are the beneficial owners of 50% or more of Gores Holding’s voting equity interests.

The number of nominees that Gores Holdings is entitled to designate under this agreement will bear the same proportion to the total number of members of our board of directors as the number of shares of common stock beneficially owned by Gores Holdings bears to the total number of shares of common stock outstanding, rounded up to the nearest whole number. In addition, Gores Holdings shall be entitled to designate the replacement for any of its board designees whose board service terminates prior to the end of the director’s term regardless of Gores Holdings’ beneficial ownership at such time. Gores Holdings shall also have the right to have its designees participate on committees of our board of directors proportionate to its stock ownership, subject to compliance with applicable law and stock exchange rules. This agreement will terminate at such time as Gores Holdings owns less than 10% of our outstanding common stock.

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Committees of the board of directors

We expect that, immediately following this offering, the standing committees of our board of directors will consist of an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee. Each of the committees will report to the board of directors as they deem appropriate and as the board of directors may request. The expected composition, duties and responsibilities of these committees are set forth below.

Audit committee

The Audit Committee will be responsible for, among other matters: (i) appointing, retaining and evaluating our independent registered public accounting firm and approving all services to be performed by them; (ii) overseeing our independent registered public accounting firm’s qualifications, independence and performance; (iii) overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; (iv) reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; (v) establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters and (vi) reviewing and approving related person transactions.

Immediately following this offering, our Audit Committee will consist of Messrs. Mellor,              and            . We believe that Mr. Mellor qualifies as an independent director according to the rules and regulations of the SEC with respect to audit committee membership. We expect to add at least one additional independent director to our Audit Committee within ninety days of the effective date of the registration statement and have a fully independent Audit Committee within one year of the effective date of the registration statement in order to comply with applicable rules and regulations of our stock exchange.

We also believe that Mr.             qualifies as our “audit committee financial expert,” as such term is defined in Item 401(h) of Regulation S-K. Our board of directors will adopt a written charter for the Audit Committee in connection with this offering, which will be available on our corporate website at www.stockbuildingsupply.com upon the completion of this offering. The information on our website is not part of this prospectus.

Compensation committee

The Compensation Committee will be responsible for, among other matters: (i) reviewing key employee compensation goals, policies, plans and programs; (ii) reviewing and approving the compensation of our directors, chief executive officer and other executive officers; (iii) reviewing and approving employment agreements and other similar arrangements between us and our executive officers and (iv) administering our stock plans and other incentive compensation plans.

Immediately following this offering, our Compensation Committee will consist of Messrs.             ,              and             . Our board of directors will adopt a written charter for the Compensation Committee in connection with this offering, which will be available on our corporate website at www.stockbuildingsupply.com upon the completion of this offering. The information on our website is not part of this prospectus.

Corporate governance and nominating committee

Our Corporate Governance and Nominating Committee will be responsible for, among other matters: (i) identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; (ii) overseeing the organization of our board of

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directors to discharge the board’s duties and responsibilities properly and efficiently; (iii) identifying best practices and recommending corporate governance principles and (iv) developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to us.

Immediately following this offering, our Corporate Governance and Nominating Committee will consist of Messrs.            ,              and             . Our board of directors will adopt a written charter for the Corporate Governance and Nominating Committee in connection with this offering, which will be available on our corporate website at www.stockbuildingsupply.com upon the completion of this offering. The information on our website is not part of this prospectus.

Compensation committee interlocks and insider participation

During 2012, no officer or employee served as a member of our Compensation Committee. None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or Compensation Committee.

Other committees

Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

Risk oversight

Our board of directors will oversee the risk management activities designed and implemented by our management. The board of directors will execute its oversight responsibility for risk management both directly and through its committees. The full board of directors will also consider specific risk topics, including risks associated with our strategic plan, business operations and capital structure. In addition, the board of directors will receive detailed regular reports from members of our senior management and other personnel that include assessments and potential mitigation of the risks and exposures involved with their respective areas of responsibility.

Our board of directors will delegate to the Audit Committee oversight of our risk management process. Our other board committees will also consider and address risk as they perform their respective committee responsibilities. All committees will report to the full board of directors as appropriate, including when a matter rises to the level of a material or enterprise level risk.

Family relationships

There are no family relationships among any of our executive officers or any of the persons to be nominated as our directors prior to the consummation of this offering.

Code of business ethics and conduct

We expect our board of directors to adopt a code of business ethics and conduct. The code of business ethics and conduct will apply to all of our employees, officers and directors. The full text of our code of business ethics and conduct will be posted on our website. If we amend or grant a waiver of one or more of the provisions of our code of business ethics and conduct, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our code of business ethics and conduct that apply to our principal executive officer, financial and accounting officers by posting the required information on our website. The information contained on our website is not part of this prospectus.

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Director compensation

The following table presents the total compensation for each person who served as a non-employee member of our board of directors during 2012. Other than as set forth in the table and described more fully below, we did not pay any compensation, make any equity awards or non-equity awards to, or pay any other compensation to any of the other non-employee members of our board of directors in 2012. Mr. Rea, our Chief Executive Officer, receives no compensation for his service as a director. The compensation received by Jeff Rea as an employee of the Company is presented in “Executive Compensation—Summary compensation table.”

Director compensation table

Name	Fees earned or paid in cash ($)			Stock awards ($)(1)		Option awards ($)(1)		Non-equity incentive plan compensation ($)		Nonqualified deferred compensation earnings ($)		All other compensation ($)		Total ($)
Timothy P. Meyer		—			—		—		—		—		—		—
Andrew Freedman		—			—		—		—		—		—		—
Robert E. Mellor	$	60,000	(2)		—		—		—		—		—	$	60,000
Ryan Wald		—			—		—		—		—		—		—
Steven C. Yager		—			—		—		—		—		—		—

(1) As of December 31, 2012, Mr. Mellor had 1,486 shares and 2,500 options outstanding.

(2) Consists of a $15,000 and $12,500 fee for each board meeting attended in person or telephonically, respectively.

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EXECUTIVE COMPENSATION

The following section provides compensation information pursuant to the scaled disclosure rules applicable to “emerging growth companies” under the rules of the SEC and may contain statements regarding future individual and company performance targets and goals. These targets and goals are disclosed in the limited context of the Company’s executive compensation program and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Overview

Historically, our board of directors has set the compensation of our executive officers. The primary objectives of our executive compensation program have been to:

Ÿ attract, engage, and retain superior talent who contribute to our long-term success;

Ÿ motivate, inspire and reward executive officers whose knowledge, skills and performance are critical to our business;

Ÿ ensure compensation is aligned with our corporate strategies and business objectives; and

Ÿ provide our executive officers with incentives that effectively align their interests with those of our stockholders.

Executive compensation design overview

Historically, our executive compensation program has reflected our growth and development oriented corporate culture. To date, the compensation of our Named Executive Officers has consisted of a combination of base salary, discretionary cash bonuses and long-term incentive compensation in the form of restricted stock or stock options. Our executive officers and all salaried employees also are eligible to receive health and welfare benefits. Pursuant to employment agreements, the Named Executive Officers are also eligible to receive certain payments and benefits upon termination of employment under certain circumstances, as well as acceleration of vesting of certain outstanding equity awards in connection with a change in control of the Company. As we transition from a private company to a publicly-traded company, we will evaluate our philosophy and compensation plans and arrangements as circumstances require. At a minimum, we expect to review executive compensation annually.

Risk assessment and compensation practices

Our management assesses and discusses with the board of directors our compensation policies and practices for our employees as they relate to our overall risk management, and based upon this assessment, we believe that any risks arising from such policies and practices are not reasonably likely to have a material adverse effect on us.

Compensation of named executive officers

Base salaries

Our board of directors reviews the base salaries of our executive officers, including the Named Executive Officers, from time to time and makes adjustments as it determines to be reasonable and necessary. The current base salaries of the Named Executive Officers are as follows:

Named Executive Officer	Base Salary
Jeffrey G. Rea	$	600,000
James F. Major, Jr.	$	325,000
Bryan J. Yeazel	$	300,000

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Management Incentive Plan

We maintain an annual cash incentive compensation plan, the 2013 Management Incentive Plan (the “2013 MIP”), for purposes of providing cash incentive compensation opportunities to our executive officers for the achievement of performance goals established by our board of directors at the beginning of each fiscal year. Under the 2013 MIP and pursuant to their employment agreements, our board of directors has established the following target bonus opportunities for each of our Named Executive Officers.

Named Executive Officer	Target award as a percentage of base salary
Jeffrey G. Rea		75	%
James F. Major, Jr.		100	%
Bryan J. Yeazel		100	%

Under the 2012 Management Incentive Plan (“the 2012 MIP”), each Named Executive Officer was eligible to receive a maximum award equal to 200% of his target award opportunity based on the Company’s achievement against financial targets established by our board of directors for (i) Adjusted Gross Profit, (ii) Adjusted EBITDA and (iii) Ending Liquidity. In addition, in order to be eligible to receive any bonus under the 2012 MIP, each Named Executive Officer had to achieve threshold targets based on: (i) the Company’s safety performance, as measured by OSHA recordable rate and CSA Basic scores; (ii) the Company’s customer service rating, as measured by our On-Time, In-Full metrics and (iii) each Named Executive Officer’s individual rating, based on a 9-block grid based on performance and leadership.

As used in the 2012 MIP, Adjusted Gross Profit means gross profit plus an adjustment of $2.5 million to add back depreciation expense included in cost of goods sold.

As used in the 2012 MIP, Ending Liquidity means excess availability on the Revolver plus cash and cash equivalents and includes a pro forma adjustment of $8.0 million to add back $23.0 million related to the payment of dividends and redemption of Class B Senior Preferred Shares and deduct $15.0 million related to the elimination of an availability restriction on the Revolver.

For 2012, the board of directors determined that the threshold targets had all been satisfied by each of our Named Executive Officers. The following table shows the financial metrics established for determining payouts under the 2012 MIP, and the calculation of the 2012 MIP payouts based on actual performance.

Performance metrics	Threshold			Target			Maximum			Actual 2012 results			Weight			Factor
(dollars in thousands)
Adjusted gross profit		$  183,150			$203,500			$213,675			$217,217
Payout %		25	%		100	%		200	%		200	%		33	%		66	%
Adjusted EBITDA		$  (10,000	)		$    1,300			$    5,000			$    1,993
Payout %		25	%		100	%		200	%		102	%		34	%		35	%
Ending liquidity		$   28,260			$  31,400			$  35,200			$  42,035
Payout %		25	%		100	%		200	%		200	%		33	%		66	%
Payout factor																	167	%

Based on our actual achievement in 2012 of 167% of the financial metrics and in consideration of continued operational performance, strategic transformation of the corporate headquarters and significant progress on our strategy, in January, 2013 our board of directors approved awarding each Named Executive Officer the following percentages of his target award: 167% for Mr. Rea, 164% for Mr. Major and 180% for Mr. Yeazel.

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Equity awards

We use equity awards to incentivize and reward our executive officers, including the Named Executive Officers, for long-term corporate performance based on the value of our common stock and, thereby, to align the interests of our executive officers with those of our stockholders. These equity awards have either been in the form of restricted stock or stock options to purchase shares of our common stock. The size of equity awards to each of the Named Executive Officers reflects their importance as executive officers and also takes into account, among other factors, their roles and responsibilities, the competitive market for executive officers, and the size, value and vesting status of existing equity awards at the time new equity awards are made. Restricted stock and stock options typically vest over a four year period from the date of grant, 10% on the first anniversary, 20% on the second anniversary, 25% on the third anniversary and the remaining 45% on the fourth anniversary, subject to such Named Executive Officers’ continued employment with us.

Compensation tables

The following table presents summary information regarding the total compensation awarded to, earned by, and paid to each individual who served as our Chief Executive Officer and the two most highly compensated executive officers (other than the Chief Executive Officer) who were serving as executive officers as of December 31, 2012 for services rendered in all capacities to the Company for the year ended December 31, 2012. These individuals are our “Named Executive Officers.”

Summary compensation table

Name and principal position	Year		Salary ($)		Stock awards ($)(1)		Option awards ($)(2)		Nonequity incentive plan compensation ($)(3)		Total ($)
Jeffrey G. Rea		2012	$	600,000	$	132,762	$	20,093	$	750,000	$	1,502,855
President and Chief Executive Officer
James F. Major, Jr.		2012	$	275,000		—	$	10,459	$	450,000	$	735,459
Executive Vice President and Chief Financial Officer
Bryan J. Yeazel		2012	$	250,000		—	$	10,459	$	450,000	$	710,459
Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary

(1) During 2012, we cancelled 3,005 vested options and 6,008 options scheduled to vest on November 15, 2012 held by Mr. Rea, and issued, in replacement, 9,013 Class B non-voting common shares to Mr. Rea (the “Replacement Shares”) for a purchase price of $90.13. The amounts reported in this column represent the repricing-date incremental fair value of the Replacement Shares, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). For a discussion of valuation assumptions, see note 17 to the consolidated financial statements included elsewhere in this prospectus.

(2) The amounts reported in this column represent the grant date fair value and repricing-date incremental fair value of the stock options granted or repriced during 2012 as computed in accordance with ASC 718. The amounts reported in this column reflect the accounting cost for

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these stock options and do not correspond to the actual economic value that may be received by the Named Executive Officers for the stock options. During 2012, Mr. Rea was granted 1,825 stock options with a fair value of $11.01 per share, Mr. Major was granted 950 stock options with a fair value of $11.01 per share and Mr. Yeazel was granted 950 stock options with a fair value of $11.01 per share. During 2012, we also repriced 30,045 options held by Mr. Rea. The incremental fair value of the stock options repriced for Mr. Rea was $4.90 per share. For a discussion of valuation assumptions, see note 17 to the consolidated financial statements included elsewhere in this prospectus.

(3) The amounts reported in this column represent the actual payout earned by each of our Named Executive Officers under our 2012 MIP.

Outstanding equity awards at fiscal year end

The following table summarizes, for each of the Named Executive Officers, the number of shares of restricted stock and the number of shares of our common stock underlying outstanding stock options held as of December 31, 2012.

	Option awards													Stock awards
Name	Vesting commencement date			Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Equity incentive plan awards: Number  of securities underlying unexercised unearned options (#)		Option exercise price ($)		Option expiration date		Number of shares or units of stock that have not vested (#)			Market value of shares or units of stock that have  not vested ($)(5)		Equity incentive plan awards: Number of unearned shares, units  or other rights that have not vested (#)		Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
Jeffrey G. Rea		1/26/2012	(1)		—		1,825		—	$	25.25		3/1/2022		21,032	(2)		—		—		—
James F. Major, Jr.		1/26/2012	(1)		—		950		—	$	25.25		4/11/2022		4,500	(3)		—		—		—
Bryan J. Yeazel		1/26/2012	(1)		—		950		—	$	25.25		4/16/2022		4,500	(4)		—		—		—

(1) The options vest over a four-year period: as to 10% of the shares underlying the option award on the first anniversary of the vesting commencement date, 20% on the second anniversary, 25% on the third anniversary and the remaining 45% on the fourth anniversary, subject to such Named Executive Officer’s continued employment with us.

(2) 7,512 of these restricted shares vest on November 15, 2013 and the remaining 13,520 shares vest on November 15, 2014.

(3) These restricted shares vested on May 5, 2013.

(4) These restricted shares vested on May 5, 2013.

(5) There was no public market for our common stock at December 31, 2012. Accordingly, the value of the restricted stock awards is based on the midpoint of the price range set forth on the cover page of this prospectus.

Employment and post-termination arrangements

We have employment agreements with each of our Named Executive Officers, which include provisions requiring us to make post-termination payments upon certain qualifying termination events. The employment agreements are for indefinite terms but may be terminated by either party at any time subject to the terms and conditions of each agreement. Each agreement sets forth a compensation package that includes an annual base salary and an annual bonus. The employment agreements provide for a base salary of at least $600,000, $275,000 and $250,000 and a target bonus of 75%, 100% and 100% of base salary, for Messrs. Rea, Major and Yeazel, respectively. The actual amount of the annual bonus is to be determined by the board of directors based upon percentage achievement of certain company-wide and individual performance goals for each respective calendar year. Under the employment agreements, each Named Executive Officer is eligible to participate in applicable benefit plans, policies or contracts that we adopt for U.S. employees, including our 401(k) plan, and other benefits and fringe benefits generally available for executive personnel. The employment agreements also provide that we are obligated to reimburse each executive for all reasonable expenses incurred in connection with performing their respective duties.

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If Mr. Rea’s employment is terminated without “cause” or due to death or disability, any unvested portion of Mr. Rea’s options and restricted shares will be forfeited and we have the right to redeem any vested portion. If his employment is terminated by us for “cause,” the entire equity award will be forfeited.

If a Named Executive Officer’s employment is terminated by us without “cause” or he resigns with “good reason,” the Named Executive Officer shall be entitled to receive his annual bonus for any completed fiscal year at the same time annual bonuses would have been paid had the Named Executive Officer remained employed. If we terminate a Named Executive Officer without “cause” or if the Named Executive Officer resigns for “good reason,” then, such Named Executive Officer would be entitled to continue receiving his base salary and to be reimbursed for the marginal cost of COBRA benefits for 12 months following the separation, conditioned upon execution and delivery of a general release.

Under the employment agreements, termination for “cause” requires that the Named Executive Officer: (i) has been convicted of, or has entered a pleading of guilty or nolo contendere to, a felony (other than DUI or a similar felony) or any crime involving fraud, theft, embezzlement or other act of dishonesty involving the Company; (ii) has knowingly and intentionally participated in fraud, embezzlement or other act of dishonesty involving the Company; (iii) materially fails to attempt in good faith to perform duties required of his employment; (iv) fails to attempt in good faith to comply with a lawful directive of the board of directors, or in the case of Messrs. Major and Yeazel, the chief executive officer; (v) engages in willful misconduct as a result of which the Named Executive Officer receives a material and improper personal benefit at the expense of the Company, or accidental misconduct resulting in such a benefit which the Named Executive Officer does not promptly report and redress; (vi) in carrying out duties, engages in willful misconduct or omissions constituting gross negligence or willful misconduct resulting in substantial economic harm to the Company; (vii) has failed for any reason to correct, cease or alter any action or omission that constitutes (A) a material breach of the agreement or (B) a material breach of his duty of loyalty to the Company or (viii) has improperly disclosed any material proprietary information without authorization.

Under the employment agreements, resignation for “good reason” requires that, without the Named Executive Officer’s prior written consent, there has been: (i) a material diminution of each Named Executive Officer’s base salary or target annual bonus; (ii) a material diminution in title or authority, duties or responsibilities of the Named Executive Officer, including, in the case of Mr. Rea, the Company becoming a subsidiary or division of any other entity and the Named Executive Officer not having his current position in that entity; (iii) in the case of Mr. Rea, any requirement that Mr. Rea report to anyone but the board of directors, and in the case of Messrs. Major and Yeazel, any requirement that they report to anyone but the chief executive officer or the board of directors; (iv) any material breach by the Company of the employment agreement or other agreements with the Company or (v) in the case of Messrs. Major and Yeazel, any requirement that the Named Executive Officer relocate his personal residence to any city more than 50 miles from Raleigh, North Carolina.

The employment agreements also contain intellectual property and non-disclosure provisions and non-competition provisions that extend for 12 months after a termination of employment.

Pursuant to various equity agreements with each of our Named Executive Officers, if a Named Executive Officer’s employment is terminated without “cause” or due to death or disability, any unvested portion of such Named Executive Officer’s restricted stock and stock options will be forfeited and we will have the right to redeem any vested portion. If a Named Executive Officer’s employment is terminated by us for “cause,” both the vested and unvested restricted stock and stock options of such Executive will be forfeited for no consideration. However, if a “change in control” occurs and within twelve months a Named Executive Officer’s employment is terminated by us without “cause” or by

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such Named Executive Officer “for good reason,” the Named Executive Officer’s restricted stock and stock options will vest as if he had worked for an additional twelve months following such change in control. In the event of a liquidity event that constitutes a change in the ownership or effective control of the Company, all of the outstanding options of each Named Executive Officer will become fully vested and exercisable.

401(k) plan

We maintain a qualified 401(k) savings plan which allows participants to defer from 0% to 50% of cash compensation up to the maximum amount allowed under Internal Revenue Service guidelines. From time to time, we make contributions to our employees’ individual 401(k) accounts as a performance incentive. Participants are always vested in their own contributions to the plan and are fully vested in contributions by us generally after a five-year vesting period.

2013 Incentive Plan

In connection with this offering, we expect to adopt the 2013 Incentive Plan. The 2013 Incentive Plan is expected to provide for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation and performance awards. Directors, officers and other employees of us and our subsidiaries, as well as others performing consulting or advisory services for us, will be eligible for grants under the 2013 Incentive Plan. The purpose of the 2013 Incentive Plan will be to provide incentives that attract, retain and motivate high-performing officers, directors, employees and consultants by providing them a proprietary interest in our long-term success or compensation based on their performance in fulfilling their responsibilities to our company. This summary may not include all of the provisions of the 2013 Incentive Plan. For further information about the 2013 Incentive Plan, we refer you to the complete copy of the form of the 2013 Incentive Plan, which we have filed as an exhibit to the registration statement.

Administration.    The 2013 Incentive Plan will be administered by a committee designated by our board of directors. The committee’s powers will include: (i) determining the form, amount and other terms and conditions of awards; (ii) construing or interpreting any provision of the 2013 Incentive Plan or any award agreement; (iii) amending the terms of outstanding awards and (iv) adopting such rules, guidelines and practices for administering the 2013 Incentive Plan as it deems advisable. The committee will have full authority to administer and interpret the 2013 Incentive Plan, to grant discretionary awards under the 2013 Incentive Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award, to make all other determinations in connection with the 2013 Incentive Plan and the awards thereunder as the committee deems necessary or desirable and to delegate authority under the 2013 Incentive Plan to our executive officers.

Available shares.    The aggregate number of shares of common stock which may be issued or used for reference purposes under the 2013 Incentive Plan or with respect to which awards may be granted may not exceed             shares. The maximum number of shares of our common stock with respect to which any stock option, stock appreciation right, shares of restricted stock or other stock-based awards that are subject to the attainment of specified performance goals and intended to satisfy Section 162(m) of the Internal Revenue Code and may be granted under the 2013 Incentive Plan during any fiscal year to any eligible individual will be             shares (per type of award); provided that the total number of shares of our common stock with respect to all such awards that may be granted under the 2013 Incentive Plan during any fiscal year to any eligible individual will be              shares. There are no annual limits on the number of shares of our common stock with respect to an award of

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restricted stock that are not subject to the attainment of specified performance goals to eligible individuals. The maximum number of shares of our common stock subject to any performance award which may be granted under the 2013 Incentive Plan during any fiscal year to any eligible individual will be              shares. The maximum value of a cash payment made under a performance award which may be granted under the 2013 Incentive Plan during any fiscal year to any eligible individual will be $        .

The number of shares available for issuance under the 2013 Incentive Plan may be subject to adjustment in the event of a reorganization, stock split, merger or similar change in our corporate structure or the number of outstanding shares of our common stock. In the event of any of these occurrences, we will make any adjustments we consider appropriate to, among other things, the number and kind of shares, options or other property available for issuance under the plan or covered by grants previously made under the plan. The shares available for issuance under the plan may be, in whole or in part, either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the 2013 Incentive Plan are for any reason cancelled, or expire or terminate unexercised, the shares covered by such awards may again be available for the grant of awards under the 2013 Incentive Plan.

Eligibility for participation.    Members of our board of directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates will be eligible to receive awards under the 2013 Incentive Plan.

Award agreement.    Awards granted under the 2013 Incentive Plan will be evidenced by award agreements, which need not be identical, and that provide additional terms, conditions, restrictions or limitations covering the grant of the award, including, without limitation, additional terms providing for the acceleration of exercisability or vesting of awards in the event of a change in control or conditions regarding the participant’s employment, as determined by the committee.

Stock options.    The committee may grant nonqualified stock options to any individuals eligible to participate in the 2013 Incentive Plan and incentive stock options to purchase shares of our common stock only to eligible employees. The committee will determine: (i) the number of shares of our common stock subject to each option; (ii) the term of each option, which may not exceed ten years, or five years in the case of an incentive stock option granted to a 10% or greater stockholder; (iii) the exercise price; (iv) the vesting schedule, if any and (v) the other material terms of each option. No incentive stock option or nonqualified stock option may have an exercise price less than the fair market value of a share of our common stock at the time of grant or, in the case of an incentive stock option granted to a 10% or greater stockholder, 110% of such share’s fair market value. Options will be exercisable at such time or times and subject to such terms and conditions as determined by the committee at grant and the exercisability of such options may be accelerated by the committee.

Stock appreciation rights.    The committee may grant stock appreciation rights, or “SARs,” either with a stock option, which may be exercised only at such times and to the extent the related option is exercisable (a “Tandem SAR”) or independent of a stock option (a “Non-Tandem SAR”). A SAR is a right to receive a payment in shares of our common stock or cash, as determined by the committee, equal in value to the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The term of each SAR may not exceed ten years. The exercise price per share covered by a SAR will be the exercise price per share of the related option in the case of a Tandem SAR and will be the fair market value of our common stock on the date of grant in the case of a Non-Tandem SAR. The committee may also grant limited SARs, either as Tandem SARs or Non-Tandem SARs, which may become exercisable only upon the occurrence of a change in control, as defined in the 2013 Incentive Plan, or such other event as the committee may designate at the time of grant or thereafter.

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Restricted stock.    The committee may award shares of restricted stock. Except as otherwise provided by the committee upon the award of restricted stock, the recipient generally will have the rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted stock and, conditioned upon full vesting of shares of restricted stock, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted stock or specifically set forth in the recipient’s restricted stock agreement. The committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period. Recipients of restricted stock will be required to enter into a restricted stock agreement with us that states the restrictions to which the shares are subject, which may include satisfaction of pre-established performance goals, and the criteria or date or dates on which such restrictions will lapse. If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of performance goals, the committee will establish for each recipient the applicable performance goals, formulae or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulae or standards while the outcome of the performance goals are substantially uncertain. Such performance goals may incorporate provisions for disregarding, or adjusting for, changes in accounting methods, corporate transactions, including, without limitation, dispositions and acquisitions, and other similar events or circumstances. Section 162(m) of the Internal Revenue Code requires that performance awards be based upon objective performance measures. The performance goals for performance-based restricted stock will be based on one or more of the objective criteria discussed in general below.

Other stock-based awards.    The committee may, subject to limitations under applicable law, make a grant of such other stock-based awards, including, without limitation, performance units, dividend equivalent units, stock equivalent units, restricted stock and deferred stock units under the 2013 Incentive Plan that are payable in cash or denominated or payable in or valued by shares of our common stock or factors that influence the value of such shares. The committee may determine the terms and conditions of any such other awards, which may include the achievement of certain minimum performance goals for purposes of compliance with Section 162(m) of the Code and a minimum vesting period. The performance goals for performance-based other stock-based awards will be based on one or more of the objective criteria discussed in general below.

Other cash-based awards.    The committee may grant awards payable in cash. Cash-based awards shall be in such form, and dependent on such conditions, as the committee shall determine, including, without limitation, being subject to the satisfaction of vesting conditions or awarded purely as a bonus and not subject to restrictions or conditions. If a cash-based award is subject to vesting conditions, the committee may accelerate the vesting of such award in its discretion.

Performance awards.    The committee may grant a performance award to a participant payable upon the attainment of specific performance goals. The committee may grant performance awards that are intended to qualify as performance-based compensation under Section 162(m) of the Code as well as performance awards that are not intended to qualify as performance-based compensation under Section 162(m) of the Code. If the performance award is payable in cash, it may be paid upon the attainment of the relevant performance goals either in cash or in shares of restricted stock, based on the then current fair market value of such shares, as determined by the committee. Based on service, performance or other factors or criteria, the committee may, at or after grant, accelerate the vesting of all or any part of any performance award.

Performance goals.    The committee may grant awards of restricted stock, performance awards, and other stock-based awards that are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Code. These awards may be granted, vest and be paid based on attainment of specified performance goals established by the committee. These performance goals may be based on the attainment of a certain target level of, or a specified increase or decrease in, one

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or more of the following measures selected by the committee: (1) earnings per share; (2) operating income; (3) gross income; (4) net income, before or after taxes; (5) cash flow; (6) gross profit; (7) gross profit return on investment; (8) gross margin return on investment; (9) gross margin; (10) operating margin; (11) working capital; (12) earnings before interest and taxes; (13) earnings before interest, tax, depreciation and amortization; (14) return on equity; (15) return on assets; (16) return on capital; (17) return on invested capital; (18) net revenues; (19) gross revenues; (20) revenue growth, as to either gross or net revenues; (21) annual recurring net or gross revenues; (22) recurring net or gross revenues; (23) license revenues; (24) sales or market share; (25) total shareholder return; (26) economic value added; (27) specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and other offsets and adjustments as may be established by the committee; (28) fair market value of a share of common stock; (29) the growth in the value of an investment in the common stock assuming the reinvestment of dividends; (30) reduction in operating expenses or (31) other objective criteria determined by the committee in accordance with the 2013 Incentive Plan.

To the extent permitted by law, the committee may also exclude the impact of an event or occurrence which the committee determines should be appropriately excluded, such as (i) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring charges; (ii) an event either not directly related to our operations or not within the reasonable control of management or (iii) a change in tax law or accounting standards required by GAAP. Performance goals may also be based on an individual participant’s performance goals, as determined by the committee. In addition, all performance goals may be based upon the attainment of specified levels of our performance, or the performance of a subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations. The committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.

Change in control.    In connection with a change in control, as will be defined in the 2013 Incentive Plan, the committee may accelerate vesting of outstanding awards under the 2013 Incentive Plan. In addition, such awards may be, in the discretion of the committee, (i) assumed and continued or substituted in accordance with applicable law; (ii) purchased by us for an amount equal to the excess of the price of a share of our common stock paid in a change in control over the exercise price of the awards or (iii) cancelled if the price of a share of our common stock paid in a change in control is less than the exercise price of the award. The committee may also provide for accelerated vesting or lapse of restrictions of an award at any time.

Stockholder rights.    Except as otherwise provided in the applicable award agreement, and with respect to an award of restricted stock, a participant will have no rights as a stockholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.

Amendment and termination.    Notwithstanding any other provision of the 2013 Incentive Plan, our board of directors may at any time amend any or all of the provisions of the 2013 Incentive Plan, or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided in the 2013 Incentive Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination may not be adversely affected without the consent of such participant.

Transferability.    Awards granted under the 2013 Incentive Plan generally will be nontransferable, other than by will or the laws of descent and distribution, except that the committee may provide for the transferability of nonqualified stock options at the time of grant or thereafter to certain family members.

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Recoupment of awards.    The 2013 Incentive Plan will provide that awards granted under the 2013 Incentive Plan are subject to any recoupment policy we may have, including the clawback of “incentive-based compensation” under the Securities Exchange Act of 1934, as amended, or under any applicable rules and regulations promulgated by the SEC.

Effective date.    We expect that the 2013 Incentive Plan will be adopted and become effective in connection with the completion of this offering.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table contains information about the beneficial ownership of our common stock as of May 1, 2013, after giving effect to (i) the effectiveness of our amended and restated certificate of incorporation, (ii) the conversion of all outstanding shares of our convertible Class C preferred stock, (iii) the conversion of all outstanding shares of our Class A voting common stock and Class B non-voting common stock into a single class of common stock, and (iv) the redemption of all of the outstanding shares of our redeemable Class A junior preferred stock and Class B senior preferred stock; each immediately prior to, or upon, the consummation of this offering, by:

Ÿ each person, or group of persons, who beneficially owns more than 5% of our capital stock, including one of the selling stockholders;

Ÿ each of our Named Executive Officers;

Ÿ each of our directors; and

Ÿ all directors and executive officers as a group.

For further information regarding material transactions between us and certain of our shareholders, see “Certain Relationships and Related Party Transactions.”

Each stockholder’s percentage ownership before the offering is based on             shares of our common stock outstanding as of May 1, 2013, as adjusted to give effect to this offering. Each stockholder’s percentage ownership after this offering is based on              shares of our common stock outstanding immediately after the completion of this offering, assuming no exercise of the underwriters’ option to purchase additional shares. We and the selling stockholders have granted the underwriters an option to purchase up to              additional shares of our common stock and the table below assumes no exercise of that option. The following table does not reflect any shares of our common stock that directors, officers, employees and certain other persons who are associated with us may purchase in this offering through the directed share program described under ‘‘Underwriting.”

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable within 60 days of May 1, 2013 are deemed to be outstanding and beneficially owned by the person holding the options. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Percentage of beneficial ownership is based on              shares of common stock to be outstanding after the completion of this offering, assuming no exercise of the underwriters’ option to purchase additional shares. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder.

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Unless otherwise indicated, the address of each of the individuals named below is c/o Stock Building Supply Holdings, Inc., 8020 Arco Corporate Drive, Suite 400, Raleigh, North Carolina 27617.

Name	Shares beneficially owned prior to the offering	Percentage of shares beneficially owned prior to the offering			Shares being sold in this offering	Shares beneficially owned after the offering	Percentage of shares beneficially owned after the offering
5% Stockholder:
Gores Building Holdings, LLC(1)			88.4	%				%
Named Executive Officers and directors:
Jeffrey G. Rea(2)			4.7
James F. Major, Jr.(3)			1.7
Bryan J. Yeazel(4)			1.7
Timothy Meyer(5)			88.4
Andrew Freedman(5)			88.4
Robert E. Mellor(6)			*
Ryan Wald(5)			88.4
Steven C. Yager(5)			88.4
All executive officers and directors as a group (8 Persons)			96.9

* Represents beneficial ownership of less than 1% of our outstanding shares of common stock.

(1) Represents (i)              shares of common stock issuable upon conversion of the convertible Class C preferred stock and              shares of common stock issuable upon conversion of Class A voting common stock held of record by Gores Holdings and (ii)              shares of common stock issuable upon conversion of Class B non-voting common stock held of record by Glendon Saturn Holdings, LLC (“Glendon Saturn”). Gores is the manager of Gores Holdings and Glendon Saturn and Alec E. Gores is the manager of Gores. Gores Capital Partners II, L.P. (“Gores II”) is the controlling member of Gores Holdings. Gores Capital Advisors II, LLC (“Gores Advisors”) is the general partner of Gores II. Gores is the manager of Gores Advisors. Gores Advisors has a seven member investment committee that, by majority vote, has voting and dispositive authority over the common stock. The members of the investment committee include Alec E. Gores, Mark R. Stone, Joseph P. Page, Vance W. Diggins, Timothy Meyer, Ryan Wald and Steven C. Yager. Andrew Freedman is a Managing Director at Glendon, an affiliate of Gores. Each of the foregoing persons may be deemed to share voting and dispositive power with respect to the shares held of record by Gores Holdings and Glendon Saturn. The address of each of the foregoing persons is c/o The Gores Group, LLC, 10877 Wilshire Blvd, 18th Floor, Los Angeles, California 90024.

(2) Represents              shares of common stock issuable upon conversion of Class B non-voting common stock.

(3) Represents              shares of common stock issuable upon conversion of Class B non-voting common stock.

(4) Represents              shares of common stock issuable upon conversion of Class B non-voting common stock.

(5) Messrs. Meyer, Wald and Yager are members of the investment committee of Gores and Mr. Freedman is a Managing Director of Glendon, and as such each may be deemed to share voting and dispositive power with respect to the shares held of record by Gores Holdings and Glendon Saturn.

(6) Represents              shares of common stock issuable upon conversion of Class B non-voting common stock and              shares of Class B non-voting common stock.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Approval policies

Following this offering, we expect that our Audit Committee will be responsible for the review, approval and ratification of “related person transactions” between us and any related person. Under SEC rules, a related person is an officer, director, nominee for director or beneficial holder of more than of 5% of any class of our voting securities since the beginning of the last fiscal year or an immediate family member of any of the foregoing. In the course of its review and approval or ratification of a related-person transaction, the Audit Committee will consider:

Ÿ the nature of the related person’s interest in the transaction;

Ÿ the material terms of the transaction, including the amount involved and type of transaction;

Ÿ the importance of the transaction to the related person and to our Company;

Ÿ whether the transaction would impair the judgment of a director or executive officer to act in our best interest and the best interest of our stockholders; and

Ÿ any other matters the audit committee deems appropriate.

Any member of the Audit Committee who is a related person with respect to a transaction under review will not be able to participate in the deliberations or vote on the approval or ratification of the transaction. However, such a director may be counted in determining the presence of a quorum at a meeting of the committee that considers the transaction.

Other than compensation agreements and other arrangements which are described under “Executive Compensation,” and the transactions described below, since January 1, 2010, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $120,000 and in which any related person had or will have a direct or indirect material interest.

Plan of conversion and certificate of incorporation

Plan of conversion

On May 2, 2013, we entered into a Plan of Conversion with Gores Holdings, pursuant to which we and Gores Holdings agreed to convert the Company from a limited liability company to a corporation. Pursuant to the terms of the Company’s former Second Amended and Restated Limited Liability Company Agreement, the Company could be converted to a corporation with the consent of Gores Holdings. In connection with the conversion, the Company adopted a certificate of incorporation and bylaws, which replaced the Second Amended and Restated Limited Liability Company Agreement, other than the provisions granting Gores Holdings and other holders of the Company’s securities registration rights as described below.

Pursuant to the Plan of Conversion, we have granted Gores Holdings and our other stockholders prior to this offering (each, a “Holder of Registrable Securities”) certain registration rights. The holders of a majority of the Registrable Securities will be entitled to request that the Company register their shares on a long-form or short-form registration statement on one or more occasions in the future, which registrations may be “shelf registrations.” Holders of Registrable Securities will also be entitled to participate in certain registered offerings by the Company, subject to the restrictions in the registration rights agreement. The Company will pay the expenses of the Holders of Registrable Securities in

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connection with their exercise of their rights under the Registration Rights Agreement. The registration rights described in this paragraph apply to (i) shares of our common stock held by Gores Holdings and its affiliates, (ii) shares of common stock held by any holder of Registrable Securities other than Gores Holdings as of the date of the Plan of Conversion, (iii) any shares of common stock issued or issuable upon conversion of our preferred stock and (iv) any of our capital stock (or that of our subsidiaries) issued or issuable with respect to the common stock described in clauses (i) through (iii) with respect to any dividend, distribution, recapitalization, reorganization or certain other corporate transactions (“Registrable Securities”). These registration rights are also for the benefit of any subsequent holder of Registrable Securities; provided that any particular securities will cease to be Registrable Securities when they have been sold in a registered public offering, sold in compliance with Rule 144 of the Securities Act or repurchased by us or our subsidiaries. In addition, at the Company’s election and with the consent of the holders of a majority of Registrable Securities, any Registrable Securities held by a person other than Gores Holdings and its affiliates will cease to be Registrable Securities if they can be sold without limitation under Rule 144 of the Securities Act.

Certificate of incorporation

Pursuant to our certificate of incorporation, the preemptive rights, the tag-along and drag-along rights and the restrictions on the transfer of our shares described in this paragraph, cease to be effective following the consummation of an initial public offering of our stock and would not apply to our initial public offering. In the event that we propose to issue additional shares, our certificate of incorporation grants preemptive rights to each of our stockholders to subscribe for additional shares in such issuance, on a pro rata basis. In addition, if Gores Holdings or its affiliates enter into an agreement to sell, directly or indirectly, any of their common stock or any interest therein, other than to an affiliate or in connection with an initial public offering, each stockholder has the right to participate in such sale on a pro-rata basis (“tag-along sale”). In the event that Gores Holdings or its affiliates determine to accept an offer from any person to acquire a majority of our outstanding common stock, subject to applicable law, each of our stockholders is entitled to include shares of common stock in such sale on a pro-rata basis (“drag-along sale”). The aggregate percentage of shares to be sold by participating stockholders in a tag-along or drag-along sale is to be determined by Gores Holdings and its affiliates. Except for the registration rights described below, our certificate of incorporation restricts our stockholders from transferring all or any portion of their shares prior to an initial public offering without the written consent of our board of directors, except to an affiliate of such stockholder.

Fees paid to Wolseley

In accordance with the Second Amended and Restated Limited Liability Company Agreement, affiliates of Wolseley provided management services to us until 2011. We paid fees to Wolseley for management services of $0.5 million and $0.4 million in 2010 and 2011, respectively.

Management services agreement with Gores

On May 4, 2009, in connection with Gores Holdings’ investment in our Company, we entered into a management services agreement with Gores. Under the management services agreement, Gores provides consulting, administrative services, oversight, advice and support. In exchange for these services, we agreed to pay Gores an annual fee of $1.0 million. We also agreed to reimburse Gores for certain out-of-pocket expenses incurred in connection with the provision of services pursuant to the management services agreement. The management agreement provided that it would terminate on March 31, 2010 but would automatically renew annually for an additional one-year term unless we and Gores agreed not to renew the agreement prior to the expiration of the then-current term. For each of the years ended December 31, 2010, 2011 and 2012, the fees we paid under the management services agreement were $1.0 million. In addition, in 2010, we paid Gores a fee of $1.5 million in connection with services performed in connection with acquisitions by the Company.

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Professional services agreement with Glendon

On May 5, 2009, in connection with Gores Holdings’ investment in our Company, we entered into a professional services agreement with Glendon, an affiliate of Gores. Under the professional services agreement, Glendon provides consulting services related to operations, mergers and acquisitions and financial matters. In exchange for these services, we agreed to pay Glendon consulting fees based on the hours spent by Glendon employees providing the consulting services. We also agreed to reimburse Glendon for out-of-pocket expenses incurred in connection with the provision of services pursuant to the professional services agreement. The professional services agreement provided that it would terminate on May 5, 2010 but would automatically renew annually for an additional one-year term unless we and Glendon agreed not to renew the agreement prior to expiration of the prior one-year term. For the years ended December 31, 2010, 2011 and 2012, the fees and out-of-pocket expenses we paid under the professional services agreement were $2.2 million, $0.9 million and $0.4 million, respectively. The fees for the year ended December 31, 2010 include $0.9 million for services performed in connection with acquisitions by the Company.

Restructuring and investment agreement

On May 5, 2009, an affiliate of Wolseley, as seller, Saturn Acquisition Holdings, LLC, then, a newly formed subsidiary wholly-owned by Gores Holdings, as purchaser, and our predecessor, entered into a restructuring and investment agreement pursuant to which Saturn Acquisition Holdings, LLC acquired substantially all of our assets and 51% of our voting interests from Wolseley and Wolseley retained a 49% voting interest. The closing of the transaction occurred on May 5, 2009.

Pursuant to the restructuring and investment agreement, Wolseley and its affiliates released us and our subsidiaries from any and all guarantees or liens associated with all loans and indebtedness between us or our subsidiaries and Wolseley or its affiliates, and certain credit agreements arranged for Wolseley that were outstanding at May 5, 2009. All other agreements and transactions between us and Wolseley were also terminated, except that concurrently with the closing of the transaction, we entered into a transition services agreement whereby Wolseley and Saturn Acquisition Holdings, LLC agreed to continue to provide certain management services that such parties had been providing at the time of execution of the agreement.

Pursuant to the restructuring and investment agreement, Wolseley agreed to indemnify us for, among other things, losses arising from any third-party claim (i) existing as of May 5, 2009 or (ii) brought or asserted against the Company arising from actions taken by Wolseley or the Company prior to May 5, 2009. In accordance with the agreement Wolseley was not liable for any claim for indemnification until the aggregate amount to be recovered by us exceeded $3 million, which occurred in 2011.

In addition, under the agreement, Wolseley agreed that, subject to certain exceptions, for a period of three years following the closing, neither it, nor its affiliates would engage in the business of supplying building materials and construction services to professional builders and contractors in the United States, other than through the ownership of our securities.

Contribution agreement

On November 16, 2011, we purchased all of Wolseley’s remaining interests in us, for cash consideration of $25 million. The purchase was financed by $15 million in borrowings under the Revolver, $5 million of cash and $5 million of cash contributed by Gores Holdings pursuant to a contribution agreement dated November 16, 2011. In exchange for Gores Holding’s contribution, we

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issued to Gores Holdings 5 million shares of our Class C preferred stock. At December 31, 2011, we had accrued $5 million in accrued expenses and other liabilities on the consolidated balance sheets related to this contribution. The shares of Class C preferred stock were issued in January 2012.

Director Nomination Agreement

In connection with this offering, we will enter into a Director Nomination Agreement with Gores Holdings that provides Gores Holdings the right to designate nominees for election to our board of directors for so long as Gores Holdings beneficially owns 10% or more of the total number of shares of our common stock then outstanding.

The number of nominees that Gores Holdings is entitled to designate under this agreement will bear the same proportion to the total number of members of our board of directors as the number of shares of common stock beneficially owned by Gores Holdings bears to the total number of shares of common stock outstanding, rounded up to the nearest whole number. In addition, Gores Holdings shall be entitled to designate the replacement for any of its board designees whose board service terminates prior to the end of the director’s term regardless of Gores Holdings’ beneficial ownership at such time. Gores Holdings shall also have the right to have its designees participate on committees of our board of directors proportionate to its stock ownership, subject to compliance with applicable law and stock exchange rules. This agreement will terminate at such time as Gores Holdings owns less than 10% of our outstanding common stock.

Promissory notes

On May 5, 2009, we made a $213,627 loan to Glendon Saturn in the form of a secured promissory note, which matures on or before May 5, 2018 and bears interest at 2.05%, compounded annually. The loan was made to Glendon Saturn in connection with its purchase of shares of our Class B common stock. As of April 30, 2013, the outstanding principal and accrued interest on Glendon Saturn’s loan was $231,628. Messrs. Meyer and Freedman, directors of the Company, are members of Glendon Saturn. Glendon Saturn will repay the principal amount of the loan prior to the filing of the registration statement of which this prospectus is part.

On July 1, 2012, we made a $531,058 loan to Mr. Rea in the form of a secured promissory note, which matures on or before June 30, 2021 and bears interest at 0.92%, compounded annually. The loan was made to Mr. Rea in connection with his purchase of shares of our Class B common stock. As of April 30, 2013, the outstanding principal and accrued interest on Mr. Rea’s loan was $535,129. Pursuant to a pledge agreement dated July 1, 2012, Mr. Rea pledged the Class B common stock purchased with the loan as collateral for the loan. The Company anticipates this loan will be forgiven by the Company prior to the filing of the registration statement of which this prospectus is part.

Redemption of Class B preferred stock

On June 23, 2010 and December 19, 2012, we redeemed $26.2 million and $12.4 million, respectively, of Class B senior preferred stock held by Gores Holdings, and also paid out $6.1 million and $10.6 million, respectively, of accrued and unpaid dividends on the redeemed shares.

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The Group Health Plan

The Company is part of a group health plan with Gores. As of December 31, 2012, the Company had $0.8 million on deposit as a reserve with Gores for the payment of run-off health care claims in the event of a plan termination. The Company anticipates that it will terminate its relationship with the Gores Group Health Plan and enter into a separate Stock Building Supply Group Health Plan prior to the filing of the registration statement of which this prospectus is a part.

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DESCRIPTION OF CAPITAL STOCK

The following is a summary of our capital stock and provisions of our amended and restated certificate of incorporation and our amended and restated bylaws, as each will be in effect prior to the closing of this offering, and certain provisions of Delaware law. This summary does not purport to be complete and is qualified in its entirety by the provisions of our amended and restated certificate of incorporation and amended and restated bylaws, copies of which have been or will be filed with the SEC as exhibits to the registration statement of which this prospectus is a part. References in this section to the “Company,” “we,” “us” and “our” refer to Stock Building Supply Holdings, Inc. and not to any of its subsidiaries.

Authorized capitalization

Our amended and restated certificate of incorporation will provide that our authorized capital stock will consist of             shares of common stock, par value $0.01 per share and             shares of undesignated preferred stock, par value $0.01 per share. Upon the completion of this offering, after giving effect to (i) the conversion of all outstanding shares of our convertible Class C preferred stock into common stock, (ii) the conversion of all outstanding shares of our Class A voting common stock and Class B non-voting common stock into a single class of common stock, (iii) the redemption of all outstanding shares of our redeemable Class A junior preferred stock and redeemable Class B senior preferred stock, and (iv) the issuance and sale of shares of common stock in this offering, we will have             shares of common stock outstanding and no shares of preferred stock outstanding, assuming no exercise of the underwriters’ option to purchase additional shares.

Common stock

Voting rights

Each share of common stock will entitle the holder to one vote with respect to each matter presented to our stockholders on which the holders of common stock are entitled to vote. Our common stock will vote as a single class on all matters relating to the election of directors on our board of directors and as provided by law. Holders of our common stock will not have cumulative voting rights. Except in respect of matters relating to the election and removal of directors on our board of directors and as otherwise provided in our amended and restated certificate of incorporation or required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. In the case of the election of directors, all matters to be voted on by our stockholders must be approved by a plurality of the votes entitled to be cast by all shares of common stock.

Dividend rights

The holders of our outstanding shares of common stock will be entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. See “Dividend Policy.” Because we are a holding company, our ability to pay dividends on our common stock will be limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our indebtedness.

Liquidation rights

In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock would be entitled to share ratably in our assets that are legally available for distribution to stockholders after payment of our debts and other liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or

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liquidation preferences. In either such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our common stock.

Other rights

Our stockholders will have no preemptive, conversion or other rights to subscribe for additional shares. All outstanding shares are and all shares registered by this prospectus will be, when sold, validly issued, fully paid and nonassessable. The rights, preferences and privileges of the holders of our common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

Listing

We intend to apply to have our common stock approved for listing on                      the under the symbol “    .”

Transfer agent and registrar

The transfer agent and registrar for our common stock will be                     .

Preferred stock

Our amended and restated certificate of incorporation will authorize our board of directors to provide for the issuance of shares of preferred stock in one or more series and to fix the preferences, powers and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof, including the dividend rate, conversion rights, voting rights, redemption rights and liquidation preference and to fix the number of shares to be included in any such series without any further vote or action by our stockholders. Any preferred stock so issued may rank senior to our common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up, or both. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our Company without further action by the stockholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others. At present, we have no plans to issue any preferred stock.

Composition of the board of directors

Following the completion of this offering, we will be deemed to be a “controlled company” under the rules of the                      because more than 50% of our outstanding voting power will be held by Gores Holdings. See “Principal and Selling Stockholders.” We intend to rely upon the “controlled company” exception to the                      board of directors and committee independence requirements. Pursuant to this exception, we will be exempt from the rules that would otherwise require that its board of directors consist of a majority of independent directors and that our Compensation Committee and Governance and Nominating Committee be composed entirely of independent directors. The “controlled company” exception does not modify the independence requirements for the Audit Committee, and we intend to comply with the requirements of the Sarbanes-Oxley Act and the stock exchange rules, which require that our Audit Committee consist exclusively of independent directors within one year of our initial public offering.

Upon the completion of this offering, our board of directors will be divided into three classes, with each class serving three-year staggered terms and one class being elected at each year’s annual meeting of stockholders. Messrs.              and              will be in the class of directors whose term

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expires at the first annual meeting of stockholders following the date of this prospectus. Messrs.             ,              and                      will be in the class of directors whose term expires at the second annual meeting of stockholders following the date of this prospectus. Messrs.             ,                      and will be in the class of directors whose term expires at the third annual meeting of stockholders following the date of this prospectus. At each annual meeting of our stockholders, successors to the class of directors whose term expires at such meeting will be elected to serve for three-year terms or until their respective successors are elected and qualified.

Corporate opportunity

Messrs. Freedman, Meyer, Wald and Yager, who are officers or employees of Gores or its affiliates serve on our board of directors. Gores is the ultimate principal equityholder of Gores Holdings, our majority stockholder (after giving effect to this offering). Gores and entities controlled by it may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts between the interests of Gores, on the one hand, and of other stockholders, on the other hand, arise, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our amended and restated certificate of incorporation that will be adopted in connection with this offering, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (i) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (ii) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (iii) the transaction is otherwise fair to us. Our amended and restated certificate of incorporation will also provide that any principal, officer, member, manager and/or employee of Gores or any entity that controls, is controlled by or under common control with, Gores (other than the Company or any Company that is controlled by the Company) or any investment funds managed by Gores will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment.

Anti-takeover effects of Delaware law and our amended and restated certificate of incorporation and amended and restated bylaws

Our amended and restated certificate of incorporation and our amended and restated bylaws will also contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board of directors the power to discourage acquisitions that some stockholders may favor.

Undesignated preferred stock

The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us. These and other provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our Company.

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Classified board of directors

Our amended and restated certificate of incorporation will provide that our board of directors will be divided into three classes, with each class serving three-year staggered terms. In addition, under our amended and restated certificate of incorporation, on and after the date that Gores Holdings and its affiliates cease to beneficially own a majority of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors (the “Trigger Date”), our directors may only be removed for cause and only upon the affirmative vote of the majority of our outstanding voting stock, at a meeting of our stockholders called for that purpose. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our Company.

Special meetings of stockholders

Our amended and restated certificate of incorporation will provide that special meetings of the stockholders may be called only upon a resolution approved by a majority of the total number of directors that we would have if there were no vacancies or, prior to the Trigger Date, at the request of the holders of a majority of the voting power of our then outstanding shares of voting capital stock.

Requirements for nominations and proposals at stockholder meetings

Our amended and restated bylaws will prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. Our amended and restated bylaws will also provide that nominations of persons for election to our board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the notice of meeting (i) by or at the direction of our board of directors or (ii) provided that our board of directors has determined that directors shall be elected at such meeting, by any stockholder who (1) is a stockholder of record both at the time the notice is delivered and on the record date for the determination of stockholders entitled to vote at the special meeting, (2) is entitled to vote at the meeting and upon such election and (3) complies with the notice procedures set forth in our amended and restated bylaws. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our Company. These provisions will not apply to nominations by Gores Holdings pursuant to the Director Nomination Agreement.

Stockholder action by written consent

Pursuant to Section 228 of the DGCL, any action required to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless our Company’s amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation will provide that, prior to the Trigger Date, any action required or permitted to be taken by our stockholders may be effected by written consent. From and after the Trigger Date, any action required or permitted to be taken by the stockholders may be effected only at a duly called annual or special meeting.

Business combinations with interested stockholders

We will elect in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the

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date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we will not be subject to any anti-takeover effects of Section 203. However, our amended and restated certificate of incorporation will contain provisions that have the same effect as Section 203, except that they will provide that (i) Gores and any of its affiliates or associates, including any investment funds managed by Gores, (ii) any other person with whom any of the foregoing are acting as a group or in concert for the purpose of acquiring, holding, voting or disposing of shares of our stock and (iii) any person who would otherwise be an interested stockholder because of a transfer of 5% or more of our outstanding voting stock by any person described in clause (i) or (ii) to such person will be excluded from the “interested stockholder” definition in our amended and restated certificate of incorporation and will therefore not be subject to the restrictions therein that have the same effect as Section 203.

Requirements for amendments to our amended and restated certificate of incorporation and amended and restated bylaws

Prior to the Trigger Date, our amended and restated certificate of incorporation will provide that our amended and restated bylaws may be adopted, amended, altered or repealed by the vote of a majority of the voting power of our then outstanding voting stock, voting together as a single class. After the Trigger Date, our amended and restated bylaws may be adopted, amended, altered or repealed by either (i) a vote of a majority of the total number of directors that the Company would have if there were no vacancies or (ii) in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least 66 ²/₃% of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class.

Following the Trigger Date, our amended and restated certificate of incorporation will provide that the provisions of our amended and restated certificate of incorporation relating to the size and composition of our board of directors, limitation on liabilities of directors, stockholder action by written consent, the ability of stockholders to call special meetings, business combinations with interested persons, amendment of our amended and restated bylaws or amended and restated certificate of incorporation and the Court of Chancery as the exclusive forum for certain disputes, may only be amended, altered, changed or repealed by the affirmative vote of the holders of at least 66  ^2/₃% of the voting power of all of our outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. Prior to the Trigger Date, our amended and restated certificate of incorporation will provide that such provisions may be amended, altered, changed or repealed by the affirmative vote of the holders of a majority of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class. Our amended and restated certificate of incorporation will also provide that the provision of our amended and restated certificate of incorporation that deals with corporate opportunity may only be amended, altered or repealed by a vote of 80% of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of our common stock in the public market, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock. No prediction can be made as to the effect, if any, future sales of shares, or the availability of shares for future sales, will have on the market price of our common stock prevailing from time to time. The sale of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common stock.

Sale of restricted shares

Upon completion of this offering, we will have              shares of common stock outstanding. Of these shares of common stock, the              shares of common stock being sold in this offering, plus any shares sold upon exercise of the underwriters’ option to purchase additional shares, will be freely tradable without restriction under the Securities Act, except for any such shares held or acquired by an “affiliate” of ours, as that term is defined in Rule 144 promulgated under the Securities Act, which shares will be subject to the volume limitations and other restrictions of Rule 144 described below. The remaining             shares of common stock held by our existing stockholders upon completion of this offering, or             shares if the underwriters exercise their option to purchase additional shares in full, will be “restricted securities,” as that phrase is defined in Rule 144, and may be resold only after registration under the Securities Act or pursuant to an exemption from such registration, including, among others, the exemptions provided by Rule 144 and 701 under the Securities Act, which rules are summarized below. These remaining shares of common stock held by our existing stockholders upon completion of this offering will be available for sale in the public market after the expiration of the lock-up agreements described in “Underwriting,” taking into account the provisions of Rules 144 and 701 under the Securities Act.

Rule 144

In general, under Rule 144 of the Securities Act as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell such shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

Ÿ 1% of the number of shares of common stock then outstanding; or

Ÿ the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Rule 144 also provides that a person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale and who has for at least six months beneficially owned shares of our common stock that are restricted securities, will be entitled to freely sell such shares of

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our common stock subject only to the availability of current public information regarding us. A person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale and who has beneficially owned for at least one year shares of our common stock that are restricted securities, will be entitled to freely sell such shares of our common stock under Rule 144 without regard to the current public information requirements of Rule 144.

Registration rights

Gores Holdings and the holders of our equity securities prior to this offering are entitled to various rights with respect to the registration of shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming fully tradable under the Securities Act immediately upon the effectiveness of the registration, except for shares held by affiliates. See “Certain Relationships and Related Party Transactions—Plan of conversion—Certificate of incorporation.” Shares covered by a registration statement will be eligible for sales in the public market upon the expiration or release from the terms of the lock-up agreement referred to below.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our Company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our Company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144.

Stock plans

We intend to file registration statements on Form S-8 under the Securities Act covering all of the shares of our common stock reserved for issuance under the 2013 Incentive Plan we intend to adopt in connection with this offering. We expect to file this registration statement as soon as practicable after this offering and adoption of the 2013 Incentive Plan. Accordingly, shares registered under the registration statement on Form S-8 will be available for sale in the open market following its effective date, subject to the Rule 144 limitations applicable to affiliates.

Lock-up agreements

In connection with this offering, we, our directors and executive officers and the selling stockholders will enter into 180-day lock-up agreements with the underwriters of this offering under which neither we nor they may, for a period of 180 days after the date of this prospectus, directly or indirectly sell, dispose of or hedge any shares of common stock or any securities convertible into or exchangeable or exercisable for shares of common stock without the prior written consent of Goldman, Sachs & Co., Barclays Capital Inc. and Citigroup Global Markets Inc. on behalf of the underwriters. See “Underwriting.”

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS

The following is a discussion of certain U.S. federal income tax consequences of the purchase, ownership and disposition of our common stock to a non-U.S. holder that purchases shares of our common stock in this offering. This discussion applies only to a non-U.S. holder that holds our common stock as a capital asset, within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). For purposes of this discussion, a “non-U.S. holder” means any beneficial owner of our common stock that is, for U.S. federal income tax purposes, an individual, corporation, estate or trust other than:

Ÿ an individual citizen or resident of the United States, as defined for U.S. federal income tax purposes;

Ÿ a corporation or other entity treated as a corporation for U.S. federal income tax purposes created or organized in the United States or under the laws of the United States or any political subdivision thereof;

Ÿ an estate whose income is subject to U.S. federal income tax regardless of its source; or

Ÿ a trust if it (i) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in place to be treated as a U.S. person for U.S. federal income tax purposes.

In the case of a beneficial owner that is classified as a partnership for U.S. federal income tax purposes, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partner and the partnership. If you are a partner in a partnership considering an investment in our common stock, then you should consult your tax advisor.

This discussion is based upon the provisions of the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. We cannot assure you that a change in law, possibly with retroactive application, will not alter significantly the tax considerations that we describe herein. We have not sought and do not plan to seek any ruling from the U.S. Internal Revenue Service, which we refer to as the IRS, with respect to statements made and the conclusions reached in the following discussion, and there can be no assurance that the IRS or a court will agree with our statements and conclusions.

This discussion does not address all aspects of U.S. federal income taxes that may be relevant to non-U.S. holders in light of their personal circumstances, and does not deal with federal taxes other than the U.S. federal income tax (such as U.S. federal estate and gift tax laws or the Medicare tax on certain investment income) or with non-U.S., state or local tax considerations. Special rules, not discussed here, may apply to certain non-U.S. holders, including:

Ÿ former citizens or residents of the United States;

Ÿ brokers, dealers or traders in securities, commodities or currencies;

Ÿ persons who hold our common stock as a position in a “straddle,” “conversion transaction” or other risk reduction transaction;

Ÿ controlled foreign corporations, passive foreign investment companies; and

Ÿ tax exempt organizations.

Such non-U.S. holders should consult their tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.

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If you are considering the purchase of our common stock, you should consult your tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of our common stock, as well as the consequences to you arising under the laws of any state, local or non-U.S. taxing jurisdiction.

Dividends

As discussed under the section entitled “Dividend Policy” above, we do not currently anticipate paying dividends. In the event that we do make a distribution of cash or property (other than certain stock distributions) with respect to our common stock (or that we engage in certain redemptions that are treated as distributions with respect to common stock), any such distribution or redemption will be treated as a dividend for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Dividends paid to you generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by you within the United States are not subject to the withholding tax, but instead are subject to U.S. federal income tax on a net-income basis at applicable graduated individual or corporate rates, unless an applicable income tax treaty provides otherwise. Certain certification and disclosure requirements, including delivery of a properly executed IRS Form W-8ECI, must be satisfied for effectively connected income to be exempt from withholding. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

If the amount of a distribution paid on our common stock exceeds our current and accumulated earnings and profits, such excess will be allocated ratably among your shares of common stock with respect to which the distribution is paid and treated first as a tax-free return of capital to the extent of your adjusted tax basis in each such share, and thereafter as capital gain from a sale or other taxable disposition of such share of common stock that is taxed to you as described below under the heading “Gain on disposition of common stock.” Your adjusted tax basis in a share is generally the purchase price of such share, reduced by the amounts of any such tax-free returns of capital.

If you wish to claim the benefit of an applicable treaty rate to avoid or reduce withholding of U.S. federal income tax for dividends, then you must (a) provide the withholding agent with a properly completed IRS Form W-8BEN (or other applicable form) and certify under penalties of perjury that you are not a U.S. person and are eligible for treaty benefits, or (b) if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that act as intermediaries (including partnerships).

If you are eligible for a reduced rate of U.S. federal income tax pursuant to an income tax treaty, then you may obtain a refund or credit of any excess amounts withheld by filing timely an appropriate claim with the IRS.

Gain on disposition of common stock

You generally will not be subject to U.S. federal income tax with respect to gain realized on the sale or other taxable disposition of our common stock, unless:

Ÿ the gain is effectively connected with a trade or business you conduct in the United States, and, where a tax treaty applies, is attributable to a U.S. permanent establishment or fixed base;

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Ÿ if you are an individual, you are present in the United States for 183 days or more in the taxable year of the sale or other taxable disposition and certain other conditions are met; or

Ÿ we are or have been during a specified testing period a “U.S. real property holding corporation” for U.S. federal income tax purposes, and certain other conditions are met.

We believe that we are not, and we do not anticipate becoming, a “U.S. real property holding corporation” for U.S. federal income tax purposes. Even if we are or become a U.S. real property holding corporation, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain in respect of our common stock as long as our common stock is traded on an established securities market and such non-U.S. holder actually or constructively owned no more than 5% of our common stock during the specified testing period. If we are or become a U.S. real property holding corporation and you actually or constructively owned more than 5% of our common stock at any time during the specified testing period, you will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates. If you are a person described in the first bullet point above, you will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates. In addition, a non-U.S. holder that is a corporation may be subject to the branch profits tax at a 30% rate on its effectively connected earnings and profits or such lower rate as may be specified by an applicable income tax treaty. If you are an individual described in the second bullet point above, you will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by U.S.-source capital losses.

Information reporting and backup withholding

The applicable withholding agent must file information returns with the IRS in connection with dividends paid to you on shares of our common stock. The IRS may make this information available to the tax authorities in the country in which you are resident. In addition, you may be subject to backup withholding (currently at a rate of 28%) with respect to dividends paid on shares of common stock, unless, generally, you certify under penalties or perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.

Additional rules relating to information reporting requirements and backup withholding with respect to payments of the proceeds from the disposition of shares of our common stock are as follows:

Ÿ If the proceeds are paid to or through the U.S. office of a broker, the proceeds generally will be subject to backup withholding and information reporting, unless you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.

Ÿ If the proceeds are paid to or through a non-U.S. office of a broker that is not a U.S. person and is not a foreign person with certain specified U.S. connections (a “U.S.-related person”), information reporting and backup withholding generally will not apply.

Ÿ If the proceeds are paid to or through a non-U.S. office of a broker that is a U.S. person or a U.S.-related person, the proceeds generally will be subject to information reporting and may be subject to backup withholding, unless you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your U.S. federal income tax liability, provided the required information is timely furnished by you to the IRS.

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Legislation affecting taxation of common stock held by or through foreign entities

In addition to the withholding discussed above, provisions commonly referred to as “FATCA” will impose withholding of 30% on dividend income from our common stock (beginning in 2014) and the gross proceeds of a disposition of our common stock (beginning in 2017) paid to “foreign financial institutions” and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied or an exemption applies. If FATCA withholding is imposed, a beneficial owner that is not a foreign financial institution generally will be entitled to a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). Investors are encouraged to consult their tax advisors regarding the implications of this legislation on their investment in our common stock.

POTENTIAL PURCHASERS OF OUR COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS TO DETERMINE THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSIDERATIONS OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON STOCK.

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UNDERWRITING

The Company, the selling stockholders and the underwriters named below will enter into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter will severally agree to purchase the number of shares indicated in the following table. Goldman, Sachs & Co., Barclays Capital Inc. and Citigroup Global Markets Inc. are the representatives of the underwriters.

Underwriters	Number of Shares
Goldman, Sachs & Co.
Barclays Capital Inc.
Citigroup Global Markets Inc.
Total

The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

The underwriters have an option to buy up to an additional             shares from the Company and the selling stockholders to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by the Company and the selling stockholders. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase             additional shares.

Paid by the Company

	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

Paid by the Selling Stockholders

	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $          per share from the initial public offering price. After the initial offering of the shares, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

The Company and its officers, directors, the selling stockholders and holders of substantially all of the Company’s common stock have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date

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180 days after the date of this prospectus, except with the prior written consent of the representatives. This agreement does not apply to any existing employee benefit plans. See “Shares Eligible for Future Sale” for a discussion of certain transfer restrictions.

Prior to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among the Company and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be the Company’s historical performance, estimates of the business potential and earnings prospects of the Company, an assessment of the Company’s management and the consideration of the above factors in relation to market valuation of companies in related businesses.

We intend to list the common stock on the              under the symbol “     .” In order to meet one of the requirements for listing the common stock on the             , the underwriters have undertaken to sell lots of 100 or more shares to a minimum of 400 beneficial holders.

In connection with the offering, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional shares for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to cover the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional shares for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the Company’s stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on the              or relevant exchange, in the over-the-counter market or otherwise.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), an offer to the public of any shares which are

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the subject of the offering contemplated by this Prospectus (the “shares”) may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares shall result in a requirement for the publication by the Company or any representative of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase any shares, as the same may be varied in that Relevant Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA would not, if the Issuer was not an authorised person, apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an

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institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer or (3) by operation of law.

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

At the Company’s request, the underwriters have reserved up to     % of the shares for sale at the initial public offering price to persons who are directors, officers or other employees, or who are otherwise associated with the Company, through a directed share program. The number of shares available for sale to the general public will be reduced by the number of directed shares purchased by participants in the program. Except for the Company’s officers and directors at the time of consummation of the offering who have entered into lock-up agreements, each person buying shares through the directed share program has agreed that, for a period of 180 days from the date of this prospectus, he or she will not, without the prior written consent of each of the representatives, dispose of or hedge any shares of the Company’s common stock or any securities convertible into or exchangeable for the Company’s common stock.

The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

The Company and the selling stockholders estimate that their share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $            .

The Company and the selling stockholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses.

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In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the issuer (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the issuer. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

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LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us by Kirkland & Ellis LLP (a partnership that includes professional corporations), Chicago, Illinois. The underwriters have been represented by Davis Polk & Wardwell LLP, New York, New York. Kirkland & Ellis LLP has from time to time represented and may continue to represent, Gores and some of its affiliates in connection with various legal matters.

EXPERTS

The consolidated financial statements as of December 31, 2012 and 2011, and for each of the three years in the period ended December 31, 2012 included in this Prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 with the SEC with respect to our common stock being distributed as contemplated by this prospectus. This prospectus is a part of and does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information with respect to the Company and our common stock, please refer to the registration statement, including its exhibits and schedules. Statements made in this prospectus relating to any contract or other document are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document. You may read and copy all materials that we file with the SEC, including the Registration Statement and its exhibits and schedules, at the SEC’s public reference room, located at 100 F Street, N.E., Washington, D.C. 20549, as well as on the Internet website maintained by the SEC at www.sec.gov. Please call the SEC at 1-800-SEC-0330 for more information on the public reference room. Information contained on any website referenced in this prospectus does not and will not constitute a part of this prospectus or the registration statement on Form S-1 of which this prospectus is a part.

In addition, we will file periodic reports and other information with the SEC.

You may request a copy of any of our filings with the SEC at no cost, by writing or telephoning us at the following address:

Stock Building Supply Holdings, Inc.

8020 Arco Corporate Drive, Suite 400

Raleigh, North Carolina 27617

Attention: General Counsel

Phone: (919) 431-1000

You should rely only on the information contained in this prospectus or to which we have referred you. We have not authorized any person to provide you with different information or to make any representation not contained in this prospectus.

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INDEX TO FINANCIAL STATEMENTS

Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2011 and 2012	F-3
Consolidated Statements of Operations for the years ended December 31, 2010, 2011 and 2012	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2010, 2011 and 2012	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2011 and 2012	F-6
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Stock Building Supply Holdings, Inc. and Subsidiaries (the “Company”):

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholders’ equity and of cash flows present fairly, in all material respects, the financial position of Stock Building Supply Holdings, Inc. and its subsidiaries at December 31, 2011 and December 31, 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenue from contracts with service elements.

/s/ PricewaterhouseCoopers LLP

Raleigh, North Carolina

May 7, 2013

F-2

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,					Pro Forma stockholders’ equity at December 31,
	2011		2012			2012
(in thousands of dollars, except share and per share amounts)						(unaudited) (Note 2)
Assets
Current assets
Cash and cash equivalents	$	4,957	$	2,691
Restricted assets		4,348		3,821
Accounts receivable, net		65,206		90,297
Inventories, net		49,682		73,918
Costs in excess of billings on uncompleted contracts		3,888		5,176
Assets held for sale		6,180		6,198
Prepaid expenses and other current assets		7,897		8,682
Income taxes receivable		9,171		—
Deferred income taxes		4,126		3,562
Total current assets		155,455		194,345
Property and equipment, net of accumulated depreciation		57,759		55,076
Intangible assets, net of accumulated amortization		19,752		25,865
Goodwill		6,511		6,511
Restricted assets		4,744		2,202
Other assets		10,420		2,013
Total assets	$	254,641	$	286,012
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	45,019	$	74,231
Accrued expenses and other liabilities		28,555		25,277
Revolving line of credit		33,850		72,218
Income taxes payable		—		3,116
Current portion of restructuring reserve		1,584		1,513
Current portion of capital lease obligation		1,243		1,329
Billings in excess of costs on uncompleted contracts		1,108		1,239
Total current liabilities		111,359		178,923
Deferred income taxes		21,180		16,983
Other long-term liabilities		15,679		14,642
Total liabilities		148,218		210,548
Commitments and contingencies (Note 15)
Redeemable Class A Junior Preferred stock, $.01 par value, 10,000 shares authorized and issued, 5,100 shares outstanding at December 31, 2011 and 2012		—		—
Redeemable Class B Senior Preferred stock, $.01 par value, 500,000 shares authorized, 75,000 shares issued, 48,760 and 36,388 shares outstanding at December 31, 2011 and 2012, respectively		54,997		36,477
Convertible Class C Preferred stock, $.01 par value, 5,000 shares authorized and issued, 0 and 5,000 shares outstanding at December 31, 2011 and 2012, respectively		—		5,000
Stockholders’ equity
Class A common stock, $.01 par value, 875,000 shares authorized and issued, 446,250 shares outstanding at December 31, 2011 and 2012	$	5	$	5		$	6
Class B common stock, $.01 par value, 125,000 shares authorized, 65,486 and 110,531 shares issued and outstanding at December 31, 2011 and 2012, respectively		1		1			1
Additional paid-in capital		49,402		46,167			51,166
Retained earnings (deficit)		2,018		(12,186	)		(12,186	)
Total stockholders’ equity		51,426		33,987		$	38,987
Total liabilities and stockholders’ equity	$	254,641	$	286,012

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

F-3

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years ended December 31,
(in thousands of dollars, except share and per share amounts)	2010			2011			2012
Net sales	$	751,706		$	759,982		$	942,398
Cost of goods sold		587,692			591,017			727,670
Gross profit		164,014			168,965			214,728
Selling, general and administrative expenses		246,338			213,036			220,686
Depreciation expense		29,337			11,844			7,759
Amortization expense		1,140			1,457			1,470
Impairment of assets held for sale		2,944			580			361
Restructuring expense		7,089			1,349			2,853
		286,848			228,266			233,129
Loss from operations		(122,834	)		(59,301	)		(18,401	)
Other income (expenses)
Bargain purchase gain		11,223			—			—
Interest expense		(1,575	)		(2,842	)		(4,037	)
Other income (expense), net		(57	)		(2,120	)		278
Loss from continuing operations before income taxes		(113,243	)		(64,263	)		(22,160	)
Income tax benefit		47,463			22,332			7,907
Loss from continuing operations		(65,780	)		(41,931	)		(14,253	)
Income (loss) from discontinued operations, net of tax benefit (provision) of $4,038, ($658) and ($52), respectively		(4,214	)		(202	)		49
Net loss		(69,994	)		(42,133	)		(14,204	)
Redeemable Class B Senior Preferred stock dividend		(5,079	)		(4,188	)		(4,480	)
Loss attributable to common stockholders		(75,073	)		(46,321	)		(18,684	)
Weighted average common shares outstanding basic and diluted		900,738			846,469			496,002
Basic and diluted income (loss) per share
Loss from continuing operations	$	(78.67	)	$	(54.48	)	$	(37.77	)
Income (loss) from discontinued operations		(4.68	)		(0.24	)		0.10
Net loss	$	(83.35	)	$	(54.72	)	$	(37.67	)
Proforma net loss per share, basic and diluted (unaudited)							$	(28.06	)
Weighted average shares used in computing pro forma net loss per share, basic and diluted (unaudited)								667,502

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

F-4

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock											Additional Paid-in Capital			Retained Earnings (Deficit)			Total
	Class A						Class B
(in thousands of dollars, except share amounts)	Shares			Amount			Shares			Amount
Stockholders’ equity as of December 31, 2009		875,000		$	9			87,500		$	1	$	73,591		$	123,412		$	197,013
Dividends accrued on Class B preferred shares		—			—			—			—		—			(5,079	)		(5,079	)
Issuance of common stock		—			—			1,486			—		100			—			100
Shareholder loans related to tax withholding on stock issuance		—			—			—			—		(99	)		—			(99	)
Issuance of nonvested stock awards, net of forfeitures		—			—			(13,000	)		—					—			—
Stock compensation expense		—			—						—		288			—			288
Net loss		—			—			—			—		—			(69,994	)		(69,994	)
Stockholders’ equity as of December 31, 2010		875,000			9			75,986			1		73,880			48,339			122,229
Dividends accrued on Class B preferred shares		—			—			—			—		—			(4,188	)		(4,188	)
Purchase of shares from existing shareholders		(428,750	)		(4	)		—			—		(24,996	)		—			(25,000	)
Shareholder loans related to tax withholding on stock issuance		—			—			—			—		134			—			134
Issuance of nonvested stock awards, net of forfeitures		—			—			(10,500	)		—		—			—			—
Stock compensation expense		—			—			—			—		384			—			384
Net loss		—			—			—			—		—			(42,133	)		(42,133	)
Stockholders’ equity as of December 31, 2011		446,250			5			65,486			1		49,402			2,018			51,426
Dividends accrued on Class B preferred shares		—			—			—			—		(4,480	)		—			(4,480	)
Issuance of common stock to related party (Note 13)		—			—			4,250			—		107			—			107
Issuance of shares to existing shareholders		—			—			13,000			—		328			—			328
Shareholder loans related to tax withholding on stock issuance		—			—			—			—		11			—			11
Issuance of nonvested stock awards, net of forfeitures		—			—			6,763			—		—			—			—
Exercise of stock options (Note 17)		—			—			21,032			—		—			—			—
Stock compensation expense		—			—			—			—		799			—			799
Net loss		—			—			—			—		—			(14,204	)		(14,204	)
Stockholders’ equity as of December 31, 2012		446,250		$	5			110,531		$	1	$	46,167		$	(12,186	)	$	33,987

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

F-5

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31,
(in thousands of dollars)	2010			2011			2012
Cash flows from operating activities
Net loss	$	(69,994	)	$	(42,133	)	$	(14,204	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense		38,915			15,257			10,299
Amortization of intangible assets		1,166			1,457			1,470
Amortization of debt issuance costs		1,252			1,553			902
Change in deferred income taxes		(25,046	)		(5,926	)		(3,633	)
Noncash stock compensation expense		288			384			799
Impairment of assets held for sale		3,607			610			481
(Gain) loss on sale of property, equipment and real estate held for sale		1,970			(2,609	)		169
Bad debt expense		2,463			1,753			2,333
Gain on bargain purchase		(11,223	)		—			—
Gain on sale of operations		(3,098	)		—			—
Change in assets and liabilities, net of effects of companies acquired
Restricted cash for payment of leases rejected in bankruptcy		14,786			—			—
Accounts receivable		35,410			(677	)		(27,026	)
Inventories, net		7,472			14,593			(22,712	)
Costs in excess of billings on uncompleted contracts		(444	)		(1,165	)		(1,288	)
Prepaid expenses and other current assets		5,894			1,022			(784	)
Current income taxes receivable/payable		(54,107	)		8,920			12,287
Other assets		3,383			(5,771	)		2,314
Accounts payable		5,114			(1,162	)		24,821
Accrued expenses and other liabilities		(2,379	)		(699	)		1,798
Restructuring reserve		(1,329	)		(462	)		1,125
Billings in excess of costs on uncompleted contracts		74			47			131
Lease rejection reserve		(11,165	)		—			—
Other long-term liabilities		(1,008	)		8,007			(1,525	)
Net cash used in operating activities		(57,999	)		(7,001	)		(12,243	)
Cash flows from investing activities
Restricted assets		(9,897	)		2,555			3,069
Proceeds from sale of operations		46,831			—			—
Purchase of businesses		(49,848	)		—			(5,732	)
Loan to seller of TBSG (Note 3)		—			—			(850	)
Proceeds from sale of property and equipment		18,201			5,220			952
Proceeds from sale of real estate held for sale		5,312			886			441
Purchases of property and equipment		(2,506	)		(1,339	)		(2,741	)
Net cash provided by (used in) investing activities		8,093			7,322			(4,861	)

F-6

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31,
(in thousands of dollars)	2010			2011			2012
Cash flows from financing activities
Proceeds from revolving line of credit		219,350			787,394			1,042,850
Repayments of proceeds from revolving line of credit		(206,350	)		(766,544	)		(1,004,482	)
Redemption of Class B preferred stock		(26,240	)		—			(12,372	)
Redemption of Class A preferred stock and Class A common stock (Note 1)		—			(25,000	)		—
Cash received from shareholder		—			5,000			—
Loans from related parties		171			134			11
Sale of Class B common stock		100			—			328
Dividends paid on Class B preferred stock		(6,060	)		—			(10,628	)
Payments of debt issuance costs		(213	)		—			(555	)
Payments on capital leases		(1,173	)		(1,511	)		(1,311	)
Secured borrowings		—			665			997
Net cash provided by (used in) financing activities		(20,415	)		138			14,838
Net increase (decrease) in cash and cash equivalents		(70,321	)		459			(2,266	)
Cash and cash equivalents
Beginning of period		74,819			4,498			4,957
End of period	$	4,498		$	4,957		$	2,691
Supplemental disclosure of cash flow information
Interest paid	$	291		$	1,165		$	3,046
Income taxes paid		31,107			2,049			244
Income tax refunds received		—			24,782			16,399
Noncash investing and financing transactions
Disposals of capital lease assets		1,032			198			—
Capital lease obligations		1,246			1,401			6,135
Issuance of Convertible Class C preferred stock (Note 13)		—			—			5,000
Issuance of Class B common stock (Note 13)		—			—			107
Dividends accrued on Class B preferred stock		5,079			4,188			4,480
Fair value of earnout agreement (Note 3)		—			—			1,075

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

F-7

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

1. Organization

Stock Building Supply Holdings, Inc., formerly known as Saturn Acquisition Holdings, LLC (“Saturn”), was organized as a limited liability company on April 16, 2009, under the laws of the State of Delaware and had no principal operations prior to the acquisition of Stock Building Supply Holdings, LLC and Subsidiaries (“SBS”) on May 5, 2009 (“Acquisition Date”). Prior to May 5, 2009, SBS was an indirect wholly-owned subsidiary of Wolseley plc (“Wolseley”). On May 5, 2009, Wolseley entered into a transaction with Gores Building Holdings, LLC (“Gores”), whereby Gores contributed $1 for a 51% voting interest in Saturn and Wolseley transferred 100% of the membership interest in SBS to Saturn in exchange for $1 and a 49% voting interest in Saturn pursuant to the terms of the Restructuring and Investment Agreement dated May 5, 2009.

On May 6, 2009, SBS filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court (collectively “Bankruptcy”). The plan of reorganization enabled SBS to reject certain operating leases for real property in locations where operations were being discontinued. SBS emerged from Chapter 11 Reorganization on June 30, 2009. For the years ended December 31, 2010, 2011 and 2012, the Company incurred Bankruptcy related fees of $675, $0 and $0, respectively, which are included in selling, general and administrative expenses on the consolidated statements of operations.

On November 16, 2011, Saturn purchased all of Wolseley’s shareholder interests, which included 428,750 Class A Voting Common shares and 4,900 Class A Junior Preferred shares, for cash consideration of $25,000. The purchase was financed by $15,000 in borrowings under the revolving line of credit, $5,000 of cash and $5,000 of cash contributed by Gores (Note 16).

On April 23, 2013, the Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a change in the name of the Company to Stock Building Supply Holdings, Inc., which was effective May 2, 2013.

Stock Building Supply Holdings, Inc. and Subsidiaries (the “Company,” “we,” “us,” “our,” and “management”) distributes lumber and building materials to new construction and repair and remodel contractors. Additionally, we provide solution-based services to our customers, including design, production specification, and installation management services.

2. Summary of significant accounting policies

Basis of presentation

The accompanying consolidated financial statements have been prepared by management in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of consolidation

The consolidated financial statements include all accounts of Saturn and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

Unaudited pro forma information

Upon the closing of a qualified initial public offering, all of the Convertible Class C Preferred stock outstanding (Note 16) will automatically convert into 171,500 shares of Class A Voting Common stock. The unaudited pro forma balance sheet information at December 31, 2012, gives effect to the automatic conversion of the outstanding shares of the Convertible Class C Preferred stock into Class A

F-8

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Voting Common stock as though the proposed initial public offering had occurred on December 31, 2012. In the accompanying statements of operations, unaudited pro forma basic and diluted net loss per share attributable to common stockholders for the year ended December 31, 2012, has been prepared to give effect to the automatic conversion of all outstanding shares of Convertible Class C Preferred stock into shares of Class A Voting Common stock as though the proposed initial public offering had occurred on January 1, 2012.

Balance sheet revision

The accompanying December 31, 2011 balance sheet has been revised from its previous presentation to present certain insurance-related assets and liabilities on a gross rather than net basis, and to classify them as long-term. The revisions, which management has determined to be immaterial, had no impact on previously reported sales, operating expenses, operating cash flow or cash position. The revisions to present these insurance-related assets and liabilities on a gross basis included a $575 increase to prepaid expenses and other current assets and accrued expenses and other liabilities. The revision to present these insurance related assets and liabilities as long-term included a $4,744 decrease to restricted assets, a $4,744 increase to other assets, a $2,892 decrease to accrued expenses and other liabilities and a $2,892 increase to other long-term liabilities.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. The significant estimates which could change by a material amount in the near term include reserves for accounts receivable, inventory, supplier rebates and goodwill impairment. Actual results may differ materially from these estimates under different assumptions or conditions.

Business and credit concentrations

The Company maintains cash at financial institutions in excess of federally insured limits. Accounts receivable potentially expose the Company to concentrations of credit risk. Mitigating this credit risk is collateral underlying certain accounts receivable (perfected liens or lien rights) as well as the Company’s analysis of a customer’s credit history prior to extending credit. Concentrations of credit risk with respect to accounts receivable are limited due to the Company’s large number of customers and their dispersion across various regions of the United States. At December 31, 2010, 2011 and 2012, no customer represented more than 10% of accounts receivable or revenue.

The Company’s future results could be adversely affected by a number of factors including: competitive pressure on sales and pricing, weather conditions, consumer spending and debt levels, interest rates, existing residential home sales and new home construction, lumber prices and product mix.

Cash and cash equivalents

Cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and have a maturity of three months or less from the time of purchase.

F-9

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Restricted assets

Restricted assets consisted of the following at December 31, 2011 and 2012:

	2011		2012
Deposits for payment of casualty & health insurance claims	$	7,505	$	5,690
Escrow related to sale of operations		1,250		—
Other deposits		337		333
	$	9,092	$	6,023

Restricted assets are classified as current or non-current assets based on their designated purpose.

Fair value of financial instruments

The Company has adopted ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1	Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2	Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3	Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation.

Accounts receivable

Accounts receivable result from the extending of credit to trade customers for the purchase of goods and services. The terms generally provide for payment within 30 days of being invoiced. On occasion, when necessary to compete in certain circumstances, the Company will sell product under extended payment terms. Accounts receivable are stated at estimated net realizable value. The allowance for doubtful accounts is based on an assessment of individual past due accounts, historical write-off experience, accounts receivable aging, customer disputes and the business environment. Account balances are charged off when the potential for recovery is considered remote. The Company grants trade discounts on a percentage basis. The Company records an allowance against accounts receivable for the amount of discounts it estimates will be taken by customers. The discounts are recorded as a reduction to revenue when products are sold.

Consideration received from suppliers

The Company enters into agreements with many of its suppliers providing for inventory purchase rebates (“supplier rebates”) upon achievement of specified volume purchasing levels. Supplier rebates

F-10

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

are accrued as part of cost of goods sold based on progress towards earning the supplier rebates, taking into consideration cumulative purchases of inventory to date and projected purchases through the end of the year. Total rebates receivable at December 31, 2011 and 2012 are $2,585 and $2,599, respectively, included in prepaid expenses and other current assets. The Company estimates the rebates applicable to inventory on-hand at each period end based on the inventory turns of the related items.

Revenue recognition

The Company recognizes revenue when products are shipped and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. All sales recognized are net of allowances for discounts and estimated returns, based on historical experience.

Revenues from contracts with service elements generally are recognized on the completed contract basis, as these contracts generally are completed within 30 days. Revenues from certain contracts with service elements, which are generally greater than 30 days, are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated costs for each contract. Costs of goods sold related to construction contracts with service elements include all direct material, subcontractor and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

The Company has accounted for revenue and costs for contracts with service elements, which are generally completed within 30 days, by the completed contract method in 2012, whereas in all prior years, revenue and costs for contracts with service elements were determined by the percentage-of-completion method. The new method of accounting for contracts with service elements was determined to be preferable due to the short-term nature of most contracts, and revenue and cost in the aggregate resulting in consistent economics to what resulted from the use of the percentage-of-completion method.

The change in accounting method for presentation of contracts was completed in accordance with ASC 250, Accounting Changes and Error Corrections (“ASC 250”). Accordingly, the change in accounting principle has been applied retrospectively by adjusting the financial statement amounts for the prior periods presented. The cumulative effect of the change in accounting for contracts was a decrease in retained earnings as of December 31, 2009 of $1,111.

F-11

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

The following tables detail the retrospective application on previously reported amounts:

As of and for the year ended December 31, 2010	As previously reported			Effect of accounting principle change			As reported
Inventories, net	$	64,725		$	(450	)	$	64,275
Costs in excess of billings on uncompleted contracts		—			2,723			2,723
Costs and estimated profits in excess of billings		2,298			(2,298	)		—
Total current assets		188,252			(25	)		188,227
Total assets		294,995			(25	)		294,970
Billings in excess of costs on uncompleted contracts		—			1,061			1,061
Total current liabilities		87,576			1,061			88,637
Total liabilities		120,871			1,061			121,932
Retained earnings		49,425			(1,086	)		48,339
Total stockholders’ equity		123,315			(1,086	)		122,229
Net sales		751,358			348			751,706
Cost of goods sold		587,369			323			587,692
Gross profit		163,989			25			164,014
Loss from operations		(122,859	)		25			(122,834	)
Loss from continuing operations before income taxes		(113,268	)		25			(113,243	)
Loss from continuing operations		(65,805	)		25			(65,780	)
Basic and diluted income (loss) per share
Loss from continuing operations	$	(78.70	)	$	0.03		$	(78.67	)

F-12

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

As of and for the year ended December 31, 2011	As previously reported			Effect of accounting principle change			As reported
Inventories, net	$	50,378		$	(696	)	$	49,682
Costs in excess of billings on uncompleted contracts		—			3,888			3,888
Costs and estimated profits in excess of billings		3,490			(3,490	)		—
Total current assets		155,753			(298	)		155,455
Total assets		254,939			(298	)		254,641
Billings in excess of costs on uncompleted contracts		—			1,108			1,108
Billings in excess of costs and estimated profits		452			(452	)		—
Total current liabilities		110,703			656			111,359
Total liabilities		147,562			656			148,218
Retained earnings		2,972			(954	)		2,018
Total stockholders’ equity		52,380			(954	)		51,426
Net sales		762,626			(2,644	)		759,982
Cost of goods sold		593,793			(2,776	)		591,017
Gross profit		168,833			132			168,965
Loss from operations		(59,433	)		132			(59,301	)
Loss from continuing operations before income taxes		(64,395	)		132			(64,263	)
Loss from continuing operations		(42,063	)		132			(41,931	)
Basic and diluted income (loss) per share
Loss from continuing operations	$	(54.64	)	$	0.16		$	(54.48	)

Shipping and handling costs

The Company includes shipping and handling costs in selling, general and administrative expenses on the consolidated statements of operations. Shipping and handling costs were $49,305, $48,139 and $50,943 for the years ended December 31, 2010, 2011 and 2012, respectively.

Property and equipment

Property and equipment are stated at cost. Expenditures for renewals and betterments, which extend the useful lives of assets, are capitalized while maintenance and repairs are charged to expense as incurred. Property and equipment obtained through acquisition are stated at estimated fair market value as of the acquisition date, and are depreciated over their estimated remaining useful lives, which may differ from our stated policies for certain assets.

F-13

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Property and equipment are depreciated using the straight-line method over the following estimated service lives:

Buildings and improvements	40 years
Leasehold improvements	Lesser of life of the asset or remaining
	lease term, and not to exceed 10 years
Furniture, fixtures and equipment	2–10 years
Vehicles	4–7 years

Assets are classified as held for sale if the Company commits to a plan to sell the asset within one year and actively markets the asset in its current condition for a price that is reasonable in comparison to its estimated fair value. Assets held for sale are stated at the lower of depreciated cost or estimated fair value less expected disposition costs. The significant remaining assets classified as held for sale as of December 31, 2012, are under contract to be sold during 2013.

Goodwill and other intangible assets

At least annually or more frequently, as changes in circumstances indicate, the Company evaluates the estimated fair value of goodwill. Regarding goodwill, to the extent that the carrying value of the net assets of any of the reporting units having goodwill is greater than their estimated fair value, the Company may be required to take goodwill impairment charges. The Company’s reporting units are its East, South and West geographic divisions and Coleman Flooring. The Company is required to make certain assumptions and estimates regarding the fair value of goodwill when assessing for impairment. Changes in the fact patterns underlying such assumptions and estimates could ultimately result in the recognition of additional impairment losses.

For purposes of testing goodwill, we estimate fair value using the income approach. The income approach uses a reporting unit’s projection of estimated future cash flows that is discounted at a market derived weighted average cost of capital. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash expenditures. The income approach has been determined to be the most representative because we do not have an active trading market for our equity or debt.

During the third quarter of 2010, 2011 and 2012, we performed our annual impairment assessment of goodwill which did not indicate that an impairment existed.

Acquired intangible assets other than goodwill are amortized over their weighted average amortization period unless they are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish the carrying value. The fair value of acquired intangible assets is determined using common valuation techniques, and the Company employs assumptions developed using the perspective of a market participant.

Impairment of long-lived assets

Long-lived assets, such as property, equipment and purchased intangible assets subject to amortization are reviewed for impairment whenever facts and circumstances indicate that the carrying amount of an asset may not be recoverable. For impairment testing of long-lived assets, we identify

F-14

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

asset groups at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset.

Income taxes

The Company computes income taxes using the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred taxes represent the difference between the tax basis of assets or liabilities, calculated under tax laws, and the reported amounts in the Company’s consolidated financial statements. The Company will establish a valuation allowance for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Periodically, the valuation allowance is reviewed and adjusted based on management’s assessments of realizable deferred tax assets.

ASC 740 also prescribes a recognition threshold and certain measurement principles for the financial statements related to tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on an income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties associated with income taxes, accounting in interim periods, disclosures and transition requirements.

The Company’s policy is to recognize interest and penalties related to income tax liabilities and unrecognized tax benefits in income tax expense.

Casualty and health insurance

The Company is self insured for general liability, auto liability and workers’ compensation exposures, as well as health care claims, with specific excess insurance purchased from independent carriers to cover individual traumatic claims in excess of the self-insured limits. The expected liability for unpaid claims, including incurred but not reported losses, is reflected on the consolidated balance sheets as a liability with current and long-term components. The amount recoverable from insurance providers is reflected on the consolidated balance sheets in prepaid expenses and other current assets. Provisions for losses are developed from valuations that rely upon the Company’s past claims experience, which considers both the frequency and settlement of claims. The casualty and health insurance liabilities are recorded at their undiscounted value.

Retirement savings program

The Company sponsors a defined contribution retirement savings plan. Employees who have attained the age of 18 and have completed 90 days of service prior to the plan entry date are eligible to participate in the plan. No employer contributions were made to the plan for the years ended December 31, 2010, 2011 and 2012.

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STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Lease obligations

The Company recognizes lease obligations with fixed escalations of rental payments on a straight-line basis over the lease term, with the amount of rental expense in excess of lease payments recorded as a deferred rent liability. As of December 31, 2011 and 2012, the Company had a deferred rent liability of $1,852 and $1,927, respectively, included in accrued expenses and other liabilities and other long-term liabilities on the consolidated balance sheets.

Advertising and promotion

Costs associated with advertising and promoting products and services are expensed in the period incurred and totaled $5,795, $399 and $1,323 for the years ended December 31, 2010, 2011 and 2012, respectively. These costs are included in selling, general and administrative expenses on the consolidated statements of operations.

Stock-based compensation

In accordance with the requirements of ASC 718, Compensation—Stock Compensation (“ASC 718”), the Company measures and recognizes compensation expense for all share-based payment awards made to employees using a fair value based pricing model. The compensation expense is recognized over the requisite service period.

Restructuring and related expenses

The Company accounts for costs associated with exit or disposal in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”), which requires that: (i) liabilities associated with exit and disposal activities be measured at fair value; (ii) one-time termination benefits be expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period; (iii) liabilities related to an operating lease/contract be recognized and measured at its fair value when the contract does not have any future economic benefit to the entity (i.e., the entity ceases to utilize the rights conveyed by the contract); and (iv) for typically all other costs related to an exit or disposal activity to be expensed as incurred.

Debt issuance costs

Costs incurred in connection with the Company’s secured credit agreement are capitalized and amortized over the term of the agreement. Total debt issuance costs, net of accumulated amortization, included in other assets on the consolidated balance sheets were $2,284 and $1,937 as of December 31, 2011 and 2012, respectively. Amortization of debt issuance costs for the years ended December 31, 2010, 2011 and 2012 was $1,252, $1,553 and $902, respectively, and is included in interest expense on the consolidated statements of operations.

Derivatives

The Company recognizes all derivative instruments as assets or liabilities in the Company’s balance sheets at fair value. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the hedge accounting criteria are reported in earnings. The Company elected not to designate any new derivative instruments as hedges for the years 2010, 2011 or 2012, and therefore all changes in the fair market value of the hedge contracts have been reported in cost of

F-16

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

goods sold, on the consolidated statements of operations. The Company may decide to designate these instruments as hedges in future periods. The Company does not enter into any derivatives for speculative or trading purposes; all derivatives are used to offset existing or expected risks associated with fluctuations in interest rates or commodities.

Warranty expense

We have warranty obligations with respect to most manufactured products; however, the liability for the warranty obligations is not significant as a result of third-party inspection and acceptance processes.

Comprehensive loss

Comprehensive loss is equal to the net loss for all periods presented.

Recently issued accounting pronouncements

Fair value measurement—In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”). The amendments in this ASU are intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards (“IFRS”). The amendments in this ASU explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. The Company adopted the provisions of ASU 2011-04 on January 1, 2012. The adoption did not have an impact on the Company’s financial position or results of operations.

Comprehensive income: Presentation—In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), to increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. GAAP and IFRS. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of members’ equity and requires that all non-owner changes in members’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. The Company adopted the provisions of ASU 2011-05 on January 1, 2012. The adoption of ASU 2011-05 did not have an impact on the Company’s financial position or results of operations.

Comprehensive income: Reclassifications—In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”), to supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASU 2011-05, which were deferred indefinitely under ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”), issued in December 2011. The amendments in ASU 2013-02

F-17

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

would require an entity to provide additional information about reclassifications out of accumulated other comprehensive income by the respective line items of net income. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The adoption of ASU 2013-02 will not have an impact on the Company’s financial position or results of operations.

3. Acquisitions

For all acquisitions, the Company allocates the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition. The market approach, which indicates value based on available market pricing for comparable assets, is utilized to estimate the fair value of inventory, property and equipment. The income approach, which indicates value based on the present value of future cash flows, is primarily used to value intangible assets. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, is used, as appropriate, for certain assets for which the market and income approaches could not be applied due to the nature of the asset.

National Home Centers, Inc.

On April 5, 2010, Stock Building Supply of Arkansas, LLC, a wholly-owned subsidiary of the Company, purchased certain assets and liabilities of National Home Centers, Inc. (“NHC”) for $15,000 in cash pursuant to Section 363 of Chapter 11 of the U.S. Bankruptcy Code. NHC consists of four locations in Arkansas which sell building materials primarily to residential contractors. The Company incurred transaction costs of $1,535 during the year ended December 31, 2010, which are included in selling, general and administrative expenses on the consolidated statements of operations. This amount includes $1,211 related to management services performed by Gores and Glendon Saturn Holdings, LLC (“Glendon”), an affiliate of Gores (Note 13). Revenue and net loss of NHC for the period April 5, 2010 through December 31, 2010 was $44,772 and $4,001, respectively.

The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on April 5, 2010.

Accounts receivable	$	10,381
Inventories		10,373
Prepaid expenses and other current assets		773
Property and equipment		9,721
Intangible assets—customer relationships		1,946
Total assets acquired		33,194
Accrued expenses and other liabilities		(869	)
Deferred income taxes		(6,102	)
Total liabilities assumed		(6,971	)
Net assets acquired		26,223
Less: Purchase price		15,000
Bargain purchase gain	$	11,223

F-18

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Bison Building Materials, LLC

On July 1, 2010, the Company purchased certain assets and liabilities of Bison Building Materials, LLC (“Bison”) for $34,848. Bison consists of three locations in Texas that sell building materials primarily to residential contractors. The Company incurred transaction costs of $1,587 during the year ended December 31, 2010, which are included in selling, general and administrative expenses on the consolidated statements of operations. These costs include $1,237 related to management services performed by Gores and Glendon (Note 13). Revenue and net loss of Bison for the period July 1, 2010 through December 31, 2010 was $44,233 and $5,052, respectively.

The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on July 1, 2010.

Accounts receivable	$	12,254
Inventories		9,994
Prepaid expenses and other current assets		76
Property and equipment		6,007
Intangible assets—trademarks		2,431
Intangible assets—customer relationships		5,036
Total assets acquired		35,798
Accrued expenses and other liabilities		(7,461	)
Total liabilities assumed		(7,461	)
Net assets acquired		28,337
Less: Purchase price		34,848
Goodwill	$	6,511

Goodwill of $6,511 arising from the acquisition consists of expected synergies and cost savings from excess purchase price over identifiable intangible net assets, as well as intangible assets that do not qualify for separate recognition, such as assembled workforce.

Total Building Services Group, LLC

On December 22, 2012, the Company purchased certain assets and liabilities of Total Building Services Group, LLC (“TBSG”) for $6,807. TBSG consists of one location in Georgia and sells framing, millwork and building materials and services primarily to residential contractors. The purchase of TBSG includes an earnout agreement (“Earnout”) in which the seller of TBSG participates in earnings over certain thresholds during the three fiscal years beginning January 1, 2013. The Company estimated the value of the Earnout to be $1,075 using discounted future cash flows. The Earnout has been classified as a Level 2 measurement in accordance with ASC 820. The Company advanced $850 against future Earnout payments and earns 9% interest on the advanced amount. The Company incurred transaction costs of $183 during the year ended December 31, 2012, which are included in selling, general and administrative expenses on the consolidated statements of operations. As the acquisition occurred on December 22, 2012, the revenue and net income of TBSG from the date of acquisition through December 31, 2012 is not significant.

F-19

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on December 22, 2012.

Accounts receivable	$	398
Inventories		1,524
Property and equipment		6,128
Intangible assets—trademarks		1,132
Intangible assets—supply agreement		4,484
Intangible assets—customer relationships		1,967
Total assets acquired		15,633
Accounts payable		(3,395	)
Accrued expenses and other liabilities		(56	)
Current portion of capital lease obligation		(423	)
Long-term capital lease obligation		(4,952	)
Total liabilities assumed		(8,826	)
Net assets acquired	$	6,807

Pro forma financial information (unaudited)

The following unaudited pro forma combined results of operations give effect to the acquisitions of TBSG, Bison and NHC by the Company as if TBSG had been acquired on January 1, 2011, and as if Bison and NHC had been acquired on January 1, 2009, the beginning of the respective comparable prior annual periods, applying certain assumptions and pro forma adjustments. These pro forma adjustments primarily relate to depreciation expense on stepped up fixed assets and amortization of acquired intangibles, and the estimated impact on the Company’s income tax provision. The unaudited pro forma consolidated results of operations are provided for illustrative purposes only and are not indicative of the Company’s actual consolidated results of operations or consolidated financial position. In addition, the unaudited pro forma combined results of operations do not reflect the costs of any integration activities, nonrecurring charges directly attributable to purchase accounting, or any synergies or other restructuring activities that may result from the acquisition.

Unaudited pro forma financial information is as follows:

	Pro forma year ended December, 31
	2010			2011			2012
Net sales	$	837,105		$	775,852		$	962,876
Loss from continuing operations		(66,518	)		(42,056	)		(15,035	)
Redeemable Class B Senior Preferred stock dividends		(5,079	)		(4,188	)		(4,480	)
Loss attributable to common stockholders from continuing operations		(71,597	)		(46,244	)		(19,515	)
Basic and diluted loss per share from continuing operations	$	(79.49	)	$	(54.63	)	$	(39.34	)

4. Discontinued operations

During the years ended December 31, 2010, 2011 and 2012, the Company ceased operations in certain geographic markets due to declines in residential home building throughout the U.S. and other strategic reasons. The Company will have no further significant continuing involvement in the sold

F-20

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

operations and exited geographic markets. The cessation of operations in these markets has been treated as discontinued operations as the markets had distinguishable cash flows and operations that have been eliminated from ongoing operations.

On January 11, 2010, the Company sold its subsidiary, Universal Supply, LLC (“US”), to an external party for proceeds of $20,771. US consisted of eight roofing and siding stores in New Jersey, and was sold in order to focus on the Company’s core residential building materials business. The Company recognized a gain on the sale of US of $1,461 in income (loss) from discontinued operations on the consolidated statements of operations, net of transaction fees of $1,009.

On April 30, 2010, the Company sold its Commercial Door and Hardware operations (“CDH”) to an external party for proceeds of $26,060. CDH consisted of twelve locations in six states and was sold in order to focus on the Company’s core residential building materials business. The Company recognized a loss on the sale of CDH of $771 in income (loss) from discontinued operations on the consolidated statements of operations, net of transaction fees of $1,399.

The operating results of the discontinued operations for the years ended December 31, 2010, 2011 and 2012 are as follows:

	2010			2011			2012
Net sales	$	74,996		$	14,670		$	1,103
Restructuring charges		(103	)		(1,033	)		(55	)
Gain (loss) before income taxes		(8,252	)		456			101
Income tax benefit (expense)		4,038			(658	)		(52	)
Net income (loss)		(4,214	)		(202	)		49

The assets and liabilities of discontinued operations reflected on the consolidated balance sheets at December 31, 2011 and 2012 are as follows:

	2011		2012
Accounts receivable, net	$	1,786	$	—
Inventories, net		961		20
Real estate held for sale		1,290		700
Prepaid expenses and other current assets		71		35
Current assets of discontinued operations		4,108		755
Property and equipment, net of accumulated depreciation		1,640		28
Noncurrent assets of discontinued operations		1,640		28
Accounts payable		45		2
Accrued expenses and other liabilities		888		167
Restructuring reserve		432		277
Current liabilities of discontinued operations		1,365		446
Long-term restructuring reserve		604		384
Other long-term liabilities		—		4
Noncurrent liabilities of discontinued operations	$	604	$	388

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STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

5. Restructuring costs

During the years ended December 31, 2010, 2011 and 2012, in addition to discontinuing operations in certain markets, the Company instituted several store closures and reductions in headcount in continuing markets (the “Restructurings”) in an effort to: (i) strengthen the Company’s competitive position; (ii) reduce costs; and (iii) improve operating margins within existing markets that management believe have favorable long-term growth demographics.

For the year ended December 31, 2010, the Company recognized restructuring charges of $7,089 from continuing operations and $103 from discontinued operations. For the year ended December 31, 2011, the Company recognized restructuring charges of $1,349 from continuing operations and $1,033 from discontinued operations. For the year ended December 31, 2012, the Company recognized restructuring charges of $2,853 from continuing operations and $55 from discontinued operations. These restructuring charges primarily relate to management’s determination that subleasing closed properties is no longer reasonably assumed which resulted in revised estimates. No additional costs are expected to be incurred related to the Restructurings.

The following table summarizes the restructuring expenses incurred in connection with the Restructurings and the remaining reserves as of December 31, 2010, 2011 and 2012.

	Work force reductions			Store closures			Total
Restructuring reserves, December 31, 2010		671			3,791			4,462
Restructuring charges incurred		97			2,285			2,382
Cash payments		(703	)		(2,141	)		(2,844	)
Restructuring reserves, December 31, 2011		65			3,935			4,000
Restructuring charges incurred		353			2,555			2,908
Cash payments		(65	)		(1,718	)		(1,783	)
Restructuring reserves at December 31, 2012	$	353		$	4,772		$	5,125

The remaining accrual for work force reduction of $353 is expected to be fully paid by December 2014. The remaining accrual for store closures of $4,772 is expected to be fully paid by January 2017 as the related leases expire.

6. Accounts receivable

Accounts receivable consist of the following at December 31, 2011 and 2012:

	2011			2012
Trade receivables	$	69,379		$	94,962
Allowance for doubtful accounts		(2,669	)		(3,095	)
Allowance for sales returns and discounts		(1,504	)		(1,570	)
	$	65,206		$	90,297

F-22

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

The following table shows the changes in our allowance for doubtful accounts.

	2010			2011			2012
Balance at January 1	$	38,131		$	4,826		$	2,669
Additions charged to expense		2,463			1,753			2,333
Deductions (write-offs)		(35,768	)		(3,910	)		(1,907	)
	$	4,826		$	2,669		$	3,095

7. Inventories

Inventories consist principally of materials purchased for resale, including lumber, sheet goods, millwork, windows and doors, as well as certain manufactured products and are valued at the lower of cost or market, with cost being measured using an average cost approach, which approximates the first-in, first-out approach. A provision for excess and obsolete inventory of $3,458 and $1,833 is recorded as of December 31, 2011 and 2012, respectively. The provision as of December 31, 2011 includes $763 related to inventory at closed stores which was sold at auction during 2012 for less than its cost.

8. Property and equipment

Property and equipment consists of the following at December 31, 2011 and 2012:

	2011			2012
Land	$	18,580		$	18,210
Buildings and improvements		19,477			24,992
Leasehold improvements		8,195			7,178
Furniture, fixtures and equipment		53,881			51,554
Vehicles		26,934			25,387
Construction-in-progress		275			293
		127,342			127,614
Less: Accumulated depreciation		(69,583	)		(72,538	)
	$	57,759		$	55,076

Depreciation expense for the years ended December 31, 2010, 2011 and 2012 amounted to $38,915, $15,257 and $10,299 including amortization expense related to capital leases. Depreciation expense of $5,672, $2,887 and $2,489 was included in cost of goods sold, in 2010, 2011 and 2012, respectively.

As of December 31, 2011, the Company had real estate held for sale of $4,890 and $1,290 included in continuing operations and discontinued operations, respectively, related to closed branches. As of December 31, 2012, the Company had real estate held for sale of $5,117 and $700 included in continuing operations and discontinued operations, respectively, related to closed branches. During the years ended December 31, 2011 and 2012, the Company reclassified $0 and $970, respectively, of property and equipment to assets held for sale, as the assets met the held for sale criteria as set forth in ASC 360, Property, Plant and Equipment (“ASC 360”).

F-23

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

As of December 31, 2011 and 2012, the Company had other assets held for sale of $0 and $381, respectively, in continuing operations, consisting primarily of information technology equipment.

For the years ended December 31, 2010, 2011 and 2012 the Company recorded impairment charges related to assets held for sale of $3,607, $610 and $481, respectively. The impairment charges arose primarily from declining commercial real estate values. The Company estimated the fair value of the assets classified as held for sale using recent sales data for similar properties in the area and analyzed the expected cash flows from different sales scenarios.

During the years ended December 31, 2010, 2011 and 2012, the Company had proceeds from the sale of property and equipment of $18,201, $5,220 and $952, respectively and proceeds from the sales of real estate held for sale of $5,312, $886 and $441, respectively. These disposals were primarily related to assets of stores closed as part of the restructuring events discussed in Note 5.

9. Goodwill and intangible assets, net

Goodwill

Goodwill of $6,511 represents the excess of the purchase price over the fair value of identifiable net assets acquired in connection to the purchase of Bison in July 2010 (Note 3). All of the goodwill from this transaction is expected to be deductible for income tax purposes.

Intangible assets

Intangible assets represent the value assigned to trademarks acquired in connection to the purchases of SBS, Bison and TBSG, the value assigned to customer relationships acquired in connection to the purchases of NHC, Bison and TBSG and the value assigned to a supply agreement acquired in connection to the purchase of TBSG. The trademark intangible assets will be amortized over a weighted-average period of 17.3 years. The customer relationship intangible assets will be amortized over a weighted-average period of 11.5 years. The supply agreement will be amortized over a period of 13 years. The following table provides the gross carrying amount and related accumulated amortization of definite-lived intangible assets.

	Trademarks					Customer relationships					Supply agreement					Total
	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
December 31, 2010	$	15,853	$	(1,313	)	$	6,982	$	(313	)	$	—	$	—		$	21,209
Amortization		—		(908	)		—		(549	)		—		—			(1,457	)
December 31, 2011		15,853		(2,221	)		6,982		(862	)		—		—			19,752
Acquisitions		1,132		—			1,967		—			4,484		—			7,583
Amortization		—		(909	)		—		(552	)		—		(9	)		(1,470	)
December 31, 2012	$	16,985	$	(3,130	)	$	8,949	$	(1,414	)	$	4,484	$	(9	)	$	25,865

F-24

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Aggregate amortization expense was $1,166, $1,457 and $1,470 for the years ended December 31, 2010, 2011 and 2012, respectively. Based upon current assumptions, the Company expects that its definite-lived intangible assets will be amortized according to the following schedule:

2013		2,164
2014		2,164
2015		2,164
2016		2,164
2017		2,164
Thereafter		15,045
	$	25,865

10. Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following at December 31, 2011 and 2012:

	2011		2012
Accrued payroll and other employee related expenses	$	7,073	$	6,940
Reserve for future share issuance to Gores (Note 13)		5,000		—
Accrued taxes		4,691		4,156
Self-insurance reserve (Note 15)		3,176		3,365
Advances from customers		2,838		2,981
Accrued professional fees		913		1,214
Accrued rebates payable		747		826
Accrued short-term deferred rent		359		593
Accrued related party management fees (Note 13)		201		119
Accrued lending fees		105		445
Litigation reserve (Note 15)		—		2,146
Other		3,452		2,492
	$	28,555	$	25,277

11. Secured Credit Agreement

On June 30, 2009, the Company entered into a Secured Credit Agreement with Wells Fargo Capital Finance (the “Credit Agreement”) which includes a revolving line of credit (the “Revolver”). The Revolver was amended during 2010, 2011 and 2012 for changes in financial covenants and maximum availability. The following is a summary of the significant terms of the Revolver:

Maturity	December 11, 2015
Interest/Usage Rate	Company’s option of Base Rate(a) plus a Base Rate Margin (ranges from 1.25%–1.75% based on Revolver availability) or LIBOR plus a LIBOR Rate Margin (ranges from 2.25%–2.75% based on Revolver availability)
Maximum Availability	Lesser of $150,000 or the borrowing base(b)
Periodic Principal Payments	None

(a) Base Rate is the higher of (i) the Federal Funds Rate plus 0.5% or (ii) the prime rate

F-25

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

(b) The Revolver’s borrowing base is calculated as the sum of (i) 85% of the Company’s eligible accounts receivable, plus (ii) the lesser of $125,000, 65% of the eligible inventory or the liquidation value of eligible inventory as defined in the Credit Agreement minus (iii) reserves from time to time set by the administrative agent. The eligible accounts receivable and inventories are further adjusted as specified in the agreement. The Company’s borrowing base can also be increased pursuant to certain terms outlined in the Credit Agreement.

The Credit Agreement provides that the Company can use the Revolver availability to issue letters of credit. The fees on any outstanding letters of credit issued under the Revolver include a participation fee equal to the LIBOR Rate Margin. The fee on the unused portion of the Revolver is 0.375% if the average daily usage is $75,000 or below, and 0.25% if the average daily usage is above $75,000. The Revolver includes a financial covenant that requires the Company to maintain a minimum Fixed Charge Coverage Ratio of 1.0 as defined by the Credit Agreement. However, the covenant is only applicable if the sum of availability under the Revolver plus qualified cash i) falls below $15,000 or ii) is between $15,000 and $20,000 for a period of five consecutive business days, and remains in effect until the sum of availability under the Revolver plus qualified cash exceeds $20,000 for 30 consecutive days. The Company has incurred operating losses and has used cash for operating activities for the years ended December 31, 2010, 2011 and 2012. While there can be no assurances, based upon the Company’s forecast, the Company does not expect the covenants to become applicable during the year ended December 31, 2013. However, should this not be the case, the Company would evaluate its liquidity options including, amendment to the credit agreement, seeking alternative financing arrangements of debt and/or equity, and/or sale of assets. No assurances can be given that such alternative financing would be available, or if available, under terms similar to the Company‘s existing Credit Agreement or that the Company would be able to sell assets on a timely basis.

The Company had outstanding borrowings of $33,850 and $72,218 with net availability of $21,603 and $31,344 as of December 31, 2011 and 2012, respectively. The interest rate on outstanding LIBOR Rate borrowings of $65,000 ranged from 3.1%-3.3% and the interest rate on outstanding Base Rate borrowings of $7,218 was 5.0% as of December 31, 2012. The Company had $5,100 and $7,550 in letters of credit outstanding under the Credit Agreement as of December 31, 2011 and 2012, respectively. The Revolver is collateralized by substantially all assets of the Company. The carrying value of the Revolver at December 31, 2012 approximates fair value as the Revolver contains a variable interest rate. As such, the fair value of the Revolver was classified as a Level 2 measurement in accordance with ASC 820.

The Company obtained an extension from Wells Fargo Capital Finance subsequent to year end related to its requirement to file its financial statements and related certifications no later than 120 days after its year end. This agreement has extended the requirement to provide December 31, 2012 financial statements and related certifications to 150 days after the Company’s year end. The Company was in compliance with all other debt covenants for the year ended December 31, 2012.

F-26

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

12. Other long-term liabilities

Other long-term liabilities consisted of the following at December 31, 2011 and 2012:

	2011		2012
Litigation reserve (Note 15)	$	7,708	$	—
Self-insurance reserve (Note 15)		2,893		3,866
Long-term restructuring reserve (Note 5)		2,416		3,612
Long-term deferred rent		1,493		1,334
Long-term capital lease obligation		822		5,635
Reserve for uncertain tax positions (Note 14)		347		—
Other		—		195
	$	15,679	$	14,642

13. Related party transactions

The Company leases operating facilities from partnerships or corporations that are partially or fully owned by certain employees. During the years ended December 31, 2010, 2011 and 2012, the Company made rental payments of $2,848, $188 and $188, respectively, to these related parties.

The Company incurs expenses related to management services provided by Gores and Glendon. The Company incurred expenses related to management services provided by Wolseley through November 16, 2011. For the years ended December 31, 2011 and 2012, these expenses were $2,406 and $1,379, respectively, and are included in selling, general and administrative expenses on the consolidated statements of operations. For the year ended December 31, 2010, these expenses totaled $5,545, of which $5,045 is included in selling, general and administrative expenses and $500 is included in loss from discontinued operations on the consolidated statements of operations. The fees for the year ended December 31, 2010, include $1,237 and $1,211 related to management services incurred in connection with the purchases of Bison and NHC, respectively (Note 3). As of December 31, 2011 and 2012, the Company had accrued expenses of $201 and $119, respectively, related to these management services. These payables are included in accrued expenses and other liabilities on the consolidated balance sheets.

As of December 31, 2011 and 2012, the Company had related party promissory note balances of $412 and $401, respectively, which represent advances, and accrued interest thereon, due from Glendon and other shareholders of the Company. These notes accrue interest at rates of 0.50%-2.72% per annum and have maturity dates ranging from May 5, 2018 to May 31, 2019. The notes are due immediately if the Company undergoes a change of control. The notes are recorded as a reduction of additional paid in capital on the consolidated balance sheets.

On July 1, 2012, the Company made a $531 loan to an executive of the Company related to an exercise of stock options. The note accrues interest at a rate of 0.92% per annum, and matures on or before June 30, 2021. The note is due immediately if the Company undergoes a change of control. While the stock options were legally exercised, they were not considered exercised for accounting purposes under ASC 718. As a result, the related loan is not reflected on the consolidated balance sheets.

As described in Note 1, Gores contributed $5,000 in connection with the Company’s purchase of Wolseley’s shareholder interests on November 16, 2011. At December 31, 2011, the Company had

F-27

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

recorded $5,000 in accrued expenses and other liabilities on the consolidated balance sheets related to this contribution. On January 26, 2012, the Company issued Gores 5,000 Class C Convertible Preferred shares (Note 16) to satisfy the liability.

On March 1, 2012, the Company issued Glendon 4,250 Class B Common shares.

The Company is part of a group health care plan with Gores. As of December 31, 2011 and 2012, the Company has $0 and $750 on deposit with Gores as a reserve for the payment of run-off health care claims in the event of a Plan termination, which is included in restricted assets on the consolidated balance sheets.

14. Income taxes

The components of income tax expense (benefit) are as follows:

	2010			2011			2012
Current
Federal	$	(21,541	)	$	(16,300	)	$	(4,419	)
State		(4,914	)		552			197
		(26,455	)		(15,748	)		(4,222	)
Deferred
Federal		(20,616	)		(4,513	)		(2,759	)
State		(4,430	)		(1,413	)		(874	)
		(25,046	)		(5,926	)		(3,633	)
	$	(51,501	)	$	(21,674	)	$	(7,855	)

The 2010 income tax benefit of $51,501 consists of $47,463 related to continuing operations and $4,038 related to discontinued operations. The 2011 income tax benefit of $21,674 consists of $22,332 related to continuing operations and ($658) related to discontinued operations. The 2012 income tax benefit of $7,855 consists of $7,907 related to continuing operations and ($52) related to discontinued operations.

A reconciliation of differences between the statutory U.S. Federal income tax rate of 35% and the Company’s effective tax rate from continuing operations for the years ended December 31, 2010, 2011, and 2012 follows:

	2010			2011			2012
Income tax expense at statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal tax		2.3			2.7			2.3
Nondeductible (permanent) items		(0.2	)		(0.2	)		(1.1	)
Indemnity tax asset		(0.9	)		(1.1	)		(0.6	)
Uncertain tax positions		2.6			3.0			1.6
Bargain purchase gain		3.5			0.0			0.0
Other Items		(0.4	)		(2.5	)		0.9
Valuation allowance		0.0			(2.1	)		(2.4	)
		41.9	%		34.8	%		35.7	%

F-28

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31, 2011 and 2012:

	2011			2012
Deferred tax assets related to:
Accounts receivable	$	480		$	516
Inventory		2,481			1,763
Accrued expenses		5,200			5,218
Other reserves and liabilities		1,388			3,913
Net operating loss and credit carryforwards		2,309			3,325
		11,858			14,735
Valuation allowance		(1,418	)		(1,946	)
Total deferred tax assets		10,440			12,789
Deferred tax liabilities related to:
Real estate held for sale		(2,354	)		(2,296	)
Intangible assets		(4,667	)		(4,391	)
Property and equipment		(19,383	)		(18,735	)
Other assets		(1,090	)		(788	)
Total deferred tax liabilities		(27,494	)		(26,210	)
Net deferred tax liability	$	(17,054	)	$	(13,421	)

At December 31, 2012, the Company has $59,602 of state net operating loss carry-forwards expiring at various dates through 2032. At December 31, 2012, the Company also has $1,679 of Federal net operating loss carry-forwards and credits that will expire at various dates through 2032.

Section 382 of the Internal Revenue Code (“IRC”) imposes annual limitations on the utilization of net operating loss carry-forwards, other tax carry-forwards, and certain built-in losses upon an ownership change as defined under that section. In general terms, an ownership change may result from transactions that increase the aggregate ownership of certain stockholders in the Company’s stock by more than 50 percentage points over a three year testing period. If the Company were to experience an IRC section 382 ownership change, an annual limitation could be imposed on certain of the Company’s tax attributes, including its net operating losses, capital loss carry-forwards, and certain other losses, credits, deductions or tax basis.

The Company recognized a current income tax receivable of $9,171 at December 31, 2011 and a current income tax payable of $3,116 at December 31, 2012.

During 2010, 2011 and 2012, the Company paid $31,107, $2,049 and $244 in Federal and state income tax payments, respectively. During 2011 and 2012, the Company carried back Federal and certain state tax net operating losses as a tax deduction to offset taxable income in prior taxable periods. As a result of this tax loss carry back, the Company received tax refunds of $24,782 in 2011 and $16,399 in 2012.

In accordance with ASC 740, the Company evaluates its deferred tax assets to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, the Company

F-29

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

considers both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The primary negative evidence considered includes the cumulative operating losses generated in prior periods. The primary positive evidence considered includes the reversal of deferred tax liabilities related to depreciation and amortization that would occur within the same jurisdiction and during the carry forward period necessary to absorb the Federal and state net operating losses and other deferred tax assets. The reversal of such liabilities would utilize the Federal and state net operating losses and other deferred tax assets.

Based upon the positive and negative evidence considered, the Company believes it is more likely than not that it will realize the benefit of the deferred tax assets, net of the existing valuation allowances of $50, $1,418, and $1,946 as of December 31, 2010, 2011 and 2012, respectively. To the extent the Company generates sufficient taxable income in the future to fully utilize the tax benefits of the net deferred tax assets on which a valuation allowance was recorded, the Company’s effective tax rate may decrease as the valuation allowance is reversed.

The following table shows the changes in the amount of the Company’s valuation allowance.

	2010		2011		2012
Balance at January 1,	$	—	$	50	$	1,418
Additions charged to expense		50		1,368		528
Deductions		—		—		—
Balance at December 31,	$	50	$	1,418	$	1,946

At December 31, 2011 and 2012, the Company has recognized $347 and $0, respectively, within other long-term liabilities related to state uncertain tax positions with equal, corresponding amounts related to the Wolseley indemnification within other assets. All of these uncertain tax position liabilities are subject to indemnification by Wolseley. During 2012, the statute of limitations expired for certain tax periods where the Company had previously recognized a long-term liability related to uncertain tax positions. As a result, the Company increased current income tax benefit for the year ended December 31, 2012 by $347 and decreased the long-term liability related to the uncertain tax positions. The Company also recognized $347 within other income (expense), net, on the consolidated statement of operations due to the reduction in the related Wolseley indemnity asset.

At December 31, 2010 and 2011, the Company’s liability for unrecognized tax benefits reflects the uncertainty as to whether certain deductions will be respected by state taxing authorities on the Company‘s prior tax returns.

F-30

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (exclusive of the effect of interest and penalties) is as follows:

	2010			2011			2012
Balance at January 1,	$	5,146		$	2,027		$	266
Tax positions taken in prior periods:
Gross increases		89			—			—
Gross decreases		—			—			—
Tax positions taken in current period:
Gross increases		—			—			—
Settlements with taxing authorities		—			—			—
Lapse of applicable statute of limitations		(3,208	)		(1,761	)		(266	)
Balance at December 31,	$	2,027		$	266		$	—

Certain state tax returns are under examination by various regulatory authorities. The Company‘s state tax returns are open to examination for an average of three years. However, certain jurisdictions remain open to examination longer than three years due to the existence of net operating losses and statutory waivers. The Company’s Federal returns are open to examination for three years; however, due to statutory waivers, SBS’ tax years ended July 31, 2008 and May 5, 2009 remain open until December 31, 2013 with the Federal tax authorities. SBS is currently under examination by the IRS for its tax years ended July 31, 2008, May 5, 2009, March 31, 2010, March 31, 2011 and March 31, 2012. At December 31, 2011 and 2012, the Company has recognized $2,864 and $2,923, respectively, related to expected tax and interest payments as a result of the IRS audits in its current income tax payable.

The Company’s policy is to recognize interest and penalties related to income tax liabilities and unrecognized tax benefits in income tax expense and to the extent the liability relates to pre-Acquisition Date tax periods, the Company recognizes a corresponding benefit related to the indemnity agreement from a subsidiary of Wolseley. Included in the balance of unrecognized tax benefits for the year ended December 31, 2010 are $871 and $444 of interest and penalties related to these taxes, respectively. Included in the balance of the unrecognized tax benefits for the year ended December 31, 2011 are $184 and $64 of interest and penalties related to these taxes, respectively. As of December 31, 2012 the Company has neither material unrecognized tax benefits nor any associated interest and penalties. During the years ended December 31, 2010, 2011 and 2012, the Company recognized penalties and interest related to income tax liabilities and uncertain tax benefits of $568, $213 and $73, respectively.

15. Commitments and contingencies

The Company is obligated under capital leases covering fleet vehicles and certain equipment, as well as one facility. The fleet vehicles and equipment leases generally have terms ranging from three to six years and the facility lease has a term of eleven years. The carrying value of property and equipment under capital leases was $1,946 and $6,999 at December 31, 2011 and 2012, respectively, net of accumulated depreciation of $3,079 and $2,799, respectively. Amortization of assets held under capital leases is included with depreciation expense on the consolidated statements of operations.

F-31

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

The Company also has several noncancelable operating leases, primarily for buildings, improvements, and equipment. These leases generally contain renewal options for periods ranging from one to five years and require the Company to pay all executory costs such as property taxes, maintenance and insurance.

Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of December 31, 2012 are as follows:

	Capital leases			Operating leases
2013	$	1,732		$	18,849
2014		1,127			17,549
2015		862			11,588
2016		716			10,922
2017		700			6,373
Thereafter		3,971			12,424
		9,108		$	77,705
Less: Amounts representing interest		(2,144	)
Total obligation under capital leases		6,964
Less: Current portion of capital lease obligation		(1,329	)
Long term capital lease obligation	$	5,635

Total rent expense under these operating leases for the years ended December 31, 2010, 2011 and 2012 was $23,394, $21,070 and $18,616, respectively, which are included in selling, general and administrative expenses on the consolidated statements of operations. Future payments for certain leases will be adjusted based on increases in the consumer price index.

In December 2012, the Company entered into a commitment to lease certain vehicles and equipment for which the lease term has not yet commenced. Total future minimum lease payments under these leases will be $1,334 and are expected to extend through 2018.

In 2012, the Company was a defendant in various pending lawsuits arising from assertions of defective drywall manufactured in China and purchased and installed by certain of the Company’s subcontractors, including In re: Chinese-Manufactured Drywall Products Liability Litigation, MDL Case No. 2047, in the United States District Court Eastern District of Louisiana (the “MDL”). The Company has sought and continues to seek reimbursement from Wolseley, the manufacturer, intermediate distributors, insurers, and others related to any costs incurred to investigate and repair defective Chinese drywall and resulting damage. As of December 31, 2012, the Company had recorded a liability of $1,638 in accrued expenses and other liabilities on the consolidated balance sheets as an estimate of probable future payouts related to the MDL. As of December 31, 2012, the Company had also recorded an indemnification asset of $1,638 in prepaid expenses and other current assets on the consolidated balance sheets as it expected full indemnification for any amounts paid related to these claims. The MDL was resolved in April 2013 without any impact to the Company’s income statement or cash flows and the Company no longer holds the liability nor the asset relating to the aforementioned matter.

F-32

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

In January 2012, an amended judgment was entered against the Company in the amount of $5,746 related to the assertion of alleged construction defects. As of December 31, 2011, the Company recorded a liability of $5,746 in other long-term liabilities on the consolidated balance sheets as an estimate of probable future payouts related to these claims. The Company also recorded an indemnification asset of $5,746 as of December 31, 2011 in other assets on the consolidated balance sheets as it expected full indemnification for any amounts paid related to this claim. This matter was resolved in 2012 without any impact on the Company’s statements of income or cash flows and, as of December 2012, the Company holds neither the liability nor asset relating to the aforementioned amended judgment.

In 2010, the Company received approximately $4,600 from the settlement of a class action lawsuit against various manufacturers of oriented strand board. The Company recorded this amount as other income on the consolidated statements of operations.

From time to time, various claims and litigation are asserted or commenced against the Company principally arising from contractual matters, product warranties and personnel and employment disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. It is not certain that the Company will prevail in these matters. However, the Company does not believe that the ultimate outcome of any pending matters, will have a material adverse effect on its consolidated financial position, results of operations or cash flows.

16. Equity and redeemable securities

Common Stock

Saturn has authorized 875,000 Class A Voting Common shares and 125,000 Class B Nonvoting Common shares with a par value of $0.01 per share.

Preferred Stock

Class A Junior Preferred Stock

On May 5, 2009, the Company authorized 10,000 Class A Junior Preferred shares available for issuance with a par value of $0.01 per share, of which 10,000 were initially issued and outstanding. At December 31, 2011 and 2012, the number of Class A Junior Preferred shares issued and outstanding was 5,100. These preferred shares, held by Gores, are redeemable by the Company at any time after July 31, 2012 for the liquidation preference of $1.00 per share, but have no voting or participation rights other than in the event of a liquidation.

In the event of an involuntary liquidation, these shares are entitled to the liquidation preference which is to be paid out after Class B Senior Preferred shares and Class C Convertible Preferred shares but before all common shares. Further, these preferred shares have no conversion features into common shares and are recorded as redeemable securities (outside of permanent equity) on the accompanying consolidated balance sheets.

Class B Senior Preferred Stock

On June 30, 2009, the Company authorized 500,000 Class B Senior Preferred shares available for issuance with a par value of $0.01 per share, of which 75,000 were initially issued and outstanding. At December 31, 2011 and 2012, the number of Class B Senior Preferred shares issued and

F-33

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

outstanding was 48,760 and 36,388, respectively. These preferred shares, held by Gores, are redeemable at any time after May 5, 2011 by the Company for the liquidation preference of $1,000 per share plus accumulated and unpaid dividends.

These shares have no voting or participating rights, but are eligible to receive cumulative preferential distributions of 8% annually when authorized by the board. Dividends earned, but not declared or paid by the Class B Preferred shares as of December 31, 2010, 2011 and 2012 were $2,049, $6,237 and $89, respectively. In the event of an involuntary liquidation, these shares are entitled to the liquidation preference which is to be paid out before all other Preferred and Common shares. These shares are also mandatorily redeemable at the liquidation preference upon an initial public offering. These preferred shares have no conversion features into common shares and are recorded as redeemable securities (outside of permanent equity) on the accompanying consolidated balance sheets.

Class C Convertible Preferred Stock

On January 26, 2012, the Company authorized 5,000 Class C Convertible Preferred shares available for issuance with a par value of $0.01 per share, of which 5,000 were initially issued and outstanding. At December 31, 2012, the number of Class C Convertible Preferred shares issued and outstanding was 5,000. These preferred shares, held by Gores, have the same voting rights as the Class A Voting Common shares. The shares are entitled to receive distributions equal to the amount of distributions as if the shares have been converted into Class A Voting Common shares. In the event of an involuntary liquidation, these shares are entitled to the liquidation which is to be paid out after Class B Preferred shares but before all other Preferred and Common shares. These shares also provide Gores with the option to convert into 171,500 Class A Voting Common shares at any time at a conversion price of $29.15. The Class C Convertible Preferred shares are recorded as redeemable securities (outside of permanent equity) on the accompanying consolidated balance sheets. As discussed in Note 2, the Class C Convertible Preferred shares will automatically convert to Class A Voting Common shares upon the completion of a public offering.

17. Equity based compensation

Nonvested stock awards

Certain employees of the Company were granted nonvested Class B Nonvoting Common shares during the years ended December 31, 2010, 2011 and 2012. These shares vest over a period of four years based on continued employment with the Company and the related compensation expense is amortized over the vesting period and included in selling, general and administrative expense on the consolidated statements of operations. There was no cash impact related to the nonvested stock awards during the years ended December 31, 2010, 2011 and 2012.

Stock option awards

During the years ended December 31, 2010, 2011 and 2012, certain directors and employees of the Company were awarded options to purchase Class B Nonvoting Common shares. These options were issued at an exercise price equal to the fair value of the Company’s stock at the date of grant. There was no cash impact related to the stock option awards during the years ended December 31, 2010, 2011 and 2012.

F-34

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

Shares awarded that revert to the Company as a result of forfeiture or termination, expiration or cancellation of an award or that are used to exercise an award or for tax withholding, will be again available for issuance. The following table highlights the expense related to share-based payment.

	2010		2011		2012
Nonvested stock	$	228	$	127	$	251
Stock options		60		257		548
Stock based compensation	$	288	$	384	$	799

The fair value of stock options was estimated using the Black-Scholes option pricing model. The Company used the following assumptions to value the stock options issued during the years ended December 31, 2010, 2011 and 2012:

	2010			2011			2012
Expected dividend yield		0	%		0	%		0	%
Expected volatility factor(1)		59	%		59	%		58	%
Risk-free interest rate(2)		1.51% - 2.06	%		1	%		0.77% - 0.89	%
Expected term (in years)		4.1 - 4.7			4.3			3.7 - 3.9

(1) The Company estimated its volatility factor based on the average volatilities of similar public entities.

(2) The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant.

The following is a summary of nonvested stock awards and stock option awards:

	Nonvested stock					Stock options
	Number of shares outstanding			Weighted average grant date fair value		Number of options outstanding			Weighted average exercise price
December 31, 2009		62,500		$	22.05		—		$	—
Granted		5,000			67.40		32,545			53.24
Vested/exercised		(6,250	)		22.05		—			—
Forfeited/cancelled		(18,000	)		21.59		—			—
December 31, 2010		43,250			27.49		32,545			53.24
Granted		2,500			49.98		2,500			49.98
Vested/exercised		(7,000	)		25.49		—			—
Forfeited/cancelled		(13,000	)		30.08		—			—
December 31, 2011		25,750			28.90		35,045			53.00
Granted		9,013			25.25		29,757			25.25
Vested/exercised		(17,263	)		25.53		—			—
Forfeited/cancelled		(2,250	)		49.98		(35,045	)		53.00
December 31, 2012		15,250		$	27.45		29,757		$	25.25

There were 10,744 shares available for future stock and stock option award issuance as of December 31, 2012.

F-35

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

On July 1, 2012, 21,032 options were legally exercised, but were not considered exercised for accounting purposes under ASC 718 (Note 13).

During the year ended December 31, 2012, the exercise price on all stock option agreements was revised to $25.25, and 9,013 options were cancelled and reissued as nonvested shares. These transactions were accounted for as modifications under ASC 718.

The outstanding stock options at December 31, 2012 have a weighted average remaining contractual life of 8.1 years. 2,750 options were exercisable as of December 31, 2012 at a weighted average exercise price of $25.25.

The following table summarizes the Company’s total unrecognized compensation cost related to equity based compensation as of December 31, 2012.

	Unearned Compensation		Weighted Average Remaining Period of Expense Recognition (in years)
Nonvested Stock	$	146		0.6
Stock Options		383		2.0
	$	529

18. Segments

ASC 280, Segment Reporting (“ASC 280”) defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Our operating segments consist of the East, South, and West geographic divisions along with Coleman Flooring. In accordance with ASC 280, due to the similar economic characteristics, nature of products, distribution methods, and customers, we have aggregated our East, South and West operating segments into one reportable segment.

In addition to our reportable segment, the Company’s consolidated results include “Other,” and is comprised of our corporate activities and Coleman Flooring, which offers professional flooring installation services.

The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total continuing operations for the period indicated.

	2010									December 31, 2010
	Net sales		Gross profit		Depreciation & amortization		Adjusted EBITDA			Total assets
Geographic divisions	$	726,623	$	157,250	$	33,145	$	(21,932	)	$	240,355
Other		25,083		6,764		3,004		(36,055	)		54,614
	$	751,706	$	164,014	$	36,149	$	(57,987	)	$	294,969

F-36

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

	2011									December 31, 2011
	Net sales		Gross profit		Depreciation & amortization		Adjusted EBITDA			Total assets
Geographic divisions	$	733,947	$	163,400	$	14,152	$	(3,342	)	$	215,051
Other		26,035		5,565		2,036		(27,457	)		39,590
	$	759,982	$	168,965	$	16,188	$	(30,799	)	$	254,641

	2012									December 31, 2012
	Net sales		Gross profit		Depreciation & amortization		Adjusted EBITDA			Total assets
Geographic divisions	$	905,278	$	206,407	$	9,901	$	23,992		$	263,019
Other		37,120		8,321		1,817		(21,999	)		22,993
	$	942,398	$	214,728	$	11,718	$	1,993		$	286,012

Reconciliation to consolidated financial statements:

	2010			2011			2012
Adjusted EBITDA	$	(57,987	)	$	(30,799	)	$	1,993
Interest expense		(1,575	)		(2,842	)		(4,037	)
Income tax benefit		47,463			22,332			7,907
Depreciation and amortization		(36,149	)		(16,188	)		(11,718	)
Impairment of assets held for sale		(2,944	)		(580	)		(361	)
Restructuring expense		(7,089	)		(1,349	)		(2,853	)
Management fees		(2,597	)		(2,406	)		(1,379	)
Non-cash compensation expense		(288	)		(384	)		(799	)
Acquisition costs		(4,086	)		(1,017	)		(284	)
Severance and other expense related to store closures and business optimization		(12,642	)		(6,761	)		(2,375	)
Reduction of tax indemnification asset		(3,056	)		(1,937	)		(347	)
Bargain purchase gain		11,223			—			—
Other		3,947			—			—
Loss from continuing operations	$	(65,780	)	$	(41,931	)	$	(14,253	)

The Company does not earn revenues or have long-lived assets located in foreign countries. In accordance with the enterprise-wide disclosure requirements of the accounting standard, the Company’s net sales from external customers by main product lines are as follows for the years ended December 31, 2010, 2011 and 2012:

	2010		2011		2012
Structural components	$	89,885	$	87,542	$	106,745
Millwork & other interior products		137,315		143,128		178,449
Lumber & lumber sheet goods		237,003		247,299		333,952
Windows & other exterior products		184,007		178,361		202,532
Other building products & services		103,496		103,652		120,720
Total sales	$	751,706	$	759,982	$	942,398

F-37

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

19. Loss per common share

Basic net loss per share is calculated in accordance with ASC Topic 260, Earnings Per Share, (“ASC 260”) by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common share equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, Convertible Class C Preferred shares, stock options and nonvested stock awards are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented.

The basic and diluted earnings per share calculations for the years ended December 31, 2010, 2011 and 2012 are presented below (in thousands, except per share amounts):

	2010			2011			2012
Loss from continuing operations	$	(65,780	)	$	(41,931	)	$	(14,253	)
Redeemable Class B Senior Preferred stock dividends		(5,079	)		(4,188	)		(4,480	)
Loss attributable to common stockholders from continuing operations		(70,859	)		(46,119	)		(18,733	)
Income (loss) from discontinued operations, net of tax		(4,214	)		(202	)		49
Loss attributable to common stockholders	$	(75,073	)	$	(46,321	)	$	(18,684	)
Weighted average outstanding shares of common stock		900,738			846,469			496,002
Basic and diluted income (loss) per share
Loss from continuing operations	$	(78.67	)	$	(54.48	)	$	(37.77	)
Income (loss) from discontinued operations		(4.68	)		(0.24	)		0.10
Net loss	$	(83.35	)	$	(54.72	)	$	(37.67	)

The following table provides the securities that could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.

	2010		2011		2012
Stock option awards		32,545		35,045		29,757
Nonvested stock awards		43,250		25,750		15,250
Convertible Class C Preferred Stock (as converted basis)		—		—		171,500

20. Subsequent events

The Company evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through May 7, 2013, the date the financial statements were available to be issued.

On April 8, 2013, Commonwealth Acquisition Holdings, LLC, a wholly-owned subsidiary of the Company, purchased certain assets and assumed certain liabilities of Chesapeake Structural Systems, Inc., Creative Wood Products, LLC and Chestruc, LLC for an adjusted purchase price of $2,623.

F-38

STOCK BUILDING SUPPLY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are presented in thousands except share and per share amounts.)

On April 23, 2013, the Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a change in the name of the Company to Stock Building Supply Holdings, Inc. On May 2, 2013, the Company filed the executed Certificate of Incorporation in the office of the Secretary of State of the State of Delaware. Upon the filing on May 2, 2013, the conversion became effective and the name of the Company was changed to Stock Building Supply Holdings, Inc.

F-39

             Shares

Stock Building Supply Holdings, Inc.

Common Stock

Goldman, Sachs & Co.
	Barclays
		Citigroup

Through and including                     , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

PART II

Item 13. Other expenses of issuance and distribution

The following table sets forth all costs and expenses, other than the underwriting discounts and commissions payable by us, in connection with the offer and sale of the securities being registered. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee.

	Amount
SEC registration fee	$	*
FINRA filing fee		*
Exchange listing fee		*
Legal fees and expenses		*
Accounting fees and expenses		*
Printing expenses		*
Miscellaneous expenses		*
Total	$	*

* To be provided by amendment.

Item 14. Indemnification of directors and officers

Section 102(b)(7) of the DGCL allows a corporation to provide in its amended and restated certificate of incorporation that a director of the corporation will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our amended and restated certificate of incorporation provides for this limitation of liability.

Section 145 of the DGCL (“Section 145”), provides that a Delaware corporation may indemnify any person who was, is or is threatened to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred.

Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or

enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.

Our amended and restated bylaws will provide that we must indemnify our directors and officers to the fullest extent authorized by the DGCL and must also pay expenses incurred in defending any such proceeding in advance of its final disposition; provided, that if and to the extent required by the DGCL, such an advance shall be made only upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified under such section or otherwise.

We intend to enter into indemnification agreements with each of our current directors and officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our amended and restated certificate of incorporation, our amended and restated bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

We expect to maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (2) to us with respect to indemnification payments that we may make to such directors and officers.

The proposed form of Underwriting Agreement previously filed as Exhibit 1.1 to this registration statement provides for indemnification to our directors and officers by the underwriters against certain liabilities.

Item 15. Recent sales of unregistered securities

Since May 1, 2010, the registrant has issued and sold the following unregistered securities:

(1) In June 2010, the registrant issued 1,486 shares of Class B non-voting common stock to Mr. Mellor for an aggregate purchase price of $100,000.

(2) In January 2012, the registrant issued 5,000 shares of Class C preferred stock to Gores Building Holdings, LLC for an aggregate purchase price of $5 million.

(3) From March 2012 to July 2012, the registrant issued an aggregate 13,000 shares of Class B non-voting common stock to certain of the registrants’ employees for an aggregate purchase price of $328,250.

No underwriters were involved in the foregoing sales of securities. The issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 promulgated under Section 3(b) of the Securities Act or on Section 4(2) of the Securities Act. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the stock certificates.

Item 16. Exhibits and financial statement schedules

(a) The list of exhibits is set forth under “Exhibit Index” at the end of this registration statement and is incorporated herein by reference.

(b) See the Index to Consolidated Financial Statements included on page F-1 for a list of the financial statements included in this registration statement. All schedules not identified above have been omitted because they are not required, are inapplicable, or the information is included in the consolidated financial statements or notes contained in this registration statement.

Certain of the agreements included as exhibits to this prospectus contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

Ÿ should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

Ÿ have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

Ÿ may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

Ÿ were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

The registrant acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this registration statement not misleading.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(i) for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and

(ii) for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Stock Building Supply Holdings, Inc., a Delaware limited liability company, has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Raleigh, North Carolina, on                     , 2013.

STOCK BUILDING SUPPLY HOLDINGS, INC.
By:
	Name:	Jeffrey G. Rea
	Title:	President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Jeffrey G. Rea and Bryan J. Yeazel and each of them singly, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act and to file the same, with all exhibits thereto and all other documents in connection therewith, with the SEC, granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in their capacities and on                     , 2013.

Signature	Title
Jeffrey G. Rea	President and Chief Executive Officer and Director (principal executive officer)
James F. Major, Jr.	Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)
Timothy Meyer	Chairman
Andrew Freedman	Director
Robert E. Mellor	Director
Ryan Wald	Director
Steven C. Yager	Director

EXHIBIT INDEX

Exhibit Number	Exhibit description
1.1*	Form of Underwriting Agreement
2.1**	Restructuring and Investment Agreement, dated as of May 5, 2009, by and among Wolseley Investments North America, Stock Building Supply Holdings, LLC and Saturn Acquisition Holdings, LLC
3.1	Certificate of Incorporation of Stock Building Supply Holdings, Inc.
3.2	Bylaws of Stock Building Supply Holdings, Inc.
3.3*	Form of Amended and Restated Certificate of Incorporation of Stock Building Supply Holdings, Inc. to become effective upon consummation of this offering
3.4*	Form of Amended and Restated Bylaws of Stock Building Supply Holdings, Inc. to become effective upon consummation of this offering
4.1*	Form of stock certificate
5.1	Form of opinion of Kirkland & Ellis LLP
10.1	Credit Agreement, dated as of June 30, 2009, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.2	Amendment No. 1 and Waiver to Credit Agreement, dated as of January 11, 2010, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.3	Amendment No. 2 and Waiver to Credit Agreement, dated as of April 2, 2010, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.4	Amendment No. 3 to Credit Agreement and Consent, dated as of June 30, 2010, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.5	Amendment No. 4 to Credit Agreement and Consent, dated as of November 16, 2011, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.6	Amendment No. 5 to Credit Agreement, dated as of May 31, 2012, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.7	Amendment No. 6 to Credit Agreement and Consent, dated as of December 13, 2012, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent
10.8	Amendment No. 7 to Credit Agreement and Consent, dated as of December 21, 2012, by and among Stock Building Supply Holdings II, LLC, as parent, the subsidiaries of parent party thereto, as borrowers, the lenders party thereto, and Wells Fargo Capital Finance (f/k/a Wells Fargo Foothill, LLC), as the co-lead arranger and administrative agent

Exhibit Number	Exhibit Description
10.9	Professional Services Agreement, dated as of May 5, 2009, by and between Glendon Partners, Inc. and Saturn Acquisition Holdings, LLC
10.10	Management Services Agreement, dated as of May 4, 2009, by and between The Gores Group, LLC and Saturn Acquisition Holdings, LLC
10.11	Contribution Agreement, dated as of November 16, 2011, by and between Saturn Acquisition Holdings, LLC and Gores Building Holdings, LLC
10.12*	Plan of Conversion of Saturn Acquisition Holdings, LLC
10.13*	Form of Director Nomination Agreement, by and among Stock Building Supply Holdings, Inc., Gores Building Holdings, LLC and The Gores Group, LLC
10.14†	Employment Agreement, dated as of November 11, 2010, between Stock Building Supply Holdings, LLC and Jeffrey G. Rea
10.15†	Employment Agreement, dated as of April 14, 2011, between Stock Building Supply Holdings, LLC and James F. Major, Jr.
10.16†	Amended and Restated Employment Agreement, dated as of April 1, 2012, between Stock Building Supply Holdings, LLC and Bryan J. Yeazel
10.17*†	Form of Indemnification Agreement (between Stock Building Supply Holdings, Inc. and its directors and officers)
10.18*†	Form of Stock Building Supply Holdings, Inc. 2013 Incentive Compensation Plan
21.1	List of subsidiaries of Stock Building Supply Holdings, Inc.
23.1*	Consent of PricewaterhouseCoopers LLP
23.2*	Consent of Kirkland & Ellis LLP (included in Exhibit 5.1)
24.1*	Powers of Attorney (included on the signature page)

* Indicates to be filed by amendment.

** Exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request.

† Indicates exhibits that constitute management contracts or compensatory plans or arrangements.

EX-2.1

Exhibit 2.1

RESTRUCTURING AND INVESTMENT AGREEMENT

By and Among

WOLSELEY INVESTMENTS NORTH AMERICA, INC.,

STOCK BUILDING SUPPLY HOLDINGS, LLC

and

SATURN ACQUISITION HOLDINGS, LLC

Dated as of May 5, 2009

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			2
SECTION 1.01.	Certain Defined Terms		2
SECTION 1.02.	Definitions		10
SECTION 1.03.	Interpretation and Rules of Construction		12
ARTICLE II PURCHASE AND SALE			12
SECTION 2.01.	Purchase and Sale of the Equity Interests		12
SECTION 2.02.	Purchase Consideration		12
SECTION 2.03.	Working Capital Adjustment		13
SECTION 2.04.	Closing		14
SECTION 2.05.	Closing Deliveries by the Seller		15
SECTION 2.06.	Closing Deliveries by the Purchaser		15
SECTION 2.07.	Allocation		16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER			17
SECTION 3.01.	Organization, Authority and Qualification of the Seller		17
SECTION 3.02.	Organization, Authority and Qualification of the Company and the Subsidiaries		17
SECTION 3.03.	Capitalization; Ownership of Equity Interests		18
SECTION 3.04.	Investment Purpose		18
SECTION 3.05.	No Conflict		19
SECTION 3.06.	Governmental Consents and Approvals		19
SECTION 3.07.	Financial Information		19
SECTION 3.08.	Litigation		20
SECTION 3.09.	Compliance with Laws		21
SECTION 3.10.	Environmental Matters		21
SECTION 3.11.	Intellectual Property		22
SECTION 3.12.	Real Property		22
SECTION 3.13.	Employee Benefit Matters		23
SECTION 3.14.	Taxes		25
SECTION 3.15.	Labor Matters
SECTION 3.16.	Transactions with Affiliates		27
SECTION 3.17.	Letters of Credit, Surety Bonds and Guarantees		27
SECTION 3.18.	Brokers		28
SECTION 3.19.	Absence of Certain Changes or Events		28
SECTION 3.20.	Company Material Contracts		28
SECTION 3.21.	Product Liability and Warranty		28
SECTION 3.22.	Sufficiency of Assets		29
SECTION 3.23.	Restructuring Transactions		29
SECTION 3.24.	DIP Facility Representations and Warranties		29
SECTION 3.25.	Disclaimer of the Seller		29

i

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER		30
SECTION 4.01.	Organization, Authority and Qualification of the Purchaser	30
SECTION 4.02.	Capitalization; Ownership of Equity Interests	30
SECTION 4.03.	No Conflict	31
SECTION 4.04.	Governmental Consents and Approvals	31
SECTION 4.05.	Investment Purpose	31
SECTION 4.06.	Financing	32
SECTION 4.07.	Guarantee	32
SECTION 4.08.	Litigation	32
SECTION 4.09.	Brokers	32
SECTION 4.10.	Tax Classification	32
SECTION 4.11.	Class B Common Shares of Purchaser	32
ARTICLE V ADDITIONAL AGREEMENTS		33
SECTION 5.01.	Conduct of Business Prior to the Closing	33
SECTION 5.02.	Access to Information	34
SECTION 5.03.	Confidentiality	35
SECTION 5.04.	Regulatory and Other Authorizations; Notices and Consents	36
SECTION 5.05.	Transition Services	36
SECTION 5.06.	Retained Names and Marks	36
SECTION 5.07.	Business Guarantees	37
SECTION 5.08.	Construction Loan Business	37
SECTION 5.09.	Further Action	38
SECTION 5.10.	Employee Benefits	38
SECTION 5.11.	Treatment of Company Loans	40
SECTION 5.12.	Treatment of Seller Loan	40
SECTION 5.13.	Termination of Affiliate Transactions	40
SECTION 5.14.	Real Estate Matters	40
SECTION 5.15.	Wolseley Equity Awards	41
SECTION 5.16.	Section 409A	41
SECTION 5.17.	Covenant Not to Compete	41
SECTION 5.18.	Seller Employees	41
SECTION 5.19.	DIP Facility	41
SECTION 5.20.	Debt Commitment Letter	42
SECTION 5.21.	Subscription	42
SECTION 5.22.	Management Equity Interests and Incentives	42
ARTICLE VI TAX MATTERS		43
SECTION 6.01.	Tax Indemnities	43
SECTION 6.02.	Tax Refunds and Tax Benefits	44
SECTION 6.03.	Contests	44
SECTION 6.04.	Preparation of Tax Returns	45

ii

SECTION 6.05.	Tax Cooperation and Exchange of Information	45
SECTION 6.06.	Conveyance Taxes	46
SECTION 6.07.	Tax Covenants	46
SECTION 6.08.	Miscellaneous	46
ARTICLE VII BANKRUPTCY MATTERS		47
SECTION 7.01.	Company Covenants and Obligations	47
SECTION 7.02.	Seller and Purchaser Covenants and Obligations	47
SECTION 7.03.	Leased Real Property	48
SECTION 7.04.	Confirmation of Executory Contracts	50
ARTICLE VIII CONDITIONS TO CLOSING		50
SECTION 8.01.	Conditions to Obligations of the Seller	50
SECTION 8.02.	Conditions to Obligations of the Purchaser	50
ARTICLE IX INDEMNIFICATION		51
SECTION 9.01.	Survival of Representations and Warranties	51
SECTION 9.02.	Indemnification by the Seller	51
SECTION 9.03.	Indemnification by the Purchaser	52
SECTION 9.04.	Limits of Indemnification	52
SECTION 9.05.	Direct Claims; Third-Party Claims	53
SECTION 9.06.	Remedies	55
SECTION 9.07.	Tax Matters	56
ARTICLE X TERMINATION		56
SECTION 10.01.	Termination	56
SECTION 10.02.	Effect of Termination	56
ARTICLE XI GENERAL PROVISIONS		56
SECTION 11.01.	Expenses	56
SECTION 11.02.	Notices	57
SECTION 11.03.	Public Announcements	58
SECTION 11.04.	Severability	58
SECTION 11.05.	Entire Agreement	58
SECTION 11.06.	Assignment	58
SECTION 11.07.	Amendment	58
SECTION 11.08.	Waiver	58
SECTION 11.09.	No Third Party Beneficiaries	59
SECTION 11.10.	Currency	59
SECTION 11.11.	Governing Law	59
SECTION 11.12.	Submission to Jurisdiction	59
SECTION 11.13.	Waiver of Jury Trial	60
SECTION 11.14.	Specific Performance	60
SECTION 11.15.	Counterparts	60

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EXHIBITS
1.01(a)	Form of Operating Agreement
2.03	Calculation of Estimated Working Capital
4.07	Form of Guarantee
5.05	Form of Transition Services Agreement
6.08	Form of Non-Foreign Affidavit
A	Plan of Reorganization

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RESTRUCTURING AND INVESTMENT AGREEMENT (as may be amended from time to time, this “Agreement”), dated as of May 5, 2009, by and among WOLSELEY INVESTMENTS NORTH AMERICA, INC., a Virginia corporation (the “Seller”), STOCK BUILDING SUPPLY HOLDINGS, LLC, a Virginia limited liability company (the “Company”), and SATURN ACQUISITION HOLDINGS, LLC, a Delaware limited liability company (the “Purchaser”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Article I.

WHEREAS, the Seller owns all the issued and outstanding limited liability company interests (the “Equity Interests”) of the Company;

WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, 100% of the Equity Interests (the “Purchased Equity Interests” and, together with the Non-Company Owned Assets, the “Purchased Assets”), all upon the terms and subject to the conditions set forth herein;

WHEREAS, the Company owns all the issued and outstanding ownership interests in the Subsidiaries;

WHEREAS, the Company and the Subsidiaries (together, the “Debtors”) are engaged in the business of supplying building materials and construction services to professional builders and contractors at various locations in the United States (the “Business”);

WHEREAS, as a condition to entering into this Agreement, the Purchaser and the Seller have agreed to cause the Debtors to file voluntary petitions for relief under chapter 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), on the date identified in the signature page to this Agreement as the Petition Date (the “Petition Date”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court” and such proceedings, collectively, the “Bankruptcy Case”) and, simultaneously therewith, motions seeking Bankruptcy Court approval of a plan of reorganization in the form attached hereto as Exhibit A (as it may be amended from time to time consistent with this Agreement, the “Plan”) and, if necessary, a disclosure statement (the “Disclosure Statement”) that provides “adequate information,” within the meaning of § 1125 of the Bankruptcy Code, regarding the Plan;

WHEREAS, the Seller is willing to provide the DIP Facility to the Debtors and the Purchaser is willing to fund the Company upon consummation of the Plan, on the terms and conditions set forth in the Plan; and

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, the Seller, the Company and the Purchaser hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. In addition to the terms defined elsewhere herein and in the Plan (which terms are used herein as so defined unless otherwise defined herein), for purposes of this Agreement:

“Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person, excluding, in the case of the Purchaser, the portfolio companies of The Gores Group, LLC.

“Affiliate Loans” means all loans and other indebtedness between any one or more of the Debtors and the Seller or an Affiliate of the Seller (other than the Debtors).

“Ancillary Agreements” means the Operating Agreement, the Guarantee and the Transition Services Agreement).

“Assets” means (i) the assets and properties of the Company and the Subsidiaries and (ii) all assets and properties used primarily in the Business as conducted by the Company and the Subsidiaries that are not owned or leased by the Company or the Subsidiaries (the “Non- Company Owned Assets”), other than the Excluded Assets and other assets that are, in the aggregate insignificant to the Business. Section 1.01(a)(i) of the Disclosure Schedule lists all of the Non-Company Owned Assets.

“Business Day” means any day that is not a Saturday, a Sunday or other day. on which banks are required or authorized by Law to be closed in The City of New York.

“Closing Date Working Capital” means Working Capital as of 11:59 p.m. on the Closing Date.

“Code” means the Internal Revenue Code of 1986, as amended through the date hereof.

“Company Loan Agreements” means, collectively (i) that certain Multicurrency Revolving Facility Agreement, dated May 14, 2008, for Wolseley plc, arranged by The Royal Bank of Scotland plc and Calyon with Lloyds TSB Bank plc acting as Agent and (ii) that certain Multicurrency Revolving Facility Agreement, dated June 2, 2006, for Wolseley plc, arranged by Bank of America, N.A., Barclays Capital, Bayerische Landesbank, London Branch, BNP Paribas, Calyon, Citigroup Global Markets Limited, Lloyds TSB Bank plc, The Royal Bank of Scotland plc and Wachovia Bank, National Association, with The Royal Bank of Scotland plc acting as Agent.

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“Company Material Contract” means any of the following to which the Company or any Subsidiary is a party or by which it or its assets are bound:

(i) any employment, contractor or consulting Contract with any manager, director, executive officer or other employee of the Company or any of the Subsidiaries earning an annual salary in excess of $75,000, other than those that are terminable by the Company or any Subsidiary on no more than 30 days notice without liability or financial obligation to the Company or any Subsidiary;

(ii) any Contract or plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, or payments made by the occurrence of any of the transactions contemplated by this Agreement (either alone or upon the occurrence of additional or subsequent events) or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement (either alone or upon the occurrence of additional or subsequent events);

(iii) any agreement of indemnification or any guaranty (other than any agreement of indemnification entered into in connection with the sale, license, maintenance, support or service of Company products in the ordinary course of business);

(iv) any Contract containing any provision or covenant prohibiting or materially limiting the ability of the Company or any of the Subsidiaries to engage in any business activity (by activity, geographic region or otherwise);

(v) (A) any Contract relating to the disposition or acquisition by the Company or any of the Subsidiaries of assets, other than inventory purchased in the ordinary course of business, or any interest in any other Person or business enterprise for consideration that remains unpaid that is in excess of $1,000,000 and (B) any agreement providing for a deferred purchase price or any other contingent obligations (other than liabilities arising after the closing of such transaction) related to prior acquisitions;

(vi) any mortgages, indentures, guarantees, loans or credit agreements, security agreements, deeds of trust or other documents granting an Encumbrance (other than any Permitted Encumbrance) upon any of the Assets, other than accounts receivable and payable in the ordinary course of business, the Company Loan Agreements (or related documents) and the Affiliate Loans;

(vii) any dealer, distributor or joint marketing agreement under which the Company or any of the Subsidiaries have continuing material obligations to jointly market any product, technology or service and which may not be canceled without penalty to the Company or any of the Subsidiaries upon notice of 30 days or less;

(viii) any settlement agreement which contains continuing material obligations of the Company or any of the Subsidiaries;

(ix) any Contract, or group of Contracts (other than sales orders or purchase orders entered into in the ordinary course of business) with a Person (or group of affiliated Persons), the termination or breach of which would reasonably be expected to have a Material Adverse Effect;

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(x) all Contracts that are Affiliate Transactions; and

(xi) any material equipment lease agreements.

“Company Intellectual Property” means all Intellectual Property owned by the Company or any Subsidiary that is material to the operation of the Business as currently conducted.

“Confirmation Order” has the meaning given to such term in the Plan.

“Construction Loan Business” means the business of providing construction, land or development financing, insurance services or other similar services by Stock Loan Services, LLC, a Delaware limited liability company, the Company and certain other Subsidiaries, which for all purposes of this Agreement is not part of the Business.

“Continuing Employee” means any employee of the Company or any Subsidiary on the Closing Date, but shall not include any Construction Loan Employee.

“Continuing Leases” means leases for the Leased Real Property that will continue to be used by the Company and the Subsidiaries after consummation of the Plan, which excludes the Rejected Leases.

“Contract” means any contract, agreement, lease, sublease, license, sales order, purchase order, instrument, undertaking, guarantee or other commitment.

“control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise.

“Conveyance Taxes” means sales, use, value added, transfer, stamp, stock transfer, real property transfer or gains and similar Taxes incurred in connection with the transfer of the Purchased Equity Interests or Non-Company Owned Assets pursuant to this Agreement, including any indirect transfer of any Asset.

“Current Assets” shall mean the current assets of the Company and the Subsidiaries as of the Closing Date, determined in accordance with IFRS, applied in a manner consistent with the Interim Financial Statements and (a) shall include cash (and cash in transit to the extent that it has reduced accounts receivable pursuant to IFRS) to the extent positive and (b) shall exclude (i) cash to the extent negative, (ii) receivables owed from the Seller or its Affiliates (other than the Company and the Subsidiaries), (iii) assets awaiting disposal as reflected on the Interim Financial Statements, and (iv) deferred Tax assets and the Excluded Assets.

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“Current Liabilities” shall mean the current liabilities of the Company and the Subsidiaries calculated as of the Closing Date in accordance with IFRS applied in a manner consistent with the Interim Financial Statements, and (i) shall include (a) cash to the extent negative and (ii) shall exclude (a) deferred Tax Liabilities, (b)Tax Liabilities that will be paid by the Seller, (c) Liabilities related to the Excluded Assets, (d) capital lease obligations, (e) acquisition holdback, and (f) payables owed to the Seller or its Affiliates, other than the Company and the Subsidiaries.

“Debt Commitment Letter” means the Debt Commitment Letter, dated as of the date hereof, between the Purchaser and the Investor.

“DIP Facility” means the Credit Agreement to be entered into between the Seller and the Debtors pursuant to the Plan.

“Disclosure Schedule” means the Disclosure Schedule provided by the Seller to the Purchaser on the date hereof, which Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and sub-sections of this Agreement, and any information and disclosure contained in any such section or sub-section of the Disclosure Schedule shall be deemed to be disclosed for any other section and sub-section of this Agreement where the applicability of such information and disclosure is reasonably apparent on the face of such information or disclosure as to qualify or otherwise apply to such other representations, warranties or covenants.

“Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien or encumbrance, other than any licenses of Intellectual Property.

“Environmental Claim” means any claim, action, cause of action, suit, proceeding, investigation, order, demand or notice by any Governmental Authority, or any other Person, alleging actual or potential liability (including, without limitation, actual or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties) arising out of, based on, resulting from or relating to (a) the presence, or release into the environment, of, or exposure to, any Hazardous Materials at any location, whether or not owned or operated by the Company or any Subsidiary, now or in the past, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

“Environmental Law” means any Law, consent decree or judgment relating to pollution, protection of human health or the environment from environmental pollution (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata, and natural resources), and, as such relates to exposure to Hazardous Materials, (i) emissions, discharges, releases or threatened releases of, or exposure to, Hazardous Materials, (ii) the manufacture, processing, distribution, use, treatment, generation, storage, containment (whether above ground or underground), disposal, transport or handling of Hazardous Materials, (iii) recordkeeping, notification, disclosure and reporting requirements regarding Hazardous Materials, (iv) endangered or threatened species of fish, wildlife and plant and the management or use of natural resources, or (v) the preservation of the environment or mitigation of adverse effects therefrom.

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“Environmental Permits” means any Permit required under or issued pursuant to any applicable Environmental Law.

“ERISA Affiliate” means any Person which is (or at any relevant time was) a member of the controlled group of corporations within the meaning of Code Section 414(b), all trades or businesses under common control within the meaning of Code Section 414(c), and all affiliated service groups within the meaning of Code Section 414(m), of which the Seller, the Company or any Subsidiary is (or at any relevant time was) a member.

“Excluded Taxes” means (a) Taxes imposed on any Non-Company Owned Assets or imposed on or payable by the Company or any Subsidiary for any taxable period beginning before and ending on or before the Closing Date; (b) with respect to Straddle Periods, Taxes imposed on any Non-Company Owned Assets or imposed on the Company or any Subsidiary which are allocable, pursuant to Section 6.01(b), to the portion of such period beginning before and ending on the Closing Date; (c) Taxes for which the Company or any Subsidiary is held liable under Section 1.1502-6 of the Regulations (or any similar provision of state, local or foreign Law) by reason of the Company or any Subsidiary being included in any consolidated, affiliated, combined or unitary group at any time on or before the Closing Date; (d) Taxes attributable to any of the transactions described in Section 3.23; (e) Taxes attributable to the conversion (including by merger or otherwise) of any predecessor of the Company or any Subsidiary into a limited liability company prior to the Closing Date; (f) Taxes attributable to the Construction Loan Business; (g) Taxes arising from any breach or inaccuracy in any representation contained in Section 3.14 of this Agreement; and (h) Taxes attributable to the election to have the provisions of Section 338(h)(10) of the Code apply to the purchase and sale of the Purchased Equity Interests; provided, however, that Excluded Taxes shall not include Taxes (other than Taxes from a deemed asset sale as a result of an election under Section 338(h)(10) of the Code or Taxes resulting from a Restructuring Transaction) relating to any acts, omissions or transactions of the Purchaser or the Company or any Subsidiary not in the ordinary course of business that occur after the Closing on the Closing Date (which shall be treated as occurring on the day after the Closing Date to the extent permitted by Treasury Regulations Section 1.1502-76(b)(1)(ii)(B) (or any comparable provision of state, local or foreign Law)).

“GAAP” means U.S. generally accepted accounting principles in effect from time to time.

“Governmental Authority” means any federal, national, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Hazardous Material” means (a) any petroleum, petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls or toxic mold or (b) any chemical, material or substance defined or regulated as toxic or hazardous or as a pollutant, contaminant or waste under any Environmental Law.

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“IFRS” means the International Financial Reporting Standards as adopted in the European Union in effect from time to time applied consistently throughout the periods involved.

“Inactive Employee” means each employee of the Company or any Subsidiary who was not actively at work as of the Closing Date. Any Inactive Employee that resumes employment with the Company or any Subsidiary following the Closing shall be treated as a Continuing Employee on the date of his or her return.

“Indemnified Party” means a Purchaser Indemnified Party or a Seller Indemnified Party, as the case may be.

“Indemnifying Party” means the Seller pursuant to Section 9.02 and the Purchaser pursuant to Section 9.03, as the case may be.

“Intellectual Property” means all United States, foreign and multinational (a) patents and patent applications, including continuations, continuations-in-part, divisions, reissues and any renewals and extensions, (b) trademarks, service marks, trade names, corporate names, brand names, trade dress, domain names and any other indicators of source or origin of a product or service, together with the goodwill associated therewith, (c) copyrights (registered and unregistered), including copyrights in computer software, database rights and data compilations, and copyrightable works, (d) confidential information and proprietary information, including trade secrets and know-how, methods, processes, formulae and algorithms, (e) any and all other intellectual property and proprietary rights recognized in any jurisdiction throughout the world, and (f) registrations and applications for registration, renewals and extensions of any of the foregoing.

“Investor” means Gores Building Holdings, LLC, a Delaware limited liability company.

“IRS” means the Internal Revenue Service of the United States.

“Law” means any federal, national, supranational, foreign, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

“Leased Real Property” means the real property currently leased, licensed, subleased, used or otherwise occupied by the Company or any Subsidiary, in each case, as tenant, together with, to the extent currently leased, licensed, subleased, used or otherwise occupied by the Company or any Subsidiary, all buildings and other structures, facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property of the Company or any Subsidiary attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing.

“Liabilities” means any and all debts, liabilities and obligations, whether accrued or unaccrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking.

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“Management Group” means Joe Appelmann, Jim Major, Steve Short, James Drexinger and Bryan Yeazel.

“Material Adverse Effect” means any event, circumstance, change in or effect on the Company or any Subsidiary that, individually or in the aggregate (taking into account all other such changes or effects), is, or is reasonably expected to be, materially adverse to the business, assets, liabilities, condition (financial or otherwise) or results of operations of the Company and the Subsidiaries, taken as a whole; provided, however, that none of the following, either alone or in combination, shall be considered in determining whether there has been a breach of a representation, warranty, covenant or agreement that is qualified by the term “Material Adverse Effect”: (a) events, circumstances, changes or effects that generally affect the industries in which the Company and the Subsidiaries operate (including legal and regulatory changes), (b) general economic or political conditions or events, circumstances, changes or effects affecting the securities markets in the United States generally, (c) changes arising from the announcement of the execution of this Agreement or the pendency of the transactions contemplated hereby, in each case to the extent due to such announcement or the pendency of the transactions contemplated hereby, (d) any circumstance, change or effect that results from any action required to be taken pursuant to this Agreement, the Plan or the transactions contemplated hereunder and thereunder or at the request of the Purchaser, (e) a material worsening of current conditions caused by acts of terrorism or war (whether or not declared) occurring after the date hereof; (f) events, circumstances, changes or effects arising out of the conversion of the Company or any Subsidiary to a limited liability company; and (g) any closing of any location of the Business or any employee terminations by the Company or any Subsidiary taken in connection with the restructuring activities of the Company and the Subsidiaries prior to the date hereof; provided, however, that effects set forth in clauses (a), (b), and (e) above may be taken into account in determining whether there has been or is a Material Adverse Effect if and only to the extent such effects have a disproportionate impact on the Company and the Subsidiaries, taken as a whole, relative to the other participants in the industry.

“Multiemployer Plan” means a multiemployer plan as defined in Section 414(f) of the Code or Section 3(37) or 4001(a)(3) of ERISA,

“Multiple Employer Plan” means a multiple employer plan within the meaning of Section 413(c) of the Code or Section 4063, 4064 or 4066 of ERISA, which is not a Multiemployer Plan.

“Operating Agreement” means the Amended and Restated Limited Liability Company Agreement of the Purchaser, in the form attached hereto as Exhibit 1.01(a).

“Owned Real Property” means the real property in which the Company or any Subsidiary has fee title (or equivalent) interest, together with all buildings and other structures, facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property of the Company or any Subsidiary attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing.

“Permit” means all permits, certificates, licenses, identification numbers, approvals, governmental franchises and other authorizations.

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“Permitted Encumbrances” means (a) statutory liens for current Taxes not yet due or delinquent (or which may be paid without interest or penalties) or the validity or amount of which is being contested in good faith by appropriate proceedings and as to which adequate reserves have been established on the Company’s books, (b) mechanics’, carriers’, workers’, repairers’ and other similar liens arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Company or any Subsidiary, as the case may be, or the validity or amount of which is being contested in good faith by appropriate proceedings, or pledges, deposits or other liens securing the performance of bids, trade contracts or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation), (c) zoning, entitlement, conservation restriction and other land use and environmental regulations by Governmental Authorities which do not materially interfere with the present use of the Assets, (d) all covenants, conditions, restrictions, easements, charges, rights-of-way, other Encumbrances and similar matters of record set forth in any state, local or municipal franchise of the Company and the Subsidiaries which do not materially interfere with the present use of the Assets, (e) consignments and (f) other Encumbrances not securing borrowed money that do not materially and adversely affect the ability of the Company or the Subsidiaries to use any property as it is currently used in the ordinary course of business.

“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

“Real Property” means, collectively, the Owned Real Property and the Leased Real Property.

“Regulations” means the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes.

“Release” means any disposing, discharging, injecting, spilling, leaking, leaching, pumping, pouring, dumping, emitting, escaping, emptying, seeping, transmission, migrating or the like of Hazardous Materials at, from, into or upon any land or water or air or otherwise entering into the environment.

“Reorganization Document” means any document filed with the Bankruptcy Court in connection with the Bankruptcy Case.

“Retention Agreements” means the Employment, Retention and Bonus Agreements dated on or about March 19, 2009, between the Seller and each member of the Management Group.

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

“Seller’s Knowledge”, “Knowledge of the Seller” or similar terms used in this Agreement mean the actual knowledge of the individuals listed in Section 1.01(a)(iii) of the Disclosure Schedule.

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“Seller Loan” means the Inter Company Loan Agreement, dated September 2, 2005, between Seller and the Company in the original maximum principal amount of $500 million.

“Straddle Period” means any taxable period beginning on or before the Closing Date and ending after the Closing Date.

“Subscription Agreement” means the Subscription Agreement, dated the date hereof, between the Purchaser and the Investor.

“Subsidiaries” means any Person controlled by the Company directly or indirectly through one or more intermediaries.

“Tax” or “Taxes” means any and all taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Government Authority.

“Tax Returns” means any and all returns, reports and forms (including elections, declarations, amendments, schedules, information returns or attachments thereto) required to be filed with a Governmental Authority with respect to Taxes.

“Working Capital” means the Current Assets of the Company and the Subsidiaries, minus the Current Liabilities of the Company and the Subsidiaries.

SECTION 1.02. Definitions. The following term’s have the meanings set forth in the Sections set forth below:

Definition	Location
“Affiliate Transactions”	3.16
“Agreement”	Preamble
“Allocation”	2.07
“ARRA”	3.13(b)
“Bankruptcy Case”	Recitals
“Bankruptcy Code”	Recitals
“Bankruptcy Court”	Recitals
“Business”	Recitals
“Business Guarantees”	3.17
“Closing”	2.04
“Closing Date”	2.04
“COBRA”	3.13(b)
“Company”	Preamble
“Confidentiality Agreement”	5.03(a)
“Consent”	3.06
“Construction Loan Employee”	5.08
“Contest”	6.03(b)
“Debtors”	Recitals
“Direct Claim”	9.05(a)

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Definition	Location
“Disclosure Statement”	Recitals
“Equity Interests”	Recitals
“ERISA”	3.13(a)
“ERISA Plans”	3.13(a)
“Estimated Lease Rejection Damages”	7.03(a)
“Excluded Assets”	3.23
“Filing”	3.06
“Final Working Capital Amount”	2.03(b)(i)
“Financial Statements”	3.07(a)
“Guarantee”	4.07
“Guarantor”	4.07
“Independent Accountant”	2.03(b)(ii)
“Independent Accounting Firm for the Allocation”	2.07
“Interim Financial Statements”	3.07(a)
“Lease Damages”	7.03(c)
“Licensed Names”	5.06
“Loss”	9.02
“Non-Company Owned Assets”	1.01
“Non-Foreign Affidavit”	6.08(g)
“Notice of Disagreement”	2.03(b)(i)
“Ongoing Leased Real Property”	3.12(b)
“Petition Date”	Recitals
“Plan”	Recitals
“Purchase Consideration”	2.02
“Purchased Assets”	Recitals
“Purchased Equity Interests”	Recitals
“Purchaser”	Preamble
“Purchaser 401 (k) Plan”	5.10(a)
“Purchaser Indemnified Party”	9.02
“Receivables”	3.07(c)
“Rejected Lease Schedule”	7.03(a)
“Restructuring Transactions”	3.23
“Rejected Leases”	7.03(a)
“Retained Names and Marks”	5.06(a)
“Seller”	Preamble
“Seller 401 (k) Plan”	5.10(a)
“Seller Indemnified Party”	9.03
“Stranded Construction Loan Assets”	5.08
“Third-Party Claim”	9.05(b)
“Title Insurer”	5.14
“Transition Services Agreement”	5.05
“WARN Act”	3.15(b)

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SECTION 1.03. Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

(a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

(b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

(c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;

(d) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

(e) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

(f) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

(g) references to a Person are also to its successors and permitted assigns;

(h) references to the “date hereof” are to the date of this Agreement;

(i) whenever the words “ordinary course of business” are used in this Agreement, they shall mean “ordinary course of business consistent with past practices”; and

(j) the use of “or” is not intended to be exclusive unless expressly indicated otherwise.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01. Purchase and Sale of the Equity Interests. Upon the terms and subject to the conditions of this Agreement and the Plan, at the Closing, the Seller shall sell to the Purchaser the Purchased Assets, and the Purchaser shall purchase the Purchased Assets.

SECTION 2.02. Purchase Consideration. The purchase consideration for the Purchased Assets shall be (i) $1,000, (ii) Class A Common Shares of the Purchaser equal to 49% of the Class A Common Shares of the Purchaser issued and outstanding as of the Closing Date, and (iii) Class A Junior Preferred Shares of the Purchaser equal to 49% of the Class A Junior Preferred Shares of the Purchaser issued and outstanding as of the Closing Date (collectively, the “Purchase Consideration”).

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SECTION 2.03. Working Capital Adjustment.

(a) Estimated Closing Date Working Capital. The Company’s good faith estimate of the Closing Date Working Capital is attached hereto as Exhibit 2.03 – Part I. In the event that the Company’s estimate of the Closing Date Working Capital at Closing is less than $420,000,000 (with at least $10,000,000 being in the form of cash (it being understood that the prepaid expense for approximately $9,141,606 paid by the Company on the date hereof for insurance shall be considered cash for this purpose)), then the Seller shall pay the difference to the Company at the Closing in immediately available funds by wire transfer to an account specified by the Purchaser. In the event that the Company’s estimate of the Closing Date Working Capital at Closing is greater than $420,000,000 then the payment adjustment will occur pursuant to Section 2.03(b)(iii). Attached as Exhibit 2.03 – Part II is a calculation of Working Capital as of March 31, 2009.

(b) Disputes Regarding Purchase Consideration Adjustments.

(i) The Company’s estimate of the Closing Date Working Capital shall become final and binding upon the parties 75 days after the Purchaser’s receipt thereof (the “Final Working Capital Amount”), unless the Purchaser shall notify the Seller prior to such date in writing that it disagrees in good faith with the calculation of the estimated Closing Date Working Capital (the “Notice of Disagreement”). The Notice of Disagreement shall state with reasonable particularity the specific items and the amount of disagreement. Thereafter, the Seller and the Purchaser shall attempt in good faith to resolve and finally determine the amount of the Final Closing Date Working Capital.

(ii) If the Seller and the Purchaser are unable to resolve the disagreement with respect to the Final Working Capital Amount within 30 calendar days following delivery of the Notice of Disagreement, KPMG LLP (or if the Purchaser and the Seller so agree, another mutually acceptable, nationally recognized independent accounting firm) (the “Independent Accountant”), shall be retained by the Purchaser and the Seller to resolve remaining disagreements set forth in the Notice of Disagreement and to make a determination with respect thereto. The Purchaser and the Seller shall each execute a customary engagement letter with respect to the engagement of the Independent Accountant. The Independent Accountant shall make its determination regarding the Final Working Capital Amount and give written notice thereof to the Seller and the Purchaser within 30 calendar days after such engagement. The determination by the Independent Accountant shall be final, binding and conclusive upon the Seller and the Purchaser. The scope of the Independent Accountant’s engagement (which will not be an audit) shall be limited to the resolution of the disputed items described in the Notice of Disagreement that remain in dispute, and the recalculation, if any, of the Closing Date Working Capital in light of such resolution. In resolving any such disputed items, the Independent Accountant may not make a determination of Closing Date Working Capital that is greater than the highest or less than the lowest calculation made by the Purchaser in the Notice of Disagreement or the Company in the estimate of the Closing Date Working Capital, respectively.

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(iii) If the Final Working Capital Amount plus the amount of any payments made by the Seller pursuant to Section 2.03(a) is less than $420,000,000, the Seller shall, within three business days after the Final Working Capital Amount becomes final and binding on the parties, make payment by wire transfer to the Company, in immediately available funds, of the amount, if any, by which the Final Working Capital plus, without duplication, the amount of any payments made by the Seller to the Company pursuant to Section 2.03(a) is less than $420,000,000, together with interest thereon at a rate per annum equal to 6%, calculated on the basis of the actual number of days elapsed over a year of 360 days, from the Closing Date to the date of payment.

(iv) If the Final Working Capital Amount plus the amount of any payments made by the Seller pursuant to section 2.03(a) is greater than $420,000,000, the Company shall, within 3 business days after the later of (i) the Final Working Capital Amount becoming final and binding on the parties and (ii) the consummation of the Plan, make payment by wire transfer to the Seller, in immediately available funds, of the amount, if any, by which the Final Working Capital Amount plus, without duplication, the amount of any payments made by the Seller to the Company pursuant to Section 2.03(a) is greater than $420,000,000, together with interest thereon at a rate per annum equal to 6% calculated on the basis of the actual number of days elapsed over a year of 360 days, from the Closing Date to the date of payment.

(v) If an Independent Accountant is engaged pursuant to Section 2.03(b)(ii), the costs, fees and expenses of the Independent Accountant shall be paid by the Purchaser, on the one hand, and the Seller, on the other hand, determined on the basis of the degree to which the Independent Accountant accepts the respective positions of the Seller and the Purchaser. For example, if it is the Purchaser’s position that the adjustment owed is $300, the Seller’s position that the adjustment owed is $100, and the Independent Accountant’s finding that the adjustment owed is $150, the Purchaser shall pay 75% (300-150/300-100) of the Independent Accountant’s costs, fees and expenses. In connection with any dispute, the Company, subject to a customary confidentiality agreement, shall provide the Seller and its representatives with reasonable access during normal business hours to all personnel, officers, employees, agents, accountants, properties and facilities, of the Company and the Subsidiaries and the books and records relating to the Company and the Subsidiaries in order to enable the Seller and its representatives to investigate and assess the Closing Date Working Capital or any other calculation or determination relating to a Notice of Disagreement.

SECTION 2.04. Closing. Subject to the terms and conditions of this Agreement, and the Plan, the sale and purchase of the Purchased Assets contemplated by this Agreement shall take place at a closing (the “Closing”) to be held at the offices of Hunton & Williams LLP, at 951 East Byrd Street, Richmond, Virginia 23219, upon satisfaction or, to the extent legally permitted, waiver of the conditions to the obligations of the parties hereto set forth in Section 8.01 and Section 8.02. The date on which the Closing occurs shall be the “Closing Date”. For purposes of this Agreement, the Closing shall be deemed to occur at 11:59 p.m. New York time on the Closing Date.

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SECTION 2.05. Closing Deliveries by the Seller. At the Closing, the Seller shall deliver or cause to be delivered to the Purchaser:

(a) certificates evidencing the Purchased Equity Interests duly endorsed in blank;

(b) executed counterparts of each Ancillary Agreement to which the Seller is a party;

(c) executed IRS Form 8023, prepared in accordance with the rules set forth therein, and all other forms or documents as are required by applicable Law for an effective election to have the provisions of Section 338(h)(10) of the Code apply to the purchase and sale of the Purchased Equity Interests (including the application of Section 338(h)(10) of the Code with respect to the equity interests of each applicable Subsidiary of the Company);

(d) elections under Section 83(b) of the Code, prepared in accordance with the rules set forth therein, by each of the individuals receiving Class B Common Shares of the Purchaser at the Closing; and

(e) evidence that the Company and the Subsidiaries have been released from any and all guarantees and Liens associated with the Company Loan Agreements and the termination of all Affiliate Transactions (other than the Transition Services Agreement) and Affiliate Loans (other than the Seller Loan), in each case without any further obligation of the Company or any of the Subsidiaries and with any and all related claims against the Company and the Subsidiaries being fully discharged; and

(f) a receipt for the Purchase Consideration.

SECTION 2.06. Closing Deliveries by the Purchaser. At the Closing, the Purchaser shall deliver, or cause to be delivered, to the Seller:

(a) the cash component of the Purchase Consideration by wire transfer or check in immediately available funds to the Purchaser;

(b) executed counterparts of each Ancillary Agreement to which the Purchaser is a party;

(c) certificates in the name of Seller evidencing the Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser included in the Purchase Consideration;

(d) certificates in the name of Joseph Appelmann and Glendon Saturn Holdings, LLC, evidencing ownership of Class B Common Shares of the Purchaser representing in the aggregate at least 3% of the Common Shares of the Purchaser;

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(e) executed IRS Form 8023, prepared in accordance with the rules set forth therein, and all other forms or documents as are required by applicable Law for an effective election to have the provisions of Section 338(h)(10) of the Code apply to the purchase and sale of the Purchased Equity Interests; and

(f) executed IRS Form 8832, prepared in accordance with the rules set forth therein, and all other forms or documents as are required by applicable Law for an effective election to cause the Purchaser to be treated as an association taxable as a corporation for federal income tax purposes,

SECTION 2.07. Allocation. Each of the Purchase Consideration, the liabilities of the Company for U.S. federal income tax purposes, and to the extent applicable, any liabilities of any Subsidiary, shall be allocated among the Assets owned by the Company, or to the extent applicable, any Subsidiary, and any Non-Company Owned Assets in accordance with their relative fair market values as of the Closing Date pursuant to Sections 338 and 1060 of the Code and the Treasury Regulations promulgated thereunder (the “Allocation”). Within 60 days after the Closing Date, the Seller shall provide the Purchaser with a proposed Allocation for the Purchaser’s review and comment. If the Purchaser does not provide any comments to the Seller in writing within 20 days following delivery by the Seller of the proposed Allocation, then the Allocation proposed by the Seller shall be deemed to be final and binding absent manifest error. If the Purchaser submits written comments to the Seller within such 20-day period, the Seller and the Purchaser shall negotiate in good faith to resolve any differences within 30 days following the Seller’s receipt of the Purchaser’s written comments. If the Purchaser and the Seller are unable to reach a resolution within such 30-day period, then the parties shall submit the disputed items to an independent, nationally recognized accounting firm mutually selected by the parties hereto (the “Independent Accounting Firm for the Allocation”) for resolution within 30 days after the date of such submission. Absent manifest error, the determination of the Independent Accounting Firm for the Allocation shall be binding on the parties. The fees of the Independent Accounting Firm for the Allocation shall be borne equally by the Seller and the Purchaser. Any subsequent payments that are treated, pursuant to Section 6.08, as adjustments to the consideration for the Purchased Assets shall be reflected in the Allocation in a manner consistent with Sections 338 and 1060 of the Code and the Treasury Regulations promulgated thereunder. For all Tax purposes, the Seller and the Purchaser agree that the transactions contemplated in this Agreement shall be reported for federal, and all comparable state and local, income Tax purposes as a taxable sale of assets and in a manner consistent with the terms of this Agreement, including the Allocation, and that none of them shall take any position inconsistent therewith in any Tax Return, in any refund claim, in any litigation, or otherwise. Each of the Purchaser and the Seller agrees to cooperate with the other in preparing IRS Forms 8594 and 8883 (including, without limitation, a Form 8883 with respect to each applicable Subsidiary), and to furnish the other with a copy of such Forms prepared in draft form within a reasonable period prior to the due date of its filing.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE SELLER

Except as set forth in the Disclosure Schedule, the Seller hereby represents and warrants to the Purchaser, as of the date hereof or, if a representation or warranty is made as of a specified date, as of such date, as follows:

SECTION 3.01. Organization, Authority and Qualification of the Seller. The Seller is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all necessary corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed, qualified or in good standing would not adversely affect the ability of the Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement, the Plan and the Ancillary Agreements to which it is a party. The execution and delivery by the Seller of this Agreement and the Ancillary Agreements to which it is a party, the performance by the Seller of its obligations hereunder and thereunder and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Seller and its stockholders. This Agreement has been, and upon their execution the Ancillary Agreements to which the Seller is a party shall have been, duly executed and delivered by the Seller, and (assuming due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and upon their execution the Ancillary Agreements to which the Seller is a party shall constitute, legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency (including all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

SECTION 3.02. Organization, Authority and Qualification of the Company and the Subsidiaries. The Company and each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all necessary power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. The Company and each Subsidiary is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary or desirable, except to the extent that the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect. True and correct copies of the organizational documents of the Company and each Subsidiary have been delivered by the Seller to the Purchaser.

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SECTION 3.03. Capitalization: Ownership of Equity Interests.

(a) The Equity Interests have been duly authorized and validly issued and were not issued in violation of, and are not subject to, any preemptive or subscription rights. There are no options, warrants, puts, calls, “phantom” stock rights, convertible or exchangeable securities or other rights, agreements, arrangements or commitments relating to the Equity Interests, or any other interest in, the Company, or obligating either the Seller or the Company to issue, sell, purchase, redeem or otherwise acquire any of the Equity Interests, or any other interest in, the Company or which give any other Person the right to receive any benefits or rights similar to any rights enjoyed by the Seller as the holder of Equity Interests or to provide fluids to or make any investment (in the form of a loan, capital contribution or otherwise) in the Company. The Equity Interests constitute all the issued and outstanding equity interests of the Company and are owned of record and beneficially by the Seller free and clear of all Encumbrances. Upon consummation of the transactions contemplated by this Agreement and the Plan and registration of the Purchased Equity Interests in the name of the Purchaser in the records of the Company, the Purchaser will own Equity Interests representing 100% of the issued and outstanding membership interests of the Company, free and clear of all Encumbrances. The Company does not own stock or any other equity interests, nor does it have any obligation to make any investment, in any corporation, partnership or other Person.

(b) Section 3.03(b) of the Disclosure Schedule sets forth, with respect to each Subsidiary, its name, type of entity, the jurisdiction of its organization, formation and qualification and its authorized and outstanding equity interests as of the date hereof. All of the equity interests for each Subsidiary that is a corporation are validly issued, fully paid and nonassessable. All of the equity interests for each Subsidiary that is not a corporation were duly authorized and are validly issued. The equity interests set forth in Section 3.03(b) of the Disclosure Schedule were not issued in violation of, and are not subject to, any preemptive or subscription rights. There are no options, warrants, puts, calls, “phantom” stock rights, convertible or exchangeable securities or other rights, agreements, arrangements or commitments relating to the equity interests of any Subsidiary or obligating either the Company or any Subsidiary to issue, sell, purchase, redeem or otherwise acquire any equity interests of any Subsidiary, or any other interest in, any Subsidiary or which give any other Person the right to receive any benefits or rights similar to any rights enjoyed by the Company as the holder of equity interests of each Subsidiary or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Subsidiary. The equity interests of each Subsidiary set forth in Section 3.03(b) of the Disclosure Schedule constitute all the issued and outstanding shares of common stock or other equity interests of the Subsidiaries and are owned of record and beneficially by the Company or a Subsidiary, as applicable, free and clear of all Encumbrances. None of the Subsidiaries owns stock or any other equity interests, or has any obligation to make any investment, in any corporation, partnership or other Person.

SECTION 3.04. Investment Purpose. The Seller is acquiring the Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof other than in compliance with all applicable laws, including United States federal securities laws. The Seller agrees that the Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any applicable state securities laws, except pursuant to an

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exemption from such registration under the Securities Act and such laws. The Seller is able to bear the economic risk of holding the Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser for an indefinite period (including total loss of its investment), and (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

SECTION 3.05. No Conflict. The execution, delivery and performance by the Seller of this Agreement and the Ancillary Agreements to which the Seller is a party do not and will not (a) violate, conflict with or result in the breach of the organizational documents of the Seller, the Company or any Subsidiary, or (b) assuming the making and obtaining of all Filings and Consents referred to in Section 3.06 and except as may result from any facts or circumstances relating solely to the Purchaser or any of its Affiliates (or any of the portfolio companies of such Affiliates), (i) conflict with or violate in any material respect any Law or Governmental Order applicable to the Seller, the Company, any Subsidiary or any of the Assets, or (ii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any Consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the triggering of any payments or result in the creation of a Lien or other Encumbrance on any property or asset of the Company or any Subsidiary pursuant to, any of the terms, conditions or provisions of any Company Material Contract, Continuing Lease, any material Permit of the Company or any Subsidiary or any material Permit pursuant to which any of the Assets is bound or subject, except in each case to the extent arising from or relating to filing of the Bankruptcy Case.

SECTION 3.06. Governmental Consents and Approvals. The execution, delivery and performance of this Agreement by the Seller and the execution, delivery and performance of each Ancillary Agreement by the Seller and any of its Affiliates party thereto do not and will not require any consent, approval, waiver, license, certification, Permit, authorization (each, a “Consent”) of any third party or any Consent or order of, action by, filing with or notification to (each, a “Filing”), any Governmental Authority, except, (a) where failure to obtain such Consent or to make such Filing would not have a Material Adverse Effect, or (b) as may be necessary as a result of any facts or circumstances relating solely to the Purchaser or its Affiliates (or any of the portfolio companies of such Affiliates).

SECTION 3.07. Financial Information.

(a) True and complete copies of (i) the audited consolidated balance sheet of the Company and its consolidated Subsidiaries for the fiscal years ended as of July 31, 2006, July 31, 2007 and July 31, 2008, and the related audited consolidated statements of income and cash flows of the Company and its consolidated Subsidiaries and the notes to each of the foregoing (collectively, the “Financial Statements”) and (ii) the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries (other than Stock Loan Services, LLC and the remainder of the Construction Loan Business), as of March 31, 2009, and the related unaudited consolidated statements of income (the “Interim Financial Statements”) are set forth in Section 3.07(a) of the Disclosure Schedules.

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(b) The Financial Statements and the Interim Financial Statements (i) were prepared in accordance with the books of account and other financial records of the Company and its consolidated Subsidiaries (except as may be indicated in the notes thereto or in Section 3.07(b) of the Disclosure Schedule and except that the Interim Financial Statements do not include Stock Loan Services, LLC), (ii) were prepared, in the case of the Financial Statements, in accordance with GAAP, and in the case of the Interim Financial Statements using the principles and accounting conventions of IFRS, in each case applied on a consistent basis throughout the periods involved except as may be indicated in the notes thereto or in Section 3.07(b) of the Disclosure Schedule, and (iii) the Financial Statements and the Interim Financial Statements (subject, in the case of the Interim Financial Statements, to normal recurring year-end adjustments, the effect of which are not, individually or in the aggregate, material) present fairly in all material respects the consolidated financial position and results of operations of the Company and its consolidated Subsidiaries (other than, in the case of the Interim Financial Statements, Stock Loan Services, LLC and the remainder of the Construction Loan Business)) as of the respective dates thereof or for the periods covered thereby, in the case of the Financial Statements, in accordance with GAAP and, in the case of the Interim Financial Statements, using the principles and accounting conventions, but not the presentation and disclosure requirements, of IFRS (except as indicated in the notes thereto or in Section 3.07(b) of the Disclosure Schedule). The segment reporting of the Construction Loan Business in the Financial Statements contain all of the revenues and expenses and assets and liabilities as determined in accordance with GAAP directly associated with the Construction Loan Business. Since March 31, 2009, the Company has not incurred any long-term liability that would be required to be disclosed in the financial statements of the Company or the footnotes thereto using the principles and accounting conventions of IFRS applied on a consistent basis.

(c) All accounts, notes receivable and other receivables (other than receivables related to the Construction Loan Business and the Affiliate Loans) reflected in the Financial Statements and Interim Financial Statements (the “Receivables”) have arisen out of bona fide sales and deliveries of goods, performance of services and other transactions in the ordinary course of the business in conformity in all material respects with the applicable purchase orders, agreements and specifications and are valid, bona fide claims against debtors for sales or other charges, and are presented in accordance with GAAP in the case of the Financial Statements, and IFRS in the case of the Interim Financial Statements, as of July 31, 2008 and March 31, 2009, respectively.

(d) The values of the inventories stated in the Financial Statements and the Interim Financial Statements reflect the normal inventory valuation policies of the Business as conducted by the Company and the Subsidiaries (other than, in the case of the Interim Financial Statements, Stock Loan Services, LLC and the remainder of the Construction Loan Business) and were determined in accordance with GAAP in the case of the Financial Statements, and IFRS in the case of the Interim Financial Statements and with principles and methods consistently applied.

SECTION 3.08. Litigation. As of the date hereof, (a) there is no Action pending or, to the Knowledge of the Seller, threatened, against the Company or any Subsidiary or affecting any Asset, before any Governmental Authority that would have a Material Adverse Effect or that would reasonably be likely to materially affect the legality,

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validity or enforceability of this Agreement, any Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby, and (b) there are no outstanding orders, writs, judgments, decrees, injunctions or settlements that materially restrict the Company or any of the Subsidiaries from conducting their business. Neither the Company nor any Subsidiary is involved in any claim, dispute or controversy with any of the top 25 suppliers or customers of the Business other than disputes and controversies in the ordinary course of business (including claims for indemnity against claims made by homeowners made in the ordinary course of business).

SECTION 3.09. Compliance with Laws.

(a) The Company and the Subsidiaries have each conducted and continue to conduct the Business in accordance in all material respects with all Laws and Governmental Orders applicable to the Company, any Subsidiary or the Business, and neither the Company nor any Subsidiary is in material violation of any such Law or Governmental Order. There is no agreement, judgment, injunction, order or decree binding upon the Company or any of the Subsidiaries which has or would reasonably be expected to have a Material Adverse Effect.

(b) The Company and the Subsidiaries are in possession of all material Permits required for the Company and the Subsidiaries, as the case may be, to own, lease and operate the Assets or to carry on the Business as it is now being conducted. All such material Permits are in full force and effect.

SECTION 3.10. Environmental Matters. (a) The Company and each Subsidiary is in material compliance with all applicable Environmental Laws and has obtained and is in compliance with all material Environmental Permits, and any past noncompliance with Environmental Laws or Environmental Permits has been resolved without any pending, ongoing or future costs, obligations or Liabilities, (b) there are no material Environmental Claims, including notices of causes of action or investigations relating to or arising under any Environmental Law pending, or to the Seller’s Knowledge, threatened, against the Company or any Subsidiary, or against any person or entity whose liability for any Environmental Claim the Company or any Subsidiary has retained or assumed either contractually or by operation of law, (c) except as would not have a Material Adverse Effect, there has been no Release of any Hazardous Materials at any Real Property or, during the period of the Company’s or any Subsidiary’s ownership, lease, operation or occupation thereof, at any real property formerly owned, leased, operated or occupied by the Company or any Subsidiary, (d) neither the Company nor any of the Subsidiaries is conducting or funding any investigation, cleanup, mitigation, restoration or reparation, or remedial or corrective action, or has agreed to assume the Liability of any other Person for, any investigation, cleanup, remediation, mitigation, restoration or reparation, or remedial or corrective action with respect to any Release of Hazardous Materials, whether voluntarily or as required by Environmental Law, Governmental Authority or otherwise, and (e) to the Knowledge of the Seller, the Seller has provided the Purchaser with true, correct and complete copies of all material environmental investigations, studies, audits, tests, reports, reviews or other analyses conducted by or on behalf of, or that are in the possession of, the Company or any of the Subsidiaries in relation to any premises presently or formerly owned, used, leased or occupied by the Company or any of the Subsidiaries.

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SECTION 3.11. Intellectual Property.

(a) Section 3.11(a) of the Disclosure Schedule sets forth a true and complete list of all patents and patent applications, registered trademarks and trademark applications, domain names and registered copyrights and copyright applications included in the Company Intellectual Property. The Company or a Subsidiary is the record owner of all registered Intellectual Property listed in Section 3.11(a) of the Disclosure Schedule, and the Company or a Subsidiary is the owner of the entire right, title and interest in, or has a valid right to use, all other Intellectual Property listed in Section 3.11(a) of the Disclosure Schedule. To the Seller’s Knowledge, there are no actual or threatened opposition proceedings, re-examination proceedings, cancellation proceedings, interference proceedings or other similar actions challenging the validity, existence or ownership of any Company Intellectual Property.

(b) Section 3.11(b) of the Disclosure Schedule sets forth a true and complete list of all licenses related to any software or information technology systems that are used by and material to the Company or any Subsidiary in the Business. As of the date hereof, all such licenses are valid and will continue to be valid following the Closing without any further consent or expense of the Company or any Subsidiary.

SECTION 3.12. Real Property.

(a) (i) The Seller has previously delivered to the Purchaser a schedule which contains (A) a true, current and complete list of all Owned Real Property and (B) a true and accurate description of (1) the street address for each parcel of Owned Real Property, together with an indication as to whether each such parcel is active or inactive and (2) the net book value as of March 31, 2009 for each parcel of Owned Real Property; and (ii) the Company or a Subsidiary has good and marketable title in fee simple to each parcel of Owned Real Property free and clear of all liens and Encumbrances, except Permitted Encumbrances. There are no outstanding options, rights of first offer or rights of first refusal to purchase any Owned Real Property or any portion thereof. The Seller has made a good faith effort to make available to the Purchaser copies of all policies of title insurance currently existing in favor of the Company and/or a Subsidiary with respect to Owned Real Property.

(b) (i) The Seller has previously delivered to the Purchaser a schedule that contains a true, current and complete list of (1) the street address of each parcel of Leased Real Property, (2) the identity of the lessee of each such parcel of Leased Real Property, and (3) the current base rent payments due under such leases; (ii) the Company or a Subsidiary has, and at Closing will have, good and valid leasehold interests in each of the Leased Real Properties, and such leasehold interests are free and clear of all Encumbrances, except Permitted Encumbrances; and (v) (A) the Seller has delivered to the Purchaser, true and complete copies of the documentation relating to each Continuing Lease and (B) there has not been any sublease or assignment entered into by the Company or any Subsidiary in respect of the Continuing Leases.

(c) (i) Neither the Company, nor any Subsidiary, has leased, subleased, licensed or otherwise granted any Person the right to use or occupy all or any portion of the Real Property and other than the Company and/or a Subsidiary there are no parties in possession of any portion of the Real Property, whether as lessees, tenants at will, trespassers or otherwise; (ii)

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neither the Company, nor any Subsidiary, has received notice of any pending condemnation or similar proceeding affecting any portion of the Real Property and, to the Seller’s Knowledge, no such action is presently contemplated or threatened; and (iii) to the Seller’s Knowledge, there is no law, ordinance, order, regulation or requirement now in existence which would require (in the absence of any applicable grandfathering and waivers) any material expenditure to remediate, remedy, remove, modify or improve any portion of the Real Property in order to bring it into material compliance therewith.

(d) All Continuing Leases are valid and in full force and effect except to the extent they have previously expired in accordance with their terms or where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of the Subsidiaries has violated any provision of, or committed or failed to perform any act which, with or without notice, lapse of time or both would constitute a default under the provisions of, any Continuing Lease, except in each case for those violations and defaults which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.13. Employee Benefit Matters.

(a) Section 3.13(a) of the Disclosure Schedule contains a true and complete list of any (i) “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and any bonus, stock option, stock purchase, restricted stock, equity based, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance, change in control or other benefit plans, programs or arrangements, and all employment, termination, severance or other contracts or agreements, to which the Seller, the Company, any Subsidiary or any of their ERISA Affiliates is a party, with respect to which the Seller, the Company, any Subsidiary or any of their ERISA Affiliates has any obligation to or which are maintained, contributed to or sponsored by the Seller, the Company, any Subsidiary or any of their ERISA Affiliates for the benefit of, any current or former employee, officer or director of the Company or any Subsidiary, (ii) each employee benefit plan for which the Company or any Subsidiary could incur liability under Section 4069 of ERISA in the event such plan has been or were to be terminated and (iii) any plan in respect of which the Company or any Subsidiary could incur liability under Section 4212(c) of ERISA (collectively, the “ERISA Plans”). Neither the Company nor any Subsidiary has any commitment (A) to create, incur Liability with respect to or cause to exist, any other employee benefit plan, program or arrangement, (B) to enter into any contract or agreement to provide compensation or benefits to any individual or (C) to modify, change or terminate any ERISA Plan, other than with respect to a modification, change or termination required by applicable Law. Section 3.13(a) of the Disclosure Schedule identifies each of the ERISA Plans that is sponsored by the Seller or any ERISA Affiliate of the Seller (other than the Company or any Subsidiary). With respect to each of the ERISA Plans, the Seller has heretofore delivered to the Purchaser true and complete copies of each ERISA Plan document (including all amendments thereto) for each written ERISA Plan or a written description of any ERISA Plan that is not otherwise in writing, as well as any documents (and any amendments thereto) related to each ERISA Plan, including, but not limited to, copies of annual reports, Form 5500s for the last three years, actuarial reports, Summary Plan Descriptions, Summary of Material Modifications, trust or funding agreements, the most recent determination letter received from the IRS with respect to

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each ERISA Plan that is intended to be qualified under Section 401(a) of the Code and contracts relating to ERISA Plan with respect to which the Seller, the Company, any Subsidiary or any ERISA Affiliate may have any liability (e.g. insurance contracts, investment management agreements, subscription and participation agreements and record keeping agreements).

(b) Each ERISA Plan has been operated in all material respects in accordance with its terms and the requirements of all applicable Laws, including, but not limited to, the Code, ERISA, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the COBRA provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”) and the Health Insurance Portability Accountability Act of 1996, as amended. Each of the Seller, the Company and the Subsidiaries has performed all material obligations required to be performed by it under, is not in any material respect in default under, or in material violation of, any ERISA Plan. No Action is pending or, to the Knowledge of the Seller, threatened with respect to any ERISA Plan (other than claims for benefits in the ordinary course). No lien has been imposed under Section 430(k) of the Code or Section 303(k) of ERISA on the assets of the Company, any of its Subsidiaries or any ERISA Affiliate, and no event or circumstance has occurred that is reasonably likely to result in the imposition of any such lien on any such assets on account of any ERISA Plan.

(c) Each ERISA Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has timely received a favorable determination letter from the IRS covering all of the provisions applicable to the ERISA Plan for which determination letters are currently available that the ERISA Plan is so qualified and each trust established in connection with any ERISA Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination letter from the IRS that it is so exempt, and no fact or event has occurred since the date of such determination letter or letters from the IRS to adversely affect the qualified status of any such ERISA Plan or the exempt status of any such trust. None of the Seller, the Company, any of its Subsidiaries, any ERISA Affiliate, any of the ERISA Plans, any trust created thereunder, nor to the Seller’s Knowledge, any trustee or administrator thereof has engaged in a transaction or has taken or failed to take any action in connection with which the Seller, the Company, any of its Subsidiaries or any ERISA Affiliate could be subject to any material liability for either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975(a) or (b), 4976 or 4980B of the Code.

(d) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (i) entitle any employees of the Company or any Subsidiary to severance pay or any increase in severance pay upon consummation of the transactions contemplated hereby or upon any termination of employment after the date hereof, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other material obligation pursuant to, any of the ERISA Plans, or (iii) limit or restrict the right of the Company or any Subsidiary to merge, amend or terminate any of the ERISA Plans. None of the ERISA Plans in effect immediately prior to the Closing Date would result separately or in the aggregate (including as a result of this Agreement or the transactions contemplated hereby) in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

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(e) Neither the Company nor any Subsidiary has ever maintained, established, sponsored, participated in, or contributed to, any ERISA Plan that is subject to Title IV of ERISA or Section 412 of the Code.

(f) Neither the Company nor any Subsidiary would reasonably be expected to incur any liability under Title IV of ERISA as a result of being treated as a single employer with the Company, any ERISA Affiliate of the Company or any Subsidiary for purposes of Section 414(b), (c), (m) or (o) of the Code.

(g) At no time has either the Company or any Subsidiary contributed to or been required to contribute to any Multiple Employer Plan.

(h) With respect to any Multiemployer Plan, neither the Company, any of the Subsidiaries, nor any ERISA Affiliate has, since September 26, 1980, made or suffered a “complete withdrawal” or a “partial withdrawal,” as such terms are respectively defined in Sections 4203 and 4205 of ERISA, that has not been satisfied in full. With respect to any ERISA Plan that is a Multiemployer Plan, (i) no event has occurred or is reasonably expected to occur with respect to the Company or any Subsidiary that presents a material risk of a “complete withdrawal” or “partial withdrawal”, (ii) neither the Company, any of the Subsidiaries nor any ERISA Affiliate has any contingent liability under Section 4204 of ERISA, and (iii) to Seller’s Knowledge, neither the Company nor any Subsidiary has received notice that any Multiemployer Plan is or will go into “reorganization” or is “insolvent” as those terms are defined under ERISA, (iv) to Seller’s Knowledge, neither the Company nor any Subsidiary has received notice that any Multiemployer plan is, or is reasonably expected to be, in “endangered” or “critical” status as those terms are defined under ERISA, and (vi) the aggregate withdrawal liability of the Company and the Subsidiaries, computed as if a complete withdrawal by the Company and the Subsidiaries had occurred under each such Multiemployer Plan on the date hereof, would not have a Material Adverse Effect.

(i) No ERISA Plan provides benefits, including without limitation death or medical benefits (whether or not insured), with respect to current or former employees of the Company, the Subsidiaries or any ERISA Affiliate after retirement or other termination of service (other than (i) coverage mandated by applicable laws, (ii) death benefits or retirement benefits under any “employee pension plan,” as that term is defined in Section 3(2) of ERISA, (iii) deferred compensation benefits accrued as liabilities on the books of the Company, any of the Subsidiaries or an ERISA Affiliate, or (iv) benefits, the full direct cost of which is borne by the current or former employee (or beneficiary thereof)).

(j) Since January 1, 2005, each ERISA Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) (i) has been operated in good faith compliance with Section 409A of the Code and the regulations thereunder and (ii) is in documentary compliance with Section 409A of the Code, in each case, taking into account any applicable transition rules, good faith compliance standards, and extensions of the deadline for compliance.

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SECTION 3.14. Taxes.

(a) All Tax Returns required to have been filed by or with respect to the Company or any Subsidiary or any Non-Company Owned Assets have been timely filed (taking into account any extension of time to file granted or obtained) and such Tax Returns are true, correct and complete in all material respects;

(b) other than Taxes of the Debtors the payment of which is prohibited or stayed by the Bankruptcy Code, all Taxes required to have been paid by or with respect to the Company or any Subsidiary or any Non-Company Owned Assets have been paid;

(c) no deficiency for any material amount of Tax has been asserted or assessed by a Governmental Authority in writing against the Company or any Subsidiary that has not been satisfied by payment, settled or withdrawn;

(d) there are no Tax liens on any assets of the Company or any Subsidiary or any Non-Company Owned Assets (other than Permitted Encumbrances);

(e) neither the Company nor any Subsidiary is subject to any accumulated earnings Tax;

(f) neither the Company nor any Subsidiary has received any notice of any pending or threatened assessment of Taxes, or any audits, examinations, investigations, or other proceedings in respect of Taxes or Tax Returns of the Company or any Subsidiary;

(g) neither the Company nor any Subsidiary has waived any statute of limitations with respect to Taxes;

(h) neither the Company nor any Subsidiary is liable for the Taxes of any other Person as a transferee, successor or otherwise, or by reason of having joined in a consolidated, combined or similar Tax return;

(i) the Company is treated as a corporation for Federal income tax purposes; and

(j) neither the Company nor any Subsidiary has participated, within the meaning of Treasury Regulation Section 1.6011-4(c)(3), in any “listed transactions,” “confidential transactions” or “transactions with contractual protections” within the meaning of Section 6011 of the Code and the Treasury Regulations thereunder (or similar provisions of state, local or foreign law).

SECTION 3.15. Labor Matters.

(a) With respect to the Business and except for such matters that would not have a Material Adverse Effect: (i) each of the Company and the Subsidiaries is in compliance with all applicable Laws regarding employment and employment practices, (ii) there are no unfair labor practice charges or complaints against the Company or any of the Subsidiaries brought before the National Labor Relations Board nor is there any grievance or any arbitration proceeding arising out of or under collective bargaining agreements with respect to the Business nor, to the Knowledge of the Seller, is any such charge, complaint, grievance or proceeding

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threatened, (iii) since August 1, 2007, there has been no labor strike, dispute, slowdown or work stoppage or lockout pending or, to the Knowledge of the Seller, threatened against the Company or the Subsidiaries, (iv) to the Knowledge of the Seller, since August 1, 2007, there has been no attempt by employees of the Company or the Subsidiaries to unionize or collectively bargain with the Company or any of the Subsidiaries, or to decertify any union with which the Company or any Subsidiary has a collective bargaining agreement, (v) there is no charge or complaint pending or, to the Knowledge of the Seller, threatened against the Company or any of the Subsidiaries before the Equal Employment Opportunity Commission or any similar Governmental Authority responsible for the prevention of unlawful employment practices, and (vi) neither the Company nor any Subsidiary is delinquent in payments to any employees or former employees for any services or amounts required to be reimbursed or otherwise paid. Section 3.15(a) of the Disclosure Schedule is a true and accurate report, in all material respects, of employee head count by market prepared by the Company and the Subsidiaries as of April 27, 2009.

(b) The Company and the Subsidiaries are, and since August 1, 2007, have been, in compliance with all notice and other requirements under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), and any similar foreign, state or local Law relating to plant closings and layoffs.

(c) Neither the Company nor any Subsidiary is a party to any collective bargaining agreement or similar agreement with any labor organization or works council, or work rules or practices agreed to with any labor organization, works council or employee association applicable to employees of the Company or any Subsidiary, other than those set forth in Section 3.15(c) of the Disclosure Schedule, true and complete copies of which have heretofore been made available to the Purchaser.

(d) The material personnel manuals and handbooks and material policies, rules and procedures applicable to employees of the Company have heretofore been made available to the Purchaser.

SECTION 3.16. Transactions with Affiliates. All accounts payable, notes payable, accounts receivable, advances, notes receivable and Contracts, and all transfers of assets or Liabilities, whether or not entered into in the ordinary course of business, to or by which the Company or any of the Subsidiaries, on the one hand, and the Seller or any Affiliates of the Seller (other than the Company or a Subsidiary), on the other hand, are a party or are otherwise bound or subject, or by which any of the Assets are bound or subject or pursuant to which the Company or any of the Subsidiaries has made, since August 1, 2007, or is obligated to make payments or incur expenses to or for the benefit of the Seller or any Affiliates of the Seller (the “Affiliate Transactions”), have been conducted or entered into, as the case may be, on an arm’s-length basis.

SECTION 3.17. Letters of Credit, Surety Bonds and Guarantees. Section 3.17 of the Disclosure Schedule sets forth, as of the date hereof (i) all standby letters of credit (to the extent that they are for the account of the Company or the Subsidiaries), performance or payment bonds, guarantee arrangements and surety bonds of any nature relating to the Business, the Company or any of the Subsidiaries (the “Business Guarantees”) and (ii) the amount of each such Business Guarantee.

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SECTION 3.18. Brokers. Except for UBS Securities LLC and Barclays Capital, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement, the Plan or the Ancillary Agreements based upon arrangements made by or on behalf of the Seller. The Seller is solely responsible for the fees and expenses of UBS Securities LLC and Barclays Capital.

SECTION 3.19. Absence of Certain Changes or Events. Since January 31, 2009 through the date hereof, (a) none of the actions which would have been prohibited by Section 5.01 below if this Agreement had been in effect since January 31, 2009 has occurred and (b) to the Knowledge of the Seller, there has not been, accrued or arisen any events, circumstances, changes or effects that would reasonably be expected to have a Material Adverse Effect and that has not otherwise been disclosed pursuant to this Agreement or in the Disclosure Schedule.

SECTION 3.20. Company Material Contracts.

(a) Section 3.20(a) of the Disclosure Schedule sets forth a list of all Company Material Contracts to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries is bound or by which any of their respective properties is bound or affected as of the date hereof, setting forth for each such Company Material Contract the subsections of the definition of Company Material Contract applicable to such Company Material Contract.

(b) All Company Material Contracts are valid and in full force and effect except to the extent they have previously expired in accordance with their terms or where the failure to be in full force and effect, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of the Subsidiaries has violated any provision of, or committed or failed to perform any act which, with or without notice, lapse of time or both would constitute a default under the provisions of, any Company Material Contract, except in each case, for those violations and defaults which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. None of the Company Material Contracts contains purchase commitments for raw materials and parts in excess of normal requirements, at a price materially in excess of current market prices.

SECTION 3.21. Product Liability and Warranty. Section 3.21 of the Disclosure Schedule sets forth the standard warranties for all products manufactured, sold, leased or delivered by the Company and the Subsidiaries, it being understood that customer warranties routinely supersede the standard warranties offered by the Company and its Subsidiaries. Since July 31, 2008, to the Knowledge of the Seller, neither the Company nor any of the Subsidiaries has taken any action which is reasonably likely to give rise to an increase in product warranty claims from the Company’s historical experience.

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SECTION 3.22. Sufficiency of Assets. Except for services to be provided pursuant to the Transition Services Agreement, the Assets owned, held, leased or licensed by the Company and the Subsidiaries constitute all of the assets, properties and services utilized to conduct the Business as presently conducted by the Company and the Subsidiaries (other than assets which are insignificant in the aggregate).

SECTION 3.23. Restructuring Transactions, Prior to the date hereof, the Seller has caused the Company, the Subsidiaries and its Affiliates to consummate the transactions listed in Section 3.23 of the Disclosure Schedule, including in order to transfer and convey to the Seller or an Affiliate of the Seller other than the Company or a Subsidiary, (a) all of the Company’s or a Subsidiary’s rights, title and interest in and to (i) the equity interests in Stock Loan Services, LLC, (ii) any and all properties, assets and Contracts relating to, arising out of or used in the conduct of the Construction Loan Business and (iii) such other properties, assets and Contracts that are not used in the conduct of Business and which are set forth in Section 3.23 of the Disclosure Schedule (collectively, the “Excluded Assets”) and (b) any Liabilities of the Seller or any Subsidiary (other than the Seller Loan) that relate to the Excluded Assets. As of the date hereof, the Company and the Subsidiaries have been fully released from any obligation relating to such Liabilities (other than the Seller Loan). The transactions referred to in this Section 3.23 shall be collectively referred to herein as the “Restructuring Transactions”.

SECTION 3.24. DIP Facility Representations and Warranties. As of the date hereof, the representations and warranties of the Seller and the Debtors contained in the DIP Facility which are not qualified as to materiality are true and correct in all material respects and the representations and warranties of the Seller and the Debtors contained in the DIP Facility that are so qualified are true and correct.

SECTION 3.25. Disclaimer of the Seller. (A) EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE III, NONE OF THE SELLER, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE COMPANY, THE SUBSIDIARIES, THE EQUITY INTERESTS, THE BUSINESS OR ANY OF THE ASSETS, INCLUDING WITH RESPECT TO (I) MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, (II) THE OPERATION OF THE BUSINESS BY THE PURCHASER AFTER THE CLOSING OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF THE BUSINESS AFTER THE CLOSING AND (B) OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PLAN OR THE ANCILLARY AGREEMENTS AND EXCLUDING FRAUD, NONE OF THE SELLER, ITS AFFILIATES, OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES WILL HAVE OR BE SUBJECT TO ANY LIABILITY OR INDEMNIFICATION OBLIGATION TO THE PURCHASER, THE COMPANY, THE SUBSIDIARIES OR TO ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO THE PURCHASER, ITS AFFILIATES OR REPRESENTATIVES OF, OR THE PURCHASER’S USE OF, ANY INFORMATION RELATING TO THE BUSINESS, INCLUDING ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO THE PURCHASER, WHETHER ORALLY OR IN WRITING, IN CERTAIN “DATA ROOMS,” MANAGEMENT PRESENTATIONS, FUNCTIONAL “BREAK-OUT”

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DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF THE PURCHASER OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE PLAN. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller as follows:

SECTION 4.01. Organization, Authority and Qualification of the Purchaser. The Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all necessary limited liability company power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The Purchaser is duly licensed or qualified to do business and is in good standing in each jurisdiction which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed, qualified or in good standing would not adversely affect the ability of Purchaser to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement, the Plan and the Ancillary Agreements to which the Purchaser is a party. The execution and delivery by the Purchaser of this Agreement and the Ancillary Agreements to which it is a party, the performance by the Purchaser of its obligations hereunder and thereunder and the consummation by the Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Purchaser. This Agreement has been, and upon their execution the Ancillary Agreements to which the Purchaser is a party shall have been, duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Seller) this Agreement constitutes, and upon their execution the Ancillary Agreements to which the Purchaser is a party shall constitute, legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency (including all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).

SECTION 4.02. Capitalization; Ownership of Equity Interests.

(a) The Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser have been duly authorized and validly issued and were not issued in violation of, and are not subject to, any preemptive or subscription rights. There are no options, warrants, puts, calls, “phantom” stock rights, convertible or exchangeable securities or other rights, agreements, arrangements or commitments relating to the Class A Common Shares of the Purchaser or Class A Junior Preferred Shares of the Purchaser, or any other interest in, the Purchaser, or obligating the Purchaser to issue, sell, purchase, redeem or otherwise acquire any

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of the Class A Common Shares of the Purchaser or Class A Junior Preferred Shares of the Purchaser, or any other interest in, the Purchaser or which give any other Person the right to receive any benefits or rights similar to any rights enjoyed by a holder of Class A Common Shares of the Purchaser or Class A Junior Preferred Shares of the Purchaser or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in the Purchaser (other than pursuant to the Subscription Agreement and the Debt Commitment Letter). Upon consummation of the transactions contemplated by this Agreement and registration of the Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser in the name of the Seller in the books and records of the Purchaser, the Seller will own the Class A Common Shares of the Purchaser and Class A Junior Preferred Shares of the Purchaser representing 49% of the issued and outstanding number of such shares of the Purchaser, free and clear of all Encumbrances. The Purchaser does not own stock or any other equity interests, nor does it have any obligation to make any investment, in any corporation, partnership or other Person.

SECTION 4.03. No Conflict. The execution, delivery and performance by the Purchaser of this Agreement and the Ancillary Agreements to which the Purchaser is a party do not and will not (a) violate, conflict with or result in the breach of any provision of the organizational documents of the Purchaser, and (b) except as may result from any facts or circumstances relating solely to the Seller or any of its Affiliates, (i) conflict with or violate in any respect any material Law or Governmental Order applicable to the Purchaser, or (ii) conflict with, result in any breach of, constitute a default (or event Which with the giving of notice or lapse of time, or both, would become a default) under, require any Consent under, give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of any material Contract to which the Purchaser is a party.

SECTION 4.04. Governmental Consents and Approvals. The execution, delivery and performance by the Purchaser of this Agreement and each Ancillary Agreements to which it is a party do not and will not require any Consent of any third party or any Consent or Filing with any Governmental Authority, except as may be necessary as a result of any facts or circumstances relating solely to the Seller or its Affiliates.

SECTION 4.05. Investment Purpose. The Purchaser is acquiring the Purchased Equity Interests solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof other than in compliance with all applicable laws, including United States federal securities laws. The Purchaser agrees that the Purchased Equity Interests may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any applicable state securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws. The Purchaser is able to bear the economic risk of holding the Purchased Equity Interests for an indefinite period (including total loss of its investment), and (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

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SECTION 4.06. Financing.

(a) The Purchaser has sufficient immediately available funds, or has access to sufficient immediately available funds pursuant to committed financing arrangements (true and complete copies of which have been delivered to the Seller), to pay, in cash, the cash portion of the Purchase Consideration and all other amounts payable pursuant to this Agreement, the Plan and the Ancillary Agreements or otherwise necessary to consummate all the transactions contemplated hereby and thereby.

(b) The Investor has sufficient immediately available funds, or has access to sufficient immediately available funds pursuant to committed financing arrangements (true and complete copies of which have been delivered to the Seller), to fund the amounts due under the Subscription Agreement and the Debt Commitment Letter, subject to the confirmation of the Plan by the Bankruptcy Court.

SECTION 4.07. Guarantee. Concurrently with the execution of this Agreement, the Purchaser has delivered to the Seller the duly executed guarantee of Gores Capital Partners II, L.P., a Delaware limited partnership and Gores Co-Invest Partnership II, L.P. a Delaware limited partnership (the “Guarantors”) in the form attached as Exhibit 4.07 to this Agreement (the “Guarantee”). The Guarantee is a legal, valid and binding obligation of each Guarantor and enforceable against each Guarantor in accordance with its terms, and no event has occurred which, with or without notice, lapse of time or both, would constitute a default on the part of such Guarantor under its Guarantee.

SECTION 4.08. Litigation. As of the date hereof, no Action by or against the Purchaser is pending or, to the knowledge of the Purchaser, threatened, which could affect the legality, validity or enforceability of this Agreement, any Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby.

SECTION 4.09. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Purchaser.

SECTION 4.10. Tax Classification. The Purchaser has made an election on IRS Form 8832 to treat the Purchaser as an association taxable as a corporation for federal income tax purposes (the “Purchaser Check-the-Box Election”). The Purchaser Check- the-Box Election will be effective prior to and on the Closing Date.

SECTION 4.11. Class B Common Shares of Purchaser. No Class B Common Shares have been or will be as of Closing Date issued to any Person that is a transferor of property to the Purchaser within the meaning of Code Section 351(a). None of the individuals identified in the certificates delivered pursuant to Section 2.06(d) has received or will receive directly as of the Closing Date or for one year following the Closing Date, any equity interest in the Purchaser other than Class B Common Shares (or equivalent rights) of the Purchaser.

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ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.01. Conduct of Business Prior to the Closing. The Seller and the Company covenant and agree that, except as described in Section 5.01 of the Disclosure Schedule and except as may be related solely to the Excluded Assets or the Construction Loan Business, between the date hereof and the Closing (or the earlier termination of this Agreement), the Company shall, and shall cause each Subsidiary to conduct the Business in compliance in all material respects with all applicable Laws and, without the prior written consent of the Purchaser (which consent may not be unreasonably withheld, conditioned or delayed), not to:

(a) (i) other than loans made pursuant to the Construction Loan Business, issue, sell, redeem, repurchase, pledge, dispose of or otherwise encumber (other than Permitted Encumbrances) or authorize the issuance, sale, redemption, repurchase, pledge, disposition or other encumbrance (other than Permitted Encumbrances) of, any equity interests, notes, bonds or other securities of the Company or any Subsidiary (or any option, warrant or other right to acquire the same), or (ii) declare, make or pay any dividends or distributions to the holders of any equity interests, other than dividends, distributions and redemptions declared, made or paid by any Subsidiary solely to the Company or another Subsidiary;

(b) (i) acquire (including by merger, consolidation, or acquisition of stock or all or substantially all of the assets or any other business combination) or make any loan, advance, capital contribution to, or investment in, any Person (other than the Company or a Subsidiary), or otherwise acquire any assets (other than inventory in the ordinary course of business consistent with past practice), in each case, involving consideration in excess of $2,000,000, individually, or $5,000,000, in the aggregate, (ii) sell, lease, transfer, or otherwise dispose of any material Assets (other than in the ordinary course of business consistent with past practice), or (iii) incur any material Encumbrance on any Asset (other than Permitted Encumbrances and other than in the ordinary course of business consistent with past practice);

(c) amend or restate the organizational documents of the Company or any Subsidiary;

(d) except as otherwise expressly set forth in this Agreement, (i) grant or announce any increase in the salaries, bonuses, pension, severance, welfare or other benefits payable to any employee or director, pay any bonus to any employee or director other than as required by Law, pursuant to any plans, programs or agreements existing on the date hereof, (ii) establish, enter into, adopt, amend or terminate any employee benefit plan or employment agreement to the extent applicable to employees of the Business or amend the terms of any outstanding equity-based awards, other than as required by Law or by the terms of any plans, programs or agreements existing as of the date hereof and listed on Section 5.01(d)(ii) of the Disclosure Schedule, (iii) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any employee benefit plan to the extent applicable to employees of the Business, other than as required by Law or by the terms of any plans, programs or agreements existing as of the date hereof and listed on Section

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5.01(d)(iii) of the Disclosure Schedule, (iv) enter into or make any loans to any employee or make any change in its existing borrowing or lending arrangements for or on behalf of any of such person, whether pursuant to an employee benefit plan or otherwise, other than with respect to loans entered into pursuant to a 401(k) plan in accordance with the terms of the applicable plan, or (v) enter into, adopt or amend in any material respect any severance or change of control agreement with any employee except, in each case, as required by Law;

(e) split, combine or reclassify any of the equity interests of the Company or any Subsidiary, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for such equity interests;

(f) dissolve, wind-up or liquidate the Company or any Subsidiary, other than any such dissolution, winding up or liquidation which is in process on the date hereof;

(g) accelerate collections or delay any payables;

(h) enter into, adopt, amend, or terminate any collective bargaining Contract or Contract with any labor union, other than any adoption, amendment, or termination (A) required by the terms of any existing Contracts, or (B) required by Law;

(i) enter into, adopt, amend or terminate any Company Material Contract (other than this Agreement); and

(j) agree to take any of the actions specified in Sections 5.01(a) through (i), except as contemplated by this Agreement, the Plan and the Ancillary Agreements.

SECTION 5.02. Access to Information.

(a) Upon reasonable notice, the Seller shall cause the Company and each Subsidiary and each of their respective officers, directors, managers, employees, agents, representatives, accountants and counsel to (i) afford the Purchaser and its authorized representatives reasonable access to the personnel, offices, properties and books and records of the Company and each Subsidiary and (ii) furnish to the officers, employees, and authorized agents and representatives of the Purchaser such additional financial and operating data and other information regarding the Business and the preparation of the historical financial statements of the Company and the Subsidiaries (or copies thereof) as the Purchaser may from time to time reasonably request; provided, however, that any such access or furnishing of information shall be conducted at the Purchaser’s expense, during normal business hours, under the supervision of the Seller’s personnel and in such a manner as not to interfere with the normal operations of the Business. Notwithstanding anything to the contrary in this Agreement, the Seller shall not be required to disclose any information to the Purchaser if such disclosure would, in the Seller’s sole discretion, (i) jeopardize any attorney-client or other legal privilege or (ii) contravene any applicable Laws, fiduciary duty or binding agreement entered into prior to the date hereof. No information received pursuant to this Section 5.02(a) shall affect or be deemed to modify or update any of the representations and warranties of the Seller contained in this Agreement.

(b) In order to facilitate the resolution of any claims made against or incurred by the Seller relating to the Business, for a period of seven years after the Closing or, if shorter,

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the applicable period specified in the Purchaser’s document retention policy, the Purchaser shall (i) retain the books and records relating to the Business, the Company and the Subsidiaries relating to periods prior to the Closing, and (ii) upon reasonable notice, afford the officers, employees, agents and representatives of the Seller reasonable access (including the right to make, at the Seller’s expense, photocopies), during normal business hours, to such books and records; provided, however, that the Purchaser shall notify Seller at least 30 days in advance of destroying any such books and records prior to the seventh anniversary of the Closing in order to provide the Seller the opportunity to access such books and records in accordance with this Section 5.02(b).

(c) In order to facilitate the resolution of any claims made against or incurred by the Purchaser, the Company or any Subsidiary relating to the Business, for a period of seven years after the Closing or, if shorter, the applicable period specified in the Seller’s document retention policy, the Seller shall (i) retain the books and records relating to the Business, the Company and the Subsidiaries relating to periods prior to the Closing which shall not otherwise have been delivered to the Purchaser, the Company or any Subsidiary, and (ii) upon reasonable notice, afford the officers, employees, agents and representatives of the Purchaser reasonable access (including the right to make, at the Purchaser’s expense, photocopies), during normal business hours, to such books and records; provided, however, that the Seller shall notify the Purchaser at least 30 days in advance of destroying any such books and records prior to the seventh anniversary of the Closing in order to provide the Purchaser the opportunity to access such books and records in accordance with this Section 5.02(c).

SECTION 5.03. Confidentiality.

(a) The terms of the letter agreement dated as of February 2, 2009 (the “Confidentiality Agreement”) between Wolseley plc, the Company and The Gores Group, LLC are hereby incorporated herein by reference and shall continue in full force and effect until the Closing, at which time such Confidentiality Agreement and the obligations of the Purchaser under this Section 5.03 shall terminate; provided, however, that the Confidentiality Agreement shall terminate only in respect of that portion of the Information (as defined in the Confidentiality Agreement) exclusively relating to the transactions contemplated by this Agreement and the Plan. If this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement shall nonetheless continue in full force and effect.

(b) Nothing provided to the Purchaser pursuant to Section 5.02(a) shall in any way amend or diminish the Purchaser’s obligations under the Confidentiality Agreement. The Purchaser acknowledges and agrees that any Information provided to the Purchaser pursuant to Section 5.02(a) or otherwise by the Seller, the Company, any Subsidiary or any officer, director, employee, agent, representative, accountant or counsel thereof shall be subject to the terms and conditions of the Confidentiality Agreement.

(c) Notwithstanding anything herein to the contrary, each party hereto (and its representatives, agents and employees) may consult any tax advisor regarding the tax treatment and tax structure of the transactions contemplated hereby, and may disclose to any Person, without limitation of any kind, the tax treatment and tax structure of such transactions and all materials (including opinions and other tax analyses) that are provided relating to such treatment or structure.

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SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents. The Seller and the Purchaser shall each use its commercially reasonable efforts to promptly obtain all Consents of, and make all Filings with, Governmental Authorities and officials and obtain all Consents of third parties, in each case, that may be or become necessary for its execution and delivery of, and the performance of its obligations pursuant to, this Agreement, the Plan and the Ancillary Agreements and will cooperate fully with the other parties in promptly seeking to obtain all such Consents and making such Filings.

SECTION 5.05. Transition Services. Following the Closing, the Seller shall provide, or cause to be provided, to the Business certain services that are currently provided by the Seller and its Affiliates to the Business, and the Purchaser shall cause the Company to provide to the Seller and its Affiliates certain services that are currently provided by the Company to the Seller and such Affiliates, all as more fully set forth in a transition services agreement substantially in the form attached hereto as Exhibit 5.05 (the “Transition Services Agreement”) to be entered into by the Seller and the Company as of the Closing.

SECTION 5.06. Retained Names and Marks.

(a) The Purchaser hereby acknowledges that all right, title and interest in and to the names “Wolseley” and “Raptor”, together with all variations thereof and all trademarks, service marks, domain names, trade names, trade dress, corporate names and other identifiers of source containing, incorporating or associated with any of the foregoing (the “Retained Names and Marks”) are owned exclusively by the Seiler or its Affiliates (other than the Company and the Subsidiaries), and that, except as, expressly provided below, any and all right of the Company or the Subsidiaries to use the Retained Names and Marks shall terminate as of the Closing and shall immediately revert to the Seller or its Affiliates (other than the Company and the Subsidiaries). The Purchaser further acknowledges that none of the Purchaser, the Company or any Subsidiary has any rights, and is not acquiring any rights, to use the Retained Names and Marks.

(b) Except as expressly provided in this Agreement, no other right to use the Retained Names and Marks is granted by the Seller to the Purchaser, the Company or the Subsidiaries, whether by implication or otherwise, and nothing hereunder permits the Purchaser, the Company or any of the Subsidiaries to use the Retained Names and Marks on any documents, materials, products or services other than in connection with (i) the sale of existing inventories of products bearing the name “Raptor” and (ii) the use of existing inventories of labeled stationery, invoices and other office supplies and materials until replacement materials excluding the Retained Names and Marks can be obtained, in the case of clause (ii) for a period not to exceed 90 days from Closing. The Company agrees to remove the Retained Names and Marks from all vehicles and signage used by the Company and the Subsidiaries as soon as practicable (but not later than December 31, 2009).

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(c) The Company hereby grants to the Seller and its Affiliates (other than the Company and the Subsidiaries), and the Purchaser hereby consents to the granting of, a royalty- free fully paid up license to use the names “Stock Loan Services” and “Stock Financial Services”, together with all variations thereof and all trademarks, service marks, domain names, trade names, trade dress, corporate names and other identifiers of source containing, incorporating or associated with such names (the “Licensed Names”), in connection with the Construction Loan Business for a period of 12 months following the Closing. The Purchaser and the Company shall not, and the Company shall cause the Subsidiaries not to, use the Licensed Names at any time after the Closing.

SECTION 5.07. Business Guarantees. Following the Closing, the Purchaser and the Seller shall, and shall cause the Company or one or more of the Subsidiaries to, contact the third parties that are party to, and beneficiaries of, the Business Guarantees, and request that the Purchaser, the Company or one or more of the Subsidiaries be substituted in all respects for the Seller or any of its Affiliates (other than the Company and the Subsidiaries), effective as soon as practicable after the Closing, in respect of all obligations of the Seller or any of its Affiliates (other than the Company and the Subsidiaries) under each of the Business Guarantees to which the Seller or any of its Affiliates (other than the Company and the Subsidiaries) is a party so that, in any such case, the Purchaser, the Company or any Subsidiary shall be solely responsible under the terms of the applicable Business Guarantees; provided, however, that notwithstanding the foregoing, neither the Company nor any Subsidiaries shall be required to pay any fee in connection with the foregoing (other than reasonable expenses of counsel). In furtherance of the foregoing, the Purchaser and the Seller agree to cause the Company to indemnify and hold harmless the Seller and its Affiliates (other than the Company and the Subsidiaries) from any Loss suffered or incurred by the Seller or any of its Affiliates (other than the Company and the Subsidiaries) in connection with any such Business Guarantees.

SECTION 5.08. Construction Loan Business. Prior to the Closing, the Seller shall cause the Company to transfer to the Seller or an Affiliate of the Seller the employees listed on Section 5.08 of the Disclosure Schedule (the “Construction Loan Employees”). Following such transfer, the Company shall have no liability with respect to any benefits or amounts payable to any Construction Loan Employee. Notwithstanding the Seller’s and the Company’s efforts to transfer and convey to the Seller or an Affiliate of the Seller all properties, assets and Contracts relating to, arising out of or used in the conduct of the Construction Loan Business, the properties, assets and Contracts listed on Section 5.08 of the Disclosure Schedule will remain in the possession of the Company or the Subsidiaries after the Closing Date (the “Stranded Construction Loan Assets”). The Purchaser and the Company agree that the Stranded Construction Loan Assets shall be held by the Company for the benefit of the Seller and the Seller shall be treated as the owner of such assets for tax purposes, and the Seller shall use commercially reasonable efforts to transfer and convey the Stranded Construction Loan Assets to the Seller or an Affiliate of the Seller as soon as practicable after Closing. The Purchaser and the Company shall cooperate with the Seller to transfer and convey the Stranded Construction Loan Assets and proceeds thereof to the Seller or an Affiliate of the Seller, and to ensure that the Seller is able to operate the Stranded Construction Loan Assets. For all purposes under this Agreement, Stranded Construction Loan Assets shall be deemed Excluded Assets.

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SECTION 5.09. Further Action.

(a) The parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, to do or cause to be done all things necessary, proper or advisable under applicable Law, and to execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement. Without limiting the foregoing, each party hereto shall cooperate with the other party, and execute and deliver, or use reasonable best efforts to cause to be executed and delivered, all instruments, and to obtain all Consents under any Permit, license, Contract or other instrument, and take all such other actions as such party may reasonably be requested to take by the other party hereto from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the other transactions contemplated hereby and thereby. In addition, the Seller shall (i) continue to provide the Company with the benefit of any assets used in the Business that are leased by Seller or its Affiliates (other than the Company and the Subsidiaries) for the term of such leases (and the Company agrees to pay to Seller the rental payments due by Seller under such leases promptly as such payments become due) and (ii) use commercially reasonable efforts to obtain Consents to the assignment of any licenses or leases related to any software, hardware or information technology systems used by the Company or any Subsidiary in the Business.

(b) In furtherance of the foregoing, at the Seller’s expense, the parties hereto shall use their respective commercially reasonable efforts to take, or cause to be taken, all appropriate action, to do or cause to be done all things necessary, proper or advisable under applicable Law and agreements, and to execute and deliver such documents and other papers and otherwise cooperate with the other party, as may be required to consummate and make effective the transactions necessary to separate the properties, assets and Liabilities relating to, arising out of or used in the conduct of the Construction Loan Business from the Business.

SECTION 5.10. Employee Benefits.

(a) Effective as of the Closing Date, the Purchaser shall establish or designate a defined contribution plan and trust intended to qualify under Section 401(a) and Section 501(a) of the Code, the terms of which are substantially similar to the Wolseley North American 401(k) Plan (the “Seller 401(k) Plan”) as of the Closing Date (the “Purchaser 401(k) Plan”). The Seller shall direct the trustee of the Seller’s 401(k) Plan to transfer, to the trustee of the Purchaser 401(k) Plan, as of the Closing Date, the account balances (whether vested or unvested), including any outstanding loans, of Continuing Employees and terminated employees of the Company or any Subsidiary who have an account balance greater than zero in the Seller 401(k) Plan (the “Former Employees”) and the trustee of the Purchaser 401(k) Plan shall accept such transfer. Upon such transfer, to the extent of the assets received, the Purchaser 401(k) Plan shall assume all liabilities for accrued benefits under the Seller 401(k) Plan in respect of such Continuing Employees and Former Employees and the Seller’s 401(k) Plan shall be relieved of all such liabilities. As to any former employee of the Company or a Subsidiary who (i) participated in the Seller 401(k) Plan, (ii) terminated employment before the Closing Date, and (iii) was not 100% vested in his or her account in the Seller 401(k) Plan at termination of employment, the Purchaser 401(k) Plan shall provide for the reinstatement of such former employee’s nonvested

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account in the Seller 401(k) Plan if the former employee satisfies the requirements for reinstatement prescribed by Section 411 of the Code in which event the Seller shall reimburse the Company for the amount of the contribution to the Purchaser 401(k) Plan that is required to reinstate those nonvested accounts less the amount of unvested balances previously transferred to the Purchaser 401(k) Plan, if any. If the Seller determines that a partial termination of the Seller 401(k) Plan has occurred, the Company shall accelerate the vesting of the accounts of Continuing Employees and Former Employees who are affected by the partial termination, to the extent of the assets received by the Purchaser 401(k) Plan for such Continuing Employees and Former Employees. The parties shall cooperate in the filing of any documents required by the transfer of assets and liabilities described herein. Each of the parties hereto shall pay its own expenses in connection with such transfer. Notwithstanding anything to the contrary, nothing in this Agreement shall be construed to limit the Purchaser’s right to amend, modify, suspend or terminate the Purchaser 401(k) Plan following the Closing Date.

(b) The Seller shall be responsible for any claims and any administrative expense including stop loss premiums incurred by any Continuing Employee (or any of his or her beneficiaries) prior to the Closing Date or by any Inactive Employee (or any of his or her beneficiaries) under an employee welfare benefit plan sponsored or maintained by the Seller or the Company to the extent that the costs attributable to such claims exceed $4,900,000. Except as otherwise provided in this Agreement, the Company, the Subsidiaries and the ERISA Plans maintained by the Company, a Subsidiary or the Company and one or more Subsidiaries shall remain responsible for the payment of benefits in accordance with the terms of such ERISA Plans.

(c) With respect to any Inactive Employee whose employment with the Company and the Subsidiaries terminates on or before the Closing Date, the Seller shall reimburse the Company for the short-term and long-term disability benefits paid on or after the Closing Date under the Company’s or Subsidiary’s self-insured plan and the monthly premium amount payable on or after the Closing Date under a Company’s or Subsidiary’s fully insured short-term or long-term disability plan until such time as the Inactive Employee is no longer receiving benefits under any such plan or policy or becomes a Continuing Employee.

(d) The Seller shall reimburse the Company for the benefits paid on or after the Closing Date (i) under COBRA and ARRA in respect of qualifying events occurring prior to Closing and (ii) under COBRA and ARRA for Inactive Employees that have not terminated employment in respect of qualifying events occurring on or after the Closing Date and before an Inactive Employee becomes a Continuing Employee, in each case less the amount of premiums received by the Company or a Subsidiary in respect of such qualifying events or from the Inactive Employee, as applicable and less the amount of subsidies credited to the Company or a Subsidiary by the U.S. government under ARRA and less any amounts paid with respect to a qualified beneficiary under a stop-loss insurance policy.

(e) The Seller shall, pursuant to Section 9.02(g), retain liability for all workers’ compensation cases based on events occurring prior to the Closing Date.

(f) With respect to any Multi employer Plan, the Seller shall be responsible for any liability that may be assessed following Closing in connection with any “complete

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withdrawal” or “partial withdrawal,” as such terms are respectively defined in Sections 4203 and 4205 of ERISA, by the Company, any Subsidiary or any ERISA Affiliate that occurred prior to Closing. The Seller shall indemnify the Company with respect to any costs or liabilities attributable to any “employee benefit plan” (as such term is defined under Section 3(3) of ERISA) subject to Title IV of ERISA (other than any Multiemployer Plan) that may be assessed against the Company or Subsidiary following the Closing on account of the Company or Subsidiary being treated as a “single employer” with the Seller or any ERISA Affiliate.

(g) The Seller shall be solely responsible for, and shall reimburse the Company for all transaction bonuses, severance payments and option or LTIP benefits paid or payable by the Company pursuant to Sections 1(e), 1(f), 2(e) and 4 of the Retention Agreements, as well as any taxes or costs of providing benefits attributable to any such transaction bonuses, severance payments and option or LTIP benefits. The Company shall be solely responsible for, and shall reimburse the Seller for, all retention bonuses paid or payable by the Company pursuant to Sections 2(b) and 2(c) of the Retention Agreements. The Seller shall reimburse the Company for all severance payments paid or payable following the Closing to those employees of the Company or any Subsidiary who were terminated prior to the Closing.

(h) Without limiting the foregoing, except as otherwise provided in this Agreement, the Seller shall retain and be responsible for all liabilities attributable, or any benefits payable, to Continuing Employees and Inactive Employees pursuant to ERISA Plans sponsored by the Seller or any ERISA Affiliate of the Seller (other than the Company or any Subsidiary).

SECTION 5.11. Treatment of Company Loans. Prior to the Closing, the Seller and its Affiliates shall cause the Company and the Subsidiaries to be released from any and all guarantees or Liens associated with the Company Loan Agreements and Affiliate Loans (other than the Seller Loan and DIP Facility), in each case without any further obligation of the Company or any of the Subsidiaries and with any and all related claims against the Company and the Subsidiaries being fully discharged.

SECTION 5.12. Treatment of Seller Loan. Upon the effective date of the Plan and the funding of the obligations set forth in the Subscription Agreement and the initial advance pursuant to the Debt Commitment Letter (or any replacement financing), the Seller shall contribute to the capital of the Company the Seller Loan pursuant to the terms of the Plan. Upon such contribution, the Company shall not have any further obligation with respect to the Seller Loan and all related claims against the Company and the Subsidiaries with respect to the Seller Loan shall be fully discharged.

SECTION 5.13. Termination of Affiliate Transactions. Prior to the Closing, the Seller and its Affiliates shall terminate all Affiliate Transactions (other than those being provided after the Closing pursuant to the Transition Services Agreement), in each case without any further obligation of the Company or any of the Subsidiaries and with any and all related claims against the Company and the Subsidiaries being fully discharged.

SECTION 5.14. Real Estate Matters. Following the Closing Date, the Seller shall cooperate with the Purchaser so that the Purchaser may obtain, for the benefit of the Company: (a) at the cost of Purchaser, all documents reasonably necessary

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(including, without limitation, estoppel certificates, owner’s affidavits and indemnities) for the Purchaser to obtain an ALTA Owner’s Policy of Title Insurance with respect to each parcel of Owned Real Property, including such endorsements as the Purchaser may reasonably require and issued by a title insurance company (“Title Insurer”) designated by the Purchaser; and (b) at the cost of Purchaser, current surveys of each parcel of Owned Real Property. Notwithstanding Seller’s covenants contained in this Section 5.14, Seller disclaims all representations and warranties with regard to the Real Property other than those contained in Section 3.12 and has no obligation to correct any defects on title.

SECTION 5.15. Wolseley Equity Awards. The Seller and its Affiliates (other than the Company and the Subsidiaries) shall be solely responsible for any obligations under any share options and similar incentive award plans of Wolseley plc, Wolseley Investments, Inc., the Seller or any of their respective Affiliates (other than the Company and the Subsidiaries).

SECTION 5.16. Section 409A. The Seller will use reasonable efforts to ensure compliance with Section 409A of the Code with respect to benefits payable to any employee of the Company or any Subsidiary with respect to the transactions contemplated hereby.

SECTION 5.17. Covenant Not to Compete. The Seller agrees that for a period of 3 years after the Closing Date, neither it nor any of its Affiliates will engage in the United States in the Business conducted by the Company and the Subsidiaries on the Closing Date other than through its ownership of the Company and the Subsidiaries. Such restriction shall not prohibit the Seller or any of its Affiliates from (a) engaging in the Construction Loan Business, (b) owning and operating the business of Ferguson Enterprises, Inc. and its subsidiaries in the manner it is conducted on the date hereof, (c) owning and operating any commercial door or door hardware distribution and installation business, (d) owning or acquiring after the date hereof any entity or business that itself is engaged in the Business so long as such entity’s or business’ annual gross revenues from the Business represent no more than 10% of the total combined annual gross revenues of such acquired entity or business at the time of such acquisition. The parties specifically acknowledge and agree that the remedy at law for any breach of this Section 5.17 shall be inadequate and that the Purchaser, in addition to any other relief available to them, shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damage.

SECTION 5.18. Seller Employees. Effective as of the Closing Date, the Company shall be deemed to have offered employment to all those employees of the Seller or any Affiliate of Seller listed on Section 5.18 of the Disclosure Schedule. An employee to whom such offer of employment is deemed made by the Company and who accepts such offer shall be deemed for all purposes to become a Continuing Employee on the day such person reports to work for the Company.

SECTION 5.19. DIP Facility. The Company and the Seller shall each enter into and deliver the DIP Facility promptly after the approval thereof by the Bankruptcy Court, and the Seller agrees to fund, or cause to be funded, the advances required to be made under the DIP Facility subject to the terms and conditions set forth therein. The initial Budget referenced in the DIP Facility is attached hereto as Exhibit 5.19.

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SECTION 5.20. Debt Commitment Letter. At the Closing, the Purchaser shall cause the Investor to enter into and deliver the Debt Commitment Letter. After the Closing Date, the Purchaser shall cause the Company and the Subsidiaries to execute and deliver such documents and take such other actions (other than the satisfaction or removal of Encumbrances) as may be required to satisfy the conditions to the initial advance under the Debt Commitment Letter on or before the effective date of the Plan. On the effective date of the Plan, the Purchaser shall cause the Investor to make the initial advance under the Debt Commitment Letter subject to the terms and conditions set forth therein (unless the Debt Commitment Letter has otherwise terminated in accordance with its terms).

SECTION 5.21. Subscription. At the Closing, the Purchaser shall cause its affiliate party to the Subscription Agreement to enter into and deliver the Subscription Agreement. Upon confirmation of the Plan, the Purchaser shall cause its affiliate party to purchase the interests in the Purchaser described therein subject to the terms and conditions set forth therein.

SECTION 5.22. Management Equity Interests and Incentives.

(a) At the Closing, the Purchaser shall issue to the persons identified in Section 5.22 of the Disclosure Schedule 30,000 Class B Common Shares of the Purchaser.

(b) Neither Purchaser nor Seller shall take any action or cause any action to be taken that could reasonably be expected to cause the Class B Common Shares of Purchaser delivered on the Closing Date and represented by the certificates delivered pursuant to Section 2.06(d) not to be treated as issued and outstanding stock of the Company as of the Closing Date for federal income tax purposes.

(c) The owner of any Class B Common Shares of the Purchaser issued and outstanding as of the Closing Date that could reasonably be treated as being subject to a substantial risk of forfeiture or being nontransferrable (within the meaning of Code Section 83 and the Treasury Regulations issued thereunder) shall make a timely election in accordance with Code Section 83(b) with respect to any such shares issued and outstanding as of the Closing Date in substantially the form delivered to Seller. The Company shall promptly loan to each owner an amount equal to the tax obligation payable with respect to such election or the issuance of such Class B Common Shares. Such loan shall be for term of approximately 8 years and 11 months, and shall have an interest rate equal to the applicable federal rate for such a loan.

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ARTICLE VI

TAX MATTERS

SECTION 6.01. Tax Indemnities.

(a) Notwithstanding any matter listed on the Disclosure Schedule, the Seller shall indemnify and hold the Purchaser, the Company and each of their respective Affiliates harmless against Excluded Taxes and associated expenses. The Company shall be responsible for and shall indemnify and hold the Seller and its Affiliates harmless against all Taxes and associated expenses of or attributable to the Company and the Subsidiaries other than Excluded Taxes.

(b) In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Tax that is allocable to the portion of the taxable period ending on the Closing Date shall be:

(i) in the case of Taxes that are either (x) based upon or related to income or receipts or (y) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible) (other than Conveyance Taxes), deemed equal to the amount which would be payable (after giving effect to amounts which may be deducted from or offset against such Taxes) if the taxable period ended on the Closing Date; and

(ii) in the case of Taxes imposed on a periodic basis with respect to the assets of the Company, or any Subsidiary or any Non-Company Owned Assets, or otherwise measured by the level of any item, deemed to be the amount of such Taxes for the entire Straddle Period (after giving effect to amounts which may be deducted from or offset against such Taxes) (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period), multiplied by a fraction the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period.

(c) Any credit or refund resulting from an overpayment of Taxes for a Straddle Period shall be prorated based upon the method employed in this paragraph (b) taking into account the type of Tax to which the refund relates. In the case of any Tax based upon or measured by capital (including net worth or long-term debt) or intangibles, any amount thereof required to be allocated under this Section 6.01(c) shall be computed by reference to the level of such items on the Closing Date.

(d) Payment by the indemnifying party of any amount due under this Section 6.01 shall be made within 10 days following written notice by the indemnified party that payment of such amounts to the appropriate taxing authority is due, provided that the indemnifying party shall not be required to make any payment earlier than two days before it is due to the appropriate taxing authority. In the case of a Tax that is contested in accordance with the provisions of Section 6.03, payment of the Tax to the appropriate taxing authority will be considered to be due no earlier than the date a final determination to such effect is made by the appropriate taxing authority or court.

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SECTION 6.02. Tax Refunds and Tax Benefits. Any Tax refund or credit (including any interest paid or credited with respect thereto) produced in taxable periods (or portions of a taxable period) ending on or before the Closing Date shall be the property of the Seller, and if received by the Purchaser or the Company or any Subsidiary, shall be paid over promptly to the Seller, net of any Taxes imposed thereon; provided, however, that the Purchaser may waive or may cause to be waived any carryback to a prior tax year or period of any net operating loss or other tax attribute arising in a period beginning after the Closing Date, as provided in Section 172 of the Code or similar provision of state, local or foreign tax law. The Purchaser shall, if the Seller so requests and at the Seller’s expense, cause the Company and the Subsidiaries or other relevant entity to file for and use its reasonable best efforts to obtain and expedite the receipt of any refund to which the Seller is entitled under this Section 6.02. The Purchaser shall permit the Seller to participate in (at the Seller’s expense) the prosecution of any such refund claim.

SECTION 6.03. Contests.

(a) In the event any Governmental Authority informs the Purchaser or the Seller (or any of their respective Affiliates) of any proposed or actual audit, examination, adjustment, claim, assessment, or demand with respect to Taxes of the Company or any Subsidiary for any taxable period that ends on or before the Closing Date or any Straddle Period, the party so informed shall promptly notify the other of such matter. No failure or delay in informing the other party shall reduce or otherwise affect the obligations or liabilities of any party hereto, except to the extent such failure or delay shall have materially and adversely affected the recipient party’s ability to defend against any Liability or claim with respect to such Taxes. Any notice shall be accompanied by a copy of any written notice or other document received from the applicable Governmental Authority with respect to such matter.

(b) In the case of a Tax audit or administrative or judicial proceeding (a “Contest”) that relates to taxable periods ending on or before the Closing Date, the Seller shall have the sole right, at its expense, to control the conduct of such Contest, provided that Seller conducts such Contest diligently and in good faith. If the Seller elects to control any Contest that relates to taxable periods ending on or before the Closing Date, the Purchaser, the Company and any relevant Subsidiary shall have the right, at their expense, to participate in such Contest.

(c) In the case of a Contest that relates to any Straddle Period, the Purchaser or the relevant Subsidiary shall have the sole right, at its expense, to control the conduct of such Contest. The Seller shall have the right, at its expense, to participate in such Contest involving any asserted Tax Liability with respect to which indemnity may be sought from the Seller pursuant to Section 6.01.

(d) Neither the Seller nor the Purchaser (nor any of their respective Affiliates) may settle or compromise any asserted Liability under this Section 6.03 without the prior written consent of the other; provided, however, that consent to settlement or compromise shall not be unreasonably withheld or delayed. The Purchaser and the Seller agree to cooperate, and the

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Purchaser agrees to cause the Company and the Subsidiaries to cooperate, in the defense against or compromise of any claim in any Contest; provided, however, that the Seller shall bear the cost and expense of such cooperation.

SECTION 6.04. Preparation of Tax Returns.

(a) The Seller shall prepare and file (or cause the Company and the Subsidiaries to prepare and file) all Tax Returns relating to each Subsidiary for taxable periods ending on or before the Closing Date. Such Tax Returns shall be prepared on a basis consistent with those prepared for prior taxable periods unless a different treatment of any item is required by Law.

(b) The Purchaser shall prepare and file (or cause the Company and the Subsidiaries to prepare and file) all Tax Returns that relate to the Company or any Subsidiary for all Straddle Periods. Such Tax Returns shall be prepared on a basis consistent with those prepared for prior taxable periods unless a different treatment of any item is required by Law. With respect to any Tax Return required to be filed with respect to the Company or any Subsidiary after the Closing Date and as to which Taxes are allocable to the Seller under Section 6.01 hereof, the Purchaser shall provide the Seller and its authorized representative with a copy of such completed Tax Return and a statement (with which the Purchaser will make available supporting schedules and information) certifying the amount of Tax shown on such Tax Return that is allocable to the Seller pursuant to Section 6.01 at least 30 days prior to the due date (including any extension thereof) for filing of such Tax Return, and the Seller and its authorized representative shall have the right to review and comment on such Tax Return and statement prior to the filing of such Tax Return. The Seller and the Purchaser agree to consult and to attempt in good faith to resolve any issues arising as a result of the review of such Tax Return and statement by the Seller or its authorized representative.

(c) The Purchaser and the Seller shall, to the extent permitted under applicable law, treat or cause to be treated for all Tax purposes the Closing Date as the last day of the taxable year or period of the Company or any Subsidiary.

SECTION 6.05. Tax Cooperation and Exchange of Information. The Seller and the Purchaser shall provide each other with such cooperation and information as either of them reasonably may request of the other (and the Purchaser shall cause the Company and the Subsidiaries to provide such cooperation and information) in filing any Tax Return, amended Tax Return or claim for refund, determining a liability for Taxes or a right to a refund of Taxes or participating in or conducting any audit or other proceeding in respect of Taxes; provided, that such cooperation shall be at the requesting party’s expense. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with related work papers and documents relating to rulings or other determinations by taxing authorities. The Seller and the Purchaser shall make themselves (and their respective employees) reasonably available on a mutually convenient basis to provide explanations of any documents or information provided under this Section 6.05. Notwithstanding anything to the contrary in Section 5.02, each of the Seller and the Purchaser shall retain all Tax Returns, work papers and all material records or other documents in its possession (or in the possession of its Affiliates) relating to Tax matters of the Company or any

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Subsidiary for any taxable period that includes the Closing Date and for all prior taxable periods until the later of (i) the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate, or (ii) 6 years following the due date (without extension) for such Tax Returns. After such time, before the Seller or the Purchaser shall dispose of any such documents in its possession (or in the possession of its Affiliates), the other party shall be given an opportunity, after 90 days prior written notice, to remove and retain all or any part of such documents as such other party may select (at such other party’s expense). Any information obtained under this Section 6.05 shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding.

SECTION 6.06. Conveyance Taxes. All Conveyance Taxes shall be paid equally by Purchaser and the Seller and shall be remitted by the Purchaser when due, and the Purchaser shall file all necessary Tax Returns arid other documentation with respect to all such Conveyance Taxes, and, if required by applicable law, the Seller shall join in the execution of any required Tax Returns and other documentation. The costs and expenses associated with such filings shall be borne equally by the Purchaser and the Seller. The Purchaser and the Seller agree to cooperate in the execution and delivery of all instruments and certificates necessary to enable the Purchaser to comply with any pre-Closing filing requirements.

SECTION 6.07. Tax Covenants. Neither the Purchaser nor any Affiliate of the Purchaser shall amend, refile or otherwise modify, or cause or permit the Company or any Subsidiary to amend, refile or otherwise modify, any Tax election or Tax Return with respect to any taxable period (or portion of any taxable period), ending on or before the Closing Date without the prior written consent of the Seller (which Consent shall not be unreasonably withheld or delayed).

SECTION 6.08. Miscellaneous.

(a) For Tax purposes, the parties agree to treat all payments made under Article II, this Article VI and Article IX, as adjustments to the consideration for the Purchased Assets.

(b) This Article VI shall be the sole provision governing indemnities for Taxes under this Agreement.

(c) For purposes of this Article VI, all references to the Purchaser, the Seller, Affiliates and the Company or any Subsidiary include successors.

(d) Notwithstanding any provision in this Agreement to the contrary, the covenants and agreements of the parties hereto contained in this Article VI shall survive the Closing and shall remain in full force until 60 days following the expiration of the applicable statutes of limitations for the Taxes in question (taking into account any extensions or waivers thereof).

(e) The representations and warranties of the Seller contained herein shall not be affected by any investigation conducted for or on behalf of, or any knowledge possessed or

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acquired at any time by, the Purchaser or its Affiliates, employees or representatives concerning any circumstance, action, omission or event relating to the accuracy or performance of any representation, warranty, covenant or obligation with respect thereto.

(f) Any Tax sharing agreement, Tax allocation agreement, Tax indemnification agreement or arrangement between the Seller or any of its Affiliates (other than the Company and the Subsidiaries), on the one hand, and any of the Company and the Subsidiaries, on the other hand, shall have been terminated, and all payments thereunder settled, immediately prior to the Closing with no payments permitted to be made thereunder on and after the Closing Date.

(g) At or prior to Closing, the Seller shall have delivered to the Purchaser an affidavit in accordance with the requirements of Treasury Regulation Section 1.1445-2(b) in substantially the form of Exhibit 6.08 hereto (the “Non-Foreign Affidavit”) along with written authorization for the Purchaser to deliver such Non-Foreign Affidavit to the Internal Revenue Service.

(h) The Purchaser and Seller shall join in making an election under Code Section 338(h)(10) (and any corresponding elections under state, local, or non-U.S. Tax law) (collectively a “Section 338(h)(10) Election”) with respect to the Purchased Equity Interests and with respect to each of the Company and the Subsidiaries and shall not take any actions (or cause any actions to be taken) that would prevent the Purchaser and Seller from making each such Section 338(h)(10) Election.

ARTICLE VII

BANKRUPTCY MATTERS

SECTION 7.01. Company Covenants and Obligations.

(a) As promptly as practicable after the execution of this Agreement, but in no event later than the Petition Date, the Company shall, and shall cause the other Debtors to, commence the Bankruptcy Case and file the Plan and, if necessary, the Disclosure Statement and shall use its reasonable best efforts to obtain approval of the Disclosure Statement, if necessary, and entry of the Confirmation Order.

(b) No Debtor shall, without the prior consent of the Purchaser and the Seller, amend or seek to amend the Plan or the Disclosure Statement in a manner that would adversely affect Purchaser or the Seller, or Purchaser’s or the Seller’s rights hereunder or thereunder following such time as the Plan and the Disclosure Statement have been filed with the Bankruptcy Court.

SECTION 7.02. Seller and Purchaser Covenants and Obligations.

(a) Each of the Seller and the Purchaser will not agree to, consent to, provide any support to, or participate in the formulation of any modification of the Plan, unless such modification has been agreed to by all parties to this Agreement. The Seller and the Purchaser

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will not agree to, vote for, consent to, provide any support to, or participate in the formulation of any other plan in the Bankruptcy Case and will not vote in favor of any plan other than the Plan. The Seller and the Purchaser further agrees that it will not object to or otherwise commence any proceeding to oppose or alter any of the terms of this Agreement, the Plan, or any Reorganization Document and will not take any action which is inconsistent with, or that would delay approval or confirmation or approval of the Plan or any Reorganization Document; provided, however, that the terms of all such Reorganization Documents are customary and otherwise consistent with the material terms of this Agreement, Without limiting the generality of the foregoing, the Seller and the Purchaser may not directly or indirectly seek, solicit, support or encourage any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of the Company or any of the Subsidiaries that could reasonably be expected to prevent, delay or impede the confirmation or approval of the Plan or any Reorganization Document.

(b) The Seller agrees and covenants that it shall, following receipt of solicitation materials, exercise all votes to which it is entitled with respect to the Seller Loan, to accept the Plan in the Bankruptcy Case (and not withdraw or change such votes in either case).

(c) The Purchaser and the Seller shall cooperate with the Company in response to any reasonable request for the supply of financial and other information reasonably necessary to demonstrate the feasibility of the Plan. The Purchaser and the Seller shall reasonably cooperate with the Company with respect to any description of the Purchaser in the Plan or the Disclosure Statement, and shall promptly notify the Company if at any time before the Effective Date it becomes aware that the Disclosure Statement contains any untrue statement of material of fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein with respect to such information regarding the Purchaser and the Seller, in light of the circumstances under which they were made, not misleading.

(d) Notwithstanding any provision to the contrary, neither the Purchaser nor the Seller shall have any right to direct the Company to include any provision in, or to take any action under, the Plan or the Confirmation Order other than as set forth in this Agreement or as shall be required to effectuate, in a manner reasonably satisfactory to the Purchaser and the Seller, the transactions to be consummated under the Plan.

SECTION 7.03. Leased Real Property.

(a) The Plan is conditioned upon, among other things, the rejection of certain leases of Leased Real Property and the limitation of damages related to such rejection as provided under Section 502(b)(6) of the Bankruptcy Code. The leases to be rejected in the Bankruptcy Case (the “Rejected Leases”) include all locations where the Company and the Subsidiaries have previously ceased operations and certain additional leased locations. The Seller and Purchaser have agreed upon an initial list of Rejected Leases (the “Rejected Lease Schedule”), which includes the Seller’s estimate of the damages arising from the rejection of each of such leases as limited by Section 502(b)(6) of the Bankruptcy Code (each an “Individual Estimated Damage Amount” and, in the aggregate, the “Aggregate Estimated Lease Damage Amount”). The Aggregate Estimated Lease Damage Amount calculated pursuant to the Rejected Lease Schedule as agreed between Seller and Purchaser on the date hereof shall be referred to as

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the “Initial Estimated Lease Damage Amount”. The Purchaser may modify the Rejected Lease Schedule from time to time during the Bankruptcy Case to add or delete leases expected to be rejected in the Bankruptcy Case.

(b) For each lease that is deleted from the Rejected Lease Schedule, the Aggregate Estimated Lease Damage Amount shall be reduced by the amount of the Individual Estimated Damage Amount associated with such lease. For each lease that is added to the Rejected Lease Schedule, the Aggregate Estimated Lease Damage Amount shall be increased by the Individual Estimated Damage Amount associated with such lease (based on the estimate provided by Seller and delivered with the Rejected Lease Schedule.

(c) The Company shall be responsible for the settlement of claims for damages arising from the rejection of the Rejected Leases, provided that (i) the Company shall, promptly upon receipt, forward to the Seller copies of all demands for payment or proofs of claims for such damages, including all supporting data, (ii) the Company shall not settle any claim for an amount greater than the applicable Estimated Lease Rejection Damages without the prior written consent of the Seller and (iii) the Company shall, promptly upon receipt, provide to the Seller copies of any final settlements of claims for such damages. In the event that any claim with a landlord cannot be resolved within a reasonable period and after good faith negotiations, the Company shall tender the case to the Seller for settlement as if it were a Third Party Claim pursuant to the procedures set forth in Section 9.05(b) (but such tender shall not affect or be limited by the provisions of Section 9.01 or 9.04).

(d) The Seller agrees to reimburse the Company for the amount, if any, by which the Lease Damages (as defined below) exceed 105% of the Aggregate Estimated Lease Damage Amount for the Rejected Leases as set forth on the final Rejected Lease Schedule. “Lease Damages” means the aggregate amount required to be paid upon final resolution of Allowed Claims (as defined in the Plan) of landlords of Rejected Leases. Seller shall be entitled to offset against the amount of Lease Damages owed to the Company the amount of the aggregate net after tax benefit to be realized by the Company and the Subsidiaries during the first twelve months after the effective date of the Plan arising from reduced annual rent expense applicable to the Continuing Leases (by comparison to the annual rent expense applicable to the twelve month period prior to the effective date of the Plan)(the “Continuing Lease Savings”). Seller may offset up to $3,000,000 of the Company’s Continued Lease Savings from its payment in respect of Lease Damages. If the Company’s Continued Lease Savings is greater than $3,000,000 Purchaser shall pay such excess to the Seller ratably on a monthly basis as such benefit is realized, but in no event will Seller be entitled to receive payments (including any offset taken) in excess of the total amount of Lease Damages that Seller actually pays.

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SECTION 7.04. Confirmation of Executory Contracts. The Purchaser and the Company agree to confirm and assume this Agreement and the Transition Services Agreement as executory contracts in the Bankruptcy Case.

ARTICLE VIII

CONDITIONS TO CLOSING

SECTION 8.01. Conditions to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written waiver, at or prior to the Closing, of each of the following conditions:

(a) No Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or Governmental Order (whether temporary, preliminary or permanent) that has the effect of making the transactions contemplated by this Agreement or the Ancillary Agreements illegal or otherwise restraining or prohibiting the consummation of such transactions; and

(b) Closing Deliveries. The Seller shall have received each of the items listed in Section 2.06.

SECTION 8.02. Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written waiver, at or prior to the Closing, of each of the following conditions:

(a) No Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or Governmental Order (whether temporary, preliminary or permanent) that has the effect of making the transactions contemplated by this Agreement or the Ancillary Agreements illegal or otherwise restraining or prohibiting the consummation of such transactions;

(b) Company Loans. The Seller and its Affiliates shall have caused the Company and the Subsidiaries to have been released from any and all guarantees or Liens associated with the Company Loan Agreements and Affiliate Loans (other than the Seller Loan and DIP Facility), in each case without any further obligation of the Company or any of the Subsidiaries and with any and all related claims against the Company and the Subsidiaries being fully discharged;

(c) Affiliate Transactions. The Seller and its Affiliates shall have terminated, or caused to be terminated, all Affiliate Transactions listed in Section 3.16 of the Disclosure Schedule, in each case without any further obligation of the Company or any of the Subsidiaries and with any and all related claims against the Company and the Subsidiaries being fully discharged; and

(d) Closing Deliveries. The Purchaser shall have received each of the items listed in Section 2.05.

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ARTICLE IX

INDEMNIFICATION

SECTION 9.01. Survival of Representations and Warranties. The representations and warranties of the parties hereto contained in this Agreement shall survive the Closing for a period of 18 months after the Closing; provided, however, that (a) the representations and warranties made pursuant to Sections 3.01, 3.02, 3.03, 3.16, 3.18, 4.01, 4.02 and 4.09 shall survive indefinitely, (b) the representations and warranties made pursuant to Sections 3.13 and 3.15 shall survive until 60 days after the expiration of the applicable statute of limitations and (c) the representations and warranties made pursuant to Section 3.10 shall survive the Closing until the 3rd anniversary of the Closing Date; provided, further, that any claim made with reasonable specificity by the party seeking to be indemnified within the time periods set forth in this Section 9.01 shall survive until such claim is finally and fully resolved.

SECTION 9.02. Indemnification by the Seller. The Purchaser, the Company and its Subsidiaries, officers, directors, employees, agents, successors and assigns (each, a “Purchaser Indemnified Party”) shall, from and after the Closing, be indemnified and held harmless by the Seller, for and against all damages, demands, causes of actions, assessments, Liabilities, claims, costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys’ and consultants’ fees and expenses) (hereinafter, a “Loss”) imposed upon, asserted against, resulting to or suffered or incurred by them, to the extent arising out of or resulting from:

(a) the breach of any representation or warranty made by either the Seller contained in this Agreement (it being understood that such representations and warranties shall be interpreted without giving effect to any limitations or qualifications as to “materiality” (including the word “material”) or “Material Adverse Effect” set forth therein (other than contained in any defined term));

(b) the breach or nonperformance of any covenant, obligation or agreement by the Seller contained in this Agreement;

(c) the Excluded Assets and all Liabilities related thereto;

(d) all actions necessary to give effect to the Restructuring Transactions;

(e) any Liability of the Company or the Subsidiaries under a control group theory of liability imposed under Environmental Laws, labor Laws or ERISA and similar statutes to the extent related to actions, policies or violations of Persons other than the Company and the Subsidiaries;

(f) the Seller’s, or any of its Affiliates’ conduct of the Construction Loan Business either prior to or following the Closing (excluding any impact on the business or customers of the Company or the Subsidiaries caused by the extension of credit, failure to extend credit or exercise of remedies by the Seller or its Affiliates in connection with the conduct of the Construction Loan Business); or

(g) any Losses of any Purchaser Indemnified Party in excess of $3,000,000 in the aggregate arising from any Third Party Claim (i) existing as of the Closing Date or (ii) brought or asserted against a Purchaser Indemnified Party arising from actions taken by any of the Seller, the Company or the Subsidiaries prior to the Closing, including, without limitation, those Third Party Claims listed in Section 9.02(g) of the Disclosure Schedule.

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SECTION 9.03. Indemnification by the Purchaser. The Seller and its Affiliates, officers, directors, employees, agents, successors and assigns (each, a “Seller Indemnified Party”) shall, from and after the Closing, be indemnified and held harmless by the Purchaser for and against any and all Losses imposed upon, asserted against, resulting to or suffered or incurred by them, to the extent arising out of or resulting from:

(a) the breach of any representation or warranty made by the Purchaser contained in this Agreement; or

(b) unless such matter is subject to indemnification by Seller pursuant to the provisions of this Agreement, any Liability of the Seller or its Affiliates under a control group theory of liability imposed under Environmental Laws, labor Laws or ERISA and similar statutes to the extent related to actions, policies or violations of Persons other than the Seller and its Affiliates; or

(c) the breach or nonperformance of any covenant, obligation or agreement by the Purchaser contained in this Agreement.

SECTION 9.04. Limits on Indemnification.

(a) No claim may be asserted nor may any Action be commenced against either party for breach of any representation, warranty, covenant or agreement contained herein, unless written notice of such claim or Action is received by such party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or Action on or prior to the date on which the representation, warranty, covenant or agreement on which such claim or Action is based ceases to survive as set forth in Section 9.01.

(b) Notwithstanding anything to the contrary contained in this Agreement: (i) an Indemnifying Party shall not be liable for any claim for indemnification pursuant to Section 9.02(a) or Section 9.03(a), unless and until the aggregate amount of indemnifiable Losses which may be recovered from the Indemnifying Party equals or exceeds $3,000,000 (which shall include any amounts paid by any Purchaser Indemnified Parties in connection with any of the Third Party Claims referenced in Section 9.02(g)), after which the Indemnifying Party shall be liable only for those Losses in excess of such amount; (ii) no Losses may be claimed under Section 9.02(a) or Section 9.03(a) by any Indemnified Party or shall be reimbursable by or shall be included in calculating the aggregate Losses set forth in clause (i) above other than Losses in excess of $50,000 resulting from any single claim or aggregated claims arising out of the same or similar facts, events or circumstances; and (iii) the maximum amount of indemnifiable Losses which may be recovered from an Indemnifying Party arising out of or resulting from the causes set forth in Section 9.02(a) or Section 9.03(a) shall be an amount equal to $20,000,000; provided, however, that the foregoing limitations shall not apply to any claim

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based upon fraud in the inducement or any claim based upon any Losses incurred by an Indemnified Party based upon, arising from or relating to any inaccuracy in or breach of any of the representations and warranties contained in Sections 3.01, 3.02, 3.03, 3.16 and 3.24.

(c) Neither party hereto shall have any liability under this Article VIII for any punitive, incidental, speculative or special damages. Notwithstanding the foregoing, it is understood and agreed that the limitation on recovery of punitive, incidental, speculative or special damages contained in the preceding sentence shall not limit a party’s ability to recover direct or general damages or change or have any bearing on the interpretation of what constitutes direct or general damages, it being understood that direct and general damages shall be given its normal meaning under applicable Law.

(d) For all purposes of this Article IX, “Losses” shall (i) be net of (A) any insurance proceeds or other recoveries (less costs of collection) actually received by the Indemnified Party or its Affiliates prior to payment by the Indemnifying Party in connection with the facts giving rise to the right of indemnification, (B) any actually realized Tax benefit to the Indemnified Party or its Affiliates utilized in a year during which the Losses were incurred arising in connection with the accrual, incurrence or payment of any such Losses or resulting from the receipt of any indemnification payment under this Article IX, and (C) any benefit or recovery actually realized by the Indemnified Party or its Affiliates prior to payment by the Indemnifying Party pursuant to agreements with third parties providing indemnification or similar protections for the benefit of the Indemnified Party in connection with the facts giving rise to the Indemnified Party’s right of indemnification under this Article IX, and (ii) exclude any loss of business or collectibility of accounts receivable arising from or relating to the exercise of remedies or failure to extend future loans in the conduct of the Construction Loan Business.

(e) The representations and warranties of the Seller contained herein shall not be affected by any investigation conducted for or on behalf of, or any knowledge possessed or acquired at any time by, the Purchaser, or its Affiliates, employees or representatives concerning any circumstance, action, omission or event relating to the accuracy or performance of any representation, warranty, covenant or obligation with respect thereto.

SECTION 9.05. Direct Claims; Third-Party Claims.

(a) An Indemnified Party shall give the Indemnifying Party notice of any matter which an Indemnified Party has determined has given or is reasonably likely to give rise to a right of indemnification under this Agreement and which does not involve a Third-Party Claim (each, a “Direct Claim”), within 60 days of such determination, and in any event within the survival periods set forth in Section 9.01, stating the amount of the Loss, if known, and method of computation thereof, the facts and circumstances which form the basis (or bases) for such claim, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises. Failure to provide such notice shall not relieve the Indemnifying Party from any of its obligations under this Article IX except to the extent that the defense of such claim is prejudiced by such failure to give such prompt notice (and then only to such extent) and shall not relieve the Indemnifying Party from any other Liability that it may have to any Indemnified Party other than under this Article IX. Promptly following receipt of any notice of a Direct Claim, the Indemnifying Party shall notify the Indemnified Party as to

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whether the Indemnifying Party accepts liability for any such Liability. If the Indemnifying Party disputes its liability with respect to such Direct Claim, the Indemnifying Party and the Indemnified Party shall use their respective commercially reasonable efforts to reach an amicable resolution of such dispute.

(b) If any Action, audit, claim, demand or assessment shall be brought or asserted by any third party (each, a “Third-Party Claim”) which, if adversely determined would entitle the Indemnified Party to indemnification pursuant to this Article IX, within 30 days of the receipt of notice of such Third-Party Claim, the Indemnified Party shall give the Indemnifying Party notice thereof specifying the facts and circumstances which form the basis (or bases) for such claim, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Patty from any of its obligations under this Article IX except to the extent that the defense of such Claim is prejudiced by such failure to give such prompt notice (and then only to such extent) and shall not relieve the Indemnifying Party from any other Liability that it may have to any Indemnified Party other than under this Article IX. The Indemnifying Party shall be entitled to assume and control the defense of such Third-Party Claim at its expense through counsel reasonably acceptable to the Indemnified Party if it gives notice of its intention to do so to the Indemnified Party within 15 days of the receipt of notice of a Third-Party Claim from the Indemnified Party. If the Indemnifying Party does not elect to compromise or defend against a Third-Party Claim, fails to timely notify the Indemnified Party of its election to do so, or otherwise abandons the defense of a Third-Party Claim, the Indemnified Party may settle (without prejudice of any of its rights as against the Indemnifying Party), compromise or defend such Third-Party Claim on behalf of and for the account and risk of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense of such Third-Party Claim at any time prior to settlement, compromise or final determination thereof. If the Indemnifying Party elects to undertake any such defense against a Third-Party Claim, the Indemnified Party may participate in such defense through counsel of its choice at its own expense. The Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. If the Indemnifying Party elects to direct the defense of any such claim or proceeding, (i) the Indemnifying Party shall not, without the prior written consent of the Indemnified Party, admit any liability with respect to, or settle, compromise or discharge, any Third-Party Claim or consent to the entry of any judgment with respect thereto, except in the case of any settlement that (A) includes as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a written release from all liability in respect of such Third-Party Claim and which does not impose any obligation on the Indemnified Party, or (B) provides solely for monetary relief to be paid by the Indemnifying Party and which does not otherwise involve or purport to bind or limit the Indemnified Party, and (ii) the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, any Third- Party Claim or consent to the entry of any judgment with respect thereto, unless (A) the Indemnifying Party consents thereto in writing (which consent shall not be unreasonably withheld or delayed), and the Indemnifying Party will not be subject to any liability for any such admission, settlement, compromise, discharge or consent to judgment made by an Indemnified Party without such prior written consent of the Indemnifying Party; (B) the Indemnifying Party

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withdraws from the defense of such Third-Party Claim liability; or (C) a final judgment from which no appeal may be taken by or on behalf of the Indemnifying Party is entered against the Indemnified Party for such Third-Party Claim. If the Indemnified Party assumes the defense of any such claims or proceeding pursuant to this Section 9.05 and proposes to settle such claims or proceeding prior to a final judgment thereon or to forgo any appeal with respect thereto, then the Indemnified Party shall give the Indemnifying Party prompt written notice thereof and the Indemnifying Party shall have the right to participate in the settlement or assume or reassume the defense of such claims or proceeding.

(c) The Purchaser hereby tenders to the Seller the various Third Party Claims listed in Section 9.02(g) of the Disclosure Schedule, and the Seller hereby assumes the defense of all such claims as the Indemnifying Party. No further notice of such claims shall be required under Section 9.05(b).

(d) The Company and the Purchaser hereby transfer and assign to the Seller any and all rights and benefits to which the Company and the Subsidiaries may be entitled with respect to Third-Party Claims brought or asserted against a Purchaser Indemnified Party to the extent subject to indemnification pursuant to Section 9.02(g), including, without limitation, those Third-Party Claims listed in Section 9.02(g) of the Disclosure Schedule. Such assigned rights include, without limitation, all claims and rights arising under insurance policies and other indemnity arrangements from third parties (including Affiliates of the Seller) relating to such claims. The Company and the Purchaser agree that the rights of the Purchaser Indemnified Parties under Section 9.02 shall be their sole rights and exclusive remedies in respect of such claims. Unless otherwise directed by the Seller, the Purchaser Indemnified Parties shall not make or pursue any claims directly against any insurance policies or other indemnity arrangements assigned to the Seller hereunder relating to such claims. The Company shall hold in trust for the benefit of the Seller and promptly remit to the Seller any amounts received by the Purchaser Indemnified Parties after the Closing Date from any insurance policies or other indemnity arrangements assigned to the Seller hereunder. The Seller shall also be subrogated to any and all other rights to which the Purchaser Indemnified Parties may be entitled in respect of matters indemnified by the Seller pursuant to Section 9.02.

SECTION 9.06. Remedies. The Purchaser and the Seller acknowledge and agree that, except for matters involving fraud in the inducement, (i) following the Closing, the indemnification provisions of Section 6.01, Section 9.02 and Section 9.03 shall be the sole and exclusive remedies of the Purchaser and the Seller for any breach by the other party of the representations and warranties in this Agreement and for any failure by the other party to perform and comply with any covenants and agreements in this Agreement, except that if any of the provisions of this Agreement are not performed in accordance with their terms or are otherwise breached, the parties shall be entitled to specific performance of the terms thereof in addition to any other remedy at law or equity, and (ii) anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of the Purchaser and the Seller, following the Closing, to rescind this Agreement or any of the transactions contemplated hereby. For the avoidance of doubt, nothing contained in this Article IX shall affect the rights and remedies of the Purchaser or the Seller prior to the Closing. Each party hereto shall take all reasonable steps to mitigate its Losses upon and after becoming aware of any event which could reasonably be

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expected to give rise to any Losses. For purposes of this Article IX, the determination regarding under which provision of this Agreement a claim for indemnification shall be brought shall be within the sole and exclusive discretion of the Indemnified Party.

SECTION 9.07. Tax Matters. Anything in this Article IX to the contrary notwithstanding, the rights and obligations of the parties with respect to indemnification for any and all Tax matters shall be solely governed by Article VI and shall not be subject to the provisions of this Article IX.

ARTICLE X

TERMINATION

SECTION 10.01. Termination.

(a) This Agreement shall automatically terminate, unless extended by the Purchaser and the Seller in writing, if the Closing shall not have occurred by May 8, 2009.

(b) This Agreement may be terminated at any time prior to the Closing:

(i) by either the Purchaser or the Seller in the event that any Governmental Order restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement shall have become final and nonappealable; or

(ii) by the mutual written consent of the Seller and the Purchaser.

SECTION 10.02. Effect of Termination. In the event of termination of this Agreement as provided in Section 10.01, this Agreement shall forthwith become void and there shall be no liability on the part of either party hereto except (a) as set forth in Section 5.03, which shall survive such termination, and (b) that nothing herein shall relieve either party from liability for any breach of this Agreement occurring prior to such termination.

ARTICLE XI

GENERAL PROVISIONS

SECTION 11.01. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be borne by the party incurring such costs and expenses, whether or not the Closing shall have occurred. For the avoidance of doubt, the Seller shall be solely responsible for all expenses, including, fees and disbursements of counsel, financial advisors and accountants, incurred by the Seller or any of its Affiliates (including the Company and the Subsidiaries) in connection with this Agreement and the transactions contemplated by this Agreement prior to the Closing, whether or not the Closing shall have occurred.

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SECTION 11.02. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt (or if that day is not a Business Day, on the first following Business Day), which, in the case of delivery by facsimile, shall be deemed to include receipt by the Person providing such notice of a confirmation page) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.02):

(a)	if to the Seller, to:
	Wolseley Investments North America, Inc.
	12500 Jefferson Avenue
	Newport News, Virginia 23602
	Facsimile:	(757) 989-2501
	Attention:	Chief Executive Officer
		Chief Financial Officer
	with copies (which shall not constitute notice) to:
	Hunton & Williams LLP
	951 East Byrd Street
	Richmond, Virginia 23219
	Facsimile:	(804) 343-4528
	Attention:	Douglas S. Granger, Esq.
	and
	Wolseley plc
	Parkview 1220
	Arlington Business Park
	Theale, Reading RG7 4GA
	United Kingdom
	Facsimile:	+44 (0) 118 929-8701
	Attention:	Group Company Secretary and General Counsel
(b)	if to the Purchaser, to:
	c/o The Gores Group, LLC
	10877 Wilshire Boulevard, 18th Floor
	Los Angeles, California 90024
	Facsimile:	(310) 209-3310
	Attention:	General Counsel

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with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071
Facsimile:	(213) 687-5600
Attention:	Rick C. Madden, Esq.

SECTION 11.03. Public Announcements. Neither party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated by this Agreement or otherwise communicate with any news media without the prior written consent of the other party unless otherwise required by Law or applicable stock exchange regulation, and the parties to this Agreement shall cooperate as to the timing and contents of any such press release, public announcement or communication.

SECTION 11.04. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.

SECTION 11.05. Entire Agreement. This Agreement (including the documents and instruments referred to herein), the Ancillary Agreements, the Guarantee and the Confidentiality Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the Seller and the Purchaser with respect to the subject matter hereof and thereof.

SECTION 11.06. Assignment, This Agreement may not be assigned by operation of law or otherwise without the express written consent of the Seller and the Purchaser (which consent may be granted or withheld in the sole discretion of the Seller or the Purchaser), as the case may be.

SECTION 11.07. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Seller and the Purchaser or (b) by a waiver in accordance with Section 11.08.

SECTION 11.08. Waiver. Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing

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signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

SECTION 11.09. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied (including the provisions of Article IX relating to indemnified parties), is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.

SECTION 11.10. Currency. Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars.

SECTION 11.11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the applicable provisions of the Bankruptcy Code and the laws of the State of New York, including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327(b), and without reference to any New York conflict of laws rule that would result in the application of the laws of a jurisdiction other than New York.

SECTION 11.12. Submission to Jurisdiction.

(a) The parties agree unconditionally that all Actions arising out of or relating to this Agreement (other than those relating to the Plan) shall be heard and determined exclusively in any New York federal court sitting in the Borough of Manhattan of The City of New York; provided, further, that, in such case, if such federal court does not have jurisdiction over such Action, such Action shall be heard and determined exclusively in any New York state court sitting in the Borough of Manhattan of The City of New York. Consistent with the preceding sentence, the parties hereto hereby (i) submit to the exclusive jurisdiction of any federal or state court sitting in the Borough of Manhattan of The City of New York for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (ii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated by this Agreement (other than those relating to the Plan) may not be enforced in or by any of the above-named courts.

(b) Without limiting any party’s right to appeal any order of the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Agreement relating to the Plan and to decide any claims or disputes which may arise or result from, or be connected with, the Plan, any breach or default hereunder relating to the Plan, or the transactions contemplated by the Plan, and (ii) any and all proceedings related to the foregoing

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shall be filed and maintained only in the Bankruptcy Court, and the parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court and shall receive notices at such locations as indicated in Section 11.02. Notwithstanding this Section 11.12(b), if the Bankruptcy Case has closed, actions arising out of or relating to the Plan shall be subject to jurisdiction and venue as set forth in Section 11.12(a).

SECTION 11.13. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.13.

SECTION 11.14. Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with the terms hereof, and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other right or remedy to which either party may be entitled, at law or equity.

SECTION 11.15. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement to be executed as of the date first written above,

WOLSELEY INVESTMENTS NORTH AMERICA, INC.
By:	/s/ David L. Keltner
	Name:	David L. Keltner
	Title:	CFO
STOCK BUILDING SUPPLY HOLDINGS, LLC
By:	/s/ Bryan J. Yeazel
	Name:	Bryan J. Yeazel
	Title:	Vice President, General Counsel and Corporate Secretary
SATURN ACQUISITION HOLDINGS, LLC
By:	/s/ Ian R. Weingerten
	Name:	Ian R. Weingerten
	Title:	Vice President

Petition Date: May 6, 2009

EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

STOCK BUILDING SUPPLY HOLDINGS, INC.

ARTICLE ONE

The name of the corporation is Stock Building Supply Holdings, Inc. (the “Corporation”).

ARTICLE TWO

The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, 19808. The name of the Corporation’s registered agent at such address is Corporation Services Company.

ARTICLE THREE

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

ARTICLE FOUR

Section 1. Authorized Shares.

A. The total number of shares of capital stock which the Corporation is authorized to issue is 1,191,486 shares, of which (A) 1,000,000 shares are designated as Class A Voting Common Stock, $0.01 par value per share (the “Class A Common Stock”), (B) 126,486 shares are designated as Class B Non-Voting Common Stock, $0.01 par value per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), (C) 10,000 shares are designated as Class A Junior Preferred Stock, $0.01 par value per share (the “Class A Preferred Stock”), (D) 50,000 shares are designated as Class B Senior Preferred Stock, $0.01 par value per share (the “Class B Preferred Stock”), and (E) 5,000 shares are designated as Class C Convertible Preferred Stock, $0.01 par value per share (the “Class C Preferred Stock” and, together with the Class A Preferred Stock and the Class B Preferred Stock, the “Preferred Stock”).

B. The designations, powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions thereof with respect to the Preferred Stock and Common Stock are as set forth in this Article Four.

Section 2. Definitions.

Capitalized words and phrases used and not otherwise defined elsewhere in this Certificate of Incorporation shall have the following meanings:

“Affiliate” means, with reference to a specified Person: (a) a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the specified Person, (b) any Person that is an executive officer, general partner, managing member or trustee of, or serves in a similar capacity with respect to, the specified Person, or for which the specified Person is an executive officer, general partner, managing member or trustee, or serves in a similar capacity, or (c) any member of the Immediate Family of the specified Person.

“Applicable Rate” means 8% per annum.

“Assignee” means any Person (a) to whom a Stockholder (or assignee thereof) Transfers all or any part of its interest in the Corporation in compliance with the terms of this Certificate of Incorporation.

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

“Certificate of Incorporation” means this Certificate of Incorporation, as may be amended from time to time.

“Change of Control” means (i) a merger or consolidation of the Corporation with any other Person (other than a reincorporation, reorganization or similar transaction where those Persons controlling the Corporation or their affiliates continue to control the Corporation after such transaction), (ii) any Person other than Gores or its Affiliates directly or indirectly becoming the beneficial owner of a majority of the outstanding Voting Stockholder Interests of the Corporation (measured as having the right to appoint or elect a majority of the members of the Board) or (iii) the sale or disposition (by merger or otherwise) of all or substantially all of the Corporation’s assets to any Person other than Gores or its affiliates.

“Class A Common Stock” is defined in Section 1.A of this Article Four.

“Class A Preferred Junior Shares” is defined in Section 4.A of this Article Four.

“Class A Preferred Liquidation Preference” is defined in Article FourSection 4.C.i of this Article Four.

“Class A Preferred Stock” is defined in Section 1.A of this Article Four.

“Class B Common Stock” is defined in Section 1.A of this Article Four.

“Class B Preferred Distribution Payment Date” is defined in Section 5.B.i of this Article Four.

“Class B Preferred Distribution Rate” is defined in Section 5.B.i of this Article Four.

“Class B Preferred Junior Shares” is defined in Section 5.A of this Article Four.

“Class B Preferred Liquidation Preference” is defined in Section 5.C of this Article Four.

“Class B Preferred Redemption Right” is defined in Section 5.D of this Article Four.

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“Class B Preferred Senior Stock” is defined in Section 5.A of this Article Four.

“Class B Preferred Stock” is defined in Section 1.A of this Article Four.

“Class C Preferred Junior Shares” is defined in Section 6.A of this Article Four.

“Class C Preferred Liquidation Preference” is defined in Section 6.C.i of this Article Four.

“Class C Preferred Original Purchase Price” is defined in Section 6.C.i of this Article Four.

“Class C Preferred Stock” is defined in Section 1.A of this Article Four.

“Class C Preferred Stock Conversion Amount” is defined in Section 6.E.i of this Article Four.

“Class C Preferred Stock Conversion Date” is defined in Section 6.E.iii.a) of this Article Four.

“Class C Preferred Stock Conversion Price” is defined in Section 6.E.i of this Article Four.

“Code” means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).

“Common Stock” is defined in Section 1.A of this Article Four.

“Corporation” is defined in Article One.

“Corporation Class A Preferred Redemption Right” is defined in Section 4.D.i of this Article Four.

“Corporation Class B Preferred Redemption Right” is defined in Section 5.D.i of this Article Four.

“DGCL” is defined in Article Three.

“Drag-Along Rights” is defined in Section 11.A of this Article Four.

“Drag-Along Sale” is defined in Section 11.A of this Article Four.

“Drag-Along Sale Date” is defined in Section 11.C of this Article Four.

“Drag-Along Sale Notice” is defined in Section 11.C of this Article Four.

“Drag-Along Stockholders” is defined in Section 11.A of this Article Four.

“Exempt Shares” shall mean the issuance of Shares (a) as consideration in connection with acquisitions of any businesses or assets from another Person, (b) in the form of Class B Common Stock or substantially equivalent rights to employees, officers and directors of the Corporation or any subsidiary of the Corporation in connection with any compensation plan approved by the Board, (c) pursuant to an IPO and (d) pursuant to issuances of Class B Common Stock to Glendon Saturn Holdings, LLC (whose members consist solely of officers and employees of Glendon Partners, Inc.) and its Affiliates not to exceed 2.5% of the aggregate outstanding Common Stock.

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“Gores” means Gores Building Holdings, LLC, a Delaware limited liability company.

“Immediate Family” means, and is limited to, an individual Stockholder’s spouse, parents, parents-in-law, grandparents, children, siblings, and grandchildren, in each case as of the date of determination, or a trust, estate or other estate-planning vehicle, all of the beneficiaries of which consist of such Stockholder or members of such Stockholder’s Immediate Family.

“IPO” shall mean a sale of the equity of the Corporation (including any Shares outstanding at such time) in an underwritten (firm commitment) public offering in accordance with the applicable securities laws resulting in the listing or quotation of the equity of the Corporation on one or more nationally recognized stock exchange or quotation system (including, without limitation, the New York Stock Exchange and The NASDAQ Global Select Market).

“Liquidator” is defined in Section 12.A of this Article Four.

“Overallotment Interests” are defined in Section 10.C of this Article Four.

“Person” means and includes an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated organization, a government or any department or agency thereof, or any entity similar to any of the foregoing.

“Plan Assets” shall have the meaning set forth in the Plan Asset Regulation.

“Plan Asset Regulation” means 29 C.F.R. §2510.3-101.

“Preferred Stock” is defined in Section 1.A of this Article Four.

“Proposed Purchaser” is defined in Section 11.A of this Article Four.

“Record Date” is defined in Section 5.B.i of this Article Four.

“Requisite Stockholders” means Stockholders who hold a majority of the Voting Stockholder Interests; provided, that so long as Gores or any of its Affiliates continues to own at least 50% of the number of Voting Stockholder Interests owned on the date of this Certificate of Incorporation, Requisite Stockholders shall mean Gores.

“Selling Group” is defined in Section 10.A of this Article Four.

“Selling Group Representative” is defined in Section 10.B of this Article Four.

“Share” means an equal, fractional share of any particular class or series of Common Stock or Preferred Stock; provided, however, that the Common Stock and the Preferred Stock shall have the differences in rights and privileges as specified in this Certificate of Incorporation.

“Stockholders” means, for purposes of this Certificate of Incorporation, the Persons owning Shares, as reflected in the books and records of the Corporation, as amended from time to time, including any Stockholders who are issued Overallotment Interests, with each Stockholder being referred to, individually, as a “Stockholder.”

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“Stockholder’s Allotment” is defined in Section 10.A of this Article Four.

“Tag-Along Notice Date” is defined in Section 10.B of this Article Four.

“Tag-Along Participation Notice” is defined in Section 10.C of this Article Four.

“Tag-Along Sale” is defined in Section 10.A of this Article Four.

“Tag-Along Sale Date” is defined in Section 10.B of this Article Four.

“Tag-Along Sale Notice” is defined in Section 10.B of this Article Four.

“Transfer” when used with respect to a Share (or rights appurtenant thereto), means any sale, conveyance, exchange, assignment, pledge, encumbrance, gift, bequest, hypothecation or other transfer or disposition by any other means, whether for value or no value and whether voluntary or involuntary (including, without limitation, by operation of law), or an agreement to do any of the foregoing. The term “Transferred” shall have a correlative meaning.

“Voting Stockholder” means any holder of Class A Common Stock and/or Class C Preferred Stock.

“Voting Stockholder Interests” means the Class A Common Stock and the Class C Preferred Stock, pursuant to the provisions set forth in Section 6.D of this Article Four.

Section 3. Preemptive Rights.

A. If the Corporation proposes to issue additional Shares (other than Exempt Shares) of the Corporation, each Stockholder shall have the right to subscribe, on a pro rata basis in accordance with its percentage ownership of Common Stock, to purchase its proportionate share of such issuance.

B. If the Corporation proposes to issue any additional Shares of the Corporation (other than Exempt Shares), it shall give the Stockholders written notice of its intention, and the terms and conditions upon which the Corporation proposes to issue the same. The Stockholders shall have fifteen (15) days from the giving of such notice to agree to purchase its pro rata share (based upon their relative ownership of Common Stock) of the additional Shares being issued upon the terms and conditions specified in the notice by giving written notice to the Corporation and stating therein the number of Shares to be purchased. If such Stockholder fails to exercise in full its preemptive rights, the Corporation shall have ninety (90) days from the expiration of such fifteen (15) day period to sell the Shares in respect of which the Stockholder’s rights were not exercised, at a price and upon general terms and conditions materially no more favorable to the purchaser thereof than specified in the Corporation’s notice to the Stockholders. If the Corporation has not sold such Shares within one hundred and twenty (120) days of the notice provided in this Article FourSection 3.B, the Corporation shall not thereafter issue or sell such Shares, without first offering such Shares to the Stockholders in the manner provided above.

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Section 4. Class A Preferred Stock.

A. Rank. The Class A Preferred Stock shall, with respect to rights to the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, rank (1) senior to (a) all of the Common Stock and (b) all Preferred Stock that is expressly junior to the Class A Preferred Stock (“Class A Preferred Junior Shares”); (2) pari passu to all Preferred Stock that is expressly pari passu with the Class A Preferred Stock; and (3) junior to (a) the Class B Preferred Stock, (b) Class C Preferred Stock, and (c) all Preferred Stock that is expressly senior to the Class A Preferred Stock.

B. Distributions. Holders of Class A Preferred Stock shall not be entitled to receive or participate in any distribution or payment other than the Class A Preferred Liquidation Preference.

C. Liquidation Preference.

i. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, before any distribution or payment shall be made to holders of Class A Preferred Junior Shares, notwithstanding anything in this Certificate of Incorporation to the contrary, including Section 12 of this Article Four, the holders of Class A Preferred Stock then outstanding shall be entitled to receive and be paid out of the assets of the Corporation legally available for distribution to the Stockholders pursuant to this Certificate of Incorporation a liquidation preference in the amount of $1.00 per Class A Preferred Share (the “Class A Preferred Liquidation Preference”).

ii. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the legally available assets of the Corporation are insufficient to pay the full amount of the liquidating distributions on all outstanding Class A Preferred Stock, then such assets shall be allocated among the holders of Class A Preferred Stock in proportion to the full liquidating distributions to which they would otherwise respectively be entitled.

iii. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Class A Preferred Stock will have no right or claim to any of the remaining assets of the Corporation, shall cease to be Stockholders in respect of such Class A Preferred Stock and the Class A Preferred Stock shall be deemed cancelled.

iv. The consolidation or merger of the Corporation with or into any other partnership, corporation, trust or entity or of any other partnership, corporation, trust or other entity with or into the Corporation or the sale, lease or conveyance of all or substantially all of, the property or business of the Corporation (in each case other than a transaction involving Gores or its affiliates), shall be deemed to constitute a liquidation, dissolution or winding up of the Corporation for purposes of this Article FourSection 4.C.

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D. Redemption at Corporation’s Option.

i. At any time after the date hereof, the Corporation shall have the right, in its sole discretion and from time to time (the “Corporation Class A Preferred Redemption Right”) to redeem all (or any portion of) the Class A Preferred Stock then outstanding for the Class A Preferred Liquidation Preference in cash. The Corporation shall provide prior written notice to each record holder of Class A Preferred Stock of the exercise of the Corporation Class A Preferred Redemption Right not less than five days nor more than 60 days prior to the applicable date of redemption. Such notice shall include (1) the number of Class A Preferred Stock to be redeemed from each such holder of Class A Preferred Stock, (2) the applicable Class A Preferred Liquidation Preference and (3) the applicable date of redemption. No failure to give or defect in such notice or defect in the mailing thereof shall affect the validity of the proceedings for the redemption of any Class A Preferred Stock except as to the holder of Class A Preferred Stock to whom notice was defective or not given. If the Corporation elects to redeem less than all of the Class A Preferred Stock, it shall redeem such units pro rata from all holders thereof.

ii. In the event any applicable redemption date shall not be a business day, then payment of the Liquidation Preference need not be made on such redemption date but may be made on the next succeeding business day with the same force and effect as if made on such applicable redemption date and no interest, additional distributions or other sum shall accrue on the amount payable for the period from and after such redemption date to such next succeeding business day.

iii. To the fullest extent permitted by applicable law, on the applicable date of redemption, (1) the holders of Class A Preferred Stock redeemed pursuant to this Article FourSection 4.D.iii, (A) shall have no further rights in respect of such Class A Preferred Stock (including without limitation any right to receive any distributions paid after the applicable date of redemption), other than the right to receive the applicable Class A Preferred Liquidation Preference, and (B) shall no longer be Stockholders in respect of such redeemed Class A Preferred Stock and (2) any redeemed Class A Preferred Stock shall no longer be deemed to be outstanding, whether or not any certificates (if any) representing such Class A Preferred Stock shall have been received by the Corporation.

E. Voting Rights. The holders of Class A Preferred Stock shall have no voting rights whatsoever on any matter relating to the Corporation, whether under the DGCL, at law, in equity or otherwise, except as required by any non-waivable provision of the law of the State of Delaware or as expressly set forth in this Certificate of Incorporation; provided, that no amendment to the terms of the Class A Preferred Stock may be made without the approval of a majority of the outstanding Class A Preferred Stock, voting as a single class.

Section 5. Class B Preferred Stock.

A. Rank. Notwithstanding any provision of this Certificate of Incorporation, including any amendments made hereto after the date hereof, the Class B Preferred Stock shall, with respect to rights to the payment of distributions and the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, rank (1) senior to (a) all of the Common Stock; (b) the Class A Preferred Stock, (c) the Class C Preferred Stock, and (d) all Preferred Stock issued in accordance with Article FourSection 5.F of this Article Four that

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is expressly junior to the Class B Preferred Stock (“Class B Preferred Junior Shares”); (2) pari passu with any Preferred Stock issued in accordance with Article FourSection 5.F of this Article Four that is expressly pari passu to the Class B Preferred Stock; and (3) junior to all Preferred Stock issued in accordance with Article FourSection 5.F of this Article Four that is expressly senior to the Class B Preferred Stock (“Class B Preferred Senior Stock”).

B. Distributions.

i. Holders of the outstanding Class B Preferred Stock shall be entitled to receive, when, as and if authorized by the Board in its sole discretion, cumulative preferential distributions at the Applicable Rate on the $1,000.00 liquidation preference of each Class B Preferred Share (the “Class B Preferred Distribution Rate”), compounded quarterly and which shall accrue and be cumulative from the date of issuance and shall be payable when declared by the Board (a “Class B Preferred Distribution Payment Date”). Distributions shall be payable to holders of record as they appear in the transfer books of the Corporation at the close of business on the applicable record date (each, a “Record Date”), which shall be the 15th day of the calendar month in which the applicable Class B Preferred Distribution Payment Date falls or such other date designated by the Board for the payment of distributions. The amount of any distribution payable for any distribution period, or portion thereof, shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

ii. Distributions on the Class B Preferred Stock which are unpaid will accumulate and compound quarterly at the Class B Preferred Distribution Rate, whether or not there is sufficient cash for such distributions and whether or not such distributions are declared.

iii. If any Class B Preferred Stock is outstanding, (A) no distributions (other than to holders of Class B Preferred Senior Stock or in the form of Common Stock or Class B Preferred Junior Shares) shall be authorized or paid or set aside for payment nor shall any other distribution be authorized or made upon any Common Stock or Class B Preferred Junior Shares unless all accrued distributions of the Class B Preferred Stock shall have been paid in full in cash, and (B) no Common Stock or Class B Preferred Junior Shares shall be redeemed, purchased or otherwise acquired (by merger, operation of law or otherwise) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such Shares) by the Corporation unless all accrued distributions of the Class B Preferred Stock shall have been paid in full in cash.

iv. If any Class B Preferred Stock is outstanding, if and for so long as distributions are not paid in full upon the Class B Preferred Stock, all distributions authorized upon the Class B Preferred Stock shall be authorized and paid pro rata so that the amount of distributions authorized and paid per Class B Preferred Share shall in all cases bear to each other the same ratio that accumulated distributions per Class B Preferred Share bear to each other.

v. No distributions on the Class B Preferred Stock shall be authorized by the Board or paid or set apart for payment by the Corporation at such times as any agreement

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of the Corporation, including any agreement relating to its indebtedness, prohibits such authorization, payment or setting apart for payment or provides that such authorization, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such authorization or payment shall be restricted or prohibited by law.

vi. Holders of the Class B Preferred Stock shall not be entitled to any distribution, whether payable in cash, property or Shares in excess of full cumulative distributions on the Class B Preferred Stock as described above. Any distribution authorized on the Class B Preferred Stock shall first be credited against the earliest accumulated but unpaid distribution due with respect to such Class B Preferred Stock which remains payable.

vii. Notwithstanding anything herein to the contrary, so long as the Corporation is in compliance with all of its obligations with respect to the Class B Preferred Stock, the Corporation may at any time make distributions in cash or in-kind of assets, properties or securities to holders of Shares other than Class B Preferred Stock, and the holders of Class B Preferred Stock shall not be entitled to participate in any such distributions.

C. Liquidation Preference.

i. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, before any distribution or payment shall be made to holders of Common Stock or Class B Preferred Junior Shares, notwithstanding anything in this Certificate of Incorporation to the contrary, including Section 12 of this Article Four, the holders of Class B Preferred Stock then outstanding shall be entitled to receive and be paid out of the assets of the Corporation legally available for distribution to the Stockholders pursuant to this Certificate of Incorporation a liquidation preference in the amount of $1,000.00 per share of Class B Preferred Stock, plus an amount equal to any accumulated and unpaid distributions to but excluding the date of payment (the “Class B Preferred Liquidation Preference”).

ii. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the legally available assets of the Corporation are insufficient to pay the full amount of the liquidating distributions on all outstanding Class B Preferred Stock, then such assets shall be allocated among the holders of Class B Preferred Stock in proportion to the full liquidating distributions to which they would otherwise respectively be entitled.

iii. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Class B Preferred Stock will have no right or claim to any of the remaining assets of the Corporation, shall cease to be Stockholders in respect of such Class B Preferred Stock and the Class B Preferred Stock shall be deemed cancelled.

iv. The consolidation or merger of the Corporation with or into any other partnership, corporation, trust or entity or of any other partnership, corporation, trust or other entity with or into the Corporation or the sale, lease or conveyance of all or

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substantially all of, the property or business of the Corporation (in each case other than a transaction involving Gores or its affiliates), shall be deemed to constitute a liquidation, dissolution or winding up of the Corporation for purposes of this Article FourSection 5.C.

D. Redemption at Corporation’s Option.

i. Subject to Article FourSection 5.E of this Article Four, at any time after the date hereof, the Corporation shall have the right, in its sole discretion and from time to time (the “Corporation Class B Preferred Redemption Right”) to redeem all (or any portion) of the Class B Preferred Stock then outstanding for the Class B Preferred Liquidation Preference in cash. The Corporation shall provide prior written notice to each record holder of Class B Preferred Stock of the exercise of the Corporation Class B Preferred Redemption Right not less than five days nor more than 60 days prior to the applicable date of redemption. Such notice shall include (1) the number of Class B Preferred Stock to be redeemed from each such holder of Class B Preferred Stock, (2) the applicable Class B Preferred Liquidation Preference, (3) the applicable date of redemption and (4) a statement informing such holder of Class B Preferred Stock that distributions on the Class B Preferred Stock to be redeemed shall cease to accrue on such redemption date. No failure to give or defect in such notice or defect in the mailing thereof shall affect the validity of the proceedings for the redemption of any Class B Preferred Stock except as to the holder of Class B Preferred Stock to whom notice was defective or not given.

ii. In the event any applicable redemption date shall not be a business day, then payment of the Class B Preferred Liquidation Preference need not be made on such redemption date but may be made on the next succeeding business day with the same force and effect as if made on such applicable redemption date and no interest, additional distributions or other sum shall accrue on the amount payable for the period from and after such redemption date to such next succeeding business day.

iii. To the fullest extent permitted by applicable law, on the applicable date of redemption, (1) the holders of Class B Preferred Stock redeemed pursuant to this Article FourSection 5.D.iii, (A) shall have no further rights in respect of such Class B Preferred Stock (including without limitation any right to receive any distributions paid after the applicable date of redemption), other than the right to receive the applicable Class B Preferred Liquidation Preference, and (B) shall no longer be Stockholders in respect of such redeemed Class B Preferred Stock and (2) any redeemed Class B Preferred Stock shall no longer be deemed to be outstanding, whether or not any certificates (if any) representing such Class B Preferred Stock shall have been received by the Corporation.

E. Mandatory Redemption. Upon an initial public offering of any of the Corporation’s Common Stock, the Corporation shall, if permitted by law, promptly redeem all Class B Preferred Stock at a redemption price per unit equal to the Class B Preferred Liquidation Preference pursuant to the procedures set forth in Article FourSection 5.D of this Article Four.

F. Voting Rights. The holders of Class B Preferred Stock shall have no voting rights whatsoever on any matter relating to the Corporation, whether under the DGCL, at

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law, in equity or otherwise, except as required by any non-waivable provision of the law of the State of Delaware or as expressly set forth in this Article FourSection 5.F. The approval of holders of a majority of the outstanding Class B Preferred Stock shall be required for the Corporation to:

i. Amend the terms of the Class B Preferred Stock (or amend the terms of this Certificate of Incorporation in a manner that would have an adverse affect on the rights and preferences of the Class B Preferred Stock);

ii. Enter into or consummate any transaction or series of related transactions that would result in a Change of Control.

iii. Commence or consent to any liquidation, dissolution or winding up of the Corporation; or

iv. Issue any class of Shares that ranks senior or pari passu to the Class B Preferred Stock with respect to receipt of distributions or upon liquidation.

Section 6. Class C Preferred Stock.

A. Rank. The Class C Preferred Stock shall, with respect to rights to the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, rank (i) senior to (a) all of the Common Stock, (b) the Class A Preferred Stock, and (c) all Preferred Stock issued that is expressly junior to the Class C Preferred Stock (“Class C Preferred Junior Shares”); (ii) pari passu to all Preferred Stock that is expressly pari passu with the Class C Preferred Stock; and (iii) junior to (a) the Class B Preferred Stock and (b) all Preferred Stock that is expressly senior to the Class C Preferred Stock.

B. Dividends and Distributions. Holders of Class C Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of funds of the Corporation legally available therefore, for each Class C Preferred Share, participating dividends of the same type as any dividends or other distribution, whether cash, in kind or other property, payable or to be made on outstanding Class A Common Stock equal to the amount of such dividends or other distribution as would be made on the number of Class A Common Stock into which such Class C Preferred Share could be converted immediately prior to the payment of such dividends or other distribution on the Class A Common Stock, as if such Class A Common Stock were outstanding on the applicable record date for such dividend or other distribution.

C. Class C Preferred Liquidation Preference.

i. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, before any distribution or payment shall be made to holders of Class C Preferred Junior Shares, notwithstanding anything in this Certificate of Incorporation to the contrary, including Section 12 of this Article Four, the holders of Class C Preferred Stock then outstanding shall be entitled to receive and be paid out of the assets of the Corporation legally available for distribution to the Stockholders pursuant to this Certificate of Incorporation a liquidation preference equal to the greater of (a) (1) $1,000 per share of Class C Preferred Stock (the “Class C Preferred Original

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Purchase Price”) plus (2) all declared but unpaid dividends on such Class C Preferred Stock, in each case as adjusted for any stock dividends, splits, combinations and similar events and (b) an amount equal to the amount the holders would have received upon liquidation, dissolution or winding up of the Corporation had such holders of Class C Preferred Stock converted their Class C Preferred Stock into Class A Common Stock immediately prior to such liquidation, dissolution or winding up (such greater amount, the “Class C Preferred Liquidation Preference”).

ii. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the legally available assets of the Corporation are insufficient to pay the full amount of the liquidating distributions on all outstanding Class C Preferred Stock, then such assets shall be allocated among the holders of Class C Preferred Stock in proportion to the full liquidating distributions to which they would otherwise respectively be entitled.

iii. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Class C Preferred Stock will have no right or claim to any of the remaining assets of the Corporation, shall cease to be Stockholders in respect of such Class C Preferred Stock and the Class C Preferred Stock shall be deemed cancelled.

iv. The consolidation or merger of the Corporation with or into any other partnership, corporation, trust or entity or of any other partnership, corporation, trust or other entity with or into the Corporation or the sale, lease or conveyance of all or substantially all of, the property or business of the Corporation (in each case other than a transaction involving Gores or its affiliates), shall be deemed to constitute a liquidation, dissolution or winding up of the Corporation for purposes of this Article FourSection 6.C.

D. Voting Rights. The holders of Class C Preferred Stock are entitled to vote on all matters on which the holders of Class A Common Stock are entitled to vote, and except as otherwise provided herein or by law, the holders of Class C Preferred Stock will vote together with the holders of Class A Common Stock as a single class. Each holder of Class C Preferred Stock is entitled to a number of votes equal to the number of Class A Common Stock into which all of the outstanding Class C Preferred Stock held by such holder of Class C Preferred Stock on the applicable record date are convertible immediately prior to the record date of such vote. The approval of holders of a majority of the outstanding Class C Preferred Stock shall be required for the Corporation to:

i. Amend the terms of the Class C Preferred Stock; or

ii. Issue any class of Shares that rank senior or pari passu to the Class C Preferred Stock with respect to receipt of distributions or upon liquidation.

E. Conversion. Each Class C Preferred Share is convertible into Class A Common Stock as provided in this Article FourSection 6.E.

i. Optional Conversion; Liquidity Events. Subject to the terms hereof, each holder of Class C Preferred Stock is entitled to convert, at any time and from time to time at the option and election of such holder of Class C Preferred Stock, any or all

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outstanding Class C Preferred Stock held by such holder of Class C Preferred Stock into a number of duly authorized and validly issued Class A Common Stock equal to the amount (the “Class C Preferred Stock Conversion Amount”) determined by dividing (a) the Class C Preferred Original Purchase Price by (b) the Class C Preferred Stock Conversion Price in effect at the time of conversion. The “Class C Preferred Stock Conversion Price” initially means $29.15, as adjusted from time to time as provided in Article FourSection 6.E.iv of this Article Four.

ii. Fractional Shares. No fractional shares of Class A Common Stock will be issued upon conversion of the Class C Preferred Stock. In lieu of fractional shares, the Corporation shall, at its option, (a) pay cash equal to such fractional amount multiplied by the fair market value per Class A Common Share as of the Class C Preferred Stock Conversion Date, as determined in good faith by the Board, or (b) issue the nearest whole number of shares of Class A Common Stock, rounding up, issuable upon conversion of the Class C Preferred Stock. If more than one share of Class C Preferred Stock is being converted at one time by the same holder of Class C Preferred Stock, then the number of full shares of Class A Common Stock issuable upon conversion will be calculated on the basis of the aggregate number of shares of Class C Preferred Stock converted by such holder of Class C Preferred Stock at such time.

iii. Mechanics of Conversion.

a) In order to convert Class C Preferred Stock into Class A Common Stock pursuant to Article FourSection 6.E.i of this Article Four, the holder of Class C Preferred Stock must surrender the certificate(s) representing such shares of Class C Preferred Stock at the office of the Corporation’s transfer agent (or at the principal office of the Corporation, if the Corporation serves as its own transfer agent), together with written notice that such holder of Class C Preferred Stock elects to convert all or such lesser number of shares represented by such certificates as specified therein. Any certificate(s) of shares of Class C Preferred Stock surrendered for conversion must be duly endorsed for transfer or accompanied by a written instrument of transfer, in a form reasonably satisfactory to the Corporation, duly executed by the registered holder of Class C Preferred Stock or his, her or its attorney-in-fact duly authorized in writing. The date of receipt of such certificates, together with such notice, by the transfer agent or the Corporation will be the date of conversion (the “Class C Preferred Stock Conversion Date”). As soon as practicable after the Class C Preferred Stock Conversion Date, the Corporation shall promptly issue and deliver to such holder of Class C Preferred Stock a certificate for the number of shares of Class A Common Stock to which such holder of Class C Preferred Stock is entitled, together with payment in cash, if any, for fractional shares (by means of a wire transfer to such holder’s bank account or delivery of a certified bank check to such holder of Class C Preferred Stock). Such conversion will be deemed to have been made on the Class C Preferred Stock Conversion Date, and the Person entitled to receive the Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such Class A Common Stock on such Class C Preferred Stock Conversion Date. In the event that fewer than all the

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shares represented by any such surrendered certificate(s) are to be converted, a new certificate or certificates shall be issued representing the unconverted shares of Class C Preferred Stock without cost to the holder thereof, except as set forth in the following sentence. The Corporation shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Class A Common Stock upon conversion or due upon the issuance of a new certificate for any shares of Class C Preferred Stock not converted in the name of the converting holder of Class C Preferred Stock, except that the Corporation shall not be obligated to pay any such tax due because shares of Class A Common Stock or certificates for shares of Class C Preferred Stock are issued in a name other than the name of the converting holder of shares of Class C Preferred Stock and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Corporation the amount of any such tax, or has established to the reasonable satisfaction of the Corporation that such tax has been or will be paid.

b) The Corporation shall at all times reserve and keep available, free from any preemptive rights, out of its authorized but unissued Class A Common Stock for the purpose of effecting the conversion of the Class C Preferred Stock, the full number of Class A Common Stock deliverable upon the conversion of all outstanding Class C Preferred Stock, and the Corporation shall take all actions to amend any instruments relating thereto to increase the authorized amount of Class A Common Stock if necessary therefor.

c) From and after the Class C Preferred Stock Conversion Date, dividends on the shares of Class C Preferred Stock to be converted on such Class C Preferred Stock Conversion Date will cease to be payable; said shares will no longer be deemed to be outstanding; and all rights of the holder thereof as a holder of Class C Preferred Stock (except the right to receive from the Corporation the Class A Common Stock upon conversion) shall cease and terminate with respect to said shares; provided, that in the event that a share of Class C Preferred Stock is not converted due to a default by the Corporation or because the Corporation is otherwise unable to issue the requisite Class A Common Stock, such shares of Class C Preferred Stock will remain outstanding and will be entitled to all of the rights thereof as provided herein. Any shares of Class C Preferred Stock that have been converted will, after such conversion, be deemed cancelled and retired and have the status of authorized but unissued Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board.

d) If the conversion is in connection with any sale thereof, the conversion may, at the option of any holder of Class C Preferred Stock tendering shares of Class C Preferred Stock to the Corporation for conversion, be conditioned upon the closing of the sale of such shares of Class C Preferred Stock with the purchaser in such sale, in which event such conversion of such shares of Class C Preferred Stock shall not be deemed to have occurred until immediately prior to the closing of such sale; and the Corporation shall be provided with reasonable evidence of such closing prior to effecting such conversion.

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iv. Adjustments to Class C Preferred Stock Conversion Price.

a) Special Definitions. For purposes of this Article FourSection 6.E.iv, the following definitions apply:

1. “Associate” has the meaning assigned to such term in Rule 12b-2 under the Exchange Act.

2. “Additional Common Stock” means any Common Stock issued or, as provided in clause II below, deemed to be issued by the Corporation after the Class C Preferred Stock Original Issuance Date; provided, that notwithstanding anything to the contrary contained herein, Additional Common Stock will not include any of the following:

I. Common Stock issued or issuable as a dividend or other distribution on Class C Preferred Stock or Common Stock;

II. Common Stock issued or issuable upon conversion of Class C Preferred Stock; and

III. Common Stock issued or issuable upon the exercise of Options issued to employees, officers or directors of, or consultants or advisors to, the Corporation or its Subsidiaries prior to November 16, 2011 pursuant to the Corporation’s benefit plans or arrangements approved by the Board.

3. “Convertible Securities” means any debt or other evidences of indebtedness, capital stock or other securities directly or indirectly convertible into or exercisable or exchangeable for Additional Common Stock.

4. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

5. “Fair Market Value” means the current fair market value of such stock or security, as determined in good faith by the Board.

6. “Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.

7. “Measurement Date” means the date of issuance of Additional Common Stock.

8. “Options” means any rights, options, warrants or similar securities to subscribe for, purchase or otherwise acquire Additional Common Stock or Convertible Securities.

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9. “Class C Preferred Stock Original Issuance Date” means the date on which the first share of Class C Preferred Stock was issued.

b) Deemed Issuances of Additional Common Stock. The maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise, conversion or exchange of Options or Convertible Securities will be deemed to be Additional Common Stock issued as of the time of the issuance of such Options or Convertible Securities; provided, however, that:

1. No adjustment in the Class C Preferred Stock Conversion Price will be made upon the subsequent issue of Common Stock upon the exercise, conversion or exchange of such Options or Convertible Securities;

2. To the extent that Common Stock is not issued pursuant to any Option or Convertible Security upon the expiration or termination of an unexercised, unconverted or unexchanged Option or Convertible Security, the Class C Preferred Stock Conversion Price will be readjusted to the Class C Preferred Stock Conversion Price that would have been in effect had such Option or Convertible Security (to the extent outstanding immediately prior to such expiration or termination) never been issued; and

3. In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option or Convertible Security or a repricing of the exercise or conversion price thereof, but not a change resulting from the anti-dilution provisions thereof, the Class C Preferred Stock Conversion Price then in effect will be readjusted to the Class C Preferred Stock Conversion Price that would have been in effect as if, on the date of issuance, such Option or Convertible Security were exercisable, convertible or exchangeable for such changed number of shares of Common Stock.

c) Determination of Consideration. The fair market value of the consideration received by the Corporation for the issue of any Additional Common Stock will be computed as follows:

1. Cash and Property. Aggregate consideration consisting of cash and other property will:

I. (insofar as it consists of cash, be computed at the aggregate of cash received by the Corporation, excluding amounts paid or payable for accrued interest or accrued dividends;

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II. (insofar as it consists of property other than cash, be computed at the fair market value thereof on the Measurement Date, as determined in good faith by the Board; and

III. (insofar as it consists of both cash and other property, be the proportion of such consideration so received, computed as provided in clauses (I) and (II) above, as determined in good faith by the Board.

2. Options and Convertible Securities. The aggregate consideration per share received by the Corporation for Options and Convertible Securities will be determined by dividing:

I. the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the full and complete exercise, conversion or exchange of such Options or Convertible Securities, by

II. the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the full and complete exercise, conversion or exchange of such Options or Convertible Securities.

d) Stock Splits and Combinations. If the outstanding shares of Common Stock are split into a greater number of shares, the Class C Preferred Stock Conversion Price then in effect immediately before such split will be proportionately decreased. If the outstanding shares of Common Stock are combined into a smaller number of shares, the Class C Preferred Stock Conversion Price then in effect immediately before such combination will be proportionately increased. These adjustments will be effective at the close of business on the date the split or combination becomes effective.

e) Issuances for Less Than Fair Market Value. In case the Corporation shall at any time after the Class C Preferred Stock Original Issuance Date issue or sell any Additional Common Stock without consideration or for a consideration per share less than the Fair Market Value (but greater than the Class C Preferred Stock Conversion Price) on the Measurement Date (or, in the case of convertible or exchangeable or exercisable securities, less than the Fair Market Value (but greater than the Class C Preferred Stock Conversion Price) as of the Measurement Date) then, and in each such case, the Class C Preferred Stock Conversion Price shall be determined by multiplying the Class C Preferred Stock

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Conversion Price in effect on the day immediately prior to the Measurement Date by a fraction:

1. the numerator of which will be the sum of (x) the number of shares of Common Stock outstanding, on a fully diluted basis, immediately prior to the Measurement Date and (y) the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total number of shares of Additional Common Stock so issued would purchase at the Fair Market Value in effect immediately prior to the Measurement Date, and

2. the denominator of which will be the sum of (x) the number of shares of Common Stock outstanding, on a fully diluted basis, immediately prior to the Measurement Date and (y) the number of such shares of Additional Common Stock issuable or so issued.

f) Issuances of Additional Common Stock. If the Corporation issues or is deemed to issue Additional Common Stock to any Person without consideration or for a consideration per share less than the Class C Preferred Stock Conversion Price per share of Common Stock on the Measurement Date, then the Class C Preferred Stock Conversion Price will be reduced, effective at the close of business on the Measurement Date, to a price (calculated to the nearest cent) determined by multiplying such Class C Preferred Stock Conversion Price by a fraction:

1. the numerator of which will be the sum of (x) the number of shares of Common Stock outstanding, on a fully diluted basis, immediately prior to the Measurement Date and (y) the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total number of shares of Additional Common Stock so issued would purchase at the Class C Preferred Stock Conversion Price in effect immediately prior to the Measurement Date, and

2. the denominator of which will be the sum of (x) the number of shares of Common Stock outstanding, on a fully diluted basis, immediately prior to the Measurement Date and (y) the number of such shares of Additional Common Stock issuable or so issued.

g) Minimum Adjustment. Notwithstanding the foregoing, the Class C Preferred Stock Conversion Price will not be reduced if the amount of such reduction would be an amount less than $0.01, but any such amount will be carried forward and reduction with respect thereto will be made at the time that such amount, together with any subsequent amounts so carried forward, aggregates to $0.01 or more.

h) Rules of Calculation; Treasury Stock. All calculations will be made to the nearest one-tenth of a cent or to the nearest one-hundredth of a share,

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as the case may be. The number of shares of Common Stock outstanding will be calculated on the basis of the number of issued and outstanding shares of Common Stock on the Measurement Date, not including shares held in the treasury of the Corporation. The Corporation shall not pay any dividend on or make any distribution to Common Stock held in treasury.

i) Waiver. Notwithstanding the foregoing, the Class C Preferred Stock Conversion Price will not be reduced if the Corporation receives, within ten (10) days following the Measurement Date, written notice from the holders of Class C Preferred Stock representing at least a majority of the then outstanding Class C Preferred Stock, voting together as a separate class, that no adjustment is to be made as the result of a particular issuance of Additional Common Stock. This waiver will be limited in scope and will not be valid for any issuance of Additional Common Stock not specifically provided for in such notice.

v. Effect of Reclassification, Merger or Sale. If any of the following events occur, namely (x) any reclassification of or any other change to the outstanding Common Stock (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock split or combination to which Article FourSection 6.E.iv of this Article Four applies), (y) any merger, consolidation or other combination of the Corporation with another Person as a result of which all holders of Common Stock become entitled to receive capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) with respect to or in exchange for such Common Stock, or (z) any sale, conveyance or other transfer of all or substantially all of the assets of the Corporation to any other Person as a result of which all holders of Common Stock become entitled to receive capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) with respect to or in exchange for such Common Stock, then shares of Class C Preferred Stock will be convertible into the kind and amount of capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) receivable upon such reclassification, change, merger, consolidation, combination, sale, conveyance or transfer by a holder of a number of shares of Common Stock issuable upon conversion of such shares of Class C Preferred Stock (assuming, for such purposes, a sufficient number of authorized shares of Common Stock available to convert all such shares of Class C Preferred Stock) immediately prior to such reclassification, change, merger, consolidation, combination, sale, conveyance or transfer; provided, that:

a) if the holders of Common Stock were entitled to exercise a right of election as to the kind or amount of capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) receivable upon such reclassification, change, merger, consolidation, combination, sale, conveyance or transfer, then the kind and amount of capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) receivable in respect of each share of Common Stock which would have otherwise been issuable upon conversion of the Class C Preferred Stock immediately prior to such reclassification, change, merger, consolidation, combination, sale, conveyance or transfer will be the kind and amount so receivable per share by a plurality of the holders of Common Stock; or

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b) if a tender offer (which includes any exchange offer) is made to and accepted by the holders of Common Stock under circumstances in which, upon completion of such tender offer, the maker thereof, together with members of any Group of which such maker is a part, and together with any Affiliate or Associate of such maker and any members of any such Group of which any such Affiliate or Associate is a part, own beneficially more than 50% of the outstanding Common Stock, each holder of shares of Class C Preferred Stock will thereafter be entitled to receive, upon conversion of such shares, the kind and amount of capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) to which such holder of Class C Preferred Stock would actually have been entitled as a holder of shares of Common Stock if such holder of shares of Class C Preferred Stock had converted such holder’s shares of Class C Preferred Stock immediately prior to the expiration of such tender offer, accepted such tender offer and all of the Common Stock held by such holder had been purchased pursuant to such tender offer, subject to adjustments (from and after the consummation of such tender offer) as nearly equivalent as possible to the adjustments provided for in Article FourSection 6.E.iv of this Article Four.

This Article FourSection 6.E.v will similarly apply to successive reclassifications, changes, mergers, consolidations, combinations, sales, conveyances and transfers. If this Section 6.E.v applies to any event or occurrence, Article FourSection 6.E.iv of this Article Four will not apply.

vi. Notice of Record Date. In the event of:

a) any stock split or combination of the outstanding Common Stock;

b) any declaration or making of a dividend or other distribution to holders of Common Stock in Additional Common Stock, any other capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness);

c) any reclassification, change, merger, consolidation, combination, sale, conveyance or transfer to which Article FourSection 6.E.v of this Article Four applies; or

d) the dissolution, liquidation or winding up of the Corporation;

then the Corporation shall file with its corporate records and mail to the holders of Class C Preferred Stock at their last addresses as shown on the records of the Corporation, at least ten (10) days prior to the record date specified in (1) below or at least twenty (20) days prior to the date specified in (2) below, a notice stating:

1. the record date of such stock split, combination, dividend or other distribution, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such stock split, combination, dividend or other distribution are to be determined, or

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2. the date on which such reclassification, change, merger, consolidation, combination, sale, conveyance, transfer, liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their Common Stock for the capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) deliverable upon such reclassification, change, merger, consolidation, combination, sale, conveyance, transfer, liquidation, dissolution or winding up.

Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (a) through (d) of this Article FourSection 6.E.vi.

vii. Certificate of Adjustments. Upon the occurrence of each adjustment or readjustment of the Class C Preferred Stock Conversion Price pursuant to this Article FourSection 6.E, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Class C Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based and shall file a copy of such certificate with its corporate records. The Corporation shall, upon the reasonable written request of any holder of Class C Preferred Stock, furnish to such holder of Class C Preferred Stock a similar certificate setting forth (x) such adjustments and readjustments, (y) the Class C Preferred Stock Conversion Price then in effect, and (z) the number of shares of Common Stock and the amount, if any, of capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) which then would be received upon the conversion of Class C Preferred Stock. Despite such adjustment or readjustment, the form of each or all certificates representing the shares of Class C Preferred Stock, if the same shall reflect the initial or any subsequent Class C Preferred Stock Conversion Price, need not be changed in order for the adjustments or readjustments to be valid in accordance with the provisions of this Section 6, which shall control.

viii. No Impairment. Except pursuant to the prior vote or written consent of the holders of Class C Preferred Stock representing at least a majority of the then outstanding shares of Class C Preferred Stock, voting together as a separate class, the Corporation shall not, whether by any amendment of its Certificate of Incorporation, by any reclassification or other change to its capital stock, by any merger, consolidation or other combination involving the Corporation, by any sale, conveyance or other transfer of any of its assets, by the liquidation, dissolution or winding up of the Corporation or by any other way, impair or restrict its ability to convert Class C Preferred Stock and issue Common Stock therefor. Except pursuant to the prior vote or written consent of the holders of Class C Preferred Stock representing at least a majority of the then outstanding Class C Preferred Stock, voting together as a separate class, the Corporation shall not avoid or seek to avoid the observance or performance of any of the terms to be observed

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or performed hereunder by the Corporation. The Corporation shall at all times in good faith take all such action as appropriate pursuant to, and assist in the carrying out of all the provisions of, this Article FourSection 6.E.

F. Calculations. For the purposes of calculating for a holder of Class C Preferred Stock such holder’s pro rata share under Section 3 of this Article Four (Preemptive Rights), Section 10 of this Article Four (Tag-Along Rights), and Section 11 of this Article Four (Drag Along Rights) and calculating the percentage of Class A Common Stock owned on the date of this Certificate of Incorporation under Article FourSection 9.A of this Article Four (Transfers), the Class C Preferred Stock shall be treated on an as-converted basis based upon the Class C Preferred Stock Conversion Price then in effect at the time of such calculation.

Section 7. Voting.

Except as may otherwise be required by law and except as set forth in Sections Section 4, 5, and 6 of this Article Four, voting power with respect to all matters requiring Stockholder action shall be vested exclusively in the Voting Stockholders. Each Voting Stockholder shall be entitled to vote its Voting Stockholder Interests on all matters on which such Voting Stockholders are entitled to vote.

Section 8. Dividends and Distributions.

A. Holders of Shares shall be entitled to receive such dividends and other distributions, including in connection with the liquidation, dissolution or winding up of the Corporation, as maybe authorized and declared by the Board upon the Shares at the times and in the aggregate amounts determined by the Board, out of any assets or funds of the Corporation legally available therefor. Subject to the provisions of Section 4, 5, and 6 of this Article Four with respect to distributions upon liquidation, as, if and when the Board determines in its sole discretion to make a distribution to the Stockholders, distributions shall be made among the Stockholders as follows:

B. First, each holder of Shares that is entitled to any preference in distribution (including, without limitation, the preferences in distribution set forth in Section 4 of this Article Four with respect to Class A Preferred Stock, Section 5 of this Article Four with respect to Class B Preferred Stock, and Section 6 of this Article Four with respect to Class C Preferred Stocks) shall be entitled to a distribution in accordance with the rights of any such class of stock (and, within such class, pro rata in proportion to the applicable Shares on the applicable record date); and

C. Second, with respect to the Common Stock, pro rata based on the number of shares outstanding of each such class of the Common Stock, share and share alike.

D. The Board may withhold from any distributions to be made to the Stockholders such amounts as are required to be withheld by the Corporation for taxes. Any such taxes withheld shall be deemed to be a distribution to the Stockholders or to particular Stockholders, reducing the amount otherwise distributable to the Stockholders or such particular Stockholders pursuant to this Article Four. Notwithstanding any provision to the contrary contained in this Certificate of Incorporation, the Corporation shall not be required to make a distribution to a Stockholder on account of its Shares if such distribution would violate the DGCL.

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E. Subject to applicable law, the Corporation shall be entitled to pay dividends and distributions out of any source of funds legally available therefor, including, without limitation, the proceeds of the issuance by the Corporation of Shares and/or indebtedness. Subject to any restrictions or limitations as may be set forth in this Certificate of Incorporation, the Board may from time to time authorize and declare and pay dividends or distributions in cash, property or other assets of the Corporation or in securities of the Corporation or from any other source as the Board, in its discretion, shall determine.

Section 9. Shares and Transfers of Shares

A. Transfers. Subject to Sections 9B, 10, 11 of this Article Four and the Registrations Rights Agreement, prior to an IPO, no Stockholder or Assignee (other than Gores, subject to the provisions of this Article Four) may Transfer all or any portion of its Shares (or beneficial interest therein) to any Person, except to an Affiliate of such Stockholder or Assignee without the prior written consent of the Board, which consent may be given or withheld in the Board’s sole and absolute discretion.

B. Restrictions. Notwithstanding any contrary provision in this Certificate of Incorporation, any otherwise permitted Transfer shall be null and void if: (a) such Transfer requires the registration of such transferred Shares pursuant to any applicable federal or state securities laws; (b) such Transfer subjects the Corporation to regulation under the Investment Company Act of 1940, the Investment Advisers Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended; (c) such Transfer results in a violation of applicable laws to which the Corporation is subject or could have liability; (d) such Transfer is made to any Person who lacks the legal right, power or capacity to own such Shares; (e) such Transfer would cause the assets of the Corporation to constitute Plan Assets, or (f) the Corporation does not receive written instruments (including, without limitation, copies of any instruments of Transfer and such Assignee’s consent to be bound by this Certificate of Incorporation as an Assignee) that are in a form reasonably satisfactory to the Board.

Section 10. Tag-Along Rights.

A. Subject to Section 11 of this Article Four, if Gores, or any of its respective Affiliates (collectively, the “Selling Group”), at any time or from time to time, enters into an agreement (whether oral or written) to sell, directly or indirectly (a “Tag-Along Sale”), any of their Common Stock or any interest therein other than to an Affiliate or in connection with an IPO, then each other Stockholder shall have the right, but not the obligation, to participate in such Tag-Along Sale (and, if necessary, to displace the Selling Group to the extent of such participation) by selling up to its pro rata shares of Common Stock (the “Stockholder’s Allotment”) equal to the product of (i) the total number of shares of Common Stock proposed to be sold by the Selling Group in the Tag-Along Sale multiplied by (ii) the quotient of (A) the number of shares of Common Stock owned by Stockholders other than the Selling Group, divided by (B) the total number of shares of Common Stock of all Stockholders prior to such sale.

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Any such sale by any Stockholder shall be on the same terms and conditions as the proposed Tag-Along Sale by the Selling Group; provided, however, that all selling Stockholders shall share pro rata, based upon the percentage of Common Stock being sold by each (i) in any indemnity liabilities to the proposed purchaser in the Tag-Along Sale (other than representations as to unencumbered ownership of and ability to transfer the Shares being sold of any other seller in the Tag-Along Sale, which shall be the sole responsibility of such other seller), provided that no Stockholder shall have liability in excess of the proceeds received by such Stockholder in the Tag-Along Sale, and (ii) in any escrow or holdback for the purpose of satisfying any such indemnity liabilities.

B. The Selling Group members participating in a Tag-Along Sale or a representative of the Selling Group (the “Selling Group Representative,” which shall be Gores until the other Stockholders are notified by Gores, the Corporation or a successor representative, of the name and address of a successor representative) shall promptly provide each Stockholder with written notice (the “Tag-Along Sale Notice”) not less than thirty (30) days prior to the proposed date of the Tag-Along Sale (the “Tag-Along Sale Date”). In order to facilitate the prompt delivery of the Tag-Along Sale Notices, the Corporation hereby covenants to provide the Selling Group members participating in a Tag-Along Sale or the Selling Group Representative, as the case may be, access to stock record books of the Corporation. Each Tag-Along Sale Notice shall set forth: (i) the name and address of each proposed purchaser of Common Stock in the Tag-Along Sale; (ii) the name of each Selling Group member participating in the Tag-Along Sale and the number of shares of Common Stock proposed to be sold by each such Selling Group member; (iii) the proposed amount and form of consideration to be paid for such Common Stock and the terms and conditions of payment offered by each proposed purchaser; (iv) the aggregate number of shares of Common Stock held of record as of the close of business on the date preceding the date of the Tag-Along Sale Notice (the “Tag-Along Notice Date”) by the Stockholder to whom the notice is sent; (v) the aggregate number of shares of Common Stock held of record as of the Tag-Along Notice Date by the Selling Group; (vi) the maximum number of units that the Stockholder to whom the notice is sent is entitled to include in the Tag-Along Sale assuming each Stockholder elected to participate in the Tag-Along Sale and elected to sell all of the Common Stock eligible to be sold by such Stockholder; (vii) confirmation that the proposed purchaser has been informed of the tag-along rights provided for herein and has agreed to purchase Common Stock in accordance with the terms hereof; (viii) the Tag-Along Sale Date; and (ix) confirmation that, with respect to the Shares to be received by the proposed purchaser, the proposed purchaser agrees in writing to be bound by, and covenants that each purchaser of all such Shares shall be bound by, the provisions of this Certificate of Incorporation as if it were a member of the Selling Group and an original party to this Certificate of Incorporation.

C. Each Stockholder who wishes to participate in the Tag-Along Sale shall provide written notice (or oral notice confirmed in writing) (the “Tag-Along Participation Notice”) to the Selling Group Representative, no less than fifteen (15) days prior to the Tag-Along Sale Date. The Tag-Along Participation Notice shall set forth the percentage of Shares, if any, that such Stockholder desires to include in the Tag-Along Sale (which shall not exceed such Stockholder’s Allotment). The Tag-Along Participation Notice shall also specify the aggregate number of additional Shares owned of record as of the date of the Tag-Along Participation Notice by such Stockholder, if any, which such Stockholder desires also to include in the Tag-Along Sale (“Overallotment Interests”) in the event there is an aggregate under subscription for

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the entire Stockholders’ Allotments. In the event there is an aggregate under subscription by the Stockholders for the entire Stockholders’ Allotments, the Selling Group member(s) participating in the Tag-Along Sale shall apportion the unsubscribed Shares to Stockholders whose Tag-Along Notices specified an amount of Overallotment Interests, which apportionment shall be on a pro rata basis among such Stockholders in accordance with the percentage of Overallotment Interests specified by all such Stockholders in their Tag-Along Participation Notices.

D. The participating members of the Selling Group shall determine the aggregate percentage of Shares to be sold by each participating Stockholder in any given Tag-Along Sale in accordance with the terms hereof, and the Tag-Along Participation Notices given by the Stockholders shall constitute their binding respective agreements to sell such Shares on the terms and conditions applicable to such sale (including the requirements of this Article FourSection 10.D).

E. If a Tag-Along Participation Notice from a Stockholder is not received by the Selling Group Representative within the 15-day period specified above, then the Selling Group members shall have the right to sell the percentage of Shares specified in the Tag-Along Sale Notice to the proposed purchaser without any participation by such Stockholder, but only on the terms and conditions stated in such Tag-Along Sale Notice and only if such sale occurs on a date within ninety (90) days of the Tag-Along Sale Date.

F. The provisions of this Section 10 shall apply regardless of the form of consideration received in the Tag-Along Sale.

Section 11. Drag Along Rights.

A. In the event the Selling Group determines to accept an offer from any Person (other than a member of the Selling Group or any Affiliate thereof) (the “Proposed Purchaser”) to acquire a majority of the outstanding Common Stock of the Corporation, then, subject to Article FourSection 11.B of this Article Four, at the option of the Selling Group, each of the other Stockholders (collectively with their Affiliates, the “Drag-Along Stockholders”) shall sell, and shall cause any Affiliate of it to sell, pursuant to such offer (the “Drag-Along Sale”) its pro rata shares of Common Stock equal to the product of (i) the total number of Shares owned by such Stockholder multiplied by (ii) the percentage of the Common Stock owned by the Selling Group being sold in such transaction; provided, that any such transfer by a Drag-Along Stockholder does not violate applicable law. The foregoing rights of the Selling Group are referred to herein as the “Drag-Along Rights.” All Drag-Along Stockholders (i) shall receive the same consideration per share of Common Stock as the Selling Group, shall be subject to the same terms and conditions of sale as the Selling Group and shall otherwise be treated the same as the Selling Group or, where appropriate, pro rata based upon the percentage of Shares held by each Stockholder, and (ii) shall execute such documents and take such actions as may be reasonably required by the Selling Group Representative.

B. Any such sale by any Stockholder shall be on the same terms and conditions as the proposed Drag-Along Sale by the Selling Group and subject to the participation of all other Stockholders; provided, however, that all Drag-Along Stockholders shall share, based upon the percentage of Shares being sold by each, (i) in any indemnity obligations to the

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Proposed Purchaser in the Drag-Along Sale (other than representations as to unencumbered ownership of, and ability to transfer, the Shares being sold by any other seller in the Drag-Along Sale, which shall be the sole responsibility of such other seller) and (ii) in any escrow or holdback for the purpose of satisfying any such indemnity obligations; provided that each Drag-Along Stockholder’s sharing obligation hereunder with respect to such indemnity or other liabilities shall be several and limited to the Shares being sold by such Drag-Along Stockholder and the proceeds thereof, including, without limitation, the cash and non-cash consideration received by such Drag-Along Stockholder with respect to such Shares. In no circumstance whatsoever hereunder shall any other recourse be had to such Drag-Along Stockholder, whether by levy or execution, or under any law, or by the enforcement of any assessment or penalty or otherwise, it being understood that the sole recourse for enforcing such Drag-Along Stockholder’s obligation hereunder shall be to such Shares being sold thereby and the proceeds thereof.

C. The Selling Group members participating in a Drag-Along Sale or the Selling Group Representative shall promptly provide each Stockholder with written notice (the “Drag-Along Sale Notice”) not less than thirty (30) days prior to the date of the Drag-Along Sale (the “Drag-Along Sale Date”). Each Drag-Along Sale Notice shall set forth: (i) the name and address of the Proposed Purchaser of Shares in the Drag-Along Sale; (ii) the proposed amount and form of consideration to be paid for such Shares and the terms and conditions of payment offered by the Proposed Purchaser; (iii) confirmation that the Proposed Purchaser has been informed of the Drag-Along Rights provided for herein and has agreed to purchase Shares in accordance with the terms hereof; (iv) that all the Drag-Along Stockholders shall be obligated to sell their Shares upon terms and conditions (subject to applicable law) no less favorable to the Drag-Along Stockholders than those the Selling Group is able to obtain for its Shares; (v) in the case of a transfer, whether through a stock sale, a merger, a recapitalization, a consolidation transaction, a transaction involving the transfer of a majority of the assets of the Corporation or otherwise, of such Shares or of such assets in a transaction requiring the vote of or tenders by the Drag-Along Stockholders, that all the Drag-Along Stockholders shall be obligated to vote in favor of such transaction and tender their Shares for the transaction consideration; and (vi) the Drag-Along Sale Date.

D. The provisions of this Article FourSection 11.D shall apply regardless of the form of consideration to be received in the Drag-Along Sale, and if any non-cash consideration is proposed in the Drag-Along Sale to each member of the Selling Group, then each Drag-Along Stockholder shall accept its pro rata share of such non-cash consideration for the Shares based upon its proportional ownership of Shares.

E. Each Drag-Along Stockholder affirms that its agreement to vote for the approval of the transaction with respect to the transfer of Shares or assets to the Proposed Purchaser under this Section 11 (to the extent any such vote is required by applicable law) is given as a condition of this Certificate of Incorporation and as such is coupled with an interest and is irrevocable. This voting agreement shall remain in full force and effect throughout the time that this Section 11 is in effect.

F. Not later than fifteen (15) days following the date of receipt of the Drag-Along Notice, each of the Drag-Along Stockholders shall deliver to the Selling Group

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Representative a duly executed assignment agreement for the Shares held by such Drag-Along Stockholder to be transferred. If any Drag-Along Stockholder fails to deliver such assignment agreement to the Selling Group Representative, the Corporation shall cause the books and records of the Corporation to show that the Shares of such Drag-Along Stockholder are bound by the provisions of this Section 11 and are transferable only to the Proposed Purchaser or an Affiliate of such Proposed Purchaser upon surrender for transfer by the holder thereof.

Section 12. Liquidation

A. Upon dissolution of the Corporation, the Board shall act as the “Liquidator” of the Corporation. The Liquidator shall liquidate the assets of the Corporation, and shall apply and distribute the proceeds thereof as follows:

i. First, to the payment of expenses of the winding-up, liquidation and dissolution of the Corporation.

ii. Second, to the payment of the obligations of the Corporation.

iii. Third, to the setting up of any reserves for contingencies which the Liquidator may consider necessary.

iv. Thereafter, to the Shareholders in accordance with Section 8 of this Article Four.

B. Notwithstanding Article FourSection 12.A.i of this Article Four, in the event that the Liquidator determines that an immediate sale of all or any portion of the Corporation assets would cause undue loss to the Stockholders, the Liquidator, in order to avoid such loss to the extent not then prohibited by the DGCL, may either defer liquidation of and withhold from distribution for a reasonable time any Corporation assets except those necessary to satisfy the Corporation’s debts and obligations, or distribute the Corporation assets to the Stockholders in kind.

Section 13. Effect of an IPO. Sections 3, 8, 9.A, 9.B, 10 and 11 of this Article Four shall cease to be effective and no Stockholder shall have any rights thereunder following the consummation of an IPO.

ARTICLE FIVE

The name and mailing address of the sole incorporator are as follows:

NAME	MAILING ADDRESS
Sunny E. Lee	c/o Kirkland & Ellis LLP 333 S. Hope Street, 29th Floor Los Angeles, CA 90071

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ARTICLE SIX

The Corporation shall have perpetual existence.

ARTICLE SEVEN

In furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, alter, adopt, amend or repeal the Bylaws of the Corporation.

ARTICLE EIGHT

Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or as set forth in the Bylaws of the Corporation. Election of directors need not be by written ballot unless the Bylaws of the Corporation so provide.

ARTICLE NINE

All non-public information received from or otherwise relating to the Corporation shall be confidential, and shall not be disclosed or otherwise released by any Stockholder to any other Person (other than another Stockholder), without the written consent of the Board. The foregoing shall not apply to the extent that the disclosure of information otherwise determined to be confidential is required to be included in the financial statements of such Person or its Affiliates or as otherwise required by applicable law or the rules of a stock exchange, provided that, prior to disclosing such confidential information, such Person shall notify the Corporation thereof, which notice shall include the basis upon which such Person believes the information is required to be disclosed.

ARTICLE TEN

The Corporation expressly elects not to be governed by Section 203 of the DGCL.

ARTICLE ELEVEN

The provisions of this Certificate of Incorporation shall apply to the full extent set forth herein with respect to any and all Shares of the Corporation or any successor or assign of the Corporation (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the Shares, by combination, recapitalization, reclassification, merger, consolidation, conversion or otherwise and the term “Shares” shall include all such other securities. In the event of any change in the capitalization of the Corporation, as a result of any equity split, equity dividend or equity combination or otherwise, the provisions of this Certificate of Incorporation shall be appropriately adjusted.

ARTICLE TWELVE

Except to the extent that the DGCL, as the same exists or may hereafter be amended, prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty, no

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director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director. Any amendment or repeal of this Article Twelve shall not adversely affect any right or protection of a director of the Corporation under the DGCL existing at the time of such repeal or modification, and shall not apply to or have any effect on the liability or alleged liability of any director with respect to any acts or omissions of such directors occurring prior to such amendment or repeal.

ARTICLE THIRTEEN

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon Stockholders herein are granted subject to this reservation.

ARTICLE FOURTEEN

The Corporation hereby renounces, to the fullest extent permitted by the laws of the State of Delaware, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any business opportunities that are presented to one or more of its directors or stockholders (other than such directors or stockholders that are employees of the Corporation or any of its Subsidiaries). No amendment or repeal of this Article Fourteen shall apply to or have any effect on the liability or alleged liability of any officer, director or stockholder of the Corporation for or with respect to any opportunities of which such officer, director, or stockholder becomes aware prior to such amendment or repeal.

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I, the undersigned, being the sole incorporator hereinbefore named, for the purpose of forming a corporation in accordance with to the General Corporation Law of the State of Delaware, do make and file this certificate, hereby declaring and certifying that the facts herein stated are true, and accordingly have hereunto set my hand this 2nd day of May, 2013.

/s/ Sunny E. Lee

Sunny E. Lee

Sole Incorporator

EX-3.2

Exhibit 3.2

BYLAWS

OF

STOCK BUILDING SUPPLY HOLDINGS, INC.

A Delaware corporation

(Adopted as of May 2, 2013)

ARTICLE I

OFFICES

Section 1 Registered Office and Agent. The address of the registered office of the corporation in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, 19808. The name of the corporation’s registered agent at such address is Corporation Services Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors.

Section 2 Other Offices. The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

DEFINITIONS

Capitalized words and phrases used and not otherwise defined elsewhere in these bylaws shall have the following meanings:

“Affiliate” means, with reference to a specified Person: (a) a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the specified Person, (b) any Person that is an executive officer, general partner, managing member or trustee of, or serves in a similar capacity with respect to, the specified Person, or for which the specified Person is an executive officer, general partner, managing member or trustee, or serves in a similar capacity, or (c) any member of the Immediate Family of the specified Person.

“Class A Common Stock” means the Class A Voting Common Stock of the corporation, $0.01 par value per share.

“Class B Common Stock” means the Class B Non-Voting Common Stock of the corporation, $0.01 par value per share.

“Common Stock” means the Class A Common Stock and the Class B Common Stock.

“Class B Preferred Stock” means the Class B Senior Preferred Stock of the corporation, $0.01 par value per share.

“Class C Preferred Stock” means the Class C Convertible Preferred Stock of the corporation, $0.01 par value per share.

“Exempt Affiliate Transactions” shall mean (a) any purchase of shares of any class of capital stock of the corporation by Gores or its Affiliates, so long as the right to purchase a pro rata share of such shares is given pursuant to Section 3 of Article Four of the Certificate of Incorporation, (b) entering into or making any payments pursuant to a management services agreement with Gores or its Affiliates to provide management services to the corporation so long as the fees payable thereunder do not exceed $1 million per fiscal year, (c) entering into or making any payments pursuant to a professional services agreement with Glendon Partners, Inc. to provide professional services to the corporation, so long as the fees payable thereunder do not exceed in each fiscal year the amounts set forth opposite such year in Schedule I hereto, (d) payment to Gores or its Affiliates of customary transaction fees (not to exceed market rates) and payment to Glendon Partners, Inc. of fees based upon their customary billing rates, in each case, in connection with any acquisition or divestiture (other than pursuant to the Purchase Agreement), (e) issuances of Class B Common Stock to Glendon Saturn Holdings, LLC (whose members consist solely of officers and employees of Glendon Partners, Inc.) and its Affiliates not to exceed 2.5% of the aggregate outstanding Common Stock, (f) redemption of Class B Preferred Stock in accordance with its terms, and (i) loans to Glendon Partners, Inc. and employees of the corporation to pay income taxes associated with employees or officers of Glendon Partners, Inc. and employees of the corporation making of 83(b) elections relating to the issuance of Class B Common Stock to the extent permitted hereunder.

“Gores” means Gores Building Holdings, LLC, a Delaware limited liability company.

“Immediate Family” means, and is limited to, an individual stockholder’s spouse, parents, parents-in-law, grandparents, children, siblings, and grandchildren, in each case as of the date of determination, or a trust, estate or other estate-planning vehicle, all of the beneficiaries of which consist of such stockholder or members of such stockholder’s Immediate Family.

“Person” means and includes an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated organization, a government or any department or agency thereof, or any entity similar to any of the foregoing.

“Purchase Agreement” means that certain Restructuring and Investment Agreement by and among the corporation, Wolseley and SBS Holdings, dated as of May 5, 2009, pursuant to which, among other things, the corporation agreed to acquire from Wolseley 100% of the membership interests in SBS Holdings in exchange for the consideration described therein, which includes shares of certain capital stock of the corporation.

“SBS Holdings” means Stock Building Supply Holdings, LLC, a Virginia limited liability company.

“Requisite Stockholders” means Stockholders who hold a majority of the Voting Stockholder Interests; provided, that so long as Gores or any of its Affiliates continues to own at least 50% of the number of Voting Stockholder Interests owned on the date of this Certificate of Incorporation, Requisite Stockholders shall mean Gores.

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“Voting Stockholder Interests” means the Class A Common Stock and the Class C Preferred Stock, pursuant to the provisions set forth in Section 6.D of Article Four of the Certificate of Incorporation.

“Wolseley” means Wolseley Investments North America, Inc., a Virginia corporation, and its assignees.

ARTICLE III

MEETINGS OF STOCKHOLDERS

Section 1 Meetings Generally. At least one meeting of the stockholders shall be held each year for the purpose of electing directors and conducting any other proper business as may come before the meeting. The date, time and place of such meeting shall be determined by the highest ranking officer then in office (the “Ranking Officer”); provided, however, that if the Ranking Officer does not act, the board of directors shall determine the date, time and place of such meeting. Notwithstanding the foregoing, no annual meeting of stockholders need be held if not required by the Certificate of Incorporation, as the same may be amended or amended and restated from time to time (the “Certificate of Incorporation”), or by the General Corporation Law of the State of Delaware.

Section 2 Special Meetings. Special meetings of the stockholders may be called for any purpose (including, without limitation, the filling of board vacancies and newly created directorships) and may be held at such time and place as shall be stated in a written notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the board of directors or the Ranking Officer and shall be called by the Ranking Officer upon the written request of holders of shares entitled to cast not less than a majority of the votes at the meeting, which written request shall state the purpose or purposes of the meeting and shall be delivered to the Ranking Officer. On such written request, the Ranking Officer shall fix a date and time for such meeting within two days of the date requested for such meeting in such written request.

Section 3 Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware as the place of meeting for any regular meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation.

Section 4 Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and. in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered (i) upon confirmation of receipt if sent by facsimile, electronic mail or personal delivery or (ii) three (3) days after being deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

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Section 5 Stockholders List. The officer having charge of the stock ledger of the corporation shall make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to any meeting either at a place within the city where the meeting is to be held which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 6 Quorum. The holders of a majority of the issued and outstanding shares of capital stock, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the Certificate of Incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. When a quorum is once present to commence a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders or their proxies.

Section 7 Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 8 Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the Certificate of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 9 Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware or by the Certificate of Incorporation and subject to Section 3 of Article VII hereof, every stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of common stock held by such stockholder.

Section 10 Proxies. Each stockholder entitled to vote at a meeting of the stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or

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acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of the stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.

Section 11 Action by Written Consent. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any regular or special meeting of the stockholders of the corporation, or any action which may be taken at any regular or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, to the corporation’s principal place of business, or to an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested, by reputable overnight courier service, or by electronic mail, with confirmation of receipt. All consents properly delivered in accordance with this Section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation as required by this Section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof.

Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used; provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

Section 12 Stockholder Approvals. Notwithstanding any other provision of these bylaws or the Certificate of Incorporation, the following actions by the corporation or any of its direct or indirect subsidiaries shall require (and shall not be taken without) the approval of the Requisite Stockholders:

(a) any transaction or agreement between the corporation or any of its subsidiaries, on one hand, and Gores or any of its Affiliates, on the other hand, other than Exempt Affiliate Transactions;

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(b) any entry of the corporation or any of its subsidiaries into bankruptcy or receivership, or any assignment for the benefit of creditors of the corporation or any of its subsidiaries other than (a) pursuant to the terms of the Purchase Agreement, or (b) if the board of directors determines in good faith that failure to do so is likely to result in a default under obligations of the corporation to third parties;

(c) any liquidation, dissolution or winding up of the corporation or any of its subsidiaries;

(d) entering into any agreement which would cause any stockholder that has not consented to such treatment becoming personally liable on or in respect of, or to guarantee any indebtedness of, the corporation or any of its subsidiaries;

(e) any other item specified elsewhere in these bylaws or the Certificate of Incorporation to be determined by approval of the Requisite Stockholders; and

(f) entering into any agreement to do any of the foregoing.

ARTICLE IV

DIRECTORS

Section 1 General Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors.

Section 2 Number, Election and Term of Office. The number of directors which shall constitute the first board shall be nine (9). The number of directors shall be subject to change by the vote of holders of a majority of the shares then entitled to vote at an election of directors. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at any meeting of the stockholders, except as provided in Section 4 of this Article IV. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

Section 3 Removal and Resignation. The directors shall only be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, the provisions of this Section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon written notice to the corporation.

Section 4 Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors shall be filled in the same manner in which

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directors are elected pursuant to Section 2 of this Article IV. Notwithstanding the foregoing, any such vacancy shall automatically reduce the number of directors pro tanto, until such time as the holders of the class of common stock which was entitled to elect the director whose office is vacant shall have exercised their right to elect a director to fill such vacancy, whereupon the number of directors shall be automatically increased pro tanto. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided.

Section 5 Meetings and Notice. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board, provided that the directors shall meet at least once per year. Special meetings of the board of directors may be called by or at the request of any two (2) directors or the Ranking Officer on at least twenty-four (24) hours notice to each director, either personally, by telephone, by mail, or by facsimile or electronic mail.

Section 6 Quorum, Required Vote and Adjournment. Each director shall be entitled to one vote except as otherwise provided in the Certificate of Incorporation. Directors then in office (and specifically excluding any vacancies) and holding a majority of the votes of all directors (or such greater number required by applicable law) shall constitute a quorum for the transaction of business. The vote of directors holding a majority of votes present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 7 Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these bylaws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

Section 8 Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member’s alternate, if alternates are designated by the board of directors as provided in Section 7 of this Article IV, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member.

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Section 9 Communications. Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this Section shall constitute presence in person at the meeting.

Section 10 Waiver of Notice and Presumption of Consent. Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have consented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.

Section 11 Action by Written Consent. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12 Expenses. The corporation shall pay or reimburse the members of the board of directors for all direct, out-of-pocket expenses incurred by them with respect to their duties to the corporation.

ARTICLE V

OFFICERS

Section 1 Number. The officers of the corporation shall be elected by the board of directors and may consist of a chairman of the board, president, chief executive officer, chief financial officer, one or more vice presidents, secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible.

Section 2 Election and Term of Office. The officers of the corporation shall be elected at any meeting of the board of directors. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

Section 3 Removal. Any officer or agent elected by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

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Section 4 Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office.

Section 5 Compensation. Compensation of all officers shall be fixed by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation.

Section 6 Chairman of the Board. The chairman of the board, if one is appointed, shall have the powers and perform the duties incident to that position. Subject to the powers of the board of directors, he shall be in the general and active charge of the entire business and affairs of the corporation. He shall preside at meetings of the board of directors and stockholders and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these bylaws. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilities and exercise all the powers of the president.

Section 7 The President. The president shall be the chief executive officer of the corporation; shall preside at all meetings of the stockholders and board of directors at which he is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts which the board of directors have authorized to be executed, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these bylaws. If there is no chief executive officer, the president shall also have the duties of the chief executive officer as prescribed above.

Section 8 Chief Financial Officer. The chief financial officer of the corporation, if one is appointed, shall, under the direction of the chief executive officer (or, in the absence of a chief executive officer, the president), be responsible for all financial and accounting matters and for the direction of the offices of treasurer and controller. The chief financial officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer (or, in the absence of a chief executive officer, the president), the president or the board of directors or as may be provided in these bylaws.

Section 9 Vice Presidents. The vice president, if one is appointed, or if there shall be more than one, the vice presidents in the order determined by the board of directors or by the president, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice presidents shall also perform such other duties and have such other powers—as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president), the president or these bylaws may, from time to time, prescribe.

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Section 10 Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the chief executive officer’s (or, in the absence of a chief executive officer, the president’s) supervision, the secretary shall give, or cause to be given, all notices required to be given by these bylaws or by law; shall have such powers and perform such duties as the board of directors, the chief executive officer, (or, in the absence of a chief executive officer, the president), the president or these bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president), the president or the secretary may, from time to time, prescribe.

Section 11 Treasurer and Assistant Treasurer. The treasurer, if one if appointed, shall, subject to the authority of the chief financial officer, have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; shall render to the chief executive officer (or, in the absence of a chief executive officer, the president), the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; and shall have such powers and perform such duties as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president), the president or these bylaws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six (6) years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the chief financial officer, treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president), the president or treasurer may, from time to time, prescribe.

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Section 12 Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors.

Section 13 Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.

ARTICLE VI

INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

Section 1 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, manager, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, manager, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this Article VI with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the Corporation. The right to indemnification conferred in this Section 1 of this Article VI shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an “advance of expenses”); provided, however, that, if and to the extent that the Delaware General Corporation Law requires, an advance of expenses incurred by

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an indemnitee in his or her capacity as a director, manager or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 of this Article VI or otherwise. The Corporation may, by action of its board of directors, provide indemnification to employees and agents of the Corporation with the same or lesser scope and effect as the foregoing indemnification of directors and officers. The Corporation hereby acknowledges that certain directors and officers affiliated with institutional investors may have certain rights to indemnification, advancement of expenses and/or insurance provided by such institutional investors or certain of their affiliates (collectively, the “Institutional Indemnitors”). The Corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the indemnitee are primary and any obligation of the Institutional Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by the indemnitee in accordance with this Article VI without regard to any rights the indemnitee may have against the Institutional Indemnitors and (iii) that it irrevocably waives, relinquishes and releases the Institutional Indemnitors from any and all claims against the Institutional Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation further agrees that no advancement or payment by the Institutional Indemnitors on behalf of the indemnitee with respect to any claim for which the indemnitee has sought indemnification from the Corporation shall affect the foregoing and the Institutional Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the indemnitee against the Corporation. Notwithstanding anything to the contrary herein, the Corporation shall not be required to provide any advance of expenses to a director or officer who is a party to an action, suit or proceeding brought by the Corporation and approved by a majority of the board of directors that alleges willful misappropriation of corporate assets by such director or officer, disclosure of confidential information in violation of such director’s or officer’s fiduciary or contractual obligations to the Corporation or any other willful and deliberate breach in bad faith of such director’s or officer’s duty to the Corporation or its stockholders.

Section 2 Procedure for Indemnification. Any indemnification of a director or officer of the Corporation or advance of expenses under Section 1 of this Article VI shall be made promptly, and in any event within forty five days (or, in the case of an advance of expenses, twenty (20) days), upon the written request of the director or officer. If a determination by the Corporation that the director or officer is entitled to indemnification pursuant to this Article VI is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved the request. If the Corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within forty five days (or, in the case of an advance of expenses, twenty days), the right to indemnification or advances as granted by this Article VI shall be enforceable by the director or officer in any court of competent jurisdiction. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the

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Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of expenses where the undertaking required pursuant to Section 1 of this Article VI, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the Corporation. Neither the failure of the Corporation (including its board of directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its board of directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. The procedure for indemnification of other employees and agents for whom indemnification is provided pursuant to Section 1 of this Article VI shall be the same procedure set forth in this Section 2 of this Article VI for directors or officers, unless otherwise set forth in the action of the board of directors providing indemnification for such employee or agent.

Section 3 Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee or agent of the Corporation or was serving at the request of the Corporation as a director, manager, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the Delaware General Corporation Law.

Section 4 Subsidiaries. To the extent any indemnitee under Section 1 of this Article VI is also entitled to indemnification from a subsidiary of the Corporation, such indemnitee shall first look to such subsidiary for indemnification, and only after seeking indemnification from such subsidiary shall such indemnitee seek indemnification from the Corporation.

Section 5 Reliance. Persons who, after the date of the adoption of this provision, become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, manager, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Article VI in entering into or continuing such service. The rights to indemnification and to the advance of expenses conferred in this Article VI shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.

Section 6 Non Exclusivity of Rights. The rights to indemnification and to the advance of expenses conferred in this Article VI shall not be exclusive of any other right which any person may have or hereafter acquire under the Certificate of Incorporation or under any statute, by law, agreement, vote of stockholders or disinterested directors or otherwise.

13

Section 7 Merger or Consolidation. For purposes of this Article VI, references to the “Corporation” shall include, in addition to the resulting Corporation, any constituent Corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent Corporation, or is or was serving at the request of such constituent Corporation as a director, manager, officer, employee or agent of another Corporation, partnership, limited liability company, joint venture, trust or other enterprise, shall stand in the same position under this Article VI with respect to the resulting or surviving Corporation as he or she would have with respect to such constituent Corporation if its separate existence had continued.

ARTICLE VII

CERTIFICATES OF STOCK

Section 1 Form. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by the chief executive officer (or, in the absence of a chief executive officer, the president), president, chief financial officer or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares of a specific class or series owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such chief executive officer (or, in the absence of a chief executive officer, the president), president, chief financial officer, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder’s attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation.

Section 2 Lost Certificates. The board of directors may direct anew certificate or certificates to be issued in place of any certificate or certificates previously issued by the

14

corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 3 Fixing a Record Date for Stockholder Meetings. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the board of directors may fix a new record date for the adjourned meeting.

Section 4 Fixing a Record Date for Action by Written Consent. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested or by facsimile or electronic mail, with confirmation of receipt. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

Section 5 Fixing a Record Date for Other Purposes. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than

15

sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

Section 6 Registered Stockholders. Prior to the surrender to the corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

Section 7 Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation.

ARTICLE VIII

GENERAL PROVISIONS

Section 1 Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created.

Section 2 Checks, Drafts or Orders. All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof.

Section 3 Contracts. The board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

Section 4 Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the

16

judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this Section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

Section 5 Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 6 Corporate Seal. The board of directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 7 Voting Securities Owned by Corporation. Voting securities in any other corporation held by the corporation shall be voted by the president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.

Section 8 Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom (at their own cost and expense). A proper purpose shall mean any purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business.

Section 9 Accounting and Fiscal Year. The books of the corporation shall be kept in accordance with generally accepted United States accounting principles, as in effect from time to time, and on such method of accounting for tax and financial reporting purposes as may be determined by the board of directors. The fiscal year of the corporation shall end on July 31 of each year, or on such other date as the board of directors shall determine.

Section 10 Section Headings. Section headings in these bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 11 Inconsistent Provisions. In the event that any provision of these bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

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ARTICLE IX

DISSOLUTION AND TERMINATION OF THE CORPORATION

Section 1 Limitations. The corporation may be dissolved, liquidated, and terminated and have its affairs wound up only pursuant to the provisions of this Article IX, and the parties hereto do hereby irrevocably waive any and all other rights they may have to cause a dissolution of the corporation or a sale or partition of any or all of the corporation assets.

Section 2 Exclusive Causes. Notwithstanding the General Corporation Law of the State of Delaware, the following and only the following events shall cause the corporation to be dissolved, liquidated, and terminated:

(a) The approval of the Requisite Stockholders; or

(b) Judicial dissolution.

Any dissolution of the corporation other than as provided in this Section shall be a dissolution in contravention of these bylaws.

Section 3 Effect of Dissolution. The dissolution of the corporation shall be effective on the day on which the event occurs giving rise to the dissolution, but the corporation shall not terminate until it has been wound up and its assets have been distributed as provided in the Certificate of Incorporation and the Certificate of Incorporation has been cancelled by the filing of a certificate of dissolution with the office of the Secretary of State of the State of Delaware. Notwithstanding the dissolution of the corporation, prior to the termination of the corporation, the business of the corporation and the affairs of the stockholders, as such, shall continue to be governed by these bylaws and the Certificate of Incorporation.

ARTICLE X

AMENDMENTS

Except for Article IV and Article VI hereof, these bylaws may be amended, altered, or repealed and new bylaws adopted at any meeting of the board of directors by a majority vote. Article VI hereof may be amended, altered, or repealed at any meeting of the board of directors only by a unanimous vote (or unanimous written consent in lieu thereof). The fact that the power to adopt, amend, alter, or repeal the bylaws has been conferred upon the board of directors shall not divest the stockholders of the same powers.

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SCHEDULE I

PROFESSIONAL SERVICES FEES

Period	Fee Amount
Fourth Quarter of Fiscal Year 2009	$	800,000
Fiscal Year 2010	$	2,400,000
Fiscal Year 2011	$	1,900,000
Fiscal Year 2012	$	1,400,000
Fiscal Year 2013	$	1,000,000
Fiscal Year 2014 and thereafter	$	1,000,000

EX-5.1

Exhibit 5.1

[FORM OF OPINION TO BE RECEIVED FROM COUNSEL]

                    , 2013

Stock Building Supply Holdings, Inc.

8020 Arco Corporate Drive, Suite 400

Raleigh, North Carolina 27617

Re: Registration Statement on Form S-1

Ladies and Gentlemen:

We are acting as special counsel to Stock Building Supply Holdings, Inc., a Delaware corporation (the “Company”), in connection with the proposed registration by the Company of shares of its Common Stock, par value $0.01 per share (the “Common Stock”), including shares of Common Stock to cover over-allotments, if any, pursuant to a Registration Statement on Form S-1 (Registration No. 333-             ), originally filed with the Securities and Exchange Commission (the “Commission”) on                     , 2013 under the Securities Act of 1933, as amended (the “Act”) (such Registration Statement, as amended or supplemented, is hereinafter referred to as the “Registration Statement”). The shares of Common Stock to be issued and sold by the Company pursuant to the Registration Statement are referred to herein as the “Shares.”

In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion, including (i) the corporate and organizational documents of the Company, including the Amended and Restated Certificate of Incorporation of the Company (the “Amended and Restated Certificate”) to be filed with the Secretary of State of the State of Delaware prior to the sale of the Shares and (ii) minutes and records of the proceedings of the Company with respect to the issuance and sale of the Shares.

For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto other than the Company and the due authorization, execution and delivery of all documents by the parties thereto other than the Company. We have not independently established or verified any facts relevant to the opinions expressed herein, but have relied upon statements and representations of officers and other representatives of the Company and others.

Based upon and subject to the foregoing qualifications, assumptions and limitations and the further limitations set forth below, we are of the opinion that upon filing of the Amended and Restated Certificate with the Secretary of State of the State of Delaware, the Shares will be duly authorized, and, when the Registration Statement becomes effective under the Act, and when the Shares are registered by the Company’s transfer agent and delivered against payment of the agreed consideration therefor, all in accordance with the Underwriting Agreement, dated as of                     , 2013, by and among the Company and Goldman, Sachs & Co., Barclays Capital Inc. and Citigroup Global Markets Inc., on behalf of the underwriters named therein, the Shares will be validly issued, fully paid and non-assessable.

Our opinion expressed above is subject to the qualification that we express no opinion as to the applicability of, compliance with, or effect of any laws except the General Corporation Law of the State of Delaware (including the statutory provisions, all applicable provisions of the Delaware constitution and reported judicial decisions interpreting the foregoing).

We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the heading “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is

required under Section 7 of the Act or the rules and regulations of the Commission. This opinion and consent may be incorporated by reference in a subsequent registration statement on Form S-1 filed pursuant to Rule 462(b) under the Act with respect to the registration of additional securities for sale in the offering contemplated by the Registration Statement and shall cover such additional securities, if any, registered on such subsequent registration statement.

We do not find it necessary for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or “Blue Sky” laws of the various states to the issuance and sale of the Shares.

This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. This opinion speaks only as of the date that the Registration Statement becomes effective under the Act and we assume no obligation to revise or supplement this opinion after the date of effectiveness should the General Corporation Law of the State of Delaware be changed by legislative action, judicial decision or otherwise after the date hereof.

Sincerely,

KIRKLAND & ELLIS LLP

2

EX-10.1

Exhibit 10.1

CREDIT AGREEMENT

by and among

STOCK BUILDING SUPPLY HOLDINGS II, LLC

as Parent,

EACH OF PARENT’S SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO FOOTHILL, LLC

as the Co-Lead Arranger and as Administrative Agent

Dated as of June 30, 2009

TABLE OF CONTENTS

			Page
1.	DEFINITIONS AND CONSTRUCTION			1
	1.1	Definitions		1
	1.2	Accounting Terms		1
	1.3	Code		1
	1.4	Construction		1
	1.5	Schedules and Exhibits		2
2.	LOAN AND TERMS OF PAYMENT			2
	2.1	Revolver Advances		2
	2.2	Increase in Commitments		3
	2.3	Borrowing Procedures and Settlements		5
	2.4	Payments; Reductions of Commitments; Prepayments		9
	2.5	Overadvances		11
	2.6	Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations		11
	2.7	Crediting Payments		13
	2.8	Designated Account		13
	2.9	Maintenance of Loan Account; Statements of Obligations		13
	2.10	Fees		13
	2.11	Letters of Credit		14
	2.12	LIBOR Option		17
	2.13	Capital Requirements		18
	2.14	Joint and Several Liability of Borrowers		19
3.	CONDITIONS; TERM OF AGREEMENT			21
	3.1	Conditions Precedent to the Initial Extension of Credit		21
	3.2	Conditions Precedent to all Extensions of Credit		22
	3.3	Maturity		22
	3.4	Effect of Maturity		22
	3.5	Early Termination by Borrowers		22
	3.6	Conditions Subsequent		22
4.	REPRESENTATIONS AND WARRANTIES			23
	4.1	Due Organization and Qualification; Subsidiaries		23
	4.2	Due Authorization; No Conflict		23
	4.3	Governmental Consents		24
	4.4	Binding Obligations; Perfected Liens		24

- i -

TABLE OF CONTENTS

(continued)

			Page
	4.5	Title to Assets; No Encumbrances		24
	4.6	Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims		24
	4.7	Litigation		25
	4.8	Compliance with Laws		25
	4.9	No Material Adverse Change		25
	4.10	Fraudulent Transfer		26
	4.11	Employee Benefits		26
	4.12	Environmental Condition		26
	4.13	Intellectual Property		27
	4.14	Leases		27
	4.15	Deposit Accounts and Securities Accounts		27
	4.16	Complete Disclosure		27
	4.17	Material Contracts		27
	4.18	Patriot Act		28
	4.19	Indebtedness		28
	4.20	Payment of Taxes		28
	4.21	Margin Stock		28
	4.22	Governmental Regulation		28
	4.23	OFAC		28
	4.24	Employee and Labor Matters		29
	4.25	Parent as a Holding Company		29
	4.26	Required Equity Documents		29
	4.27	[Intentionally Omitted]		29
	4.28	Eligible Accounts		29
	4.29	Eligible Inventory		29
	4.30	Locations of Inventory and Equipment		29
	4.31	Inventory Records		30
5.	AFFIRMATIVE COVENANTS			30
	5.1	Financial Statements, Reports, Certificates		30
	5.2	Collateral Reporting		30
	5.3	Existence		30
	5.4	Maintenance of Properties		30
	5.5	Taxes		30

- ii -

TABLE OF CONTENTS

(continued)

			Page
	5.6	Insurance		31
	5.7	Inspection		31
	5.8	Compliance with Laws		31
	5.9	Environmental		31
	5.10	Disclosure Updates		32
	5.11	Formation/Acquisition of Subsidiaries; Designation of Additional Restricted Subsidiaries		32
	5.12	Further Assurances		33
	5.13	Lender Meetings		33
	5.14	Material Contracts		33
	5.15	Location of Inventory and Equipment		33
	5.16	Assignable Material Contracts		34
	5.17	Required Equity Account		34
6.	NEGATIVE COVENANTS			34
	6.1	Indebtedness		34
	6.2	Liens		34
	6.3	Restrictions on Fundamental Changes		34
	6.4	Disposal of Assets		35
	6.5	Change Name		35
	6.6	Nature of Business		35
	6.7	Prepayments and Amendments		35
	6.8	Change of Control		36
	6.9	Restricted Junior Payments		36
	6.10	Accounting Methods		38
	6.11	Investments		38
	6.12	Transactions with Affiliates		38
	6.13	Use of Proceeds		39
	6.14	Parent as Holding Company		39
	6.15	Consignments		39
	6.16	Inventory and Equipment with Bailees		39
	6.17	Required Equity		39
7.	FINANCIAL COVENANTS			40
8.	EVENTS OF DEFAULT			44

- iii -

TABLE OF CONTENTS

(continued)

			Page
9.	RIGHTS AND REMEDIES			47
	9.1	Rights and Remedies		47
	9.2	Remedies Cumulative		47
10.	WAIVERS; INDEMNIFICATION			47
	10.1	Demand; Protest; etc.		47
	10.2	The Lender Group’s Liability for Collateral		47
	10.3	Indemnification		47
11.	NOTICES			48
12.	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER			49
13.	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS			50
	13.1	Assignments and Participations		50
	13.2	Successors		52
14.	AMENDMENTS; WAIVERS			53
	14.1	Amendments and Waivers		53
	14.2	Replacement of Certain Lenders		54
	14.3	No Waivers; Cumulative Remedies		55
15.	AGENT; THE LENDER GROUP			55
	15.1	Appointment and Authorization of Agent		55
	15.2	Delegation of Duties		55
	15.3	Liability of Agent		55
	15.4	Reliance by Agent		56
	15.5	Notice of Default or Event of Default		56
	15.6	Credit Decision		56
	15.7	Costs and Expenses; Indemnification		57
	15.8	Agent in Individual Capacity		57
	15.9	Successor Agent		58
	15.10	Lender in Individual Capacity; Co-Lead Arrangers		58
	15.11	Collateral Matters		58
	15.12	Restrictions on Actions by Lenders; Sharing of Payments		59
	15.13	Agency for Perfection		60
	15.14	Payments by Agent to the Lenders		60
	15.15	Concerning the Collateral and Related Loan Documents		60
	15.16	Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information		60
	15.17	Several Obligations; No Liability		61

- iv -

TABLE OF CONTENTS

(continued)

			Page
16.	WITHHOLDING TAXES			61
17.	GENERAL PROVISIONS			64
	17.1	Effectiveness		64
	17.2	Section Headings		64
	17.3	Interpretation		64
	17.4	Severability of Provisions		64
	17.5	Bank Product Providers		64
	17.6	Debtor-Creditor Relationship		64
	17.7	Counterparts; Electronic Execution		64
	17.8	Revival and Reinstatement of Obligations		65
	17.9	Confidentiality		65
	17.10	Lender Group Expenses		66
	17.11	USA PATRIOT Act		66
	17.12	Integration		66
	17.13	Stock Building Supply, LLC as Agent for Borrowers		66
	17.14	Additional Borrowers		66

- v -

EXHIBITS AND SCHEDULES

Exhibit A-1	Form of Assignment and Acceptance
Exhibit B-1	Form of Borrowing Base Certificate
Exhibit B-2	Bank Product Provider Letter Agreement
Exhibit C-1	Form of Compliance Certificate
Exhibit L-1	Form of LIBOR Notice
Schedule A-1	Agent’s Account
Schedule A-2	Authorized Persons
Schedule C-1	Commitments
Schedule D-1	Designated Account
Schedule E-2	Closed Locations
Schedule P-1	Permitted Investments
Schedule P-2	Permitted Liens
Schedule 1.1	Definitions
Schedule 3.1	Conditions Precedent
Schedule 3.6	Conditions Subsequent
Schedule 4.1(b)	Parent Obligation to Repurchase or Retire Stock
Schedule 4.1(c)	Capitalization of Restricted Subsidiaries of Parent
Schedule 4.6(a)	States of Organization
Schedule 4.6(b)	Chief Executive Offices
Schedule 4.6(c)	Organizational Identification Number
Schedule 4.6(d)	Commercial Tort Claims
Schedule 4.7(b)	Litigation
Schedule 4.11	Employee Benefit Plans
Schedule 4.15	Deposit Accounts and Securities Accounts
Schedule 4.17	Material Contracts
Schedule 4.19	Permitted Indebtedness
Schedule 4.20	Payment of Taxes
Schedule 4.24	Employee and Labor Matters
Schedule 4.30	Locations of Inventory and Equipment
Schedule 5.1	Financial Statements, Reports, Certificates
Schedule 5.2	Collateral Reporting
Schedule 6.6	Nature of Business

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of June 30, 2009, by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”). WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), and as co-lead arranger, BANK OF AMERICA, N.A. (“BOA”), as co-lead arranger, STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), and each of Parent’s Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with each other Subsidiary that becomes a party hereto after the date hereof in accordance with the terms hereof, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”).

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, however, that if Administrative Borrower notifies Agent that Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Borrowers that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred. When used herein, the term “financial statements” shall include the notes and schedules thereto. Whenever the term “Parent” is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent and its Restricted Subsidiaries on a consolidated basis, unless the context clearly requires otherwise.

1.3 Code. Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, however, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.

1.4 Construction. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words

“asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash (or, in the case of Letters of Credit or Bank Products, providing Letter of Credit Collateralization) of all Obligations other than unasserted contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and that are not required by the provisions of this Agreement to be repaid or cash collateralized. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

1.5 Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

2. LOAN AND TERMS OF PAYMENT.

2.1 Revolver Advances.

(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Commitment agrees (severally, not jointly or jointly and severally) to make advances (“Advances”) to Borrowers in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the Maximum Revolver Amount less the sum of (A) the Letter of Credit Usage at such time plus (B) the Plan Reserve plus (C) the Special Reserve plus (D) the Distribution Reserve, and (ii) the Borrowing Base at such time less the Letter of Credit Usage at such time.

(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Advances, together with interest accrued thereon, shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.

(c) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right to establish reserves (which, for the avoidance of doubt, shall be without duplication of any reserve otherwise provided for herein) against the Borrowing Base in such amounts, and with respect to such matters, as Agent in its Permitted Discretion shall deem necessary or appropriate, including reserves with respect to (i) sums that Parent or its Restricted Subsidiaries are required to pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (ii) amounts owing by Parent or its Restricted Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent likely would have a priority superior to Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral; provided, however, that (w) no reserve shall be established under this clause (ii) solely with respect to a Lien in favor of a landlord that, in the judgment of Agent based upon advice of legal counsel, would not have priority superior to Agent’s Liens (it being understood and agreed that Agent may impose reserves for other purposes, including for rent, the failure to deliver a Collateral Access Agreement that gives the Agent the right to access the premises of a landlord and sufficient time to liquidate the Collateral on such premises, or other amounts that Parent, its Restricted Subsidiaries, or any member of the Lender Group are required to pay such landlord), (x) no reserve shall be established under this Section 2.1(c) with respect to a Lien in favor of a landlord that, in the judgment of Agent based upon advice of legal counsel, likely would have priority superior to Agent’s Liens if such landlord has delivered a Collateral Access Agreement to Agent, pursuant to which such landlord has waived or subordinated its Lien to Agent’s Lien on the Collateral (it being understood and agreed that Agent may impose reserves as Agent in its Permitted Discretion shall deem necessary or appropriate for other purposes given the

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circumstances, including for rent, the failure to deliver a Collateral Access Agreement that gives the Agent the right to access the premises of a landlord and sufficient time to liquidate the Collateral on such premises, or other amounts that Parent, its Restricted Subsidiaries, or any member of the Lender Group (solely in its capacity as an Agent or Lender hereunder) are required to pay such landlord); (y) a reserve imposed under this clause (ii) solely for a Lien in favor of a landlord which, in the judgment of Agent, likely would have priority superior to Agent’s Liens, for which a Collateral Access Agreement described in (x) above has not been delivered to Agent, shall not exceed 3 months rent (it being understood and agreed that Agent may impose reserves for other purposes, including for rent, the failure to deliver a Collateral Access Agreement that gives the Agent the right to access the premises of a landlord and sufficient time to liquidate the Collateral on such premises, or other amounts that Parent, its Restricted Subsidiaries, or any member of the Lender Group (solely in its capacity as an Agent or Lender hereunder are required to pay such landlord); (iii) to the extent that any Inventory is located on real property leased by a Borrower or in a contract warehouse, and such leased location or contract warehouse, as applicable, is not subject to a Collateral Access Agreement executed by the lessor or warehouseman that gives the Agent the right to access the premises of the landlord or the warehouseman, as the case may be, and sufficient time to liquidate the Collateral on such premises or in such warehouse, as the case may be, (iv) to the extent that any Inventory is located on real property leased by a Borrower or in a contract warehouse, and such Inventory is not segregated or otherwise separately identifiable from goods of Persons other than the Loan Parties, if any, stored on the premises. The amount of any reserve established pursuant to this Section 2.1(c) shall bear a reasonable relationship to the matter which is the basis of such reserve. Notwithstanding anything to the contrary contained in this Section 2.1(c), no reserve shall be established during the 30-day period following the Closing Date as a result of any Borrower’s failure to execute and deliver to Agent any Collateral Access Agreement.

2.2 Increase in Commitments.

(a) From time to time (but not more than on 5 occasions) during the period from and after the Closing Date, the Maximum Revolver Amount may be increased (each increase that satisfies the terms and conditions of this Section, an “Approved Increase”) by an amount not in excess of the Available Increase Amount at the option of Borrowers by delivery of a written notice from Administrative Borrower of a proposed increase to Agent if and only if (i) each of the conditions precedent set forth in Section 3.2 are satisfied as of the Increase Effective Date (as if Borrowers were requesting an extension of credit hereunder), (ii) if a Financial Covenant Period has commenced and is continuing, Borrowers have delivered to Agent updated pro forma Projections (after giving effect to the proposed increase) for Parent and its Restricted Subsidiaries reflecting compliance (to the extent required by Section 7) on a pro forma basis with the financial covenants in Section 7 for each month during the next 12 month period (on a month-by-month basis) following the Increase Effective Date in which such Financial Covenant Period is projected to be continuing, in form reasonably acceptable to Agent, (iii) Borrowers shall have (A) reached agreement with the prospective new Lenders (the “Prospective Lenders”) with respect to the amount of any supplemental closing fee to be paid to such Prospective Lenders on the Increase Effective Date and shall have communicated the amount of such supplemental closing fee to Agent, (B) reached agreement with the Prospective Lenders with respect to the interest rates applicable to the Advances to be made by such Prospective Lenders and shall have communicated the amount of such interest rates to Agent, (C) entered into an agreement with WFF and BOA regarding the payment of supplemental closing fees to be paid to each of them, such supplemental closing fees to be in an amount sufficient to provide each of them with closing fees (aggregating the closing fees paid on the Closing Date together with supplemental closing fees, if any, paid on a prior Increase Effective Date and the supplemental closing fees payable on the subject Increase Effective Date) on the amount of WFF’s and BOA’s Commitments equivalent (in percentage terms) to the closing fees payable to the Prospective Lenders (it being understood and agreed that once earned any closing fees or supplemental closing fees paid to WFF or BOA prior to any such date shall be nonrefundable, and neither WFF nor BOA shall be required to disgorge any such fees for any reason, including in the event that the closing fees or supplemental closing fees paid to WFF or BOA (individually or in the aggregate) is greater than the amount of closing fees or supplemental closing fees payable to the Prospective Lenders), (D) if the Base Rate Margin or the LIBOR Rate Margin, as the case may be, that is to be applicable to the Advances to be made by the Prospective Lenders is greater than

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the Base Rate Margin or the LIBOR Rate Margin, as the case may be, otherwise applicable to Advance hereunder, then the Base Rate Margin or the LIBOR Rate Margin, as the case may be, otherwise applicable to Advances hereunder following the Increase Effective Date shall automatically be increased by the amount of such excess, effective on the Increase Effective Date, and (E) paid any fees described in clauses (A) and (C) above to Agent for the account of the Prospective Lenders, WFF, and BOA, as applicable. Each such notice shall specify the date on which the proposed increase is to be effective (the “Increase Effective Date”), which date shall not be less than 10 Business Days after the date of such notice. Each proposed increase shall be in an amount of at least $10,000,000 and integral multiples of $10,000,000 in excess thereof.

(b) So long as each of the requirements set forth in Section 2.2(a) are satisfied, the increased Commitments with respect to an Approved Increase shall become effective, as of such Increase Effective Date.

(c) Agent shall invite each Lender to increase its Commitment (it being understood that no Lender shall be obligated to increase its Commitment) and, if sufficient Lenders do not agree to increases in their Commitments in an aggregate amount equal to the Approved Increase, may invite any other Person who is reasonably satisfactory to Agent and Borrowers to become a Lender in connection with an Approved Increase by executing a joinder agreement, in form and substance reasonably satisfactory to Agent, to which such Person, Borrowers, and Agent are party (the “Increase Joinder”). Such Increase Joinder may, with the consent of Borrowers and Required Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of Agent, to effectuate the provisions of this Section 2.2; provided, however, that (i) any amendment to effect the agreements reached between the applicable parties pursuant to Section 2.2 (a)(iii) shall require only the consent of Borrowers, the relevant Prospective Lenders, WFF, BOA, and Agent, as applicable, and (ii) any amendment to cure any ambiguity, defect, or inconsistency as may be necessary or appropriate, in the opinion of Agent shall require only the consent of Borrowers and Agent.

(d) Unless otherwise specifically provided herein, all references in this Agreement and any other Loan Document to Advances shall be deemed, unless the context otherwise requires, to include Advances made pursuant to the increased Commitments and Maximum Revolver Amount pursuant to this Section 2.2. Advances made pursuant to the increased Commitments shall bear interest at the same rate that is then applicable to Advances made pursuant to this Agreement.

(e) To the extent any Advances or Letters of Credit are outstanding on the Increase Effective Date, each of the Lenders having a Commitment prior to the Increase Effective Date (the “Pre-Increase Revolver Lenders”) shall assign to any Lender which is acquiring a new or additional Commitment on the Increase Effective Date (the “Post-Increase Revolver Lenders”), and such Post-Increase Revolver Lenders shall purchase from each Pre-Increase Revolver Lender, at the principal amount thereof, such interests in the Advances and participation interests in Letters of Credit on such Increase Effective Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Advances and participation interests in Letters of Credit will be held by Pre-Increase Revolver Lenders and Post-Increase Revolver Lenders ratably in accordance with their Pro Rata Share after giving effect to such increased Commitments.

(f) The Advances, Commitments, and Maximum Revolver Amount established pursuant to this Section 2.2 shall constitute Advances, Commitments, and Maximum Revolver Amount under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from any guarantees and the security interests created by the Loan Documents. Borrowers shall take any actions reasonably required by Agent to ensure and demonstrate that the Liens granted by the Loan Documents continue to be perfected under the Code or otherwise after giving effect to the establishment of any such new Commitments and Maximum Revolver Amount.

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2.3 Borrowing Procedures and Settlements.

(a) Procedure for Borrowing. Each Borrowing shall be made by a written request by an Authorized Person delivered to Agent. Unless Swing Lender is not obligated to make a Swing Loan pursuant to Section 2.3(b) below, such notice must be received by Agent no later than 10:00 a.m. (California time) on the Business Day that is the requested Funding Date specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date, which shall be a Business Day; provided, however, that if Swing Lender is not obligated to make a Swing Loan as to a requested Borrowing, such notice must be received by Agent no later than 10:00 a.m. (California time) on the Business Day prior to the date that is the requested Funding Date. At Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time. In such circumstances, Borrowers agree that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.

(b) Making of Swing Loans. In the case of a request for an Advance and so long as either (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus the amount of Collections or payments applied to Swing Loans since the last Settlement Date, plus the amount of the requested Advance does not exceed $20,000,000, or (ii) Swing Lender, in its sole discretion, shall agree to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make an Advance in the amount of such Borrowing (any such Advance made solely by Swing Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and such Advances being referred to collectively as “Swing Loans”) available to Borrowers on the Funding Date applicable thereto by transferring immediately available funds to the Designated Account. Each Swing Loan shall be deemed to be an Advance hereunder and shall be subject to all the terms and conditions applicable to other Advances, except that all payments on any Swing Loan shall be payable to Swing Lender solely for its own account. Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date. Swing Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan. The Swing Loans shall be secured by Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Advances that are Base Rate Loans.

(c) Making of Loans.

(i) In the event that Swing Lender is not obligated to make a Swing Loan, then promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m. (California time) on the Business Day immediately preceding the Funding Date applicable thereto, by telecopy, telephone, or other similar form of transmission, of the requested Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, not later than 10:00 a.m. (California time) on the Funding Date applicable thereto. After Agent’s receipt of the proceeds of such Advances, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Agent to the Designated Account; provided, however, that, subject to the provisions of Section 2.3(d)(ii), Agent shall not request any Lender to make, and no Lender shall have the obligation to make, any Advance if (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date.

(ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (California time) on the date of a Borrowing, that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may

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assume that each Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If any Lender shall not have made its full amount available to Agent in immediately available funds and if Agent in such circumstances has made available to Borrowers such amount, that Lender shall on the Business Day following such Funding Date make such amount available to Agent, together with interest at the Defaulting Lender Rate for each day during such period. A notice submitted by Agent to any Lender with respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error. If such amount is so made available, such payment to Agent shall constitute such Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances composing such Borrowing. The failure of any Lender to make any Advance on any Funding Date shall not relieve any other Lender of any obligation hereunder to make an Advance on such Funding Date, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on any Funding Date.

(iii) Agent shall not be obligated to transfer to a Defaulting Lender any payments made by Borrowers to Agent for the Defaulting Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments to each other non-Defaulting Lender member of the Lender Group ratably in accordance with their Commitments (but only to the extent that such Defaulting Lender’s Advance was funded by the other members of the Lender Group) or, if so directed by Administrative Borrower and if no Event of Default has occurred and is continuing (and to the extent such Defaulting Lender’s Advance was not funded by the Lender Group), retain same to be re-advanced to Borrowers as if such Defaulting Lender had made Advances to Borrowers. Subject to the foregoing, Agent may hold and, in its Permitted Discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero. This Section shall remain effective with respect to such Lender until (x) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting Lenders, Agent, and Borrowers shall have waived such Defaulting Lender’s default in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to Agent all amounts owing by Defaulting Lender in respect thereof. The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by any Borrower of its duties and obligations hereunder to Agent or to the Lenders other than such Defaulting Lender. Any such failure to fund by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrowers at their option, upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being repaid its share of the outstanding Obligations (other than Bank Product Obligations, but including an assumption of its Pro Rata Share of the Letters of Credit) without any premium or penalty of any kind whatsoever; provided, however, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or any Borrower’s rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.

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(d) Protective Advances and Optional Overadvances.

(i) Any contrary provision of this Agreement notwithstanding, Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, to make Advances to, or for the benefit of, Borrowers on behalf of the Lenders (in an aggregate amount for all such Advances taken together not exceeding $20,000,000 outstanding at any one time) that Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (any of the Advances described in this Section 2 3(d)(i) shall be referred to as “Protective Advances”).

(ii) Any contrary provision of this Agreement notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Advances (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would be created, so long as (A) after giving effect to such Advances, the outstanding Revolver Usage does not exceed the Borrowing Base by more than $20,000,000, and (B) after giving effect to such Advances, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount. In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value), and the Lenders with Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Advances to Borrowers to an amount permitted by the preceding sentence. In such circumstances, if any Lender with a Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. Each Lender with a Commitment shall be obligated to settle with Agent as provided in Section 2.3(e) for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.3(d)(ii), and any Overadvances resulting from the charging to the Loan Account of interest, fees, or Lender Group Expenses.

(iii) Each Protective Advance and each Overadvance shall be deemed to be an Advance hereunder, except that no Protective Advance or Overadvance shall be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all payments on the Protective Advances shall be payable to Agent solely for its own account. The Protective Advances and Overadvances shall be repayable on demand, secured by Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Advances that are Base Rate Loans. The ability of Agent to make Protective Advances is separate and distinct from its ability to make Overadvances and its ability to make Overadvances is separate and distinct from its ability to make Protective Advances. For the avoidance of doubt, the limitations on Agent’s ability to make Protective Advances do not apply to Overadvances and the limitations on Agent’s ability to make Overadvances do not apply to Protective Advances. The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrowers in any way.

(iv) Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary: (A) no Overadvance or Protective Advance may be made by Agent if such Advance would cause the aggregate principal amount of Overadvances and Protective Advances outstanding to exceed an amount equal to ten percent (10%) of the Maximum Revolver Amount; and (B) to the extent any Protective Advance causes the aggregate Revolver Usage to exceed the Maximum Revolver Amount, each such Protective Advance shall be for Agent’s sole and separate account and not for the account of any Lender.

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(e) Settlement. It is agreed that each Lender’s funded portion of the Advances is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Advances. Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall not be for the benefit of Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Advances, the Swing Loans, and the Protective Advances shall take place on a periodic basis in accordance with the following provisions:

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent (1) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with respect to the outstanding Protective Advances, and (3) with respect to Borrowers’ or their Restricted Subsidiaries’ Collections or payments received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. (California time) on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Advances, Swing Loans, and Protective Advances for the period since the prior Settlement Date. Subject to the terms and conditions contained herein (including Section 2.3(c)(iii)): (y) if a Lender’s balance of the Advances (including Swing Loans and Protective Advances) exceeds such Lender’s Pro Rata Share of the Advances (including Swing Loans and Protective Advances) as of a Settlement Date, then Agent shall, by no later than 12:00 p.m. (California time) on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances (including Swing Loans and Protective Advances), and (z) if a Lender’s balance of the Advances (including Swing Loans and Protective Advances) is less than such Lender’s Pro Rata Share of the Advances (including Swing Loans and Protective Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m. (California time) on the Settlement Date transfer in immediately available funds to Agent’s Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances (including Swing Loans and Protective Advances). Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans or Protective Advances and, together with the portion of such Swing Loans or Protective Advances representing Swing Lender’s Pro Rata Share thereof, shall constitute Advances of such Lenders. If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and Protective Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Advances, Swing Loans, and Protective Advances as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.

(iii) Between Settlement Dates, Agent, to the extent Protective Advances or Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any Collections or payments received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Advances, for application to the Protective Advances or Swing Loans. Between Settlement Dates, Agent, to the extent no Protective Advances or Swing Loans are outstanding, may pay over to Swing Lender any Collections or payments received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Advances, for application to Swing Lender’s Pro Rata Share of the Advances. If, as of any Settlement Date, Collections or payments of Parent or its Restricted Subsidiaries received since the then immediately preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Advances other than to Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to the

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outstanding Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Advances. During the period between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Protective Advances, and each Lender (subject to the effect of agreements between Agent and individual Lenders) with respect to the Advances other than Swing Loans and Protective Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.

(f) Notation. Agent, as a non-fiduciary agent for Borrowers, shall maintain a register showing the principal amount of the Advances, owing to each Lender, including the Swing Loans owing to Swing Lender, and Protective Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

(g) Lenders’ Failure to Perform. All Advances (other than Swing Loans and Protective Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

2.4 Payments; Reductions of Commitments: Prepayments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein. Any payment received by Agent later than 11:00 a.m. (California time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(ii) Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

(b) Apportionment and Application.

(i) So long as no Application Event has occurred and is continuing and except as otherwise provided with respect to Defaulting Lenders, all principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses (other than fees or expenses that are for Agent’s separate account) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. All payments to be made hereunder by Borrowers shall be remitted to Agent and all (subject to Section 2.4(b)(iv), and Section 2.4(e)) such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing, to reduce the balance of the Advances outstanding and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

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(ii) At any time that an Application Event has occurred and is continuing and except as otherwise provided with respect to Defaulting Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows:

(A) first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

(B) second, to pay any fees or premiums then due to Agent under the Loan Documents until paid in full,

(C) third, to pay interest due in respect of all Protective Advances until paid in full,

(D) fourth, to pay the principal of all Protective Advances until paid in full,

(E) fifth, ratably to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

(F) sixth, ratably to pay any fees or premiums then due to any of the Lenders under the Loan Documents until paid in full,

(G) seventh, ratably to pay interest due in respect of the Advances (other than Protective Advances), and the Swing Loans until paid in full,

(H) eighth, ratably (i) to pay the principal of all Swing Loans until paid in full, (ii) to pay the principal of all Advances until paid in full, (iii) to Agent, to be held by Agent, for the benefit of Issuing Lender (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of the Issuing Lender, a share of each Letter of Credit Disbursement), as cash collateral in an amount up to 105% of the Letter of Credit Usage (and, upon the expiration of a Letter of Credit that is undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof), and (iv) up to the Bank Product Reserve established prior to the occurrence of, and not in contemplation of, the subject Application Event, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Bank Products, with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral,

(I) ninth, to pay any other Obligations (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Bank Products, with any balance to be paid to Agent, to be held by Agent, for the benefit of the Bank Product Providers, as cash collateral), and

(J) tenth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

(iv) In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment made by any Borrower to Agent and specified by Administrative Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

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(v) For purposes of Section 2.4(b)(ii), “paid in full” means payment in cash of all amounts owing under the Loan Documents, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

(vi) In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.4 shall control and govern.

(c) Reduction of Commitments. The Commitments shall terminate on the Maturity Date. Borrowers may reduce the Commitments, without premium or penalty, to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Advances not yet made as to which a request has been given by Borrowers under Section 2.3(a), plus (C) the amount of all Letters of Credit not yet issued as to which a request has been given by Borrowers pursuant to Section 2.11(a). Each such reduction shall be in an amount which is not less than $10,000,000 (unless the Commitments are being reduced to zero and the amount of the Commitments in effect immediately prior to such reduction are less than $100,000,000), shall be made by providing not less than 5 Business Days prior written notice to Agent and shall be irrevocable (provided that notice of termination of all Commitments made in accordance with Section 3.5 shall be permitted to be rescinded to the extent provided in Section 3.5). Once reduced, the Commitments may not be increased. Each such reduction of the Commitments shall reduce the Commitments of each Lender proportionately in accordance with its Pro Rata Share thereof.

(d) Optional Prepayments on Advances. Borrowers may prepay the principal of any Advance at any time in whole or in part without premium or penalty.

(e) [Intentionally Omitted].

(f) [Intentionally Omitted].

2.5 Overadvances. If, at any time or for any reason, the principal amount of Obligations owed by Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.11 is greater than any of the limitations set forth in Section 2.1 or Section 2.11, as applicable (an “Overadvance”), Borrowers shall immediately pay to Agent, in cash, the amount of such excess, which amount shall be used by Agent to reduce the Obligations in accordance with the priorities set forth in Section 2.4(b); provided, however, that in the case of an Overadvance that is caused solely as a result of the charging by Agent of Lender Group Expenses to the Loan Account, Borrowers shall have 3 Business Days from the date of the initial occurrence of such Overadvance to pay to Agent, in cash, the amount of such excess (which period of 3 Business Days shall in no event be duplicative of the 3 Business Days period referenced in Section 8.1(a) of this Agreement). Borrowers jointly and severally promise to pay the Obligations (including principal, interest, fees, costs, and expenses) in Dollars in full on the Maturity Date or, if earlier, on the date on which the Obligations are declared due and payable pursuant to the terms of this Agreement.

2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.6(c), all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof as follows:

(i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and

(ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.

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(b) Letter of Credit Fees. Borrowers shall pay Agent (for the ratable benefit of the Lenders, subject to any agreements between Agent and individual Lenders), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.11(e)) which shall accrue at a per annum rate equal to the LIBOR Rate Margin times the Daily Balance of the undrawn amount of all outstanding Letters of Credit (the “Letter of Credit Participation Fee”). In addition, Borrowers shall pay to Agent, for the sole benefit of Agent, a fronting fee that shall accrue at a rate equal to the Daily Balance of the undrawn amount of all outstanding Letters of Credit times 0.125 percentage points.

(c) Default Rate. Upon the occurrence and during the continuation of an Event of Default and at the election of the Required Lenders,

(i) all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof at a per annum rate equal to 2.00 percentage points above the per annum rate otherwise applicable hereunder, and

(ii) the Letter of Credit Participation Fee shall be increased to 2.00 percentage points above the per annum rate otherwise applicable hereunder.

(d) Payment. Except to the extent provided to the contrary in Section 2.10 or Section 2.12(a), interest, Letter of Credit fees, all other fees payable hereunder or under any of the other Loan Documents, and all costs, expenses, and Lender Group Expenses payable hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the first day of each month at any time that Obligations or Commitments are outstanding. Borrowers hereby authorize Agent, from time to time without prior notice to Borrowers, to charge all interest, Letter of Credit fees, and all other fees payable hereunder or under any of the other Loan Documents (in each case, as and when due and payable), all costs, expenses, and Lender Group Expenses payable hereunder or under any of the other Loan Documents (in each case, as and when incurred), all charges, commissions, fees, and costs provided for in Section 2.11(e) (as and when accrued or incurred), all fees and costs provided for in Section 2.10 (as and when accrued or incurred), and all other payments as and when due and payable under any Loan Document (including any amounts due and payable to the Bank Product Providers in respect of Bank Products up to the amount of the Bank Product Reserve) to the Loan Account, which amounts thereafter shall constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances that are Base Rate Loans. Any interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document not paid when due shall be compounded by being charged to the Loan Account and shall thereafter constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances that are Base Rate Loans (unless and until converted into LIBOR Rate Loans in accordance with the terms of this Agreement).

(e) Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement,

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Borrowers are and shall be liable only for the payment of such maximum as allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

2.7 Crediting Payments.

(a) The receipt of any payment item by Agent shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to Agent’s Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before 11:00 a.m. (California time). If any payment item is received into Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on a Business Day, it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

(b) [intentionally omitted].

2.8 Designated Account. Agent is authorized to make the Advances, and Issuing Lender is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d), Administrative Borrower agrees to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Advances requested by Borrowers and made by Agent or the Lenders hereunder. Unless otherwise agreed by Agent and Administrative Borrower, any Advance or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be made to the Designated Account. Administrative Borrower may amend Schedule D-1 to designate a new Deposit Account as the Designated Account by delivering a new Schedule D-1 to Agent, which Schedule shall specify the account number of the new Designated Account and the name and address of the depository bank at which the new Designated Account is maintained.

2.9 Maintenance of Loan Account: Statements of Obligations. Agent shall maintain an account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged with all Advances (including Protective Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued or made by Issuing Lender for Borrowers’ account, and with all other payment Obligations hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees and expenses, and Lender Group Expenses. In accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from Borrowers or for Borrowers’ account. Agent shall render monthly statements regarding the Loan Account to Borrowers, including principal, interest, fees, and including an itemization of all charges and expenses constituting Lender Group Expenses owing, and such statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 45 days after receipt thereof by Borrowers, Administrative Borrower shall deliver to Agent written objection thereto describing the error or errors contained in any such statements.

2.10 Fees. Borrowers shall pay to Agent,

(a) for the account of Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

(b) for the ratable account of those Lenders with Commitments, on the first day of each month from and after the Closing Date up to the first day of the month prior to the Payoff Date and on the Payoff Date, an unused line fee in an amount equal to the Applicable Unused Line Fee per annum times the result of (i) the Maximum Revolver Amount, less (ii) the average Daily Balance of the Revolver Usage during the immediately preceding month (or portion thereof).

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2.11 Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of Administrative Borrower made in accordance herewith, the Issuing Lender agrees to issue, or to cause an Underlying Issuer, as Issuing Lender’s agent, to issue, a requested Letter of Credit. If Issuing Lender, at its option, elects to cause an Underlying Issuer to issue a requested Letter of Credit, then Issuing Lender agrees that it will obligate itself to reimburse such Underlying Issuer (which may include, among, other means, by becoming an applicant with respect to such Letter of Credit or entering into undertakings which provide for reimbursements of such Underlying Issuer with respect to such Letter of Credit; each such obligation or undertaking, irrespective of whether in writing, a “Reimbursement Undertaking”) with respect to Letters of Credit issued by such Underlying Issuer. By submitting a request to Issuing Lender for the issuance of a Letter of Credit, Borrowers shall be deemed to have requested that Issuing Lender issue or that an Underlying Issuer issue the requested Letter of Credit and to have requested Issuing Lender to issue a Reimbursement Undertaking with respect to such requested Letter of Credit if it is to be issued by an Underlying Issuer (it being expressly acknowledged and agreed by Borrowers that Borrowers are and shall be deemed to be an applicant (within the meaning of Section 5-102(a)(2) of the Code) with respect to each Underlying Letter of Credit). Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by an Authorized Person and delivered to the Issuing Lender via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance reasonably satisfactory to the Issuing Lender and shall specify (i) the amount of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iii) the expiration date of such Letter of Credit, (iv) the name and address of the beneficiary of the Letter of Credit, and (v) such other information (including, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit. Anything contained herein to the contrary notwithstanding, the Issuing Lender may, but shall not be obligated to, issue or cause the issuance of a Letter of Credit or to issue a Reimbursement Undertaking in respect of an Underlying Letter of Credit, in either case, that supports the obligations of Parent or its Subsidiaries in respect of (1) a lease of real property, or (2) an employment contract. Borrowers agree that this Agreement (along with the terms of the applicable application) will govern each Letter of Credit and its issuance. The Issuing Lender shall have no obligation to issue a Letter of Credit or a Reimbursement Undertaking in respect of an Underlying Letter of Credit, in either case, if any of the following would result after giving effect to the requested issuance:

(i) the Letter of Credit Usage would exceed the Borrowing Base less the outstanding amount of Advances, or

(ii) the Letter of Credit Usage would exceed $40,000,000, or

(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of (A) the Plan Reserve plus (B) the Special Reserve plus (C) the Distribution Reserve plus (D) the outstanding amount of Advances.

Borrowers and the Lender Group acknowledge and agree that certain Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit shall be in form and substance acceptable to the Issuing Lender, including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender makes a payment under a Letter of Credit or an Underlying Issuer makes a payment under an Underlying Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable Letter of Credit Disbursement not later than 11:00 a.m., California time, on the date that Administrative Borrower receives written or telephonic notice of such Letter of Credit Disbursement if such notice is received prior to 10:00 a.m., California time, or not later than 11:00 a.m., California time, on

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the following Business Day, if such notice is received after 10:00 a.m., California time, and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, initially, shall bear interest at the rate then applicable to Advances that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to be an Advance hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to Issuing Lender shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.11(b) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear.

(b) Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant to Section 2.11(a), each Lender with a Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to Section 2.11(a) on the same terms and conditions as if Borrowers had requested the amount thereof as an Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit or a Reimbursement Undertaking (or an amendment to a Letter of Credit or a Reimbursement Undertaking increasing the amount thereof) and without any further action on the part of the Issuing Lender or the Lenders with Commitments, the Issuing Lender shall be deemed to have granted to each Lender with a Commitment, and each Lender with a Commitment shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Lender and each Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer under the applicable Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of each Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer and not reimbursed by Borrowers on the date due as provided in Section 2.11(a), or of any reimbursement payment required to be refunded to Borrowers for any reason. Each Lender with a Commitment acknowledges and agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this Section 2.11(b) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for the account of the Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

(c) Borrowers hereby agree to indemnify, save, defend, and hold the Lender Group and each Underlying Issuer harmless from any loss, reasonable out-of-pocket cost or expense (including reasonable out-of-pocket attorneys fees), or liability incurred by Issuing Lender, any other member of the Lender Group, or any Underlying Issuer arising out of or in connection with any Reimbursement Undertaking or any Letter of Credit; provided, however, that Borrowers shall not be obligated hereunder to indemnify for any loss, reasonable out-of-pocket cost or expense (including reasonable out-of-pocket attorneys fees), or liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of the Issuing Lender, any other member of the Lender Group, or any Underlying Issuer. Each Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Letter of Credit or by Issuing Lender’s interpretations of any Reimbursement Undertaking, even though this interpretation may be different from such Borrower’s own, and each Borrower understands and agrees that none of the Issuing Lender, the Lender Group, or any Underlying Issuer shall be liable for any error, negligence, or mistake, whether of omission or commission, in following any Borrower’s instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower understands that the Reimbursement Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Borrowers hereby agree to indemnify, save, defend, and hold Issuing Lender and the other members of the Lender Group harmless with

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respect to any loss, reasonable out-of-pocket cost or expense (including reasonable out-of-pocket attorneys fees), or liability incurred by them as a result of the Issuing Lender’s indemnification of an Underlying Issuer; provided, however, that Borrowers shall not be obligated hereunder to indemnify for any such loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the Issuing Lender or any other member of the Lender Group. Borrowers hereby acknowledge and agree that none of the Issuing Lender, any other member of the Lender Group, or any Underlying Issuer shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Letter of Credit.

(d) Borrowers hereby authorize and direct any Underlying Issuer to deliver to the Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application.

(e) Any and all issuance charges, usage charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and shall be reimbursable promptly, but in any event within 3 Business Days, by Borrowers to Agent for the account of the Issuing Lender; it being acknowledged and agreed by Borrowers that, as of the Closing Date, the usage charge imposed by the Underlying Issuer is .825% per annum times the undrawn amount of each Underlying Letter of Credit, that such usage charge may be changed from time to time, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.

(f) If by reason of (i) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the Issuing Lender, any member of the Lender Group, or Underlying Issuer with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or

(ii) there shall be imposed on the Issuing Lender, any other member of the Lender Group, or Underlying Issuer any other condition regarding any Letter of Credit or Reimbursement Undertaking,

and the result of the foregoing is to increase, directly or indirectly, the cost to the Issuing Lender, any other member of the Lender Group, or an Underlying Issuer of issuing, making, guaranteeing, or maintaining any Reimbursement Undertaking or Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrowers, and Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate the Issuing Lender, any other member of the Lender Group, or an Underlying Issuer for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder; provided, however, that Borrowers shall not be required to provide any compensation pursuant to this Section 2.11(f) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Borrowers; provided further, however, that if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Agent of any amount due pursuant to this Section 2.11(f), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

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2.12 LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option, subject to 2.12(b) below, (the “LIBOR Option”) to have interest on all or a portion of the Advances be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto, (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof. On the last day of each applicable Interest Period, unless Borrowers properly have exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder. At any time that an Event of Default has occurred and is continuing, at the written election of the Required Lenders, Borrowers no longer shall have the option to request that Advances bear interest at a rate based upon the LIBOR Rate.

(b) LIBOR Election.

(i) Borrowers may, at any time and from time to time, so long as Administrative Borrower has not received a notice from Agent, after the occurrence and during the continuance of an Event of Default, of the election of the Required Lenders to terminate the right of Borrowers to exercise the LIBOR Option during the continuance of such Event of Default, elect to exercise the LIBOR Option by notifying Agent prior to 11:00 a.m. (California time) at least 3 Business Days prior to the commencement of the proposed Interest Period (the “LIBOR Deadline”). Notice of Borrowers’ election of the LIBOR Option for a permitted portion of the Advances and an Interest Period pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic notice received by Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California time) on the same day). Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of the affected Lenders.

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In connection with each LIBOR Rate Loan, Borrowers shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A certificate of Agent or a Lender delivered to Borrowers setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall constitute prima facie evidence of the amount(s) set forth therein. Borrowers shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate. If a payment of a LIBOR Rate Loan on a day other than the last day of the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request of Borrowers, hold the amount of such payment as cash collateral in support of the Obligations until the last day of such Interest Period and apply such amounts to the payment of the applicable LIBOR Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any LIBOR Rate Loan and that, in the event that Agent does not defer such application, Borrowers shall be obligated to pay any resulting Funding Losses.

(iii) Borrowers shall have not more than 7 LIBOR Rate Loans in effect at any given time. Borrowers only may exercise the LIBOR Option for proposed LIBOR Rate Loans of at least $1,000,000.

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(c) Conversion. Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any time; provided, however, that in the event that LIBOR Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any automatic prepayment through the required application by Agent of proceeds of Parent’s and its Restricted Subsidiaries’ Collections in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, Borrowers shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii).

(d) Special Provisions Applicable to LIBOR Rate.

(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs, in each case, due to changes in applicable law (other than with respect to Taxes, which shall be governed by Section 16) occurring subsequent to the commencement of the then applicable Interest Period, including changes in the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any successor), excluding the Reserve Percentage, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate. In any such event, the affected Lender shall give Borrowers and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Borrowers may, by notice to such affected Lender (y) require such Lender to furnish to Borrowers a statement setting forth the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

(ii) In the event that any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation or application thereof, shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent and Borrowers and Agent promptly shall transmit the notice to each other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines that it would no longer be unlawful or impractical to do so.

(e) No Requirement of Matched Funding. Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate; provided that, for the avoidance of doubt, neither Agent nor any Lender shall assert or be entitled to any Funding Losses in respect of LIBOR Rate Loans with respect to which Agent or such Lender did not actually acquire Eurodollar deposits to fund or otherwise match fund.

2.13 Capital Requirements.

(a) If, after the date hereof, any Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital requirements for banks or bank holding companies, or any change in the interpretation or application thereof by any Governmental Authority charged with the administration thereof, or (ii) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s Commitments hereunder to a level below that which such Lender or such

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holding company could have achieved but for such adoption, change, or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount reasonably deemed by such Lender to be material, then such Lender may notify Borrowers and Agent thereof. Following receipt of such notice, Borrowers agree to pay such Lender the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by such Lender of a statement in the amount and setting forth in reasonable detail such Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error). In determining such amount, such Lender may use any reasonable averaging and attribution methods. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrowers shall not be required to compensate a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that such Lender notifies Borrowers of such law, rule, regulation or guideline giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that if such claim arises by reason of the adoption of or change in any law, rule, regulation or guideline that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

(b) If any Lender requests additional or increased costs referred to in Section 2.12(d)(i) or amounts under Section 2.13(a) (any such Lender, an “Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Section 2.12(d)(i) or Section 2.13(a), as applicable, and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it. Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment. If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant to Section 2.12(d)(i) or Section 2.13(a), as applicable, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.12(d)(i) or Section 2.13(a), as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Section 2.12(d)(i) or Section 2.13(a), as applicable, may seek a substitute Lender reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender and such Affected Lender’s Commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender shall assign to the Replacement Lender its Obligations and Commitments, pursuant to an Assignment and Acceptance Agreement, and upon such purchase by the Replacement Lender, such Replacement Lender shall be deemed to be a “Lender” for purposes of this Agreement and such Affected Lender shall cease to be a “Lender” for purposes of this Agreement.

2.14 Joint and Several Liability of Borrowers.

(a) Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 2.14), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.

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(c) If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligation.

(d) The Obligations of each Borrower under the provisions of this Section 2.14 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other circumstances whatsoever.

(e) Except as otherwise expressly provided in this Agreement, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Advances or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement). Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower. Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Agent or Lender with respect to the failure by any Borrower to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.14 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.14, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.14 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each Borrower under this Section 2.14 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Borrower or any Agent or Lender.

(f) Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents. Each Borrower hereby covenants that such Borrower will continue to keep informed of Borrowers’ financial condition, the financial condition of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

(g) Each Borrower waives all rights and defenses arising out of an election of remedies by Agent or any Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Agent’s or such Lender’s rights of subrogation and reimbursement against such Borrower by the operation of Section 580(d) of the California Code of Civil Procedure or otherwise.

(h) Each Borrower waives all rights and defenses that such Borrower may have because the Obligations are secured by Real Property. This means, among other things:

(i) Agent and Lenders may collect from such Borrower without first foreclosing on any Collateral pledged by any other Borrower.

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(ii) If Agent or any Lender forecloses on any Real Property Collateral pledged by Borrowers:

(A) The amount of the Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price.

(B) Agent and Lenders may collect from such Borrower even if Agent or Lenders, by foreclosing on the Real Property Collateral, has destroyed any right such Borrower may have to collect from the other Borrowers.

This is an unconditional and irrevocable waiver of any rights and defenses such Borrower may have because the Obligations are secured by Real Property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.

(i) The provisions of this Section 2.14 are made for the benefit of Agent, each member of the Lender Group, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, or any of their successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this Section 2.14 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.14 will forthwith be reinstated in effect, as though such payment had not been made.

(j) Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent or Lenders with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full. Any claim which any Borrower may have against any other Borrower with respect to any payments to any Agent or any member of the Lender Group hereunder or under any other Loan Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor. Notwithstanding anything to the contrary contained in this Section 2.14, no Borrower shall exercise any rights of subrogation, contribution, indemnity, reimbursement or other similar rights against, and shall not proceed or seek recourse against or with respect to any property or asset of, any other Borrower (the “Foreclosed Borrower”), including after payment in full of the Obligations, if all or any portion of the Obligations have been satisfied in connection with an exercise of remedies in respect of the capital Stock of such Foreclosed Borrower whether pursuant to the Security Agreement or otherwise.

3. CONDITIONS; TERM OF AGREEMENT.

3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of each Lender to make its initial extension of credit provided for hereunder, is subject to the fulfillment, to the satisfaction of

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Agent and each Lender of each of the conditions precedent set forth on Schedule 3.1 (the execution and delivery of this Agreement by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent).

3.2 Conditions Precedent to all Extensions of Credit. The obligation of the Lender Group (or any member thereof) to make any Advances hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

(a) the representations and warranties of Parent or its Restricted Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any portion of any representation and warranty that is already qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and

(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

3.3 Maturity. This Agreement shall continue in full force and effect for a term ending on June 30, 2013 (the “Maturity Date”). The foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default.

3.4 Effect of Maturity. On the Maturity Date, all commitments to provide additional credit hereunder shall automatically be terminated and all Obligations (including contingent reimbursement obligations of Borrowers with respect to outstanding Letters of Credit and including all Bank Product Obligations, but excluding unasserted contingent indemnification Obligations) immediately shall become due and payable without notice or demand (including the requirement that Borrowers provide (a) Letter of Credit Collateralization, and (b) Bank Product Collateralization). No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) shall relieve or discharge any Loan Party of its duties, Obligations, or covenants hereunder or under any other Loan Document and Agent’s Liens in the Collateral shall remain in effect until all Obligations have been paid in full and the Commitments have been terminated. When all of the Obligations have been paid in full and the Lender Group’s obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security interests and liens previously filed by Agent with respect to the Obligations.

3.5 Early Termination by Borrowers. Borrowers have the option, at any time upon 5 Business Days prior written notice to Agent, to terminate this Agreement and terminate the Commitments hereunder by paying to Agent the Obligations (including (a) providing Letter of Credit Collateralization with respect to the then existing Letter of Credit Usage, and (b) providing Bank Product Collateralization with respect to the then existing Bank Products), in full. The foregoing notwithstanding, Borrowers may rescind such a termination notice once during the term of this Agreement by providing written notice of such rescission by 9:00 a.m. (California time) on the date set forth in such termination notice as the date of termination of this Agreement.

3.6 Conditions Subsequent. The obligation of the Lender Group (or any member thereof) to continue to make Advances (or otherwise extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto, of the conditions subsequent set forth on Schedule 3.6 (the failure by Borrowers to so perform or cause to be performed such conditions subsequent as and when required by the terms thereof, shall constitute an immediate Event of Default). Notwithstanding any other provision of this Agreement or any other Loan Document to the contrary (including any provision that may require performance of a relevant

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requirement on or prior to the Closing Date or within a shorter time period), the performance or causing to be performed of the conditions subsequent set forth on Schedule 3.6 with respect to the Schedule 3.6 Deliverables (as defined in Schedule 3.6) in existence as of the Closing Date as and when required by the terms thereof shall constitute the performance of the relevant requirement in accordance with the terms of the Loan Documents with respect to such Schedule 3.6 Deliverables for all purposes under the Loan Documents.

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each of Parent and each Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any portion of any representation and warranty that is already qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any portion of any representation and warranty that is already qualified or modified by materiality in the text thereof), as of the date of the making of each Advance (or other extension of credit) made thereafter, as though made on and as of the date of such Advance (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

4.1 Due Organization and Qualification; Subsidiaries.

(a) Each Loan Party (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Change, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

(b) Except as described on Schedule 4.1(b), Parent is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock.

(c) Set forth on Schedule 4.1(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Loan Parties’ direct and indirect Restricted Subsidiaries, showing: (i) the number of shares of each class of common and preferred Stock authorized for each of such Restricted Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Parent. All of the outstanding capital Stock of each such Restricted Subsidiary has been validly issued and is fully paid and nonassessable.

(d) Except as set forth on Schedule 4.1(c) and except for directors’ qualifying shares, there are no subscriptions, options, warrants, or calls relating to any shares of Parent’s Restricted Subsidiaries’ capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Neither Parent nor any of its Restricted Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Parent’s Restricted Subsidiaries’ capital Stock or any security convertible into or exchangeable for any such capital Stock.

4.2 Due Authorization: No Conflict.

(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.

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(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries except to the extent that any such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change.

4.3 Governmental Consents. The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, except for (i) registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect, (ii) filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date, and (iii) consents or approvals the failure of which to obtain could not reasonably be expected to cause a Material Adverse Change.

4.4 Binding Obligations: Perfected Liens.

(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(b) Agent’s Liens are validly created, perfected (other than (i) in respect of any motor vehicle with respect to which the Lien of Agent has not been duly recorded against title thereof, and (ii) any Deposit Accounts and Securities Accounts not subject to a Control Agreement as permitted by Section 6.11, and subject only to the filing of financing statements in the appropriate filing offices and if a copyright is registered with the United States Copyright Office, the filing of a security agreement with the United States Copyright Office), and first priority Liens, subject only to Permitted Liens.

4.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its Restricted Subsidiaries has (i) good, sufficient and legal title to (in the case of fee interests in Real Property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (iii) good and valid title to (in the case of all other personal property), all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements to the extent permitted hereby. All of such assets are free and clear of Liens except for Permitted Liens.

4.6 Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number: Commercial Tort Claims.

(a) The name of (within the meaning of Section 9-503 of the Code) and jurisdiction of organization of each Loan Party and each of its Restricted Subsidiaries is set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

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(b) The chief executive office of each Loan Party and each of its Restricted Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

(c) Each Loan Party’s and each of its Restricted Subsidiaries’ tax identification numbers and organizational identification numbers, if any, are identified on Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

(d) As of the Closing Date, no Loan Party and no Restricted Subsidiary of a Loan Party holds any commercial tort claims that exceed in the aggregate for all such commercial tort claims $1,000,000, except as set forth on Schedule 4.6(d).

4.7 Litigation.

(a) There are no actions, suits, or proceedings pending or, to the knowledge, after due inquiry, of each officer of each Loan Party, threatened in writing against a Loan Party or any of its Restricted Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Change.

(b) Schedule 4.7(b) sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of $750,000 that, as of the Closing Date, is pending or, to the knowledge, after due inquiry, of each officer of each Loan Party, threatened against a Loan Party or any of its Restricted Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties’ and their Restricted Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.

4.8 Compliance with Laws. No Loan Party nor any of its Restricted Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change, or (b) is in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.

4.9 No Material Adverse Change. All historical financial statements relating to the Loan Parties and their Restricted Subsidiaries that have been delivered by Borrowers to Agent (i) prior to the Closing Date, have been prepared in accordance with GAAP or IFRS (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Restricted Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended, and (ii) on or after the Closing Date, have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Restricted Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended. Since April 30, 2009, except as contemplated by (and in accordance with) the Plan as of the Effective Date, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Change with respect to the Loan Parties and their Restricted Subsidiaries.

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4.10 Fraudulent Transfer.

(a) Parent and its Restricted Subsidiaries, on a consolidated basis, are Solvent.

(b) No transfer of property is being made by any Loan Party or any Restricted Subsidiary and no obligation is being incurred by any Loan Party or any Restricted Subsidiary in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

4.11 Employee Benefits.

(a) Except as set forth on Schedule 4.11, as of the Closing Date, there are no Benefit Plans or Multiemployer Plans. No Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates has incurred any liability (either actual or contingent) with respect to any plan that is subject to Title IV of ERISA that is not a Benefit Plan.

(b) Each Benefit Plan has been administered in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Change. No Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the IRC relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that, in either case, would reasonably be expected to result in the incurrence of any material liability by any Loan Party, any of their Subsidiaries, or any of their ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Loan Party, any of their Subsidiaries or any of their ERISA Affiliates, in any case pursuant to ERISA or the IRC, other than any such liabilities as would not reasonably be expected to result either individually or in the aggregate in a Material Adverse Change and other than Permitted Liens.

(c) No Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates has incurred any withdrawal liability that has not been satisfied in full. No Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates are subject to any contingent withdrawal liability) under ERISA or pursuant to any legally-enforceable arrangement in respect of any Multiemployer Plan, in any case, that, individually or in the aggregate would reasonably be expected to result in a Material Adverse Change.

(d) As of the Closing Date, except to the extent required under Section 4980B of the IRC, no Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employees of any Loan Party or any of their Subsidiaries and no Loan Party and none of their Subsidiaries have any liability with respect to any such plan. After the Closing Date, except as would not reasonably be expected to result in a Material Adverse Change and except to the extent required under Section 4980B of the IRC, no Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employees of any Loan Party or any of their Subsidiaries and no Loan Party and none of their Subsidiaries have any liability with respect to any such plan. As of the Closing Date, each Benefit Plan (other than a Multiemployer Plan) can be terminated on no less than 180 days’ notice.

(e) As of the Closing Date, no ERISA Event has occurred. After the Closing Date, except as would not reasonably be expected to result in a Material Adverse Change, no ERISA Event has occurred.

4.12 Environmental Condition. Except, in each case, as could not reasonably be expected to result in a Material Adverse Change, (a) no Loan Party’s or its Restricted Subsidiaries’ properties or assets has been used by a Loan Party, its Restricted Subsidiaries, or to Parent and each Borrower’s knowledge by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation of any applicable Environmental Law, (b) no Loan Party’s or its Restricted Subsidiaries’ properties or assets has ever been designated or identified pursuant to, or under any Environmental Law as a Hazardous

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Materials disposal site, (c) no Loan Party nor any of its Restricted Subsidiaries has received written notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Restricted Subsidiaries, and (d) no Loan Party nor any of its Restricted Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree with any Governmental Authority, or settlement agreement for Environmental Liabilities with any Person pursuant to, or under any Environmental Law or relating to Environmental Liabilities.

4.13 Intellectual Property. As of the Closing Date, each Loan Party and its Restricted Subsidiaries own, or hold licenses in, all trademarks, trade names, copyrights, patents, and licenses that are necessary to the conduct of its business as currently conducted.

4.14 Leases. Each Loan Party and its Restricted Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or its Restricted Subsidiaries exists under any of them.

4.15 Deposit Accounts and Securities Accounts. Set forth on Schedule 4.15 (as updated pursuant to the provisions of the Security Agreement from time to time) is a listing of all of the Loan Parties’ and their Restricted Subsidiaries’ Deposit Accounts and Securities Accounts, including, with respect to each bank or securities intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.

4.16 Complete Disclosure. All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about the Borrowers’ industry) furnished by or on behalf of a Loan Party or its Restricted Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about the Borrowers’ industry) hereafter furnished by or on behalf of a Loan Party or its Restricted Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The Projections delivered to Agent on June 15, 2009 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Parent’s and Borrowers’ good faith estimate, on the date such Projections are delivered, of the Loan Parties’ and their Restricted Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Restricted Subsidiaries, that no assurances can be given that such Projections will be realized, and that actual results may differ in a material manner from such Projections).

4.17 Material Contracts. Set forth on Schedule 4.17 (as such Schedule may be updated from time to time) is a reasonably detailed description of the Material Contracts of each Loan Party and its Restricted Subsidiaries as of the most recent Delivery Date (as defined below); provided, however, that Borrowers may amend Schedule 4.17 to add additional Material Contracts so long as such amendment occurs by written notice to Agent on the date that Parent provides its quarterly financial statements pursuant to Section 5.1 (the “Delivery Date”). Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Loan Party or its Restricted Subsidiary and, to the best of Borrowers’ knowledge, each other Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified (other than amendments or modifications permitted by Section 6.7(b)), and (c) is not in default due to the action or inaction of the applicable Loan Party or its Restricted Subsidiary.

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4.18 Patriot Act. To the extent applicable, each Loan Party and each of its Restricted Subsidiaries is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of its Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

4.19 Indebtedness. Set forth on Schedule 4.19 is a true and complete list of all Indebtedness of each Loan Party and each of its Restricted Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

4.20 Payment of Taxes. Except as otherwise permitted under Section 5.5 or as set forth on Schedule 4.20, all tax returns and reports of each Loan Party and its Restricted Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon a Loan Party and its Restricted Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable. Each Loan Party and each of its Restricted Subsidiaries have made adequate provision in accordance with GAAP for all taxes not yet due and payable. Except as set forth on Schedule 4.20, no Borrower knows of any proposed tax assessment (not including assessments for taxes that are not yet due and payable) against a Loan Party or any of its Restricted Subsidiaries that is not being actively contested by such Loan Party or such Restricted Subsidiary diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

4.21 Margin Stock. No Loan Party nor any of its Restricted Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to Borrowers will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve.

4.22 Governmental Regulation. No Loan Party nor any of its Restricted Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any of its Restricted Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

4.23 OFAC. No Loan Party nor any of its Restricted Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC. No Loan Party nor any of its Restricted Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has more than 10% of its assets located in Sanctioned Entities, or (c) derives more than 10% of its revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. The proceeds of any Advance will not be used by any Loan Party or any of its Affiliates to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

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4.24 Employee and Labor Matters. Except as set forth on Schedule 4.24, there is (i) no unfair labor practice complaint pending or, to the knowledge of any Loan Party, threatened against any Loan Party before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party which arises out of or under any collective bargaining agreement that would reasonably be expected to result in material liability to any Loan Party, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or, to the knowledge of any Loan Party, threatened against any Loan Party that would reasonably be expected to result in a material liability to any Loan Party, or (iii) to the knowledge of any Loan Party, no union representation question existing with respect to the employees of any Loan Party and no union organizing activity taking place with respect to any of the employees of any Loan Party. No Loan Party has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of any Loan Party have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. All material payments due from any Loan Party on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of any Loan Party, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

4.25 Parent as a Holding Company. Parent is a holding company and does not have any liabilities, own any material assets (other than the Stock of SBS Holdings), or engage in any operations or business (other than the ownership of Borrowers and their Subsidiaries).

4.26 Required Equity Documents. As of the Closing Date, Borrowers have delivered to Agent true and correct copies of any Required Equity Documents. No party thereto is in default in the performance or compliance with any provisions thereof and the Required Equity Documents comply in all material respects with all applicable laws. The Required Equity Documents are in full force and effect as of the Closing Date and have not been terminated, rescinded or withdrawn as of such date. The execution, delivery and performance of the Required Equity Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than consents or approvals that have been obtained and that are still in full force and effect. To Borrowers’ knowledge, none of the representations or warranties of any other Person in any Required Equity Document contains any untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading.

4.27 [Intentionally Omitted].

4.28 Eligible Accounts. As to each Account that is identified by Borrowers as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of Borrowers’ business, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

4.29 Eligible Inventory. As to each item of Inventory that is identified by Borrowers as Eligible Inventory in the most recent Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

4.30 Locations of Inventory and Equipment. The Inventory and Equipment (other than vehicles or Equipment out for repair) of the Borrowers (a) except as permitted by Section 6.16, are not stored with a bailee, warehouseman, or similar party; and (b) are located only at, or in-transit between or to, the locations identified on Schedule 4.30(b) (as such Schedule may be updated pursuant to Section 5.15).

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4.31 Inventory Records. Each Borrower keeps correct and accurate records itemizing and describing the type, quality, and quantity of its Inventory and the book value thereof.

5. AFFIRMATIVE COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, the Loan Parties shall and shall cause each of their Restricted Subsidiaries to comply with each of the following:

5.1 Financial Statements, Reports, Certificates. Deliver to Agent (with, in the case of items that are not delivered electronically, with copies for each Lender, if so requested by Agent), each of the financial statements, reports, and other items set forth on Schedule 5.1 no later than the times specified therein. In addition, each of Parent and each Borrower agrees that no Restricted Subsidiary of a Loan Party will have a fiscal year different from that of Parent. In addition, Parent agrees to maintain a system of accounting that enables Parent to produce the financial statements that are required pursuant to Schedule 5.1 or any other provision of this Agreement. Each Loan Party shall also (a) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to its and its Restricted Subsidiaries’ sales, and (b) maintain its billing systems/practices as approved by Agent prior to the Closing Date and shall only make material modifications thereto with notice to, and with the consent of, Agent.

5.2 Collateral Reporting. Provide Agent (with, in the case of items that are not delivered electronically, with copies for each Lender, if so requested by Agent) with each of the reports set forth on Schedule 5.2 at the times specified therein. In addition, Borrowers agree to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

5.3 Existence. Except as otherwise permitted under Section 6.3 or 6.4 at all times maintain and preserve in full force and effect its existence (including being in good standing in its jurisdiction of organization) and all rights and franchises, licenses and permits material to its business; provided, however, that no Loan Party or any of its Restricted Subsidiaries shall be required to preserve any such right or franchise, licenses or permits if such Person’s board of directors (or similar governing body) shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to the Lenders.

5.4 Maintenance of Properties. Maintain and preserve all of its assets that are necessary to the proper conduct of its business in good working order and condition and maintain and preserve all of its material assets that are useful in the proper conduct of its business in good working order and condition, in each case, ordinary wear, tear, and casualty excepted and Permitted Dispositions excepted, and comply with the material provisions of all material leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof, unless such provisions are the subject of a Permitted Protest.

5.5 Taxes. Cause all assessments and taxes imposed, levied, or assessed against any Loan Party or its Restricted Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period, except (a) to the extent that such assessments or taxes do not exceed an aggregate amount, for all Loan Parties, in excess of $1,000,000, or (b) to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest and so long as, in the case of an assessment or tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax. Parent will and will cause each of its Restricted Subsidiaries to make timely payment or deposit of all tax payments and withholding taxes required of it and them by applicable laws,

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including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Agent with proof reasonably satisfactory to Agent indicating that Parent and its Restricted Subsidiaries have made such payments or deposits.

5.6 Insurance. At Borrowers’ expense, maintain or cause to be maintained insurance respecting each of the Loan Parties’ and their Restricted Subsidiaries’ assets wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks as ordinarily are insured against by other Persons engaged in the same or similar businesses and at similar locations. Borrowers also shall maintain or cause to be maintained (with respect to each of the Loan Parties and their Restricted Subsidiaries) business interruption, general liability, and product liability insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation. All such policies of insurance shall be with responsible and reputable insurance companies and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and in any event in amount, adequacy and scope reasonably satisfactory to Agent that is no less favorable to the Loan Parties than the insurance maintained by the Loan Parties on the Closing Date or such policies of insurance shall be reasonably acceptable to Agent. All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. Except as otherwise consented to by Agent in its sole discretion (such consent to be evidenced by Agent’s approval of the applicable certificates and endorsements), all certificates of property and general liability insurance are to be delivered to Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Agent of the exercise of any right of cancellation. If Borrowers fail to maintain such insurance, Agent may arrange for such insurance, but at Borrowers’ expense and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Borrowers shall give Agent prompt notice of any loss exceeding $1,000,000 covered by its casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

5.7 Inspection. Permit Agent and its duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to conduct appraisals and valuations, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees at such reasonable times and intervals as Agent may designate and, so long as no Event of Default exists, with reasonable prior notice to Borrowers.

5.8 Compliance with Laws. Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change.

5.9 Environmental.

(a) Keep any property or assets either owned, or to the extent controlled or operated by Parent or its Restricted Subsidiaries free of any Environmental Liens (other than Environmental Liens that secure obligations in an amount not in excess of $500,000 at any time outstanding) or post bonds or other financial assurances reasonably sufficient to satisfy the obligations or liability evidenced by such Environmental Liens,

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(b) Comply, in all material respects, with Environmental Laws and provide to Agent existing material and relevant documentation of such compliance, if applicable, which Agent reasonably requests,

(c) Promptly (but in any event within 15 days or such longer period as may be determined by Agent in its sole discretion) notify Agent of any release of which any Borrower has knowledge of a Hazardous Material at or from property owned, or to the extent controlled or operated by Parent or its Restricted Subsidiaries which requires Parent or any Restricted Subsidiary to (i) report such release to any Governmental Authority or (ii) take Remedial Actions pursuant to applicable Environmental Law, and

(d) Promptly, but in any event within 15 days of its receipt thereof (or such longer period as may be determined by Agent in its sole discretion), provide Agent with written notice of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of Parent or its Restricted Subsidiaries, (ii) commencement of any written Environmental Action or written notice that an Environmental Action will be filed against Parent or its Restricted Subsidiaries, or (iii) written notice of a material violation, citation, or other administrative order from a Governmental Authority.

5.10 Disclosure Updates. Promptly and in no event later than 5 Business Days (or such longer period as may be determined by Agent in its sole discretion) after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to the Lender Group contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

5.11 Formation/Acquisition of Subsidiaries; Designation of Additional Restricted Subsidiaries. At the time that any Loan Party forms any direct or indirect Subsidiary (other than any Unrestricted Subsidiary) or acquires any direct or indirect Subsidiary (other than an Unrestricted Subsidiary), or designates an Unrestricted Subsidiary as a Restricted Subsidiary, in each case, after the Closing Date, such Loan Party shall (a) within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) cause any such new Subsidiary to provide to Agent a joinder to the Guaranty (or, at the election of Parent and so long as Agent receives a field examination of such Subsidiary and appraisal of the assets of such Subsidiary, in each case, in form and substance satisfactory to Agent, a joinder to this Agreement), the Security Agreement, and the Intercompany Subordination Agreement, together with such other security documents (including, at the request of Agent, mortgages with respect to any Real Property owned in fee of such new Subsidiary with a fair market value of at least $250,000), as well as appropriate financing statements (and with respect to all property subject to a mortgage, fixture filings), all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary); provided that the Guaranty, the Security Agreement, and such other security documents shall not be required to be provided to Agent with respect to any Subsidiary of Parent that is a CFC if providing such documents would result in adverse tax consequences or the costs to the Loan Parties of providing such Guaranty, executing any security documents or perfecting the security interests created thereby are unreasonably excessive (as determined by Agent in consultation with Borrowers) in relation to the benefits of Agent and the Lenders of the security or guarantee afforded thereby, (b) within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) provide to Agent a pledge agreement (or an addendum to the Security Agreement) and appropriate certificates and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary reasonably satisfactory to Agent; provided that only 65% of the total outstanding voting Stock of any first tier Subsidiary of any Loan Party that is a CFC (and none of the Stock of any Subsidiary of such CFC) shall be required to be pledged if pledging a greater amount would result in adverse tax consequences or the costs to the Loan Parties of providing such pledge or perfecting the security interests created thereby are unreasonably excessive (as reasonably determined by Agent in

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consultation with Borrowers) in relation to the benefits of Agent and the Lenders of the security or guarantee afforded thereby (which pledge, if reasonably requested by Agent, shall be governed by the laws of the jurisdiction of such Subsidiary), and (c) within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which in its reasonable opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance or other documentation with respect to all Real Property owned in fee and subject to a mortgage). Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall be a Loan Document.

5.12 Further Assurances. At any time upon the reasonable request of Agent, execute or deliver to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (collectively, the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, (i) to create, perfect, and continue perfected or to better perfect Agent’s Liens, (ii) to create and perfect Liens in favor of Agent in any Real Property acquired by any Loan Party after the Closing Date with a fair market value in excess of $250,000; (iii) on any date after an Event of Default has occurred and has been continuing for at least 15 days, to create and perfect Liens in favor of Agent in any Real Property (A) owned by any Loan Party as of the Closing Date and (B) that is not subject to a Permitted Lien described in clause (r) of the definition of Permitted Liens, to the extent of such Loan Party’s interest in such Real Property on such date, and (iv) in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided, however, that the foregoing shall not apply to (a) any Unrestricted Subsidiary or (b) any Subsidiary of a Loan Party that is a CFC if providing such documents would result in adverse tax consequences or the costs to the Loan Parties of providing such documents are unreasonably excessive (as reasonably determined by Agent in consultation with Borrowers) in relation to the benefits of Agent and the Lenders of the benefits afforded thereby. To the maximum extent permitted by applicable law, each of Parent and each Borrower authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s or its Restricted Subsidiary’s name, as applicable, and authorizes Agent to file such executed Additional Documents in any appropriate filing office. In furtherance and not in limitation of the foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by the assets of the Loan Parties (subject to the exceptions and limitations contained above in this Section 5.12, in this Agreement, and in the other Loan Documents).

5.13 Lender Meetings. Within 120 days after the close of each fiscal year of Parent, at the request of Agent or of the Required Lenders and upon reasonable prior notice, hold a meeting (at a mutually agreeable location and time or, at the option of Agent, by conference call) with all Lenders who choose to attend such meeting at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of Parent and its Restricted Subsidiaries and the projections presented for the current fiscal year of Parent.

5.14 Material Contracts. On each Delivery Date, provide Agent with copies of (a) each Material Contract entered into since the previous Delivery Date, and (b) each material amendment or modification of any Material Contract entered into since the previous Delivery Date.

5.15 Location of Inventory and Equipment. Keep each Borrower’s Inventory and Equipment (other than vehicles and Equipment out for repair) only at the locations identified on Schedule 4.30 and their chief executive offices only at the locations identified on Schedule 4.6(b); provided, however, that Borrowers may amend Schedule 4.30 or Schedule 4.6(b) so long as (a) such amendment occurs by written notice to Agent not less than 10 days prior to the date on which such Inventory or Equipment is moved to such new location or such chief executive office is relocated (or by such later date as may be agreed upon by Agent in its sole discretion), (b) such new location is within the United States, and (c) if no Collateral Access Agreement is delivered to Agent for such location on or prior to the date on which such Inventory or Equipment is moved to

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such new location or such chief executive office is relocated (or such later date as may be agreed upon by Agent in its sole discretion), Agent shall have the right to establish reserves pursuant to Section 2.1(c) (or, if the value of the Inventory at such location is de minimis in Agent’s reasonable determination, Agent shall have the right to exclude such Inventory from Eligible Inventory rather than establish a reserve).

5.16 Assignable Material Contracts. Use commercially reasonable efforts to ensure that any Material Contract entered into after the Closing Date by Parent or one of its Restricted Subsidiaries that generates or, by its terms, will generate revenue, permits the assignment of such agreement (and all rights of Parent or such Restricted Subsidiary, as applicable, thereunder) to Parent’s or such Restricted Subsidiary’s lenders or an agent for any lenders (and any transferees of such lenders or such agent, as applicable).

5.17 Required Equity Account. Maintain the Required Equity solely in the Required Equity Account, which funds (a) shall be segregated in, and maintained solely in, such Required Equity Account, (b) shall not be commingled with any other funds of Parent, any of its Subsidiaries or any other Person, (c) shall be used solely to pay any and all lease rejection claims allowed under the Plan, and (d) shall not be withdrawn from the Required Equity Account (except to pay such allowed lease rejection claims) until such time when all of the lease rejection claims that are allowed under the Plan have been paid in full. For the avoidance of doubt, if any funds remain in such Required Equity Account after all lease rejection claims allowed under the Plan have been paid in full, such funds may be transferred to a Deposit Account or Securities Account subject to a Control Agreement.

6. NEGATIVE COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, the Loan Parties will not and will not permit any of their Restricted Subsidiaries to do any of the following:

6.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness. In the event that any item of Indebtedness would qualify to be included in more than one category of Permitted Indebtedness, the Administrative Borrower may select the category in which to classify such item of Indebtedness.

6.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

6.3 Restrictions on Fundamental Changes.

(a) Other than in order to consummate a Permitted Acquisition, enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Stock, except for (i) any merger between Loan Parties, provided that a Borrower must be the surviving entity of any such merger to which a Borrower is a party and no merger may occur between Parent and any Borrower, (ii) any merger between Loan Parties and Restricted Subsidiaries of Parent that are not Loan Parties so long as a Loan Party is the surviving entity of any such merger, and (iii) any merger between Subsidiaries of Parent that are not Loan Parties,

(b) Other than Permitted Dispositions, liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Restricted Subsidiaries of Parent with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a Loan Party (other than Parent and other than SBS Holdings) or any of its wholly-owned Restricted Subsidiaries so long as all of the assets (including any interest in any Stock) of such liquidating or dissolving Loan Party or Restricted Subsidiary are transferred to a Loan Party (or in the case of the liquidation or dissolution of a Borrower, are transferred to another Borrower) that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a

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Restricted Subsidiary of a Borrower that is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Restricted Subsidiary are transferred to a Restricted Subsidiary of Parent that is not liquidating or dissolving, or

(c) Suspend or go out of a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with the transactions permitted pursuant to Section 6.4.

6.4 Disposal of Assets. Other than Permitted Dispositions, Permitted Investments, or transactions expressly permitted by Sections 6.3 and 6.11, convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of Parent’s or its Restricted Subsidiaries assets; provided that Parent or any Restricted Subsidiary may enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of any of the assets of any of Parent and its Restricted Subsidiaries so long as (i) the Net Cash Proceeds from the relevant transaction are sufficient to repay all of the Obligations in full or (ii) the obtaining of an amendment or waiver to this Agreement, or the payment in full of the Obligations and termination of the Commitments is a condition precedent to the consummation of the relevant transaction.

6.5 Change Name. Change any Loan Party’s name, organizational identification number, state of organization or organizational identity unless a Loan Party provides at least 10 days (or such shorter period as permitted by Agent in writing in its sole discretion) prior written notice to Agent of such change.

6.6 Nature of Business. Make any change in the nature of its or their business as described in Schedule 6.6 or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided that the foregoing shall not prevent Parent and its Restricted Subsidiaries from engaging in any business or acquiring properties or assets that are reasonably related or ancillary to its or their business.

6.7 Prepayments and Amendments.

(a) Except in connection with Refinancing Indebtedness permitted by Section 6.1.

(i) optionally prepay, redeem, defease, purchase, or otherwise optionally acquire any Indebtedness constituting obligations for borrowed money of Parent or its Restricted Subsidiaries, other than (to the extent constituting obligations for borrowed money) (A) the Obligations in accordance with this Agreement, (B) from the proceeds of, or in exchange for, Refinancing Indebtedness that constitutes Permitted Indebtedness, (C) Permitted Intercompany Advances, and (D) Indebtedness incurred in respect of capital leases or Permitted Purchase Money Indebtedness,

(ii) make any payment on account of Indebtedness that has been contractually subordinated in right of payment if such payment is not permitted at such time under the subordination terms and conditions, or

(b) Directly or indirectly, amend, modify, or change any of the terms or provisions of

(i) any agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness constituting obligations for borrowed money of Parent or its Restricted Subsidiaries other than (to the extent constituting obligations for borrowed money) (A) the Obligations in accordance with this Agreement, (B) Permitted Intercompany Advances, (C) Indebtedness permitted under clauses (h), (i), (j), (m), (n), and (p) (and with consent (not to be unreasonably withheld or delayed) of Agent, clause (1)) of the definition of Permitted Indebtedness (so long as such Indebtedness continues to constitute Permitted Indebtedness after giving effect to such amendments, modifications or changes), and (D) any agreement evidencing Indebtedness incurred in respect of capital leases or Permitted Purchase Money Indebtedness so long as refinancing of such Indebtedness in connection therewith constitutes Refinancing Indebtedness,

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(ii) any Material Contract except to the extent that such amendment, modification or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Lenders, or

(iii) the Governing Documents of any Loan Party or any of its Restricted Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders.

6.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any Change of Control.

6.9 Restricted Junior Payments. Make any Restricted Junior Payment; provided, however, that, so long as it is permitted by law,

(a) so long as no Event of Default shall have occurred and be continuing or would result therefrom, Parent may make cash distributions to Saturn for the purpose of permitting Saturn to make cash distributions to current and former employees, officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Stock of Saturn held by such Persons, provided, however, that the aggregate amount of such redemptions made during the term of this Agreement plus the amount of Indebtedness outstanding under clause (j) of the definition of Permitted Indebtedness, does not exceed $500,000 in the aggregate,

(b) (i) Parent may make cash distributions to any direct or indirect holding company of Parent that files a Parent Consolidated Tax Return for the sole purpose of allowing such holding company of Parent to pay federal and state income taxes and franchise taxes solely arising from any Parent Consolidated Tax Return (provided that the aggregate amount of such distributions shall not exceed the sum of (x) the portion of the Parent Consolidated Tax Return liability attributable to the Loan Parties plus (y) the aggregate amount of distributions received by any Loan Party from Subsidiaries that are not Loan Parties to the extent such distributions were made in respect of Parent Consolidated Tax Return liability attributable to such Subsidiaries), (ii) so long as no Event of Default has occurred and is continuing or would result therefrom, Parent may make cash distributions to any direct or indirect holding company of Parent in an aggregate amount not to exceed $500,000 in any fiscal year of Parent for the sole purpose of allowing such holding company of Parent to make payment of other reasonable out of pocket administrative and maintenance expenses (including maintenance of existence) arising out of the operation of such direct or indirect holding company as a holding company of Parent and the administration by such direct or indirect holding company of the consolidated operations of Parent and its Subsidiaries, (iii) Parent may make cash distributions to any direct or indirect holding company of Parent for the sole purpose of permitting such holding company of Parent to pay the premiums of group medical and dental insurance plans for the employees of Parent and its Restricted Subsidiaries, and (iv) Parent may make cash distributions to any direct or indirect holding company of Parent for the sole purpose of permitting such direct or indirect holding company of Parent to pay the premiums and other fees and expenses of insurance covering Parent and its Subsidiaries.

(c) so long as no Event of Default has occurred and is continuing or would result therefrom, Parent may make cash distributions to Saturn for the purpose of permitting Saturn to make payments to Gores, and Saturn shall have used such cash distributions to make payments to Gores pursuant to the Gores Management Agreement in an aggregate amount not to exceed $84,000 in any month; provided, that if at any time any such payments are not permitted to be made as a result of the failure to satisfy the condition set forth in this Section 6.9(c). then (1) such amounts shall continue to accrue, and (2) any such amounts that have accrued but which were not permitted to be paid may be paid in any subsequent quarter so long as the condition set forth in this Section 6.9(c) is satisfied at the time of the making of such payments,

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(d) Parent may make cash distributions to Saturn for the purpose of permitting Saturn to make payments to Glendon, and Saturn shall have used such cash distributions to make payments to Glendon pursuant to the Glendon Management Agreement in an aggregate amount not to exceed $3,500,000 during the period beginning on the Closing Date and ending July 31, 2010, $2,500,000 during the 12 month period ending July 31, 2011, $2,000,000 during the 12 month period ending July 31, 2012, and $1,500,000 during the 12 month period ending July 31, 2013; provided, however, that if the amount of the distributions permitted to be made in any period as set forth above pursuant to this Section 6.9(d) is greater than the actual amount of such distributions for such period (the amount by which such permitted cash distributions for such period exceed the actual amount of cash distributions for such period, the “Excess Distribution Amount”), then 50% of such Excess Distribution Amount (such amount referred to as the “Carry-Over Distribution Amount”) may be carried forward to the next succeeding period (the “Succeeding Distribution Period”); provided further that (x) the Carry-Over Distribution Amount applicable to a particular Succeeding Distribution Period may not be used in that period until the amount permitted above to be expended in such period has first been used in full and (y) the Carry-Over Distribution Amount applicable to a particular Succeeding Distribution Period may not be carried forward to another period; provided, further, that, notwithstanding anything contained in this Section 6.9(d), cash distributions in excess of the amounts permitted above (taking into account any Carry-Over Distribution Amount) for the period beginning on the Closing Date and ending July 31, 2010 and the 12 month periods ending July 31, 2011, July 31, 2012, and July 31, 2013, shall be permitted so long as Parent’s and its Restricted Subsidiaries’ Availability plus Qualified Cash is equal to or greater than $50,000,000; and provided, further, that upon request of Agent, Borrowers shall provide Agent with documentation reasonably satisfactory to Agent in respect of any such excess cash distributions made in reliance on the immediately preceding proviso to this Section 6.9(d),

(e) so long as no Event of Default has occurred and is continuing or would result therefrom, Parent may make cash distributions to Saturn for the purpose of permitting Saturn to make payments to Wolseley, and Saturn shall have used such cash distributions to make payments to Wolseley pursuant to the Wolseley Management Agreement in an aggregate amount not to exceed $42,000 per month; provided, that if at any time any such payments to Wolseley are not permitted to be made as a result of the failure to satisfy the condition set forth in this Section 6.9(e), then (1) such amounts shall continue to accrue, and (2) any such amounts that have accrued but which were not permitted to be paid may be paid in any subsequent quarter so long as the condition set forth in this Section 6.9(e) is satisfied at the time of the making of such payments,

(f) Parent may make cash distributions to Saturn for the purpose of permitting Saturn to make reimbursement payments (i) to Equity Sponsor on account of reasonable out-of-pocket costs and expenses incurred by Gores pursuant to the Gores Management Agreement; (ii) to Glendon on account of reasonable out-of-pocket costs and expenses incurred by Glendon pursuant to the Glendon Management Agreement, and (iii) to Wolseley on account of reasonable out-of-pocket costs and expenses incurred by Wolseley pursuant to the Wolseley Management Agreement,

(g) Parent may make cash distributions to Saturn for the purpose of permitting Saturn to make payments required to be paid by Saturn pursuant to the Transition Services Agreement so long as the fees charged under such Transition Service Agreement are no less favorable, taken as a whole, to Saturn than would be obtained in an arm’s length transaction with a non-Affiliate,

(h) so long as (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) the cash distribution and payment thereof is in compliance with applicable law (including, to the extent applicable, the Delaware Limited Liability Company Act, as amended from time to time) and the constituent documents of Parent, (iii) Availability (without giving effect to the Distribution Reserve) plus Qualified Cash of Parent and its Subsidiaries both before and immediately after giving effect thereto is greater than $100,000,000, (iv) on a pro forma basis after giving effect to any such cash distribution Availability (without giving effect to the Distribution Reserve) plus Qualified Cash of Parent and its Subsidiaries is projected by Borrowers to be in excess of $100,000,000 as of the end of each month during the 12 month

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period immediately following the proposed date of such cash distribution, (v) Borrowers shall have delivered to Agent updated projections and calculations evidencing the satisfaction of the conditions outlined in clauses (iii) and (iv) of this Section 6.9(h), in each case, in form reasonably satisfactory to Agent, and (vi) no such cash distribution is paid or made until on or after the date that is 270 days after the Closing Date, Parent may declare and pay cash distributions in an aggregate amount not to exceed (A) $30,000,000 during any calendar year, and (B) $80,000,000 during the term of this Agreement,

(i) (i) Parent may make cash distributions to Saturn in an amount equal to the proceeds of any Permitted Disposition permitted under clause (o) of the definition of Permitted Dispositions, and (ii) so long as such distribution takes place within 120 days after the Closing Date, Parent may distribute to Saturn all or any portion of the Stock of all of DWF Entity; provided, that upon the sale or other disposition of all or substantially all of the Stock or assets of the DWF Entities to one or more third parties that are not Affiliates of Parent, Parent shall cause Saturn to repay to a Loan Party the lesser of (A) the amount of the outstanding Permitted Investments described in clause (v) of the definition thereof made in the DWF Entities, and (B) the Net Cash Proceeds received on account of all such sales or other dispositions in respect of the DWF Entities, and

(j) Parent may make the payments described in Section 6.12(e).

6.10 Accounting Methods. Modify or change its fiscal year (other than to a December 31 fiscal year) or its method of accounting (other than as may be required to conform to GAAP).

6.11 Investments.

(a) Except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment. From and after the date that is 30 days (or such longer period as may be determined by Agent in its sole discretion) after the Closing Date, Loan Parties shall not have Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities Accounts (other than (i) an aggregate amount of not more than $650,000 at any one time, in the case of Parent and its Restricted Subsidiaries (other than those Restricted Subsidiaries that are CFCs), (ii) amounts deposited into Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for Parent’s or its Restricted Subsidiaries’ employees, (iii) with respect to the Required Equity Account, and (iv) an aggregate amount of not more than an amount to be agreed upon by Agent and Borrowers (calculated at current exchange rates) at any one time, in the case of Restricted Subsidiaries of Parent that are CFCs)) unless such Loan Parties, as applicable, and the applicable bank or securities intermediary have entered into Control Agreements with Agent governing such Permitted Investments in order to perfect (and further establish) Agent’s Liens in such Permitted Investments.

(b) Notwithstanding anything in this Agreement to the contrary, the only Permitted Investments that may be made in the Unrestricted Subsidiaries (including the DWF Entities) during the term of this Agreement are Permitted Investments permitted under clauses (e), (g), (m) (so long as such Investment is in the form of an acquisition of Stock of such Unrestricted Subsidiary for no, or a de minimis amount of, consideration), (u) and (v) of the definition of Permitted Investments.

6.12 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction with any Affiliate of Parent or any of its Restricted Subsidiaries except for:

(a) (i) transactions among Loan Parties, (ii) transactions among Restricted Subsidiaries that are not Loan Parties, (iii) transactions with Unrestricted Subsidiaries resulting from Parent and its Subsidiaries having a consolidated cash management system; provided, that the transactions described in this Section 6.12(a)(iii) shall not be permitted with respect to the DWF Entities from and after the date that is 120 days after the Closing Date, and (iv) any other transactions (other than the payment of management,

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consulting, monitoring, or advisory fees) between Parent or its Restricted Subsidiaries, on the one hand, and any Affiliate of Parent or its Restricted Subsidiaries, on the other hand, so long as such transactions described in this clause (iv) are: (A) disclosed to Agent prior to the consummation thereof, if they involve one or more payments by Parent or its Restricted Subsidiaries in excess of $1,000,000 for any single transaction or series of related transactions, and (B) no less favorable, taken as a whole, to Parent or its Restricted Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate,

(b) so long as it has been approved by Parent or the applicable Subsidiaries’ Board of Directors in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers) of Parent and its Subsidiaries,

(c) the payment of reasonable fees, compensation, severance, or employee benefit arrangements to officers and outside directors of Parent and its Subsidiaries in the ordinary course of business and consistent with industry practice,

(d) transactions and payments permitted by Section 6.3, Section 6.9, or Section 6.11; and

(e) reimbursement of the Equity Sponsor and its Affiliates on or about the Closing Date of its out-of-pocket fees and expenses incurred in connection with the Plan in an aggregate amount not to exceed $1,300,000.

6.13 Use of Proceeds. Use the proceeds of the Advances (a) on the Closing Date, to (i) refinance the DIP Facility and certain other senior secured indebtedness of Parent and its Subsidiaries and other items necessary to consummate the Plan, (ii) finance ongoing working capital and general corporate needs of Borrowers and their Restricted Subsidiaries, and (iii) pay transactional fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, and (b) thereafter, consistent with the terms and conditions hereof, for its lawful and permitted purposes; provided, that in no event shall any proceeds of the Advances be used to pay any lease rejection claims (which amounts shall be paid solely from the proceeds of the Required Equity).

6.14 Parent as Holding Company. Permit Parent to incur any liabilities, own or acquire any assets (other than interests in Deposit Accounts and Securities Accounts, cash and Cash Equivalents the Stock of SBS Holdings), or engage itself in any operations or business, except in connection with its ownership of SBS Holdings and its rights and obligations under the Loan Documents.

6.15 Consignments. Consign any of the Inventory of any Borrower or sell any of the Inventory of any Borrower on bill and hold, sale or return, sale on approval, or other conditional terms of sale, other than in the ordinary course of business.

6.16 Inventory and Equipment with Bailees. Store the Inventory or Equipment of Parent or its Restricted Subsidiaries at any time now or hereafter with a bailee, warehouseman, or similar party; provided, however, that Borrowers may store Inventory or Equipment with a bailee, warehouseman or similar party so long as (a) Borrowers provide Agent with written notification of its intent to enter into a storage agreement, (b) the location at which such Inventory or Equipment will be stored is within the United States, and (c) if no Collateral Access Agreement is delivered to Agent with respect to such bailee, warehouseman, or similar party on or prior to the date on which any such Inventory is stored therewith (or such later date as may be agreed upon by Agent in its sole discretion), Agent shall have the right to establish reserves pursuant to Section 2.1(c) (or, if the value of the Inventory at such location is de minimis in Agent’s reasonable determination, Agent shall have the right to exclude such Inventory from Eligible Inventory rather than establish a reserve).

6.17 Required Equity. Use any funds of any Loan Party (including any proceeds of any Advance), other than the Required Equity, to pay any lease rejection claims allowed under the Plan until the entire amount of the Required Equity has been used to pay such lease rejection claims allowed under the Plan (so long as such additional amount is not paid out of the proceeds of the Advances), at which time Borrowers may use such funds for any purpose permitted under this Agreement.

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7. FINANCIAL COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, Parent will comply with each of the following financial covenants:

(a) Minimum EBITDA. If any Financial Covenant Period has commenced and is continuing, achieve EBITDA as of the end of the applicable period ended immediately preceding the date on which any such Financial Covenant Period commenced and as of the end of each applicable period ended during such Financial Covenant Period, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

Applicable Amount			Applicable Period
($	11,600,000	)	For the month ending August 31, 2009
($	19,600,000	)	For the 2 month period ending September 30, 2009
($	25,600,000	)	For the 3 month period ending October 31, 2009
($	31,100,000	)	For the 4 month period ending November 30, 2009
($	36,500,000	)	For the 5 month period ending December 31, 2009
($	41,900,000	)	For the 6 month period ending January 31, 2010
($	48,800,000	)	For the 7 month period ending February 28, 2010
($	55,800,000	)	For the 8 month period ending March 31, 2010
($	62,700,000	)	For the 9 month period ending April 30, 2010

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Applicable Amount			Applicable Period
($	68,400,000	)	For the 10 month period ending May 31, 2010
($	74,100,000	)	For the 11 month period ending June 30, 2010
($	79,700,000	)	For the 12 month period ending July 31, 2010
($	74,400,000	)	For the 12 month period ending August 31, 2010
($	69,100,000	)	For the 12 month period ending September 30, 2010
($	63,700,000	)	For the 12 month period ending October 31, 2010
($	66,900,000	)	For the 12 month period ending November 30, 2010
($	70,100,000	)	For the 12 month period ending December 31, 2010
($	73,300,000	)	For the 12 month period ending January 31, 2011
($	66,900,000	)	For the 12 month period ending February 28, 2011
($	60,500,000	)	For the 12 month period ending March 31, 2011
($	54,000,000	)	For the 12 month period ending April 30, 2011
($	38,100,000	)	For the 12 month period ending May 31, 2011

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Applicable Amount			Applicable Period
($	22,100,000	)	For the 12 month period ending June 30, 2011
($	6,100,000	)	For the 12 month period ending July 31, 2011
($	2,300,000	)	For the 12 month period ending August 31, 2011
$	1,500,000		For the 12 month period ending September 30, 2011
$	5,300,000		For the 12 month period ending October 31, 2011
$	6,700,000		For the 12 month period ending November 30, 2011
$	8,100,000		For the 12 month period ending December 31, 2011
$	9,500,000		For the 12 month period ending January 31, 2012
$	13,500,000		For the 12 month period ending February 28, 2012
$	17,500,000		For the 12 month period ending March 31, 2012
$	21,500,000		For the 12 month period ending April 30, 2012
$	29,100,000		For the 12 month period ending May 31, 2012
$	36,600,000		For the 12 month period ending June 30, 2012

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Applicable Amount		Applicable Period
$	44,100,000	For the 12 month period ending July 31, 2012
$	48,000,000	For the 12 month period ending August 31, 2012
$	52,000,000	For the 12 month period ending September 30, 2012
$	55,900,000	For the 12 month period ending October 31, 2012
$	58,900,000	For the 12 month period ending November 30, 2012
$	61,800,000	For the 12 month period ending December 31, 2012
$	64,700,000	For the 12 month period ending January 31, 2013
$	69,100,000	For the 12 month period ending February 28, 2013
$	73,600,000	For the 12 month period ending March 31, 2013
$	78,000,000	For the 12 month period ending April 30, 2013
$	84,500,000	For the 12 month period ending May 31, 2013
$	90,900,000	For the 12 month period ending June 30, 2013

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(b) Capital Expenditures. If any Financial Covenant Period has commenced and is continuing during any period set forth in the table below, then, as of any date of determination during such Financial Covenant Period, Parent and its Restricted Subsidiaries shall not make Capital Expenditures during such period through such date of determination in excess of the amount set forth in the table below for the applicable period:

Applicable Period	Amount of Capital Expenditures
Closing Date through July 31, 2010	$	12,200,000
August 1, 2010 through July 31, 2011	$	13,400,000
August 1, 2011 through July 31, 2012	$	14,600,000
August 1, 2012 through July 31, 2013	$	15,800,000

provided, however, that if the amount of the Capital Expenditures permitted to be made in any period as set forth in the above table is greater than the actual amount of the Capital Expenditures for such period (the amount by which such permitted Capital Expenditures for such period exceed the actual amount of Capital Expenditures for such period, the “Excess Amount”), then the lesser of (i) such Excess Amount and (ii) 50% of the amount set forth in the above table for the next succeeding period (such lesser amount referred to as the “Carry-Over Amount”) may be carried forward to the next succeeding period (the “Succeeding Period”); provided further that (x) the Carry-Over Amount applicable to a particular Succeeding Period may not be used in that period until the amount permitted above to be expended in such period has first been used in full and (y) the Carry-Over Amount applicable to a particular Succeeding Period may not be carried forward to another period.

8. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

8.1 If Borrowers fail to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations (other than Bank Product Obligations that do not exceed an aggregate of $3,000,000) consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) (other than Bank Product Obligations that do not exceed an aggregate of $3,000,000), and such failure continues for a period of 3 Business Days, or (b) all or any portion of the principal of the Obligations (other than Bank Product Obligations that do not exceed an aggregate of $3,000,000);

8.2 If any Loan Party or any of its Restricted Subsidiaries:

(a) fails to perform or observe any covenant or other agreement contained in any of (i) Sections 3.6, 5.1, 5.2 (except that (x) with respect to the weekly reporting on Schedule 5.2, Borrower shall be allowed a cure period of 3 Business Days on not more than 4 occasions during each fiscal year and (y) with respect to clauses (s) through (aa), Borrower shall be allowed a cure period of 10 days), 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if Borrowers refuse to allow Agent or its representatives or agents to visit Borrowers’ properties, inspect its assets or books or

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records, examine and make copies of its books and records, or discuss Borrowers’ affairs, finances, and accounts with officers and employees of Borrowers in accordance with the terms of such Section), 5.10, 5.11, 5.12(iii), 5.13, and 5.17 of this Agreement, (ii) Sections 6.1 through 6.17 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 6 of the Security Agreement;

(b) fails to perform or observe any covenant or other agreement contained in any of Sections 5.3 (other than if any Borrower is not in good standing in its jurisdiction of organization), 5.4, 5.5, 5.8, 5.12 (other than Section 5.12(iii)), 5.14, and 5.15 of this Agreement and such failure continues for a period of 10 days after the earlier of (i) the date on which such failure shall first become known to any executive officer of any Borrower or (ii) the date on which written notice thereof is given to Borrowers by Agent; or

(c) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents (other than Bank Product Agreements relating to Bank Product Obligations that do not exceed an aggregate of $3,000,000), in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any executive officer of any Borrower or (ii) the date on which written notice thereof is given to Borrowers by Agent;

8.3 If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $3,000,000, or more (except to the extent fully covered by insurance (other than any applicable deductibles) pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Restricted Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied or vacated or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

8.4 If an Insolvency Proceeding is commenced by a Loan Party or any of its Restricted Subsidiaries;

8.5 If an Insolvency Proceeding is commenced against a Loan Party or any of its Restricted Subsidiaries and any of the following events occur: (a) such Loan Party or such Restricted Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Restricted Subsidiary, or (e) an order for relief shall have been issued or entered therein;

8.6 If Parent and its Restricted Subsidiaries are enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business of Parent and its Restricted Subsidiaries, taken as a whole;

8.7 If there is a default in one or more agreements to which a Loan Party or any of its Restricted Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Restricted Subsidiaries’ Indebtedness involving an aggregate amount of $3,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, that is then exercisable but irrespective of whether actually exercised, to accelerate the maturity of such Loan Party’s or its Restricted Subsidiary’s obligations thereunder; provided, however, that the written cure or written waiver of such default under any such agreement in accordance with the terms of such agreement shall constitute a cure or waiver of such “Event of Default” under this Agreement;

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8.8 If any warranty, representation or certification made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any portion of any representation and warranty that is already qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

8.9 If the obligation of any Guarantor under the Guaranty is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of the Loan Documents);

8.10 If the Security Agreement or any other Loan Document (other than any Bank Product Agreements relating to Bank Product Obligations that do not exceed an aggregate of $3,000,000) that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, or (b) as the result of an action or failure to act on the part of Agent;

8.11 The validity or enforceability of any Loan Document (other than any Bank Product Agreements relating to Bank Product Obligations that do not exceed an aggregate of $3,000,000) shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Restricted Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Restricted Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Restricted Subsidiaries shall deny that such Loan Party or its Restricted Subsidiaries has any liability or obligation purported to be created under any Loan Document (other than any Bank Product Agreements relating to Bank Product Obligations that do not exceed an aggregate of $3,000,000); or

8.12 The occurrence of one or more ERISA Events that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Change.

8.13 Following the Closing Date, if any of the Loan Parties, their Subsidiaries, or their ERISA Affiliates are assessed total aggregate withdrawal liability in excess of [$10,000,000] (or such lesser amount as would reasonably be expected to result in a Material Adverse Change); or (ii) increased contribution obligations to Multiemployer Plans result in an aggregate annual liability in excess of $3,000,000 (or such lesser amount as would reasonably be expected to result in a Material Adverse Change.

8.14 If there exists, as of any valuation date for a Benefit Plan, other than a Benefit Plan acquired as the result of an acquisition of a company sponsoring a defined benefit plan, but only to the extent that such Benefit Plan is not amended to cover employees who were not covered as of the date of such acquisition (an “Excluded Benefit Plan”), or in the aggregate for all Benefit Plans (excluding Benefit Plans with assets in excess of benefit liabilities and excluding Excluded Benefit Plans) an excess of the actuarial present value (determined on the basis of reasonable assumptions employed by the independent actuary for such plan) of benefit liabilities (as defined in Section 4001(a)(16) of ERISA) over the fair market value of the assets of such plan, only if such excess individually or in the aggregate for all such Benefit Plans (excluding in such computation any Benefit Plans with assets greater than benefit liabilities) exceeds $3,000,000 or such lesser amount as would reasonably be expected to result in a Material Adverse Change.

8.15 If any of the Loan Parties, their Subsidiaries, or any of their ERISA Affiliates incur any termination liability to the PBGC (other than with respect to a Multiemployer Plan) or to one or more Benefit Plans pursuant to ERISA or otherwise in an aggregate amount exceeding $3,000,000 or such lesser amount as would reasonably be expected to result in a Material Adverse Change.

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9. RIGHTS AND REMEDIES.

9.1 Rights and Remedies. Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall, in each case by written notice to Borrowers and in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following on behalf of the Lender Group:

(a) declare the Obligations, whether evidenced by this Agreement or by any of the other Loan Documents immediately due and payable, whereupon the same shall become and be immediately due and payable, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by Borrowers; and

(b) declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with any obligation of any Lender hereunder to make Advances and the obligation of the Issuing Lender to issue Letters of Credit.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to Borrowers or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations then outstanding, together with all accrued and unpaid interest thereon and all fees and all other amounts due under this Agreement and the other Loan Documents, shall automatically and immediately become due and payable, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by Parent and each Borrower.

9.2 Remedies Cumulative. The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

10. WAIVERS; INDEMNIFICATION.

10.1 Demand; Protest; etc. Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which any Borrower may in any way be liable.

10.2 The Lender Group’s Liability for Collateral. Each Borrower hereby agrees that: (a) so long as Agent complies with its obligations, if any, under the Code, the Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrowers.

10.3 Indemnification. Borrowers shall pay, indemnify, defend, and hold the Agent-Related Persons and the Lender-Related Persons (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other reasonable out-of-pocket costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that Borrowers shall not be

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liable for costs and expenses (including attorneys fees) of any Lender (other than WFF) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Parent’s and its Restricted Subsidiaries’ compliance with the terms of the Loan Documents (provided, however, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders or (ii) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that the indemnification in this clause (a) shall extend to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand), (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by any Borrower or any of its Restricted Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial Actions arising out of any such assets or properties of any Borrower or any of its Restricted Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). The foregoing to the contrary notwithstanding, Borrowers shall have no obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, attorneys, or agents. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrowers were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON OTHER THAN ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)

11. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile. In the case of notices or demands to Administrative Borrower, any Borrower, or Agent, as the case may be, they shall be sent to the respective address set forth below:

If to Administrative	STOCK BUILDING SUPPLY, LLC
Borrower or any other	8020 Arco Corporate Drive
Borrower:	Raleigh, NC 27617 Attn: Chief Financial Officer Fax No. (919) 431-1180
with copies to:	THE GORES GROUP, LLC 10877 Wilshire Boulevard, 18th Floor Los Angeles, CA 90024 Attn: General Counsel Fax No. (310) 209-3310

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and:	SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 300 South Grand Avenue, Suite 3400 Los Angeles, CA 90071 Attn: Kristine Dunn, Esq. Fax No.: (213) 621-5493
If to Agent:	WELLS FARGO FOOTHILL, LLC 2450 Colorado Avenue Suite 3000 West Santa Monica, California 90404 Attn: Business Finance Division Manager Fax No.: (310) 453-7413
with copies to:	PAUL, HASTINGS, JANOFSKY & WALKER LLP 515 S. Flower Street Twenty-fifth Floor Los Angeles, CA 90071 Attn: John Francis Hilson, Esq. Fax No.: (213) 996-6300

Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF PARENT, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF PARENT, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF PARENT, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1 Assignments and Participations.

(a) With the prior written consent of Agent and, so long as no Event of Default has occurred and is continuing, the Administrative Borrower, which consents shall not be unreasonably withheld, delayed or conditioned, and shall not be required in connection with an assignment to a Person that is a Lender or an Affiliate (other than individuals) of a Lender, any Lender may assign and delegate to one or more assignees (each, an “Assignee”; provided, however, that no Loan Party, Affiliate of a Loan Party, Equity Sponsor, or Affiliate of Equity Sponsor shall be permitted to become an Assignee) all or any portion of the Obligations, the Commitments and the other rights and obligations of such Lender hereunder and under the other Loan Documents, in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (x) an assignment or delegation by any Lender to any other Lender or an Affiliate of any Lender or (y) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000); provided, however, that Borrowers and Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Borrowers and Agent by such Lender and the Assignee, (ii) such Lender and its Assignee have delivered to Administrative Borrower and Agent an Assignment and Acceptance and Agent has notified the assigning Lender of its receipt thereof in accordance with Section 13.1(b), and (iii) unless waived by Agent, the assigning Lender or Assignee has paid to Agent for Agent’s separate account a processing fee in the amount of $3,500.

(b) From and after the date that Agent notifies the assigning Lender (with a copy to Administrative Borrower) that it has received an executed Assignment and Acceptance (which has been executed by Agent and the Administrative Borrower, to the extent that consent of Agent or Administrative Borrower to the relevant assignment is required) and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a).

(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as

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follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance or observance by Borrowers of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(d) Immediately upon Agent’s receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

(e) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, however, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) change the amount or due dates of scheduled principal repayments or prepayments or premiums, and (v) all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement (and subject to the provisions of Section 15.12 as if such Participant were a Lender). The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other

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Lenders, Agent, Borrowers, the Collections of any Borrower or its Restricted Subsidiaries, the Collateral, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

(f) In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to Parent and its Restricted Subsidiaries and their respective businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

(h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or cause to be maintained, a register (the “Register”) on which it enters the name and address of each Lender as the registered owner of the Advances (and the principal amount thereof and stated interest thereon) held by such Lender (each, a “Registered Loan”). Other than in connection with an assignment by a Lender of all or any portion of its portion of the Advances to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same), Borrowers shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case of any assignment by a Lender of all or any portion of the Advances to an Affiliate of such Lender or a Related Fund of such Lender, and which assignment is not recorded in the Register, the assigning Lender, on behalf of Borrowers, shall maintain a register comparable to the Register.

(i) In the event that a Lender sells participations in the Registered Loan, such Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or cause to be maintained) a register on which it enters the name of all participants in the Registered Loans held by it (and the principal amount (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations) (the “Participant Register”). A Registered Loan (and the Registered Note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register.

(j) Agent shall make a copy of the Register (and each Lender shall make a copy of its Participant Register in the extent it has one) available for review by Borrowers from time to time as Borrowers may reasonably request.

13.2 Successors. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that Borrowers may not assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by the Lenders shall release any Borrower from its

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Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 and, except as expressly required pursuant to Section 13.1, no consent or approval by Borrowers is required in connection with any such assignment.

14. AMENDMENTS; WAIVERS.

14.1 Amendments and Waivers.

(a) No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect to any departure by Parent or any Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are parties thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly adversely affected thereby and Parent and each Borrower, do any of the following:

(i) increase the amount of or extend the expiration date of any Commitment of any Lender,

(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

(iii) reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except (y) in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders), and (z) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or a reduction of fees for purposes of this clause (iii)),

(iv) amend or modify this Section or any provision of this Agreement providing for consent or other action by all Lenders,

(v) other than as permitted by Section 15.11, release Agent’s Lien in and to any of the Collateral,

(vi) change the definition of “Required Lenders” or “Pro Rata Share”,

(vii) contractually subordinate any of Agent’s Liens (other than to Liens that secure Purchase Money Indebtedness or a Capital Lease Obligation),

(viii) other than in connection with a merger, liquidation, dissolution or sale of such Person permitted by the terms hereof or the other Loan Documents, release any Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

(ix) amend any of the provisions of Section 2.4(b)(i) or (ii),

(x) amend Section 13.1(a) to permit a Loan Party, an Affiliate of a Loan Party, Equity Sponsor, or an Affiliate of Equity Sponsor to be permitted to become an Assignee, or

(xi) change the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Inventory, Bank Product Reserve, Plan Reserve, Special Reserve, Surety Reserve, and Distribution Reserve) that are used in such definition to the extent that any such change results in more credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount, or change Section 2.1(c).

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(b) No amendment, waiver, modification, or consent shall amend, modify, or waive (i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrowers (and shall not require the written consent of any of the Lenders), and (ii) any provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrowers, and the Required Lenders,

(c) No amendment, waiver, modification, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Lender, or any other rights or duties of Issuing Lender under this Agreement or the other Loan Documents, without the written consent of Issuing Lender, Agent, Borrowers, and the Required Lenders,

(d) No amendment, waiver, modification, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lender, or any other rights or duties of Swing Lender under this Agreement or the other Loan Documents, without the written consent of Swing Lender, Agent, Borrowers, and the Required Lenders, and

(e) Anything in this Section 14.1 to the contrary notwithstanding, any amendment, modification, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not create, modify or otherwise affect rights or obligations of Parent or any Borrower, shall not require consent by or the agreement of Parent or any Borrower.

14.2 Replacement of Certain Lenders.

(a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the unanimous consent, authorization, or agreement of any Lender directly adversely affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not such greater number of the Lenders as may be required by Section 14.1 or (ii) any Lender makes a claim for compensation under Section 16, then Borrowers or Agent, upon at least 5 Business Days prior irrevocable notice, may permanently replace any Lender (a “Holdout Lender”) that failed to give its consent, authorization, or agreement or made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Holdout Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender or Tax Lender, as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender being repaid its share of the outstanding Obligations (including an assumption of its Pro Rata Share of the Letters of Credit) without any premium or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Holdout Lender shall be made in accordance with the terms of Section 13.1. Until such time as the Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of such Letters of Credit.

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14.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by Parent and each Borrower of any provision of this Agreement. Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

15. AGENT; THE LENDER GROUP.

15.1 Appointment and Authorization of Agent. Each Lender hereby designates and appoints WFF as its representative under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as such on the express conditions contained in this Section 15. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent; it being expressly understood and agreed that the use of the word “Agent” is for convenience only, that WFF is merely the representative of the Lenders, and only has the contractual duties set forth herein. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, the Collections of Parent and its Restricted Subsidiaries, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply, and distribute the Collections of Parent and its Restricted Subsidiaries as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collateral and the Collections of Parent and its Restricted Subsidiaries, (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Parent or its Restricted Subsidiaries, the Obligations, the Collateral, the Collections of Parent and its Restricted Subsidiaries, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

15.2 Delegation of Duties. Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made without gross negligence or willful misconduct.

15.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan

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Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by Parent or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of Parent or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of Parent or its Subsidiaries.

15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the requisite Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

15.5 Notice of Default or Event of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Borrowers referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.” Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to Section 15.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; provided, however, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

15.6 Credit Decision. Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Parent and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender. Each Lender represents to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of Borrowers or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue

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to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrowers or any other Person party to a Loan Document. Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Borrowers or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons. Each Lender acknowledges that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender with any credit or other information with respect to Borrowers, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or representatives’ possession before or after the date on which such Lender became a party to this Agreement.

15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, attorneys fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient amounts from the Collections of Parent and its Restricted Subsidiaries received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders. In the event Agent is not reimbursed for such costs and expenses by Parent or its Restricted Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s Pro Rata Share thereof. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so), according to their Pro Rata Shares, from and against any and all Indemnified Liabilities; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an Advance or other extension of credit hereunder. Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s Pro Rata Share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

15.8 Agent in Individual Capacity. WFF and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though WFF were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, WFF or its Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them. The terms “Lender” and “Lenders” include WFF in its individual capacity.

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15.9 Successor Agent. Agent may resign as Agent upon 30 days prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Borrowers (unless such notice is waived by Borrowers). If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Borrowers (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders. If, at the time that Agent’s resignation is effective, it is acting as the Issuing Lender or the Swing Lender, such resignation shall also operate to effectuate its resignation as the Issuing Lender or the Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit or make Swing Loans. If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and Borrowers, a successor Agent. If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Borrowers (such consent not to be unreasonably withheld, delayed, or conditioned). In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

15.10 Lender in Individual Capacity; Co-Lead Arrangers.

(a) Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

(b) WFF and BOA, in their respective capacities as “co-lead arrangers” shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to them in their capacities as Lenders or, in the case of WFF, in its capacities as Agent, Swing Lender, or Issuing Lender. Without limiting the foregoing, WFF and BOA, in their respective capacities as “co-lead arrangers” shall not have or be deemed to have any fiduciary relationship with any Borrower or with any Lender. Each Lender acknowledges that it has not relied upon, and will not rely upon, WFF or BOA in deciding to enter into this Agreement or in taking or not taking action hereunder.

15.11 Collateral Matters.

(a) The Lenders hereby irrevocably authorize Agent to, and Agent shall upon Administrative Borrower’s request, release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrowers of all Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale or disposition is a Permitted Disposition or is otherwise permitted under Section 6.4 (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in

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which the Loan Parties owned no interest at the time Agent’s Lien was granted nor at any time thereafter, (iv) constituting property leased to the Loan Parties under a lease that has expired or is terminated in a transaction permitted under this Agreement, or (v) in accordance with the express terms of the Security Agreement or any other document or instrument creating or evidencing Agent’s Liens. The Lenders hereby irrevocably authorize Agent, based upon the instruction of the Required Lenders, to credit bid and purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted by Agent under the provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code, at any sale thereof conducted under the provisions of the Bankruptcy Code, including Section 363 of the Bankruptcy Code, or at any sale or foreclosure conducted by Agent (whether by judicial action or otherwise) in accordance with applicable law. Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or Borrowers at any time, the Lenders will confirm in writing Agent’s authority to release any such Liens on particular types or items of Collateral or any Borrower or any Guarantor pursuant to this Section 15.11; provided, however, that (1) Agent shall not be required to execute any document necessary to evidence such release on terms that, in Agent’s reasonable opinion, upon the advice of legal counsel, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien or Borrower or Guarantor without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of Borrowers (other than Borrowers expressly being released) in respect of) all interests retained by Borrowers, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral. The Lenders further hereby irrevocably authorize Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures Permitted Purchase Money Indebtedness.

(b) Agent shall have no obligation whatsoever to any of the Lenders to assure that the Collateral exists or is owned by Parent or its Restricted Subsidiaries or is cared for, protected, or insured or has been encumbered, or that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as otherwise provided herein.

15.12 Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to Parent or its Restricted Subsidiaries or any deposit accounts of Parent or its Restricted Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all

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of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, however, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

15.13 Agency for Perfection. Agent hereby appoints each other Lender as its agent (and each Lender hereby accepts such appointment) for the purpose of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control. Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s instructions.

15.14 Payments by Agent to the Lenders. All payments to be made by Agent to the Lenders shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

15.15 Concerning the Collateral and Related Loan Documents. Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents. Each member of the Lender Group agrees that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.

15.16 Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information. By becoming a party to this Agreement, each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report respecting Parent or its Restricted Subsidiaries (each a “Report” and collectively, “Reports”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding Parent and its Restricted Subsidiaries and will rely significantly upon Parent’s and its Restricted Subsidiaries’ books and records, as well as on representations of any Borrower’s personnel,

(d) agrees to keep all Reports and other material, non-public information regarding Parent and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and

(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or

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draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

In addition to the foregoing: (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Parent or its Restricted Subsidiaries to Agent that has not been contemporaneously provided by Parent or such Restricted Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Parent or its Restricted Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of Borrowers the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Parent or such Restricted Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Borrowers a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

15.17 Several Obligations; No Liability. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group. No Lender shall be responsible to Borrowers or any other Person for any failure by any other Lender to fulfill its obligations to make credit available hereunder, nor to advance for it or on its behalf in connection with its Commitment, nor to take any other action on its behalf hereunder or in connection with the financing contemplated herein.

16. WITHHOLDING TAXES.

(a) All payments made by Borrowers hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense. In addition, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes except to the extent required by law, and in the event any deduction or withholding of Taxes is required, Borrowers shall comply with the next sentence of this Section 16(a). If any Taxes are so levied or imposed, Borrowers agree to pay the full amount of such Taxes and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this Section 16(a) after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein; provided, however, that Borrowers shall not be required to increase any such amounts if the increase in such amount payable results from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally determined by a court of competent jurisdiction). Borrowers will furnish to Agent reasonably promptly after the date the payment of any Tax is due pursuant to applicable law, certified copies of tax receipts or other reasonable documentation evidencing such payment by Borrowers.

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(b) Borrowers agree to pay any present or future stamp, value added or documentary taxes or any other excise or property taxes, charges, or similar levies that arise from any payment made hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document.

(c) If a Lender or Participant is entitled to claim an exemption or reduction from United States withholding tax, such Lender or Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the following before receiving its first payment under this Agreement and at any other time reasonably requested by Agent or the Borrowers:

(i) if such Lender or Participant is entitled to claim an exemption from United States withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to any Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);

(ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;

(iii) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

(iv) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments); or

(v) a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.

Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

(d) If a Lender or Participant claims an exemption from withholding tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its first payment under this Agreement, but only if such Lender or such Participant is legally able to deliver such forms, provided, however, that nothing in this Section 16(d) shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its tax returns). Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

(e) If a Lender or Participant claims exemption from, or reduction of, withholding tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify Agent (or,

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in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrowers to such Lender or Participant. To the extent of such percentage amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to Section 16(c) or 16(d) as no longer valid. With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to Section 16(c) or 16(d), if applicable. Borrowers agree that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 with respect thereto and provided that a Participant shall not be entitled to any additional amounts pursuant to this Section 16 in excess of the amount to which Lender granting the participation would have been entitled.

(f) If a Lender or a Participant is entitled to a reduction in the applicable withholding tax, Borrowers and Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant an amount equivalent to the applicable withholding tax after taking into account such reduction. If the forms or other documentation required by Section 16(c), 16(d), or 16(e) are not delivered to Agent or Borrowers (or, in the case of a Participant, to the Lender granting the participation), then Agent or Borrowers (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

(g) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent or Borrowers (or, in the case of a Participant, that the Lender granting the participation) did not properly withhold tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify Agent or Borrowers (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together with all costs and expenses (including attorneys fees and expenses). The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

(h) If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by Borrowers or with respect to which Borrowers have paid additional amounts pursuant to this Section 16, so long as no Event of Default has occurred and is continuing, it shall pay over such refund to Borrowers (but only to the extent of payments made, or additional amounts paid, by Borrowers under this Section 16 with respect to Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such a refund); provided, that Borrowers, upon the request of Agent or such Lender, agree to repay the amount paid over to Borrowers (plus any penalties, interest or other charges, imposed by the relevant Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything in this Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender to make available its tax returns (or any other information which it deems confidential) to Borrowers or any other Person.

(i) Each Lender agrees that, as promptly as practicable after the occurrence of any event giving rise to the operation of Section 16 with respect to such Lender, it will use reasonable, good faith efforts (subject to overall policy considerations of such Lender) to eliminate or reduce any additional payment which

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may thereafter accrue, including by designating another lending office or assigning its rights and obligations hereunder to another of its offices, branches or Affiliates with the object of avoiding the consequences of such event; provided, that such designation or other action is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations or rights of Borrowers or any Lender pursuant to Section 16.

17. GENERAL PROVISIONS.

17.1 Effectiveness. This Agreement shall be binding and deemed effective when executed by Parent, each Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

17.2 Section Headings. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

17.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or Parent or any Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

17.4 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

17.5 Rank Product Providers. Each Bank Product Provider shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting. Agent hereby agrees to act as a non-fiduciary agent for such Bank Product Providers and, by virtue of providing a Bank Product, each Bank Product Provider shall be automatically deemed to have appointed Agent as its non-fiduciary agent; it being understood and agreed that the rights and benefits of such Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In connection with any such distribution of payments and collections, Agent shall be entitled to assume no amounts are owing to any Bank Product Provider unless such Bank Product Provider has notified Agent in writing of the amount that is owing to it prior to such distribution.

17.6 Debtor-Creditor Relationship. The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor. No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

17.7 Counterparts; Electronic Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.

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17.8 Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by any Borrower or Guarantor or the transfer to the Lender Group of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “Voidable Transfer”), and if the Lender Group is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the Lender Group related thereto, the liability of each Borrower or Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

17.9 Confidentiality.

(a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding Parent and its Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement (it being understood and agreed that any information regarding Parent and its Subsidiaries, their operations, assets, and existing and contemplated business plans that is marked or otherwise reasonably designated in good faith as “confidential”, shall be presumed to be Confidential Information unless such information is publicly available other than as a result of disclosure of such information in violation of this Section 17.9 or any other applicable confidentiality undertakings), except: (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group (“Lender Group Representatives”), (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers), provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrowers with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrowers pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance by Borrowers or as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (v) the disclosing party agrees to provide Borrowers with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrowers pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (v) shall be limited to the portion of the Confidential Information as may be required by such governmental authority pursuant to such subpoena or other legal process, (vi) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (vii) in connection with any assignment, participation or pledge of any Lender’s interest under this Agreement, provided that any such assignee, participant, or pledgee shall have agreed in writing to receive such information hereunder subject to the terms of this Section, (viii) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; provided, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (viii) with respect to litigation involving any Person (other than Borrowers, Agent, any Lender, any

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of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Borrowers with prior notice thereof, and (ix) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may provide information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services.

17.10 Lender Group Expenses. Borrowers agree to pay any and all Lender Group Expenses promptly after demand therefor by Agent and agree that its obligations contained in this Section 17.10 shall survive payment or satisfaction in full of all other Obligations.

17.11 USA PATRIOT Act. Each Lender that is subject to the requirements of the Patriot Act hereby notifies Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies Borrowers, which information includes the name and address of Borrowers and other information that will allow such Lender to identify Borrowers in accordance with the Patriot Act.

17.12 Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

17.13 Stock Building Supply, LLC as Agent for Borrowers. Each Borrower hereby irrevocably appoints Stock Building Supply, LLC, a North Carolina limited liability company, as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative Borrower”) which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide Agent with all notices with respect to Advances and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Advances and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group. To induce the Lender Group to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by any Borrower or by any third party whosoever, arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein provided, (b) the Lender Group’s relying on any instructions of the Administrative Borrower, or (c) any other action taken by the Lender Group hereunder or under the other Loan Documents, except that Borrowers will have no liability to the relevant Agent-Related Person or Lender- Related Person under this Section 17.13 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

17.14 Additional Borrowers. Upon the execution and delivery by any Subsidiary of Parent of a joinder to this Agreement pursuant to Section 5.11, such Subsidiary shall become a Borrower hereunder with the same force and effect as if originally named as a Borrower herein. The execution and delivery of any instrument adding an additional Borrower as a party to this Agreement shall not require the consent of any Lender hereunder. The rights and obligations of each Borrower hereunder shall remain in full force and effect notwithstanding the addition of any new Borrower hereunder.

[Signature pages to follow.]

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

STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chief Executive Officer
STOCK BUILDING SUPPLY HOLDINGS, LLC, a Virginia limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President
COLEMAN FLOOR, LLC, a Delaware limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President
SBS CONSTRUCTION SERVICES OF NEW MEXICO, LLC, a Delaware limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chairman of the Board
STOCK BUILDING SUPPLY, LLC, a North Carolina limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chairman of the Board
STOCK BUILDING SUPPLY OF FLORIDA, LLC, a Florida limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chairman of the Board

[SIGNATURE PAGE TO CREDIT AGREEMENT]

STOCK BUILDING SUPPLY MIDWEST, LLC, a Delaware limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chairman of the Board
STOCK BUILDING SUPPLY OF TEXAS, LLC, a Delaware limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chairman of the Board
STOCK BUILDING SUPPLY WEST, LLC, a Utah limited liability company
By:	/s/ Joseph J. Appelmann
Name:	Joseph J. Appelmann
Title:	President and Chairman of the Board

[SIGNATURE PAGE TO CREDIT AGREEMENT]

WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as Agent and as a Lender
By:	/s/ S. N. Thomas
Name:	S. N. Thomas
Title:	V.P

[SIGNATURE PAGE TO CREDIT AGREEMENT]

BANK OF AMERICA, N.A., as a co-lead arranger and as a Lender
By:	/s/ Bobby P.S. Bans
Name:	Bobby P.S. Bans
Title:	Vice President – Portfolio

[SIGNATURE PAGE TO CREDIT AGREEMENT]

EXHIBIT A-1

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of                      between                                          (“Assignor”) and                                          (“Assignee”). Reference is made to the credit agreement described in Annex I hereto (as amended, restated, supplemented, renewed, extended or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

1. In accordance with the terms and conditions of Section 13 of the Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor, and Assignor’s portion of the Commitments, all to the extent specified on Annex I.

2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Loan Documents, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any Guarantor or the performance or observance by any Borrower or any Guarantor of any of their respective obligations under the Loan Documents or any other instrument or document furnished pursuant thereto, and (d) represents and warrants that the amount set forth as the Purchase Price on Annex I represents the amount owed by Borrowers to Assignor with respect to Assignor’s share of the Advances assigned hereunder, as reflected on Assignor’s books and records.

3. The Assignee (a) confirms that it has received copies of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance upon Agent, Assignor, or any other Lender, based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents; (c) confirms that it is eligible as an assignee under the terms of the Credit Agreement; (d) appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; [and (f) attaches the forms (duly completed and executed by it) prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty and such other documents as may be required to be delivered by it under the Credit Agreement.]

4. Following the execution of this Assignment Agreement by the Assignor and Assignee, the Assignor will deliver this Assignment Agreement to Agent for recording by Agent. The

effective date of this Assignment (the “Settlement Date”) shall be the latest to occur of (a) the date of the execution and delivery hereof by the Assignor and the Assignee, (b) the receipt by Agent for its sole and separate account a processing fee in the amount of $3,500 (if required by the Credit Agreement), (c) the receipt of any required consents of Agent and Administrative Borrower, and (d) the date specified in Annex I.

5. As of the Settlement Date (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of the Credit Agreement, including such assigning Lender’s obligations under Article 15 and Section 17.9 of the Credit Agreement.

6. Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as set forth in Annex I). From and after the Settlement Date, Agent shall make all payments that are due and payable to the holder of the interest assigned hereunder (including payments of principal, interest, fees and other amounts) to Assignor for amounts which have accrued up to but excluding the Settlement Date and to Assignee for amounts which have accrued from and after the Settlement Date. On the Settlement Date, Assignor shall pay to Assignee an amount equal to the portion of any interest, fee, or any other charge that was paid to Assignor prior to the Settlement Date on account of the interest assigned hereunder and that are due and payable to Assignee with respect thereto, to the extent that such interest, fee or other charge relates to the period of time from and after the Settlement Date.

7. This Assignment Agreement may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. This Assignment Agreement may be executed and delivered by facsimile or other electronic image scan transmission (e.g., “PDF” or “tif ’ via email) all with the same force and effect as if the same were a fully executed and delivered original manual counterpart.

8. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers, as of the first date written above.

[NAME OF ASSIGNOR]
as Assignor
By:
	Name:
	Title:
[NAME OF ASSIGNEE]
as Assignee
By:
	Name:
	Title:

ACCEPTED AND AGREED THIS DAY     OF             , 20
WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as Agent
By:
	Name:
	Title:
AND IF REQUIRED BY THE CREDIT AGREEMENT:
STOCK BUILDING SUPPLY, LLC, a North Carolina limited liability company, as Administrative Borrower
By:
	Name:
	Title:

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

ANNEX I

1. Borrowers: Each of the Subsidiaries of STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), party to the Credit Agreement

2. Name and Date of Credit Agreement:

Credit Agreement, dated as of June 30, 2009, by and among Parent, Borrowers, the lenders a party thereto (the “Lenders”), BANK OF AMERICA, N.A., a national banking association, as co-lead arranger, and WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as co-lead arranger and as administrative agent for the Lenders

3.      Date of Assignment Agreement:
4.      Assigned Amounts:
a.      Assigned Amount of Commitment	$
b.      Assigned Amount of Advances	$
5.      Settlement Date:
6.      Purchase Price	$
7.      Notice and Payment Instructions, etc.

Assignee: Assignor:

Stock Building Supply Holdings II, LLC	Certificate No.	1
8020 Arco Corporate Drive	Report Date	mm/dd/yy
Raleigh, NC 27617	As Of Date	mm/dd/yy
Borrowing Base Report - Submitted to Wells Fargo Foothill

ACCOUNTS RECEIVABLE
1. Beginning Balance (Ending Balance of Last Report)						$	0.00
2. Gross Adjustment (-)							0.00
3. Less: Total Collections							0.00
4. Add Back Non-AR Cash Collections							0.00
5. Less: Discounts/Allowances							0.00
6. ENDING BALANCE PER AGINGS							0.00
7. Less: Unapplied Cash							0.00
8. Less: Ineligible Accounts Receivable							0.00
9. ELIGIBLE ACCOUNTS RECEIVABLE							0.00
10. Times: Accounts Receivable Advance Rate							85	%
11. ACCOUNTS RECEIVABLE AVAILABILITY							0.00
12. Dilution Reserve (Amount > 5%)		4.00	%				0.00
13. Other Reserve (per Audit)							0.00
14. Line Amount Reserve							0.00
15. Other Reserve							0.00
16. Total AR Availability							0.00
17. AR AVAILABILITY:                     u THE LESSER OF				$	150,000,000		OR		Line 17	$	0.00
INVENTORY
18. Total Gross Inventory                     as of		mm/dd/yy				$	0.00
19. Less: Ineligible Inventory							0.00
20. ELIGIBLE INVENTORY							0.00
21. Times: Inventory Advance Rate							65	%
22. INVENTORY AVAILABILITY							0.00
23. NOLV Reserve							0.00
24. Rent Reserve							0.00
25. Appraisal Reserve							0.00
26. Line Amount Reserve							0.00
27. Other Reserve							0.00
28. Total Available Inventory							0.00
29. INVENTORY AVAILABILITY    u THE LESSER  OF				$	125,000,000		OR		LINE 28	$	0.00
TOTAL BORROWING BASE AVAILABILITY
30. AVAILABILITY: THE LESSER OF MAX. LOAN	$	150,000,000			OR SUM OF LINES 17 and 29				0.00	$	0.00
AVAILABILITY
31. Calculated Borrowing Base Availability					(Line 30 above)					$	0.00
32. Less: Ending Loan Balance             as of		mm/dd/yy									0.00
33. Less: Outstanding L/C Balance					(from Loan Ledger Report)						0.00
34. Less: Availability Block											25,000,000.00
35. Less: Bank Products Reserve											0.00
36. Less: Other Reserve											0.00
37. Net Excess Availability											(25,000,000.00	)

All capitalized terms defined in the Credit Agreement referred to below and used in this certificate shall have the meanings set forth in the Credit Agreement unless specifically defined herein. The undersigned, Stock Building Supply Holdings II, LLC, a Delaware limited liability company (“Parent”), pursuant to Schedule 5.2 of that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, modified, supplemented, refinanced, renewed, or extended from time to time, the “Credit Agreement”), entered into among Parent, each of Parent’s Subsidiaries party thereto from time to time, the lenders signatory thereto from time to time and Wells Fargo Foothill, LLC, a Delaware limited liability company as co-lead arranger and as administrative agent (in such capacity, together with its successors and assigns, if any, in such capacity, “Agent”), hereby certifies to Agent that the above items, calculated in accordance with the terms and definitions set forth in the Credit Agreement for such items are true and correct. Additionally, the undersigned hereby certifies and represents and warrants to the Lender Group on behalf of Borrower that (i) no Default or Event of Default has occurred and is continuing on the date hereof, except for such conditions or events as may have been disclosed to Agent on or prior to the date hereof and (ii) all of the foregoing is true and correct as of the effective date of the calculations set forth above and that such calculations have been made in accordance with the requirements of the Credit Agreement.

Authorized Signature
	By:
			Title
	Print Name:	Date:

EXHIBIT B-2

FORM OF BANK PRODUCT PROVIDER LETTER AGREEMENT

[Letterhead of Specified Bank Products Provider]

[Date]

Wells Fargo Foothill, LLC, as Agent

2450 Colorado Avenue

Suite 3000 West

Santa Monica, California 90404

Attention: Business Finance Division Manager

Fax No.: (310) 453-7413

Reference is hereby made to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or modified from time to time, the “Credit Agreement”), by and among the lenders party thereto (such lenders, together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and as co-lead arranger, STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), and each of Parent’s Subsidiaries party thereto (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), and BANK OF AMERICA, N.A., as co-lead arranger. Capitalized terms used herein but not specifically defined herein shall have the meanings ascribed to them in the Credit Agreement.

Reference is also made to that certain [describe the Bank Product Agreement or Agreements] (the “Specified Bank Product Agreement [Agreements]”) dated as of [                    ] by and between [Lender or Affiliate of Lender] (the “Specified Bank Products Provider”) and [identify the Loan Party].

1. Appointment of Agent. The Specified Bank Products Provider hereby designates and appoints Agent, and Agent by its signature below hereby accepts such appointment, as its representative under the Credit Agreement and the other Loan Documents, and Specified Bank Products Provider and Agent each agree that the provisions of Sections 15.1, 15.2, 15.3, 15.4, 15.6, 15.7, 15.8, 15.11(b), 15.12, 15.13, 15.14, and 15.15, including, as applicable, the defined terms referenced therein (but only to the extent used therein), which govern the relationship, and certain representations, acknowledgements, appointments, rights, restrictions, and agreements, between the Agent, on the one hand, and the Lenders or the Lender Group, on the other hand, shall, from and after the date of this letter agreement also apply to and govern, mutatis mutandis, the relationship between the Agent, on the one hand, and the Specified Bank Product Provider with respect to the Bank Products provided pursuant to the Specified Bank Product Agreement[s], on the other hand.

2. Acknowledgement of Certain Provisions of Credit Agreement. The Specified Bank Products Provider hereby acknowledges that it has reviewed all of the provisions of the Credit Agreement (including without limitation, Sections 2.4(b)(ii), 14.1, 15.9, 15.11, and 17.5 of the Credit Agreement, and, as applicable, the defined terms referenced therein) and agrees to be bound by the provisions thereof.

3. Reporting Requirements. On a monthly basis (not later than the 10th Business Day of each calendar month) the Specified Bank Products Provider agrees to provide Agent with a written report, in form and substance satisfactory to Agent, detailing Specified Bank Products Provider’s reasonable determination of the credit exposure of Parent and its Subsidiaries in respect of the Bank Products provided by Specified Bank Products Provider pursuant to the Specified Bank Products Agreement[s]. If Agent does not receive such written report within the time period provided above, Agent shall be entitled to assume that the reasonable determination of the credit exposure of Parent and its Subsidiaries with respect to the Bank Products provided pursuant to the Specified Bank Products Agreement[s] is zero. Specified Bank Products Provider acknowledges and agrees that Agent shall be entitled to rely on the information in such reports to establish the Bank Product Reserve and agrees that if such reports are not delivered to Agent within the time period specified above, Agent shall be entitled to implement a Bank Products Reserve in respect of the Bank Product Obligations pursuant to the Specified Bank Products Agreement[s] equal to zero.

4. Bank Product Obligations. From and after the delivery of this letter agreement to Agent and the acknowledgement of this letter agreement by Agent until the Payoff Date, the obligations and liabilities of Parent and its Subsidiaries to Specified Bank Product Provider in respect of Bank Products evidenced by the Specified Bank Product Agreement[s] shall constitute Bank Product Obligations and Specified Bank Product Provider shall constitute a Bank Product Provider, in each case, in accordance with and subject to the terms of, the Credit Agreement.

5. Notices. All notices and other communications provided for hereunder shall be given in the form and manner provided in Section 11 of the Credit Agreement, and, if to Agent, shall be mailed, sent, or delivered to Agent in accordance with Section 11 in the Credit Agreement, if to Administrative Borrower or any other Borrower, shall be mailed, sent, or delivered to such Borrower in accordance with Section 11 in the Credit Agreement, and, if to Specified Bank Products Provider, shall be mailed, sent or delivered to the address set forth below, or, in each case as to any party, at such other address as shall be designated by such party in a written notice to the other party.

If to Specified Bank
Products Provider:
	Attn:
	Fax No.

6. Miscellaneous. This letter agreement is for the benefit of the Agent, the Specified Bank Products Provider, the Borrowers and each their respective successors and assigns (including any successor agent pursuant to Section 15.9 of the Credit Agreement). In connection with any transfer or assignment by Specified Bank Products Provider of any Specified Bank Products Agreement, the assignees or transferees of Specified Bank Product Provider shall bind themselves in a writing addressed to the Agent to the terms of this letter agreement; provided that, for the avoidance of doubt, no Specified Bank Products Agreement may be assigned to any Person that is not a Lender or an Affiliate of a Lender, and only Lenders and Affiliates of Lenders shall be permitted to be Bank Product Providers for purposes of the Loan Documents. Unless the context of this letter agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. This letter agreement is a Loan Document. This letter agreement may be executed in any number of counterparts and by different parties on separate counterparts. Each of such counterparts shall be deemed to be an original, and all of such counterparts, taken together, shall constitute but one and the same agreement. Delivery of an executed counterpart of this letter by telefacsimile or other means of electronic transmission shall be equally effective as delivery of a manually executed counterpart.

7. Governing Law.

(a) THE VALIDITY OF THIS LETTER AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS LETTER AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS, AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. EACH BORROWER, SPECIFIED BANK PRODUCTS PROVIDER, AND AGENT WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 7(b).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, SPECIFIED BANK PRODUCTS PROVIDER, AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH BORROWER, SPECIFIED BANK PRODUCTS PROVIDER, AND AGENT REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS LETTER AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

[signature pages to follow]

Sincerely,

[SPECIFIED BANK PRODUCTS PROVIDER]

By:

Name:

Title:

Acknowledged, accepted, and agreed as of the date first written above:

STOCK BUILDING SUPPLY, LLC,

a North Carolina limited liability company,

as Administrative Borrower

By:

Name:

Title:

Acknowledged, accepted, and agreed as of the date first written above:

WELLS FARGO FOOTHILL, LLC,

a Delaware limited liability company,
as Agent

By:

Name:

Title:

EXHIBIT C-1

FORM OF COMPLIANCE CERTIFICATE

[on Parent’s letterhead]

To: Wells Fargo Foothill, LLC, as Agent

under the below referenced Credit Agreement

2450 Colorado Avenue

Suite 3000 West

Santa Monica, California 90404

Attn: Business Finance Division Manager

Re: Compliance Certificate dated                     

Ladies and Gentlemen:

Reference is made to that certain CREDIT AGREEMENT (as amended, restated, modified, supplemented, renewed or extended from time to time, the “Credit Agreement”) dated as of June 30, 2009, by and among the lenders party thereto (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), BANK OF AMERICA, N.A., a national banking association, as co-lead arranger, WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and as co-lead arranger, STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), and each of Parent’s Subsidiaries party thereto (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”). Capitalized terms used in this Compliance Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.

This Compliance Certificate is being delivered pursuant to Schedule 5.1 of the Credit Agreement. The undersigned officer of Parent hereby certifies as of the date hereof on behalf of Parent in his/her capacity as an officer of Parent and not in an individual capacity that:

1. The financial statements of Parent and its Restricted Subsidiaries furnished in Schedule 1 attached hereto, have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments), and present fairly in all material respects, the consolidated financial condition as of the date thereof of Parent and its Subsidiaries, or, in the case of audited annual financial statements, the consolidated financial condition as of the date thereof of Saturn and its Subsidiaries.

2. Such officer has reviewed the terms of the Credit Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and financial condition of Parent and its Restricted Subsidiaries during the accounting period covered by the financial statements delivered pursuant to Schedule 5.1 of the Credit Agreement.

3. Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, specifying the nature and period of existence thereof and what action Parent and its Restricted Subsidiaries have taken, are taking, or propose to take with respect thereto.

[4. As of the date hereof, Parent and its Restricted Subsidiaries are in compliance with the applicable covenants contained in Section 7 of the Credit Agreement as demonstrated on Schedule 3 hereof, except as otherwise indicated on Schedule 3 hereof.]¹

¹  To be included if a Financial Covenant Period has occurred and is continuing.

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this      day of             , 20    .

STOCK BUILDING SUPPLY HOLDINGS II, LLC,

a Delaware limited liability company, as Parent

By:

Name:

Title:

SCHEDULE 1

Financial Information

SCHEDULE 2

Default or Event of Default

SCHEDULE 3²

Financial Covenants

1. Minimum EBITDA.

Parent’s EBITDA for the [    ] month period ending                  , 20     is $     , and such amount [is/is not] greater than or equal to the amount set forth in Section 7(a) of the Credit Agreement for the corresponding period.]

2. Capital Expenditures.

Parent and its Restricted Subsidiaries made Capital Expenditures during the period from                  , 20     through                  , 20     in an amount equal to $            , and such amount [is/is not] less than or equal to the amount permitted to be expended pursuant to Section 7(b) of the Credit Agreement for the corresponding period (taking into account any Carry-Over Amount).

²  To be included if a Financial Covenant Period has occurred and is continuing.

EXHIBIT L-1

FORM OF LIBOR NOTICE

Wells Fargo Foothill, LLC, as Agent

under the below referenced Credit Agreement

2450 Colorado Avenue

Suite 3000 West

Santa Monica, California 90404

Ladies and Gentlemen:

Reference hereby is made to that certain Credit Agreement, dated as of                  , 2009 (as amended, restated, supplemented, renewed, extended or otherwise modified from time to time, the “Credit Agreement”), among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), each of Parent’s Subsidiaries party thereto (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), the lenders party thereto (the “Lenders”), BANK OF AMERICA, N.A., a national banking association, as co-lead arranger, and WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and as co-lead arranger. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with respect to outstanding Advances in the amount of $             (the “LIBOR Rate Advance”) [, and is a written confirmation of the telephonic notice of such election given to Agent].

The LIBOR Rate Advance will have an Interest Period of 3 months commencing on                     .

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of determining the rate of interest based on the LIBOR Rate under the Credit Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

(signature page follows)

Wells Fargo Foothill, LLC, as Agent

Page 2

Dated:                          , 20    

STOCK BUILDING SUPPLY, LLC,

a North Carolina limited liability company,

as Administrative Borrower

By:

Name:

Title:

Acknowledged by:

WELLS FARGO FOOTHILL, LLC,

a Delaware limited liability company, as Agent

By:

Name:

Title:

EX-10.2

Exhibit 10.2

January 11, 2010

STOCK BUILDING SUPPLY, LLC

8020 Arco Corporate Drive

Raleigh, NC 27617

Attn: Chief Financial Officer

Fax No. (919) 431-1180

Re:    Amendment Number One and Waiver to Credit Agreement (this “Amendment”)

Ladies and Gentlemen:

Reference is made hereby to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (the “Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), the lenders party thereto (“Lenders”), WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company (“WFF”), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and as co-lead arranger, and BANK OF AMERICA, N.A., as co-lead arranger. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

Borrowers have requested that Agent and Lenders make certain amendments to the Credit Agreement and agree to waive certain Defaults or Events of Default. Subject to the terms and conditions contained herein, Agent and Lenders are willing to accommodate Borrowers’ requests.

Effective as of the date hereof, Borrowers, Agent, and the Lenders hereby agree as follows:

1. Agent and the Lenders hereby waive any Defaults or Events of Default that may have occurred on or prior to the date hereof as a result of any cash disbursements from payables and/or payroll accounts made by any Loan Party or Restricted Subsidiary on behalf of any of the DWF Entities in the ordinary course of business pursuant to the cash management systems of Parent and its Subsidiaries so long as (a) such DWF Entity was a Subsidiary of Parent at the time of such disbursement, and (b) any such disbursement was or is reimbursed by the DWF Entities no later than ten Business Days following the date of such disbursement (the “Specified Defaults and Events of Default”); provided, however, nothing herein, nor any communications among Borrowers, Agent, or any Lender, shall be deemed a waiver with respect to any Events of Default, other than the Specified Defaults and Events of Default, or any future failure of any Loan Party to comply fully with any provision of any Loan Document to which it is a party, and in no event shall this waiver be deemed to be a waiver of enforcement of any of Agent’s or Lenders’ rights or remedies under the Credit Agreement and the other Loan Documents, at law (including under the Code), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to Section 9.1 of the Credit Agreement, with respect to any other Defaults or Events of Default now existing or hereafter arising.

2. Clause (iii) of Section 6.12(a) of the Credit Agreement is hereby amended by inserting therein the phrase “, except in the case of Permitted DWF Disbursement Transactions,” immediately after the phrase “; provided, that”.

3. Section 9.1 of the Credit Agreement is hereby amended by adding the following sentence immediately after clause (b) thereof:

Upon the occurrence and during the continuation of an Event of Default, upon the instruction of the Required Lenders, Agent shall exercise all other rights and remedies available to it or the Lenders under the Loan Documents or under applicable law.

4. The first sentence of Section 15.1 of the Credit Agreement is hereby amended and restated as follows:

Each Lender hereby designates and appoints WFF as its agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.

5. Schedule 1.1 to the Credit Agreement is hereby amended by inserting the following definition therein, in proper alphabetical order:

“Permitted DWF Disbursement Transactions” means cash disbursements from payables or payroll accounts made by any Loan Party or Restricted Subsidiary on behalf of any of the DWF Entities in the ordinary course of business pursuant to the cash management systems of Parent and its Subsidiaries so long as (a) such DWF Entity was a Subsidiary of Parent at the time of such disbursement, (b) any such disbursement is reimbursed in full by such DWF Entity to Parent and its Restricted Subsidiaries no later than 10 Business Days following the date of such disbursement, and (c) without limiting the requirement that the DWF Entities reimburse such disbursements in full in accordance with the foregoing clause (b), such disbursements that have not been reimbursed do not exceed an aggregate of $5,000,000 outstanding at any point in time.

6. Clause (o) of the definition of “Permitted Dispositions” contained in Schedule 1.1 to the Credit Agreement is hereby amended by replacing the reference to “120 days” with “360 days”.

7. Clause (u) of the definition of “Permitted Investments” contained in Schedule 1.1 to the Credit Agreement is hereby amended by inserting therein the phrase “Permitted DWF Disbursement Transactions,” immediately after the phrase “Investments in the DWF Entities in the form of”.

8. (a) Clause (q) of Schedule 5.2 to the Credit Agreement is hereby amended by deleting the “and” at the end thereof, (b) clause (r) of Schedule 5.2 to the Credit Agreement is hereby amended by replacing the reference to “.” with “, and”, (c) each of clauses (s) – (jj) of Schedule 5.2 to the Credit Agreement are hereby re-lettered as clauses (t) – (kk), respectively, and (d) the following new clause (s) is added to Schedule 5.2 to the Credit Agreement in the row entitled “Monthly (no later than the 10th day of each month) (but without duplication of any other items delivered pursuant to this Schedule 5.2)”:

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(s) a detailed report regarding the cash disbursements from payables or payroll accounts made by any Loan Party or Restricted Subsidiary on behalf of any of the DWF Entities pursuant to the cash management systems of Parent and its Subsidiaries during the prior month.

The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are restated, ratified and confirmed in all respects effective as of the date hereof and as amended hereby. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. The modifications and waivers set forth herein are limited to those specified herein, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default (other than the Specified Defaults and Events of Default), shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of Agent and the Lenders.

Each Loan Party hereby represents and warrants that (a) the execution, delivery, and performance of this Amendment are within its corporate or similar powers, have been duly authorized by all necessary corporate or other action of such Loan Party, and are not in contravention of any material provision of federal, state, or local law or regulation applicable to it, or any order, judgment or decree of any court or other Governmental Authority binding on it, or of the terms of its charter or bylaws, or of any Material Contract of any Loan Party (except as would not reasonably be expected to have a Material Adverse Change), (b) after giving effect to this Amendment, as of the date hereof, no Default or Event of Default shall have occurred and be continuing, and (c) after giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

Each Loan Party hereby (a) acknowledges and reaffirms its obligations owing to the Agent and the Lenders under each Loan Document to which it is a party, and (b) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and effect as modified hereby. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof. All obligations owing by each Loan Party to Agent and the Lenders are unconditionally owing by such Loan Party to Agent and the Lenders, without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever.

Each undersigned Guarantor consents to the modification of the Credit Agreement as set forth in this Amendment. Although such Guarantor has been informed of the matters set forth herein and has agreed to the same, it understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendment, and nothing herein shall create such a duty.

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THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

This Amendment is a Loan Document.

[Signature pages to follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

Very Truly Yours,
WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as Agent and a Lender
By:	/s/ Amelie Yehros
Name:	Amelie Yehros
Title:	SVP

BANK OF AMERICA, N.A., as a Lender
By:	/s/ Bobby P. S. Bans
Name:	Bobby P. S. Bans
Title:	Vice President

Accepted and Agreed:
STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
STOCK BUILDING SUPPLY HOLDINGS, LLC, a Virginia limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
COLEMAN FLOOR, LLC, a Delaware limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
SBS CONSTRUCTION SERVICES OF NEW MEXICO, LLC, a Delaware limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer

2

STOCK BUILDING SUPPLY, LLC, a North Carolina limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
STOCK BUILDING SUPPLY OF FLORIDA, LLC, a Florida limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
STOCK BUILDING SUPPLY MIDWEST, LLC, a Delaware limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
STOCK BUILDING SUPPLY OF TEXAS, LLC, a Delaware limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
STOCK BUILDING SUPPLY WEST, LLC, a Utah limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer
SBS CONSTRUCTION HOLDINGS, LLC, a Virginia limited liability company
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer

3

STOCK BUILDING SUPPLY WEST (USA), INC., a Delaware corporation
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Senior Vice President, Chief Financial Officer & Treasurer

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EX-10.3

Exhibit 10.3

April 2, 2010

STOCK BUILDING SUPPLY, LLC

8020 Arco Corporate Drive

Raleigh, NC 27617

Attn: Chief Financial Officer

Fax No. (919) 431-1180

Re:    Amendment Number Two and Waiver to Credit Agreement (this “Amendment”)

Ladies and Gentlemen:

Reference is made hereby to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (the “Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), the lenders party thereto (“Lenders”), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and as co-lead arranger, and BANK OF AMERICA, N.A., as co-lead arranger. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

Borrowers have requested that Agent and Lenders make certain amendments to the Credit Agreement and agree to waive certain Events of Default. Subject to the terms and conditions contained herein, Agent and Lenders are willing to accommodate Borrowers’ requests.

Effective as of the date hereof, Borrowers, Agent, and the Lenders hereby agree as follows:

1. Agent and the Lenders hereby waive the Event of Default that arose on February 28, 2010 as a result of cash disbursements from payables and/or payroll accounts made by any Loan Party or Restricted Subsidiary on behalf of any of the DWF Entities exceeding $5,000,000 on February 28, 2010 (the “Specified Event of Default”); provided, however, nothing herein, nor any communications among Borrowers, Agent, or any Lender, shall be deemed a waiver with respect to any Events of Default, other than the Specified Event of Default, or any future failure of any Loan Party to comply fully with any provision of any Loan Document to which it is a party, and in no event shall this waiver be deemed to be a waiver of enforcement of any of Agent’s or Lenders’ rights or remedies under the Credit Agreement and the other Loan Documents, at law (including under the Code), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to Section 9.1 of the Credit Agreement, with respect to any other Defaults or Events of Default now existing or hereafter arising.

2. The definition of “Permitted Acquisition” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clause (c) of such definition as follows:

“(c) no Indebtedness will be incurred, assumed, or would exist with respect to Parent or its Restricted Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clauses (l), (m) or (o) of the definition of Permitted Indebtedness and no Liens will be incurred, assumed or would exist with respect to the assets of Parent or its Restricted Subsidiaries as a result of such Acquisition other than Permitted Liens,”.

Agent hereby notifies the Lenders and Borrower that it has agreed to extend the deadline for the delivery of documents required pursuant to Section 5.11 of the Credit Agreement in connection with Stock Building Supply, LLC’s formation of Stock Building Supply of Arkansas, LLC to April 5, 2010.

The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are restated, ratified and confirmed in all respects effective as of the date hereof and as amended hereby. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. The modifications and waivers set forth herein are limited to those specified herein, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default (other than the Specified Event of Default), shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of Agent and the Lenders.

Each Loan Party hereby represents and warrants that (a) the execution, delivery, and performance of this Amendment are within its corporate or similar powers, have been duly authorized by all necessary corporate or other action of such Loan Party, and are not in contravention of any material provision of federal, state, or local law or regulation applicable to it, or any order, judgment or decree of any court or other Governmental Authority binding on it, or of the terms of its charter or bylaws, or of any Material Contract of any Loan Party (except as would not reasonably be expected to have a Material Adverse Change), (b) after giving effect to this Amendment, as of the date hereof, no Default or Event of Default shall have occurred and be continuing, and (c) after giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

Each Loan Party hereby (a) acknowledges and reaffirms its obligations owing to the Agent and the Lenders under each Loan Document to which it is a party, and (b) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and effect as modified hereby. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for

2

such obligations from and after the date hereof. All obligations owing by each Loan Party to Agent and the Lenders are unconditionally owing by such Loan Party to Agent and the Lenders, without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever.

Each undersigned Guarantor consents to the modification of the Credit Agreement as set forth in this Amendment. Although such Guarantor has been informed of the matters set forth herein and has agreed to the same, it understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

This Amendment is a Loan Document.

[Signature pages to follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

Very Truly Yours,
WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC), as Agent and a Lender
By:	/s/ Amelie Yehros
Name:	Amelie Yehros
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER TWO AND WAIVER TO CREDIT AGREEMENT]

BANK OF AMERICA, N.A., as a Lender
By:	/s/ Bobby P.S. Bans
Name:	Bobby P.S. Bans
Title:	Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER TWO AND WAIVER TO CREDIT AGREEMENT]

Accepted and Agreed:

STOCK BUILDING SUPPLY HOLDINGS II, LLC,

a Delaware limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

STOCK BUILDING SUPPLY HOLDINGS, LLC,

a Virginia limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

COLEMAN FLOOR, LLC,

a Delaware limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

SBS CONSTRUCTION SERVICES OF NEW MEXICO, LLC,

a Delaware limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

STOCK BUILDING SUPPLY, LLC,

a North Carolina limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

STOCK BUILDING SUPPLY OF FLORIDA, LLC,

a Florida limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER TWO AND WAIVER TO CREDIT AGREEMENT]

STOCK BUILDING SUPPLY MIDWEST, LLC,

a Delaware limited liability company

By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	SVP

STOCK BUILDING SUPPLY OF TEXAS, LLC,

a Delaware limited liability company

By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	SVP

STOCK BUILDING SUPPLY WEST, LLC,

a Utah limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

SBS CONSTRUCTION HOLDINGS, LLC,

a Virginia limited liability company

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

STOCK BUILDING SUPPLY WEST (USA), INC.,

a Delaware corporation

By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER TWO AND WAIVER TO CREDIT AGREEMENT]

EX-10.4

Exhibit 10.4

AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT

THIS AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT (this “Amendment”), dated as of June 30, 2010, is entered into by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto as a borrower (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), each of Parent’s Subsidiaries listed on the signature pages hereto as a guarantor (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Guarantor”, and individually and collectively, jointly and severally, as “Guarantors”), the lenders party hereto (“Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC) (“WFCF”), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and in light of the following:

W I T N E S S E T H

WHEREAS, Parent, Borrowers, Lenders, BANK OF AMERICA, N.A. (“BofA”), as co-lead arranger, WFCF as co-lead arranger, and Agent are parties to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, Borrowers have requested that Agent and Lenders make certain amendments to the Credit Agreement;

WHEREAS, Stock Building Supply Holdings, LLC, a Virginia limited liability company (“SBS Holdings”), has entered into that certain Asset Purchase Agreement dated as of May 4, 2010 (the “Bison Asset Purchase Agreement”, and together with the other documents, instruments and agreements executed and delivered in connection therewith or otherwise relating thereto, the “Bison Acquisition Documents”), by and between SBS Holdings, as buyer, and Bison Building Holdings, Inc., a Texas corporation, Bison Building Materials, LLC, a Texas limited liability company, Bison Building GP, Inc., a Texas corporation, HLBM Company, a Texas limited liability company, Milltech, Inc., a Colorado corporation, Bison Building Materials Nevada, LLC, a Nevada limited liability company, Bison Multi-Family Sales, LLC, a Texas limited liability company, and Bison Construction Services, LLC, a Texas limited liability company, as sellers (collectively, “Sellers”), whereby pursuant to the terms and subject to the conditions set forth therein, SBS Holdings agrees to purchase from Sellers substantially all of the assets of Sellers used in their business in exchange for cash consideration of $18,600,000 plus the assumption of the Specifically Assumed Liabilities (as defined in the Bison Asset Purchase Agreement) to the extent set forth in Section 2.03 of the Bison Asset Purchase Agreement (collectively, together with the assignment referred to in the recital immediately below, the “Bison Acquisition”);

WHEREAS, SBS Holdings has assigned the Bison Asset Purchase Agreement and delegated its duties thereunder to its Subsidiary, SBS / Bison Building Materials, LLC, a Delaware limited liability company (“SBS/Bison”);

WHEREAS, Borrowers have requested that Agent and Lenders consent to the consummation of the Bison Acquisition; and

WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are willing to accommodate Borrowers’ requests.

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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby.

2. Amendments to Credit Agreement.

(a) Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating the following definitions in their entirety as follows:

“Base LIBOR Rate” means the rate per annum rate appearing on Bloomberg L.P.’s (the “Service”) Page BBAMI/(Official BBA USD Dollar Libor Fixings) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) 2 Business Days prior to the commencement of the requested Interest Period, for a term and in an amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with the Agreement, which determination shall be conclusive in the absence of manifest error.

“Base Rate” means the greater of (a) the Federal Funds Rate plus  ¹/₂%, and (b) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate.

“Base Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a Base Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Average Daily Availability calculation determined by Agent in its Permitted Discretion (the “Average Daily Availability Calculation”):

Level	Average Daily Availability	Base Rate Margin
I	If the Average Daily Availability is less than $40,000,000	2.75 percentage points
II	If the Average Daily Availability is greater than or equal to $40,000,000 and less than $75,000,000	2.50 percentage points
III	If the Average Daily Availability is greater than or equal to $75,000,000	2.25 percentage points

The Base Rate Margin shall be based upon the most recent Average Daily Availability Calculation, which will be calculated by Agent in its Permitted Discretion based on Average Daily Availability as of the end of each fiscal quarter. The Base Rate Margin shall be re-determined quarterly by Agent in its Permitted Discretion and any change to the Base Rate Margin based on the Average Daily Availability as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.

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“Fixed Charges” means, with respect to any period and with respect to Parent and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other than interest paid-in-kind, amortization of financing fees and other non-cash Interest Expense) during such period, (b) principal payments in respect of Indebtedness that are required to be paid in cash during such period, (c) all federal, state, and local income taxes paid in cash during such period, and (d) all Restricted Junior Payments paid (whether in cash or other property, other than common Stock) during such period; provided, however, that this definition of Fixed Charges shall not include (i) any distributions or payments permitted to be made under Section 6.9(i) or 6.9(j) of the Agreement or (ii) any Restricted Junior Payments made to the extent permitted pursuant to Section 6.9(d) (without giving effect to the third proviso of such Section 6.9(d)).

“LIBOR Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Average Daily Availability Calculation determined by Agent in its Permitted Discretion:

Level	Average Daily Availability	LIBOR Rate Margin
I	If the Average Daily Availability is less than $40,000,000	3.75 percentage points
II	If the Average Daily Availability is greater than or equal to $40,000,000 and less than $75,000,000	3.50 percentage points
III	If the Average Daily Availability is greater than or equal to $75,000,000	3.25 percentage points

The LIBOR Rate Margin shall be based upon the most recent Average Daily Availability Calculation, which will be calculated by Agent in its Permitted Discretion based on Average Daily Availability as of the end of each fiscal quarter. The LIBOR Rate Margin shall be re-determined quarterly by Agent in its Permitted Discretion and any change to the LIBOR Rate Margin based on the Average Daily Availability as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.

“Special Reserve” means, as of any date of determination $15,000,000; provided, however, that (i) if, as of the end of any fiscal quarter following the Third Amendment Effective Date, the Fixed Charge Coverage Ratio of Parent and its Restricted Subsidiaries for the 12 consecutive month period most recently ended (such period, the “Special Reserve Test Period”) is greater than 1.00:1.00, then the Special Reserve shall be reduced to $10,000,000 as of the end of such fiscal quarter and (ii) if, as of the end of any fiscal quarter ended after the end of the Special Reserve Test Period, the Fixed Charge Coverage Ratio of Parent and its Restricted Subsidiaries is greater than 1.00:1.00 for either the 6 consecutive month period most recently ended or the 12 consecutive month period most recently ended, then the Special Reserve shall be reduced by $5,000,000 as of the end of such fiscal quarter (in the case of the foregoing (i) and (ii), as certified in writing by Borrowers to Agent (which certificate shall contain calculations of such Fixed Charge Coverage Ratios of Parent and its Restricted Subsidiaries and shall be accompanied by the relevant financial statements)); provided that in no event shall the Special Reserve be less than $0.

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(b) Schedule 1.1 to the Credit Agreement is hereby amended by adding the following definitions in proper alphabetical order:

“Bison Acquisition” has the meaning specified therefor in the Third Amendment.

“Non-Cash Acquisition Consideration” means purchase consideration payable in respect of a proposed Permitted Acquisition that is composed of (a) Stock of Parent or any of its direct or indirect parent companies (other than Prohibited Preferred Stock), and (c) the proceeds of equity contributions made to the Loan Parties by Equity Sponsor or any Person that is a holder of Stock of Parent or any of its direct or indirect parent companies prior to consummation of the proposed Permitted Acquisition for the purpose of funding, in whole or in part, the proposed Permitted Acquisition.

“Third Amendment” means that certain Amendment Number Three to Credit Agreement and Consent, dated as of June 30, 2010, by and among Borrowers, Guarantors, the Lenders party thereto, and Agent.

“Third Amendment Effective Date” has the meaning specified therefor in the Third Amendment.

(c) Schedule 1.1 to the Credit Agreement is hereby amended by deleting the definitions of “Distribution Reserve” and “Applicable Unused Line Fee” in their entirety.

(d) The definition of “Borrowing Base” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clause (c) of such definition as follows:

“(c) the sum of (i) the Bank Product Reserve, (ii) the Plan Reserve, (iii) the Special Reserve, (iv) the Surety Reserve, and (v) the aggregate amount of reserves, if any, established by Agent under Section 2.1(c) of the Agreement.”

(e) The definition of “EBITDA” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clause (b) thereof as follows:

“(b) without duplication, the sum of the following amounts of Parent and its Restricted Subsidiaries for such period and to the extent deducted in determining Net Income of Parent and its Restricted Subsidiaries for such period (i) Interest Expense, (ii) income tax expense (or distributions to Saturn in respect of income tax expense attributable to Parent and its Restricted Subsidiaries permitted pursuant to Section 6.9(b)(i), to the extent such distribution reduced Net Income), (iii) depreciation expense, (iv) amortization expense, (v) any extraordinary or non-recurring non-cash losses, including any extraordinary or non-recurring non-cash losses from Permitted Dispositions, (vi) restructuring costs incurred by Parent and its Restricted Subsidiaries in connection with the Plan for write-downs of bad debt of Parent and its Restricted Subsidiaries or write-downs of obsolete Inventory of Parent and its Restricted Subsidiaries in connection with the closure of stores of Parent and its Restricted Subsidiaries that are located in the cities identified on Schedule E-2 in an aggregate amount not to exceed $53,300,000, (vii) restructuring costs incurred by Parent and its Restricted Subsidiaries in connection with the Plan for the payment of claims resulting from the rejection of leases in an amount not to exceed $77,000,000, (viii) restructuring costs or other one-time costs to achieve operating expense cost reductions incurred by Parent and its Restricted Subsidiaries on or after July 1, 2010 in an aggregate amount not to exceed $3,000,000, (ix) fees, expenses, and reimbursements paid to Gores, Glendon, and Wolseley in such period to the

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extent permitted by Section 6.9(c), (d) (without giving effect to the third proviso of such Section 6.9(d)), (e) or (f) of the Agreement (or distributed to Saturn to the extent permitted under Section 6.9(c), (d) (without giving effect to the third proviso of such Section 6.9(d)), (e) or (f) for such purpose to the extent such distribution reduces Net Income), (x) professional fees, costs, and expenses (A) incurred by the Loan Parties in connection with the cases under the Bankruptcy Code or the confirmation and effectiveness of the Plan, accrued in such period (so long as such accrual occurs on or prior to June 30, 2010); or (B) fees and expenses incurred on or about the Closing Date in respect of the transactions contemplated by the Agreement so long as the applicable period includes the Closing Date, in an aggregate amount, not to exceed $10,500,000, (xi) fees and expenses incurred in connection with any Approved Increase (including any additional fees paid to WFF and BOA), (xii) non-recurring non-cash charges (except to the extent representing a reserve or accrual for cash expenses in another period), including goodwill, asset and other impairment charges, loses on early extinguishment of debt, and write-downs of deferred financing costs, and (xiii) non-recurring cash fees, cash charges and other cash expenses made or incurred in connection with the Bison Acquisition that are paid before the consummation thereof or within 1 year after the consummation thereof in an aggregate amount not to exceed $8,000,000.”

(f) The definition of “Eligible Accounts” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by (i) deleting the amount “$5,000,000” appearing in each of clauses (a) and (o) therein, and (ii) replacing such amount with “$7,500,000”.

(g) The definition of “Permitted Acquisition” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clause (k) of such definition as follows:

“(k) the purchase consideration payable in respect of all Permitted Acquisitions during the term of the Agreement (including the proposed Acquisition and including deferred payment obligations but excluding (i) the purchase consideration for the Bison Acquisition and any Permitted Acquisitions consummated by any Loan Party on or before the Third Amendment Effective Date, and (ii) Non-Cash Acquisition Consideration) shall not exceed $50,000,000 in the aggregate;”

(h) The definition of “Permitted Indebtedness” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clause (o) of such definition as follows:

“(o) Acquired Indebtedness (excluding all Acquired Indebtedness incurred in connection with a Permitted Acquisition consummated by any Loan Party on or before the Third Amendment Effective Date) in an amount not to exceed $15,000,000 outstanding at any one time,”

(i) The definition of “Permitted Investments” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by (i) deleting the amount “$5,000,000” appearing in clause (v) therein and (ii) replacing such amount with “$10,000,000”.

(j) Section 2.l(a) to the Credit Agreement is hereby amended and restated in its entirety as follows:

“(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Commitment agrees (severally, not jointly or jointly and severally) to make advances (“Advances”) to Borrowers in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the Maximum Revolver Amount less the sum of (A) the Letter of Credit Usage at such time plus (B) the Plan Reserve plus (C) the Special Reserve, and (ii) the Borrowing Base at such time less the Letter of Credit Usage at such time.”

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(k) Section 2.10(b) of the Credit Agreement is hereby amended by (i) deleting the phrase “the Applicable Unused Line Fee” appearing therein and (ii) replacing such phrase with “0.50%”.

(1) Section 2.1l(a)(iii) to the Credit Agreement is hereby amended and restated in its entirely as follows:

“(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of (A) the Plan Reserve plus (B) the Special Reserve plus (C) the outstanding amount of Advances.”

(m) Section 3.3 of the Credit Agreement is hereby amended by (i) deleting the date “June 30, 2013” appearing therein, and (ii) replacing such date with “June 30, 2014”.

(n) Section 5.17 of the Credit Agreement is hereby deleted in its entirety.

(o) Section 6.9(h) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(h) so long as (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) the cash distribution and payment thereof is in compliance with applicable law (including, to the extent applicable, the Delaware Limited Liability Company Act, as amended from time to time) and the constituent documents of Parent, (iii) Availability plus Qualified Cash of Parent and its Subsidiaries both before and immediately after giving effect thereto is greater than $75,000,000, (iv) on a pro forma basis after giving effect to any such cash distribution Availability plus Qualified Cash of Parent and its Subsidiaries is projected by Borrowers to be in excess of $75,000,000 as of the end of each month during the 12 month period immediately following the proposed date of such cash distribution, and (v) Borrowers shall have delivered to Agent updated projections and calculations evidencing the satisfaction of the conditions outlined in clauses (iii) and (iv) of this Section 6.9(h), in each case, in form reasonably satisfactory to Agent, Parent may declare and pay cash distributions in an aggregate amount not to exceed $80,000,000 during the term of this Agreement,”

(p) Section 7 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“7. FINANCIAL COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, Parent will comply with each of the following financial covenants:

(a) Minimum EBITDA. If any Financial Covenant Period has commenced and is continuing, achieve EBITDA as of the end of the applicable period ended immediately preceding the date on which any such Financial Covenant Period commenced and as of the end of each applicable period ended during such Financial Covenant Period, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

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Applicable Amount	Applicable Period
($11,800,000)	For the 3 month period ending September 30, 2010
($25,400,000)	For the 6 month period ending December 31, 2010
($38,500,000)	For the 9 month period ending March 31, 2011
($42,625,000)	For the 12 month period ending June 30, 2011
($27,619,000)	For the 12 month period ending September 30, 2011
($19,183,000)	For the 12 month period ending December 31, 2011
($5,877,000)	For the 12 month period ending March 31, 2012
$10,389,000	For the 12 month period ending June 30, 2012
$24,229,000	For the 12 month period ending September 30, 2012
$39,760,000	For the 12 month period ending December 31, 2012
$50,080,000	For the 12 month period ending March 31, 2013
$57,120,000	For the 12 month period ending June 30, 2013
$62,240,000	For the 12 month period ending September 30, 2013
$64,800,000	For the 12 month period ending December 31, 2013 and for each 12 month period ended at the end of a fiscal quarter thereafter

(b) Capital Expenditures. If any Financial Covenant Period has commenced and is continuing during any period set forth in the table below, then, as of any date of determination during such Financial Covenant Period, Parent and its Restricted Subsidiaries shall not make Capital Expenditures during such period through such date of determination in excess of the amount set forth in the table below for the applicable period:

Applicable Period	Amount of Capital Expenditures
The 12 month period ended December 31, 2010	$	7,080,000
The 12 month period ended December 31, 2011	$	14,400,000

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The 12 month period ended December 31, 2012	$	19,200,000
The 12 month period ended December 31, 2013	$	24,000,000
The 6 month period ended June 30, 2014	$	12,000,000

provided, however, that if the amount of the Capital Expenditures permitted to be made in any period as set forth in the above table is greater than the actual amount of the Capital Expenditures for such period (the amount by which such permitted Capital Expenditures for such period exceed the actual amount of Capital Expenditures for such period, the “Excess Amount”), then the lesser of (i) such Excess Amount and (ii) 50% of the amount set forth in the above table for the next succeeding period (such lesser amount referred to as the “Carry-Over Amount”) may be carried forward to the next succeeding period (the “Succeeding Period”); provided further that (x) the Carry-Over Amount applicable to a particular Succeeding Period may not be used in that period until the amount permitted above to be expended in such period has first been used in full and (y) the Carry-Over Amount applicable to a particular Succeeding Period may not be carried forward to another period.”

(q) Section 8.2(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(a) fails to perform or observe any covenant or other agreement contained in any of (i) Sections 3.6, 5.1, 5.2 (except that (x) with respect to the weekly reporting on Schedule 5.2, Borrower shall be allowed a cure period of 3 Business Days on not more than 4 occasions during each fiscal year and (y) with respect to clauses (s) through (aa), Borrower shall be allowed a cure period of 10 days), 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if Borrowers refuse to allow Agent, or its representatives or agents to visit Borrowers’ properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss Borrowers’ affairs, finances, and accounts with officers and employees of Borrowers in accordance with the terms of such Section), 5.10, 5.11, 5.12(iii), and 5.13 of this Agreement, (ii) Sections 6.1 through 6.17 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 6 of the Security Agreement;”

(r) Exhibit_B-l of the Credit Agreement is hereby amended by (i) deleting such Exhibit in its entirety, and (ii) inserting the Exhibit B-l attached hereto as Exhibit A in lieu thereof.

(s) Schedule 5.2 to the Credit Agreement is hereby amended by amending and restating the first two rows thereof as follows:

“Weekly (no later than Wednesday of each week), so long as Availability is less than $35,000,000, and otherwise, monthly (no later than the 10th day of each month), (a) an Account roll-forward with supporting details supplied from sales journals, collection journals, credit registers and any other records of the Borrowers,   (b) Inventory system/perpetual reports specifying the cost of the Borrowers’ Inventory, by category (delivered electronically, if the Loan Parties have implemented electronic reporting),   (c) a detailed calculation of those Accounts that are not eligible for the Borrowing Base, if the Borrowers have not implemented electronic reporting,   (d) a detailed calculation of Inventory categories that are not eligible for the Borrowing Base, if the Borrowers have not implemented electronic reporting, and   (e) a detailed accounts receivable aging, by total, of the Borrowers’ Accounts (delivered electronically, if the Loan Parties have implemented electronic reporting).

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Weekly (no later than Wednesday of each week), so long as Availability is less than $35,000,000, and otherwise, monthly (no later than the 15th day of each month), (f) a Borrowing Base Certificate.”

3. Amendments to that certain Joinder Agreement, dated as of April 2, 2010, by and among Agent, Borrowers, and Guarantors (the “SBS of Arkansas Joinder”).

(a) Section 1 of the SBS of Arkansas Joinder is hereby amended by (i) deleting the phrase “new Borrower” appearing therein and (ii) replacing such phrase with “New Borrower”.

(b) Section 9 of the SBS of Arkansas Joinder is hereby amended and restated in its entirety as follows:

“9. Notices. Notices to New Borrower shall be given in the manner set forth for Borrowers in Section 11 of the Credit Agreement.

(c) Section 12 of the SBS of Arkansas Joinder is hereby amended and restated in its entirety as follows:

“12. Effect on Loan Documents.

(a) Except as contemplated to be supplemented hereby, the Credit Agreement, the Fee Letter, the Intercompany Subordination Agreement, and each other Loan Document shall continue to be, and shall remain, in full force and effect. Except as expressly contemplated hereby, this Agreement shall not be deemed (i) to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement, the Fee Letter, the Intercompany Subordination Agreement, or any of the instruments or agreements referred to therein, as the same may be amended or modified from time to time.

(b) Each reference in the Credit Agreement and the other Loan Documents to “Borrower”, “Grantor”, “Obligor” or words of like import referring to a Borrower, Grantor or an Obligor shall include and refer to New Borrower and (b) each reference in the Credit Agreement, the Fee Letter, Intercompany Subordination Agreement, or any other Loan Document to this “Agreement”, “hereunder”, “herein”, “hereof”, “thereunder”, “therein”, “thereof”, or words of like import referring to the Credit Agreement, the Fee Letter, Intercompany Subordination Agreement, or any other Loan Document shall mean and refer to such agreement as supplemented by this Agreement.”

(d) The SBS of Arkansas Joinder is hereby amended by amending and restating the seventh row of Schedule 4.1(c) as follows:

“Stock Building Supply of Arkansas, LLC 100% of common interests N/A Stock Building Supply, LLC”

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4. Amendment to that certain Joinder No. 2 to Security Agreement, dated as of April 2, 2010, by and among Agent and Stock Building Supply of Arkansas, LLC (the “SBS of Arkansas Joinder to Security Agreement”).

(a) The SBS of Arkansas Joinder to Security Agreement is hereby amended by replacing the reference to “STOCK BUILDING SUPPLY HOLDINGS, LLC, a Virginia limited liability company” in the first recital thereof with “STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company”.

(b) The SBS of Arkansas Joinder to Security Agreement is hereby amended by replacing the text set forth in Schedule 5 thereof with “None”.

5. Consent. The provisions of the Credit Agreement and the other Loan Documents to the contrary notwithstanding, subject to the satisfaction of the conditions precedent set forth in Section 7 below, Agent and the Required Lenders hereby consent to the consummation of the Bison Acquisition on or before August 16, 2010 on the terms and subject to the conditions set forth in the Bison Acquisition Documents substantially in the form of such documentation delivered to Agent prior to the execution and delivery of this Amendment or subject to subsequent amendments or modifications thereto that are not materially adverse to Agent or Lenders.

6. Agreement Regarding Credit Card Accounts. Upon Agent’s completion of an audit and electronic collateral reporting testing of Accounts owing to Borrowers from Credit Card Issuers (as defined below) or Credit Card Processors (as defined below), the results of which are satisfactory to Agent in its Permitted Discretion, Agent and the Lenders agree to include Accounts owing to a Borrower on a non recourse basis from Credit Card Issuers or Credit Card Processors arising in the ordinary course of Borrowers’ business and net of such Credit Card Issuers’ or Credit Card Processors’ expenses and chargebacks (“Credit Card Accounts”), up to an aggregate amount equal to the lower of (a) $2,000,000, and (b) 90% of such eligible Credit Card Accounts (which advance rate shall be subject to adjustment by Agent and the Lenders in their discretion based on the results of such audit), subject to the Dilution Reserve and other reserves set forth in the Credit Agreement (subject to other reserve requirements imposed by Agent and the Lenders in their discretion based on the results of such audit). The eligibility requirements for such Credit Card Accounts shall be those set forth in the definition of Eligible Accounts and other eligibility requirements to be determined by Agent and the Lenders in their discretion based on the results of such audit. Each of the parties hereto agrees to promptly execute an amendment to the Credit Agreement if requested by Agent to document the inclusion of such Credit Card Accounts in the Borrowing Base in accordance with the foregoing. As used herein, “Credit Card Issuer” means, collectively, the issuers of (i) MasterCard or Visa bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International, American Express, Discover, and Diners Club (or their respective successors), and (ii) private label credit cards of any Borrower that are co-branded credit cards with any of the issuers listed in clause (i) above. As used herein, “Credit Card Processor” means any Person that acts as a credit card clearinghouse or processor with respect to any sales transactions involving credit card purchases by customers using credit cards issued by any Credit Card Issuer.

7. Conditions Precedent to Amendment. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment (such date being the “Third Amendment Effective Date”):

(a) Agent shall have received this Amendment, duly executed and delivered by the parties hereto.

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(b) After giving effect to this Amendment, the representations and warranties set forth herein and in the Credit Agreement and the other Loan Documents shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).

(c) After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing or shall result from the consummation of the transactions contemplated herein.

(d) Borrowers shall have paid (or substantially concurrently with the closing of this Amendment will pay) to Agent, all fees, costs, expenses and taxes payable pursuant to Section 17.10 of the Credit Agreement, to the extent requested by Agent in writing prior to the date hereof.

(e) Agent shall have received, in immediately available funds, the Amendment Fee referred to in Section 11 hereof (which Amendment Fee shall be for the ratable benefit of WFCF and BofA).

(f) Agent shall have received a certificate from the Secretary of SBS/Bison, dated as of the date hereof, attaching true, correct and complete copies of the material Bison Acquisition Documents executed on or prior to the date hereof. Such certificate from the Secretary of SBS/Bison shall certify that (i) the attached documents are true, correct and complete copies of the material Bison Acquisition Documents executed on or prior to the date hereof, and (ii) such documents constitute all of the material Bison Acquisition Documents executed on or prior to the date hereof.

(g) Agent shall have received a certificate of an authorized officer of SBS/Bison, dated as of the date hereof, attesting that there is no (i) litigation, investigation or proceeding (judicial or administrative) pending or, threatened in writing, against any Loan Party by any Governmental Authority arising out of the transactions contemplated by or effected in connection with the Bison Acquisition Documents, or (ii) injunction, writ or restraining order restraining or prohibiting the transactions contemplated by the Bison Acquisition Documents.

(h) Agent shall have received letters, in form and substance reasonably satisfactory to Agent, from Wells Fargo Bank, N.A. (formerly known as Wachovia Bank, N.A.) and Wachovia Financial Services, Inc. respecting satisfaction of the obligations of Sellers under the Wachovia DIP Facility and the Wachovia Equipment Notes (each as defined in the Bison Asset Purchase Agreement) and releasing all of the liens existing in favor of such Persons in and to the assets of the Sellers;

(i) Agent shall have received a joinder agreement duly executed and delivered by SBS/Bison and each other party thereto, along with the other documents, instruments and agreements required thereby, each being in form and substance reasonably satisfactory to Agent, which documents shall be in full force and effect.

(j) Agent shall have received a customary opinion of counsel, in form and substance reasonably satisfactory to Agent, with respect to the joinder agreement and related documents executed and delivered by SBS/Bison.

8. Representations and Warranties. Each Loan Party hereby represents and warrants to Agent for the benefit of the Lender Group and the Bank Product Providers as follows:

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(a) The execution, delivery, and performance by it of this Amendment (i) have been duly authorized by all necessary action of such Loan Party, and (ii) do not and will not (A) violate any material provision of federal, state, or local law or regulation applicable to such Loan Party or its Subsidiaries, the Governing Documents of such Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of such Loan Party except to the extent such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of such Loan Party, other than Permitted Liens, (D) require any approval of such Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of such Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change, or (C) require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, except for (i) registrations, consents, approvals, notices or other actions that have been obtained and that are still in force and effect, (ii) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Agent for filing or recordation, and (iii) consents or approvals the failure of which to obtain could not reasonably be expected to cause a Material Adverse Change.

(b) This Amendment has been duly executed and delivered by such Loan Party. This Amendment is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against any Borrower or any Guarantor.

(d) SBS/Bison has delivered to Agent true, correct and complete copies of the material Bison Acquisition Documents executed on or prior to the date hereof, including all schedules and exhibits thereto. The execution, delivery and performance of each of the Bison Acquisition Documents to which a Loan Party is party have been duly authorized by all necessary action on the part of such Loan Party. Each Bison Acquisition Document to which a Loan Party is a party is the legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, in each case except (i) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefore may be brought. No Loan Party is in default in the performance or compliance with any provisions thereof. All representations and warranties made by a Loan Party in the Bison Acquisition Documents executed on or prior to the date hereof and in the certificates delivered in connection therewith are true, correct and complete in all material respects. To each Loan Party’s knowledge, none of the Sellers’ representations and warranties in the Bison Acquisition Documents executed on or prior to the date hereof contain any untrue statement of a material fact or omit any fact necessary to make the statements therein not misleading, in any case that could reasonably be expected to result in a Material Adverse Change.

(e) As of the date hereof, all requisite approvals by Governmental Authorities having jurisdiction over the Loan Parties and, to the Loan Parties’ knowledge, the Sellers, with respect to the Bison Acquisition, have been obtained (including filings or approvals required under the Hart-Scott-

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Rodino Antitrust Improvements Act), except for any approval the failure to obtain could not reasonably be expected to be materially adverse to the interests of the Agent or Lenders. After giving effect to the transactions contemplated by the Bison Acquisition Documents, SBS/Bison will have good title to the assets acquired pursuant to the Bison Asset Purchase Agreement, free and clear of all Liens other than Permitted Liens.

(f) As of the Third Amendment Effective Date, all lease rejection claims arising out of the Loan Parties’ bankruptcies in the United States Bankruptcy Court for the District of Delaware, jointly administered under Case No. 09-11554, have been paid in full other than one disputed lease rejection claim which is in an amount equal to or less than $360,000.

(g) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the Third Amendment Effective Date and no condition exists which constitutes a Default or an Event of Default as of the Third Amendment Effective Date.

(h) After giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

(i) This Amendment has been entered into without force or duress, of the free will of such Loan Party, and the decision of such Loan Party to enter into this Amendment is a fully informed decision and such Loan Party is aware of all legal and other ramifications of each such decision.

(j) It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder.

9. Covenants.

(a) Borrowers hereby covenant and agree that substantially concurrently with the consummation of the Bison Acquisition they shall pay the Indebtedness owing under the Wachovia DIP Facility and the Indebtedness evidenced by the Wachovia Equipment Notes to the extent set forth in the letters delivered pursuant to Section 7(h) of this Amendment. Borrowers hereby further covenant and agree that within 1 Business Day of the date of consummation of the Bison Acquisition they shall deliver to Agent evidence, in form satisfactory to Agent, that they have complied with the foregoing.

(b) Borrowers hereby covenant and agree that within 5 Business Days of the date of consummation of the Bison Acquisition they shall deliver to Agent a certificate from the Secretary of SBS/Bison attaching true, correct and complete copies of the material Bison Acquisition Documents executed on or prior to such date and not previously delivered to Agent and certifying that the attached documents, together with the Bison Acquisition Documents delivered to Agent on or before the Third Amendment Effective Date, are true, correct and complete copies of the material Bison Acquisition Documents executed on or prior to such date.

Borrowers hereby agree that their failure to comply with the foregoing shall constitute an immediate Event of Default.

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10. Payment of Costs and Fees. Borrowers agree to pay all reasonable out-of-pocket costs and expenses of Lender Group (including, without limitation, the reasonable fees and out-of-pocket disbursements of outside counsel to Agent and each Lender) in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.

11. Amendment Fee. On or before the Third Amendment Effective Date, Borrowers shall pay to Agent an amendment fee in the amount of $200,000 (“Amendment Fee”) in immediately available funds. Such Amendment Fee shall be fully earned and non-refundable on the Third Amendment Effective Date.

12. Choice of Law and Venue; Jury Trial Waiver.

(a) THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH LOAN PARTY WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12.

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT, LENDERS AND EACH LOAN PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT, LENDERS AND EACH LOAN PARTY REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

13. Further Assurances. At any time upon the reasonable request of Agent, each Loan Party shall promptly execute and deliver to Agent such Additional Documents as Agent shall request pursuant to the Credit Agreement and the other Loan Documents, in each case in form and substance reasonably satisfactory to Agent.

14. Effect on Loan Documents.

(a) The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery,

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and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. Except for the amendments to the Credit Agreement expressly set forth herein, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The amendments, consents, waivers and modifications set forth herein are limited to the specified hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of the Agent and the Lenders.

(b) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

(c) To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.

15. Entire Agreement. This Amendment, and the terms and provisions hereof, the Credit Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written.

16. Reaffirmation of Obligations. Each Loan Party hereby reaffirms its obligations under each Loan Document to which it is a party. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof.

17. Ratification. Each Loan Party hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as amended hereby.

18. Miscellaneous.

                (a) This Amendment is a Loan Document. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be equally effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed

15

counterpart of this Amendment by telefacsimile or other electronic image scan transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

(b) Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Amendment shall be severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Amendment.

(d) Neither this Amendment nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or any Loan Party, whether under any rule of construction or otherwise, on the basis that this Amendment has been drafted by any such Person. This Amendment has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e) Although each Guarantor has been informed of the matters set forth herein and has agreed to same, such Guarantor understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

(f) The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

(g) Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Amendment refer to this Amendment as a whole and not to any particular provision of this Amendment. Section, subsection, clause, schedule, and exhibit references herein are to this Amendment unless otherwise specified. Any reference in this Amendment to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash (or cash collateralization in accordance with the terms of the Credit Agreement) of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of the Credit Agreement and the full and final termination of any commitment to extend any financial accommodations under the Credit Agreement and any other Loan Document. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

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19. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Signature pages to follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers as of the date first written above.

STOCK BUILDING SUPPLY HOLDINGS II, LLC,
a Delaware limited liability company, as Parent and as a Guarantor
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

STOCK BUILDING SUPPLY HOLDINGS, LLC,
a Virginia limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

COLEMAN FLOOR, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

SBS CONSTRUCTION SERVICES OF NEW MEXICO, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

STOCK BUILDING SUPPLY, LLC,
a North Carolina limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

STOCK BUILDING SUPPLY OF FLORIDA, LLC,
a Florida limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

[SIGNATURE PAGE TO AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT]

STOCK BUILDING SUPPLY MIDWEST, LLC, a Delaware limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

STOCK BUILDING SUPPLY OF TEXAS, LLC, a Delaware limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

STOCK BUILDING SUPPLY WEST, LLC, a Utah limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

STOCK BUILDING SUPPLY OF ARKANSAS, LLC, a Delaware limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

SBS/BISON BUILDING MATERIALS, LLC, a Delaware limited liability company, as a Borrower
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

SBS CONSTRUCTION HOLDINGS, LLC, a Virginia limited liability company, as a Guarantor
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President,
	General Counsel & Corporate Secretary

[SIGNATURE PAGE TO AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT]

STOCK BUILDING SUPPLY WEST (USA), INC., a Delaware corporation, as a Guarantor
By:	/s/ Bryan J. Yeazel
Name:	Bryan J. Yeazel
Title:	Senior Vice President, General Counsel & Corporate Secretary

[SIGNATURE PAGE TO AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT]

WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC), as Agent and as a Lender
By:	/s/ Amelie Yehros
Name:	Amelie Yehros
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT]

BANK OF AMERICA, N.A., as a co-lead arranger and as a Lender
By:	/s/ Bobby P.S. Bans
Name:	Bobby P.S. Bans
Title:	V.P.

[SIGNATURE PAGE TO AMENDMENT NUMBER THREE TO CREDIT AGREEMENT AND CONSENT]

EX-10.5

Exhibit 10.5

AMENDMENT NUMBER FOUR TO CREDIT AGREEMENT AND CONSENT

THIS AMENDMENT NUMBER FOUR TO CREDIT AGREEMENT AND CONSENT (this “Amendment”), dated as of November 16, 2011, is entered into by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto as a borrower (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), each of Parent’s Subsidiaries listed on the signature pages hereto as a guarantor (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Guarantor”, and individually and collectively, jointly and severally, as “Guarantors”), the lenders party hereto (“Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC) (“WFCF”), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and in light of the following:

W I T N E S S E T H

WHEREAS, Parent, Borrowers, Lenders, BANK OF AMERICA, N.A. (“BofA”), as co-lead arranger, WFCF, as co-lead arranger, and Agent are parties to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, Borrowers have informed Agent and Lenders that Saturn intends to enter into an agreement (the “Purchase Agreement”) with Wolseley pursuant to which Saturn will purchase the remaining Stock of Saturn owned by Wolseley for an amount not to exceed $25,000,000 (the “Proposed Purchase”);

WHEREAS, pursuant to the Purchase Agreement, Wolseley will be granted the right to purchase all of the Stock of Stock Building Supply of Florida, LLC, SBS Construction Holdings, LLC, United Plumbing, LLC, and Arneco Construction Services, LLC (formerly known as SBS Construction Services of Nevada, LLC) (collectively, the “Purchase Option Entities”);

WHEREAS, Borrowers have requested that Lenders provide Advances under the Credit Agreement to finance up to $15,000,000 of the Proposed Purchase;

WHEREAS, Borrowers have requested that Agent and Lenders (a) make certain amendments to the Credit Agreement, and (b) consent to (i) the use of Advances under the Credit Agreement to finance up to $15,000,000 of the Proposed Purchase and (ii) the sale to Wolseley of the Purchase Option Entities; and

WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are willing to accommodate Borrowers’ requests.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby.

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2. Amendments to Credit Agreement.

(a) Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating the following definitions in their entirety as follows:

“Available Increase Amount” means, as of any date of determination, an amount equal to the result of (a) $75,000,000 minus (b) the aggregate principal amount of increases to the Commitments and the Maximum Revolver Amount previously made pursuant to Section 2.2 of the Agreement.

“Change of Control” means that (a) prior to a Qualified IPO, (i) Permitted Holders fail to own and control, directly or indirectly, 50.1%, or more, of the Stock of Saturn having the right to vote for the election of members of the Board of Directors, (ii) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35%, or more, of the Stock of Saturn having the right to vote for the election of members of the Board of Directors, (iii) Permitted Holders have failed to appoint a majority of the members of the Board of Directors, or (iv) Saturn fails to own and control, directly or indirectly, 100% of the Stock of Parent and each other Loan Party (other than Loan Parties that have been sold or otherwise disposed of or wound up dissolved or liquidated in a Permitted Disposition or in a transaction permitted by Section 6.3); and (b) after a Qualified IPO, (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20%, or more, of the Stock of Saturn having the right to vote for the election of members of the Board of Directors, (ii) a majority of the members of the Board of Directors do not constitute Continuing Directors, or (iii) Saturn fails to own and control, directly or indirectly, 100% of the Stock of Parent and each other Loan Party (other than Loan Parties that have been sold or otherwise disposed of or wound up, dissolved or liquidated in a Permitted Disposition or in a transaction permitted by Section 6.3).

“Financial Covenant Period” means a period which shall commence (a) immediately on any date on which Availability plus Qualified Cash is less than $18,000,000, and (b) on any date on which Availability plus Qualified Cash has been less than $20,000,000 but equal to or greater than $18,000,000 for a period of 5 consecutive Business Days, and in each case such period shall continue until the date on which Availability plus Qualified Cash has been greater than or equal to $20,000,000 for a period of 30 days.

(b) The definition of “EBITDA” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clause (c) thereof as follows:

(c) without duplication, the sum of the following amounts of Parent and its Restricted Subsidiaries for such period and to the extent included in determining Net Income of Parent and its Restricted Subsidiaries for such period: (i) non-recurring non-cash items increasing such Net Income for such period, (ii) any extraordinary or non-recurring gains, including any extraordinary or non-recurring gains from Dispositions, (iii) gains from the receipt of proceeds under insurance policies net of any associated losses, and (iv) income tax benefits (it being understood that an income tax benefit is a positive number).

(c) The definition of “Maximum Revolver Amount” appearing in Schedule 1.1 to the Credit Agreement is hereby amended by (i) deleting the amount “$150,000,000” appearing therein, and (ii) replacing such amount with “$125,000,000”.

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(d) Section 2.3(d)(i) to the Credit Agreement is hereby amended by (i) deleting the reference to “$20,000,000” appearing therein, and (ii) replacing such reference with “ten percent (10%) of the Maximum Revolver Amount”.

(e) Section 2.3(d)(ii) to the Credit Agreement is hereby amended by (i) deleting the reference to “$20,000,000” appearing therein, and (ii) replacing such reference with “ten percent (10%) of the Maximum Revolver Amount”.

(f) Section 2.6(b) to the Credit Agreement is hereby amended by deleting the last sentence therein in its entirety. The effectiveness of such amendment shall be retroactive to the Closing Date.

(g) Section 2.11(e) to the Credit Agreement is hereby amended by (i) deleting the percentage “.825%” appearing therein, and (ii) replacing such percentage with “.125%”. The effectiveness of such amendment shall be retroactive to the Closing Date.

(h) Section 6.9(e) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: “[intentionally omitted],”.

(i) Section 6.9(f)(iii) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: “[intentionally omitted]”.

(j) Section 7(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:

(a) Minimum EBITDA. If any Financial Covenant Period has commenced and is continuing, achieve EBITDA as of the end of the applicable period ended immediately preceding the date on which any such Financial Covenant Period commenced and as of the end of each applicable period ended during such Financial Covenant Period, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

Applicable Amount	Applicable Period
($3,473,000)	For the 3 month period ending December 31, 2011
($18,162,000)	For the 6 month period ending March 31, 2012
($21,355,000)	For the 9 month period ending June 30, 2012
($20,958,000)	For the 12 month period ending September 30, 2012
($18,432,000)	For the 12 month period ending December 31, 2012
($6,621,000)	For the 12 month period ending March 31, 2013

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$713,000	For the 12 month period ending June 30, 2013
$4,264,000	For the 12 month period ending September 30, 2013
$7,199,000	For the 12 month period ending December 31, 2013
$9,698,000	For the 12 month period ending March 31, 2014
$13,160,000	For the 12 month period ending June 30, 2014

(k) Exhibit B-1 of the Credit Agreement is hereby amended by (i) deleting such Exhibit in its entirety, and (ii) inserting the Exhibit B-1 attached hereto as Exhibit A in lieu thereof.

(l) Schedule C-1 of the Credit Agreement is hereby amended by (i) deleting such Schedule in its entirety, and (ii) inserting the Schedule C-1 attached hereto as Exhibit B in lieu thereof.

3. Consent. The provisions of the Credit Agreement and the other Loan Documents to the contrary notwithstanding, subject to the satisfaction of the conditions precedent set forth in Section 4 below, Agent and each Lender hereby consents to (a) use of up to $15,000,000 of Advances (the “Subject Advances”) for the purpose of partially financing the Proposed Purchase; provided that the making of such Advances to Borrowers shall be subject to the conditions set forth in the Credit Agreement for the making of Advances and the Availability requirements of the Credit Agreement, (b) the dividend or distribution by Parent of an aggregate amount equal to the proceeds of any of the Subject Advances to Saturn for the purpose of partially financing the Proposed Purchase, and (c) the sale of all of the Stock of the Purchase Option Entities to Wolesley or any of its Affiliates; provided, however, that the consent set forth in this clause (c) shall only be effective so long as the assets owned by each of the Purchase Option Entities at the time of such sale are de minimus.

4. Conditions Precedent to Amendment. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment (such date being the “Fourth Amendment Effective Date”):

(a) Agent shall have received this Amendment, duly executed and delivered by the parties hereto.

(b) After giving effect to this Amendment, the representations and warranties set forth herein and in the Credit Agreement and the other Loan Documents shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).

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(c) After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing or shall result from the consummation of the transactions contemplated herein.

(d) Borrowers shall have paid (or substantially concurrently with the closing of this Amendment will pay) to Agent, all fees, costs, expenses and taxes payable pursuant to Section 17.10 of the Credit Agreement, to the extent requested by Agent in writing prior to the date hereof.

(e) Agent shall have received evidence that (i) a portion of the purchase price for the Proposed Purchase in an amount of not less than $5,000,000 has been received, or shall be received substantially concurrently with the effectiveness of this Amendment, by Saturn from the Permitted Holders, and (ii) Saturn has an additional $5,000,000 of cash on hand for the remainder of the purchase price.

(f) Agent shall have received evidence that the Wolseley Management Agreement has been terminated or will be terminated substantially concurrently with the closing of the Proposed Purchase.

5. Representations and Warranties. Each Loan Party hereby represents and warrants to Agent for the benefit of the Lender Group and the Bank Product Providers as follows:

(a) The execution, delivery, and performance by it of this Amendment (i) have been duly authorized by all necessary action of such Loan Party, and (ii) do not and will not (A) violate any material provision of federal, state, or local law or regulation applicable to such Loan Party or its Subsidiaries, the Governing Documents of such Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of such Loan Party except to the extent such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of such Loan Party, other than Permitted Liens, (D) require any approval of such Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of such Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change, or (E) require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, except for (1) registrations, consents, approvals, notices or other actions that have been obtained and that are still in force and effect, (2) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Agent for filing or recordation, and (3) consents or approvals the failure of which to obtain could not reasonably be expected to cause a Material Adverse Change.

(b) This Amendment has been duly executed and delivered by such Loan Party. This Amendment is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against any Borrower or any Guarantor.

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(d) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the Fourth Amendment Effective Date and no condition exists which constitutes a Default or an Event of Default as of the Fourth Amendment Effective Date.

(e) After giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

(f) This Amendment has been entered into without force or duress, of the free will of such Loan Party, and the decision of such Loan Party to enter into this Amendment is a fully informed decision and such Loan Party is aware of all legal and other ramifications of each such decision.

(g) It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder.

6. Acknowledgments. Each Borrower hereby acknowledges that all amounts due and owing to any Borrower on or prior to the date hereof related to either the Letter of Credit fronting fee imposed pursuant to Section 2.6(b) of the Credit Agreement or the usage charge imposed pursuant to Section 2.11(e) of the Credit Agreement have been paid in full, and neither Agent, Issuing Lender nor any Lender has any further obligations or liabilities to any Borrower with respect thereto.

7. Payment of Costs and Fees. Borrowers agree to pay all reasonable out-of-pocket costs and expenses of Lender Group (including, without limitation, the reasonable fees and out-of-pocket disbursements of outside counsel to Agent and each Lender) in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.

8. Choice of Law and Venue; Jury Trial Waiver.

(a) THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH LOAN PARTY WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12.

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(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT, LENDERS AND EACH LOAN PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT, LENDERS AND EACH LOAN PARTY REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

9. Further Assurances. At any time upon the reasonable request of Agent, each Loan Party shall promptly execute and deliver to Agent such Additional Documents as Agent shall request pursuant to the Credit Agreement and the other Loan Documents, in each case in form and substance reasonably satisfactory to Agent.

10. Effect on Loan Documents.

(a) The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. Except for the amendments to the Credit Agreement expressly set forth herein, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The amendments, consents, waivers and modifications set forth herein are limited to the specified hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of the Agent and the Lenders.

(b) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

(c) To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.

11. Entire Agreement. This Amendment, and the terms and provisions hereof, the Credit Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written.

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12. Reaffirmation of Obligations. Each Loan Party hereby reaffirms its obligations under each Loan Document to which it is a party. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof.

13. Ratification. Each Loan Party hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as amended hereby.

14. Miscellaneous.

(a) This Amendment is a Loan Document. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be equally effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

(b) Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Amendment shall be severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Amendment.

(d) Neither this Amendment nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or any Loan Party, whether under any rule of construction or otherwise, on the basis that this Amendment has been drafted by any such Person. This Amendment has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e) Although each Guarantor has been informed of the matters set forth herein and has agreed to same, such Guarantor understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

(f) The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

(g) Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and

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“including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Amendment refer to this Amendment as a whole and not to any particular provision of this Amendment. Section, subsection, clause, schedule, and exhibit references herein are to this Amendment unless otherwise specified. Any reference in this Amendment to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash (or cash collateralization in accordance with the terms of the Credit Agreement) of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of the Credit Agreement and the full and final termination of any commitment to extend any financial accommodations under the Credit Agreement and any other Loan Document. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

15. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Signature pages to follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers as of the date first written above.

STOCK BUILDING SUPPLY HOLDINGS II, LLC,
a Delaware limited liability company, as Parent and as a Guarantor
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

STOCK BUILDING SUPPLY HOLDINGS, LLC,
a Virginia limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

COLEMAN FLOOR, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

STOCK BUILDING SUPPLY, LLC,
a North Carolina limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

STOCK BUILDING SUPPLY OF FLORIDA, LLC,
a Florida limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

STOCK BUILDING SUPPLY MIDWEST, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER FOUR AND CONSENT]

STOCK BUILDING SUPPLY WEST, LLC,
a Utah limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

STOCK BUILDING SUPPLY OF ARKANSAS, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

SBS / BISON BUILDING MATERIALS, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

SBS CONSTRUCTION HOLDINGS, LLC,
a Virginia limited liability company, as a Guarantor
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER FOUR AND CONSENT]

STOCK BUILDING SUPPLY WEST (USA), INC.,
a Delaware corporation, as a Guarantor
By:	/s/ Bryan Yeazel
Name:	Bryan Yeazel
Title:	Executive Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER FOUR AND CONSENT]

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company (formerly known as Wells Fargo Foothill LLC), as Agent and as a Lender
By:	/s/ Amelie Yennes
Name:	Amelie Yennes
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER FOUR AND CONSENT]

BANK OF AMERICA, N.A.,
as a co-lead arranger and as a Lender
By:	/s/ Steven W. Sharp
Name:	Steven W. Sharp
Title:	Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER FOUR AND CONSENT]

EX-10.6

Exhibit 10.6

AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT

THIS AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT (this “Amendment”), dated as of May 31, 2012, is entered into by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto as a borrower (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), each of Parent’s Subsidiaries listed on the signature pages hereto as a guarantor (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Guarantor”, and individually and collectively, jointly and severally, as “Guarantors”), the lenders party hereto (“Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC) (“WFCF”), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and in light of the following:

W I T N E S S E T H

WHEREAS, Parent, Borrowers, Lenders, BANK OF AMERICA, N.A. (“BofA”), as co-lead arranger, WFCF as co-lead arranger, and Agent are parties to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, Borrowers have requested that Agent and Lenders make certain amendments to the Credit Agreement; and

WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are willing to accommodate Borrowers’ request.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby.

2. Amendments to Credit Agreement.

(a) Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating the following definitions in their entirety as follows effective as of May 14, 2012:

““Base Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a Base Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Average Daily Availability calculation determined by Agent in its Permitted Discretion (the “Average Daily Availability Calculation”):

Level	Average Daily Availability	Base Rate Margin
I	If the Average Daily Availability is less than $40,000,000	2.25 percentage points

II	If the Average Daily Availability is greater than or equal to $40,000,000 and less than $75,000,000	2.00 percentage points
III	If the Average Daily Availability is greater than or equal to $75,000,000	1.75 percentage points

The Base Rate Margin shall be based upon the most recent Average Daily Availability Calculation, which will be calculated by Agent in its Permitted Discretion based on Average Daily Availability as of the end of each fiscal quarter. The Base Rate Margin shall be re-determined quarterly by Agent and any change to the Base Rate Margin based on the Average Daily Availability as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.”

““LIBOR Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Average Daily Availability Calculation determined by Agent in its Permitted Discretion:

Level	Average Daily Availability	LIBOR Rate Margin
I	If the Average Daily Availability is less than $40,000,000	3.25 percentage points
II	If the Average Daily Availability is greater than or equal to $40,000,000 and less than $75,000,000	3.00 percentage points
III	If the Average Daily Availability is greater than or equal to $75,000,000	2.75 percentage points

The LIBOR Rate Margin shall be based upon the most recent Average Daily Availability Calculation, which will be calculated by Agent in its Permitted Discretion based on Average Daily Availability as of the end of each fiscal quarter. The LIBOR Rate Margin shall be re-determined quarterly by Agent and any change to the LIBOR Rate Margin based on the Average Daily Availability as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.”

(b) Schedule 1.1 to the Credit Agreement is hereby amended by amending and restating clauses (c) and (d) of the definition of “Lender Group Expenses” as follows:

“(c) Agent's customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of any Borrower (whether by wire transfer or otherwise), together with any out-of-pocket costs and expenses incurred in connection therewith, (d) customary charges imposed or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party,”

(c) Section 12 of the Credit Agreement is hereby amended by inserting subclauses (d), (e), and (f) immediately following subclause (c) thereof in their entirety as follows:

“(d) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(e) NO CLAIM MAY BE MADE BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO (OR BY ANY LOAN PARTY AGAINST THE SWING LENDER, ISSUING LENDER, OR THE UNDERLYING ISSUER) OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH SUCH PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

(f) IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE "COURT") BY OR AGAINST ANY PARTY HERETO OR ANY PARTY TO ANY OTHER LOAN DOCUMENT (INCLUDING ANY GUARANTOR) IN CONNECTION WITH ANY CLAIM RELATED TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND THE WAIVER SET FORTH IN CLAUSE (C) ABOVE IS NOT ENFORCEABLE IN SUCH PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:

(i) WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE. VENUE FOR THE REFERENCE PROCEEDING SHALL BE IN THE COUNTY OF LOS ANGELES, CALIFORNIA.

(ii) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING SET-OFF OR RECOUPMENT), (C) APPOINTMENT OF A RECEIVER, AND (D) TEMPORARY, PROVISIONAL, OR ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY

RESTRAINING ORDERS, OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO PARTICIPATE IN A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT WITH RESPECT TO ANY OTHER MATTER.

(iii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN 10 DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY SHALL HAVE THE RIGHT TO REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B). THE REFEREE SHALL BE APPOINTED TO SIT WITH ALL OF THE POWERS PROVIDED BY LAW. PENDING APPOINTMENT OF THE REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR PROVISIONAL REMEDIES.

(iv) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING. ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY PARTY SO REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A COURT REPORTER SHALL BE USED AND THE REFEREE SHALL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COSTS OF THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE'S FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.

(v) THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND SHALL ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA.

(vi) THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND PROCEDURAL LAW. THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT. THE REFEREE SHALL REPORT HIS OR HER DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW. THE REFEREE SHALL ISSUE A DECISION AND PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION 644, THE REFEREE'S DECISION SHALL BE ENTERED BY THE COURT AS A JUDGMENT IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT. THE FINAL JUDGMENT OR ORDER FROM ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY THE COURT.

(vii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY HERETO KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION SHALL APPLY TO ANY DISPUTE BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.”

3. Conditions Precedent to Amendment. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment:

(a) Agent shall have received this Amendment, duly executed and delivered by the parties hereto.

(b) After giving effect to this Amendment, the representations and warranties set forth herein and in the Credit Agreement and the other Loan Documents shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).

(c) After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing or shall result from the consummation of the transactions contemplated herein.

(d) Borrowers shall have paid (or substantially concurrently with the closing of this Amendment will pay) to Agent, all fees, costs, expenses and taxes payable pursuant to Section 17.10 of the Credit Agreement, to the extent requested by Agent in writing prior to the date hereof.

4. Representations and Warranties. Each Loan Party hereby represents and warrants to Agent for the benefit of the Lender Group and the Bank Product Providers as follows:

(a) The execution, delivery, and performance by it of this Amendment (i) have been duly authorized by all necessary action of such Loan Party, and (ii) do not and will not (A) violate any material provision of federal, state, or local law or regulation applicable to such Loan Party or its Subsidiaries, the Governing Documents of such Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of such Loan Party except to the extent such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of such Loan Party, other than Permitted Liens, (D) require any approval of such Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of such Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change, or (C) require any registration with, consent, or approval of, or notice to, or

other action with or by, any Governmental Authority, except for (1) registrations, consents, approvals, notices or other actions that have been obtained and that are still in force and effect, (2) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Agent for filing or recordation, and (3) consents or approvals the failure of which to obtain could not reasonably be expected to cause a Material Adverse Change.

(b) This Amendment has been duly executed and delivered by such Loan Party. This Amendment is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against any Borrower or any Guarantor.

(d) After giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

(e) This Amendment has been entered into without force or duress, of the free will of such Loan Party, and the decision of such Loan Party to enter into this Amendment is a fully informed decision and such Loan Party is aware of all legal and other ramifications of each such decision.

(f) It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder.

5. Payment of Costs and Fees. Borrowers agree to pay all reasonable out-of-pocket costs and expenses of Lender Group (including, without limitation, the reasonable fees and out-of-pocket disbursements of outside counsel to Agent and each Lender) in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.

6. Choice of Law and Venue; Jury Trial Waiver; Judicial Reference. This Amendment SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AS AMENDED HEREBY, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

7. Further Assurances. At any time upon the reasonable request of Agent, each Loan Party shall promptly execute and deliver to Agent such Additional Documents as Agent shall request pursuant to the Credit Agreement and the other Loan Documents, in each case in form and substance reasonably satisfactory to Agent.

8. Effect on Loan Documents.

(a) The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. Except for the amendments to the Credit Agreement expressly set forth herein, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The amendments, consents, waivers and modifications set forth herein are limited to the specified hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of the Agent and the Lenders.

(b) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

(c) To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.

9. Entire Agreement. This Amendment, and the terms and provisions hereof, the Credit Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written.

10. Reaffirmation of Obligations. Each Loan Party hereby reaffirms its obligations under each Loan Document to which it is a party. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof.

11. Ratification. Each Loan Party hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as amended hereby.

12. Miscellaneous.

(a) This Amendment is a Loan Document. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or

other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be equally effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

(b) Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Amendment shall be severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Amendment.

(d) Neither this Amendment nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or any Loan Party, whether under any rule of construction or otherwise, on the basis that this Amendment has been drafted by any such Person. This Amendment has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e) Although each Guarantor has been informed of the matters set forth herein and has agreed to same, such Guarantor understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

(f) The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

(g) Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Amendment refer to this Amendment as a whole and not to any particular provision of this Amendment. Section, subsection, clause, schedule, and exhibit references herein are to this Amendment unless otherwise specified. Any reference in this Amendment to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash (or cash collateralization in accordance with the terms of the Credit Agreement) of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of the Credit Agreement and the full and final termination of any commitment to extend any financial accommodations under the Credit Agreement and any other Loan Document. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

13. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Signature pages to follow.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers as of the date first written above.

STOCK BUILDING SUPPLY HOLDINGS II, LLC,
a Delaware limited liability company, as Parent and as a Guarantor
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

STOCK BUILDING SUPPLY HOLDINGS, LLC,
a Virginia limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

COLEMAN FLOOR, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

STOCK BUILDING SUPPLY, LLC,
a North Carolina limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

STOCK BUILDING SUPPLY OF FLORIDA, LLC,
a Florida limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

STOCK BUILDING SUPPLY MIDWEST, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

[SIGNATURE PAGE TO AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT]

STOCK BUILDING SUPPLY WEST, LLC,
a Utah limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

STOCK BUILDING SUPPLY OF ARKANSAS, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

SBS / BISON BUILDING MATERIALS, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

SBS CONSTRUCTION HOLDINGS, LLC,
a Virginia limited liability company, as a Guarantor
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

[SIGNATURE PAGE TO AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT]

STOCK BUILDING SUPPLY WEST (USA), INC.,
a Delaware corporation, as a Guarantor
By:	/s/ JAMES F. MAJOR, JR.
Name:	JAMES F. MAJOR, JR.
Title:	EVP / CFO

[SIGNATURE PAGE TO AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT]

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC), as Agent and as a Lender
By:	/s/ Amelie Yehros
Name:	Amelie Yehros
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT]

BANK OF AMERICA, N.A.,
as a co-lead arranger and as a Lender
By:	/s/ STEVEN W. SHARP
Name:	STEVEN W. SHARP
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT]

EX-10.7

Exhibit 10.7

AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND AMENDMENT NUMBER ONE TO

SECURITY AGREEMENT AND CONSENT

THIS AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND AMENDMENT NUMBER ONE TO SECURITY AGREEMENT AND CONSENT (this “Amendment”), dated as of December 13, 2012, is entered into by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto as a borrower (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), each of Parent’s Subsidiaries listed on the signature pages hereto as a guarantor (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Guarantor”, and individually and collectively, jointly and severally, as “Guarantors”), the lenders party hereto (“Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC) (“WFCF”), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and in light of the following:

W I T N E S S E T H

WHEREAS, Parent, Borrowers, Lenders, BANK OF AMERICA, N.A. (“BofA”), as co-lead arranger, WFCF as co-lead arranger, and Agent are parties to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, each of the parties listed on the signature pages thereto and those additional entities that thereafter become parties thereto (collectively, jointly and severally, “Grantors” and each individually “Grantor”) and Agent are parties to that certain Security Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “Security Agreement”);

WHEREAS, Borrowers desire to engage in commodities trading through commodity accounts held at FCStone, LLC, a Futures Commission Merchant;

WHEREAS, Parent has formed a new subsidiary, Coleman Floor Southeast, LLC, a Delaware limited liability company (“Coleman”), and as required by Section 5.11 of the Credit Agreement and subject to the terms and provisions set forth in the Joinder Documents (as defined below), desires to join Coleman as a new Borrower to the Credit Agreement and the other Loan Documents;

WHEREAS, Borrowers have requested that Agent and Lenders make certain amendments to the Credit Agreement and the Security Agreement and consent to the joinder of Coleman as a new Borrower; and

WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are willing to accommodate Borrowers’ requests.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby.

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2. Amendments to Credit Agreement.

(a) Section 2.1 of the Credit Agreement is hereby amended and modified by amending and restating clause (a) appearing therein in its entirety as follows:

“(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Commitment agrees (severally, not jointly or jointly and severally) to make advances (“Advances”) to Borrowers in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the Maximum Revolver Amount less the Letter of Credit Usage at such time and (ii) the Borrowing Base at such time less the Letter of Credit Usage at such time.”

(b) Section 2.10 of the Credit Agreement is hereby amended and modified by replacing the reference to “0.50%” appearing in clause (b) thereof with “Applicable Unused Line Fee”.

(c) Section 2.11 of the Credit Agreement is hereby amended and modified by amending and restating the second subclause (iii) appearing in clause (a) thereof in its entirety as follows:

“(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of Advances.”

(d) Section 3.3 of the Credit Agreement is hereby amended and modified by replacing the reference to “June 30, 2014” appearing therein with “December 11, 2015”.

(e) Section 4.15 of the Credit Agreement is hereby amended and modified by amending and restating such section in its entirety as follows:

“4.15 Deposit Accounts, Securities Accounts, and Commodity Accounts. Set forth on Schedule 4.15 (as updated pursuant to the provisions of the Security Agreement from time to time) is a listing of all of the Loan Parties’ and their Restricted Subsidiaries’ Deposit Accounts, Securities Accounts, and Commodity Accounts, including, with respect to each bank, or securities intermediary, or commodity intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts or Commodity Accounts maintained with such Person.”

(f) Section 6.9 of the Credit Agreement is hereby amended and modified by amending and restating clause (h) appearing therein in its entirety as follows:

“(h) commencing on the date on which Parent has delivered to Agent and the Lenders the audited annual financial statements for the fiscal year of Parent ending December 31, 2013 required by Section 5.1 (together with all other detail and documentation required pursuant to the terms of Schedule 5.1 to be delivered in connection therewith, including the items required pursuant to clauses (d), (e), and (f) of Schedule 5.1), Parent may declare and pay cash distributions to its equity holders, so long as (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) the declaration of the cash distribution and the payment thereof is permitted by and in compliance with applicable law (including, to the extent applicable, the Delaware Limited Liability Company Act, as amended from time to time) and the constituent documents of Parent, (C) Availability of Parent and its Subsidiaries both immediately before and immediately after giving effect thereto is greater than $25,000,000, (D) the aggregate amount of distributions made by Parent in any fiscal year in reliance on this Section 6.9(h) does not exceed an amount equal to 50% of the Free Cash Flow of Parent and its Restricted Subsidiaries for the immediately preceding fiscal year of Parent (it being understood that Free Cash Flow will be calculated using the audited financial statements referenced in clause (E) of this Section 6.9(h)), (E) no such distributions in reliance on this Section 6.9(h) are made in any fiscal year of Parent until the date on which Parent has delivered to Agent (for distribution to the Lenders) the audited annual financial statements for the immediately preceding fiscal year of Parent as required by Section 5.1 (together with all other detail and documentation required pursuant to the terms of Schedule 5.1 to be delivered in connection therewith, including the items required pursuant to clauses (d), (e), and (f) of Schedule 5.1), and (F) Borrowers shall have delivered to Agent calculations evidencing the satisfaction of the conditions outlined in clauses (C) and (D) of this Section 6.9(h), in each case, in form reasonably satisfactory to Agent,”

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(g) Section 6.9 of the Credit Agreement is hereby amended and modified by: (i) deleting the reference to “and” appearing at the end of clause (i) thereof, (ii) replacing the reference to “.” appearing at the end of clause (j) thereof with “, and”, and (iii) inserting a new clause (k) immediately following the end of clause (j) as follows:

“(k) so long as (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) the cash distribution and payment thereof is permitted by and in compliance with applicable law (including, to the extent applicable, the Delaware Limited Liability Company Act, as amended from time to time) and the constituent documents of Parent, Parent may declare and pay a cash distribution on the Stock of Parent in an amount not to exceed $27,500,000 on or prior to December 31, 2012.”

(h) Section 6.11 of the Credit Agreement is hereby amended and modified by amending and restating clause (a) of such section in its entirety as follows:

“(a) Except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment. From and after the date that is 30 days (or such longer period as may be determined by Agent in its sole discretion) after the Closing Date, (i) Loan Parties shall not have Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities Accounts (other than (A) an aggregate amount of not more than $650,000 at any one time, in the case of Parent and its Restricted Subsidiaries (other than those Restricted Subsidiaries that are CFCs), (B) amounts deposited into Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for Parent’s or its Restricted Subsidiaries’ employees, (C) with respect to the Required Equity Account, and (D) an aggregate amount of not more than an amount to be agreed upon by Agent and Borrowers (calculated at current exchange rates) at any one time, in the case of Restricted Subsidiaries of Parent that are CFCs)) unless such Loan Parties, as applicable, and the applicable bank, securities intermediary or commodity intermediary have entered into Control Agreements with Agent governing such Permitted Investments in order to perfect (and further establish) Agent’s Liens in such Permitted Investments, and (ii) Loan Parties shall not have Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Commodities Accounts (other than Permitted Investments made in reliance on clause (v) of the definition of Permitted Investment in an aggregate amount not to exceed $1,000,000 in the FCStone Commodity Accounts) unless such Loan Parties, as applicable, and the applicable commodity intermediary have entered into Control Agreements with Agent governing such Permitted Investments in order to perfect (and further establish) Agent’s Liens in such Permitted Investments.”

(i) Section 7 of the Credit Agreement is hereby amended and modified by: (i) deleting clauses (a) and (b) appearing thereof in its entirety, and (ii) amending and restating such section in its entirety as follows:

“7. FINANCIAL COVENANT.

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, Parent will comply with the following financial covenant:

Fixed Charge Coverage Ratio. If any Financial Covenant Period has commenced and is continuing, have a Fixed Charge Coverage Ratio as of the end of the applicable period ended immediately preceding the date on which any such Financial Covenant Period commenced and as of the end of each applicable period ended during such Financial Covenant Period, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

Applicable Ratio	Applicable Period
1.00:1.00	For the six month period ending December 31, 2012
1.00:1.00	For the nine month period ending March 31, 2013
1.00:1.00	For the twelve month period ending June 30, 2013 and on the last day of each quarter thereafter”

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(j) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending and restating the following definitions, or adding (as applicable) the following definitions in the appropriate alphabetical order:

““Applicable Unused Line Fee” means, as of any date of determination, the applicable amount set forth in the following table that corresponds to the most recent Average Daily Usage calculation determined by Agent (the “Average Daily Usage Calculation”):

Level	Average Daily Usage	Applicable Unused Line Fee
I	If the Average Daily Usage is less than or equal to $75,000,000	0.375 percentage points
II	If the Average Daily Usage is greater than $75,000,000	0.25 percentage points

The Applicable Unused Line Fee shall be based upon the most recent Average Daily Usage Calculation, which will be calculated by Agent based on Average Daily Usage as of the last day of the applicable fiscal quarter. The Applicable Unused Line Fee shall be re-determined quarterly by Agent and any change to the Applicable Unused Line Fee based on the Average Daily Usage as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.”

““Available Increase Amount” means, as of any date of determination, an amount equal to the result of (a) $50,000,000 minus (b) the aggregate principal amount of increases to the Commitments and the Maximum Revolver Amount made after the Sixth Amendment Effective Date and on or prior to such date of determination pursuant to Section 2.2 of the Agreement.”

““Base Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a Base Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Average Daily Availability calculation determined by Agent in its Permitted Discretion (the “Average Daily Availability Calculation”); provided, that for the period from the Sixth Amendment Effective Date through and including December 31, 2012, the Base Rate Margin shall be set at the margin in the row styled “Level I”:

Level	Average Daily Availability	Base Rate Margin
I	If the Average Daily Availability is less than $40,000,000	1.75 percentage points
II	If the Average Daily Availability is greater than or equal to $40,000,000 and less than $75,000,000	1.50 percentage points
III	If the Average Daily Availability is greater than or equal to $75,000,000	1.25 percentage points

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The Base Rate Margin shall be based upon the most recent Average Daily Availability Calculation, which will be calculated by Agent in its Permitted Discretion based on Average Daily Availability as of the end of each fiscal quarter. The Base Rate Margin shall be re-determined quarterly by Agent and any change to the Base Rate Margin based on the Average Daily Availability as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.”

““Commodity Account” means any commodity account (as that term is defined in the Code).”

““EBITDA” means, with respect to Parent and its Restricted Subsidiaries for any period, (a) the Net Income of Parent and its Restricted Subsidiaries for such period, plus (b) without duplication, the sum of the following amounts of Parent and its Restricted Subsidiaries for such period and to the extent deducted in determining Net Income of Parent and its Restricted Subsidiaries for such period (i) Interest Expense, (ii) income tax expense (or distributions to Saturn in respect of income tax expense attributable to Parent and its Restricted Subsidiaries permitted pursuant to Section 6.9(b)(i), to the extent such distribution reduced Net Income), (iii) depreciation expense, (iv) amortization expense, (v) any extraordinary or non-recurring non-cash losses, including any extraordinary or non-recurring non-cash losses from Permitted Dispositions, (vi) restructuring costs incurred by Parent and its Restricted Subsidiaries in connection with the Plan for write-downs of bad debt of Parent and its Restricted Subsidiaries or write-downs of obsolete Inventory of Parent and its Restricted Subsidiaries in connection with the closure of stores of Parent and its Restricted Subsidiaries that are located in the cities identified on Schedule E-2 in an aggregate amount not to exceed $53,300,000, (vii) [reserved], (viii) [reserved], (ix) fees, expenses, and reimbursements paid to Gores, Glendon, and Wolseley in such period to the extent permitted by Section 6.9(c), (d) (without giving effect to the third proviso of such Section 6.9(d)), (e) or (f) of the Agreement (or distributed to Saturn to the extent permitted under Section 6.9(c), (d) (without giving effect to the third proviso of such Section 6.9(d)), (e) or (f) for such purpose to the extent such distribution reduces Net Income), (x) [reserved], (xi) fees and expenses incurred in connection with any Approved Increase (including any additional fees paid to WFF and BOA), (xii) non-recurring non-cash charges (except to the extent representing a reserve or accrual for cash expenses in another period), including goodwill, asset and other impairment charges, losses on early extinguishment of debt, and write-downs of deferred financing costs, (xiii) [reserved], and (xiv) restructuring charges and other costs incurred by Parent or any Restricted Subsidiary in connection with closed stores during the period from July 1, 2012, through December 31, 2013, in an aggregate amount not to exceed $3,000,000, minus (c) without duplication, the sum of the following amounts of Parent and its Restricted Subsidiaries for such period and to the extent included in determining Net Income of Parent and its Restricted Subsidiaries for such period: (i) non-recurring non-cash items increasing such Net Income for such period, (ii) any extraordinary or non-recurring gains, including any extraordinary or non-recurring gains from Dispositions, (iii) gains from the receipt of proceeds under insurance policies net of any associated losses, and (iv) income tax benefits (it being understood that an income tax benefit is a positive number).

For the purposes of calculating EBITDA for any period (each, a “Reference Period”), if at any time during such Reference Period (and after the Closing Date), Parent and its Restricted Subsidiaries shall have made a Permitted Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such Permitted Acquisition, are factually supportable, and are expected to have a continuing impact, in each case to be mutually and reasonably agreed upon by Parent and its Restricted Subsidiaries and Agent) as if any such Permitted Acquisition or adjustment occurred on the first day of such Reference Period.”

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““FCStone Commodity Accounts” means those Commodity Accounts of a Loan Party held at FCStone, LLC.”

““FCStone, LLC” means FCStone, LLC, a Futures Commission Merchant, or any affiliate thereof.”

““Financial Covenant Period” means a period which shall commence (a) immediately on any date on which Availability plus Qualified Cash is less than $15,000,000, and (b) on any date on which Availability plus Qualified Cash has been less than $20,000,000 but equal to or greater than $15,000,000 for a period of 5 consecutive Business Days, and in each case such period shall continue until the date on which Availability plus Qualified Cash has been greater than or equal to $20,000,000 for a period of 30 days.”

““Fixed Charges” means, with respect to any period and with respect to Parent and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other than interest paid-in-kind, amortization of financing fees and other non-cash Interest Expense) during such period, (b) scheduled principal payments in respect of Indebtedness that are required to be paid in cash during such period, (c) all federal, state, and local income taxes accrued during such period, and (d) all Restricted Junior Payments paid (whether in cash or other property, other than common Stock) during such period; provided, however, that this definition of Fixed Charges shall not include (i) any distributions or payments permitted to be made under Section 6.9(h), 6.9(i), 6.9(j), or 6.9(k) of the Agreement, (ii) any Restricted Junior Payments made to the extent permitted pursuant to Section 6.9(d) (without giving effect to the third proviso of such Section 6.9(d)), or (iii) payments made by Parent and its Restricted Subsidiaries on or after the Sixth Amendment Effective Date in connection with the federal income tax audit of Parent and its Subsidiaries with respect to the tax years ending March 31, 2010, March 31, 2011, and March 31, 2012, in an aggregate amount not to exceed $4,000,000.”

““Free Cash Flow” means, with respect to any fiscal period and with respect to Parent and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP, (a) EBITDA, minus (b) the sum, without duplication, of (i) Interest Expense paid in cash during such fiscal period, (ii) income taxes paid in cash during such period, (iii) the cash portion of Capital Expenditures made during such period, (iv) all management, consulting, monitoring, and advisory fees paid to Equity Sponsors during such period, (v) all Restricted Junior Payments paid by Parent in cash or Cash Equivalents during such period (other than (1) Restricted Junior Payments made pursuant to Section 6.9(h) of the Agreement and (2) any Restricted Junior Payment relating to payments, distributions or other amounts that have been deducted in calculating Net Income or EBITDA and have not been added back in clause (b) of the definition of “EBITDA”), and (vi) all principal payments made or due (without duplication) in respect of any Indebtedness (other than the Advances) during such period.”

““LIBOR Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Average Daily Availability Calculation determined by Agent in its Permitted Discretion; provided, that for the period from the Sixth Amendment Effective Date through and including December 31, 2012, the LIBOR Rate Margin shall be set at the margin in the row styled “Level I”:

Level	Average Daily Availability	LIBOR Rate Margin
I	If the Average Daily Availability is less than $40,000,000	2.75 percentage points
II	If the Average Daily Availability is greater than or equal to $40,000,000 and less than $75,000,000	2.50 percentage points
III	If the Average Daily Availability is greater than or equal to $75,000,000	2.25 percentage points

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The LIBOR Rate Margin shall be based upon the most recent Average Daily Availability Calculation, which will be calculated by Agent in its Permitted Discretion based on Average Daily Availability as of the end of each fiscal quarter. The LIBOR Rate Margin shall be re-determined quarterly by Agent and any change to the LIBOR Rate Margin based on the Average Daily Availability as of the end of any fiscal quarter shall be effective as of the first day of the immediately following fiscal quarter.”

““Qualified Cash” means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents owned by the Loan Parties and their Restricted Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof (other than the Required Equity Account), and which such Deposit Account or Securities Account is the subject of a Control Agreement (except and to the extent excused for a period of time under Schedule 3.6 to the Agreement) and is maintained by a branch office of the bank or securities intermediary located within the United States. For the avoidance of doubt, any amount of cash and Cash Equivalents of the Loan Parties and their Restricted Subsidiaries that is in Commodity Accounts (including the FCStone Commodity Accounts) shall be excluded from Qualified Cash.”

““Qualified Cash Reporting Date” means any date on which the evaluation of the satisfaction of any test, condition, calculation, covenant, or other determination under any Loan Document requires a determination of the amount of Qualified Cash as of such date of determination.”

““Sixth Amendment” means that certain Amendment Number Six to Credit Agreement and Amendment Number One to Security Agreement and Consent, dated as of December 13, 2012, by and among Borrowers, Guarantors, the Lenders party thereto, Agent, and Lenders.”

““Sixth Amendment Effective Date” has the meaning specified therefor in the Sixth Amendment.”

(k) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Borrowing Base” by amending and restating clause (c) appearing therein in its entirety as follows:

“(c) the sum of (i) the Bank Product Reserve, (ii) the Surety Reserve, and (iii) the aggregate amount of reserves, if any, established by Agent under Section 2.1(c) of the Agreement.”

(l) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Maximum Revolver Amount” by replacing the reference to “$125,000,000” appearing therein with “$150,000,000”.

(m) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Permitted Investments” by: (i) deleting the “and” appearing at the end of clause (u) thereof, and (ii) amending and restating clause (v) in its entirety and inserting a new clause (w) immediately following the end of clause (v) as follows:

“(v) deposits of cash and Cash Equivalents in an aggregate amount not to exceed $1,000,000 outstanding at any time in the FCStone Commodity Accounts to secure Indebtedness to FCStone, LLC permitted pursuant to clause (h) of the definition of Permitted Indebtedness in connection with the hedging of commodities pricing risk, and

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(w) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments (other than Investments in the FCStone Commodity Accounts) in an aggregate amount not to exceed $10,000,000 during the term of the Agreement.”

(n) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Permitted Liens” by: (i) deleting the “and” appearing at the end of clause (y) thereof, and (ii) amending and restating clause (z) in its entirety and inserting a new clause (aa) immediately following the end of clause (z) as follows:

“(z) Liens in favor of FCStone, LLC, existing on the FCStone Commodity Accounts and the contents thereof to secure obligations to FCStone, LLC arising in connection with the maintenance and provision of the FCStone Commodity Accounts in the ordinary course of business and Indebtedness to FCStone, LLC permitted pursuant to clause (h) of the definition of Permitted Indebtedness in connection with the hedging of commodities pricing risk; provided, however, that the aggregate amount of cash and Cash Equivalents on deposit in the FCStone Commodity Accounts and subject to such Liens shall not exceed $1,000,000, and

(aa) other Liens (other than Liens on the FCStone Commodity Accounts and the contents thereof) as to which the aggregate amount of the obligations secured thereby does not exceed $2,500,000.”

(o) Schedule 1.1 of the Credit Agreement is hereby amended and modified by deleting the definitions of “Plan Reserve” and “Special Reserve” in its entirety.

(p) Schedule 4.15 of the Credit Agreement is hereby amended and modified by deleting such Schedule in its entirety and inserting the Schedule attached hereto as Exhibit A in lieu thereof.

(q) Schedule 5.1 of the Credit Agreement is hereby amended and modified by deleting such Schedule in its entirety and inserting the Schedule attached hereto as Exhibit B in lieu thereof.

(r) Schedule 5.2 of the Credit Agreement is hereby amended and modified by deleting such Schedule in its entirety and inserting the Schedule attached hereto as Exhibit C in lieu thereof.

(s) Schedule C-1 of the Credit Agreement is hereby amended and modified by deleting such Schedule in its entirety and inserting the Schedule attached hereto as Exhibit D in lieu thereof.

(t) Exhibit C-1 of the Credit Agreement is hereby amended and modified by deleting such Exhibit in its entirety and inserting the Exhibit attached hereto as Exhibit E in lieu thereof.

3. Amendments to Security Agreement.

(a) Section 1 of the Security Agreement is hereby amended and modified by adding the following definition in the appropriate alphabetical order:

““Commodity Account” means any commodity account (as that term is defined in the Code).”

““Triggering Event” means, as of any date of determination, that (a) an Event of Default has occurred, or (b) Excess Availability plus Qualified Cash is less than $20,000,000.”

(b) Section 1 of the Security Agreement is hereby amended and modified by re-lettering each of clauses (q) – (rrr) as clauses (r) – (sss), respectively.

(c) Section 5(f)(iv)(D) of the Security Agreement is hereby amended and modified by amending and restating such section in its entirety as follows:

(d) “(D) with respect to any Securities Accounts or Commodity Accounts, the delivery of Control Agreements with respect thereto; and”

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(e) Section 6(c) of the Security Agreement is hereby amended and modified by inserting new a clause “(iv)” immediately following clause (iii) appearing therein as follows:

“(iv) Except to the extent otherwise excused by the Credit Agreement, each Grantor shall obtain a Control Agreement with respect to all of such Grantor’s Commodities Accounts.”

(f) Section 16(c) of the Security Agreement is hereby amended and modified by amending and restating such section in its entirety as follows:

“(c) Agent may, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon any Grantor or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to any Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under Section 9-104 of the Code, instruct the bank maintaining such Deposit Account for the applicable Grantor to pay the balance of such Deposit Account to or for the benefit of Agent, (ii) with respect to any Grantor’s Securities Accounts in which Agent’s Liens are perfected by control under Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the applicable Grantor to (A) transfer any cash in such Securities Account to or for the benefit of Agent, or (B) liquidate any financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or for the benefit of Agent, and (iii) with respect to any Grantor’s Commodity Accounts in which Agent’s Liens are perfected by control under Section 9-106 of the Code, instruct the commodity intermediary maintaining such Commodity Account for the applicable Grantor to (A) transfer any cash in such Commodity Account to or for the benefit of Agent, or (B) liquidate any open commodity contract in such Commodity Account or any commodities related to such commodity contract and transfer the cash proceeds thereof to or for the benefit of Agent.”

(g) Section 23 of the Security Agreement is hereby amended and modified by inserting clauses (d), (e), and (f) immediately following clause (c) thereof in their entirety as follows:

“(d) EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(e) NO CLAIM MAY BE MADE BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO (OR AGAINST THE AGENT, THE SWING LENDER, ISSUING LENDER, OR THE UNDERLYING ISSUER OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM) FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH, AND EACH SUCH PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

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(f) IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY CLAIM RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THE WAIVER SET FORTH IN CLAUSE (C) ABOVE IS NOT ENFORCEABLE IN SUCH PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:

(i) WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE. VENUE FOR THE REFERENCE PROCEEDING SHALL BE IN THE COUNTY OF LOS ANGELES, CALIFORNIA.

(ii) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING SET-OFF OR RECOUPMENT), (C) APPOINTMENT OF A RECEIVER, AND (D) TEMPORARY, PROVISIONAL, OR ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS, OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) – (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO PARTICIPATE IN A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT WITH RESPECT TO ANY OTHER MATTER.

(iii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN 10 DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY SHALL HAVE THE RIGHT TO REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B). THE REFEREE SHALL BE APPOINTED TO SIT WITH ALL OF THE POWERS PROVIDED BY LAW. PENDING APPOINTMENT OF THE REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR PROVISIONAL REMEDIES.

(iv) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING. ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY PARTY SO REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A COURT REPORTER SHALL BE USED AND THE REFEREE SHALL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COSTS OF THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.

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(v) THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND SHALL ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA.

(vi) THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND PROCEDURAL LAW. THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT. THE REFEREE SHALL REPORT HIS OR HER DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW. THE REFEREE SHALL ISSUE A DECISION AND PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION 644, THE REFEREE’S DECISION SHALL BE ENTERED BY THE COURT AS A JUDGMENT IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT. THE FINAL JUDGMENT OR ORDER FROM ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY THE COURT.

(vii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY HERETO KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION SHALL APPLY TO ANY DISPUTE BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS AGREEMENT.”

4. Consent.

(a) The provisions of the Credit Agreement and the other Loan Documents to the contrary notwithstanding, subject to the satisfaction of the conditions precedent set forth in Section 5 below, Agent and Lenders hereby consent to the joinder of Coleman as a new Borrower, on the terms and upon and subject to the satisfaction of the conditions set forth in the Joinder Documents (as defined below) executed and delivered to Agent prior to the execution and delivery of this Amendment.

(b) Stock Building Supply West, LLC has informed Agent and the Lenders that it intends to enter into Capital Leases or other Permitted Purchase Money Indebtedness to finance the acquisition of the forklifts described on Schedule 1 attached hereto and that, in connection with such financing, the financing source requires that Agent release the Liens, if any, on any Collateral described on Schedule 1. The provisions of the Credit Agreement and the other Loan Documents to the contrary notwithstanding, subject to the satisfaction of the conditions precedent set forth in Section 5 below, the Lenders hereby irrevocably authorize Agent to release the Liens on the Collateral described on Schedule 1.

5. Covenants. Each Loan Party hereby covenants and agrees that:

(a) On or prior to the date that is 30 days after the Sixth Amendment Effective Date (or such later date as may be agreed to in writing by Agent in its sole discretion), the Loan Parties shall (i) either (A) provide Agent with evidence reasonably satisfactory to Agent that the information set forth in Schedule 4.15 of the Credit Agreement is accurate and complete or (B) delivered to Agent an updated Schedule 4.15 to the Credit Agreement in form and substance reasonably satisfactory to Agent (which such Schedule, upon delivery to, and approval of same by Agent, shall, without any further action by any party thereto, update and replace Schedule 4.15 to the Credit Agreement) and (ii) deliver to Agent duly executed and delivered Control

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Agreements with respect to the Deposit Accounts and Securities Accounts of the Loan Parties as Agent may reasonable require (except to the extent otherwise expressly excused by the terms of the Credit Agreement or the Security Agreement), in form and substance reasonably satisfactory to Agent. Each Loan Party hereby agree that their failure to comply with the foregoing shall constitute an immediate Event of Default.

(b) On or prior to the date that is 10 days after the Sixth Amendment Effective Date (or such later date as may be agreed to in writing by Agent in its sole discretion), the Loan Parties shall deliver to Agent and the Lenders: (i) a customary opinion of counsel related to the joinder of Coleman as a Borrower, and (ii) to the extent required by Agent, an opinion of North Carolina counsel related to the joinder of Coleman as a Borrower, in each case, regarding such matters as to Coleman or its direct parent as Agent or its counsel may reasonably request, and which is otherwise in form and substance reasonably satisfactory to Agent.

(c) On or prior to the date that is 10 days after the Sixth Amendment Effective Date (or such later date as may be agreed to in writing by Agent in its sole discretion), the Loan Parties shall deliver to Agent evidence, in form and substance satisfactory to Agent, that Coleman has been added to the Loan Parties’ existing insurance policies required by Section 5.6 of the Credit Agreement.

6. Conditions Precedent to Amendment. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment (such date upon which such conditions are all satisfied, being the “Sixth Amendment Effective Date”):

(a) Agent shall have received this Amendment, duly executed and delivered by the parties hereto.

(b) Agent shall have received a certificate from the Secretary, Assistant Secretary, Company Secretary or Corporate Secretary of each Loan Party (other than Coleman), dated as of the date hereof, (i) certifying that the resolutions of such Loan Party’s board of directors (or similar governing body) attached to a certificate previously delivered to Agent and dated as of the Closing Date (or any other applicable date prior to the date hereof) and certified by a Secretary, Assistant Secretary, Company Secretary or Corporate Secretary of such Loan Party (A) have not been amended, rescinded, or modified since their adoption and remain in full force and effect as of the Sixth Amendment Effective Date, and (B) authorize such Loan Party’s execution, delivery, and performance of this Amendment, and approve the terms of, and the transactions contemplated herein, and the other Loan Documents executed concurrently herewith to which such Loan Party is a party, and (ii) either (A) attesting to the incumbency and signatures of such specific officers of such Loan Party or (B) attesting that the officers of such Loan Party for which incumbency and signatures were previously certified to in such prior certificate delivered to Agent remain authorized to act on behalf of such Loan Party.

(c) Agent shall have received a certificate of status, good standing or other equivalent, as applicable, with respect to each Loan Party (other than Coleman), dated as of a recent date, such certificate to be issued by the appropriate officer of the jurisdiction of incorporation or organization of such Loan Party, which certificate shall indicate that such Loan Party is in good standing in such jurisdiction.

(d) Agent shall have received (i) copies of each Loan Party’s (other than Coleman’s) Governing Documents, as amended, modified or supplemented to the date hereof, certified by the Secretary, Assistant Secretary, Company Secretary or Corporate Secretary of such Loan Party, or (ii) a certificate of such Secretary, Assistant Secretary, Company Secretary or Corporate Secretary that the Governing Documents of such Loan Party previously attached to a certificate previously delivered to the Agent and certified by a Secretary, Assistant Secretary, Company Secretary or Corporate Secretary of such Loan Party remain in effect (without any further amendment, modification or supplement since such prior certification) on and as of the date hereof.

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(e) After giving effect to this Amendment, the representations and warranties set forth herein and in the Credit Agreement and the other Loan Documents shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).

(f) After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing or shall result from the consummation of the transactions contemplated herein.

(g) Agent shall have received, in immediately available funds, the Amendment Fee referred to in Section 9 hereof (which Amendment Fee shall be for the ratable benefit of WFCF and BofA).

(h) Agent shall have received a joinder agreement duly executed and delivered by Coleman, and each other party thereto, along with the other documents, instruments and agreements required thereby (collectively, the “Joinder Documents”), each being in form and substance reasonably satisfactory to Agent, which documents shall be in full force and effect.

(i) Agent shall have received satisfactory evidence (including copies of orders closing such cases) that Case No. 09-11554 and Case No. 09-11572 in United States Bankruptcy Court for the District of Delaware have been closed.

7. Representations and Warranties. Each Loan Party hereby represents and warrants to Agent for the benefit of the Lender Group and the Bank Product Providers as follows:

(a) The execution, delivery, and performance by it of this Amendment (i) have been duly authorized by all necessary action of such Loan Party, and (ii) do not and will not (A) violate any material provision of federal, state, or local law or regulation applicable to such Loan Party or its Subsidiaries, the Governing Documents of such Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of such Loan Party except to the extent such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of such Loan Party, other than Permitted Liens, (D) require any approval of such Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of such Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change, or (C) require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, except for (1) registrations, consents, approvals, notices or other actions that have been obtained and that are still in force and effect, (2) filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, and (3) consents or approvals the failure of which to obtain could not reasonably be expected to cause a Material Adverse Change.

(b) This Amendment has been duly executed and delivered by such Loan Party. This Amendment is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

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(c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against any Borrower or any Guarantor.

(d) After giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

(e) This Amendment has been entered into without force or duress, of the free will of such Loan Party, and the decision of such Loan Party to enter into this Amendment is a fully informed decision and such Loan Party is aware of all legal and other ramifications of each such decision.

(f) It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder.

(g) (i) The required amount of the “Plan Reserve” at all times during the 12 month period ended prior to the Sixth Amendment Effective Date was $0, (ii) all amounts required to be paid by Borrowers on account of allowed administrative claims or lease rejection claims under or in connection with the Plan have been indefeasibly paid in full, and (iii) Case No. 09-11554 and Case No. 09-11572 in United States Bankruptcy Court for the District of Delaware have been closed.

8. Payment of Costs and Fees. Borrowers agree to pay all reasonable out-of-pocket costs and expenses of Lender Group (including, without limitation, the reasonable fees and out-of-pocket disbursements of outside counsel to Agent and each Lender) in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.

9. Amendment Fee. On or before the Sixth Amendment Effective Date, Borrowers shall pay to Agent (for the benefit of the Lenders in accordance with their respective Pro Rata Shares) an amendment fee in the amount of $375,000 (“Amendment Fee”) in immediately available funds. Such Amendment Fee shall be fully earned and non-refundable on the Sixth Amendment Effective Date and constitutes a portion of the Obligations and is in addition to any other fees payable under the Credit Agreement or any other Loan Document. Agent hereby is expressly authorized by Borrower to (a) charge such Amendment Fee to the Loan Account, and (b) designate such amount as an Advance under the Credit Agreement.

10. Choice of Law and Venue; Jury Trial Waiver; Judicial Reference. This Amendment SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AS AMENDED HEREBY, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

11. Further Assurances. At any time upon the reasonable request of Agent, each Loan Party shall promptly execute and deliver to Agent such Additional Documents as Agent shall request pursuant to the Credit Agreement and the other Loan Documents, in each case in form and substance reasonably satisfactory to Agent.

12. Effect on Loan Documents.

(a) The Credit Agreement and the Security Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in

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accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement, the Security Agreement or any other Loan Document. Except for the amendments to the Credit Agreement and the Security Agreement expressly set forth herein, the Credit Agreement, the Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The amendments, consents, waivers and modifications set forth herein are limited to the specified hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement or the Security Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of Agent and the Lenders.

(b) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

(c) Upon and after the effectiveness of this Amendment, each reference in the Security Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Security Agreement, and each reference in the other Loan Documents to “the Security Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Security Agreement, shall mean and be a reference to the Security Agreement as modified and amended hereby.

(d) To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement or the Security Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement or the Security Agreement as modified or amended hereby.

13. Entire Agreement. This Amendment, and the terms and provisions hereof, the Credit Agreement, the Security Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written. Each Loan Party consents to the amendments to the Credit Agreement and the Security Agreement set forth in this Amendment and agrees that all Obligations owing by such Person are unconditionally owing by such Person to Agent and the Lenders, without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever.

14. Reaffirmation of Obligations. Each Loan Party hereby reaffirms its obligations under each Loan Document to which it is a party. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof.

15. Ratification. Each Loan Party hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement, Security Agreement, and the other Loan Documents effective as of the date hereof and as amended hereby.

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16. Miscellaneous.

(a) This Amendment is a Loan Document. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be equally effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

(b) Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Amendment shall be severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Amendment.

(d) Neither this Amendment nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or any Loan Party, whether under any rule of construction or otherwise, on the basis that this Amendment has been drafted by any such Person. This Amendment has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e) Although each Guarantor has been informed of the matters set forth herein and has agreed to same, such Guarantor understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

(f) The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

(g) Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Amendment refer to this Amendment as a whole and not to any particular provision of this Amendment. Section, subsection, clause, schedule, and exhibit references herein are to this Amendment unless otherwise specified. Any reference in this Amendment to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash (or cash collateralization in accordance with the terms of the Credit Agreement) of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of the Credit Agreement and the full and final termination of any commitment to extend any financial accommodations under the Credit Agreement and any other Loan Document. The words “asset” and “property” shall be

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construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

17. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers as of the date first written above.

STOCK BUILDING SUPPLY HOLDINGS II, LLC,
a Delaware limited liability company, as Parent, as a Guarantor, and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
STOCK BUILDING SUPPLY HOLDINGS, LLC,
a Virginia limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
COLEMAN FLOOR, LLC,
a Delaware limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
STOCK BUILDING SUPPLY, LLC,
a North Carolina limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
STOCK BUILDING SUPPLY OF FLORIDA, LLC,
a Florida limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL

[SIGNATURE PAGE TO AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND

AMENDMENT NUMBER ONE TO SECURITY AGREEMENT AND CONSENT]

STOCK BUILDING SUPPLY MIDWEST, LLC,
a Delaware limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
STOCK BUILDING SUPPLY WEST, LLC,
a Utah limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
STOCK BUILDING SUPPLY OF ARKANSAS, LLC,
a Delaware limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
SBS / BISON BUILDING MATERIALS, LLC,
a Delaware limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
COLEMAN FLOOR SOUTHEAST, LLC,
a Delaware limited liability company, as a Borrower and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL

[SIGNATURE PAGE TO AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND

AMENDMENT NUMBER ONE TO SECURITY AGREEMENT AND CONSENT]

STOCK BUILDING SUPPLY WEST (USA), INC.,
a Delaware corporation, as a Guarantor and as a Grantor
By:	/s/ BRYAN J. YEAZEL
Name:	BRYAN J. YEAZEL
Title:	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL
	BRYAN J. YEAZEL
	EXECUTIVE VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & GENERAL COUNSEL

[SIGNATURE PAGE TO AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND

AMENDMENT NUMBER ONE TO SECURITY AGREEMENT AND CONSENT]

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC), as Agent and as a Lender
By:	/s/ Amelie Yehros
Name:	Amelie Yehros
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND

AMENDMENT NUMBER ONE TO SECURITY AGREEMENT AND CONSENT]

BANK OF AMERICA, N.A.,
as a Lender
By:	/s/ Steven W. Sharp
Name:	Steven W. Sharp
Title:	Senior Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER SIX TO CREDIT AGREEMENT AND

AMENDMENT NUMBER ONE TO SECURITY AGREEMENT AND CONSENT]

EX-10.8

Exhibit 10.8

AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT

THIS AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT (this “Amendment”), dated as of December 21, 2012, is entered into by and among STOCK BUILDING SUPPLY HOLDINGS II, LLC, a Delaware limited liability company (“Parent”), each of Parent’s Subsidiaries listed on the signature pages hereto as a borrower (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as “Borrowers”), each of Parent’s Subsidiaries listed on the signature pages hereto as a guarantor (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Guarantor”, and individually and collectively, jointly and severally, as “Guarantors”), the lenders party hereto (“Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC) (“WFCF”), as the administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”) and in light of the following:

W I T N E S S E T H

WHEREAS, Parent, Borrowers, Lenders, BANK OF AMERICA, N.A. (“BofA”), as co-lead arranger, WFCF as co-lead arranger, and Agent are parties to that certain Credit Agreement, dated as of June 30, 2009 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, Borrowers have requested that Agent and Lenders make certain amendments to the Credit Agreement;

WHEREAS, Borrowers have informed Agent and the Lenders that Peach Acquisition Co., LLC, a Delaware limited liability company (“Acquisition Co.”) and a Restricted Subsidiary of Stock Building Supply, LLC intends to enter into that certain Asset Purchase Agreement (the “TBS Group Acquisition Agreement”; and together with the other documents, instruments and agreements executed and delivered in connection therewith or otherwise relating thereto, the “TBS Group Acquisition Documents”), by and among Acquisition Co., Total Building Services Group, LLC, a Georgia limited liability company (“Seller”), and William C. Poston and A. Milburn Poston (collectively, the “Shareholders”), whereby pursuant to the terms and subject to the conditions set forth therein, Acquisition Co. agrees to purchase from Seller all or substantially all of the assets of Seller in exchange for, among other things, the Purchase Price (as defined in the TBS Group Acquisition Agreement) plus the Earnout Payments (as defined in the TBS Group Earnout Agreement) payable pursuant to the TBS Group Earnout Agreement (such acquisition, the “TBS Group Acquisition”);

WHEREAS, Borrowers desire to join Acquisition Co. as a new Borrower to the Credit Agreement and the other Loan Documents, as required by Section 5.11 of the Credit Agreement and subject to the terms and provisions set forth in the Joinder Documents (as defined below);

WHEREAS, Borrowers have requested that Agent and Lenders (a) consent to: (i) the consummation of the TBS Group Acquisition, and (ii) the joinder of Acquisition Co. as a new Borrower, and (b) make certain amendments to the Credit Agreement; and

WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are willing to accommodate Borrowers’ requests.

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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby.

2. Amendments to Credit Agreement.

(a) Section 6.7(a) of the Credit Agreement is hereby amended and modified by: (i) deleting the “or” appearing at the end of clause (ii) thereof, and (ii) inserting a new clause (iii) immediately following clause (ii) as follows:

“(iii) make any payment on account of any TBS Group Earnout unless immediately before and immediately after giving effect to such payment (y) no Default or Event of Default has occurred and is continuing or would result after giving effect thereto, and (z) Borrowers have Availability plus Qualified Cash in an amount equal to or greater than $20,000,000, or”

(b) Section 6.7(b) of the Credit Agreement is hereby amended and modified by: (i) deleting the “or” appearing at the end of clause (ii) thereof, (ii) replacing the reference to “.” Appearing at the end of clause (iii) thereof with “, or”, and (iii) inserting a new clause (iv) immediately following clause (iii) as follows:

“(iv) (A) the TBS Group Acquisition Agreement or any other TBS Group Acquisition Document (other than the TBS Group Earnout Agreement), except to the extent that such amendment, modification or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Lenders, or (B) the TBS Group Earnout Agreement, except to the extent that such amendment, modification or change could not, individually or in the aggregate, reasonably be expected to be adverse to the interests of the Lenders.”

(c) Schedule 1.1 to the Credit Agreement is hereby amended and modified by amending and restating the following definitions, or adding (as applicable) the following definitions in the appropriate alphabetical order:

““Acquisition Co.” means Peach Acquisition Co., LLC, a Delaware limited liability company.”

““EBITDA” means, with respect to Parent and its Restricted Subsidiaries for any period, (a) the Net Income of Parent and its Restricted Subsidiaries for such period, plus (b) without duplication, the sum of the following amounts of Parent and its Restricted Subsidiaries for such period and to the extent deducted in determining Net Income of Parent and its Restricted Subsidiaries for such period (i) Interest Expense, (ii) income tax expense (or distributions to Saturn in respect of income tax expense attributable to Parent and its Restricted Subsidiaries permitted pursuant to Section 6.9(b)(i), to the extent such distribution reduced Net Income), (iii) depreciation expense, (iv) amortization expense, (v) any extraordinary or non-recurring non-cash losses, including any extraordinary or non-recurring non-cash losses from Permitted Dispositions, (vi) restructuring costs incurred by Parent and its Restricted Subsidiaries in connection with the Plan for write-downs of bad debt of Parent and its Restricted Subsidiaries or write-downs of obsolete Inventory of Parent and its Restricted Subsidiaries in connection with the closure of stores of Parent and its Restricted Subsidiaries that are located in the cities identified on Schedule E-2 in an aggregate amount not to exceed $53,300,000, (vii) [reserved], (viii) [reserved], (ix)

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fees, expenses, and reimbursements paid to Gores, Glendon, and Wolseley in such period to the extent permitted by Section 6.9(c), (d) (without giving effect to the third proviso of such Section 6.9(d)), (e) or (f) of the Agreement (or distributed to Saturn to the extent permitted under Section 6.9(c), (d) (without giving effect to the third proviso of such Section 6.9(d)), (e) or (f) for such purpose to the extent such distribution reduces Net Income), (x) [reserved], (xi) fees and expenses incurred in connection with any Approved Increase (including any additional fees paid to WFF and BOA), (xii) non-recurring non-cash charges (except to the extent representing a reserve or accrual for cash expenses in another period), including goodwill, asset and other impairment charges, losses on early extinguishment of debt, and write-downs of deferred financing costs, (xiii) non-recurring cash fees, cash charges and other cash expenses made or incurred in connection with the TBS Group Acquisition (including restructuring charges related thereto) that are paid before the consummation of the TBS Group Acquisition or within 1 year after the consummation of the TBS Group Acquisition in an aggregate amount not to exceed $650,000, and (xiv) restructuring charges and other costs incurred by Parent or any Restricted Subsidiary in connection with closed stores during the period from July 1, 2012, through December 31, 2013, in an aggregate amount not to exceed $3,000,000, minus (c) without duplication, the sum of the following amounts of Parent and its Restricted Subsidiaries for such period and to the extent included in determining Net Income of Parent and its Restricted Subsidiaries for such period: (i) non-recurring non-cash items increasing such Net Income for such period, (ii) any extraordinary or non-recurring gains, including any extraordinary or non-recurring gains from Dispositions, (iii) gains from the receipt of proceeds under insurance policies net of any associated losses, and (iv) income tax benefits (it being understood that an income tax benefit is a positive number).

For the purposes of calculating EBITDA for any period (each, a “Reference Period”), if at any time during such Reference Period (and after the Closing Date), Parent and its Restricted Subsidiaries shall have made a Permitted Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such Permitted Acquisition, are factually supportable, and are expected to have a continuing impact, in each case to be mutually and reasonably agreed upon by Parent and its Restricted Subsidiaries and Agent) as if any such Permitted Acquisition or adjustment occurred on the first day of such Reference Period.”

““Fixed Charges” means, with respect to any period and with respect to Parent and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other than interest paid-in-kind, amortization of financing fees and other non-cash Interest Expense) during such period, (b) scheduled principal payments in respect of Indebtedness that are required to be paid in cash during such period (it being agreed, for the avoidance of doubt, that “scheduled payments” includes any payments required to be made in cash (excluding, for the avoidance of doubt, payments actually offset against the TBS Group PIK Note, instead of paid in cash) in respect of any earnouts, including any TBS Group Earnout); provided, however, that the amount of any earnout or TBS Group Earnout included pursuant to this clause (b) for any period shall be reduced by an amount equal to the applicable Earnout Adjustment Amount (defined below) for such period and such earnout, if any, (c) all federal, state, and local income taxes accrued during such period, and (d) all Restricted Junior Payments paid (whether in cash or other property, other than common Stock) during such period; provided, however, that this definition of Fixed Charges shall not include (i) any distributions or payments permitted to be made under Section 6.9(h), 6.9(i), 6.9(j), or 6.9(k) of the Agreement, (ii) any Restricted Junior Payments made to the extent permitted pursuant to Section 6.9(d) (without giving effect to the third proviso of such Section 6.9(d)), or (iii) payments made by Parent and its Restricted Subsidiaries on or after the Sixth Amendment Effective Date in connection with the federal income tax audit of Parent and its Subsidiaries with respect to the tax years ending March 31, 2010, March 31, 2011, and March 31, 2012, in an aggregate amount not to exceed $4,000,000. For purposes of this definition, the term “Earnout Adjustment Amount” means, with respect to any earnout or the TBS

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Group Earnout during any period, the amount by which EBITDA or Net Income for such period is actually reduced (and, in the case of Net Income, such reduction is not added back in calculating EBITDA) as a result of the application of any requirement under GAAP that dictates that such earnout or TBS Group Earnout be treated as an expense or otherwise that reduces Net Income and/or EBITDA of Parent and its Subsidiaries for such period (and, in the case of Net Income, such reduction is not added back in calculating EBITDA).”

““Seventh Amendment” means that certain Amendment Number Seven to Credit Agreement and Consent, dated as of December 21, 2012, by and among Borrowers, Guarantors, the Lenders party thereto, and Agent.”

““Seventh Amendment Effective Date” has the meaning specified therefor in the Seventh Amendment.”

““TBS Group” means Total Building Services Group, LLC, a Georgia limited liability company.”

““TBS Group Acquisition” has the meaning specified therefor in the Seventh Amendment.”

““TBS Group Acquisition Agreement” means that certain Asset Purchase Agreement dated on or about December 22, 2012 by and among Acquisition Co., TBS Group, and William C. Poston and A. Milburn Poston.”

““TBS Group Acquisition Documents” means the TBS Group Acquisition Agreement and the other Transaction Documents (as defined in the TBS Group Acquisition Agreement).”

““TBS Group Earnout” means the Earnout Payments as defined in the TBS Group Earnout Agreement.”

““TBS Group Earnout Agreement” means that certain Earnout Agreement dated on or about December 22, 2012 by and between TBS Group and Acquisition Co.”

““TBS Group PIK Note” means that certain Payment-In-Kind Note on or about December 22, 2012, by William C. Poston, A. Milburn Poston, and TBS Group, in favor Acquisition Co. in the original principal amount of $850,000.”

(d) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Permitted Acquisition” by amending and restating clause

(f) appearing therein in its entirety as follows: “(f) Borrowers shall have Availability plus Qualified Cash in an amount equal to or greater than $25,000,000 immediately after giving effect to the consummation of the proposed Acquisition,”

(e) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Permitted Acquisition” by amending and restating clause

(k) appearing therein in its entirety as follows: “(k) the purchase consideration payable in respect of all Permitted Acquisitions during the term of the Agreement (including the proposed Acquisition and including deferred payment obligations but excluding (i) the purchase consideration for the Bison Acquisition and any Permitted

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Acquisitions consummated by any Loan Party on or before the Third Amendment Effective Date, and (ii) solely to the extent otherwise included, the purchase consideration for the TBS Group Acquisition, and (iii) Non-Cash Acquisition Consideration) shall not exceed $50,000,000 in the aggregate;

provided, however, that so long as the purchase consideration payable (including deferred payment obligations) in respect of a proposed Acquisition and all other Acquisitions which have been consummated pursuant to this proviso does not exceed $5,000,000 in the aggregate, such Acquisition may be consummated notwithstanding the failure to comply with clauses (d) or (e) of this definition of Permitted Acquisition (it being understood and agreed that this $5,000,000 is included in (and not additive of) the amount set forth in clause (k) of this definition of Permitted Acquisition.”

(f) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Permitted Indebtedness” by amending and restating clause (q) appearing therein in its entirety as follows:

“(q) (i) contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, earn-out (other than the TBS Group Earnout), non-compete, or similar obligation of Parent or the applicable Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions or the TBS Group Acquisition and (ii) Indebtedness consisting of the TBS Group Earnout,”

(g) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending the definition of “Permitted Investments” by: (i) deleting the “and” appearing at the end of clause (v) thereof, and (ii) amending and restating clause (w) in its entirety and inserting a new clause (x) immediately following the end of clause (v) as follows:

“(w) Investments in the form of a loan by Acquisition Co. to the Seller (as defined in the Seventh Amendment) and the Shareholders (as defined in the Seventh Amendment) in an aggregate principal amount (without regard to any interest that is paid-in-kind) not to exceed $850,000 pursuant to the terms of the TBS Group PIK Note, and

(x) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments (other than Investments in the FCStone Commodity Accounts) in an aggregate amount not to exceed $10,000,000 during the term of the Agreement.”

3. Consent.

(a) The provisions of Sections 5.11 and 6.11 of the Credit Agreement to the contrary notwithstanding, subject to the satisfaction of the conditions precedent set forth in Section 5 and 6 below, Agent and Lenders hereby consent to the consummation of the TBS Group Acquisition on or before December 28, 2012, solely on the terms and subject to the conditions set forth in the TBS Group Acquisition Documents in the form of such documentation attached as Exhibit A hereto, or subject to subsequent amendments or modification thereto that are not adverse to Agent or the Lenders. Anything contained in the Credit Agreement or any other Loan Document to the contrary notwithstanding, (i) with respect to Inventory acquired in connection with the TBS Group Acquisition and Accounts owned by Acquisition Co. or acquired in connection with the TBS Group Acquisition, until such time as the completion of a field examination with respect to Acquisition Co. and such Accounts and Inventory reasonably satisfactory to Agent, the aggregate increase to the Borrowing Base based on such Accounts and Inventory shall be limited to $2,500,000 in the aggregate, and (ii) with respect to Inventory owned by Acquisition Co. or acquired in connection with the TBS Group Acquisition, until such time as the completion of an appraisal and a field exam with respect to such Inventory reasonably satisfactory to

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Agent, the aggregate increase to the Borrowing Base based on such Inventory shall be limited to $2,500,000 in the aggregate. It is understood and agreed that Agent is authorized to exclude all engineered wood products Inventory (and the proceeds thereof) owned by Acquisition Co. or acquired in the TBS Group Acquisition from the Borrowing Base until such time as Agent shall have received an amendment, in form and substance satisfactory to Agent, to the financing statement filed against Seller by Bradley Plywood Corporation DBA Dixie Plywood Company of Atlanta and such other evidence as Agent may reasonably require to verify the first priority Lien of Agent in all such engineered wood products Inventory.

(b) The provisions of Sections 5.11 and 6.11 of the Credit Agreement to the contrary notwithstanding, subject to the satisfaction of the conditions precedent set forth in Section 5 below, Agent and Lenders hereby consent to the joinder of Acquisition Co. as a new Borrower, on the terms and upon and subject to the satisfaction of the conditions set forth in the Joinder Documents (as defined below) executed and delivered to Agent prior to the execution and delivery of this Amendment.

4. Covenants. Each Loan Party hereby covenants and agrees that:

(a) On or prior to the date that is 30 days after the Seventh Amendment Effective Date (or such later date as may be agreed to in writing by Agent in its sole discretion), the Loan Parties shall use commercially reasonable efforts to obtain a Collateral Access Agreement with respect to the location at 1000 Loudermilk Drive, Marietta, Georgia 30060, duly executed and delivered by the parties thereto and in form and substance reasonably satisfactory to Agent, and the same shall be in full force and effect; provided, that such Collateral Access Agreement shall not be required if it has not been obtained after the use of such commercially reasonable efforts.

(b) On or prior to the date that is 1 Business Day after the date of consummation of the TBS Group Acquisition, the Loan Parties shall deliver to Agent the original TBS Group PIK Note (as defined in the Credit Agreement), together with an original allonge duly indorsed in blank. The Loan Parties hereby agree that their failure to comply with any of the foregoing shall constitute an immediate Event of Default.

(c) Borrowers hereby covenant and agree that substantially concurrently with the consummation of the TBS Group Acquisition they shall pay the Indebtedness owing to Bank of North Georgia in accordance with the Bank of North Georgia Payoff Letter. Borrowers hereby further covenant and agree that within 1 Business Day of the date of consummation of the TBS Group Acquisition they shall deliver to Agent evidence, in form satisfactory to Agent, that they have complied with the foregoing and that all Liens in favor of Bank of North Georgia on the assets acquired pursuant to the TBS Group Acquisition have been terminated and released.

5. Conditions Precedent to Amendment. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment (such date upon which such conditions are all satisfied, being the “Seventh Amendment Effective Date”):

(a) Agent shall have received this Amendment, duly executed and delivered by the parties hereto.

(b) After giving effect to this Amendment, the representations and warranties set forth herein and in the Credit Agreement and the other Loan Documents shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).

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(c) After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing or shall result from the consummation of the transactions contemplated herein.

(d) Agent shall have received letters, in form and substance reasonably satisfactory to Agent, from Bank of North Georgia and Bank of North GA div Synovus Bank, respecting satisfaction of all indebtedness and obligations of Seller to such Person secured by liens on the assets acquired pursuant to the TBS Group Acquisition and releasing all of the liens existing in favor of such Person in and to such assets acquired pursuant to the TBS Group Acquisition (the “Bank of North Georgia Payoff Letter”).

(e) Agent shall have received a joinder agreement duly executed and delivered by Acquisition Co. and each other party thereto, along with the other documents, instruments and agreements required thereby (collectively, the “Joinder Documents”), each being in form and substance reasonably satisfactory to Agent, which documents shall be in full force and effect.

(f) No Event of Default shall have occurred and be continuing or would result from the consummation of the TBS Group Acquisition and the TBS Group Acquisition is consensual.

6. Additional Conditions Precedent to Consent. The satisfaction of each of the following shall constitute additional conditions precedent to the effectiveness of Section 4(a) of this Amendment:

(a) No Event of Default shall have occurred and be continuing or would result from the consummation of the TBS Group Acquisition.

(b) Each of the TBS Group Acquisition Documents shall have been duly executed and delivered by the parties thereto, and the same shall be in full force and effect, on or before December 28, 2012.

(c) Agent shall have received a certificate from the Secretary of Parent. attaching fully executed versions of the material TBS Group Acquisition Documents and all schedules and exhibits thereto, and any other material agreement or document related to the TBS Group Acquisition, and each such agreement and all other documentation associated with the TBS Group Acquisition (including the TBS Group Acquisition documents and all schedules thereto) shall be in substantially the same form and substance attached hereto as Exhibit A and shall be subject to no subsequent amendments, revisions or modifications thereto that are adverse to the Lenders or the Loan Parties without the consent of Agent. Such certificate from the Secretary of Acquisition Co. shall certify that (i) the attached documents are true, correct and complete copies of the material TBS Group Acquisition Documents, (ii) such documents constitute all of the material TBS Group Acquisition Documents, and (iii) that such documents are in substantially the same from as the documents attached as Exhibit A to this Amendment.

(d) Agent shall have received evidence, in form and substance satisfactory to Agent, including a certificate from an authorized officer of Parent certifying that at the time of the TBS Group Acquisition (and after giving effect thereto), that:

i) no Event of Default has occurred and is continuing or would result from the consummation of the TBS Group Acquisition and that the TBS Group Acquisition is consensual.

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ii) that there is no (i) litigation, investigation or proceeding (judicial or administrative) pending or, threatened in writing, against any Loan Party by any Governmental Authority arising out of the transactions contemplated by or effected in connection with the TBS Group Acquisition Documents, or (ii) injunction, writ or restraining order restraining or prohibiting the transactions contemplated by the TBS Group Acquisition Documents.

iii) No Indebtedness will be incurred, assumed, or would exist with respect to Parent or its Restricted Subsidiaries as a result of the TBS Group Acquisition, other than Indebtedness permitted under clauses (l), (m), (o), or (q) of the definition of Permitted Indebtedness and no Liens will be incurred, assumed or would exist with respect to the assets of Parent or its Restricted Subsidiaries as a result of the TBS Group Acquisition other than Permitted Liens.

iv) The execution, delivery and performance of each of the TBS Group Acquisition Documents to which a Loan Party is party have been duly authorized by all necessary action on the part of such Loan Party. Each TBS Group Acquisition Document to which a Loan Party is a party is the legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, in each case except (i) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefore may be brought. No Loan Party is in default in the performance or compliance with any provisions thereof. All representations and warranties made by a Loan Party in the TBS Group Acquisition Documents executed on or prior to the date hereof and in the certificates delivered in connection therewith are true, correct and complete in all material respects. To each Loan Party’s knowledge, none of the Seller’s (as defined in the TBS Group Acquisition Agreement) representations and warranties in the TBS Group Acquisition Documents executed on or prior to the date hereof contain any untrue statement of a material fact or omit any fact necessary to make the statements therein not misleading, in any case that could reasonably be expected to result in a Material Adverse Change.

v) Acquisition Co. does not (i) maintain, contribute to, or otherwise have any obligation with respect to any multiemployer plan within the meaning of Section 3(37) of ERISA that is underfunded, and (ii) maintain, contribute to, or otherwise has any obligation with respect to any other benefit plans that is subject to Title IV of ERISA is underfunded.

vi) All requisite approvals by Governmental Authorities having jurisdiction over the Loan Parties and, to the Loan Parties’ knowledge, the Seller (as defined in the TBS Group Acquisition Agreement), with respect to the TBS Group Acquisition, have been obtained (including filings or approvals required under the Hart-Scott-Rodino Antitrust Improvements Act), except for any approval the failure to obtain could not reasonably be expected to be materially adverse to the interests of the Agent or Lenders.

vii) After giving effect to the transactions contemplated by the TBS Group Acquisition Documents, Acquisition Co. will have good title to the assets acquired pursuant to the TBS Group Acquisition Agreement, free and clear of all Liens other than Permitted Liens.

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viii) Borrowers will have Availability plus Qualified Cash in an amount equal to or greater than $25,000,000 immediately after giving effect to the consummation of the TBS Group Acquisition.

ix) The assets being acquired in the TBS Group Acquisition (other than a de minimis amount of assets in relation to Parent’s and its Restricted Subsidiaries’ total assets), are useful in or engaged in, as applicable, the business of Parent and its Restricted Subsidiaries or a business reasonably related thereto.

x) The assets being acquired in the TBS Group Acquisition (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or Canada.

7. Representations and Warranties. Each Loan Party hereby represents and warrants to Agent for the benefit of the Lender Group and the Bank Product Providers as follows:

(a) The execution, delivery, and performance by it of this Amendment (i) have been duly authorized by all necessary action of such Loan Party, and (ii) do not and will not (A) violate any material provision of federal, state, or local law or regulation applicable to such Loan Party or its Subsidiaries, the Governing Documents of such Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of such Loan Party except to the extent such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of such Loan Party, other than Permitted Liens, (D) require any approval of such Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of such Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change, or (C) require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, except for (1) registrations, consents, approvals, notices or other actions that have been obtained and that are still in force and effect, (2) filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, and (3) consents or approvals the failure of which to obtain could not reasonably be expected to cause a Material Adverse Change.

(b) This Amendment has been duly executed and delivered by such Loan Party. This Amendment is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has been issued and remains in force by any Governmental Authority against any Borrower or any Guarantor.

(d) The documents attached as Exhibit A hereto constitute correct and complete copies of the material TBS Group Acquisition Documents, including all schedules and exhibits thereto, to be entered into in connection with the TBS Group Acquisition. As of the date hereof, Acquisition Co. does not (i) maintain, contribute to, or otherwise have any obligation with respect to any multiemployer plan within the meaning of Section 3(37) of ERISA that is underfunded, and (ii) maintain, contribute to, or otherwise has any obligation with respect to any other benefit plans that is subject to Title IV of ERISA is underfunded.

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(e) As of the date hereof, all requisite approvals by Governmental Authorities having jurisdiction over the Loan Parties and, to the Loan Parties’ knowledge, the Seller (as defined in the TBS Group Acquisition Agreement), with respect to the TBS Group Acquisition, have been obtained (including filings or approvals required under the Hart-Scott-Rodino Antitrust Improvements Act), except for any approval the failure to obtain could not reasonably be expected to be materially adverse to the interests of the Agent or Lenders. After giving effect to the transactions contemplated by the TBS Group Acquisition Documents, Acquisition Co. will have good title to the assets acquired pursuant to the TBS Group Acquisition Agreement, free and clear of all Liens other than Permitted Liens.

(f) No Indebtedness will be incurred, assumed, or would exist with respect to Parent or its Restricted Subsidiaries as a result of the TBS Group Acquisition, other than Indebtedness permitted under clauses (l), (m), (o), or (q) of the definition of Permitted Indebtedness and no Liens will be incurred, assumed or would exist with respect to the assets of Parent or its Restricted Subsidiaries as a result of the TBS Group Acquisition other than Permitted Liens.

(g) Borrowers will have Availability plus Qualified Cash in an amount equal to or greater than $25,000,000 immediately after giving effect to the consummation of the TBS Group Acquisition.

(h) The assets being acquired in the TBS Group Acquisition (other than a de minimis amount of assets in relation to Parent’s and its Restricted Subsidiaries’ total assets), are useful in or engaged in, as applicable, the business of Parent and its Restricted Subsidiaries or a business reasonably related thereto.

(i) The assets being acquired in the TBS Group Acquisition (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or Canada.

(j) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the Seventh Amendment Effective Date and no condition exists which constitutes a Default or Event of Default as of the Seventh Amendment Effective Date.

(k) After giving effect to this Amendment, the representations and warranties in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

(l) This Amendment has been entered into without force or duress, of the free will of such Loan Party, and the decision of such Loan Party to enter into this Amendment is a fully informed decision and such Loan Party is aware of all legal and other ramifications of each such decision.

(m) It has read and understands this Amendment, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full and final form, and has been advised by its counsel of its rights and obligations hereunder.

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8. Payment of Costs and Fees. Borrowers agree to pay all reasonable out-of-pocket costs and expenses of Lender Group (including, without limitation, the reasonable fees and out-of-pocket disbursements of outside counsel to Agent and each Lender) in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto.

9. Choice of Law and Venue; Jury Trial Waiver; Judicial Reference. This Amendment SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AS AMENDED HEREBY, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

10. Further Assurances. At any time upon the reasonable request of Agent, each Loan Party shall promptly execute and deliver to Agent such Additional Documents as Agent shall request pursuant to the Credit Agreement and the other Loan Documents, in each case in form and substance reasonably satisfactory to Agent.

11. Effect on Loan Documents.

(a) The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document. Except for the amendments to the Credit Agreement expressly set forth herein, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The amendments, consents, waivers and modifications set forth herein are limited to the specified hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrowers remains in the sole and absolute discretion of Agent and the Lenders.

(b) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.

(c) To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.

12. Entire Agreement. This Amendment, and the terms and provisions hereof, the Credit Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter hereof, whether express or implied, oral or written. Each Loan Party consents to the amendments to the Credit

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Agreement set forth in this Amendment and agrees that all Obligations owing by such Person are unconditionally owing by such Person to Agent and the Lenders, without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever.

13. Reaffirmation of Obligations. Each Loan Party hereby reaffirms its obligations under each Loan Document to which it is a party. Each Loan Party hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with the Security Agreement or any other Loan Document, to Agent, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof.

14. Ratification. Each Loan Party hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as amended hereby.

15. Miscellaneous.

(a) This Amendment is a Loan Document. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be equally effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic image scan transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

(b) Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Amendment shall be severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Amendment.

(d) Neither this Amendment nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or any Loan Party, whether under any rule of construction or otherwise, on the basis that this Amendment has been drafted by any such Person. This Amendment has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e) Although each Guarantor has been informed of the matters set forth herein and has agreed to same, such Guarantor understands that neither Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty.

(f) The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

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(g) Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Amendment refer to this Amendment as a whole and not to any particular provision of this Amendment. Section, subsection, clause, schedule, and exhibit references herein are to this Amendment unless otherwise specified. Any reference in this Amendment to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash (or cash collateralization in accordance with the terms of the Credit Agreement) of all Obligations other than contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of the Credit Agreement and the full and final termination of any commitment to extend any financial accommodations under the Credit Agreement and any other Loan Document. The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.

16. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers as of the date first written above.

STOCK BUILDING SUPPLY HOLDINGS II, LLC,
a Delaware limited liability company, as Parent and as a Guarantor
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
STOCK BUILDING SUPPLY HOLDINGS, LLC,
a Virginia limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
COLEMAN FLOOR, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
STOCK BUILDING SUPPLY, LLC, a North Carolina limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
STOCK BUILDING SUPPLY OF FLORIDA, LLC, a Florida limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT]

STOCK BUILDING SUPPLY MIDWEST, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
STOCK BUILDING SUPPLY WEST, LLC,
a Utah limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
STOCK BUILDING SUPPLY OF ARKANSAS, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
SBS / BISON BUILDING MATERIALS, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
COLEMAN FLOOR SOUTHEAST, LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer
PEACH ACQUISITION CO., LLC,
a Delaware limited liability company, as a Borrower
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT]

STOCK BUILDING SUPPLY WEST (USA), INC.,
a Delaware corporation, as a Guarantor
By:	/s/ James F. Major, Jr.
Name:	James F. Major, Jr.
Title:	Executive Vice President and Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT]

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company (formerly known as Wells Fargo Foothill, LLC), as Agent and as a Lender
By:	/s/ Amelie Yehros
Name:	Amelie Yehros
Title:	SVP

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT]

BANK OF AMERICA, N.A.,
as a Lender
By:	/s/ Steven W. Sharp
Name:	Steven W. Sharp
Title:	Senior Vice President

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND CONSENT]

EX-10.9

Exhibit 10.9

PROFESSIONAL SERVICES AGREEMENT

THIS PROFESSIONAL SERVICES AGREEMENT, dated as of May 5, 2009 (the “Effective Date”), is by and between Glendon Partners, Inc., a Delaware corporation (“Glendon”), and Saturn Acquisition Holdings, LLC, a Delaware limited liability company (the “Company”). Glendon and the Company are collectively referred to herein as the “Parties.”

WHEREAS, Glendon maintains a group of professional business consultants with expertise in the areas of finance, tax, accounting, project and corporate financing, legal affairs, business and operational management, facilities management, sales and marketing, technology development, human resources and mergers and acquisitions support; and

WHEREAS, the Company desires to receive from Glendon, and Glendon desires to provide to the Company, professional services in certain of the areas described in the preceding paragraph as from time to time may be requested by the Company (the “Services”).

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

1. RELATIONSHIP OF THE PARTIES.

a. Engagement. The Company hereby engages Glendon to provide such of the Services as the Company from time to time shall request, and Glendon agrees to be so engaged.

b. Independent Relationship. Glendon is and will remain an independent contractor and the provisions of this Agreement are not intended to create any partnership, joint venture, agency or employment relationship between the Parties. Each Party shall be solely responsible for and shall comply with all federal, state and local laws pertaining to employment relationships, income tax withholding, unemployment and disability compensation contributions and other employment-related requirements.

2. FEES.

a. Consulting Fees. The Company shall pay to Glendon consulting fees for the Services (the “Consulting Fees”) calculated on the basis of the actual hours spent by Glendon employees rendering the Services multiplied by an hourly rate (inclusive of administrative support) that (i) takes into account the personal expertise and experience of the individual service providers acting on behalf of Glendon in the framework of this Agreement, and (ii) is not materially less favorable to the Company than the rate generally chargeable for the same services by a non-affiliated third-party consulting or advisory firm in an arm’s length consulting or service arrangement. A list of the present service providers of Glendon with a description of their field of expertise and current hourly rates is attached hereto as Schedule 1. Glendon and the Company will from time to time update Schedule 1 to reflect the current Glendon employees providing the Services and their current rates.

b. Invoicing. Glendon will periodically (but no less than quarterly) present the Company with an invoice, containing a detailed overview of the Services that were provided during the period since the last such invoice, the actual hours spent on such services by each individual service provider, and the total amount of Consulting Fees due for such services. Unless otherwise agreed in writing by Glendon, the Consulting Fees shall be due and payable within 30 days of invoice.

c. Expenses. In addition, the Company shall reimburse Glendon for all out- of-pocket expenses incurred by Glendon in the performance of the Services. Such reimbursement shall be made promptly upon the presentation of an invoice setting forth such expenses.

3. TERM. The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier terminated as provided herein, shall terminate on the date that is one year from the Effective Date; provided, that this Agreement will automatically renew on each anniversary of the Effective Date for an additional one-year term unless the Parties mutually agree not to renew this Agreement prior to the expiration of the then-current Term.

4. CONFIDENTIALITY AND NON-DISCLOSURE.

a. All corporate management services provided hereunder by Glendon for use by the Company and all information which concerns the business of either Party disclosed to the other Party in the course of the activities of the Agreement (“Confidential Matter”), shall be treated as confidential and shall not be disclosed by the recipient to any third party. For avoidance of doubt, Confidential Matter shall include correspondence, memoranda, notes, summaries and models containing Confidential Matter prepared by a Party receiving Confidential Matter, but shall not include: (i) information which was in the possession of the receiving Party at the time such information was disclosed; (ii) information which enters the public domain, other than as a result of a breach of this Agreement by the receiving Party; and (iii) information which becomes available to the receiving Party from a source other than the disclosing Party, which source is not under an obligation to keep such information confidential. The receiving Party shall use the same care to keep Confidential Matter confidential as it uses to preserve the confidentiality of its own Confidential Matter, but no less than employing reasonable precautions for information having a high degree of competitive significance. Each Party shall take appropriate measures to insure that its employees are aware of the restrictions contained herein.

b. Notwithstanding the foregoing, a Party may disclose Confidential Matter of the other Party to the extent required by law, provided that before making any such disclosure, the receiving Party advises the disclosing Party of the disclosure required and cooperates with the disclosing Party in all legitimate efforts to avoid or limit disclosure at the disclosing Party’s expense.

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5. TERMINATION OF THE AGREEMENT. This Agreement may be terminated prior to the expiration of the Term by a Party upon written notice to the other Party upon the occurrence of a Termination Event involving the other Party. As used herein, a “Termination Event” shall mean any of the following:

(a) A Party shall fail to perform in any material respect any of its obligations hereunder (including a failure to pay any amounts required to be paid hereunder) and such failure shall continue for at least ten (10) days after written notice of such failure; or

(b) A Party is dissolved, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors, fails to pay debts as they become due, or becomes the subject of any bankruptcy, insolvency or debtor rehabilitation proceeding.

In addition, Glendon may terminate this Agreement prior to the expiration of the Term by providing written notice to the Company in the event of: (i) any sale of all or substantially all of the assets of the Company in a single transaction or series of related transactions, or (ii) the sale by the Company’s parent company of majority control of the Company.

Any termination of this Agreement pursuant to this Section 5 shall be without prejudice to any other rights of the Party.

6. INDEMNIFICATION.

a. The Company shall, to the fullest extent permitted by applicable law, indemnify and hold each Indemnified Party (as defined below) harmless from and against any and all Losses (as defined below) incurred by such Indemnified Party which directly or indirectly arise out of, relate to or result from: (i) the performance of the Services, or (ii) the ongoing operation of the Company’s business. As used herein, “Indemnified Party” means any of Glendon and its affiliates and their respective officers, directors, members, shareholders, managers, employees, agents, subcontractors, successors and assigns. As used herein, ‘‘Losses” means any and all losses, damages, liabilities, claims, demands, actions, suits, proceedings, judgments, fines, penalties, amounts paid in settlement, reasonable attorneys’ fees and other costs and expenses incurred in prosecuting, defending or investigating any claim or threatened claim. Notwithstanding the foregoing, in no event shall the Company be required to indemnify any Indemnified Party for any Losses for any act or omission with respect to which a court of competent jurisdiction has issued a final, nonappealable judgment finding that such act or omission arose out of such Indemnified Party’s gross negligence, wanton malfeasance, willful or illegal conduct or conduct that was intentionally injurious to the Company.

b. In the event a claim for damages arises for which an Indemnified Person shall be entitled to indemnification hereunder, such Indemnified Person shall notify the Company in writing within thirty (30) days of the first receipt of notice of such claim; provided that a failure by an Indemnified Person to notify the Company within such time shall not relieve the Company of its obligations hereunder, except to the extent of actual prejudice caused by such delay. Upon receipt by the Company of a notice from an Indemnified Person with respect to any

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claim of a third party against such Indemnified Person, the Company shall assume the defense of such claim with counsel reasonably satisfactory to such Indemnified Person. Such Indemnified Person shall cooperate to the extent reasonably requested by the Company in defense or prosecution thereof and shall furnish such records, information, and similar documents in association therewith as may reasonably be required in the course of the defense of the claim. The Company shall not settle any claim for which indemnification has been sought hereunder without the written consent of the applicable Indemnified Party unless the terms of such settlement (i) provide for no relief other than the payment of monetary damages, which amounts will be fully indemnified pursuant to Section 6(a), and (ii) contain no admission of fault. An Indemnified Person shall have the right to participate in the defense of such claim through counsel of its choice, at its expense, however the Company shall retain control over the litigation and authority to resolve such claim subject to this Section. The Company shall advance any out- of-pocket expenses incurred by an Indemnified Person upon receipt of an undertaking to return such amounts if it is finally determined that the Indemnified Person is not entitled to indemnification pursuant to Section 6(a) hereof.

7. DISCLAIMER OF PROFESSIONAL LIABILITY. The Parties acknowledge that certain Glendon professionals may be licensed as attorneys or accountants and that certain aspects of the Services may relate to matters that could customarily fall within the scope of legal representation and/or public accountancy. The Company hereby acknowledges and agrees that none of the Services provided to the Company shall be deemed to entail the practice of law or public accountancy on behalf of the Company, or to create an attorney-client or accountant-client relationship between the Company, on the one hand, and Glendon or any Glendon professional, on the other hand. As a material inducement to Glendon to enter into this Agreement and perform the Services hereunder, the Company hereby disclaims and releases each Indemnified Person from any liability arising under applicable case law, statute or rule with respect to professional responsibility for the practice of law or public accountancy.

8. MISCELLANEOUS.

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

b. Assignment. Neither Party may transfer its interest (or any portion thereof) in this Agreement without the consent of the other Party, provided that Glendon may delegate its duties to perform any or all of the Services, and assign its rights to receive any or all of the Consulting Fees, to any affiliate, provided that Glendon shall remain bound by this Agreement.

c. No Waiver. No failure or delay on the part of any party to this Agreement in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.

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d. Entire Agreement. This Agreement sets forth the entire understanding between the Parties with respect to the subject matter hereof, and there are no terms, conditions, representations, warranties or covenants other than those contained herein. This Agreement supercedes any previous agreements or understandings between the parties with respect to the subject matter hereof, whether written or oral.

e. Third Party Beneficiaries. Except as expressly set forth in Sections 6 and 7, there are no third party beneficiaries to this Agreement.

f. Attorneys Fees. The prevailing party in any proceeding brought to interpret or enforce any provision of this Agreement or to recover for breach thereof shall be entitled to recover, in addition to such other relief as may be awarded, the reasonable fees and expenses of its counsel.

g. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of Delaware, without regard to conflicts of laws principles thereunder.

h. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original.

i. Construction. The headings to the various subdivisions of this Agreement are for convenience of reference only and shall not define or limit any of the terms of provisions hereof. The language in all parts of this Agreement will in all cases be construed as a whole and in accordance with its fair meaning and not restricted for or against either party.

IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the date first above written.

GLENDON PARTNERS, INC.		SATURN ACQUISITION HOLDINGS, LLC
BY	/s/ Joseph P. Page	By	/s/ Steven G. Eisner
	Joseph P. Page		Steven G. Eisner
	Chief Operating Officer		Vice President

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Schedule 1

Glendon Professional	Area of Expertise	Hourly Rate
AWAD, JOE	Legal	$	300
BARNETT, LINDA	Administrative	$	100
BOCCHI, RAOUL	Operations London	$	250
BRANDT, MICHAEL	Operations	$	700
BRONSTEIN, ANDREW	Finance	$	700
CHAND, IVA	Administrative	$	100
COOK, LES	Operations	$	375
EISNER, STEVE	Legal	$	550
FONTAINE, TERESA	Administrative	$	100
FREEDMAN, ANDY	Finance	$	700
HAMMAD, SAAD	Operations London	$	700
HANS, KURT	Tax	$	450
HARMON, KARI	Operations	$	350
HARNISH, ERIC	Finance	$	700
HATTLER, ERIC	Legal	$	800
KIM, EUGENE	Operations	$	300
KUTRIEH, TAREK	Operations	$	350
LOTZ, CINDY	Administrative	$	100
McGUIRT, TAMI	Administrative	$	100
MEYER, TIMOTHY	Operations	$	700
MOSSIAH, NANCY	Administrative	$	100
NOLD, MICHAEL	Operations	$	700
NUTTING, MICHAEL	Finance	$	500
PHILLIPS, ANNE	Audit & Risk Management	$	400
ROSSEN, JEREMY	HR	$	500
STONE, THOMAS	Tax	$	225
TAPPIN, TODD	Finance	$	700
TERRELL, BRITT	Debt Financing	$	450
TIS, ERIC	Finance	$	350
TURNER, DEWEY	Operations	$	600
VON DER LIETH, JENNIFER	Administrative	$	100
WAGONER, KAREN	Tax	$	250

EX-10.10

Exhibit 10.10

MANAGEMENT SERVICES AGREEMENT

THIS MANAGEMENT SERVICES AGREEMENT, dated effective as of May 4, 2009, is by and between The Gores Group, LLC, a Delaware limited liability company (“Gores”), and Saturn Acquisition Holdings, LLC, a Delaware limited liability company (the “Company”). Gores and the Company are collectively referred to herein as the “Parties.”

WHEREAS, Gores provides a corporate infrastructure that provides expertise in various areas, including without limitation: general corporate strategy and oversight; finance, tax and legal matters; management and operations; corporate governance; facilities leases and subleases; sales, marketing and customer relations; technology; and human resources strategy.

WHEREAS, the Company desires to receive from Gores, and Gores desires to provide to the Company, certain of the services described in the preceding paragraph on a regular periodic basis as necessary or desirable to assist the Company in its governance and the oversight of its business (the “Monitoring Services”).

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

1. MONITORING SERVICES. Gores will provide the Monitoring Services to the Company as and when necessary, including without limitation the following:

• Participation of Gores officers and employees as members of the Company’s Board of Directors and other governing bodies

• Participation of Gores officers and employees in monthly management meetings

• Other assistance to the Company in connection with the development of general corporate strategy and corporate governance functions

• Finance and tax oversight

• Oversight and strategic support of the Company’s internal and external legal services

• Periodic high-level managerial and operational oversight

• Mergers and acquisitions advice and support

• Facilities advice and support

• Sales, marketing and customer relations advice and support

• Strategic human resources support

2. MONITORING FEE. In consideration of the provision of the Monitoring Services by Gores, the Company shall pay to Gores a monitoring fee (the “Monitoring Fee”) equal to $83,333.33 per month. Such amount shall be paid in United States dollars on a monthly basis.

3. OCCASIONAL SERVICES. From time to time the Company may request that Gores provide additional services relating to specific initiatives, situations or circumstances affecting the

Company’s business that are supplemental to the Monitoring Services (the “Occasional Services”). Gores shall provide such Occasional Services as are mutually agreed to between the Parties and shall charge the Company a fee for the Occasional Services in an amount and subject to the conditions as mutually agreed to by the Parties.

4. RESTRICTIONS. Notwithstanding anything herein to the contrary, the payment of the Monitoring Fee and any fees for Occasional Services performed hereunder is subject to any restrictions on such payment imposed by the Company’s creditors, preferred shareholders, partners or members, or those of its parent company; provided, however, that in the event that any such restriction renders the Company unable to make any such payment, the Company shall not be relieved of its obligation to make such payment and shall do so as promptly as practicable following the lapse of the applicable restriction.

5. EXPENSES. In addition to the Monitoring Fee and any fees for Occasional Services, the Company shall reimburse Gores for all actual and reasonable out-of-pocket expenses incurred by Gores in the performance of the services provided hereunder. Such reimbursement shall be made within 30 days following the presentation of an invoice setting forth such expenses.

6. TERM. The term of this Agreement (the “Term”) shall commence on the date hereof and, unless earlier terminated as provided herein, shall terminate on July 31, 2010; provided, that this Agreement will automatically renew annually for an additional one year Term unless the Parties mutually agree not to renew this Agreement prior to the expiration of the then-current Term.

7. CONFIDENTIALITY AND NON-DISCLOSURE.

(a) All management services provided hereunder by Gores for use by the Company and all information which concerns the business of either Party disclosed to the other Party in the course of the activities of the Agreement (“Confidential Matter”), shall be treated as confidential and shall not be disclosed by the recipient to any third party. For avoidance of doubt, Confidential Matter shall include correspondence, memoranda, notes, summaries and models containing Confidential Matter prepared by a Party receiving Confidential Matter, but shall not include: (i) information which was in the possession of the receiving Party at the time such information was disclosed; (ii) information which enters the public domain, other than as a result of a breach of this Agreement by the receiving Party; and (iii) information which becomes available to the receiving Party from a source other than the disclosing Party, which source is not under an obligation to keep such information confidential. The receiving Party shall use the same care to keep Confidential Matter confidential as it uses to preserve the confidentiality of its own Confidential Matter, but no less than employing reasonable precautions for information having a high degree of competitive significance. Each Party shall take appropriate measures to insure that its employees are aware of the restrictions contained herein.

(b) Notwithstanding the foregoing, a Party may disclose Confidential Matter of the other Party to the extent required by law, provided that before making any such disclosure, the receiving Party advises the disclosing Party of the disclosure required and cooperates with the disclosing Party in all legitimate efforts to avoid or limit disclosure at the disclosing Party’s expense.

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8. ASSIGNMENT. Neither Party may transfer its interest (or any portion thereof) in this Agreement without the consent of the other Party, provided that Gores may delegate its duties to perform any or all of the Monitoring Services or Occasional Services, and assign its rights to receive any or all of the Monitoring Fee or Consulting Fees, to any affiliate, provided that Gores shall remain bound by this Agreement.

9. TERMINATION OF THE AGREEMENT. This Agreement may be terminated prior to the expiration of the Term by a Party upon written notice to the other Party upon the occurrence of a Termination Event involving the other Party. As used herein, a “Termination Event” shall mean any of the following:

(a) A Party shall fail to perform in any material respect any of its obligations hereunder (including a failure to pay any amounts required to be paid hereunder) and such failure shall continue for at least ten (10) days after written notice of such failure; or

(b) A Party is dissolved, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors, fails to pay debts as they become due, or becomes the subject of any bankruptcy, insolvency or debtor rehabilitation proceeding.

In addition, Gores may terminate this Agreement prior to the expiration of the Term by providing written notice to the Company in the event of: (i) any sale of all or substantially all of the assets of the Company in a single transaction or series of related transactions, or (ii) the sale by the Company’s parent company of majority control of the Company.

Any termination of this Agreement pursuant to this Section 9 shall be without prejudice to any other rights of the Party.

10. INDEMNIFICATION.

(a) The Company hereby indemnifies and agrees to hold Gores, its affiliates, its and their officers, directors, employees, agents, subcontractors and assigns (“Indemnified Persons”) harmless from and against all costs, losses, expenses, liabilities, claims, demands, actions, suits, proceedings or damages of any kind or nature (“Losses”) which shall arise during the course of business and by virtue of any activities which may be attributable hereto, except to the extent such Losses arise from the gross negligence or willful misconduct of the person seeking indemnification.

(b) In the event a claim for damages arises for which an Indemnified Person shall be entitled to indemnification hereunder, such Indemnified Person shall notify the Company in writing within thirty (30) days of the first receipt of notice of such claim; provided that a failure by an Indemnified Person to notify the Company within such time shall not relieve the Company of its obligations hereunder, except to the extent of actual prejudice caused by such delay. Upon receipt by the Company of a notice from an Indemnified Person with respect to any claim of a third party

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against such Indemnified Person, the Company shall assume the defense of such claim with counsel reasonably satisfactory to such Indemnified Person. Such Indemnified Person shall cooperate to the extent reasonably requested by the Company in defense or prosecution thereof and shall furnish such records, information, and similar documents in association therewith as may reasonably be required in the course of the defense of the claim. The Company shall have the right to settle any claim for which indemnification has been sought hereunder; provided that to the extent that such settlement requires an Indemnified Person to take, or prohibits an Indemnified Person from taking, any action or purports to obligate an Indemnified Person in any manner, then the Company shall not settle such claim without the prior written consent of such Indemnified Person (which consent may be granted or withheld in such Indemnified Person’s sole discretion). An Indemnified Person shall have the right to participate in the defense of such claim through counsel of its choice, at its expense, however the Company shall retain control over the litigation and authority to resolve such claim subject to this Section. The Company shall advance any out-of-pocket expenses incurred by an Indemnified Person upon receipt of an undertaking to return such amounts if it is finally determined that the Indemnified Person is not entitled to indemnification hereunder.

11. MISCELLANEOUS.

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

(b) No failure or delay on the part of any party to this Agreement in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.

(c) This Agreement sets forth the entire understanding between the Parties with respect to the subject matter hereof, and there are no terms, conditions, representations, warranties or covenants other than those contained herein. This Agreement supercedes any previous agreements or understandings between the parties with respect to the subject matter hereof, whether written or oral. There are no third party beneficiaries to this Agreement.

(d) The prevailing party in any proceeding brought to interpret or enforce any provision of this Agreement or to recover for breach thereof shall be entitled to recover, in addition to such other relief as may be awarded, the reasonable fees, expenses of its counsel.

(e) This Agreement shall be construed in accordance with and governed by the laws of Delaware, without regard to conflicts of laws principles thereunder.

(f) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original.

(g) The headings to the various subdivisions of this Agreement are for convenience of reference only and shall not define or limit any of the terms of provisions hereof. The language in all parts of this Agreement will in all cases be construed as a whole and in accordance with its fair meaning and not restricted for or against either party.

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IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the date first above written.

THE GORES GROUP, LLC		SATURN ACQUISITION HOLDINGS, LLC
By	/s/ Ian R. Weingerten	By	/s/ Ian R. Weingerten
Name:	Ian R. Weingarten	Name:	Ian R. Weingarten
Title:	Managing Director	Title:	Vice President

EX-10.11

Exhibit 10.11

CONTRIBUTION AGREEMENT

This Contribution Agreement (the “Agreement”), effective as of November 16, 2011 (the “Effective Date”), is entered into by and among Saturn Acquisition Holdings, LLC, a Delaware limited liability company (the “Company”) and Gores Building Holdings, LLC, a Delaware limited liability company (the “Purchaser”). Capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Amended and Restated Limited Liability Company Agreement of the Company, dated as of May 5, 2009, as amended.

RECITALS

WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, certain equity securities of the Company (the “Subject Shares”) upon the terms and subject to the conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1. Subject Shares. The parties shall negotiate in good faith with respect to the amounts, classes, rights and other terms and conditions of the Subject Shares. Promptly following the conclusion of such negotiations, the Company shall issue and deliver the Subject Shares to the Purchaser against payment by Purchaser of the Purchase Price (as defined below) on the date hereof.

Section 2. Closing. The purchase and sale of the Subject Shares shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3200, Los Angeles, California 90071, concurrently with the execution of this Agreement (the “Closing”).

Section 3. Purchase Price. The aggregate amount of consideration to be paid by the Purchaser at the Closing for the Subject Shares shall be $5,000,000 (the “Purchase Price”). The Purchase Price shall be paid to the Company by transfer of immediately available funds.

Section 4. Representations and Warranties of the Parties. Each party hereby represents and warrants to the other party as follows:

(a) Power and Authority. The execution, delivery and performance by the party of this Agreement and the consummation by the party of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the party. This Agreement has been duly and validly executed and delivered by the party and constitutes the valid and binding obligation of the party, enforceable against the party in accordance with its terms, except to the extent that such enforceability (i) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally and (ii) is subject to general principles of equity.

(b) No Conflicts. The execution, delivery and performance of this Agreement by the party and the consummation by the party of the transactions contemplated hereby will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law, statute, rule or regulation to which the party is subject, (ii) violate any order, judgment or decree applicable to the party or (iii) conflict with, or result in a breach or default under, any term or condition of the organizational documents of the party or any material agreement or other instrument to which the party is a party or by which it may be bound; except for violations, conflicts, breaches or defaults which in the aggregate would not materially hinder or impair the consummation of the transactions contemplated hereby.

(c) Consents. No consent, approval or authorization of, exemption by, or filing with, any governmental or regulatory authority is required in connection with the execution, delivery and performance by the party of this Agreement or the consummation by the party of the transactions contemplated hereby.

Section 5. Fees and Expenses. The parties agree to pay all of the fees and expenses incurred by the parties hereto in connection with this Agreement, including, but not limited to the fees, expenses and disbursements of such parties, counsel and other advisors.

Section 6. Notices. All notices, consents, waivers or other communications required or permitted hereunder shall be in writing and shall sent by electronic mail, registered or certified mail, return receipt requested, postage prepaid or otherwise delivered by hand, messenger, internationally recognized courier or facsimile transmission, addressed:

(a)	If sent to the Company, to:
	Saturn Acquisition Company, LLC
	8020 Arco Corporate Drive
	Raleigh, NC 276171
	Attention:	Bryan Yeazel
	Facsimile:	(919) 431-1180
	Email:	bryan.yeazel@stocksupply.com
(b)	If sent to Purchaser, to:
	Gores Building Holdings, LLC
	c/o The Gores Group, LLC
	10877 Wilshire Boulevard, 18th Floor
	Los Angeles, CA 90024
	Attention:	Steve Eisner
	Facsimile:	(310) 209-3310
	Email:	seisner@gores.com

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or as having been given when delivered, if delivered by hand or by messenger (or overnight courier), 24 hours after delivery by electronic mail, 24 hours after confirmed receipt if sent by facsimile transmission or at the earlier of its receipt or on the fifth day after mailing, if mailed, as aforesaid.

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Section 7. Confidentiality. The parties agree to keep the terms and conditions of this Agreement strictly confidential and not disclose such terms without the prior written consent of the other party, except (a) as may be required by law and (b) that each party may disclose such terms and conditions to its representatives, advisors and counsel who acknowledge the confidentiality hereof.

Section 8. Miscellaneous.

(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns, and no other person will have any rights or obligation hereunder. None of the parties may assign (whether by operation of law or otherwise) this Agreement.

(c) This Agreement constitutes the full and entire understanding and agreement between the parties hereto with regard to the subject matter hereof and supersedes all prior oral or written (and all contemporaneous oral) agreements or understandings with respect to the subject matter hereof.

(d) No delay or omission to exercise any right power or remedy accruing to any party hereto upon any breach or default of the other party hereto under this Agreement shall impair any such right, power or remedy or such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach or default under this agreement, or any waiver on the part of any party hereto of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any party, shall be cumulative and not alternative.

(e) This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the parties hereto, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

(f) If any provision of this Agreement, or its application to any party hereto, shall be, or be found by an authority of competent jurisdiction to be, invalid or unenforceable in whole or in part, such provision shall be constructed and applied so as to give effect, to the greatest extent possible, the original intent of the parties hereto. The invalidity or unenforceability of any of the provisions of this Agreement shall not affect the other validity herein, all of which shall remain in full force and effect.

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(g) The parties stipulate that the remedies at law of the parties hereto in the event of any default or threatened default by either party in the performance of or compliance with any of the terms of this Agreement are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. The exercise of any remedy by any of the parties shall not be deemed an election of remedies or preclude any of the parties from exercising any other remedies in the future.

(h) This Agreement may be amended, modified or supplemented only by a written instrument signed by all of the parties.

(i) All of the parties hereto irrevocably submits, in any legal action or proceeding relating to this Agreement, to the jurisdiction of the courts of the United States and the State of California, in the city of Los Angeles, and consents that (1) any such action or proceeding may be brought in such courts and waive any objection that they may now or hereafter have to the venue of such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and (2) service of legal process in any such action or proceeding may be made upon it by certified mail, return receipt requested, postage prepaid, to such party at its address specified in Section 6, provided, that nothing herein shall prevent any party hereto from bringing any action in any other jurisdiction.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Contribution Agreement, with effect as of the date first written above.

SATURN ACQUISITION HOLDINGS, LLC, a Delaware limited liability company
By:	/s/ BRYAN J. YEAZEL
	Name:	BRYAN J. YEAZEL
	Title:	EXECUTIVE VICE PRESIDENT & GENERAL COUNSEL
GORES BUILDING HOLDINGS, LLC, a Delaware limited liability company
By:	/s/ Steven G. Eisner
	Name:	Steven G. Eisner
	Title:	Vice President

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EX-10.14

Exhibit 10.14

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of November 11, 2010 between Jeff Rea (“Executive”) and Stock Building Supply Holdings, LLC, a Delaware limited liability company (the “Company”).

RECITALS

WHEREAS, Executive has substantial expertise and experience in the building supply industry and the field of executive management; and

WHEREAS, the Company desires to employ Executive, and Executive has agreed to enter into employment with the Company, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the Company and Executive hereby agree as follows:

TERMS AND CONDITIONS

SECTION 1

EMPLOYMENT

1.1 Employment. The Company hereby employs Executive and Executive hereby accepts such employment by the Company for the period and upon the terms and conditions contained in this Agreement.

1.2 Position and Duties. Executive shall serve the Company as its Chief Executive Officer. Executive shall have all of the powers and duties in such capacity that are customary to the powers and duties of those of a Chief Executive Officer of a company within the industry in which the Company operates, including specifically the following: setting the Company’s operational and financial objectives, annual budget and quarterly forecasts in conjunction with the Company’s long range plan to maximize the Company’s value and efficiency; defining and implementing the Company’s policies and systems of control to ensure that all Company activities are carried out in accordance with the Company’s overall business principles, goals and objectives; and indirectly overseeing and/or supervising all of the Company’s operations, facilities and personnel. The foregoing powers and duties shall be subject to the general direction of the Company’s Board of Directors (the “Board”). Executive shall report directly to Board and all employees shall report to Executive or his designee. Executive shall be appointed or elected to the Board and the Board of Saturn Acquisition Holdings, LLC throughout his service as Chief Executive Officer. Executive shall devote Executive’s substantially full business time, attention and efforts to the affairs of the Company and Executive shall not engage in any other business duties or pursuits or render any services of a professional nature to any other entity or person, or serve on any other for profit boards of directors, without the prior written consent of the Board, provided that Executive may be involved in charitable activities and manage his personal passive investments provided

that the foregoing does not materially interfere with Executive’s performance of his duties hereunder. In addition, in the event that any parent entity is or becomes an operating company or becomes publicly traded, Executive shall be chief executive officer and a board member of such entity.

1.3 Effective Date; Indefinite Term. Executive’s employment under this Agreement shall commence on November 15, 2010 (the “Effective Date”) and shall continue for an indefinite term, until terminated in accordance with Section 3 below. Certain provisions, however, as more fully set forth in Sections 4, 5 and 6 below, continue in effect beyond the date of the termination of Executive’s employment (the “Termination Date”).

SECTION 2

COMPENSATION AND BENEFITS

2.1 Compensation.

(a) Base Salary. The Company shall pay to Executive an annual base salary at the rate of $600,000 each calendar year (as increased from time to time, “Base Salary”), payable in substantially equal semi-monthly or bi-weekly amounts, in accordance with the Company’s ordinary payroll and withholding practices from time to time in effect for its employees. During the term of employment hereunder, the Executive’s salary shall be reviewed from time to time (but no less than annually) to determine whether an increase in Executive’s salary is appropriate (but no decrease). Any such increase shall be at the sole discretion of the Board.

(b) Annual Bonus. During the term of employment, Executive shall be eligible to receive an annual bonus (“Annual Bonus”) under the Company’s incentive award plan for management and executives as from time to time adopted by the Board (the “Incentive Plan”). The Annual Bonus shall be determined based on a target bonus equal to 75% of Base Salary, with the actual amount of the Annual Bonus to be determined by the Board based upon percentage achievement of certain Company-wide and individual performance goals or milestones for each respective calendar year (or any portion thereof), as established in good faith under the Incentive Plan. The Incentive Plan shall also provide for lower and higher (maximum 2 times target) bonus levels based upon higher or lower achievements. Any Annual Bonus earned for the 2010 calendar year will be pro-rated based on the Effective Date. Executive shall be entitled to receive the Annual Bonus (to the extent earned in accordance with the Incentive Plan) only, except as otherwise provided herein, if Executive remains employed by the Company through the date that such Annual Bonus is paid in accordance with terms of the Incentive Plan, and Executive expressly acknowledges that, except as otherwise provided herein, the Annual Bonus, if any, is not earned by Executive until such time as it is paid pursuant to the Incentive Plan.

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2.2 Benefits.

(a) Generally. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable benefits plans, policies or contracts, in all employee benefits programs that the Company may adopt for its U.S. employees generally providing for sick or other leave, vacation, group health, disability and life insurance benefits. Executive shall be eligible to participate in the Company’s 401(k) plan on the terms and conditions and qualifications of such plan from time to time in effect, with a Company match (if any) no less favorable than that provided to any other Company executive.

(b) Executive Plans. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable plans, policies or contracts, in all benefits or fringe benefits which are in effect generally for the Company’s executive personnel from time to time.

(c) Vacation Days. Executive shall be entitled to four (4) weeks’ paid vacation per year in addition to the Company’s normal holiday schedule.

2.3 Equity Participation. In addition to the compensation described above, subject to the approval of the Board, Executive will be entitled to receive an equity interest in the Company’s parent company, Saturn Acquisition Holdings, LLC (“Parent”), equal to 3.00% of the common equity value of Parent above the fair market value of such common equity on the date of grant (the “Equity Interest”). The terms and specific form of the Equity Interest will be determined by Parent in consultation with Executive. The Equity Interest will vest on each of the first four anniversary dates of the Effective Date as follows: 1^st anniversary — 10%, 2^nd anniversary — 20%, 3^rd anniversary — 25% and 4^th anniversary — 45%. Vesting of the Equity Interest will accelerate and become 100% vested upon a liquidity event for the Company (as defined in the Option Agreement). If Executive’s employment is terminated voluntarily by Executive, by the Company without Cause (as defined below) or due to Executive’s death or Disability (as defined below), any unvested portion of Executive’s Equity Interest will be forfeited and the Company shall have the right to redeem Executive’s vested Equity Interest at a price that approximates the fair market value of such vested Equity Interest (in accordance with the Option Agreement). If Executive’s employment is terminated by the Company for Cause, Executive’s entire Equity Interest will be forfeited.

2.4 Expense Reimbursement. The Company shall pay or reimburse Executive for all reasonable expenses incurred in connection with performing his duties upon presentation of documents in accordance with the reasonable procedures established by the Company. It is expected that Executive will have to do extensive travel to Raleigh, North Carolina and other Company business locations. All reasonable expenses incurred by Executive in connection with such travel and lodging at Company business locations shall be treated as reasonable business expenses. The parties will re-evaluate the location of Executive’s primary residence on the first anniversary date of this Agreement to mutually determine if Executive will relocate and, if so, to agree upon an appropriate relocation package.

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SECTION 3

TERMINATION

3.1 By the Company:

(a) For Cause. The Company shall have the right at any time, exercisable upon written notice, to terminate the Executive’s employment for Cause. As used in this Agreement, “Cause” shall mean that the Executive:

(i) has been convicted of, or has entered a pleading of guilty or nolo contendre to, a felony (other than DUI or similar felony) or any crime involving fraud, theft, embezzlement or other act of dishonesty involving the Company;

(ii) has knowingly and intentionally participated in fraud, embezzlement, or other act of dishonesty involving the Company;

(iii) materially fails to attempt in good faith to perform Executive’s duties required under Executive’s employment by the Company (it being agreed that failure of the Company to achieve operating results or similar poor performance of the Company shall not, in and of itself, be deemed a failure to attempt in good faith to perform Executive’s duties);

(iv) fails to attempt in good faith to comply with a lawful directive of the Board that is consistent with the Company’s business practices and Code of Ethics;

(v) engages in willful misconduct as a result of which Executive receives a material and improper personal benefit at the expense of the Company, or accidental misconduct resulting in such a benefit which Executive does not promptly report to the Company and redress promptly upon becoming aware of such benefit;

(vi) in carrying out his duties under this Agreement, has engaged in willful misconduct or omissions constituting gross negligence or willful misconduct resulting in any of the foregoing, or which, in the good faith opinion of the Board, could be expected to result in, substantial economic harm to the Company;

(vii) has failed for any reason to correct, cease or alter any action or omission that (A) constitutes a material breach of this Agreement or the Confidentiality Agreement (as defined below), or (B) constitutes a material breach of his duty of loyalty to the Company; or

(viii) has improperly disclosed any material Proprietary Information (as defined below) without authorization except as otherwise permitted by this Agreement, another agreement between the parties or any Company policy in effect at the time of disclosure.

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For purposes of the definition of “Cause”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

The Company shall provide written notice to Executive of any act or omission that the Company believes constitutes grounds for “Cause” pursuant to clause (iii), (iv) or (vii) above, and no such act or omission shall constitute “Cause” unless Executive fails to remedy such act or omission within ten (10) days of the receipt of such notice; provided that such ten (10) day cure period shall not apply with respect to any matter that is incapable of cure within such period. Furthermore, no act shall be deemed willful unless taken in bad faith and without a good faith belief that it is not adverse to the best interests of the Company.

(b) Due to Death or Disability. Executive’s employment shall terminate upon Executive’s death and the Company may terminate Executive’s employment due to Executive’s Disability. As used in this Agreement, “Disability” shall mean any physical or mental disability or incapacity that has caused Executive not to be able to perform the services required of Executive by the Company for a period of 180 consecutive days or for shorter periods aggregating 180 days during any twelve (12) month period provided, however, that Executive shall be deemed to suffer from a Disability if Executive is rendered incapable of fully performing the services required of Executive by Company for a period of ninety (90) consecutive days and at the end of such ninety (90) day period, a qualified independent physician selected by the Company determines that there is no reasonable prospect of Executive resuming such required services within the subsequent ninety (90) day period. For purposes of the definition of “Disability”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties. Any question as to the existence of a Disability upon which Executive and the Company cannot agree shall be determined by a qualified independent physician selected by Executive (or, if Executive is unable to make such selection, a selection shall be made by Executive’s spouse, if available, or if such spouse is unavailable due to death or incapacity, any other adult member of Executive’s immediate family), with the consent of the Company, which consent shall not be unreasonably withheld. The determination of such physician made in writing to the Company and Executive shall be final and conclusive for all purposes of determining Disability under this Agreement. Notwithstanding the foregoing, the Executive shall have a termination for Disability if he has a separation from service within the meaning of Code Section 409A as a result of a physical or mental incapacity.

(c) Without Cause. The Company may terminate Executive’s employment under this Agreement at anytime Without Cause. As used in this Agreement, a termination “Without Cause” shall mean the termination of Executive’s employment by the Company other than for Cause pursuant to Section 3.1(a) above or due to death or Disability pursuant to Section 3.1(b) above.

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3.2 By the Executive:

(a) Without Good Reason. Executive may terminate his employment under this Agreement at any time Without Good Reason. As used in this Agreement, a termination “Without Good Reason” shall mean termination of Executive’s employment by Executive other than For Good Reason pursuant to Section 3.2(b) below.

(b) For Good Reason. Executive shall have the right at any time to resign his employment under this Agreement For Good Reason. As used in this Agreement, “For Good Reason” shall mean, without the Executive’s prior written consent:

(i) a material diminution in the Executive’s Base Salary or Target Annual Bonus;

(ii) a material diminution in the Executive’s authority, duties or responsibilities, which shall include the Company becoming a subsidiary or division of any other entity and the Executive not being chief executive officer of the ultimate parent entity (other than a nonpublic company whose assets consist primarily of stock of the Company) but shall not include diminution as a result of a bona fide arm’s length sale of assets of the Company to an unrelated person or entity that is not a sale of all or substantially all of the assets of the Company so long as Executive retains his position with the Company and the Parent;

(iii) any requirement that the Executive report to anyone but the board of the ultimate parent entity (other than a nonpublic company whose assets consist primarily of stock of the Company);

(iv) any material breach by the Company or related entities of this Agreement or the Executive’s other agreements with the Company or related entities.

Notwithstanding the foregoing, no event shall be a Good Reason event unless the Executive gives the Company written notice thereof within ninety (90) days of the first occurrence thereof, the Company does not cure such event within thirty (30) days of the giving of such notice and the Executive does not terminate employment prior to sixty (60) days after the end of the cure period.

3.3 Compensation Upon Termination. Upon termination of Executive’s employment with the Company, the Company’s obligation to pay compensation and benefits under Section 2 hereof shall terminate, except that the Company shall pay to the Executive or, if applicable, the Executive’s heirs, all earned but unpaid Base Salary under Section 2.1(a) and accrued vacation under Section 2.2, in each case, through the Termination Date. In addition, Executive shall be entitled to receive any amounts or benefits due under any plan or program in accordance with the term thereof, and, other than on a Cause termination or a voluntary termination by Executive without Good Reason, his annual bonus for any completed fiscal year at the same time annual bonuses would have been paid if he had continued in employment. Executive’s medical benefits shall be covered as specified in Exhibit A attached hereto and incorporated herein by this

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reference. If the Company terminates Executive’s employment Without Cause or if Executive terminates his employment for Good Reason, then, in addition, to the foregoing compensation, upon execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in Section 6.11, the Company shall pay severance benefits pursuant to Section 3.4 below. No other payments or compensation of any kind shall be paid in respect of Executive’s employment with or termination from the Company, provided that the foregoing shall not limit his rights with regard to his equity or his rights to indemnification and directors’ and officers’ liability insurance coverage. In the event of any termination of Executive’s employment, the exclusive remedies available to the Executive shall be the amounts due under this Section 3, which are in the nature of liquidated damages, and are not in the nature of a penalty.

3.4 Severance Benefits.

(a) Subject to the terms and conditions of eligibility for Executive’s receipt of severance benefits under this Agreement, including the execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in Section 6.11, the Company shall pay to Executive, as severance benefits, an amount equal to Twelve (12) months Base Salary. The severance benefits under this Section 3.4 shall be paid to Executive on a salary continuation basis according to the Company’s normal payroll practices over the course of the applicable time period following the date the Executive incurs a Separation from Service.

(b) Notwithstanding any other provision of this Agreement, any severance benefits that would otherwise have been paid before the Company’s first normal payroll payment date falling on or after the thirtieth (30^th) day after the date on which the Executive incurs a Separation from Service (the “First Payment Date”) shall be made on the First Payment Date. Each separate severance installment payment and each other payment that Executive may be eligible to receive under this Agreement shall be a separate payment under this Agreement for all purposes.

(c) Notwithstanding anything to the contrary in this Agreement, with respect to any severance benefits or amounts payable to the Executive under this Agreement, in no event shall a termination of employment occur under this Agreement unless such termination constitutes a Separation from Service. For purposes of this Agreement, a “Separation from Service” shall mean the Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto.

(d) Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable to the Executive pursuant to this Section 3.4 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals). However, to the extent any such payments are treated as non-qualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the

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Code, then to the extent delayed commencement of any portion of the benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 3.4(d) shall be paid in a lump sum to the Executive. Thereafter, payments will resume in accordance with this Agreement. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto).

(e) The Executive shall have no obligation to mitigate the amounts due under (a) above and any amounts earned by Executive from other employment shall not be offset or reduce the amounts due hereunder.

SECTION 4

CERTAIN AGREEMENTS

4.1 Confidentiality. Executive acknowledges that the Company owns and shall own and has developed and shall develop proprietary information concerning its business and its customers and clients (“Proprietary Information”). Such Proprietary Information includes, among other things, trade secrets, financial information, product plans, customer lists, marketing plans, systems, manuals, training materials, forecasts, inventions, improvements, ideas, know-how and other intellectual property. Executive shall, at all times, both during employment by the Company and thereafter, keep all Proprietary Information in confidence and trust and shall not use or disclose any Proprietary Information without the written consent of the Company, except in the good faith performance of Executive’s duties. Concurrently with the execution of this Agreement, Executive is entering into a Confidentiality and Non-Disclosure Agreement (the “Confidentiality Agreement”).

4.2 Company Property. Executive recognizes that all Proprietary Information, however stored or memorialized, and all identification cards, keys, access codes, marketing materials, documents, records and other equipment or property which the Company provides are the sole property of the Company, except those given to Executive related to his compensation, benefits and similar type documents shall not be so considered. Upon termination of employment, Executive shall (1) refrain from taking any such property from the Company’s premises, and (2) return any such property in Executive’s possession. Executive may retain his address books so far as they contain only contact information.

4.3 Assignment of Inventions to the Company. Executive shall promptly disclose to the Company all improvements, inventions, formulas, ideas, works of authorship, processes, computer programs, know-how and trade secrets developed,

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whether or not patentable, made or conceived or reduced to practice or developed by Executive, either alone or jointly with others, during and related to Executive’s employment or while using the Company’s equipment, supplies, facilities or trade secret information (collectively, “Inventions”). All Inventions, and other intellectual property rights shall be the sole property of the Company and shall be “works made for hire.” Executive hereby assigns to the Company any rights Executive may have or acquire in all Inventions and agrees to perform, during and after employment with the Company, at the Company’s expense including reasonable compensation to Executive, all acts reasonably necessary by the Company in obtaining and enforcing intellectual property rights with respect to such Inventions. Executive hereby irrevocably appoints the Company and its officers and agents as Executive’s attorney-in-fact to act for and in Executive’s name and stead with respect to such Inventions.

SECTION 5

COVENANT NOT TO ENGAGE IN CERTAIN ACTS

5.1 General. The parties understand and agree that the purpose of the restrictions contained in this Section 5 is to protect the goodwill and other legitimate business interests of the Company, and that the Company would not have entered into this Agreement in the absence of such restrictions. Executive acknowledges and agrees that the restrictions are reasonable and do not, and will not, unduly impair his ability to make a living after the termination of his or her employment with the Company. The provisions of this Section 5 shall survive the expiration or sooner termination of this Agreement. For purposes of this Section 5, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

5.2 Non-Compete; Non-Diversion. In consideration for this Agreement to employ Executive and other valuable consideration provided hereunder, Executive agrees and covenants that during the term of employment and, except as provided below, for a period of twelve (12) months after the Termination Date, and except when acting on behalf of the Company, Executive shall not, directly or indirectly, for himself or any third party, or alone or as a member of a partnership or limited liability company, or as an officer, director, shareholder, member or otherwise, engage in the following acts:

(i) divert or attempt to divert any existing business of the Company, provided that after the Termination Date this shall not prevent normal competitive sales activities for a non-Listed Company (as defined below);

(ii) solicit, induce or entice, or seek to solicit, induce or entice, or otherwise interfere with the Company’s business relationship with, any customer of the Company, provided that after the Termination Date this shall not prevent normal competitive sales activities for a non-Listed Company;

(iii) (A) during the term of employment, render any services (whether as an independent contractor or otherwise) on behalf of any company or line of business that competes anywhere in the United States with the Company (a

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“Competing Business”), and (B) for a period of twelve months after the Termination Date, render any services (whether as an independent contractor or otherwise) on behalf of any Listed Company (as defined below);

(iv) own or control any interest in (except as a passive investor of less than two percent (2%) of the capital stock or publicly traded notes or debentures of a publicly held company), or become an officer, director, partner, member, or joint venturer of, any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies;

(v) advance credit or lend money to any third party for the purpose of establishing or operating any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies; or

(vi) with respect to any substantially full time independent contractor of the Company, employee of the Company or individual who was, at any time during the three months prior to the Termination Date, an employee of the Company: (A) hire or retain, or attempt to hire or retain, such individual to provide services for any third party; or (B) encourage, induce, solicit or attempt to solicit, divert, cause or attempt to cause, such individual to (1) terminate and/or leave his or her employment, (2) accept employment with any person or entity other than the Company, or (3) terminate his or her relationship with the Company or devote less than his or her full time efforts to the Company.

As used herein, “Listed Company” means one of five (5) companies that are material competitors as identified by the Company, provided that the Company may at any time change such five (5) companies to alternative competitors so long as the number does not exceed five (5), no change can be effective after the termination of Executive’s employment with the Company and any change shall be effective thirty (30) days after Executive is given written notice thereof and only if at the end of such thirty (30) day period the Executive is employed by the Company. As of the Effective Date, the Listed Companies are Pro Build Holdings Inc., 84 Lumber Co., Builders FirstSource, Inc., BMC Select, and HD Supply, Inc.. The parties acknowledge and agree that clause (vi) above shall not be violated by general advertising not targeted at the foregoing people nor serving as a reference upon request of the foregoing with regard to an entity with which Executive is not associated.

5.3 Cessation/Reimbursement of Payments. If Executive violates any provision of this Section 5, the Company may, upon giving written notice to Executive, immediately cease all payments and benefits that it may be providing to Executive pursuant to Sections 2 or 3, and Executive shall be required to reimburse the Company for any payments received from, and the cash value of any benefits provided by, the Company between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit Executive to forego or waive such payments in order to avoid his or her obligations under this Section 5; and provided, further, that any release of claims by Executive pursuant to Section 6.11 shall continue in effect.

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5.4 Survival; Injunctive Relief. Executive agrees that the provisions of this Section 5 shall survive the termination of this Agreement and the termination of the Executive’s employment. Executive acknowledges that a breach by him of the covenants contained in this Section 5 cannot be reasonably or adequately compensated in damages in an action at law and that such breach will cause the Company immeasurable and irreparable injury and damage. Executive further acknowledges that he possesses unique skills, knowledge and ability and that competition in violation of this Section 5 would be extremely detrimental to the Company. By reason thereof, each of the Company and Executive agrees that the other shall be entitled, in addition to any other remedies it may have under this Agreement, at law or in equity, or otherwise, to temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail any actual or threatened violation of this Section 5, without proof of actual damages that have been or may be caused to the Company by such breach or threatened breach, and waives to the fullest extent permitted by law the posting or securing of any bond by the other party in connection with such remedies.

SECTION 6

MISCELLANEOUS

6.1 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by certified or registered mail, postage prepaid, with return receipt requested, telecopy (with hard copy delivered by overnight courier service), or delivered by hand, messenger or overnight courier service, and shall be deemed given when received at the addresses of the parties set forth below, or at such other address furnished in writing to the other parties hereto:

To the Company:	Stock Building Supply Holdings, LLC c/o The Gores Group, LLC 10877 Wilshire Boulevard, 18th Floor Los Angeles, CA 90024 Fax:      310-209-3310 Attn:    Fund General Counsel
To Executive:	at the home address of Executive maintained in the human resource records of the Company.

6.2 Severability. The parties agree that it is not their intention to violate any public policy or statutory or common law. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. Without limiting the foregoing, if any portion of Section 5 is held to be unenforceable, the maximum enforceable restriction of time, scope of activities and geographic area will be substituted for any such restrictions held unenforceable.

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6.3 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to its principles of conflicts of laws. The parties agree to submit to the jurisdiction of the State of Delaware; agrees that any dispute concerning the interpretation or application of this Agreement shall be heard by A JUDGE AND NOT A JURY; and agrees that any dispute shall be brought exclusively in a state or federal court of competent jurisdiction in Delaware. The parties waive any and all objections to jurisdiction or venue.

6.4 Survival. The covenants and agreements of the parties set forth in Sections 3, 4, 5 and 6 are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, irrespective of the reason therefor.

6.5 Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the terms of employment, compensation, benefits, and covenants of Executive, and supersede all other prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, between Executive and the Company relating to the subject matter of the Agreement, which such other prior and contemporaneous agreements and understandings, inducements or conditions shall be deemed terminated effective immediately. Notwithstanding the foregoing, Executive acknowledges that the Confidentiality Agreement shall continue in effect during the term of Executive’s employment.

6.7 Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the Company’s successors and assigns, including any direct or indirect successor by purchase, merger, consolidation, reorganization, liquidation, dissolution, winding up or otherwise with respect to all or substantially all of the business or assets of the Company, and the Executive’s spouse, heirs, and personal and legal representatives.

6.8 Counterparts; Amendment. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be amended or modified only by written instrument duly executed by the Company and Executive.

6.9 Voluntary Agreement. The parties have read this Agreement carefully and understand and accept the obligations that it imposes upon them without reservation. No other promises or representations have been made to either party to induce the party to sign this Agreement. The parties are signing this Agreement voluntarily and freely.

6.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns (including any direct or indirect successor, spouses, heirs and personal and legal representatives. Any such successor or assign of the Company shall be included in the term “Company” as

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used in this Agreement. This Agreement may not be assigned by the Company except to a successor to all or substantially all of its business and then only if such successor promptly delivers to Executive an assumption of the obligations hereunder.

6.11 Release of Claims. The Company’s obligation to pay severance benefits pursuant to Section 3.4 is expressly conditioned on Executive’s execution and delivery of a Separation Agreement and General Release substantially in the form of Exhibit A attached hereto and incorporated herein by this reference no later than twenty-one (21) days after the date the Executive incurs a Separation from Service without revoking it for a period of seven (7) days following delivery. Executive’s failure to execute and deliver such Separation Agreement and General Release within such twenty-one (21) day time period (or Executive’s subsequent revocation of such Separation Agreement and General Release) will void the Company’s obligation to pay severance benefits under this Agreement.

6.12 Confidentiality Of Previous Employers’ Information. The Company acknowledges that the Executive may have had access to confidential and proprietary information of his previous employer(s) and that Executive may be obligated to maintain the confidentiality of such information, not use such information or not to provide certain services to the Company, in each case pursuant to applicable law and/or any contractual relationship between Executive and a previous employer. The Company hereby instructs Executive as follows: (1) Executive shall not disclose any such confidential or proprietary information to the Company or any of its affiliates, (2) Executive shall not use any such confidential or proprietary information in connection with his employment with the Company, and (3) Executive shall not perform any services for the benefit of the Company that would cause Executive to be in breach of his obligations owed to any previous employer or other third party. If the Company requests Executive to provide any such services or to disclose any such information, Executive will advise the Company that he or she is prohibited from doing so and the Company will accept such response and make no further requests or demands therefore. The Company acknowledges that Executive has other restrictive covenant obligations (other than working for the Company) to his former employer and will not compel Executive to violate them. In addition, Executive may provide cooperation to his former employer on matters related to his employment period with such former employer without being in violation of this Agreement.

6.13 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of the Executive, except for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to the Executive as soon as administratively practicable following such submission, but in no event later than December 31^st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any

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reimbursement payments after December 31^st of the calendar year following the calendar year in which the expense was incurred. This Section 6.13 shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to the Executive.

6.14 Section 409A. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under this Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(l)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. The Executive recognizes that the Internal Revenue Code imposes the Section 409A Penalties on the Executive. In the event that following the date hereof the Company reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

6.15 Indemnification, etc. The Company and the Parent shall indemnify and hold harmless Executive to the fullest extent permitted by law (including advancement of legal fees) for any action or inaction he takes in good faith with regard to the Company or Parent or any employee benefit plan of either. Furthermore, the Company and Parent shall cover Executive on its directors’ and officers’ liability insurance policies to no less extent than that which covers any other officer or director of the Company or Parent.

6.16 Legal Fees. The Company shall pay Executive’s reasonable legal fees and expenses incurred in connection with entering into this Agreement and related agreements promptly upon presentation of invoices therefor (but in any event prior to March 15, 2011) and shall to the extent that such amounts are taxable income to Executive provide him within such time period a gross-up therefor such that he has no after tax cost with regard thereto. Executive shall request such invoices to be delivered directly to the Company in accordance with Section 6.1.

[signatures on following page]

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In witness whereof, the parties have executed this Agreement as of the date first written above.

COMPANY: STOCK BUILDING SUPPLY HOLDINGS, LLC		EXECUTIVE:
By:	/s/ Illegible	/s/ Jeff Rea
Name: [Illegible]		Jeff Rea
Its:
AGREED AS TO SECTIONS 2.3 AND 6.15
SATURN ACQUISITION HOLDINGS, LLC
By:	/s/ Illegible
Name: [Illegible]
Its:

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EXHIBIT A

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (this “Agreement”) is made as of                                          by and between Jeff Rea (“Executive”) and Stock Building Supply Holdings, LLC (the “Company”). For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Termination of Employment. The parties agree that Executive’s employment with the Company and all of its affiliates is terminated effective as of                      (the “Effective Date”).

2. Payments Due to Executive. Executive acknowledges receipt of $             from the Company, representing Executive’s accrued but unpaid Base Salary through the Effective Date. Other than as expressly set forth in Executive’s employment agreement with the Company (the “Employment Agreement”), Executive is not entitled to any consulting fees, wages, accrued vacation pay, benefits or any other amounts with respect to his employment through the Effective Date.

3. Severance Benefits and Continuing Health Insurance Coverage. In consideration of Executive’s execution and non-revocation of this Agreement, the Company agrees to pay to Executive an amount equal to 12 months of Executive’s current annual base salary, payable on a salary continuation basis according to the Company’s normal payroll practices over the course of the period following the Revocation Period Expiration Date, as defined in Section 4(g) of this Agreement and in accordance with Section 3.4 of the Employment Agreement. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required by applicable law to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

Executive will be eligible for continuation of Health Insurance coverage effective [EFFECTIVE DATE], at Executive’s expense, as required by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”); provided that the Company shall pay the Executive as taxable income at the same time the respective payments are made under the prior paragraph an amount equal to the difference between the COBRA cost and the amount of employee contributions for such coverage that Executive would have had to pay if an active employee for the 12-month period commencing on the Effective Date. Please review the provided COBRA Notice regarding your COBRA rights. Information along with enrollment forms will be sent to Executive’s home address through a third party administrator. If Executive does not receive this information and documentation with respect to COBRA within 30 days of the Effective Date please call [COMPANY CONTACT NAME/TITLE], at [COMPANY CONTACT NUMBER].

4. General Release.

(a) Executive, on behalf of Executive, his or her heirs, executors, personal representatives, administrators and assigns, irrevocably, knowingly and unconditionally releases, remises and discharges the Company, its parents, all current or former affiliated or related companies of the Company and its parent, partnerships, or joint ventures, and, with respect to each of them, all of the Company’s or such related entities’ predecessors and successors, and with respect to each such entity, its officers, directors, managers, Executives, equity holders, advisors and counsel (collectively, the “Company Parties”) from any and all actions, causes of action, charges, complaints, claims, damages, demands, debts, lawsuits, rights, understandings and obligations of any kind, nature or description whatsoever, known or unknown (collectively, the “Claims”), arising out of or relating to the Executive’s employment with the Company and/or the separation of Executive from the Company.

(b) This general release of Claims by Executive includes, without limitation, (i) all Claims based upon actions or omissions (or alleged actions or omissions) that have occurred up to and including the date of this Agreement, regardless of ripeness or other limitation on immediate pursuit of any Claim in the absence of this Agreement; (ii) all Claims relating to or arising out of Executive’s employment with and separation from the Company; (iii) all Claims (including Claims for discrimination, harassment, and retaliation) arising under any federal, state or local statute, regulation, ordinance, or the common law, including without limitation, Claims arising under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination in Employment Act, as amended, the Family and Medical Leave Act and the Executive Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Equal Pay Act, the Fair labor Standards Act, 42 U.S.C. § 1981, and any other federal or state law, local ordinance or common law including for wrongful discharge, breach of implied or express contract, intentional or negligent infliction of emotional distress, defamation or other tort; and (iv) all Claims for reinstatement, attorney’s fees, interest, costs, wages or other compensation.

(c) Executive agrees that there is a risk that each and every injury which he or she may have suffered by reason of his or her employment relationship might not now be known, and there is a further risk that such injuries, whether known or unknown at the date of this Agreement, might become progressively worse, and that as a result thereof further damages may be sustained by Executive; nevertheless, Executive desires to forever and fully release and discharge the Company Parties, and he or she fully understands that by the execution of this Agreement no further claims for any such injuries may ever be asserted.

(d) This general release does not release any Claim that relates to: (i) Executive’s right to enforce this Agreement; (ii) any rights Executive may have to indemnification from personal liability or to protection under any insurance policy maintained by the Company or Parent, including without limitation any general liability, EPLI, or directors and officers insurance policy; (iii) Executive’s right, if any, to government-provided unemployment and worker’s compensation benefits; or (iv)

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Executive’s rights under any Company Executive benefit plans (i.e. health, disability or retirement plans), which by their explicit terms survive the termination of Executive’s employment or (v) any rights with regard to equity in the Company or Parent.

(e) Executive agrees that the consideration set forth in Sections 2 and 3 above and Section 4(g) below shall constitute the entire consideration provided under this Agreement, and that Executive will not seek from the Company Parties any further compensation or other consideration for any claimed obligation, entitlement, damage, cost or attorneys’ fees in connection with the matters encompassed by this Agreement, except as provided in (d) above.

(f) Executive understands and agrees that if any facts with respect to this Agreement or Executive’s prior treatment by or employment with the Company are found to be different from the facts now believed to be true, Executive expressly accepts, assumes the risk of, and agrees that this Agreement shall remain effective notwithstanding such differences. Executive agrees that the various items of consideration set forth in this Agreement fully compensate for said risks, and that Executive will have no legal recourse against the Company in the event of discovery of a difference in facts.

(g) Executive agrees to the release of all known and unknown claims, including expressly the waiver of any rights or claims arising out of the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), and in connection with such waiver of ADEA claims, and as provided by the Older Worker Benefit Protection Act, Executive understands and agrees as follows:

i. Executive has the right to consult with an attorney before signing this Agreement, and is hereby advised to do so;

ii. Executive shall have a period of twenty-one (21) days from the Termination Date (or from the date of receipt of this Agreement if received after the Termination Date) in which to consider the terms of the Agreement (the “Review Period”). Executive may at his or her option execute this Agreement at any time during the Review Period. If the Executive does not return the signed Agreement to the Company prior to the expiration of the 21 day period, then the offer of severance benefits set forth in this Agreement shall lapse and shall be withdrawn by the Company;

iii. Executive may revoke this Agreement at any time during the first seven (7) days following Executive’s execution of this Agreement, and this Agreement and release shall not be effective or enforceable until the seven-day period has expired (“Revocation Period Expiration Date”). Notice of a revocation by the Executive must be made to the designated representative of the Company (as described below) within the seven (7) day period after Executive signs this Agreement. If Executive revokes this

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Agreement, it shall not be effective or enforceable. Accordingly, the “Effective Date” of this Agreement shall be on the eighth (8^th) day after Executive signs the Agreement and returns it to the Company, and provided that Executive does not revoke the Agreement during the seven (7) day revocation period;

In the event Executive elects to revoke this release pursuant to Paragraph 4(g)(iii) above, Executive shall notify Company by hand-delivery, express courier or certified mail, return receipt requested, within seven (7) days after signing this Agreement to: [COMPANY CONTACT NAME/TITLE], at [COMPANY CONTACT ADDRESS]. In the event that Executive exercises his or her right to revoke this release pursuant to Paragraph 4(g)(iii) above, any and all obligations of Company under this Agreement shall be null and void. Executive agrees that by signing this Agreement prior to the expiration of the twenty-one (21) day period he or she has voluntarily waived his or her right to consider this Agreement for the full twenty-one (21’) day period.

EXECUTIVE AGREES THAT THE CONSIDERATION RECEIVED BY HIM OR HER UNDER THIS AGREEMENT, INCLUDING THE PAYMENTS DESCRIBED ABOVE, IS IN FULL AND COMPLETE SATISFACTION OF ANY CLAIMS THAT EXECUTIVE MAY HAVE, OR MAY HAVE HAD, ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT, UP TO THE DATE OF EXECUTION OF THIS AGREEMENT, EXCEPT AS PROVIDED IN SECTION 4(d) ABOVE. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE UNDERSTANDS THAT, BY ENTERING INTO THIS AGREEMENT, HE OR SHE NO LONGER HAS THE RIGHT TO ASSERT ANY CLAIM OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER RELIEF AGAINST THE COMPANY PARTIES FOR ACTS OR INJURIES ARISING OUT OF EXECUTIVE’S FORMER EMPLOYMENT BY COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT. Such claims further include any claims Executive may have pursuant to an internal grievance procedure at Company (including for the avoidance of doubt, all of its subsidiaries or affiliates). Executive does not waive any rights or claims that may arise after the date this Agreement is executed.

5. Review of Agreement; No Assignment of Claims. Executive represents and warrants that he or she (a) has carefully read and understands all of the provisions of this Agreement and has had the opportunity for it to be reviewed and explained by counsel to the extent Executive deems it necessary, (b) is voluntarily entering into this Agreement, (c) has not relied upon any representation or statement made by the Company or any other person with regard to the subject matter or effect of this Agreement, (d) has not transferred or assigned any Claims and (e) has not filed any complaint or charge against any of the Company Parties with any local, state, or federal agency or court.

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6. No Claims. Each party represents that it has not filed any Claim against the other Party with any state, federal or local agency or court and that it will not file any Claim at any time regarding the matters covered by this Agreement; provided, however, that nothing in this Agreement shall be construed to prohibit Executive from filing a Claim, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission; provided, further, that Executive acknowledges that he will not be entitled to recover any monetary or other damages in connection with or as a result of any such EEOC or state FEP agency proceeding.

7. Interpretation. This Agreement shall take effect as an instrument under seal and shall be governed and construed in accordance with the laws of the State of Delaware without regard to provisions or principles thereof relating to conflict of laws.

8. Agreement as Defense. This Agreement may be pleaded as a full and complete defense to any subsequent action or other proceeding arising out of, relating to, or having anything to do with any and all Claims, counterclaims, defenses or other matters capable of being alleged, which are specifically released and discharged by this Agreement. This Agreement may also be used to abate any such action or proceeding and/or as a basis of a cross-complaint for damages.

9. Ongoing Covenants. Executive acknowledges that nothing in this Agreement shall limit or otherwise impact Executive’s continuing obligations of confidentiality to the Company in accordance with applicable law or agreements between the Company and Executive with respect to non-competition or non-solicitation, and Executive covenants and agrees to abide by all such continuing obligations.

10. No Adverse Comments. For two (2) years Executive and the Company agree not to make, issue, release or authorize any written or oral statements, knowingly derogatory or defamatory in nature, about the other (which in the case of the Company shall include its affiliates and their respective products, services, directors, officers or Executives), provided that the foregoing shall not be violated by truthful testimony in response to legal process, normal competitive statements, rebuttal of statements by the other or actions to enforce the party’s rights.

11. Integration; Severability. The terms and conditions of this Agreement constitute the entire agreement between Company and Executive and supercede all previous communications, either oral or written, between the parties with respect to the subject matter of this Agreement. No agreement or understanding varying or extending the terms of this Agreement shall be binding upon either party unless in writing signed by or on behalf of such party. In the event that a court finds any portion of this Agreement unenforceable for any reason whatsoever, Company and Executive agree that the other provisions of the Agreement shall be deemed to be severable and will continue in full force and effect to the fullest extent permitted by law.

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EXECUTIVE ACKNOWLEDGES THE FOLLOWING: HE OR SHE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND OF HIS OR HER OWN FREE WILL WITH A FULL UNDERSTANDING OF ITS TERMS; HE OR SHE HAS READ THIS AGREEMENT; THAT HE OR SHE FULLY UNDERSTANDS ITS TERMS; THAT EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY FOR ADVICE; THAT HE OR SHE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT; THAT HE OR SHE HAS HAD AMPLE TIME TO CONSIDER HIS OR HER DECISION BEFORE ENTERING INTO THE AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE IS SATISFIED WITH THE TERMS OF THIS AGREEMENT AND AGREES THAT THE TERMS ARE BINDING UPON HIM OR HER.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

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EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THE COMPANY OF HIS ABILITY TO TAKE ADVANTAGE OF THE CONSIDERATION PERIOD AFFORDED BY SECTION 7 ABOVE AND THAT HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

Jeff Rea

STOCK BUILDING SUPPLY HOLDINGS, LLC

By:

Name:

Title:

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EX-10.15

Exhibit 10.15

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of April 14, 2011 (the “Effective Date”) between James F. Major, Jr. (“Executive”) and Stock Building Supply Holdings, LLC, a Virginia limited liability company (the “Company”).

RECITALS

WHEREAS, Executive has substantial expertise and experience in the building supply industry and the field of finance, accounting and information technology; and

WHEREAS, Executive is currently employed by the Company as its Senior Vice President, Chief Financial Officer and Treasurer; and

WHEREAS, Executive and the Company desire that the Executive’s employment with the Company shall continue; and

WHEREAS, Executive and the Company desire to set forth the terms and conditions of Executive’s ongoing employment in this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, including Executive’s agreement to sign a Separation Agreement and General Release as provided in Section 6.11 below in the event of a termination of Executive’s employment with the Company, the Company and Executive hereby agree as follows:

TERMS AND CONDITIONS

SECTION 1

EMPLOYMENT

1.1 Employment. The Company hereby employs Executive and Executive hereby accepts such employment by the Company for the period and upon the terms and conditions contained in this Agreement.

1.2 Position and Duties. Executive shall serve the Company as its Executive Vice President, Chief Financial Officer and Treasurer. Executive shall have all of the powers and duties in such capacity that are customary to the powers and duties of those of a Executive Vice President, Chief Financial Officer and Treasurer of a company within the industry in which the Company operates, including specifically the following: overall management of the processes and associates related to accounting and controls, financial planning and analysis, treasury, taxation, information systems, pricing, accounts payable and trade receivables. The foregoing powers and duties shall be subject to the direction of the Company’s Board of Directors (the “Board”) and its Chief Executive Officer. Executive shall report to Chief Executive Officer or his successor. Executive shall devote Executive’s full business time and attention and full diligence and vigor and good faith efforts to the affairs of the Company and Executive shall not engage in any other

business duties or pursuits or render any services of a professional nature to any other entity or person, or serve on any other board of directors, without the prior written consent of the Chief Executive Officer. Executive will be based at the Company’s headquarters in Raleigh, North Carolina or at such other location as agreed by Executive and the Company’s Chief Executive Officer.

1.3 Effective Date; Indefinite Term. Executive’s employment under this Agreement shall continue for an indefinite term, until terminated in accordance with Section 3 below. Certain provisions, however, as more fully set forth in Sections 4, 5 and 6 below, continue in effect beyond the date of the termination of Executive’s employment (the “Termination Date”).

SECTION 2

COMPENSATION AND BENEFITS

2.1 Compensation.

(a) Base Salary. The Company shall pay to Executive an annual base salary at the rate not less than $275,000 each calendar year (“Base Salary”), payable in in accordance with the Company’s ordinary payroll and withholding practices from time to time in effect for its employees. During the term of employment hereunder, the Executive’s salary shall be reviewed from time to time (but no less than annually) to determine whether an increase in Executive’s salary is appropriate. Any such increase shall be at the sole discretion of the Board.

(b) Annual Bonus. During the term of employment, Executive shall be eligible to receive an annual bonus (“Annual Bonus”) under the Company’s incentive award plan for management and executives as from time to time adopted by the Board (the “Incentive Plan”). The Annual Bonus shall be determined based on a target bonus equal to 100% of Base Salary, with the actual amount of the Annual Bonus to be determined by the Board based upon percentage achievement of certain Company-wide and individual performance goals or milestones for each respective calendar year (or any portion thereof), as established in the Incentive Plan. The actual amount of the Annual Bonus to be paid under the incentive plan will be in a range between 0% and 200% of Base Salary. Executive shall be entitled to receive the Annual Bonus (to the extent earned in accordance with the Incentive Plan) only if Executive remains employed by the Company through the date that such Annual Bonus is paid in accordance with terms of the Incentive Plan, and Executive expressly acknowledges that the Annual Bonus, if any, is not earned by Executive until such time as it is paid pursuant to the Incentive Plan.

2.2 Benefits.

(a) Generally. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable benefits plans, policies or contracts, in all employee benefits programs that the Company may adopt for its U.S. employees generally providing for sick or other leave, vacation, group health, disability and life insurance benefits. Executive shall be eligible to participate in the Company’s 401(k) plan on the

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terms and conditions and qualifications of such plan from time to time in effect, with a Company match (if any) no less favorable than that provided to any other Company executive.

(b) Executive. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable plans, policies or contracts, in all benefits or fringe benefits which are in effect generally for the Company’s executive personnel from time to time,

2.2 Expense Reimbursement. The Company shall pay or reimburse Executive for all reasonable expenses incurred in connection with performing his duties upon presentation of documents in accordance with the reasonable procedures established by the Company,

SECTION 3

TERMINATION

3.1 By the Company:

(a) For Cause. The Company shall have the right at any time, exercisable upon written notice, to terminate the Executive’s employment for Cause. As used in this Agreement, “Cause” shall mean that the Executive:

(i) has been convicted of, or has entered a pleading of guilty or nolo contendre to, a felony (other than DUI or similar felony) or any crime involving fraud, theft, embezzlement or other act of dishonesty involving the Company;

(ii) has knowingly and intentionally participated in fraud, embezzlement, or other act of dishonesty involving the Company;

(iii) materially fails to attempt in good faith to perform Executive’s duties required under Executive’s employment by or other relationship with the Company (it being agreed that failure of the Company to achieve operating results or similar poor performance of the Company shall not, in and of itself, be deemed a failure to perform Executive’s duties);

(iv) fails to attempt in good faith to comply with a lawful directive of the CEO or the Board that is consistent with the Company’s business practices and Code of Ethics;

(v) engages in willful misconduct for which Executive receives a material and improper personal benefit at the expense of the Company, or accidental misconduct resulting in such a benefit which Executive does not promptly report to the Company and redress promptly upon becoming aware of such benefit;

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(vi) in carrying out his duties under this Agreement, has engaged in acts or omissions constituting gross negligence or willful misconduct resulting in, or which, in the good faith opinion of the Board, could be expected to result in, substantial economic harm to the Company;

(vii) has failed for any reason to correct, cease or alter any action or omission that (A) in the good faith opinion of the Board does or may materially and adversely affect the Company’s business or operations, (B) materially violates or does not conform with the Company’s policies, standards or regulations in a material way, (C) constitutes a material breach of this Agreement or the Confidentiality Agreement (as defined below), or (D) constitutes a material breach of his duty of loyalty to the Company; or

(viii) has disclosed any Proprietary Information (as defined below) without authorization from the Board, Chief Executive Officer or General Counsel except as otherwise permitted by this Agreement, another agreement between the parties or any Company policy in effect at the time of disclosure.

For purposes of the definition of “Cause”, “Company” shall include any subsidiary, business unit or affiliate (which, for the avoidance of doubt, shall not include Wolseley plc or any of its wholly-owned subsidiaries) of the Company with respect to which Executive performs Executive’s duties.

The Company shall provide written notice to Executive of any act or omission that the Company believes constitutes grounds for “Cause” pursuant to clause (iii), (iv) or (vii) above, and no such act or omission shall constitute “Cause” unless Executive fails to remedy such act or omission within ten (10) days of the receipt of such notice; provided that such ten (10) day cure period shall not apply with respect to any matter that is incapable of cure within such period.

(b) Due to Death or Disability. Executive’s employment shall terminate upon Executive’s death and the Company may terminate Executive’s employment due to Executive’s Disability. As used in this Agreement, “Disability” shall mean any physical or mental disability or incapacity that renders Executive incapable of fully performing the services required of Executive by the Company for a period of 180 consecutive days or for shorter periods aggregating 180 days during any twelve (12) month period; provided, however, that Executive shall be deemed to suffer from a Disability if Executive is rendered incapable of fully performing the services required of Executive by Company for a period of ninety (90) consecutive days and at the end of such ninety (90) day period, a qualified independent physician selected by the Company determines that there is no reasonable prospect of Executive resuming such required services within the subsequent ninety (90) day period. For purposes of the definition of “Disability”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties. Any question as to the existence of a Disability upon which Executive and the Company cannot agree shall be determined by a qualified independent physician selected by Executive (or, if Executive is unable to make such selection, a selection shall be made by Executive’s spouse, if available, or if such spouse

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is unavailable due to death or incapacity, any other adult member of Executive’s immediate family), with the consent of the Company, which consent shall not be unreasonably withheld. The determination of such physician made in writing to the Company and Executive shall be final and conclusive for all purposes of determining Disability under this Agreement.

(c) Without Cause. The Company may terminate Executive’s employment under this Agreement at anytime Without Cause. As used in this Agreement, a termination “Without Cause” shall mean the termination of Executive’s employment by the Company other than for Cause pursuant to Section 3.1(a) above or due to death or Disability pursuant to Section 3.1(b) above.

3.2 By the Executive:

(a) Without Good Reason. Executive may terminate his employment under this Agreement at any time Without Good Reason. As used in this Agreement, a termination “Without Good Reason” shall mean termination of Executive’s employment by Executive other than For Good Reason pursuant to Section 3.2(b) below.

(b) For Good Reason. Executive shall have the right at any time to resign his employment under this Agreement For Good Reason. As used in this Agreement, “For Good Reason” shall mean (i) a material diminution in the Executive’s Base Salary or Target Annual Bonus, (ii) a material diminution in Executive’s title, authority, duties and responsibilities as compared to Executive’s title, authority, duties and responsibilities measured immediately after the Effective Date, (iii) any requirement that the Executive report to anyone but (A) the Chief Executive Officer of the ultimate parent entity, or (B) if the Company becomes a subsidiary or a division of another entity, the most senior executive of such subsidiary or division, (iv) any material breach by the Company or related entities of this Agreement or the Executive’s other agreements with the Company or related entities, (v) the failure of any successor to all or substantially all of the Company’s business or assets to promptly assume and continue this Agreement, whether contractually or as a matter of law, within fifteen (15) days of the transaction which gives rise to the successor’s rights in this Agreement and (v) any requirement by the Company that Executive relocate his personal residence to any city more than 50 miles from Raleigh, North Carolina.

Notwithstanding the foregoing, no event shall be a Good Reason event unless the Executive gives the Company written notice thereof within ninety (90) days of the first occurrence thereof, the Company does not cure such event within thirty (30) days of the giving of such notice and the Executive does not terminate employment prior to sixty (60) days after the end of the cure period.

3.3 Compensation Upon Termination. Upon termination of Executive’s employment with the Company, the Company’s obligation to pay compensation and benefits under Section 2 hereof shall terminate, except that the Company shall pay to the Executive or, if applicable, the Executive’s heirs, all earned but unpaid Base Salary under Section 2.1(a) and accrued vacation under Section 2.2, in each case, through the

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Termination Date. Executive’s medical benefits shall be covered as specified in Exhibit A attached hereto and incorporated herein by this reference. If the Company terminates Executive’s employment Without Cause or if Executive terminates his employment for Good Reason, then, in addition, to the foregoing compensation, upon execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in Section 6.11, the Company shall pay severance benefits pursuant to Section 3.4 below. No other payments or compensation of any kind shall be paid in respect of Executive’s employment with or termination from the Company. In addition, Executive shall be entitled to receive any amounts or benefits due under any plan or program in accordance with the term thereof, and, other than on termination for Cause or a voluntary termination by Executive without Good Reason, his annual bonus for any completed fiscal year at the same time annual bonuses would have been paid if he had continued in employment (it being understood that in the event of any such termination Executive is not entitled to an Annual Bonus for the then-current Fiscal Year). Notwithstanding any contrary provision contained herein, in the event of any termination of Executive’s employment, the exclusive remedies available to the Executive shall be the amounts due under this Section 3. which are in the nature of liquidated damages, and are not in the nature of a penalty.

3.4 Severance Benefits.

(a) Subject to the terms and conditions of eligibility for Executive’s receipt of severance benefits under this Agreement, including the execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in Section 6.11, the Company shall pay to Executive, as severance benefits, an amount equal to Twelve (12) months Base Salary. The severance benefits under this Section 3.4 shall be paid to Executive on a salary continuation basis according to the Company’s normal payroll practices over the course of the applicable time period following the date the Executive incurs a Separation from Service.

(b) Notwithstanding any other provision of this Agreement, any severance benefits that would otherwise have been paid before the Company’s first normal payroll payment date falling on or after the thirtieth (30^th) day after the date on which the Executive incurs a Separation from Service (the “First Payment Date”) shall be made on the First Payment Date. Each separate severance installment payment and each other payment that Executive may be eligible to receive under this Agreement shall be a separate payment under this Agreement for all purposes.

(c) Notwithstanding anything to the contrary in this Agreement, with respect to any severance benefits or amounts payable to the Executive under this Agreement, in no event shall a termination of employment occur under this Agreement unless such termination constitutes a Separation from Service. For purposes of this Agreement, a “Separation from Service” shall mean the Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto.

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(d) Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable to the Executive pursuant to this Section 3.4 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals). However, to the extent any such payments are treated as non-qualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 3.4(d) shall be paid in a lump sum to the Executive. Thereafter, payments will resume in accordance with this Agreement. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto).

(e) The Executive shall have no duty or obligation to mitigate the amounts due under (a) above and any amounts earned by Executive from other employment shall not be offset or reduce the amounts due hereunder.

SECTION 4

CERTAIN AGREEMENTS

4.1 Confidentiality. Executive acknowledges that the Company owns and shall own and has developed and shall develop proprietary information concerning its business and its customers and clients (“Proprietary Information”). Such Proprietary Information includes, among other things, trade secrets, financial information, product plans, customer lists, marketing plans, systems, manuals, training materials, forecasts, inventions, improvements, know-how and other intellectual property, in each case, relating to the Company’s business. Executive shall, at all times, both during employment by the Company and thereafter, keep all Proprietary Information in confidence and trust and shall not use or disclose any Proprietary Information without the written consent of the Company, except as necessary in the ordinary course of Executive’s duties. Executive shall keep the terms of this Agreement in confidence and trust and shall not disclose such terms, except to Executive’s family, accountants, financial advisors, or attorneys, or as otherwise authorized or required by law. Executive agrees to execute the Company’s standard form of confidentiality agreement (the “Confidentiality Agreement”) applicable to all employees on the Effective Date.

4.2 Company Property. Executive recognizes that all Proprietary Information, however stored or memorialized, and all identification cards, keys, flash

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drives, computers, mobile phones, Personal Data Assistants, telephone numbers, access codes, marketing materials, documents, records and other equipment or property which the Company provides are the sole property of the Company. Upon termination of employment, Executive shall (1) refrain from taking any such property from the Company’s premises, and (2) return any such property in Executive’s possession.

4.3 Assignment of Inventions to the Company. Executive shall promptly disclose to the Company all improvements, inventions, formulas, processes, computer programs, know-how and trade secrets developed, whether or not patentable, made or conceived or reduced to practice or developed by Executive, either alone or jointly with others, during and related to Executive’s employment and the Company’s business or while using the Company’s equipment, supplies, facilities or trade secret information (collectively, “Inventions”). All Inventions, and other intellectual property rights shall be the sole property of the Company and shall be “works made for hire.” Executive hereby assigns to the Company any rights Executive may have or acquire in all Inventions and agrees to perform, during and after employment with the Company, at the Company’s expense including reasonable compensation to Executive, all acts reasonably necessary by the Company in obtaining and enforcing intellectual property rights with respect to such Inventions. Executive hereby irrevocably appoints the Company and its officers and agents as Executive’s attorney-in-fact to act for and in Executive’s name and stead with respect to such Inventions.

SECTION 5

COVENANT NOT TO ENGAGE IN CERTAIN ACTS

5.1 General. The parties understand and agree that the purpose of the restrictions contained in this Section 5 is to protect the goodwill and other legitimate business interests of the Company, and that the Company would not have entered into this Agreement in the absence of such restrictions. Executive acknowledges and agrees that the restrictions are reasonable and do not, and will not, unduly impair his ability to make a living after the termination of his or her employment with the Company. The provisions of this Section 5 shall survive the expiration or sooner termination of this Agreement. For purposes of this Section 5, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

5.2 Non-Compete; Non-Diversion. In consideration for this Agreement to employ Executive and other valuable consideration provided hereunder, Executive agrees and covenants that during the term of employment and for a period of twelve (12) months after the Termination Date, Executive shall not, directly or indirectly, for himself or any third party, or alone or as a member of a partnership or limited liability company, or as an officer, director, shareholder, member or otherwise, engage in the following acts:

(i) divert or attempt to divert any existing business of the Company provided that after the Termination Date this shall not prevent normal competitive sales for a non-Listed Company (as defined below);

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(ii) solicit, induce or entice, or seek to solicit, induce or entice, or otherwise interfere with the Company’s business relationship with, any customer of the Company, provided that after the Termination Date this shall not prevent normal competitive sales activities for a non-Listed Company;

(iii) (A) during the term of employment, render any services (whether as an independent contractor or otherwise) on behalf of any company or line of business that competes anywhere in the United States with the Company (a “Competing Business”), and (B) for a period of twelve months after the Termination Date, render any services other than legal services (whether as an independent contractor or otherwise) on behalf of any Listed Company (as defined below);

(iv) own or control any interest in (except as a passive investor of less than two percent (2%) of the capital stock or publicly traded notes or debentures of a publicly held company), or become an officer, director, partner, member, or joint venturer of, any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies;

(v) advance credit or lend money to any third party for the purpose of establishing or operating any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies; or

(vi) with respect to any substantially full time independent contractor of the Company, employee of the Company or individual who was, at any time during the three months prior to the Termination Date, an employee of the Company: (A) hire or retain, or attempt to hire or retain, such individual to provide services for any third party; or (B) encourage, induce, solicit or attempt to solicit, divert, cause or attempt to cause, such individual to (1) terminate and/or leave his or her employment, (2) accept employment with any person or entity other than the Company, or (3) terminate his or her relationship with the Company or devote less than his or her full time efforts to the Company.

As used herein, “Listed Company” means one of six (6) companies that are material competitors as identified by the Company, provided that the Company may at any time change such six (6) companies to alternative competitors so long as the number does not exceed six (6), no change can be effective after the termination of Executive’s employment with the Company and any change shall be effective thirty (30) days after Executive is given written notice thereof and only if at the end of such thirty (30) day period the Executive is employed by the Company. As of the Effective Date, the Listed Companies are Pro Build Holdings, Inc., 84 Lumber Co., Builders FirstSource, Inc., BMC Select, HD Supply, Inc. and Ganahl Lumber Co. The parties acknowledge and agree that clause (vi) above shall not be violated by general advertising not targeted at the foregoing people nor serving as a reference upon request of the foregoing with regard to an entity with which Executive is not associated. The parties acknowledge and agree that the term “Competing Business” does not include (i) builders of light frame (wood) commercial and new residential homes or (ii) any manufacturer of lumber, building

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materials or equipment or appliances. Further, the Parties hereby acknowledge and agree that if Executive becomes employed by any company described in the preceding sentence, Executive shall be permitted to contact, solicit, sell to or otherwise do business with such Competing Businesses and that such activities shall not violate the terms of this Section.

5.3 Cessation/Reimbursement of Payments. If Executive violates any provision of this Section 5, the Company may, upon giving written notice to Executive, immediately cease all payments and benefits that it may be providing to Executive pursuant to Sections 2 or 3, and Executive shall be required to reimburse the Company for any payments received from, and the cash value of any benefits provided by, the Company between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit Executive to forego or waive such payments in order to avoid his or her obligations under this Section 5; and provided, further, that any release of claims by Executive pursuant to Section 6.11 shall continue in effect.

5.4 Survival; Injunctive Relief. Executive agrees that the provisions of this Section 5 shall survive the termination of this Agreement and the termination of the Executive’s employment. Executive acknowledges that a breach by him of the covenants contained in this Section 5 cannot be reasonably or adequately compensated in damages in an action at law and that such breach will cause the Company immeasurable and irreparable injury and damage. Executive further acknowledges that he possesses unique skills, knowledge and ability and that competition in violation of this Section 5 would be extremely detrimental to the Company. By reason thereof, each of the Company and Executive agrees that the other shall be entitled, in addition to any other remedies it may have under this Agreement, at law or in equity, or otherwise, to temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail any actual or threatened violation of this Section 5, without proof of actual damages that have been or may be caused to the Company by such breach or threatened breach, and waives to the fullest extent permitted by law the posting or securing of any bond by the other party in connection with such remedies.

SECTION 6

MISCELLANEOUS

6.1 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by certified or registered mail, postage prepaid, with return receipt requested, telecopy (with hard copy delivered by overnight courier service), or delivered by hand, messenger or overnight courier service, and shall be deemed given when received at the addresses of the parties set forth below, or at such other address furnished in writing to the other parties hereto:

To the Company:	Stock Building Supply Holdings, LLC 8020 Arco Corporate Drive Raleigh, NC 27617 Attn: General Counsel Fax:919-431-1180
To Executive:	at the home address of Executive maintained in the human resource records of the Company.

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6.2 Severability. The parties agree that it is not their intention to violate any public policy or statutory or common law. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. Without limiting the foregoing, if any portion of Section 5 is held to be unenforceable, the maximum enforceable restriction of time, scope of activities and geographic area will be substituted for any such restrictions held unenforceable.

6.3 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina without regard to its principles of conflicts of laws. Executive agrees to submit to the jurisdiction of the State of North Carolina; agrees that any dispute concerning the interpretation or application of this Agreement shall be heard by A JUDGE AND NOT A JURY; and agrees that any dispute shall be brought exclusively in a state or federal court of competent jurisdiction in North Carolina. Executive waives any and all objections to jurisdiction or venue.

6.4 Survival. The covenants and agreements of the parties set forth in Sections 4, 5 and 6 are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, irrespective of the reason therefor.

6.5 Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the terms of employment, compensation, benefits, and covenants of Executive, and supersede all other prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, between Executive and the Company relating to the subject matter of the Agreement, which such other prior and contemporaneous agreements and understandings, inducements or conditions shall be deemed terminated effective immediately. For the avoidance of doubt, the parties agree that any and all indemnification agreements between Executive and the Company shall continue in full force unimpaired by this Agreement. Notwithstanding the foregoing, Executive acknowledges that the Confidentiality Agreement shall continue in effect during the term of Executive’s employment.

6.7 Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the Company’s successors and assigns, including any direct or indirect successor by purchase, merger, consolidation, reorganization, liquidation, dissolution, winding up or otherwise with respect to all or substantially all of the business or assets of the Company, and the Executive’s spouse, heirs, and personal and legal representatives.

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6.8 Counterparts; Amendment. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be amended or modified only by written instrument duly executed by the Company and Executive.

6.9 Voluntary Agreement. Executive has read this Agreement carefully and understands and accepts the obligations that it imposes upon Executive without reservation. No other promises or representations have been made to Executive to induce Executive to sign this Agreement. Executive is signing this Agreement voluntarily and freely.

6.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns (including any direct or indirect successor, spouses, heirs and personal and legal representatives. Any such successor or assign of the Company shall be included in the term “Company” as used in this Agreement.

6.11 Release of Claims. In consideration for the compensation and other benefits provided pursuant to this Agreement, Executive agrees to execute a “Separation Agreement and General Release” form substantially in the form of Exhibit A attached hereto and incorporated herein by this reference. The Company’s obligation to pay severance benefits pursuant to Section 3.4 is expressly conditioned on Executive’s execution and delivery of such Separation Agreement and General Release no later than forty-five (45) days after the date the Executive incurs a Separation from Service without revoking it for a period of seven (7) days following delivery. Executive’s failure to execute and deliver such Separation Agreement and General Release within such forty- five (45) day time period (or Executive’s subsequent revocation of such Separation Agreement and General Release) will void the Company’s obligation to pay severance benefits under this Agreement.

6.12 Confidentiality Of Previous Employers’ Information. The Company acknowledges that the Executive may have had access to confidential and proprietary information of his previous employer(s) and that Executive may be obligated to maintain the confidentiality of such information, not use such information or not to provide certain services to the Company, in each case pursuant to applicable law and/or any contractual relationship between Executive and a previous employer. The Company hereby instructs Executive as follows: (1) Executive shall not disclose any such confidential or proprietary information to the Company or any of its affiliates, (2) Executive shall not use any such confidential or proprietary information in connection with his employment with the Company, and (3) Executive shall not perform any services for the benefit of the Company that would cause Executive to be in breach of his obligations owed to any previous employer or other third party. If the Company requests Executive to provide any such services or to disclose any such information, Executive will advise the Company that he or she is prohibited from doing so. Executive agrees to indemnify,

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defend and hold the Company and its affiliates harmless from and against any claims, losses or liabilities (including reasonable attorneys’ fees) incurred by the Company or any of its affiliates as a result of any breach by Executive of this Section 6.12.

6.13 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of the Executive, except for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to the Executive as soon as administratively practicable following such submission, but in no event later than December 31^st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any reimbursement payments after December 31^st of the calendar year following the calendar year in which the expense was incurred. This Section 6.13 shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to the Executive.

6.14 Section 409A. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under this Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(l)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties. In the event that following the date hereof the Company reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

6.15 Indemnification, etc. The Company shall indemnify and hold harmless Executive to the fullest extent permitted by law (including advance of legal fees) for any action or inaction he takes in good faith with regard to the Company or parent or any benefit plan of either. Further, the Company shall cover Executive on its directors’ and officers’ liability insurance policies to no less extent than that which covers any other officer or director of the Company.

[signatures on following page]

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In witness whereof, the parties have executed this Agreement as of the date first written above.

COMPANY:		EXECUTIVE:
STOCK BUILDING SUPPLY HOLDINGS, LLC
By:	/s/ JEFF REA	/s/ James F. Major, Jr.
Name:	JEFF REA	James F. Major, Jr.
Its:	PRESIDENT & CEO

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EXHIBIT A

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (this “Agreement”) is made as of                      by and between James F. Major, Jr. (“Executive”) and Stock Building Supply Holdings, LLC (the “Company”). For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Termination of Employment. The parties agree that Executive’s employment with the Company and all of its affiliates is terminated effective as of                      (the “Effective Date”).

2. Payments Due to Executive. Executive acknowledges receipt of $         from the Company, representing Executive’s accrued but unpaid Base Salary through the Effective Date. Other than as expressly set forth in this Section, Executive is not entitled to any consulting fees, wages, accrued vacation pay, benefits or any other amounts with respect to his employment through the Effective Date.

3. Severance Benefits and Continuing Health Insurance Coverage. In consideration of Executive’s execution and non-revocation of this Agreement, the Company agrees to pay to Executive an amount equal to twelve (12) months of Executive’s current annual base salary, payable on a salary continuation basis according to the Company’s normal payroll practices over the course of the period following the Revocation Period Expiration Date, as defined in Section 4(g) of this Agreement. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required by applicable law to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

Executive will be eligible for continuation of Health Insurance coverage effective [EFFECTIVE DATE], at Executive’s expense, as required by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”); provided that the Company shall pay the Executive as taxable income at the same time the respective payments are made under the prior paragraph an amount equal to the difference between the COBRA cost and the amount of employee contributions for such coverage that Executive would have had to pay if Executive had been an active employees for the 12-month period commencing on the Effective Date. Please review the provided COBRA Notice regarding your COBRA rights. Information along with enrollment forms will be sent to Executive’s home address through a third party administrator. If Executive does not receive this information and documentation with respect to COBRA within 30 days of the Effective Date please call [COMPANY CONTACT NAME/TITLE], at [COMPANY CONTACT NUMBER].

4. General Release.

(a) Executive, on behalf of Executive, his or her heirs, executors, personal representatives, administrators and assigns, irrevocably, knowingly and unconditionally releases, remises and discharges the Company, its parents, all current or former affiliated or related companies of the Company and its parent, partnerships, or joint ventures, and, with respect to each of them, all of the Company’s or such related entities’ predecessors and successors, and with respect to each such entity, its officers, directors, managers, Executives, equity holders, advisors and counsel (collectively, the “Company Parties”) from any and all actions, causes of action, charges, complaints, claims, damages, demands, debts, lawsuits, rights, understandings and obligations of any kind, nature or description whatsoever, known or unknown (collectively, the “Claims”), arising out of or relating to the Executive’s employment with the Company and/or the separation of Executive from the Company.

(b) This general release of Claims by Executive includes, without limitation, (i) all Claims based upon actions or omissions (or alleged actions or omissions) that have occurred up to and including the date of this Agreement, regardless of ripeness or other limitation on immediate pursuit of any Claim in the absence of this Agreement; (ii) all Claims relating to or arising out of Executive’s employment with and separation from the Company; (iii) all Claims (including Claims for discrimination, harassment, and retaliation) arising under any federal, state or local statute, regulation, ordinance, or the common law, including without limitation, Claims arising under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination in Employment Act, as amended, the Family and Medical Leave Act and the Executive Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Equal Pay Act, the Fair labor Standards Act, 42 U.S.C. § 1981, and any other federal or state law, local ordinance or common law including for wrongful discharge, breach of implied or express contract, intentional or negligent infliction of emotional distress, defamation or other tort; and (iv) all Claims for reinstatement, attorney’s fees, interest, costs, wages or other compensation.

(c) Executive agrees that there is a risk that each and every injury which he or she may have suffered by reason of his or her employment relationship might not now be known, and there is a further risk that such injuries, whether known or unknown at the date of this Agreement, might become progressively worse, and that as a result thereof further damages may be sustained by Executive; nevertheless, Executive desires to forever and fully release and discharge the Company Parties, and he or she fully understands that by the execution of this Agreement no further claims for any such injuries may ever be asserted.

(d) This general release does not release any Claim that relates to: (i) Executive’s right to enforce this Agreement; (ii) any rights Executive may have to indemnification from personal liability or to protection under any insurance policy maintained by the Company, including without limitation any general liability, EPLI, or directors and officers insurance policy or any contractual indemnification agreement; (iii) Executive’s right, if any, to government-provided unemployment and worker’s

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compensation benefits; or (iv) Executive’s rights under any Company Executive benefit plans (i.e. health, disability or retirement plans), which by their explicit terms survive the termination of Executive’s employment.

(e) Executive agrees that the consideration set forth in Sections 2 and 3 above and Section 4(g) below shall constitute the entire consideration provided under this Agreement, and that Executive will not seek from the Company Parties any further compensation or other consideration for any claimed obligation, entitlement, damage, cost or attorneys’ fees in connection with the matters encompassed by this Agreement.

(f) Executive understands and agrees that if any facts with respect to this Agreement or Executive’s prior treatment by or employment with the Company are found to be different from the facts now believed to be true, Executive expressly accepts, assumes the risk of, and agrees that this Agreement shall remain effective notwithstanding such differences. Executive agrees that the various items of consideration set forth in this Agreement fully compensate for said risks, and that Executive will have no legal recourse against the Company in the event of discovery of a difference in facts.

(g) Executive agrees to the release of all known and unknown claims, including expressly the waiver of any rights or claims arising out of the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), and in connection with such waiver of ADEA claims, and as provided by the Older Worker Benefit Protection Act, Executive understands and agrees as follows:

i. Executive has the right to consult with an attorney before signing this Agreement, and is hereby advised to do so;

ii. Executive shall have a period of forty-five (45) days from the Termination Date (or from the date of receipt of this Agreement if received after the Termination Date) in which to consider the terms of the Agreement (the “Review Period”). Executive may at his or her option execute this Agreement at any time during the Review Period. If the Executive does not return the signed Agreement to the Company prior to the expiration of the 45 day period, then the offer of severance benefits set forth in this Agreement shall lapse and shall be withdrawn by the Company;

iii. Executive may revoke this Agreement at any time during the first seven (7) days following Executive’s execution of this Agreement, and this Agreement and release shall not be effective or enforceable until the seven-day period has expired (“Revocation Period Expiration Date”). Notice of a revocation by the Executive must be made to the designated representative of the Company (as described below) within the seven (7) day period after Executive signs this Agreement. If Executive revokes this Agreement, it shall not be effective or enforceable. Accordingly, the “Effective Date” of this Agreement shall be on the eighth (8^th) day after

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Executive signs the Agreement and returns it to the Company, and provided that Executive does not revoke the Agreement during the seven (7) day revocation period;

In the event Executive elects to revoke this release pursuant to Paragraph 4(g)(iii) above, Executive shall notify Company by hand-delivery, express courier or certified mail, return receipt requested, within seven (7) days after signing this Agreement to: [COMPANY CONTACT NAME/TITLE], at [COMPANY CONTACT ADDRESS]. In the event that Executive exercises his or her right to revoke this release pursuant to Paragraph 4(g)(iii) above, any and all obligations of Company under this Agreement shall be null and void. Executive agrees that by signing this Agreement prior to the expiration of the forty-five (45) day period he or she has voluntarily waived his or her right to consider this Agreement for the full forty-five (45) day period.

EXECUTIVE AGREES THAT THE CONSIDERATION RECEIVED BY HIM OR HER UNDER THIS AGREEMENT, INCLUDING THE PAYMENTS DESCRIBED ABOVE, IS IN FULL AND COMPLETE SATISFACTION OF ANY CLAIMS THAT EXECUTIVE MAY HAVE, OR MAY HAVE HAD, ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT, UP TO THE DATE OF EXECUTION OF THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE UNDERSTANDS THAT, BY ENTERING INTO THIS AGREEMENT, HE OR SHE NO LONGER HAS THE RIGHT TO ASSERT ANY CLAIM OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER REILEF AGAINST THE COMPANY PARTIES FOR ACTS OR INJURIES ARISING OUT OF EXECUTIVE’S FORMER EMPLOYMENT BY COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT. Such claims further include any claims Executive may have pursuant to an internal grievance procedure at Company (including for the avoidance of doubt, all of its subsidiaries or affiliates). Executive does not waive any rights or claims that may arise after the date this Agreement is executed.

5. Review of Agreement; No Assignment of Claims. Executive represents and warrants that he or she (a) has carefully read and understands all of the provisions of this Agreement and has had the opportunity for it to be reviewed and explained by counsel to the extent Executive deems it necessary, (b) is voluntarily entering into this Agreement, (c) has not relied upon any representation or statement made by the Company or any other person with regard to the subject matter or effect of this Agreement, (d) has not transferred or assigned any Claims and (e) has not filed any complaint or charge against any of the Company Parties with any local, state, or federal agency or court.

6. No Claims. Each party represents that it has not filed any Claim against the other Party with any state, federal or local agency or court and that it will not file any Claim at any time regarding the matters covered by this Agreement; provided, however, that nothing in this Agreement shall be construed to prohibit Executive from filing a

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Claim, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission; provided, further, that Executive acknowledges that he will not be entitled to recover any monetary or other damages in connection with or as a result of any such EEOC or state FEP agency proceeding.

7. Interpretation. This Agreement shall take effect as an instrument under seal and shall be governed and construed in accordance with the laws of the State of North Carolina without regard to provisions or principles thereof relating to conflict of laws.

8. Agreement as Defense. This Agreement may be pleaded as a full and complete defense to any subsequent action or other proceeding arising out of, relating to, or having anything to do with any and all Claims, counterclaims, defenses or other matters capable of being alleged, which are specifically released and discharged by this Agreement. This Agreement may also be used to abate any such action or proceeding and/or as a basis of a cross-complaint for damages.

9. Nondisclosure of Agreement. The terms and conditions of this Agreement are confidential. Executive agrees not to disclose the terms of this Agreement to anyone except immediate family members and Executive’s attorneys and financial advisers. Executive further agrees to inform these people that the Agreement is confidential and must not be disclosed to anyone else. Executive may disclose the terms of this Agreement if compelled to do so by a court, but Executive agrees to notify the Company immediately if anyone seeks to compel Executive’s testimony in this regard, and to cooperate with the Company if the Company decides to oppose such effort. Executive agrees that disclosure by Executive in violation of this Agreement would cause so much injury to the Company that money alone could not fully compensate the Company and that the Company is entitled to injunctive and equitable relief. Executive also agrees that the Company would be entitled to recover money from Executive if this Agreement were violated.

10. Ongoing Covenants. Executive acknowledges that nothing in this Agreement shall limit or otherwise impact Executive’s continuing obligations of confidentiality to the Company in accordance with Company policy and applicable law, or any applicable Company policies or agreements between the Company and Executive with respect to non-competition or non-solicitation, and Executive covenants and agrees to abide by all such continuing obligations.

11. No Adverse Comments. For two (2) years, Executive and the Company agree not to make, issue, release or authorize any written or oral statements, derogatory or defamatory in nature, about the other (which in the case of the Company shall include its affiliates or their respective products, services, directors, officers or Executives), provided that the foregoing shall not be violated by truthful testimony in response to legal process, normal competitive statements, rebuttal of statements by the other or actions to enforce the party’s rights.

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12. Integration; Severability. The terms and conditions of this Agreement constitute the entire agreement between Company and Executive and supercede all previous communications, either oral or written, between the parties with respect to the subject matter of this Agreement. No agreement or understanding varying or extending the terms of this Agreement shall be binding upon either party unless in writing signed by or on behalf of such party. In the event that a court finds any portion of this Agreement unenforceable for any reason whatsoever, Company and Executive agree that the other provisions of the Agreement shall be deemed to be severable and will continue in full force and effect to the fullest extent permitted by law.

EXECUTIVE ACKNOWLEDGES THE FOLLOWING: HE OR SHE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND OF HIS OR HER OWN FREE WILL WITH A FULL UNDERSTANDING OF ITS TERMS; HE OR SHE HAS READ THIS AGREEMENT; THAT HE OR SHE FULLY UNDERSTANDS ITS TERMS; THAT EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY FOR ADVICE; THAT HE OR SHE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT; THAT HE OR SHE HAS HAD AMPLE TIME TO CONSIDER HIS OR HER DECISION BEFORE ENTERING INTO THE AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE IS SATISFIED WITH THE TERMS OF THIS AGREEMENT AND AGREES THAT THE TERMS ARE BINDING UPON HIM OR HER.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

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EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THE COMPANY OF HIS ABILITY TO TAKE ADVANTAGE OF THE CONSIDERATION PERIOD AFFORDED BY SECTION 7 ABOVE AND THAT HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

James F. Major, Jr.

STOCK BUILDING SUPPLY HOLDINGS, LLC

By:

Name:

Title:

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EX-10.16

Exhibit 10.16

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of April 1, 2012 (the “Effective Date”) between Bryan J. Yeazel (“Executive”) and Stock Building Supply Holdings, LLC, a Virginia limited liability company (the “Company”).

RECITALS

WHEREAS, Executive is currently employed by the Company as its Executive Vice President, General Counsel and Corporate Secretary and is a party to that certain Employment Agreement dated April 14, 2011 (the “Original Agreement”); and

WHEREAS, Executive and the Company have agreed that Executive will assume responsibility for the Company’s Integrated Supply Chain including the sourcing, product management, marketing, LEAN, and Stock Logistics Solutions functions of the Company in addition to his duties described in the Original Agreement;

WHEREAS, Executive and the Company desire that the Executive’s employment with the Company shall continue; and

WHEREAS, Executive and the Company desire to set forth the terms and conditions of Executive’s ongoing employment in this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, including Executive’s agreement to sign a Separation Agreement and General Release as provided in Section 6.11 below in the event of a termination of Executive’s employment with the Company, the Company and Executive hereby agree as follows:

TERMS AND CONDITIONS

SECTION 1

EMPLOYMENT

1.1 Employment. The Company hereby employs Executive and Executive hereby accepts such employment by the Company for the period and upon the terms and conditions contained in this Agreement.

1.2 Position and Duties. Executive shall serve the Company as its Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary. Executive shall have all of the powers and duties in such capacity that are customary to the powers and duties of those of a Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary and head of Human Resources of a company within the industry in which the Company operates, including specifically the following: overall management responsibility for the Company and its subsidiaries for (i)

the legal and regulatory affairs including without limitation corporate and commercial transactions, resolution of disputes (including litigated and non-litigated matters) and management of regulatory compliance, (ii) the human resources department (including all human resources processes and personnel), (iii) corporate governance, (iv) the placement of insurance for the Company and management of insurer and brokerage relationships, (iv) the Company’s health and safety department, (v) the Company’s internal and external communications function and (vi) the Company’s Integrated Supply Chain function including sourcing, product management, marketing, LEAN and Stock Logistics Solutions. The foregoing powers and duties shall be subject to the direction of the Company’s Board of Directors (the “Board”) and its Chief Executive Officer. Executive shall report to Chief Executive Officer or his successor. Executive shall devote Executive’s full business time and attention and full diligence and vigor and good faith efforts to the affairs of the Company and Executive shall not engage in any other business duties or pursuits or render any services of a professional nature to any other entity or person, or serve on any other board of directors, without the prior written consent of the Chief Executive Officer. Executive will be based at the Company’s headquarters in Raleigh, North Carolina or at such other location as agreed by Executive and the Company’s Chief Executive Officer.

1.3 Effective Date; Indefinite Term. Executive’s employment under this Agreement shall continue for an indefinite term, until terminated in accordance with Section 3 below. Certain provisions, however, as more fully set forth in Sections 4, 5 and 6 below, continue in effect beyond the date of the termination of Executive’s employment (the “Termination Date”).

SECTION 2

COMPENSATION AND BENEFITS

2.1 Compensation.

(a) Base Salary. The Company shall pay to Executive an annual base salary at the rate not less than $250,000 each calendar year (“Base Salary”), payable in in accordance with the Company’s ordinary payroll and withholding practices from time to time in effect for its employees. During the term of employment hereunder, the Executive’s salary shall be reviewed from time to time (but no less than annually) to determine whether an increase in Executive’s salary is appropriate. Any such increase shall be at the sole discretion of the Board.

(b) Annual Bonus. During the term of employment, Executive shall be eligible to receive an annual bonus (“Annual Bonus”) under the Company’s incentive award plan for management and executives as from time to time adopted by the Board (the “Incentive Plan”). The Annual Bonus shall be determined based on a target bonus equal to 100% of Base Salary, with the actual amount of the Annual Bonus to be determined by the Board based upon percentage achievement of certain Company-wide and individual performance goals or milestones for each respective calendar year (or any portion thereof), as established in the Incentive Plan. The actual amount of the Annual Bonus to be paid under the incentive plan will be in a range between 0% and 200% of

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Base Salary. Executive shall be entitled to receive the Annual Bonus (to the extent earned in accordance with the Incentive Plan) only if Executive remains employed by the Company through the date that such Annual Bonus is paid in accordance with terms of the Incentive Plan, and Executive expressly acknowledges that the Annual Bonus, if any, is not earned by Executive until such time as it is paid pursuant to the Incentive Plan.

2.2 Benefits.

(a) Generally. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable benefits plans, policies or contracts, in all employee benefits programs that the Company may adopt for its U.S. employees generally providing for sick or other leave, vacation, group health, disability and life insurance benefits. Executive shall be eligible to participate in the Company’s 401(k) plan on the terms and conditions and qualifications of such plan from time to time in effect, with a Company match (if any) no less favorable than that provided to any other Company executive.

(b) Executive. Executive shall be eligible to participate, to the extent it is legal and permitted by the applicable plans, policies or contracts, in all benefits or fringe benefits which are in effect generally for the Company’s executive personnel from time to time.

2.3 Expense Reimbursement. The Company shall pay or reimburse Executive for all reasonable expenses incurred in connection with performing his duties upon presentation of documents in accordance with the reasonable procedures established by the Company.

SECTION 3

TERMINATION

3.1 By the Company:

(a) For Cause. The Company shall have the right at any time, exercisable upon written notice, to terminate the Executive’s employment for Cause. As used in this Agreement, “Cause” shall mean that the Executive:

(i) has been convicted of, or has entered a pleading of guilty or nolo contendre to, a felony (other than DUI or similar felony) or any crime involving fraud, theft, embezzlement or other act of dishonesty involving the Company;

(ii) has knowingly and intentionally participated in fraud, embezzlement, or other act of dishonesty involving the Company;

(iii) materially fails to attempt in good faith to perform Executive’s duties required under Executive’s employment by or other relationship with the Company (it being agreed that failure of the Company to achieve operating results or similar poor performance of the Company shall not, in and of itself, be deemed a failure to perform Executive’s duties);

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(iv) fails to attempt in good faith to comply with a lawful directive of the CEO or the Board that is consistent with the Company’s business practices and Code of Ethics;

(v) engages in willful misconduct for which Executive receives a material and improper personal benefit at the expense of the Company, or accidental misconduct resulting in such a benefit which Executive does not promptly report to the Company and redress promptly upon becoming aware of such benefit;

(vi) in carrying out his duties under this Agreement, has engaged in acts or omissions constituting gross negligence or willful misconduct resulting in, or which, in the good faith opinion of the Board, could be expected to result in, substantial economic harm to the Company;

(vii) has failed for any reason to correct, cease or alter any action or omission that (A) in the good faith opinion of the Board does or may materially and adversely affect the Company’s business or operations, (B) materially violates or does not conform with the Company’s policies, standards or regulations in a material way, (C) constitutes a material breach of this Agreement or the Confidentiality Agreement (as defined below), or (D) constitutes a material breach of his duty of loyalty to the Company; or

(viii) has disclosed any Proprietary Information (as defined below) without authorization from the Board, Chief Executive Officer or General Counsel except as otherwise permitted by this Agreement, another agreement between the parties or any Company policy in effect at the time of disclosure.

For purposes of the definition of “Cause”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

The Company shall provide written notice to Executive of any act or omission that the Company believes constitutes grounds for “Cause” pursuant to clause (iii), (iv) or (vii) above, and no such act or omission shall constitute “Cause” unless Executive fails to remedy such act or omission within ten (10) days of the receipt of such notice; provided that such ten (10) day cure period shall not apply with respect to any matter that is incapable of cure within such period.

(b) Due to Death or Disability. Executive’s employment shall terminate upon Executive’s death and the Company may terminate Executive’s employment due to Executive’s Disability. As used in this Agreement, “Disability” shall mean any physical or mental disability or incapacity that renders Executive incapable of fully performing the services required of Executive by the Company for a period of 180 consecutive days or for shorter periods aggregating 180 days during any twelve (12) month period; provided,

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however, that Executive shall be deemed to suffer from a Disability if Executive is rendered incapable of fully performing the services required of Executive by Company for a period of ninety (90) consecutive days and at the end of such ninety (90) day period, a qualified independent physician selected by the Company determines that there is no reasonable prospect of Executive resuming such required services within the subsequent ninety (90) day period. For purposes of the definition of “Disability”, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties. Any question as to the existence of a Disability upon which Executive and the Company cannot agree shall be determined by a qualified independent physician selected by Executive (or, if Executive is unable to make such selection, a selection shall be made by Executive’s spouse, if available, or if such spouse is unavailable due to death or incapacity, any other adult member of Executive’s immediate family), with the consent of the Company, which consent shall not be unreasonably withheld. The determination of such physician made in writing to the Company and Executive shall be final and conclusive for all purposes of determining Disability under this Agreement.

(c) Without Cause. The Company may terminate Executive’s employment under this Agreement at anytime Without Cause. As used in this Agreement, a termination “Without Cause” shall mean the termination of Executive’s employment by the Company other than for Cause pursuant to Section 3.1(a) above or due to death or Disability pursuant to Section 3.1(b) above.

3.2 By the Executive:

(a) Without Good Reason. Executive may terminate his employment under this Agreement at any time Without Good Reason. As used in this Agreement, a termination “Without Good Reason” shall mean termination of Executive’s employment by Executive other than For Good Reason pursuant to Section 3.2(b) below.

(b) For Good Reason. Executive shall have the right at any time to resign his employment under this Agreement For Good Reason. As used in this Agreement, “For Good Reason” shall mean (i) a material diminution in the Executive’s Base Salary or Target Annual Bonus, (ii) a material diminution in Executive’s title, authority, duties and responsibilities as compared to Executive’s title, authority, duties and responsibilities measured immediately after the Effective Date, (iii) any requirement that the Executive report to anyone but (A) the Chief Executive Officer of the ultimate parent entity, or (B) if the Company becomes a subsidiary or a division of another entity, the most senior executive of such subsidiary or division, (iv) any material breach by the Company or related entities of this Agreement or the Executive’s other agreements with the Company or related entities, (v) the failure of any successor to all or substantially all of the Company’s business or assets to promptly assume and continue this Agreement, whether contractually or as a matter of law, within fifteen (15) days of the transaction which gives rise to the successor’s rights in this Agreement and (v) any requirement by the Company that Executive relocate his personal residence to any city more than 50 miles from Raleigh, North Carolina.

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Notwithstanding the foregoing, no event shall be a Good Reason event unless the Executive gives the Company written notice thereof within ninety (90) days of the first occurrence thereof, the Company does not cure such event within thirty (30) days of the giving of such notice and the Executive does not terminate employment prior to sixty (60) days after the end of the cure period.

3.3 Compensation Upon Termination. Upon termination of Executive’s employment with the Company, the Company’s obligation to pay compensation and benefits under Section 2 hereof shall terminate, except that the Company shall pay to the Executive or, if applicable, the Executive’s heirs, all earned but unpaid Base Salary under Section 2.1(a) and accrued vacation under Section 2.2, in each case, through the Termination Date. Executive’s medical benefits shall be covered as specified in Exhibit A attached hereto and incorporated herein by this reference. If the Company terminates Executive’s employment Without Cause or if Executive terminates his employment for Good Reason, then, in addition, to the foregoing compensation, upon execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in Section 6.11, the Company shall pay severance benefits pursuant to Section 3.4 below. No other payments or compensation of any kind shall be paid in respect of Executive’s employment with or termination from the Company. In addition, Executive shall be entitled to receive any amounts or benefits due under any plan or program in accordance with the term thereof, and, other than on termination for Cause or a voluntary termination by Executive without Good Reason, his annual bonus for any completed fiscal year at the same time annual bonuses would have been paid if he had continued in employment (it being understood that in the event of any such termination Executive is not entitled to an Annual Bonus for the then-current Fiscal Year). Notwithstanding any contrary provision contained herein, in the event of any termination of Executive’s employment, the exclusive remedies available to the Executive shall be the amounts due under this Section 3, which are in the nature of liquidated damages, and are not in the nature of a penalty.

3.4 Severance Benefits.

(a) Subject to the terms and conditions of eligibility for Executive’s receipt of severance benefits under this Agreement, including the execution and delivery (and non-revocation) by Executive of the Separation Agreement and General Release as set forth in Section 6.11, the Company shall pay to Executive, as severance benefits, an amount equal to Twelve (12) months Base Salary. The severance benefits under this Section 3.4 shall be paid to Executive on a salary continuation basis according to the Company’s normal payroll practices over the course of the applicable time period following the date the Executive incurs a Separation from Service.

(b) Notwithstanding any other provision of this Agreement, any severance benefits that would otherwise have been paid before the Company’s first normal payroll payment date falling on or after the thirtieth (30^th) day after the date on which the Executive incurs a Separation from Service (the “First Payment Date”) shall be made on the First Payment Date. Each separate severance installment payment and each other payment that Executive may be eligible to receive under this Agreement shall be a separate payment under this Agreement for all purposes.

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(c) Notwithstanding anything to the contrary in this Agreement, with respect to any severance benefits or amounts payable to the Executive under this Agreement, in no event shall a termination of employment occur under this Agreement unless such termination constitutes a Separation from Service. For purposes of this Agreement, a “Separation from Service” shall mean the Executive’s “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto.

(d) Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable to the Executive pursuant to this Section 3.4 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals). However, to the extent any such payments are treated as non-qualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 3.4(d) shall be paid in a lump sum to the Executive. Thereafter, payments will resume in accordance with this Agreement. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto).

(e) The Executive shall have no duty or obligation to mitigate the amounts due under (a) above and any amounts earned by Executive from other employment shall not be offset or reduce the amounts due hereunder.

SECTION 4

CERTAIN AGREEMENTS

4.1 Confidentiality. Executive acknowledges that the Company owns and shall own and has developed and shall develop proprietary information concerning its business and its customers and clients (“Proprietary Information”). Such Proprietary Information includes, among other things, trade secrets, financial information, product plans, customer lists, marketing plans, systems, manuals, training materials, forecasts, inventions, improvements, know-how and other intellectual property, in each case, relating to the Company’s business. Executive shall, at all times, both during

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employment by the Company and thereafter, keep all Proprietary Information in confidence and trust and shall not use or disclose any Proprietary Information without the written consent of the Company, except as necessary in the ordinary course of Executive’s duties. Executive shall keep the terms of this Agreement in confidence and trust and shall not disclose such terms, except to Executive’s family, accountants, financial advisors, or attorneys, or as otherwise authorized or required by law. Executive agrees to execute the Company’s standard form of confidentiality agreement (the “Confidentiality Agreement”) applicable to all employees on the Effective Date.

4.2 Company Property. Executive recognizes that all Proprietary Information, however stored or memorialized, and all identification cards, keys, flash drives, computers, mobile phones, Personal Data Assistants, telephone numbers, access codes, marketing materials, documents, records and other equipment or property which the Company provides are the sole property of the Company. Upon termination of employment, Executive shall (1) refrain from taking any such property from the Company’s premises, and (2) return any such property in Executive’s possession.

4.3 Assignment of Inventions to the Company. Executive shall promptly disclose to the Company all improvements, inventions, formulas, processes, computer programs, know-how and trade secrets developed, whether or not patentable, made or conceived or reduced to practice or developed by Executive, either alone or jointly with others, during and related to Executive’s employment and the Company’s business or while using the Company’s equipment, supplies, facilities or trade secret information (collectively, “Inventions”). All Inventions, and other intellectual property rights shall be the sole property of the Company and shall be “works made for hire.” Executive hereby assigns to the Company any rights Executive may have or acquire in all Inventions and agrees to perform, during and after employment with the Company, at the Company’s expense including reasonable compensation to Executive, all acts reasonably necessary by the Company in obtaining and enforcing intellectual property rights with respect to such Inventions. Executive hereby irrevocably appoints the Company and its officers and agents as Executive’s attorney-in-fact to act for and in Executive’s name and stead with respect to such Inventions.

SECTION 5

COVENANT NOT TO ENGAGE IN CERTAIN ACTS

5.1 General. The parties understand and agree that the purpose of the restrictions contained in this Section 5 is to protect the goodwill and other legitimate business interests of the Company, and that the Company would not have entered into this Agreement in the absence of such restrictions. Executive acknowledges and agrees that the restrictions are reasonable and do not, and will not, unduly impair his ability to make a living after the termination of his or her employment with the Company. The provisions of this Section 5 shall survive the expiration or sooner termination of this Agreement. For purposes of this Section 5, “Company” shall include any subsidiary, business unit or affiliate of the Company with respect to which Executive performs Executive’s duties.

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5.2 Non-Compete; Non-Diversion. In consideration for this Agreement to employ Executive and other valuable consideration provided hereunder, Executive agrees and covenants that during the term of employment and for a period of twelve (12) months after the Termination Date, Executive shall not, directly or indirectly, for himself or any third party, or alone or as a member of a partnership or limited liability company, or as an officer, director, shareholder, member or otherwise, engage in the following acts:

(i) divert or attempt to divert any existing business of the Company provided that after the Termination Date this shall not prevent normal competitive sales for a non-Listed Company (as defined below);

(ii) solicit, induce or entice, or seek to solicit, induce or entice, or otherwise interfere with the Company’s business relationship with, any customer of the Company, provided that after the Termination Date this shall not prevent normal competitive sales activities for a non-Listed Company;

(iii) (A) during the term of employment, render any services (whether as an independent contractor or otherwise) on behalf of any company or line of business that competes anywhere in the United States with the Company (a “Competing Business”) , and (B) for a period of twelve months after the Termination Date, render any services other than legal services (whether as an independent contractor or otherwise) on behalf of any Listed Company (as defined below);

(iv) own or control any interest in (except as a passive investor of less than two percent (2%) of the capital stock or publicly traded notes or debentures of a publicly held company), or become an officer, director, partner, member, or joint venturer of, any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies;

(v) advance credit or lend money to any third party for the purpose of establishing or operating any Competing Business, provided that after the Termination Date this shall only apply to the Listed Companies; or

(vi) with respect to any substantially full time independent contractor of the Company, employee of the Company or individual who was, at any time during the three months prior to the Termination Date, an employee of the Company: (A) hire or retain, or attempt to hire or retain, such individual to provide services for any third party; or (B) encourage, induce, solicit or attempt to solicit, divert, cause or attempt to cause, such individual to (1) terminate and/or leave his or her employment, (2) accept employment with any person or entity other than the Company, or (3) terminate his or her relationship with the Company or devote less than his or her full time efforts to the Company.

As used herein, “Listed Company” means one of six (6) companies that are material competitors as identified by the Company, provided that the Company may at any time change such six (6) companies to alternative competitors so long as the number does not

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exceed six (6), no change can be effective after the termination of Executive’s employment with the Company and any change shall be effective thirty (30) days after Executive is given written notice thereof and only if at the end of such thirty (30) day period the Executive is employed by the Company. As of the Effective Date, the Listed Companies are Pro Build Holdings, Inc., 84 Lumber Co., Builders FirstSource, Inc., BMC Select, HD Supply, Inc. and Ganahl Lumber Co. The parties acknowledge and agree that clause (vi) above shall not be violated by general advertising not targeted at the foregoing people nor serving as a reference upon request of the foregoing with regard to an entity with which Executive is not associated. The parties acknowledge and agree that the term “Competing Business” does not include (i) builders of light frame (wood) commercial and new residential homes or (ii) any manufacturer of lumber, building materials or equipment or appliances. Further, the Parties hereby acknowledge and agree that if Executive becomes employed by any company described in the preceding sentence, Executive shall be permitted to contact, solicit, sell to or otherwise do business with such Competing Businesses and that such activities shall not violate the terms of this Section.

5.3 Cessation/Reimbursement of Payments. If Executive violates any provision of this Section 5, the Company may, upon giving written notice to Executive, immediately cease all payments and benefits that it may be providing to Executive pursuant to Sections 2 or 3, and Executive shall be required to reimburse the Company for any payments received from, and the cash value of any benefits provided by, the Company between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit Executive to forego or waive such payments in order to avoid his or her obligations under this Section 5; and provided, further, that any release of claims by Executive pursuant to Section 6.11 shall continue in effect.

5.4 Survival; Injunctive Relief. Executive agrees that the provisions of this Section 5 shall survive the termination of this Agreement and the termination of the Executive’s employment. Executive acknowledges that a breach by him of the covenants contained in this Section 5 cannot be reasonably or adequately compensated in damages in an action at law and that such breach will cause the Company immeasurable and irreparable injury and damage. Executive further acknowledges that he possesses unique skills, knowledge and ability and that competition in violation of this Section 5 would be extremely detrimental to the Company. By reason thereof, each of the Company and Executive agrees that the other shall be entitled, in addition to any other remedies it may have under this Agreement, at law or in equity, or otherwise, to temporary, preliminary and/or permanent injunctive and other equitable relief to prevent or curtail any actual or threatened violation of this Section 5, without proof of actual damages that have been or may be caused to the Company by such breach or threatened breach, and waives to the fullest extent permitted by law the posting or securing of any bond by the other party in connection with such remedies.

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SECTION 6

MISCELLANEOUS

6.1 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by certified or registered mail, postage prepaid, with return receipt requested, telecopy (with hard copy delivered by overnight courier service), or delivered by hand, messenger or overnight courier service, and shall be deemed given when received at the addresses of the parties set forth below, or at such other address furnished in writing to the other parties hereto:

To the Company:	Stock Building Supply Holdings, LLC
	8020 Arco Corporate Drive
	Raleigh, NC 27617
	Attn: President
	Fax:919-431-1180
To Executive:	at the home address of Executive maintained in the human resource records of the Company.

6.2 Severability. The parties agree that it is not their intention to violate any public policy or statutory or common law. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. Without limiting the foregoing, if any portion of Section 5 is held to be unenforceable, the maximum enforceable restriction of time, scope of activities and geographic area will be substituted for any such restrictions held unenforceable.

6.3 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina without regard to its principles of conflicts of laws. Executive agrees to submit to the jurisdiction of the State of North Carolina; agrees that any dispute concerning the interpretation or application of this Agreement shall be heard by A JUDGE AND NOT A JURY; and agrees that any dispute shall be brought exclusively in a state or federal court of competent jurisdiction in North Carolina. Executive waives any and all objections to jurisdiction or venue.

6.4 Survival. The covenants and agreements of the parties set forth in Sections 4, 5 and 6 are of a continuing nature and shall survive the expiration, termination or cancellation of this Agreement, irrespective of the reason therefor.

6.5 Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the terms of employment, compensation, benefits, and covenants of Executive, and supersede all other prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, between Executive and the Company relating to the subject matter of the Agreement, which such other prior and contemporaneous agreements and understandings, inducements or conditions shall be deemed terminated effective

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immediately. For the avoidance of doubt, the parties agree that any and all indemnification agreements between Executive and the Company shall continue in full force unimpaired by this Agreement. Notwithstanding the foregoing, Executive acknowledges that the Confidentiality Agreement shall continue in effect during the term of Executive’s employment.

6.6 Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the Company’s successors and assigns, including any direct or indirect successor by purchase, merger, consolidation, reorganization, liquidation, dissolution, winding up or otherwise with respect to all or substantially all of the business or assets of the Company, and the Executive’s spouse, heirs, and personal and legal representatives.

6.7 Counterparts; Amendment. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be amended or modified only by written instrument duly executed by the Company and Executive.

6.8 Voluntary Agreement. Executive has read this Agreement carefully and understands and accepts the obligations that it imposes upon Executive without reservation. No other promises or representations have been made to Executive to induce Executive to sign this Agreement. Executive is signing this Agreement voluntarily and freely.

6.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns (including any direct or indirect successor, spouses, heirs and personal and legal representatives. Any such successor or assign of the Company shall be included in the term “Company” as used in this Agreement.

6.10 Release of Claims. In consideration for the compensation and other benefits provided pursuant to this Agreement, Executive agrees to execute a “Separation Agreement and General Release” form substantially in the form of Exhibit A attached hereto and incorporated herein by this reference. The Company’s obligation to pay severance benefits pursuant to Section 3.4 is expressly conditioned on Executive’s execution and delivery of such Separation Agreement and General Release no later than forty-five (45) days after the date the Executive incurs a Separation from Service without revoking it for a period of seven (7) days following delivery. Executive’s failure to execute and deliver such Separation Agreement and General Release within such forty- five (45) day time period (or Executive’s subsequent revocation of such Separation Agreement and General Release) will void the Company’s obligation to pay severance benefits under this Agreement.

6.11 Confidentiality Of Previous Employers’ Information. The Company acknowledges that the Executive may have had access to confidential and proprietary information of his previous employer(s) and that Executive may be obligated to maintain the confidentiality of such information, not use such information or not to provide certain

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services to the Company, in each case pursuant to applicable law and/or any contractual relationship between Executive and a previous employer. The Company hereby instructs Executive as follows: (1) Executive shall not disclose any such confidential or proprietary information to the Company or any of its affiliates, (2) Executive shall not use any such confidential or proprietary information in connection with his employment with the Company, and (3) Executive shall not perform any services for the benefit of the Company that would cause Executive to be in breach of his obligations owed to any previous employer or other third party. If the Company requests Executive to provide any such services or to disclose any such information, Executive will advise the Company that he or she is prohibited from doing so. Executive agrees to indemnify, defend and hold the Company and its affiliates harmless from and against any claims, losses or liabilities (including reasonable attorneys’ fees) incurred by the Company or any of its affiliates as a result of any breach by Executive of this Section 6.12.

6.12 In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of the Executive, except for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to the Executive as soon as administratively practicable following such submission, but in no event later than December 31^st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any reimbursement payments after December 31^st of the calendar year following the calendar year in which the expense was incurred. This Section 6.13 shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to the Executive.

6.13 Section 409A. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under this Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(l)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties. In the event that following the date hereof the Company reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

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6.14 Indemnification, etc. The Company shall indemnity and hold harmless Executive to the fullest extent permitted by law (including advance of legal fees) for any action or inaction he takes in good faith with regard to the Company or parent or any benefit plan of either. Further, the Company shall cover Executive on its directors’ and officers’ liability insurance policies to no less extent than that which covers any other officer or director of the Company.

[signatures on following page]

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In witness whereof, the parties have executed this Agreement as of the date first written above.

COMPANY:		EXECUTIVE:
STOCK BUILDING SUPPLY HOLDINGS, LLC
By:	/s/ JEFF REA	/s/ Bryan J. Yeazel
Name:	JEFF REA	Bryan J. Yeazel
Its:	CEO & PRESIDENT

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EXHIBIT A

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (this “Agreement”) is made as of                      by and between Bryan J. Yeazel (“Executive”) and Stock Building Supply Holdings, LLC (the “Company”), For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Termination of Employment. The parties agree that Executive’s employment with the Company and all of its affiliates is terminated effective as of                      (the “Effective Date”).

2. Payments Due to Executive. Executive acknowledges receipt of $             from the Company, representing Executive’s accrued but unpaid Base Salary through the Effective Date. Other than as expressly set forth in this Section, Executive is not entitled to any consulting fees, wages, accrued vacation pay, benefits or any other amounts with respect to his employment through the Effective Date.

3. Severance Benefits and Continuing Health Insurance Coverage. In consideration of Executive’s execution and non-revocation of this Agreement, the Company agrees to pay to Executive an amount equal to twelve (12) months of Executive’s current annual base salary, payable on a salary continuation basis according to the Company’s normal payroll practices over the course of the period following the Revocation Period Expiration Date, as defined in Section 4(g) of this Agreement. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required by applicable law to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

Executive will be eligible for continuation of Health Insurance coverage effective [EFFECTIVE DATE], at Executive’s expense, as required by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”); provided that the Company shall pay the Executive as taxable income at the same time the respective payments are made under the prior paragraph an amount equal to the difference between the COBRA cost and the amount of employee contributions for such coverage that Executive would have had to pay if Executive had been an active employees for the 12-month period commencing on the Effective Date. Please review the provided COBRA Notice regarding your COBRA rights. Information along with enrollment forms will be sent to Executive’s home address through a third party administrator. If Executive does not receive this information and documentation with respect to COBRA within 30 days of the Effective Date please call [COMPANY CONTACT NAME/TITLE], at [COMPANY CONTACT NUMBER].

4. General Release.

(a) Executive, on behalf of Executive, his or her heirs, executors, personal representatives, administrators and assigns, irrevocably, knowingly and unconditionally releases, remises and discharges the Company, its parents, all current or former affiliated or related companies of the Company and its parent, partnerships, or joint ventures, and, with respect to each of them, all of the Company’s or such related entities’ predecessors and successors, and with respect to each such entity, its officers, directors, managers, Executives, equity holders, advisors and counsel (collectively, the “Company Parties”) from any and all actions, causes of action, charges, complaints, claims, damages, demands, debts, lawsuits, rights, understandings and obligations of any kind, nature or description whatsoever, known or unknown (collectively, the “Claims”), arising out of or relating to the Executive’s employment with the Company and/or the separation of Executive from the Company.

(b) This general release of Claims by Executive includes, without limitation, (i) all Claims based upon actions or omissions (or alleged actions or omissions) that have occurred up to and including the date of this Agreement, regardless of ripeness or other limitation on immediate pursuit of any Claim in the absence of this Agreement; (ii) all Claims relating to or arising out of Executive’s employment with and separation from the Company; (iii) all Claims (including Claims for discrimination, harassment, and retaliation) arising under any federal, state or local statute, regulation, ordinance, or the common law, including without limitation, Claims arising under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination in Employment Act, as amended, the Family and Medical Leave Act and the Executive Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Equal Pay Act, the Fair labor Standards Act, 42 U.S.C. § 1981, and any other federal or state law, local ordinance or common law including for wrongful discharge, breach of implied or express contract, intentional or negligent infliction of emotional distress, defamation or other tort; and (iv) all Claims for reinstatement, attorney’s fees, interest, costs, wages or other compensation.

(c) Executive agrees that there is a risk that each and every injury which he or she may have suffered by reason of his or her employment relationship might not now be known, and there is a further risk that such injuries, whether known or unknown at the date of this Agreement, might become progressively worse, and that as a result thereof further damages may be sustained by Executive; nevertheless, Executive desires to forever and fully release and discharge the Company Parties, and he or she fully understands that by the execution of this Agreement no further claims for any such injuries may ever be asserted.

(d) This general release does not release any Claim that relates to: (i) Executive’s right to enforce this Agreement; (ii) any rights Executive may have to indemnification from personal liability or to protection under any insurance policy maintained by the Company, including without limitation any general liability, EPLI, or directors and officers insurance policy or any contractual indemnification agreement; (iii) Executive’s right, if any, to government-provided unemployment and worker’s

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compensation benefits; or (iv) Executive’s rights under any Company Executive benefit plans (i.e. health, disability or retirement plans), which by their explicit terms survive the termination of Executive’s employment.

(e) Executive agrees that the consideration set forth in Sections 2 and 3 above and Section 4(g) below shall constitute the entire consideration provided under this Agreement, and that Executive will not seek from the Company Parties any further compensation or other consideration for any claimed obligation, entitlement, damage, cost or attorneys’ fees in connection with the matters encompassed by this Agreement.

(f) Executive understands and agrees that if any facts with respect to this Agreement or Executive’s prior treatment by or employment with the Company are found to be different from the facts now believed to be true, Executive expressly accepts, assumes the risk of, and agrees that this Agreement shall remain effective notwithstanding such differences. Executive agrees that the various items of consideration set forth in this Agreement fully compensate for said risks, and that Executive will have no legal recourse against the Company in the event of discovery of a difference in facts.

(g) Executive agrees to the release of all known and unknown claims, including expressly the waiver of any rights or claims arising out of the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), and in connection with such waiver of ADEA claims, and as provided by the Older Worker Benefit Protection Act, Executive understands and agrees as follows:

i. Executive has the right to consult with an attorney before signing this Agreement, and is hereby advised to do so;

ii. Executive shall have a period of forty-five (45) days from the Termination Date (or from the date of receipt of this Agreement if received after the Termination Date) in which to consider the terms of the Agreement (the “Review Period”). Executive may at his or her option execute this Agreement at any time during the Review Period. If the Executive does not return the signed Agreement to the Company prior to the expiration of the 45 day period, then the offer of severance benefits set forth in this Agreement shall lapse and shall be withdrawn by the Company;

iii. Executive may revoke this Agreement at any time during the first seven (7) days following Executive’s execution of this Agreement, and this Agreement and release shall not be effective or enforceable until the seven-day period has expired (“Revocation Period Expiration Date”). Notice of a revocation by the Executive must be made to the designated representative of the Company (as described below) within the seven (7) day period after Executive signs this Agreement. If Executive revokes this Agreement, it shall not be effective or enforceable. Accordingly, the “Effective Date” of this Agreement shall be on the eighth (8^th) day after

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Executive signs the Agreement and returns it to the Company, and provided that Executive does not revoke the Agreement during the seven (7) day revocation period;

In the event Executive elects to revoke this release pursuant to Paragraph 4(g)(iii) above, Executive shall notify Company by hand-delivery, express courier or certified mail, return receipt requested, within seven (7) days after signing this Agreement to: [COMPANY CONTACT NAME/TITLE], at [COMPANY CONTACT ADDRESS]. In the event that Executive exercises his or her right to revoke this release pursuant to Paragraph 4(g)(iii) above, any and all obligations of Company under this Agreement shall be null and void. Executive agrees that by signing this Agreement prior to the expiration of the forty-five (45) day period he or she has voluntarily waived his or her right to consider this Agreement for the full forty-five (45) day period.

EXECUTIVE AGREES THAT THE CONSIDERATION RECEIVED BY HIM OR HER UNDER THIS AGREEMENT, INCLUDING THE PAYMENTS DESCRIBED ABOVE, IS IN FULL AND COMPLETE SATISFACTION OF ANY CLAIMS THAT EXECUTIVE MAY HAVE, OR MAY HAVE HAD, ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT, UP TO THE DATE OF EXECUTION OF THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE UNDERSTANDS THAT, BY ENTERING INTO THIS AGREEMENT, HE OR SHE NO LONGER HAS THE RIGHT TO ASSERT ANY CLAIM OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER REILEF AGAINST THE COMPANY PARTIES FOR ACTS OR INJURIES ARISING OUT OF EXECUTIVE’S FORMER EMPLOYMENT BY COMPANY (INCLUDING FOR THE AVOIDANCE OF DOUBT, ALL OF ITS SUBSIDIARIES OR AFFILIATES) OR THE TERMINATION OF THAT EMPLOYMENT, Such claims further include any claims Executive may have pursuant to an internal grievance procedure at Company (including for the avoidance of doubt, all of its subsidiaries or affiliates). Executive does not waive any rights or claims that may arise after the date this Agreement is executed.

5. Review of Agreement; No Assignment of Claims. Executive represents and warrants that he or she (a) has carefully read and understands all of the provisions of this Agreement and has had the opportunity for it to be reviewed and explained by counsel to the extent Executive deems it necessary, (b) is voluntarily entering into this Agreement, (c) has not relied upon any representation or statement made by the Company or any other person with regard to the subject matter or effect of this Agreement, (d) has not transferred or assigned any Claims and (e) has not filed any complaint or charge against any of the Company Parties with any local, state, or federal agency or court.

6. No Claims. Each party represents that it has not filed any Claim against the other Party with any state, federal or local agency or court and that it will not file any Claim at any time regarding the matters covered by this Agreement; provided, however, that nothing in this Agreement shall be construed to prohibit Executive from filing a

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Claim, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission; provided, further, that Executive acknowledges that he will not be entitled to recover any monetary or other damages in connection with or as a result of any such EEOC or state FEP agency proceeding.

7. Interpretation. This Agreement shall take effect as an instrument under seal and shall be governed and construed in accordance with the laws of the State of North Carolina without regard to provisions or principles thereof relating to conflict of laws.

8. Agreement as Defense. This Agreement may be pleaded as a full and complete defense to any subsequent action or other proceeding arising out of, relating to, or having anything to do with any and all Claims, counterclaims, defenses or other matters capable of being alleged, which are specifically released and discharged by this Agreement. This Agreement may also be used to abate any such action or proceeding and/or as a basis of a cross-complaint for damages.

9. Nondisclosure of Agreement. The terms and conditions of this Agreement are confidential. Executive agrees not to disclose the terms of this Agreement to anyone except immediate family members and Executive’s attorneys and financial advisers. Executive further agrees to inform these people that the Agreement is confidential and must not be disclosed to anyone else. Executive may disclose the terms of this Agreement if compelled to do so by a court, but Executive agrees to notify the Company immediately if anyone seeks to compel Executive’s testimony in this regard, and to cooperate with the Company if the Company decides to oppose such effort. Executive agrees that disclosure by Executive in violation of this Agreement would cause so much injury to the Company that money alone could not fully compensate the Company and that the Company is entitled to injunctive and equitable relief. Executive also agrees that the Company would be entitled to recover money from Executive if this Agreement were violated.

10. Ongoing Covenants. Executive acknowledges that nothing in this Agreement shall limit or otherwise impact Executive’s continuing obligations of confidentiality to the Company in accordance with Company policy and applicable law, or any applicable Company policies or agreements between the Company and Executive with respect to non-competition or non-solicitation, and Executive covenants and agrees to abide by all such continuing obligations.

11. No Adverse Comments. For two (2) years, Executive and the Company agree not to make, issue, release or authorize any written or oral statements, derogatory or defamatory in nature, about the other (which in the case of the Company shall include its affiliates or their respective products, services, directors, officers or Executives), provided that the foregoing shall not be violated by truthful testimony in response to legal process, normal competitive statements, rebuttal of statements by the other or actions to enforce the party’s rights.

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12. Integration; Severability. The terms and conditions of this Agreement constitute the entire agreement between Company and Executive and supercede all previous communications, either oral or written, between the parties with respect to the subject matter of this Agreement. No agreement or understanding varying or extending the terms of this Agreement shall be binding upon either party unless in writing signed by or on behalf of such party. In the event that a court finds any portion of this Agreement unenforceable for any reason whatsoever, Company and Executive agree that the other provisions of the Agreement shall be deemed to be severable and will continue in full force and effect to the fullest extent permitted by law.

EXECUTIVE ACKNOWLEDGES THE FOLLOWING: HE OR SHE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND OF HIS OR HER OWN FREE WILL WITH A FULL UNDERSTANDING OF ITS TERMS; HE OR SHE HAS READ THIS AGREEMENT; THAT HE OR SHE FULLY UNDERSTANDS ITS TERMS; THAT EXECUTIVE IS ADVISED TO CONSULT AN ATTORNEY FOR ADVICE; THAT HE OR SHE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT; THAT HE OR SHE HAS HAD AMPLE TIME TO CONSIDER HIS OR HER DECISION BEFORE ENTERING INTO THE AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE OR SHE IS SATISFIED WITH THE TERMS OF THIS AGREEMENT AND AGREES THAT THE TERMS ARE BINDING UPON HIM OR HER.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

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EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THE COMPANY OF HIS ABILITY TO TAKE ADVANTAGE OF THE CONSIDERATION PERIOD AFFORDED BY SECTION 7 ABOVE AND THAT HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have executed this Agreement with effect as of the date first above written.

Bryan J. Yeazel

STOCK BUILDING SUPPLY HOLDINGS, LLC

By:

Name:

Title:

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EX-21.1

Exhibit 21.1

Subsidiaries of the registrant are as follows:

	State of Incorporation or Organization
Stock Building Supply Holdings II, LLC	Delaware
Stock Building Supply Holdings, LLC	Virginia
Michael Nicholas Carpentry, LLC	Illinois
Stock Building Supply, LLC	North Carolina
Coleman Floor, LLC	Delaware
Coleman Floor Southeast, LLC	Delaware
Commonwealth Acquisition Holdings, LLC	Delaware
Stock Building Supply Midwest, LLC	Delaware
Stock Building Supply of Arkansas, LLC d/b/a National Home Centers	Delaware
Stock Window & Door Southeast, LLC	Delaware
TBSG, LLC	Delaware
Stock Building Supply of Florida, LLC	Florida
Stock Building Supply West, LLC	Utah
SBS/Bison Building Materials, LLC	Delaware
Stock Building Supply West (USA), Inc.	Delaware