Company Name: Builder Marts of America, Inc.
Public Availability Date: June 8, 1973

[INQUIRY LETTER]

WYCHE, BURGESS, FREEMAN & PARHAM

P.O. BOX 10207, 44 EAST CAMPERDOWN WAY

GREENVILLE, SOUTH CAROLINA 29603

April 24, 1973

Neil McCoy, Esq., Chief Counsel

Division of Corporate Finance

Securities and Exchange Commission

500 North Capitol Street

Washington, D.C. 20549

Re: 1933 Act/4(1)/Rule 144

Builder Marts of America, Inc.

Dear Sir:

This is a request for an interpretive letter with respect to the interpretation to be given Rule 144 as to the proper two year holding period applicable to shares of common stock purchased by certain employees of Builder Marts of America, Inc. ("the Company").

The Company filed a Registration Statement with the Commission on March 23, 1973, Registration No. 2-41353. In connection with such Registration Statement, a question has arisen as to the applicable holding period under Rule 144 for certain shares of stock held by employees of the Company.

With respect to the President of the Company, who is the holder of 361,500 shares of common stock, the chronology of events is as follows:

1. On May 12, 1966, the President purchased 49,500 shares for cash.

2. On April 23, 1967, the President purchased an additional 186,600 shares from the Company, borrowing the purchase price from the Company, and executing a promissory note to the Company secured solely by a pledge of the stock purchased.

3. In April, 1969, the President purchased in additional 125,400 shares from the Company and paid the Company for such shares from the proceeds of a loan from a bank, simultaneously paying off his note to the Company for the 186,600 shares from such proceeds as well. The loan from the bank was secured by a pledge of all of the stock of the Company owned by the President, including the 49,500 shares purchased in May of 1966 for cash. The Company simultaneously executed a guarantee to the bank under which the Company agreed to purchase the President's stock from the bank in the event of default on the note to the bank.

4. On December 26, 1971, the bank released the Company from its guarantee.

5. On March 30, 1972, the loan was transferred to a different bank at which time the Company again executed a guarantee agreeing to repurchase the stock in the event of default, thus resulting in a period slightly in excess of three months during which there was no corporate guarantee in connection with the President's loan.

6. On December 18, 1972, the bank cancelled the Company's guarantee.

Section (d)(2) provides that "giving the person from who the securities were purchased a promissory note or other obligation to pay the purchase price,. . . shall not be deemed full payment of the purchase price." Section (d)(1) of Rule 144 provides that the full purchase price or other consideration shall have been paid or given at least two years prior to a sale under Rule 144. By its terms, Section (d)(2) would not appear to apply to the above described transaction except for the period between April of 1968 and April of 1969 when the purchaser was indebted directly to the Company. However, the corporate guarantee to the bank raises a question as to whether or not the two year holding period was in effect during the period the loan was guaranteed. Under these facts, the following questions appear to be raised:

1. Is the holding period of the 49,500 shares for which the purchaser paid cash affected by their subsequent pledge as additional collateral for a loan to the President in view of the corporate guarantee?

2. Does the Rule 144 holding period run during the period of time that the stock was pledged as collateral for a bank loan, where the loan was guaranteed by the Company?

3. If the holding period was not running while the bank loan was guaranteed by the Company, did the holding period run during the period between December 26, 1971 and March 30, 1972 when no corporate guarantee existed?

A number of other employee stockholders of the Company purchased their stock from the Company by borrowing the purchase price from a bank and delivering to the bank a promissory note collateralized solely by a pledge of the stock purchased from the Company. All of such guaranties have now been released by the bank. As stated above, it would not appear that the corporate guarantee of the stockholders loan to the bank is within the ambit of Section (d)(2) of Rule 144 and that the holding period under Rule 144 would begin to run on the date the securities were purchased from the seller by the employees stockholder. However, the Commission's advice in this regard would be appreciated.

As disclosure in this regard is required in the Company's Registration Statement which has been filed with the Commission, the Commission's prompt attention to this request would be very much appreciated. If the undersigned can be of any assistance in further clarifying this request, please call collect at the telephone number indicated above.

Very truly yours,

WYCHE, BURGESS, FREEMAN & PARHAM

By

James M. Shoemaker, Jr.

JMS/sab

[STAFF REPLY LETTER]

MAY 9 1973

James M. Shoemaker, Jr., Esq.

Wyche, Burgees, Freeman & Parham

P.O. Box 10207

44 East Camperdown Way

Greenville, South Carolina 29603

Re: Builder Marts of America, Inc.

Dear Mr. Shoemaker:

This is with reference to your letter dated April 24, 1973 requesting as interpretation of the applicability of the holding period requirement of Rule 144 to shares of common stock of Builder Marts of America, Inc. (the "Company") purchased by the President and certain other employees of the Company.

We understand the material facts to be as follows. The President purchased from the Company for cash 49,500 shares on May 12, 1966. On April 23, 1967, he obtained another 186,600 shares, for which he executed to the Company a promissory note for the purchase price secured solely by a pledge of the stock purchased. In April 1969, the President purchased an additional 125,400 shares from the Company and paid for these shares from the proceeds of a bank loss. Such proceeds were also used to pay off the President's note to the Company for 186,600 shares. This bank loan was secured by a pledge of all of the stock of the Company owned by the President at that date. Simultaneously the Company executed a guarantee to the bank for the loan made to the President.

As stated in your letter, other Company employee purchased stock from the Company by borrowing the purchase price from a bank and delivering to the bank a promissory note collateral solely by a pledge of the stock purchased. Although it is not entirely clear from your letter, it appears that each of these notes was guaranteed by the Company.

On the basis of the facts presented, it is this Division's view that, for purposes of computing the holding period under Rule 144 for the shares held by the Company's President and various other employees, there should be excluded those periods during which the Company's guarantees for the bank loans mentioned above are in effect.

Sincerely yours,

Peter J. Romeo

Attorney Adviser