Exhibit 10.5

 

 

 

HOLDING PLEDGE AGREEMENT

made by

HDS HOLDING CORPORATION, as Pledgor

in favor of

BANK OF AMERICA, N.A.,

as Administrative Agent and as Collateral Agent

Dated as of April 12, 2012

 

 

 

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         Page  

SECTION 1

  DEFINED TERMS      2   

1.1

  Definitions.      2   

1.2

  Other Definitional Provisions.      6   

SECTION 2

  [Reserved]      6   

SECTION 3

  GRANT OF SECURITY INTEREST      6   

3.1

  Pledged Stock      6   

3.2

  Intercreditor Relations      6   

SECTION 4

  REPRESENTATIONS AND WARRANTIES      7   

4.1

  Representations and Warranties of the Pledgor      7   

SECTION 5

  COVENANTS      8   

5.1

  Covenants of the Pledgor      8   

SECTION 6

  REMEDIAL PROVISIONS      9   

6.1

  Pledged Stock.      9   

6.2

  Proceeds To Be Turned Over to the Collateral Agent      10   

6.3

  Application of Proceeds      11   

6.4

  Code and Other Remedies      11   

6.5

  Registration Rights.      12   

SECTION 7

  THE COLLATERAL AGENT      13   

7.1

  Collateral Agent’s Appointment as Attorney-in-Fact, etc.      13   

7.2

  Duty of Collateral Agent      13   

7.3

  Financing Statements      14   

7.4

  Authority of Collateral Agent      14   

SECTION 8

  NON-LENDER SECURED PARTIES      14   

8.1

  Rights to Pledged Stock.      14   

8.2

  Appointment of Agent      16   

8.3

  Waiver of Claims      16   

8.4

  Designation of Non-Lender Secured Parties      16   

SECTION 9

  MISCELLANEOUS      16   

9.1

  Amendments in Writing      16   

9.2

  Notices      17   

9.3

  No Waiver by Course of Conduct; Cumulative Remedies      17   

9.4

  Indemnification.      17   

9.5

  Successors and Assigns      18   

9.6

  Counterparts      18   

 

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9.7

  Severability      18   

9.8

  Section Headings      18   

9.9

  Integration      18   

9.10

  GOVERNING LAW      18   

9.11

  Submission to Jurisdiction; Waivers      18   

9.12

  Acknowledgments      19   

9.13

  WAIVER OF JURY TRIAL      19   

9.14

  Releases.      19   

9.15

  Judgment      20   

9.16

  Transfer Tax Acknowledgment      21   

SCHEDULES

 

1 Notice Address of Pledgor

 

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HOLDING PLEDGE AGREEMENT

HOLDING PLEDGE AGREEMENT, dated as of April 12, 2012, made by HDS Holding
Corporation, a Delaware corporation (the “Pledgor”) in favor of BANK OF AMERICA,
N.A., as collateral agent (in such capacity, the “Collateral Agent”) and
administrative agent (in such capacity, the “Administrative Agent”) for the
banks and other financial institutions (collectively, the “Lenders”;
individually, a “Lender”) from time to time parties to the Credit Agreement
described below.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated as of the date hereof
(as amended, amended and restated, waived, supplemented or otherwise modified
from time to time, together with any agreement extending the maturity of, or
restructuring, refunding, refinancing or increasing the Indebtedness under such
agreement or any successor agreements, the “Credit Agreement”), among HD Supply,
Inc., a Delaware corporation (the “Borrower”), Bank of America, N.A., as
Administrative Agent and Collateral Agent, and the other parties party thereto,
the Lenders have severally agreed to make extensions of credit to the Borrower
upon the terms and subject to the conditions set forth therein (capitalized
terms that are used in these recitals and not defined herein are used as defined
in subsection 1.1);

WHEREAS, pursuant to that certain ABL Credit Agreement, dated as of the date
hereof (as amended, amended and restated, waived, supplemented or otherwise
modified from time to time, together with any agreement extending the maturity
of, or restructuring, refunding, refinancing or increasing the Indebtedness
under such agreement or any successor agreements, the “ABL Credit Agreement”),
among the Borrower, certain subsidiaries of the Borrower that are or may become
parties thereto (together with the Borrower, collectively, the “ABL Borrowers”),
the several banks and other financial institutions from time to time parties
thereto (as further defined in the ABL Credit Agreement, the “ABL Lenders”),
General Electric Capital Corporation, as administrative agent (in such capacity,
the “ABL Administrative Agent”) and collateral agent (in such capacity, the
“U.S. ABL Collateral Agent”) for the ABL Lenders thereunder, GE Canada Finance
Holding Company, as Canadian administrative agent and Canadian collateral agent,
and the other parties party thereto, the ABL Lenders have severally agreed to
make extensions of credit to the ABL Borrowers upon the terms and subject to the
conditions set forth therein;

WHEREAS, pursuant to that certain ABL Holding Pledge Agreement, dated as of the
date hereof, among the Pledgor, the ABL Administrative Agent and the U.S. ABL
Collateral Agent, the Pledgor has granted a second priority Lien for the benefit
of the Secured Parties (as defined in the U.S. ABL Guarantee and Collateral
Agreement) on the Pledged Stock;

WHEREAS, the Pledgor is the sole stockholder of the Borrower;

WHEREAS, the Collateral Agent, the ABL Agent, the First Lien Note Agent (as
defined in the Base Intercreditor Agreement), and the Second Lien Note Agent (as
defined in the Base Intercreditor Agreement) have entered into an Intercreditor
Agreement, acknowledged by the Pledgor, the Borrower and certain Subsidiaries of
the Borrower, dated as of the date hereof (as amended, amended and restated,
waived, supplemented or otherwise modified from time to time subject to
subsection 9.1 hereof, the “Base Intercreditor Agreement”);

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WHEREAS, the Collateral Agent, the First Lien Note Agent and the Second Lien
Note Agent have entered into an Intercreditor Agreement, acknowledged by the
Pledgor, the Borrower, and certain Subsidiaries of the Borrower, dated as of the
date hereof (as amended, amended and restated, waived, supplemented or otherwise
modified from time to time subject to subsection 9.1 hereof, the “Cash Flow
Intercreditor Agreement”);

WHEREAS, the Pledgor and the Borrower will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement and the ABL Credit Agreement; and

WHEREAS, it is a condition to the obligation of the Lenders to make their
respective extensions of credit under the Credit Agreement that the Pledgor
shall execute and deliver this Agreement to the Collateral Agent for the benefit
of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Collateral Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, the Pledgor hereby agrees with the
Administrative Agent and the Collateral Agent, for the benefit of the Secured
Parties, as follows:

SECTION 1 DEFINED TERMS

1.1 Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

(b) The following terms shall have the following meanings:

“ABL Administrative Agent”: as defined in the recitals hereto.

“ABL Agent”: as defined in the Base Intercreditor Agreement.

“ABL Borrowers”: as defined in the recitals hereto.

“ABL Credit Agreement”: as defined in the recitals hereto.

“ABL Lenders”: as defined in the recitals hereto.

“ABL Obligations”: as defined in the Base Intercreditor Agreement.

“Additional Agent”: as defined in the Base Intercreditor Agreement or Cash Flow
Intercreditor Agreement, as applicable.

“Administrative Agent”: as defined in the preamble hereto.

 

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“Agreement”: this Holding Pledge Agreement, as the same may be amended,
restated, supplemented, waived or otherwise modified from time to time.

“Bank Products Affiliate”: any Person who (i) has entered into a Bank Products
Agreement with a Grantor with the obligations of such Grantor thereunder being
secured pursuant to this Agreement or one or more other Loan Documents, (ii) was
a Lender or an Affiliate of a Lender at the time of entry into such Bank
Products Agreement, or on or prior to May 15, 2012, or at the time of the
designation referred to in the following clause (iii) and (iii) has been
designated by the Borrower in accordance with subsection 8.4 of the Guarantee
and Collateral Agreement (provided that no Person shall, with respect to any
Bank Products Agreement, be at any time a Bank Products Affiliate with respect
to more than one Credit Facility (as defined in the Base Intercreditor Agreement
or Cash Flow Intercreditor Agreement, as applicable)).

“Bank Products Agreement”: any agreement pursuant to which a bank or other
financial institution agrees to provide (i) treasury services, (ii) credit card,
merchant card, purchasing card or stored value card services (including, without
limitation, processing and other administrative services with respect thereto),
(iii) cash management services (including, without limitation, controlled
disbursements, credit cards, credit card processing services, automated
clearinghouse and other electronic funds transfer transactions, return items,
netting, overdrafts, depository, lockbox, stop payment, information reporting,
wire transfer and interstate depository network services) and (iv) other similar
banking products or services as may be requested by any Grantor (for the
avoidance of doubt, excluding letters of credit and loans except indebtedness
arising from services described in items (i) through (iii) of this definition).

“Bank Products Provider”: any Person (other than a Bank Products Affiliate) that
has entered into a Bank Products Agreement with a Grantor with the obligations
of such Grantor thereunder being secured pursuant to this Agreement or one or
more other Loan Documents as designated by the Borrower in accordance with
subsection 8.4 of the Guarantee and Collateral Agreement (provided that no
Person shall, with respect to any Bank Products Agreement, be at any time a Bank
Products Provider with respect to more than one Credit Facility (as defined in
the Base Intercreditor Agreement or Cash Flow Intercreditor Agreement, as
applicable)).

“Bankruptcy Case”: (i) the Pledgor, the Borrower or any of its Subsidiaries
commencing any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Pledgor, the Borrower or any of the
Borrower’s Subsidiaries making a general assignment for the benefit of its
creditors; or (ii) there being commenced against the Pledgor, the Borrower or
any of the Borrower’s Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days.

“Bankruptcy Code”: Title 11 of the United States Code.

 

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“Base Intercreditor Agreement”: as defined in the recitals hereto.

“Borrower”: as defined in the recitals hereto.

“Cash Flow Intercreditor Agreement”: as defined in the recitals hereto.

“Code”: the Uniform Commercial Code as from time to time in effect in the State
of New York.

“Collateral Account Bank”: Bank of America, N.A., an Affiliate thereof or
another bank which at all times is a Lender as selected by the Pledgor and
consented to in writing by the Collateral Agent (such consent not to be
unreasonably withheld or delayed).

“Collateral Agent”: as defined in the preamble hereto.

“Collateral Proceeds Account”: a non-interest bearing cash collateral account
established and maintained by the Pledgor at an office of the Collateral Account
Bank in the name, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Parties.

“Collateral Representative”: (i) the Cash Flow Collateral Representative (as
defined in the Base Intercreditor Agreement), (ii) the Senior Priority
Representative (as defined in the Cash Flow Intercreditor Agreement) and
(iii) if any other Intercreditor Agreement is executed, the Person acting as
representative for the Collateral Agent and the Secured Parties thereunder for
the applicable purpose contemplated by this Agreement.

“Credit Agreement”: as defined in the recitals hereto.

“first priority”: with respect to any Lien purported to be created by this
Agreement, that such Lien is the most senior Lien to which the Pledged Stock is
subject (subject to Permitted Liens).

“Grantor”: as defined in the Guarantee and Collateral Agreement.

“Hedging Affiliate”: any Person who (i) has entered into a Hedging Agreement
with any Grantor with the obligations of such Grantor thereunder being secured
pursuant to this Agreement or one or more other Loan Documents, (ii) was an
Agent, an Other Representative, a Lender or an Affiliate of an Agent, an Other
Representative or a Lender at the time of entry into such Hedging Agreement, or
on or prior to May 15, 2012, or at the time of the designation referred to in
the following clause (iv) or (iii) an ABL Agent, an ABL Credit Agreement Lender
(as defined in the Base Intercreditor Agreement) or an Affiliate of an ABL
Credit Agreement Lender at the time of entry into such Hedging Agreement, or on
or prior to the date of this Agreement, or at the time of the designation
referred to in the following clause (iv), and (iv) has been designated by the
Borrower in accordance with subsection 8.4 of the Guarantee and Collateral
Agreement (provided that no Person shall, with respect to any Hedging Agreement,
be at any time a Hedging Affiliate with respect to more than one Credit Facility
(as defined in the Base Intercreditor Agreement or Cash Flow Intercreditor
Agreement, as applicable)).

 

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“Hedging Agreement”: any interest rate, foreign currency, commodity, credit or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity, credit or equity values (including, without limitation, any
option with respect to any of the foregoing and any combination of the foregoing
agreements or arrangements), and any confirmation executed in connection with
any such agreement or arrangement, including, without limitation, any Interest
Rate Agreement, Commodities Agreement or Currency Agreement.

“Intercreditor Agreements”: (i) the Base Intercreditor Agreement, (ii) the Cash
Flow Intercreditor Agreement and (iii) any other intercreditor agreement that
may be entered into in the future by the Collateral Agent and one or more
Additional Agents and acknowledged by, the Pledgor, the Borrower and certain of
its Subsidiaries (each as amended, amended and restated, waived, supplemented or
otherwise modified from time to time) (upon and during the effectiveness
thereof).

“Lender” and “Lenders”: each as defined in the preamble hereto.

“Lender Secured Parties”: the collective reference to (i) the Administrative
Agent, the Collateral Agent and each Other Representative, (ii) the Lenders, and
(iii) each of their respective successors and assigns and their permitted
transferees and endorsees.

“Management Credit Provider”: any Person that is a beneficiary of a Management
Guarantee, as designated by the Borrower.

“Non-Lender Secured Parties”: the collective reference to all Bank Products
Affiliates, Hedging Affiliates, Bank Products Providers, and Management Credit
Providers and all successors, assigns, transferees and replacements thereof.

“Obligations”: as defined in the Guarantee and Collateral Agreement.

“Permitted Liens”: any Lien on the Pledged Stock that, if the Pledged Stock were
the property or an asset of the Borrower or any Restricted Subsidiary, would be
a “Permitted Lien” as defined in the Credit Agreement.

“Pledged Stock”: with respect to the Pledgor, the shares of Capital Stock of the
Borrower held by the Pledgor, as well as any other shares, stock certificates,
options or rights of any nature whatsoever in respect of any Capital Stock of
the Borrower that may be issued or granted to, or held by, the Pledgor while
this Agreement is in effect.

“Pledgor”: as defined in the preamble hereto.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, Proceeds of Pledged Stock shall include, without
limitation, all dividends or other income from the Pledged Stock, collections
thereon or distributions or payments with respect thereto.

“Secured Parties”: the collective reference to the Lender Secured Parties and
the Non-Lender Secured Parties.

 

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“U.S. ABL Collateral Agent”: as defined in the recitals hereto.

“U.S. ABL Guarantee and Collateral Agreement”: as defined by the term “Guarantee
and Collateral Agreement” in the ABL Credit Agreement.

1.2 Other Definitional Provisions.

(a) The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection, and
Schedule references are to this Agreement unless otherwise specified. The words
“include”, “includes”, and “including” shall be deemed to be followed by the
phrase “without limitation”.

(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(c) All references in this Agreement to any of the property described in the
definition of the term “Pledged Stock”, or to any Proceeds thereof, shall be
deemed to be references thereto only to the extent the same constitutes Pledged
Stock.

SECTION 2 [Reserved]

SECTION 3 GRANT OF SECURITY INTEREST

3.1 Pledged Stock. The Pledgor hereby grants to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in all of the Pledged Stock
of the Pledgor now owned or at any time hereafter acquired by the Pledgor, and
any Proceeds thereof, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.

3.2 Intercreditor Relations. Notwithstanding anything herein to the contrary, it
is the understanding of the parties that the Liens granted pursuant to
subsection 3.1 shall (x) be senior in priority to the Liens granted to the ABL
Agent for the benefit of the holders of the ABL Obligations to secure the ABL
Obligations pursuant to the relevant ABL Documents (as defined in the Base
Intercreditor Agreement) and (y) prior to the applicable Discharge of Additional
Obligations (as defined in the Base Intercreditor Agreement or the Cash Flow
Intercreditor Agreement, as applicable), be pari passu and equal in priority to
the Liens granted to any Additional Agent for the benefit of the holders of the
applicable Additional Obligations to secure such Additional Obligations pursuant
to the applicable Additional Collateral Documents (as defined in the Base
Intercreditor Agreement or the Cash Flow Intercreditor Agreement, as applicable)
(except, in the case of this clause (y), as may be separately otherwise agreed
between the Collateral Agent, on behalf of itself and the Secured Parties, and
any Additional Agent, on behalf of itself and the Additional Secured Parties (as
defined in the Base Intercreditor Agreement or the Cash Flow Intercreditor
Agreement, as applicable) represented thereby including pursuant to the Cash
Flow Intercreditor Agreement). The Collateral Agent acknowledges and agrees that
the relative priority of such Liens granted to the Collateral Agent, the ABL
Agent and any Additional Agent may be determined solely pursuant to the
applicable Intercreditor Agreements,

 

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and not by priority as a matter of law or otherwise. Notwithstanding anything
herein to the contrary, the Liens and security interest granted to the
Collateral Agent pursuant to this Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder are subject to the provisions of the
Intercreditor Agreements. In the event of any conflict between the terms of any
Intercreditor Agreement and this Agreement, the terms of the applicable
Intercreditor Agreement shall govern and control as among (i) the Collateral
Agent, the ABL Agent and any Additional Agent, in the case of the Base
Intercreditor Agreement, (ii) the Collateral Agent and any Additional Agent, in
the case of the Cash Flow Intercreditor Agreement, and (iii) the Collateral
Agent and any other secured creditor (or agent therefor) party thereto, in the
case of any other Intercreditor Agreement. In the event of any such conflict,
the Pledgor may act (or omit to act) in accordance with such Intercreditor
Agreement, and shall not be in breach, violation or default of its obligations
hereunder by reason of doing so. Notwithstanding any other provision hereof, any
obligation hereunder to deliver to the Collateral Agent the Pledged Stock shall
be satisfied by causing the Pledged Stock to be delivered to the Collateral
Agent, or the applicable Collateral Representative, as applicable, to be held in
accordance with any applicable Intercreditor Agreement.

SECTION 4 REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of the Pledgor. To induce the Collateral
Agent, the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, the Pledgor hereby represents and warrants to
the Collateral Agent and each other Secured Party that:

4.1.1 The shares of Pledged Stock pledged by the Pledgor hereunder constitute
all the issued and outstanding shares of all classes of the Capital Stock of the
Borrower owned by the Pledgor.

4.1.2 [Reserved].

4.1.3 The Pledgor is the record and beneficial owner of, and has good title to,
the Pledged Stock pledged by it hereunder, free of any and all Liens securing
Indebtedness owing to any other Person, except the security interest created by
this Agreement and Liens arising by operation of law or Permitted Liens.

4.1.4 Upon delivery to the Collateral Agent or the applicable Collateral
Representative, as applicable, in accordance with any applicable Intercreditor
Agreement, of the certificates evidencing the Pledged Stock held by the Pledgor
together with executed undated stock powers or other instruments of transfer,
the security interest created in the Pledged Stock constituting certificated
securities by this Agreement, assuming the continuing possession of the Pledged
Stock by the Collateral Agent or the applicable Collateral Representative, as
applicable, in accordance with any applicable Intercreditor Agreement, will
constitute a valid, perfected first priority (subject, in terms of priority
only, to the priority of the Liens of the applicable Collateral Representative)
security interest in the Pledged Stock to the extent provided in and governed by
the Code, in each case subject to no Liens other than Permitted Liens (and any
applicable Intercreditor Agreement), enforceable in accordance with its terms
against all creditors of

 

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the Pledgor and any Persons purporting to purchase the Pledged Stock from the
Pledgor, except as enforceability may be affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

SECTION 5 COVENANTS

5.1 Covenants of the Pledgor. The Pledgor covenants and agrees with the
Collateral Agent and the other Secured Parties that, from and after the date of
this Agreement until the date upon which the Loans, and all other Obligations
then due and owing shall have been paid in full in cash and the Commitments
shall have terminated:

5.1.1 Additional Shares. If the Pledgor shall, as a result of its ownership of
the Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any stock certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), stock option or similar rights in respect of the Capital
Stock of the Borrower, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise
in respect thereof, the Pledgor shall accept the same as the agent for the
Collateral Agent and the other Secured Parties, hold the same in trust for the
Collateral Agent and the other Secured Parties and deliver the same forthwith to
the Collateral Agent (that will hold the same on behalf of the Secured Parties)
or the applicable Collateral Representative, as applicable, in accordance with
any applicable Intercreditor Agreement, in the exact form received, duly
indorsed by the Pledgor to the Collateral Agent or the applicable Collateral
Representative, as applicable, in accordance with any applicable Intercreditor
Agreement, if required, or accompanied by an undated stock power covering such
certificate duly executed in blank by the Pledgor, to be held by the Collateral
Agent or the applicable Collateral Representative, as applicable, in accordance
with any applicable Intercreditor Agreement, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Pledged Stock upon the liquidation or dissolution of the Borrower
(except any liquidation or dissolution permitted by the Credit Agreement) shall
be paid over to the Collateral Agent or the applicable Collateral
Representative, as applicable, in accordance with any applicable Intercreditor
Agreement, to be held by the Collateral Agent or the applicable Collateral
Representative, as applicable, in accordance with any applicable Intercreditor
Agreement, subject to the terms hereof as additional collateral security for the
Obligations, and in case any distribution of capital shall be made on or in
respect of the Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of the Borrower or pursuant to the
reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Collateral Agent, be
delivered to the Collateral Agent, or the applicable Collateral Representative,
as applicable, in accordance with any applicable Intercreditor Agreement, to be
held by the Collateral Agent or the applicable Collateral Representative, as
applicable, in accordance with any applicable Intercreditor Agreement, subject
to the terms hereof as additional collateral security for the

 

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Obligations, in each case except as otherwise provided by any applicable
Intercreditor Agreement. If any sums of money or property so paid or distributed
in respect of the Pledged Stock shall be received by the Pledgor, the Pledgor
shall, until such money or property is paid or delivered to the Collateral Agent
or the applicable Collateral Representative, as applicable, in accordance with
any applicable Intercreditor Agreement, hold such money or property in trust for
the Secured Parties, segregated from other funds of the Pledgor, as additional
collateral security for the Obligations. The Pledgor shall notify the Collateral
Agent promptly in writing of the occurrence of any of the events described in
this subsection 5.1.1 with respect to the Pledged Stock.

5.1.2 [Reserved]

5.1.3 Maintenance of Security Interest. The Pledgor shall maintain the security
interest created by this Agreement in the Pledged Stock as a security interest
having at least the perfection and priority described in subsection 4.1.4, and
shall defend such security interest against the claims and demands of all
Persons whomsoever. At any time and from time to time, upon the written request
of the Collateral Agent and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Collateral Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted by the Pledgor.

SECTION 6 REMEDIAL PROVISIONS

6.1 Pledged Stock.

(a) Unless an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have given notice to the Pledgor of the Collateral
Agent’s intent to exercise its corresponding rights pursuant to subsection
6.1(b), the Pledgor shall be permitted to receive all cash dividends and
distributions paid in respect of the Pledged Stock (subject to the second and
third sentences of subsection 5.1.1. of this Agreement), to the extent permitted
in the Credit Agreement, and to exercise all voting and corporate rights with
respect to the Pledged Stock; provided, however, that no vote shall be cast or
corporate right exercised or such other action taken (other than in connection
with a transaction expressly permitted by the Credit Agreement) which, in the
Collateral Agent’s reasonable judgment, would materially impair the Pledged
Stock or the related rights or remedies of the Secured Parties or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.

(b) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give written notice of its intent to exercise such rights to the
Pledgor, (i) the Collateral Agent or the applicable Collateral Representative,
as applicable, in accordance with the terms of any applicable Intercreditor
Agreement, shall have the right to receive any and all cash dividends, payments
or other Proceeds paid in respect of the Pledged Stock and make application
thereof to the Obligations in such order as is provided in subsection 6.3, and
(ii) any or all of the Pledged Stock shall be registered in the name of the
Collateral Agent or the applicable Collateral Representative, or the respective
nominee of any thereof, as applicable, in accordance with the

 

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terms of any applicable Intercreditor Agreement, and the Collateral Agent or the
applicable Collateral Representative, or acting through its respective nominee,
as applicable, in accordance with the terms of any applicable Intercreditor
Agreement, may thereafter exercise (x) all voting, corporate and other rights
pertaining to the Pledged Stock at any meeting of shareholders of the Borrower
or otherwise and (y) any and all rights of conversion, exchange, subscription
and any other rights, privileges or options pertaining to the Pledged Stock as
if it were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of the Borrower, or upon the exercise by the Pledgor or
the Collateral Agent or the applicable Collateral Representative, as applicable,
in accordance with the terms of any applicable Intercreditor Agreement, of any
right, privilege or option pertaining to the Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Collateral Agent or the applicable
Collateral Representative, as applicable, in accordance with the terms of any
applicable Intercreditor Agreement, may reasonably determine), all without
liability (other than for its gross negligence or willful misconduct) except to
account for property actually received by it, but the Collateral Agent or the
applicable Collateral Representative, as applicable, shall have no duty to the
Pledgor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing, provided that the
Collateral Agent or the applicable Collateral Representative, as applicable,
shall not exercise any voting or other consensual rights pertaining to the
Pledged Stock in any way that would constitute an exercise of the remedies
described in subsection 6.4 other than in accordance with subsection 6.4.

(c) The Pledgor hereby authorizes and instructs the Borrower hereunder to
(i) comply with any instruction received by it from the Collateral Agent in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from the Pledgor, and the Pledgor agrees that the
Borrower shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Stock directly to the Collateral Agent.

6.2 Proceeds To Be Turned Over to the Collateral Agent. If an Event of Default
shall occur and be continuing, and the Collateral Agent shall have instructed
the Pledgor to do so, all Proceeds of the Pledged Stock received by the Pledgor
consisting of cash, checks and other Cash Equivalent items shall be held by the
Pledgor in trust for the Collateral Agent and the other Secured Parties hereto,
the ABL Agent and the other ABL Secured Parties (as defined in the Base
Intercreditor Agreement), any Additional Agent and the other applicable
Additional Secured Parties (as defined in the Base Intercreditor Agreement or
the Cash Flow Intercreditor Agreement, as applicable), or the applicable
Collateral Representative, as applicable, in accordance with the terms of any
applicable Intercreditor Agreement, segregated from other funds of the Pledgor,
and shall, forthwith upon receipt by the Pledgor, be turned over to the
Collateral Agent, or the applicable Collateral Representative, as applicable, in
accordance with the terms of any applicable Intercreditor Agreement (or their
respective agents appointed for purposes of perfection), in the exact form
received by the Pledgor (duly indorsed by the Pledgor to the Collateral Agent,
or the applicable Collateral Representative, as applicable, in accordance with
the terms of any applicable Intercreditor Agreement, if required). All Proceeds
of the

 

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Pledged Stock received by the Collateral Agent hereunder shall be held by the
Collateral Agent in the relevant Collateral Proceeds Account maintained under
its sole dominion and control. All Proceeds of the Pledged Stock while held by
the Collateral Agent in such Collateral Proceeds Account (or by the Pledgor in
trust for the Collateral Agent and the other Secured Parties) shall continue to
be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in subsection 6.3.

6.3 Application of Proceeds. It is agreed that if an Event of Default shall
occur and be continuing, any and all Proceeds of the Pledgor’s Collateral (as
defined in the Credit Agreement) received by the Collateral Agent (whether from
the Pledgor or otherwise) shall be held by the Collateral Agent for the benefit
of the Secured Parties as collateral security for the Obligations (whether
matured or unmatured), and/or then or at any time thereafter may, in the sole
discretion of the Collateral Agent, be applied by the Collateral Agent against
the Obligations then due and owing in the order of priority set forth in each
applicable Intercreditor Agreement.

6.4 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations to the extent permitted by applicable law, all
rights and remedies of a secured party under the Code or any other applicable
law. Without limiting the generality of the foregoing, to the extent permitted
by applicable law, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon the Pledgor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances, forthwith (subject to the terms of
any documentation governing any Special Purpose Financing and subject to each
applicable Intercreditor Agreement) collect, receive, appropriate and realize
upon the Pledged Stock, or any part thereof, and/or may forthwith, subject to
any existing reserved rights or licenses, sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver the Pledged Stock or
any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker’s board or
office of the Collateral Agent or any other Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Collateral Agent or any other Secured Party shall have the
right, to the extent permitted by law, upon any such sale or sales, to purchase
the whole or any part of the Pledged Stock so sold, free of any right or equity
of redemption in the Pledgor, which right or equity is hereby waived and
released. The Collateral Agent shall apply the net proceeds of any action taken
by it pursuant to this subsection 6.4, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of the Pledged Stock or in any way relating to the Pledged
Stock or the rights of the Collateral Agent and the other Secured Parties
hereunder, including, without limitation, reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Obligations then due
and owing, in the order of priority specified in subsection 6.3 above, and only
after such application and after the payment by the Collateral Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-615(a)(3) of the Code, need the Collateral Agent account for the
surplus, if any, to the Pledgor. To the extent permitted by applicable law,
(i) the Pledgor waives all claims, damages and demands it may acquire against
the Collateral Agent or any other Secured Party

 

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arising out of the repossession, retention or sale of the Pledged Stock, other
than any such claims, damages and demands that may arise from the gross
negligence or willful misconduct of any of the Collateral Agent or such other
Secured Party, and (ii) if any notice of a proposed sale or other disposition of
the Pledged Stock shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.

6.5 Registration Rights.

(a) If the Collateral Agent shall determine to exercise its right to sell any or
all of the Pledged Stock pursuant to subsection 6.4, and if in the reasonable
opinion of the Collateral Agent it is necessary or reasonably advisable to have
the Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the Pledgor will use its reasonable best
efforts to cause the Borrower to (i) execute and deliver, and use its reasonable
best efforts to cause the directors and officers of the Borrower to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts as may be, in the reasonable opinion of the Collateral Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its reasonable
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of not more than one year from
the date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the reasonable opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. The Pledgor agrees to use its reasonable best
efforts to cause the Borrower to comply with the provisions of the securities or
“Blue Sky” laws of any and all states and the District of Columbia that the
Collateral Agent shall reasonably designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) that will satisfy the provisions of Section 11(a) of the Securities
Act.

(b) The Pledgor recognizes that the Collateral Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, to the extent permitted by applicable law, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Collateral Agent shall not be under any obligation to delay a sale
of the Pledged Stock for the period of time necessary to permit the Borrower to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the Borrower would agree to do so.

(c) The Pledgor agrees to use its reasonable best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this subsection 6.5 valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the

 

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covenants contained in this subsection 6.5 will cause irreparable injury to the
Collateral Agent and the Lenders, that the Collateral Agent and the Lenders have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this subsection 6.5 shall be specifically
enforceable against the Pledgor, and, to the extent permitted by applicable law,
the Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred or is continuing under the Credit Agreement.

SECTION 7 THE COLLATERAL AGENT

7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc.

(a) The Pledgor hereby irrevocably constitutes and appoints the Collateral Agent
and any authorized officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of the Pledgor and in the name of the Pledgor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments that may be reasonably necessary or desirable to accomplish the
purposes of this Agreement to the extent permitted by applicable law, provided
that the Collateral Agent agrees not to exercise such power except upon the
occurrence and during the continuance of any Event of Default, and in accordance
with and subject to each applicable Intercreditor Agreement. Without limiting
the generality of the foregoing, at any time when an Event of Default has
occurred and is continuing (in each case to the extent permitted by applicable
law) and subject to each applicable Intercreditor Agreement, (x) the Pledgor
hereby gives the Collateral Agent the power and right, on behalf of the Pledgor,
without notice or assent by the Pledgor, to execute, in connection with any sale
provided for in subsection 6.4 or 6.5, any indorsements, assessments or other
instruments of conveyance or transfer with respect to the Pledged Stock.

(b) The reasonable expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this subsection 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due ABR Loans, from the date of payment by the
Collateral Agent to the date reimbursed by the Pledgor, shall be payable by the
Pledgor to the Collateral Agent on demand.

(c) The Pledgor hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable as
to the Pledgor until this Agreement is terminated as to the Pledgor, and the
security interests in the Pledged Stock of the Pledgor created hereby are
released.

7.2 Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Pledged Stock in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
its own account. None of the Collateral Agent, any other Secured Party or any of
their respective officers, directors, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Pledged Stock or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Pledged Stock upon

 

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the request of the Pledgor or any other Person or, except as otherwise provided
herein, to take any other action whatsoever with regard to the Pledged Stock or
any part thereof. The powers conferred on the Collateral Agent and the other
Secured Parties hereunder are solely to protect the Collateral Agent’s and the
other Secured Parties’ interests in the Pledged Stock and shall not impose any
duty upon the Collateral Agent or any other Secured Party to exercise any such
powers. The Collateral Agent and the other Secured Parties shall be accountable
only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Pledgor for any act or failure to act
hereunder, except as otherwise provided herein or for their own gross negligence
or willful misconduct.

7.3 Financing Statements. Pursuant to any applicable law, the Pledgor authorizes
the Collateral Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Pledged Stock without the
signature of the Pledgor in such form and in such filing offices as the
Collateral Agent reasonably determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. The Pledgor authorizes
the Collateral Agent to use any collateral description reasonably determined by
the Collateral Agent that describes with particularity the Pledged Stock in any
such financing statements. The Collateral Agent agrees to notify the Pledgor of
any financing or continuation statement filed by it; provided that any failure
to give such notice shall not affect the validity or effectiveness of any such
filing.

7.4 Authority of Collateral Agent. The Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by the Collateral Agent or the exercise or non-exercise by the
Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement or
any amendment, supplement or other modification of this Agreement shall, as
between the Collateral Agent and the Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Pledgor,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Pledgor shall not be under any obligation, or entitlement, to
make any inquiry respecting such authority.

SECTION 8 NON-LENDER SECURED PARTIES

8.1 Rights to Pledged Stock.

(a) The Non-Lender Secured Parties shall not have any right whatsoever to do any
of the following: (i) exercise any rights or remedies with respect to the
Collateral, or to direct the Collateral Agent to do the same, including, without
limitation, the right to (A) enforce any Liens or sell or otherwise foreclose on
any portion of the Collateral, (B) request any action, institute any
proceedings, exercise any voting rights, give any instructions, make any
election, notify account debtors or make collections with respect to all or any
portion of the Collateral or (C) release the Pledgor under this Agreement or
release any Collateral from the Liens of any Security Document or consent to or
otherwise approve any such release; (ii) demand, accept or obtain any Lien on
any Collateral (except for Liens arising under, and subject to the terms of, the
Security

 

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Documents); (iii) vote in any Bankruptcy Case or similar proceeding in respect
of the Borrower or any of its Subsidiaries (any such proceeding, for purposes of
this clause (a), a “Bankruptcy”) with respect to, or take any other actions
concerning the Collateral; (iv) receive any proceeds from any sale, transfer or
other disposition of any of the Collateral (except in accordance with the
Security Documents); (v) oppose any sale, transfer or other disposition of the
Collateral; (vi) object to any debtor-in-possession financing in any Bankruptcy
which is provided by one or more Lenders among others (including on a priming
basis under Section 364(d) of the Bankruptcy Code); (vii) object to the use of
cash collateral in respect of the Collateral in any Bankruptcy; or (viii) seek,
or object to the Lenders seeking on an equal basis, any adequate protection or
relief from the automatic stay with respect to the Collateral in any Bankruptcy.

(b) Each Non-Lender Secured Party, by its acceptance of the benefits of this
Agreement and the other Security Documents, agrees that in exercising rights and
remedies with respect to the Collateral, the Collateral Agent and the Lenders,
with the consent of the Collateral Agent, may enforce the provisions of the
Security Documents and exercise remedies thereunder and under any other Loan
Documents (or refrain from enforcing rights and exercising remedies), all in
such order and in such manner as they may determine in the exercise of their
sole business judgment. Such exercise and enforcement shall include, without
limitation, the rights to collect, sell, dispose of or otherwise realize upon
all or any part of the Collateral, to incur expenses in connection with such
collection, sale, disposition or other realization and to exercise all the
rights and remedies of a secured lender under the Uniform Commercial Code of any
applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of
the benefits of this Agreement and the other Security Documents hereby agree not
to contest or otherwise challenge any such collection, sale, disposition or
other realization of or upon all or any of the Collateral. Whether or not a
Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be
deemed to have consented to any sale or other disposition of any property,
business or assets of the Borrower or any of its Subsidiaries and the release of
any or all of the Collateral from the Liens of any Security Document in
connection therewith.

(c) Notwithstanding any provision of this subsection 8.1, the Non-Lender Secured
Parties shall be entitled, subject to each applicable Intercreditor Agreement,
to file any necessary responsive or defensive pleadings in opposition to any
motion, claim, adversary proceeding or other pleadings (A) in order to prevent
any Person from seeking to foreclose on the Collateral or supersede the
Non-Lender Secured Parties’ claim thereto or (B) in opposition to any motion,
claim, adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Non-Lender Secured
Parties. Each Non-Lender Secured Party, by its acceptance of the benefits of
this Agreement, agrees to be bound by and to comply with each applicable
Intercreditor Agreement and authorizes the Collateral Agent to enter into each
Intercreditor Agreement on its behalf.

(d) Each Non-Lender Secured Party, by its acceptance of the benefits of this
Agreement, agrees that the Collateral Agent and the Lenders may deal with the
Collateral, including any exchange, taking or release of Collateral, may change
or increase the amount of the Obligations, and may release the Pledgor from its
obligations hereunder, all without any liability or obligation (except as may be
otherwise expressly provided herein) to the Non-Lender Secured Parties.

 

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8.2 Appointment of Agent. Each Non-Lender Secured Party, by its acceptance of
the benefits of this Agreement and the other Security Documents, shall be deemed
irrevocably to make, constitute and appoint the Collateral Agent, as agent under
the Credit Agreement (and all officers, employees or agents designated by the
Collateral Agent) as such Person’s true and lawful agent and attorney-in-fact,
and in such capacity, the Collateral Agent shall have the right, with power of
substitution for the Non-Lender Secured Parties and in each such Person’s name
or otherwise, to effectuate any sale, transfer or other disposition of the
Collateral. It is understood and agreed that the appointment of the Collateral
Agent as the agent and attorney-in-fact of the Non-Lender Secured Parties for
the purposes set forth herein is coupled with an interest and is irrevocable. It
is understood and agreed that the Collateral Agent has appointed the
Administrative Agent as its agent for purposes of perfecting certain of the
security interests created hereunder and for otherwise carrying out certain of
its obligations hereunder.

8.3 Waiver of Claims. To the maximum extent permitted by law, each Non-Lender
Secured Party waives any claim it might have against the Collateral Agent or the
Lenders with respect to, or arising out of, any action or failure to act or any
error of judgment, negligence, or mistake or oversight whatsoever on the part of
the Collateral Agent or the Lenders or their respective directors, officers,
employees or agents with respect to any exercise of rights or remedies under the
Loan Documents or any transaction relating to the Collateral (including, without
limitation, any such exercise described in subsection 8.1(b) above), except for
any such action or failure to act which constitutes willful misconduct or gross
negligence of such Person. None of the Collateral Agent, any Lender or any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Borrower any Subsidiary of the
Borrower, any Non-Lender Secured Party or any other Person or to take any other
action or forbear from doing so whatsoever with regard to the Collateral or any
part thereof, except for any such action or failure to act which constitutes
willful misconduct or gross negligence of such Person.

8.4 Designation of Non-Lender Secured Parties. The Borrower may from time to
time designate a Person as a “Bank Products Affiliate,” a “Bank Products
Provider,” a “Hedging Affiliate” or a “Management Credit Provider” under
subsection 8.4 of the Guarantee and Collateral Agreement by written notice to
the Collateral Agent. Upon being so designated by the Borrower, such Bank
Products Provider, Bank Products Affiliate, Hedging Affiliate or Management
Credit Provider (as the case may be) shall be a Non-Lender Secured Party for the
purposes of this Agreement for as long as so designated by the Borrower;
provided that, at the time of the Borrower’s designation of such Non-Lender
Secured Party, the obligations of the Pledgor under the applicable Hedging
Agreement, Bank Products Agreement or Management Guarantee (as the case may be)
have not been designated as ABL Obligations.

SECTION 9 MISCELLANEOUS

9.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Pledgor and the Collateral Agent; provided that
(a) any provision of this Agreement imposing obligations on the Pledgor may be
waived by the Collateral Agent in a written instrument executed by the
Collateral Agent and (b) if separately agreed in writing

 

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between the Borrower and any Non-Lender Secured Party (and such Non-Lender
Secured Party has been designated in writing by the Borrower to the Collateral
Agent for purposes of this sentence, for so long as so designated), no such
amendment, modification or waiver shall amend, modify or waive subsection 6.3
(or the definition of “Non-Lender Secured Party” or “Secured Party” to the
extent relating thereto) if such amendment, modification or waiver would
directly and adversely affect such Non-Lender Secured Party without the written
consent of such Non-Lender Secured Party. For the avoidance of doubt, it is
understood and agreed that any amendment, amendment and restatement, waiver,
supplement or other modification of or to any Intercreditor Agreement that would
have the effect, directly or indirectly, through any reference herein to any
Intercreditor Agreement or otherwise, of waiving, amending, supplementing or
otherwise modifying this Agreement, or any term or provision hereof, or any
right or obligation of the Pledgor hereunder or in respect hereof, shall not be
given such effect except pursuant to a written instrument executed by the
Pledgor and the Collateral Agent in accordance with this subsection 9.1.

9.2 Notices. All notices, requests and demands to or upon the Collateral Agent
or the Pledgor hereunder shall be effected in the manner provided for in
subsection 10.2 of the Credit Agreement; provided that any such notice, request
or demand to or upon the Pledgor shall be addressed to the Pledgor at its notice
address set forth on Schedule 1, unless and until the Pledgor shall change such
address by notice to the Collateral Agent and the Administrative Agent given in
accordance with subsection 10.2 of the Credit Agreement.

9.3 No Waiver by Course of Conduct; Cumulative Remedies. None of the Collateral
Agent or any other Secured Party shall by any act (except by a written
instrument pursuant to subsection 9.1), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent or any other Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Collateral Agent or any other Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Collateral Agent or such other Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

9.4 Indemnification.

(a) The Pledgor agrees to pay, and to save the Collateral Agent, the
Administrative Agent and the other Secured Parties harmless from, (x) any and
all liabilities with respect to, or resulting from any delay in paying, any and
all stamp, excise, sales or other similar taxes which may be payable or
determined to be payable with respect to the Pledged Stock or in connection with
any of the transactions contemplated by this Agreement and (y) any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement (collectively, the “indemnified liabilities”), in each case to the
extent the Borrower would be required to do so pursuant to

 

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subsection 10.5 of the Credit Agreement, and in any event excluding any taxes or
other indemnified liabilities arising from gross negligence or willful
misconduct of the Collateral Agent, the Administrative Agent or any other
Secured Party.

(b) The agreements in this subsection 9.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.

9.5 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the Pledgor, the Collateral Agent and the Secured Parties and
their respective successors and assigns; provided that the Pledgor may not
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent, except as
permitted hereby or by the Credit Agreement.

9.6 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

9.7 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

9.8 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

9.9 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Pledgor, the Collateral Agent, the Administrative Agent
and the other Secured Parties with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Pledgor, the Collateral Agent or any other Secured Party relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.

9.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES
ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

9.11 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably
and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and

 

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enforcement of any judgment in respect thereof, to the non exclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address referred to in subsection 9.2 or at such other address of which the
Collateral Agent and the Administrative Agent (in the case of any other party
hereto) or the Borrower (in the case of the Collateral Agent and the
Administrative Agent) shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any punitive damages.

9.12 Acknowledgments. The Pledgor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

(b) none of the Collateral Agent, the Administrative Agent or any other Secured
Party has any fiduciary relationship with or duty to the Pledgor arising out of
or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Pledgor, on the one hand, and the Collateral Agent, the
Administrative Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of pledgor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Pledgor and the Secured Parties.

9.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

9.14 Releases.

(a) At such time as the Loans and the other Obligations (other than any
Obligations owing to a Non-Lender Secured Party) then due and owing shall have
been paid in full and the

 

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Commitments have been terminated, all Pledged Stock shall be automatically
released from the Liens created hereby, and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Collateral Agent and the Pledgor hereunder shall terminate, all without delivery
of any instrument or performance of any act by any party, and all rights to the
Pledged Stock shall revert to the Pledgor. At the request and sole expense of
the Pledgor following any such termination, the Collateral Agent shall deliver
to the Pledgor any Pledged Stock held by the Collateral Agent hereunder, and the
Collateral Agent and the Administrative Agent shall execute and deliver to the
Pledgor such releases and other documents (including without limitation UCC
termination statements), and do or cause to be done all other acts, as the
Pledgor shall reasonably request to evidence such termination.

(b) In connection with any sale or other disposition of the Pledged Stock
permitted by the Credit Agreement or any consolidation with or merger with or
into any Person by the Borrower permitted by the Credit Agreement or any
conveyance, transfer or lease of all or substantially all its assets by the
Borrower to any Person permitted by the Credit Agreement (including Section 7.3
thereof), the Lien pursuant to this Agreement on the Pledged Stock shall be
automatically released. In connection with the sale or other disposition of all
of the Pledged Stock permitted under the Credit Agreement, the merger or
consolidation of the Borrower with or into any Person permitted by the Credit
Agreement, or the conveyance, transfer or lease of all or substantially all its
assets by the Borrower permitted by the Credit Agreement, the Collateral Agent
shall, upon receipt from the Borrower of a written request for the release of
the Pledged Stock, identifying the terms of the sale or other disposition or
other transaction in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a certification by the Borrower
stating that such transaction is in compliance with the Credit Agreement and the
other Loan Documents, deliver to the Borrower the Pledged Stock held by the
Collateral Agent hereunder and the Collateral Agent and the Administrative Agent
shall execute and deliver to the Pledgor (at the sole cost and expense of the
Pledgor) all releases or other documents (including without limitation UCC
termination statements), and do or cause to be done all other acts, necessary or
reasonably desirable for the release of such security or the Liens created
hereby on the Pledged Stock, as applicable, as the Pledgor may reasonably
request.

(c) In addition, the Lien pursuant to this Agreement shall be released on the
Pledged Stock (and any Proceeds thereof) as provided in the Base Intercreditor
Agreement or the Cash Flow Intercreditor Agreement. At the request and sole
expense of the Pledgor following any such release, the Collateral Agent shall
deliver to the Pledgor the Pledged Stock held by the Collateral Agent hereunder,
and the Collateral Agent and the Administrative Agent shall execute and deliver
to the Pledgor such releases and other documents (including without limitation
UCC termination statements), and do or cause to be done all other acts, as the
Pledgor shall reasonably request to evidence such release.

9.15 Judgment. If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one currency into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Collateral Agent could purchase the first currency with
such other currency on the Business Day preceding the day on which final
judgment is given.

 

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9.16 Transfer Tax Acknowledgment. Each party hereto acknowledges that the shares
delivered hereunder are being transferred to and deposited with the Collateral
Agent (or other Person in accordance with any applicable Intercreditor
Agreement) as collateral security for the Obligations and that this Section 9.16
is intended to be the certificate of exemption from New York stock transfer
taxes for the purposes of complying with Section 270.5(b) of the Tax Law of the
State of New York.

[Remainder of page left blank intentionally; signature pages follow.]

 

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

PLEDGOR:

 

HDS HOLDING CORPORATION By:  

/s/ Vidya Chauhan

  Name:  Vidya Chauhan   Title:    Vice President

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Acknowledged and Agreed to as of

the date hereof by:

 

HD SUPPLY, INC. By:  

/s/ Vidya Chauhan

  Name:   Vidya Chauhan   Title:  

Senior Vice President,

Strategic

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Acknowledged and Agreed to as of

the date hereof by:

 

BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent

By:  

/s/ Darleen R Parmelee

  Name:  Darleen R Parmelee   Title:    Assistant Vice President

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Schedule 1

NOTICE ADDRESS OF PLEDGOR

Notices, requests or demands to or upon the Pledgor under the this Agreement
shall be made to the Pledgor as follows:

HDS Holding Corporation

c/o HD Supply, Inc.

3100 Cumberland Blvd., Suite 1480

Atlanta, Georgia 30339

Attention: General Counsel

Fax No: (770) 852-9466