GENERAL SECURITY
AGREEMENT
EXECUTED by the parties as of the 26
th day of August, 2008.
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BANK OF
AMERICA, N.A. ,
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on its own
behalf as Lender (acting through its Canada branch) and as
Collateral Agent, for itself and on behalf of the Secured Parties
(as such term is defined in the Credit Agreement, hereinafter
defined)
335 Madison Avenue, New York, New York 10017
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(hereinafter
the “ Collateral Agent ”)
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WARNACO OF
CANADA COMPANY
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Having its
registered office at 1959 Upper Water Street, Halifax, Nova Scotia,
Canada, B3J 3N2 and its principal place of business at 20600 Clark
Graham Blvd., Baie d’Urfé, Québec, Canada, H9X
4B6
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(hereinafter
the “ Debtor ”)
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SECTION 1 – GRANT OF
SECURITY INTEREST
As a general and
continuing security for the payment and performance of the Secured
Obligations (as such term is defined in the Credit Agreement,
hereinafter defined) of the Debtor, the Debtor, IN CONSIDERATION
OF THE SECURED OBLIGATIONS and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby grants, bargains, assigns and transfers to the
Collateral Agent (for itself and on behalf of the Secured Parties),
and grants to the Collateral Agent (for itself and on behalf of the
Secured Parties) a continuing security interest in all of the
Debtor’s right, title and interest in and to all the personal
property, assets and undertakings of the Debtor of whatsoever
nature and kind, whether now owned or hereafter-acquired by or on
behalf of the Debtor, wherever located (the “
Collateral ”) including, without
limitation:
All debts, book
debts, accounts, claims, demands, moneys and choses in action
whatsoever including, without limitation, claims against the Crown
and claims under insurance policies, which are now owned by or are
due, owing or accruing due to the Debtor or which may hereafter be
owned by or become due, owing or accruing due to the Debtor
together with all contracts, securities, bills, notes, lien notes,
judgments, chattel mortgages, mortgages and all other rights,
benefits and documents now or hereafter
General Security Agreement —
Warnaco of Canada Company (2008)
2
taken, vested
in or held by the Debtor in respect of or as security for the same
and the full benefit and advantage thereof, and all rights of
action or claims which the Debtor now has or may at any time
hereafter have against any person or persons, firm or corporation
in respect thereof (all of the foregoing being herein collectively
called the “ Accounts Receivable ”);
All inventory
of whatever kind now or hereafter owned by the Debtor or in which
the Debtor now or hereinafter has an interest or right of any kind,
and all accessions thereto and products thereof, including, without
limitation, all goods, merchandise, raw materials, goods in
process, finished goods, packaging and packing material and other
tangible personal property now or hereafter held for sale, lease,
rental or resale or that are to be furnished or have been furnished
under a contract of service or that are to be used or consumed in
the business of the Debtor (all of the foregoing being herein
collectively called the “ Inventory
”);
All goods now
or hereafter owned by the Debtor which are not inventory or
consumer goods as defined in the PPSA (as hereinafter defined)
including, without limitation, all fixtures, equipment, machinery,
tools, furniture, vehicles and other tangible personal property
(all of the foregoing being herein collectively called the “
Equipment ”);
(d)
Chattel Paper, Instruments, Securities,
etc.
All chattel
paper, instruments, warehouse receipts, bills of lading and other
documents of title, whether negotiable or non-negotiable, shares,
stock, warrants, bonds, debentures, debenture stock or other
securities (including, without limitation, those described in
Schedule “2” hereto), now or hereafter owned by
the Debtor;
All intangibles
now or hereafter owned by the Debtor including, without limitation,
all contractual rights, goodwill, patents, trade marks, trade
names, copyrights, industrial designs and other industrial or
intellectual property or rights therein, including, without
limitation, those described in Schedule “5”
hereto;
(f) Books
and Accounts, etc.
With respect to
the personal property described in Paragraphs (a) to
(e) inclusive, all books, accounts, invoices, deeds,
documents, writings, letters, papers, security certificates and
other records in any form evidencing or relating thereto and all
contracts, securities, instruments and other rights and benefits in
respect thereof;
General Security Agreement —
Warnaco of Canada Company (2008)
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The uncalled
capital, money, rights, bills of exchange, negotiable and
non-negotiable instruments, judgments and securities not otherwise
described in Paragraphs (a) to (f) inclusive;
With respect to
the personal property described in Paragraphs (a) to
(g) inclusive, all substitutions and replacements thereof,
increases, additions and accessions thereto and any interest of the
Debtor therein; and
With respect to
the personal property described in Paragraphs (a) to
(h) inclusive, personal property in any form or fixtures
derived directly or indirectly from any dealing with such property
or that indemnifies or compensates for such property destroyed or
damaged and proceeds of proceeds whether of the same type, class or
kind as the original proceeds; provided , however ,
that the foregoing grant of security interest shall not include a
security interest in any Excluded Property; and provided, further,
that, if and when any property shall cease to be Excluded Property,
the Collateral Agent for the benefit of the Secured Parties shall
have, and at all times from and after the date hereof be deemed to
have had, a security interest in such property.
1.2
Definitions and Interpretation
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In
the present General Security Agreement (this “
Agreement ”):
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(a)
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Terms used herein and defined in the
Personal Property Security Act (Ontario) or similar
legislation of any other Canadian jurisdiction, the laws of which
are required by such legislation to be applied in connection with
the issue, perfection, enforcement, opposability, validity or
effect of security interests (collectively the “ PPSA
”) shall have the same meanings as in the PPSA unless the
context otherwise requires;
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(b)
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Terms used herein and defined in the
Securities Transfer Act (Ontario) (the “ STA
”) shall have the same meanings as in the STA unless the
context otherwise requires;
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(c)
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Capitalized terms not otherwise
defined herein shall have the same meanings as ascribed to them in
the Credit Agreement, unless the context otherwise
requires;
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(d)
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Any
reference to “ Collateral ” shall, unless the
context otherwise requires, refer to “Collateral or any part
thereof”;
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(e)
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The
term “ security interest ” and the grant of the
“ security interest ” herein provided for shall
include, without limitation, a fixed mortgage, hypothecation,
pledge, charge and assignment of the Collateral in favour of the
Collateral Agent (for itself and on behalf of the Secured
Parties);
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General Security Agreement —
Warnaco of Canada Company (2008)
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(f)
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“ Additional Pledged
Collateral ” means any Pledged Collateral acquired by the
Debtor after the date hereof and in which a security interest is
granted pursuant to Section 1 (Grant of Security Interest),
including, to the extent a security interest is granted therein
pursuant to Section 1 (Grant of Security Interest),
(i) all Stock and Stock Equivalents of any Person that are
acquired by the Debtor after the date hereof, together with all
certificates, instruments or other documents representing any of
the foregoing and all Security Entitlements of the Debtor in
respect of any of the foregoing, (ii) all additional
Indebtedness from time to time owed to the Debtor by any obligor on
the Pledged Debt Instruments and the Instruments evidencing such
Indebtedness and (iii) all interest, cash, Instruments and
other property or Proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any of
the foregoing. “Additional Pledged Collateral” may be
Intangibles (including Intellectual Property), Instruments or
Investment Property;
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(g)
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“ Blocked Account
” means a deposit account maintained by the Debtor with a
Blocked Account Bank which account is the subject of an effective
Blocked Account Letter, and includes all monies on deposit therein
and all certificates and instruments, if any, representing or
evidencing such Blocked Account;
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(h)
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“ Blocked Account Bank
” means a financial institution approved (such approval not
to be unreasonably withheld) by the Administrative Agent and with
respect to which the Debtor has delivered to the Collateral Agent
an executed Blocked Account Letter (hereinafter
defined);
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(i)
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“ Blocked Account
Letter ” means a letter agreement in a form acceptable to
the Collateral Agent, executed by the Debtor and the Collateral
Agent and acknowledged and agreed to by the relevant Blocked
Account Bank;
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(j)
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“ Cash Collateral
Account ” means any deposit account or Securities Account
that is (a) established by the Collateral Agent from time to
time in its sole discretion to receive cash and Cash Equivalents
(or purchase cash or Cash Equivalents with funds received) from the
Debtor or any other Loan Party or their Subsidiaries or Affiliates
or Persons acting on their behalf pursuant to the Loan Documents,
(b) with such depositaries and securities intermediaries as
the Collateral Agent may determine in its sole discretion,
(c) in the name of the Collateral Agent (although such account
may also have words referring to the Debtor and the account’s
purpose), (d) under the control of the Collateral Agent and
(e) in the case of a Securities Account, with respect to which
the Collateral Agent shall be the Entitlement Holder and the only
Person authorized to give Entitlement Orders with respect thereto,
except as otherwise provided in Section 3.9 hereof.
Notwithstanding the foregoing, the Special Cash Collateral Account
shall not constitute a Cash Collateral Account;
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(k)
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“ CCQ ” means the
Civil Code of Quebec ;
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(l)
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“ Certificated Security
” has the meaning given to such term in the PPSA;
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(m)
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“ CIPO ” means
the Canadian Intellectual Property Office;
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(n)
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“ Collateral ”
has the meaning specified in Section 1.1 hereof;
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General Security Agreement —
Warnaco of Canada Company (2008)
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(o)
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“ Collateral Agent
” shall include, in addition to the Collateral Agent referred
to in the preamble of the Credit Agreement, any successors and
assigns to the Collateral Agent appointed pursuant to the Credit
Agreement and means the “Collateral Agent” in its
capacity as collateral agent for the benefit of the Secured Parties
with respect to the Secured Obligations;
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(p)
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“ Control Account
” means a securities account maintained by the Debtor with
the relevant approved Securities Intermediary which account is the
subject of an effective Control Account Agreement, and includes all
monies and other assets on deposit or otherwise held
therein;
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(q)
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“ Control Account
Agreement ” means a letter agreement in a form acceptable
to the Collateral Agent, executed by the Debtor, the Collateral
Agent and the relevant approved Securities Intermediary;
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(r)
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“ Copyright License
” means any agreement, whether written or oral, providing for
the grant by or to the Debtor of any right under any Copyright,
including the grant of any right to use, copy, publicly perform,
display, create derivative works of, manufacture, distribute,
exploit or sell materials derived from any Copyright;
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(s)
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“ Copyrights ”
means (a) all copyrights arising under the laws of Canada, any
other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished,
all registrations and recordings thereof and all applications for
registration or recording in connection therewith, including all
registrations, recordings and applications for registration or
recording with CIPO or in any foreign counterparts thereof, and
(b) the right to obtain all renewals, reversions and
extensions thereof;
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(t)
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“ Credit Agreement
” shall mean that certain Credit Agreement dated the date
hereof among, inter alia , the Debtor, as borrower, the
financial institutions, together with their respective successors
and assigns, listed on the signature pages thereof from time to
time, as Lenders, and the Collateral Agent, as the same may be
amended, supplemented, revised, restated or replaced from time to
time;
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(u)
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“ Discharge of Lender
Claims ” means the payment in full in cash of the
principal of, interest and premium, if any, on all Secured
Obligations and, with respect to Hedging Obligations, Hedging
Obligations or letters of credit outstanding thereunder, delivery
of cash collateral or backstop letters of credit in respect thereof
in compliance with the terms hereof, of the Credit Agreement, in
each case after or concurrently with termination of all
Commitments, and payment in full in cash of any other Secured
Obligations that are due and payable at or prior to the time such
principal and interest are paid;
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(v)
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“ Entitlement Holder
” has the meaning given to such term in the PPSA;
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(w)
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“ Entitlement Order
” has the meaning given to such term in the PPSA;
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(x)
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“ Excluded Property
” means, collectively, (i) any permit, lease, license,
contract, instrument or other agreement held by the Debtor that
validly prohibits the creation by the Debtor of a Lien thereon, or
any permit, lease, license, contract, instrument or other agreement
held by the Debtor to the extent that any Requirement of Law
applicable thereto prohibits the creation of a Lien
thereon,
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General Security Agreement —
Warnaco of Canada Company (2008)
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but
only, in each case, to the extent, and for so long as, such
prohibition is not removed, terminated or rendered unenforceable or
otherwise deemed ineffective by the PPSA or any other Requirement
of Law; and (ii) any Equipment owned by the Debtor that is
charged by a “purchase-money security interest” (as
defined in the PPSA) or subject to a Capital Lease if the contract
or other agreement in which such Lien is granted (or in the
documentation providing for such Capital Lease) prohibits or
requires the consent of any Person other than the Debtor as a
condition to the creation of any other Lien on such Equipment;
provided, however, “Excluded Property” shall not
include any Proceeds, substitutions or replacements of Excluded
Property (unless such Proceeds, substitutions or replacements would
constitute Excluded Property);
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(y)
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“ Financial Assets
” has the meaning given to such term in the PPSA;
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(z)
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“ Hedging Obligations
” means all obligations of any Person under any Hedging
Contract;
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(aa)
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“ Instrument ”
has the meaning given to such term in the PPSA;
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(bb)
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“ Intellectual Property
” means, collectively, (a) all right, title and interest
of the Debtor in intellectual property, whether arising under
Canadian, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks, Trademark Licenses, trade secrets, Internet domain
names, Websites, advertising rights, rights in designs, including
registrations thereof, and rights in data, and (b) all rights
to income, royalties, proceeds and damages now or hereafter due
and/or payable under and with respect thereto, including all rights
to sue and recover at law or in equity for any past, present and
future infringement, misappropriation, dilution, violation or other
impairment thereof;
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(cc)
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“ Investment Property
” has the meaning given to such term in the PPSA;
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(dd)
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“ LLC ” means
each limited liability company in which the Debtor has an equity
interest, including those set forth on Schedule 2 (
Pledged Collateral );
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(ee)
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“ LLC Agreement ”
means each operating agreement with respect to a LLC, as each
agreement has heretofore been, and may hereafter be, amended,
restated, supplemented or otherwise modified from time to
time;
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(ff)
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“ Material Intellectual
Property ” means Intellectual Property owned by or
licensed to the Debtor and material to Debtor’s
business;
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(gg)
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“ Partnership ”
means each partnership in which the Debtor has an equity interest,
including those set forth on Schedule 2 ( Pledged
Collateral );
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(hh)
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“ Partnership Agreement
” means each partnership agreement governing a Partnership,
as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified;
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(ii)
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“ Patent License
” means all agreements, whether written or oral, providing
for the grant by or to the Debtor of any right to manufacture, have
manufactured, use, import, lease, sell or offer for sale any
product, design or process covered in whole or in part by a
Patent;
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General Security Agreement —
Warnaco of Canada Company (2008)
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(jj)
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“ Patents ” means
(a) all patents of Canada or any other country or patent
rights arising under multinational laws, (b) all applications
for patents of Canada or any other country or patent rights arising
under multinational laws and (c) all rights to obtain any
reissues, extensions, divisions, continuations and
continuations-in-part of the foregoing;
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(kk)
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“ Pledged Certificated
Stock ” means all Certificated Securities and any other
Stock and Stock Equivalent of a Person evidenced by a certificate,
Instrument or other equivalent document, in each case owned by the
Debtor, including all Stock listed on Schedule 2 (
Pledged Collateral );
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(ll)
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“ Pledged Collateral
” means, collectively, the Pledged Stock, Pledged Debt
Instruments, any other Investment Property of the Debtor (other
than Pledged Stock, Pledged Debt Instruments and other Investment
Property whose value, in the aggregate, does not exceed
$1,000,000), all chattel paper, certificates or other Instruments
representing any of the foregoing and all Security Entitlements of
the Debtor in respect of any of the foregoing. Pledged Collateral
may be Intangibles, Instruments or Investment Property;
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(mm)
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“ Pledged Debt
Instrument ” means all right, title and interest of the
Debtor in Instruments evidencing any Indebtedness owed to the
Debtor, including all Indebtedness described on
Schedule 2 ( Pledged Collateral ), issued by the
obligors named therein;
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(nn)
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“ Pledged Stock ”
means all Pledged Certificated Stock and all Pledged Uncertificated
Stock;
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(oo)
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“ Pledged Uncertificated
Stock ” means any Stock or Stock Equivalent of any Person
that is not a Pledged Certificated Stock, including all right,
title and interest of the Debtor as a limited or general partner in
any Partnership or as a member of any LLC and all right, title and
interest of the Debtor in, to and under any Partnership Agreement
or LLC Agreement to which it is a party;
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(pp)
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“ Receiver ”
shall have the meaning provided to such term in Section 6.4
hereof;
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(qq)
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“ Registerable Intellectual
Property ” means any Intellectual Property in respect of
which ownership, title, security interests, hypothecs, charges or
encumbrances are capable of registration, recording or notation
with any applicable authority pursuant to applicable
law;
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(rr)
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“ Restricted Account
” means a deposit account maintained by the Debtor with a
Restricted Account Bank which account is the subject of an
effective Restricted Account Letter, and includes all monies on
deposit therein and all certificates and instruments, if any,
representing or evidencing such Restricted Account;
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(ss)
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“ Restricted Account
Bank ” means a financial institution selected or approved
(such approval not to be unreasonably withheld) by the
Administrative Agent and with respect to which the Debtor has
delivered an executed Restricted Account Letter;
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(tt)
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“ Restricted Account
Letter ” means a letter agreement in a form acceptable to
the Administrative Agent, executed by the Debtor;
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General Security Agreement —
Warnaco of Canada Company (2008)
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(uu)
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“ Securities
Intermediaries ” has the meaning given to such term in
the PPSA;
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(vv)
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“ Securities Account
” has the meaning given to such term in the PPSA;
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(ww)
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“ Security Entitlement
” has the meaning given to such term in the PPSA;
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(xx)
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“ Security Interest
” means, collectively, each security interest, mortgage,
charge, assignment or transfer in or of Collateral granted or
created by the Debtor under this Agreement;
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(yy)
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“ Third Party Intellectual
Property Rights ” means any right, title or interest of
any Person under patent, copyright, trademark or trade secret law
or any other statutory provision or common law doctrine relating to
intellectual property or proprietary rights;
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(zz)
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“ Trademark License
” means any agreement, whether written or oral, providing for
the grant by or to the Debtor of any right under any
Trademark.;
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(aaa)
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“ Trademarks ”
means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade
styles, trade dress, service marks, logos and other source or
business identifiers, and, in each case, all goodwill associated
therewith, whether now existing or hereafter adopted or acquired,
all registrations and recordings thereof and all applications for
registration or recording in connection therewith, in each case
whether in CIPO or in any similar office or agency of Canada, any
Province or Territory thereof or any other country or any political
subdivision thereof and all common-law rights related thereto, and
(b) the right to obtain all renewals thereof; and
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(bbb)
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“ UCC ” means the
Uniform Commercial Code as from time to time in effect in the State
of New York.
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The last day of
the term of any lease, oral or written, or any agreement therefor,
now held or hereafter acquired by the Debtor, shall be excepted
from the security interest hereby granted and shall not form part
of the Collateral, but the Debtor shall stand possessed of such one
day remaining, upon trust to assign and dispose of the same as the
Collateral Agent or any assignee of such lease or agreement shall
direct. If any such lease or agreement therefor contains a
provision which provides in effect that such lease or agreement may
not be assigned, sub-leased, charged or encumbered without the
leave, license, consent or approval of the lessor, the application
of the security interest created hereby to any such lease or
agreement shall be conditional upon such leave, license, consent or
approval having been obtained.
1.4
Debtor Remains Liable
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Notwithstanding anything herein to
the contrary:
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(a)
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the
Debtor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein to
perform all its duties and obligations thereunder to the same
extent as if this Agreement had not been executed;
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General Security Agreement —
Warnaco of Canada Company (2008)
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(b)
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the
exercise by the Collateral Agent of any of the rights or remedies
hereunder shall not release the Debtor from any of its duties or
obligations under the contracts and agreements included in the
Collateral; and
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(c)
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the
Collateral Agent shall not have any obligation or liability under
the contracts and agreements included in the Collateral by reason
of this Agreement, nor shall the Collateral Agent be obligated to
perform any of the obligations or duties of the Debtor thereunder
or to take any action to collect or enforce any claim for payment
assigned hereunder.
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SECTION 2 –
REPRESENTATIONS AND WARRANTIES
To induce the
Lenders, the Issuers, the Collateral Agent and the Administrative
Agent to enter into the Credit Agreement, the Debtor hereby
represents and warrants each of the following to the Lenders, the
Issuers, the Collateral Agent, the Administrative Agent and the
other Secured Parties:
2.1
Title; No Other Liens
Except for the
Liens granted to the Collateral Agent pursuant to this Agreement
and the other Liens permitted to exist on the Collateral under the
Credit Agreement, the Debtor (a) is the record and beneficial
owner of the Pledged Collateral pledged by it hereunder
constituting Instruments or Certificated Securities, (b) is
the Entitlement Holder of all such Pledged Collateral constituting
Investment Property held in a Securities Account and (c) has
rights in or the power to collaterally transfer each other item of
Collateral in which a Lien is granted by it hereunder, free and
clear of any Lien (other than Liens for taxes not yet due and
payable).
2.2
Perfection and Priority
The security
interests granted pursuant to this Agreement shall constitute valid
and continuing perfected security interests in favour of the
Collateral Agent in the Collateral for which perfection is governed
by the PPSA or filing with CIPO upon (i) in the case of all
Collateral in which a security interest may be perfected by filing
a financing statement under the PPSA, the completion of the
filings and other actions specified on Schedule 3 (
Filings ) (which, in the case of all filings and other
documents referred to on such schedule, have been delivered to the
Collateral Agent in completed and duly executed form),
(ii) the delivery to the Collateral Agent of all Collateral
consisting of Instruments and Certificated Securities, in each case
properly endorsed for transfer to the Collateral Agent or in blank,
(iii) the execution of Control Account Agreements with respect
to Investment Property not in certificated form, (iv) the
execution of a Blocked Account Letter with respect to all deposit
accounts of the Debtor as specified in Section 3.8(a)(i) hereto,
(v) all appropriate filings having been made with CIPO and
(vi) the receipt by the Collateral Agent of the consent of the
issuer or nominated person with respect to each letter-of-credit
right. Such security interests shall be prior to all other Liens on
the Collateral except for Customary Permitted Liens having priority
over the Collateral Agent’s Liens by operation of law or
otherwise as permitted hereunder or under the Credit
Agreement.
General Security Agreement —
Warnaco of Canada Company (2008)
10
2.3
Jurisdiction of Organization; Chief Executive
Office
On the Closing
Date, the Debtor’s jurisdiction of organization, legal name,
organizational identification number, if any, and the location of
its chief executive office or sole place of business is specified
on Schedule 1 ( Jurisdiction of Organization;
Principal Executive Office ) and, to the extent different from
that on the Closing Date, such Schedule 1 (
Jurisdiction of Organization; Principal Executive Office )
also lists all jurisdictions of organization, legal names and
locations of such Debtor’s chief executive office or sole
place of business for the period beginning five years preceding the
date hereof.
2.4
Inventory and Equipment
Schedule 4 ( Location of Inventory and Equipment
) sets forth each location at which the Debtor’s Inventory
and Equipment (other than mobile goods and Inventory or Equipment
in transit) is kept on the Closing Date.
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(a)
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The
Pledged Stock that constitutes Pledged Collateral pledged hereunder
by the Debtor is listed on Schedule 2 (Pledged Collateral) and
constitutes that percentage of the issued and outstanding equity of
all classes of each issuer thereof as set forth on Schedule 2
(Pledged Collateral).
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(b)
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All
of the Pledged Stock (other than Pledged Stock in limited liability
companies and partnerships) that constitutes Pledged Collateral has
been duly and validly issued and are fully paid and
nonassessable.
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(c)
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All
Pledged Collateral and, if applicable, any Additional Pledged
Collateral, consisting of Certificated Securities or Instruments
has been delivered to the Collateral Agent in accordance with
Section 3.5(a) (Pledged Collateral) hereof, and
Section 7.11 of the Credit Agreement and such other pledge
agreement or other Collateral Documents entered into by the Debtor
in favour of the Collateral Agent.
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(d)
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Subject to Section 3.5(a), all
Pledged Collateral held by a Securities Intermediary in a
Securities Account is subject to a Control Account
Agreement.
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(e)
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Other than Pledged Stock
constituting Intangibles, there is no Pledged Collateral other than
(i) that represented by Certificated Securities or
(ii) Instruments in the possession of the Collateral Agent or
that consisting of Financial Assets held in a Securities Account
that is subject to a Control Account Agreement.
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(f)
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The
Constituent Documents of any Person governing any Pledged Stock do
not prohibit (i) the Collateral Agent, upon the occurrence and
during the continuance of an Event of Default, from exercising all
of the rights of the Debtor granting the security interest therein,
and (ii) a transferee or assignee of Stock of such Person from
becoming a member, partner or, as the case may be, other holder of
such Pledged Stock to the same extent as the Debtor entitled to
participate in the management of such Person and, pursuant to the
Constituent Documents of any Person governing any Pledged Stock,
upon the transfer of the entire interest of the
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General Security Agreement —
Warnaco of Canada Company (2008)
11
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Debtor, the Debtor shall cease to be
a member, partner or, as the case may be, other holder of such
Pledged Stock.
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2.6
Deposit Accounts; Securities Accounts
The only deposit
accounts or Securities Accounts maintained by the Debtor on the
Closing Date are those listed on Schedule 7 (Deposit Accounts
and Securities Accounts), which sets forth such information for the
Debtor and which clearly identifies each deposit account which is
maintained as a concentration account by the Debtor.
No amount payable
to the Debtor under or in connection with any account is evidenced
by any Instrument or Chattel Paper that has not been delivered to
the Collateral Agent, properly endorsed for transfer, to the extent
delivery is required by Section 3.6 (Delivery of Instruments
and Chattel Paper).
2.8
Intellectual Property
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(a)
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Schedule 5 (Intellectual
Property) (i) sets forth a true and complete list of all
Intellectual Property of the Debtor on the date hereof (other than
licenses to commercial off-the-shelf software), separately
identifying that owned by the Debtor and that licensed by or to
such Debtor and (ii) sets forth a true and complete list of
all Material Intellectual Property owned by or licensed to the
Debtor on the date hereof (other than licenses to commercial
off-the-shelf software), separately identifying that owned by the
Debtor and that licensed by or to the Debtor. The Material
Intellectual Property set forth on Schedule 5 (Intellectual
Property) constitutes all of the material intellectual property
rights necessary for the Debtor to conduct its business as
currently and as proposed to be conducted.
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(b)
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On
the date hereof, all Material Intellectual Property owned by the
Debtor is valid, in full force and effect, subsisting, unexpired
and enforceable, has not been adjudged invalid and has not been
abandoned. To the knowledge of the Debtor, the business of the
Debtor, and the use of the Material Intellectual Property in
connection therewith, does not infringe, misappropriate, dilute or
violate any Third Party Intellectual Property Rights. The Debtor is
not party to or the subject of any pending or, to the
Debtor’s knowledge, threatened claim of infringement,
misappropriation, dilution or violation of any Third Party
Intellectual Property Rights, and there are no facts or
circumstances that the Debtor reasonably believes are likely to
form the basis for any such claim, and the Debtor has not received
written notice of any such claim, or a written offer of a license
to any Third Party Intellectual Property Rights, or any written
notice regarding the existence of any Third Party Intellectual
Property Rights that would be likely to have a Material Adverse
Effect on the Debtor or otherwise would impair any Material
Intellectual Property.
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General Security Agreement —
Warnaco of Canada Company (2008)
12
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(c)
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Except as set forth in
Schedule 5(c) (Intellectual Property), on the date hereof,
none of the Material Intellectual Property owned by the Debtor is
the subject of any licensing or franchise agreement pursuant to
which the Debtor is the licensor or franchisor.
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(d)
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No
holding, decision or judgment has been rendered by any Governmental
Authority challenging the Debtor’s rights in the Material
Intellectual Property or that would limit or otherwise impair the
ownership, use, validity or enforceability of any Material
Intellectual Property.
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(e)
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No
action or proceeding challenging the Debtor’s rights in the
Intellectual Property or the ownership, use, validity or
enforceability of any Material Intellectual Property owned by the
Debtor is on the date hereof pending or, to the knowledge of the
Debtor, threatened. There are no claims, judgments or settlements
to be paid by the Debtor relating to the Material Intellectual
Property. To the Debtor’s knowledge, no Person has been or is
infringing, misappropriating, diluting or violating the Material
Intellectual Property owned by the Debtor.
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(f)
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The
Debtor is not in material breach of any Copyright License, Patent
License or Trademark License nor in breach of any Material License.
The consummation of the transactions contemplated by this Agreement
shall not impair any of the Debtor’s right in, cause a breach
of, or impair the validity or enforceability of, any Material
Intellectual Property.
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SECTION 3 – COVENANTS OF
THE DEBTOR
The Debtor agrees
with the Collateral Agent to the following, as long as any Secured
Obligation or Commitment remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in
writing:
The Debtor shall
(a) except for the security interest created by this
Agreement, not create or suffer to exist any Lien upon or with
respect to any Collateral, except Liens permitted under
Section 8.2 (Liens, Etc.) of the Credit Agreement,
(b) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement, any other Loan
Document, any Requirement of Law or any policy of insurance
covering the Collateral, (c) not sell, transfer or assign (by
operation of law or otherwise) any Collateral except as permitted
under the Credit Agreement, (d) not enter into any agreement
or undertaking restricting the right or ability of the Debtor or
the Collateral Agent to sell, assign or transfer any Collateral
except in connection with an Asset Sale (i) that is permitted
under Section 8.4 of the Credit Agreement or (ii) that is
pursuant to a contract which contains a condition precedent that
consent under the Credit Agreement be obtained.
3.2
Maintenance of Perfected Security Interest; Further
Documentation
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(a)
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The
Debtor shall maintain the security interests created by this
Agreement as perfected security interests having at least the
priority described in Section 2.2
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General Security Agreement —
Warnaco of Canada Company (2008)
13
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(Perfection and Priority) and shall
defend such security interests and such priority against the claims
and demands of all Persons.
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(b)
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The
Debtor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral
as the Collateral Agent may reasonably request in writing, all in
detail and in form and substance reasonably satisfactory to the
Collateral Agent.
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(c)
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At
any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of the Debtor, the Debtor
shall promptly and duly execute and deliver to the Collateral
Agent, and have recorded, such further instruments and documents
and take such further action as the Collateral Agent may reasonably
request (or be directed to request by the Administrative Agent at
the Administrative Agent’s reasonable request) for the
purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including
the filing of any financing or continuation statement under the
PPSA (or other similar laws) in effect in any jurisdiction with
respect to the security interests created hereby and the execution
and delivery of Blocked Account Letters or Restricted Account
Letters and Control Account Agreements.
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3.3
Changes in Locations, Name, Etc.
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(a)
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Except upon 15 or more days’
prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (i) all additional financing statements
and other documents reasonably requested by the Collateral Agent to
maintain the validity, perfection and priority of the security
interests provided for herein and (ii) if applicable, a
written supplement to Schedule 4 ( Location of
Inventory and Equipment ) showing (A) any additional
locations at which Inventory or Equipment shall be kept or
(B) any changes in any location where Inventory or Equipment
shall be kept that would require the Collateral Agent to take any
action to maintain perfected security interests in such Collateral,
the Debtor shall not do any of the following:
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(i)
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permit any Inventory or Equipment to
be kept at a location other than those listed on
Schedule 4 ( Location of Inventory and Equipment
), except for Inventory or Equipment in transit;
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(ii)
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change its jurisdiction of
organization from that referred to in Section 2.3
(Jurisdiction of Organization; Chief Executive Office);
or
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(iii)
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change its legal name, or
organizational identification number, if any, or corporation,
unlimited liability company, limited liability company or other
organizational structure to such an extent that any financing
statement filed in connection with this Agreement would become
misleading.
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(b)
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The
Debtor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a
record of all payments received
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General Security Agreement —
Warnaco of Canada Company (2008)
14
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and
all credits granted with respect to the Collateral and all other
dealings with the Collateral.
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The Debtor shall
not cause nor shall it permit any Person other than the Collateral
Agent to have control (as determined pursuant to the STA) of any
Financial Asset or Investment Property constituting part of the
Collateral.
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(a)
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The
Debtor shall (i) deliver to the Collateral Agent for the
benefit of the Secured Parties, all certificates and Instruments
representing or evidencing any Pledged Collateral (including
Additional Pledged Collateral), whether now existing or hereafter
acquired, in suitable form for transfer by delivery or, as
applicable, accompanied by such Debtor’s endorsement, where
necessary, or duly executed instruments of transfer or assignment
in blank, all in form and substance reasonably satisfactory to the
Collateral Agent, together, in respect of any Additional Pledged
Collateral, with a pledge amendment, duly executed by the Debtor,
in a form reasonably acceptable to the Collateral Agent, an
acknowledgment, or such other documentation acceptable to the
Collateral Agent and (ii) maintain all other Pledged
Collateral constituting Investment Property in a Securities Account
subject to a Control Account Agreement. The Collateral Agent shall
have the right, following an Event of Default and without notice to
the Debtor, to transfer to or to register in its name or in the
name of its nominees any Pledged Collateral. The Collateral Agent
shall have the right at any time to exchange any certificate or
instrument representing or evidencing any Pledged Collateral for
certificates or instruments of smaller or larger
denominations.
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(b)
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Except as provided in Section 6
(Remedies on Default), the Debtor shall be entitled to receive all
cash dividends paid in respect of the Pledged Collateral (other
than liquidating or distributing dividends). Any sums paid upon or
in respect of any Pledged Collateral upon the liquidation or
dissolution of any issuer of any Pledged Collateral, any
distribution of capital made on or in respect of any Pledged
Collateral or any property distributed upon or with respect to any
Pledged Collateral pursuant to the recapitalization or
reclassification of the capital of any issuer of Pledged Collateral
or pursuant to the reorganization thereof (except, in each case, to
the extent resulting in cash being distributed to the Debtor)
shall, unless otherwise subject to a perfected security interest
(with the priorities contemplated herein) in favour of the
Collateral Agent, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Secured
Obligations. If any sum of money or property so paid or distributed
in respect of any Pledged Collateral shall be received by the
Debtor, the Debtor shall, until such money or property is paid or
delivered to the Collateral Agent, hold such money or property in
trust for the Collateral Agent, segregated from other funds of the
Debtor, as additional security for the Secured
Obligations.
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General Security Agreement —
Warnaco of Canada Company (2008)
15
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(c)
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Except as provided in Section 6
(Remedies on Default), the Debtor shall be entitled to exercise all
voting, consent and corporate, partnership, unlimited liability
company, limited liability company and similar rights with respect
to the Pledged Collateral; provided, however, that no vote shall be
cast, consent given or right exercised or other action taken by the
Debtor that would impair the Collateral, be inconsistent with or
result in any violation of any provision of the Credit Agreement,
this Agreement or any other Loan Document or, without prior notice
to the Collateral Agent, enable or permit any issuer of Pledged
Collateral to issue any Stock or other equity Securities of any
nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any Stock or other
equity Securities of any nature of any issuer of Pledged
Collateral.
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(d)
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The
Debtor shall not grant control (within the meaning of such term
under the STA) over any Investment Property to any Person other
than the Collateral Agent.
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(e)
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In
the case the Debtor is an issuer of Pledged Collateral, the Debtor
agrees to be bound by the terms of this Agreement relating to the
Pledged Collateral issued by it and shall comply with such terms
insofar as such terms are applicable to it. In the case the Debtor
is a holder of any Stock or Stock Equivalent in any Person that is
an issuer of Pledged Collateral, the Debtor consents to
(i) the exercise of the rights granted to the Collateral Agent
hereunder (including those described in Section 6.10 (Pledged
Collateral)), and to the transfer of such Pledged Stock to the
Collateral Agent or its nominee and to the substitution of the
Collateral Agent or its nominee as a holder of such Pledged Stock
with all the rights, powers and duties of other holders of Pledged
Stock of the same class and, if the Debtor having pledged such
Pledged Stock hereunder had any right, power or duty at the time of
such pledge or at the time of such substitution beyond that of such
other holders, with all such additional rights, powers and
duti
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