PLEDGE AND SECURITY AGREEMENT

Execution Copy

PLEDGE AND SECURITY AGREEMENT

Dated as of August 26, 2008

among

Warnaco Inc.,
as a Grantor

and

Each Other Grantor
From Time to Time Party Hereto

and

Bank of America, N.A.
as Collateral Agent

Kaye Scholer LLP
425 Park Avenue
New York, New York 10022

           This Pledge and Security Agreement (this “ Agreement ”), dated as of August 26, 2008, by Warnaco Inc., a Delaware corporation (the “ Borrower ”), and each of the other entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.11 (Additional Grantors) (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of Bank of America, N.A. (“ BofA ”), as collateral agent for the Secured Parties (as defined below) (in such capacity, the “ Collateral Agent ”).

W i t n e s s e t h:

           Whereas , the Borrower, The Warnaco Group, Inc. (“ Group ”), the lenders and issuers party thereto from time to time, BofA, as administrative agent for the Lenders and the Issuers (in such capacity, the “ Administrative Agent ”) and as Collateral Agent (together with the Administrative Agent, the “ Agents ”), Banc of America Securities LLC and Deutsche Bank Securities Inc., as joint lead arrangers, Banc of America Securities LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as joint bookrunners, Deutsche Bank Securities Inc., as sole syndication agent, and HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A. and RBS Business Capital, a division of RBS Asset Finance Inc., as co-documentation agents, have entered into a certain Credit Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”);

           Whereas , the Grantors other than the Borrower are party to the Guaranty pursuant to which they have guaranteed the Obligations of the Borrower under the Credit Agreement;

           Whereas , Warnaco of Canada Company, a Canadian corporation (the “ Canadian Borrower ”), the lenders and issuers party thereto from time to time, BofA, as administrative agent and as collateral agent, and certain other persons have entered into or will enter into a certain Credit Agreement (as amended, supplemented or otherwise modified from time to time, the “ Canadian Facility ”);

           Whereas , in connection with the Canadian Facility, the Grantors will enter into the Loan Party Canadian Facility Guaranty pursuant to which they will guarantee the Canadian Secured Obligations of the Canadian Borrower under the Canadian Facility;

           Whereas , it is a condition precedent to the effectiveness of the Credit Agreement and of the Canadian Facility that the Grantors shall have executed and delivered this Agreement to the Collateral Agent;

           Whereas , each Grantor will receive substantial direct and indirect benefits from the making of the Loans, the issuance of the Letters of Credit and the granting of the other financial accommodations to the Borrower under the Credit Agreement and from the granting of the financial accommodations to the Canadian Borrower under the Canadian Facility;

           Now, therefore, in consideration of the premises and to induce the Lenders, the Issuers, the Administrative Agent and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders and the Issuers to make their respective extensions of credit to the Borrower thereunder and to induce the lenders and issuers to be party to the Canadian Facility to enter into the Canadian Facility and to make their respective extensions of credit to the Canadian Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:

ARTICLE I. Defined Terms

      Section 1.1 Definitions

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

          (b) Terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC, including the following terms (which are capitalized herein):

“Account”
“Account Debtor”
“Certificated Security”
“Chattel Paper”
“Commercial Tort Claim”
“Commodity Account”
“Control Account”
“Deposit Account”
“Documents”
“Entitlement Holder”
“Entitlement Order”
“Equipment”
“Financial Asset”
“General Intangibles”
“Goods”
“Instruments”
“Inventory”
“Investment Property”
“Letter-of-Credit Right”
“Proceeds”
“Securities Account”
“Securities Intermediary”
“Security”
“Security Entitlement”
“Supporting Obligation”

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

          “ Additional Pledged Collateral ” means any Pledged Collateral acquired by any Grantor after the date hereof and in which a security interest is granted pursuant to Section 2.2 (Grants of Security Interests in Collateral) , including, to the extent a security interest is granted therein pursuant to Section 2.2 (Grants of Security Interests in Collateral) , (i) all Stock and Stock Equivalents of any Person that are acquired by any Grantor after the date hereof, together with all certificates, instruments or other documents representing any of the foregoing and all Security Entitlements of any Grantor in respect of any of the foregoing, (ii) all additional Indebtedness from time to time owed to any Grantor 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 General Intangibles (including Intellectual Property), Instruments or Investment Property.

          “ Agents ” has the meaning specified in the recitals to this Agreement.

          “ Agreement ” means this Pledge and Security Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time).

          “ Blocked Account ” means a deposit account maintained by any Grantor 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.

          “ Blocked Account Bank ” means a financial institution approved (such approval not to be unreasonably withheld) by the Administrative Agent and with respect to which a Grantor has delivered to the Collateral Agent an executed Blocked Account Letter.

          “ Blocked Account Letter ” means a letter agreement, substantially in the form of Annex I-A (Form of Blocked Account Letter) to this Agreement (with such changes thereto as may be agreed to by the Administrative Agent), executed by the relevant Grantor and the Collateral Agent and acknowledged and agreed to by the relevant Blocked Account Bank.

          “ 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 any one or more of the Grantors 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 Borrower 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 2.3 . Notwithstanding the foregoing, the Special Cash Collateral Account shall not constitute a Cash Collateral Account.

          “ Collateral ” has the meaning specified in Section 2.1 (Collateral) .

          “ Collateral Agent ” shall include, in addition to the Collateral Agent referred to in the preamble hereto, 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.

          “ Control Account ” means a securities account maintained by any Grantor with the relevant Approved Securities Intermediary (as defined in Annex 2 (Form of Control Account Agreement) ) which account is the subject of an effective Control Account Agreement, and includes all monies and other assets on deposit or otherwise held therein.

          “ Control Account Agreement ” means a letter agreement, substantially in the form of Annex 2 (Form of Control Account Agreement) (with such changes as may be agreed to by the Administrative Agent), executed by the relevant Grantor, the Collateral Agent and the relevant Approved Securities Intermediary (as defined in Annex 2 (Form of Control Account Agreement) hereto).

          “ Copyright Licenses ” means any agreement, whether written or oral, providing for the grant by or to any Grantor 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.

          “ Copyrights ” means (a) all copyrights arising under the laws of the United States, 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 in the United States Copyright Office or in any foreign counterparts thereof, and (b) the right to obtain all renewals, reversions and extensions thereof.

          “ 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 Canadian Secured Obligations and, with respect to Hedging Obligations, Hedging Obligations (as defined in the Canadian Facility) 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 and of the Canadian Facility, in each case after or concurrently with termination of all Commitments and Commitments (as defined in the Canadian Facility), and payment in full in cash of any other Secured Obligations and Canadian Secured Obligations that are due and payable at or prior to the time such principal and interest are paid.

          “ Excluded Equity ” means, collectively, any Voting Stock of any direct Foreign Subsidiary of any Grantor in excess of 65% of the total outstanding Voting Stock of such Subsidiary. For the purposes of this definition, “ Voting Stock ” means, as to any issuer, the issued and outstanding shares of each class of capital stock or other ownership interests of such issuer entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).

          “ Excluded Property ” means, collectively, (i) Excluded Equity, (ii) any permit, lease, license, contract, instrument or other agreement held by any Grantor that validly prohibits the creation by such Grantor of a Lien thereon, or any permit, lease, license, contract, instrument or other agreement held by any Grantor to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, 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 UCC or any other Requirement of Law; and (iii) any Equipment owned by any Grantor that is Purchase-Money Collateral (as defined in the UCC) 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 any Grantor 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).

          “ Foreign Person ” means any Person not organized under the laws of any state of the United States of America or the District of Columbia.

          “ Grantor ” has the meaning specified in the recitals to this Agreement.

          “ Hedging Obligations ” means all obligations of any Person under any Hedging Contract.

          “ Intellectual Property ” means, collectively, (a) all right, title and interest of any Grantor in intellectual property, whether arising under United States, 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.

          “ LLC ” means each limited liability company in which a Grantor has an equity interest, including those set forth on Schedule 2 (Pledged Collateral) .

          “ 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.

          “ Material Intellectual Property ” means Intellectual Property owned by or licensed to a Grantor and material to any Grantor’s business.

          “ Partnership ” means each partnership in which a Grantor has an equity interest, including those set forth on Schedule 2 (Pledged Collateral) .

          “ 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.

          “ Patent License ” means all agreements, whether written or oral, providing for the grant by or to any Grantor 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.

          “ Patents ” means (a) all patents of the United States or any other country or patent rights arising under multinational laws, (b) all applications for patents of the United States 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.

          “ 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 any Grantor, including all Stock listed on Schedule 2 (Pledged Collateral), but excluding Excluded Equity.

          “ Pledged Collateral ” means, collectively, the Pledged Stock, Pledged Debt Instruments, any other Investment Property of any Grantor (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 any Grantor in respect of any of the foregoing. Pledged Collateral may be General Intangibles, Instruments or Investment Property.

          “ Pledged Debt Instruments ” means all right, title and interest of any Grantor in Instruments evidencing any Indebtedness owed to such Grantor, including all Indebtedness described on Schedule 2 (Pledged Collateral) , issued by the obligors named therein.

          “ Pledged Stock ” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.

          “ Pledged Uncertificated Stock ” means any Stock or Stock Equivalent of any Person that is not a Pledged Certificated Stock (excluding Excluded Equity), including all right, title and interest of any Grantor as a limited or general partner in any Partnership or as a member of any LLC and all right, title and interest of any Grantor in, to and under any Partnership Agreement or LLC Agreement to which it is a party.

          “ Restricted Account ” means a deposit account maintained by any Grantor 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.

          “ 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 a Grantor has delivered an executed Restricted Account Letter.

          “ Restricted Account Letter ” means a letter agreement, substantially in the form of Annex I-B (Form of Restricted Account Letter) or as otherwise acceptable to the Administrative Agent, executed by the relevant Grantor.

          “ Securities Act ” means the Securities Act of 1933, as amended.

          “ Secured Parties ” has the meaning specified in the Credit Agreement.

          “ 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.

          “ Trademark License ” means any agreement, whether written or oral, providing for the grant by or to any Grantor of any right under any Trademark.

          “ 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 the United States Patent and Trademark Office or in any similar office or agency of the United States, any State 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.

          “ UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of law, any of the perfection or priority of the Collateral Agent’s (for the benefit of the Secured Parties) security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “ UCC ” (as it applies to such security interest) shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions related to such provisions.

          “ Vehicles ” means all vehicles covered by a certificate of title law of any state of the United States of America or the District of Columbia.

          Certain Other Terms

          (a) In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each mean “ to but excluding ” and the word “ through ” means “ to and including. ”

          (b) The terms “ herein, ” “ hereof, ” “ hereto ” and “ hereunder ” and similar terms refer to this Agreement as a whole and not to any particular Article, Section, subsection or clause in this Agreement.

          (c) References herein to an Annex, Schedule, Article, Section, subsection or clause refer to the appropriate Annex or Schedule to, or Article, Section, subsection or clause in, this Agreement.

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

          (e) Where the context requires, provisions relating to any Collateral, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or any relevant part thereof.

          (f) Any reference in this Agreement to a Loan Document shall include all appendices, exhibits and schedules thereto, and, unless specifically stated otherwise, all amendments, restatements, supplements or other modifications thereto, and as the same may be in effect at any time such reference becomes operative.

          (g) The term “ including ” means “ including without limitation ” except when used in the computation of time periods.

          (h) The terms “ Lender, ” “ Issuer, ” “ Administrative Agent ,” “ Collateral Agent ” and “ Secured Party ” include their respective successors.

          (i) References in this Agreement to any statute shall be to such statute as amended or modified and in effect from time to time.

ARTICLE II. Grant of Security Interest

      Section 2.1 Collateral

          For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests (other than, in each case, Excluded Property) is collectively referred to as the “ Collateral ”:

          (i) all Accounts;

          (ii) all Chattel Paper;

          (iii) all Deposit Accounts;

          (iv) all Documents;

          (v) all Equipment;

          (vi) all General Intangibles;

          (vii) all Instruments;

          (viii) all Inventory;

          (ix) all Investment Property;

          (x) all Letter-of-Credit Rights;

          (xi) all Vehicles;

          (xii) the Commercial Tort Claims described on Schedule 6 (Commercial Tort Claims) and on any supplement thereto received by the Collateral Agent pursuant to Section 4.10 (Notice of Commercial Tort Claims) ;

          (xiii) all Intellectual Property and goodwill associated therewith;

          (xiv) all books and records pertaining to any or all of the other property described in this Section 2.1 ;

          (xv) all other goods and personal property of such Grantor, whether tangible or intangible and wherever located; and

          (xvi) to the extent not otherwise included, all Proceeds of any or all of the foregoing.

      Section 2.2 Grants of Security Interests in Collateral

          Each Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor; 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.

      Section 2.3 Cash Collateral Accounts

          The Collateral Agent may establish one or more Cash Collateral Accounts with such depositaries and Securities Intermediaries as it in its sole discretion shall determine. Each Grantor agrees that each such Cash Collateral Account shall be under the control of the Collateral Agent and that the Collateral Agent shall be the Entitlement Holder with respect to each such Cash Collateral Account that is a Securities Account and the only Person authorized to give Entitlement Orders with respect to each such Securities Account. Without limiting the foregoing, funds on deposit in any Cash Collateral Account may be invested in Permitted Cash Equivalents at the direction of the Collateral Agent and, except during the continuance of an Event of Default (unless otherwise agreed to by the Administrative Agent in its sole discretion), the Collateral Agent agrees with each Grantor to issue Entitlement Orders for such investments in Permitted Cash Equivalents as requested by the Borrower; provided , however , that the Collateral Agent shall not have any responsibility for, or bear any risk of loss of, any such requested investment or income thereon and the Collateral Agent shall have no obligation to make or cause to be made any such investment absent a request by the Borrower for a specific investment in Permitted Cash Equivalents. Neither any Warnaco Entity nor any other Person claiming on behalf of or through any Warnaco Entity shall have any right to demand payment of any funds held in any Cash Collateral Account at any time prior to Discharge of Lender Claims, except (i) as provided in Section 2.9(f) of the Credit Agreement and (ii) that the Borrower may request that the Collateral Agent apply funds in any Cash Collateral Account directly to the immediate payment of the Loans and if paid in full then to the cash collateralization of Letter of Credit Obligations (and not to be delivered to any Warnaco Entity). The Collateral Agent shall apply all funds on deposit in a Cash Collateral Account as provided in Section 2.9(f) of the Credit Agreement.

ARTICLE III. Representations and Warranties

          To induce the Lenders, the Issuers, the Collateral Agent and the Administrative Agent to enter into the Credit Agreement, each Grantor hereby represents and warrants each of the following to the Lenders, the Issuers, the Collateral Agent, the Administrative Agent and the other Secured Parties:

      Section 3.1 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, such Grantor (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).

      Section 3.2 Perfection and Priority

          The security interests granted pursuant to this Agreement shall constitute valid and continuing perfected security interests in favor of the Collateral Agent in the Collateral for which perfection is governed by the UCC or filing with the United States Copyright Office or with the United States Patent and Trademark Office upon (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, 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 a Grantor as specified in Section 4.7(a)(i) hereto, (v) all appropriate filings having been made with the United States Copyright Office 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 that is not a Supporting Obligation. 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.

      Section 3.3 Jurisdiction of Organization; Chief Executive Office

          On the Closing Date, such Grantor’s jurisdiction of organization, legal name, organizational identification number, if any, and the location of such Grantor’s 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 Grantor’s chief executive office or sole place of business for the period beginning five years preceding the date hereof.

      Section 3.4 Inventory and Equipment

           Schedule 4 (Location of Inventory and Equipment) sets forth each location at which such Grantor’s Inventory and Equipment (other than mobile goods and Inventory or Equipment in transit) is kept on the Closing Date.

      Section 3.5 Pledged Collateral

          (a) The Pledged Stock that constitutes Pledged Collateral pledged hereunder by such Grantor 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) .

          (b) 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.

          (c) 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 4.4(a) (Pledged Collateral) and Section 7.11 of the Credit Agreement.

          (d) Subject to Section 4.7 , all Pledged Collateral held by a Securities Intermediary in a Securities Account is subject to a Control Account Agreement.

          (e) Other than Pledged Stock constituting General 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.

          (f) 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 Grantor 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 Grantor 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 such Grantor, such Grantor shall cease to be a member, partner or, as the case may be, other holder of such Pledged Stock.

      Section 3.6 Deposit Accounts; Securities Accounts

          The only Deposit Accounts, Securities Accounts or Commodity Accounts maintained by any Grantor on the Closing Date are those listed on Schedule 7 (Deposit Accounts and Securities Accounts) , which sets forth such information separately for each Grantor and which clearly identifies each Deposit Account which is maintained as a concentration account by such Grantor.

      Section 3.7 Accounts

          No amount payable to such Grantor 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 4.5 (Delivery of Instruments and Chattel Paper).

      Section 3.8 Intellectual Property

          (a)  Schedule 5 (Intellectual Property) (i) sets forth a true and complete list of all Intellectual Property of such Grantor on the date hereof (other than licenses to commercial off-the-shelf software), separately identifying that owned by such Grantor and that licensed by or to such Grantor and (ii) sets forth a true and complete list of all

Material Intellectual Property owned by or licensed to such Grantor on the date hereof (other than licenses to commercial off-the-shelf software), separately identifying that owned by such Grantor and that licensed by or to such Grantor. The Material Intellectual Property set forth on Schedule 5 (Intellectual Property) constitutes all of the material intellectual property rights necessary for the Grantors to conduct their business as currently and as proposed to be conducted.

          (b) On the date hereof, all Material Intellectual Property owned by such Grantor 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 such Grantor, the business of such Grantor, and the use of the Material Intellectual Property in connection therewith, does not infringe, misappropriate, dilute or violate any Third Party Intellectual Property Rights. Such Grantor is not party to or the subject of any pending or, to such Grantor’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 such Grantor reasonably believes are likely to form the basis for any such claim, and such Grantor 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 any Grantor or otherwise would impair any Material Intellectual Property.

          (c) Except as set forth in Schedule 5(c) (Intellectual Property), on the date hereof, none of the Material Intellectual Property owned by such Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

          (d) No holding, decision or judgment has been rendered by any Governmental Authority challenging such Grantor’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.

          (e) No action or proceeding challenging such Grantor’s rights in the Intellectual Property or the ownership, use, validity or enforceability of any Material Intellectual Property owned by such Grantor is on the date hereof pending or, to the knowledge of such Grantor, threatened. There are no claims, judgments or settlements to be paid by such Grantor relating to the Material Intellectual Property. To such Grantor’s knowledge, no Person has been or is infringing, misappropriating, diluting or violating the Material Intellectual Property owned by such Grantor.

          (f) No Grantor is in material breach of any Copyright License, Patent License or Trademark License and no Grantor in breach of any Material License. The consummation of the transactions contemplated by this Agreement shall not impair any of such Grantor’s right in, cause a breach of, or impair the validity or enforceability of, any Material Intellectual Property.

      Section 3.9 Commercial Tort Claims

          The only Commercial Tort Claims (with a reasonable expectation of recovery of at least $1,000,000) of any Grantor existing on the Closing Date (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such Commercial Tort Claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 6 (Commercial Tort Claims) , which sets forth such information separately for each Grantor.

ARTICLE IV. Covenants

          Each Grantor agrees with the Collateral Agent to the following, as long as any Secured Obligation, Canadian Secured Obligation, Commitment or Commitment (as defined in the Canadian Facility) remains outstanding and, in each case, unless the Requisite Lenders otherwise consent in writing:

      Section 4.1 Generally

          Such Grantor 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 such Grantor 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.

      Section 4.2 Maintenance of Perfected Security Interest; Further Documentation

          (a) Such Grantor shall maintain the security interests created by this Agreement as perfected security interests having at least the priority described in Section 3.2 (Perfection and Priority) and shall defend such security interests and such priority against the claims and demands of all Persons.

          (b) Such Grantor 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.

          (c) At any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor shall promptly

and duly execute and deliver, 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 UCC (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.

      Section 4.3 Changes in Locations, Name, Etc.

          (a) 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, such Grantor shall not do any of the following:

     (i) 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;

     (ii) change its jurisdiction