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SECURITIES PLEDGE AGREEMENT WARNACO OF
CANADA COMPANY as Company and BANK OF AMERICA,
N.A. as Collateral Agent August 26, 2008
SECURITIES PLEDGE AGREEMENT Securities Pledge Agreement
dated as of August 26, 2008 made by Warnaco of Canada Company (the
" Company ") to and in favour of the Collateral Agent (as
hereinafter defined). RECITALS:
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A.
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WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof among, inter alia , Warnaco of Canada
Company, as borrower (together with its successors and permitted
assigns, the "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 (the " Credit Agreement "),
the Lenders have agreed to make Loans available to and for the
benefit of the Borrower; unless otherwise defined herein, all
capitalized words and expressions when used herein shall have the
same meaning as ascribed thereto in the Credit Agreement
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B.
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WHEREAS, the Collateral Agent is to hold for its own benefit and
is to act as agent under the Credit Agreement, inter alia, to hold
as agent for the rateable benefit of itself and the other Secured
Parties, any and all security for the payment and performance of
the obligations of the Company under the Credit Agreement and the
other Loan Documents.
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C.
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WHEREAS, the Company has agreed to execute and deliver this
agreement to and in favour of the Collateral Agent as security for
the payment and performance of the Company’s obligations to
the Collateral Agent and the Secured Parties under the Credit
Agreement and the other Loan Documents.
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NOW THEREFORE , in consideration of the foregoing
premises and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the Company, the Company
and the Collateral Agent agree as follows:
ARTICLE I – SECURITY 1.1 Definitions
and Interpretation
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(a)
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Terms defined in the Personal Property Security Act
(Ontario) (as amended from time to time, the " PPSA ") and
used in this agreement have the same meanings.
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(b)
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Any reference to the " STA " in this agreement means the
Securities Transfer Act (Ontario), as amended from time to
time.
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(c)
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Any references to the " General Security Agreement "
shall mean that certain General Security Agreement dated as of or
about the date hereof between the Company, as grantor, and the
Collateral Agent, as same may be amended, supplemented, revised,
restated or replaced from time to time.
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(d)
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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
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Pledge Agreement — Warnaco of Canada Company (2008)
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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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1.2 Grant of Security.
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(a)
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The Company assigns, mortgages, charges, hypothecates and
pledges to the Collateral Agent, for its own benefit as a Lender
(acting through its Canada branch) and as agent for the rateable
benefit of itself and the other Secured Parties and grants to the
Collateral Agent, for its own benefit as a Lender (acting through
its Canada branch) and as agent for the rateable benefit of itself
and the other Secured Parties, a security interest in the following
property and assets (collectively, the " Collateral "):
(i) all certificated and uncertificated securities registered
in the name of the Company including those as described in Schedule
"A" (collectively, the " Pledged Securities "),
(ii) all securities accounts of the Company including those
described in Schedule "B" (collectively, the " Pledged
Securities Accounts "), all cash balances in the Pledged
Securities Accounts and all security entitlements in respect of
financial assets from time to time listed or described on the
Pledged Securities Accounts or any statement in respect thereof,
(the " Pledged Securities Entitlements ") (iv) all
options, warrants and rights, whether as an addition to, in
substitution of, or in exchange for, the Pledged Securities, the
Pledged Security Accounts or the financial assets and other
property subject to the Pledged Security Entitlements, (v) all
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, or in
exchange for, any such Pledged Securities, Pledged Security
Entitlements, Pledged Securities Accounts, options, warrants and
rights; (vi) all other rights and claims of the Company in
respect of, or in connection with, the foregoing and (vii) all
proceeds arising out of the foregoing; 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.
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(b)
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For greater certainty, the Collateral includes any substitutions
or additions arising out of any consolidation, subdivision,
reclassification, stock dividend or similar increase or decrease
in, or alteration to, the capital of any issuer of the Pledged
Securities or the financial assets and other property subject to
the Pledged Security Entitlements or otherwise held in any Pledged
Securities Account.
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1.3 Obligations Secured.
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(a)
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The assignments, mortgages, charges, hypothecations, pledges and
security interests granted hereby (the " Security Interest
") secure the payment and performance by the Borrower of the
Secured Obligations (as such term is defined in the Credit
Agreement) (collectively, and together with the expenses, costs and
charges set out in Section 1.3(b), the " Obligations
").
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Pledge Agreement — Warnaco of Canada Company (2008)
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(b)
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All expenses, costs and charges incurred by or on behalf of the
Collateral Agent and the Secured Parties in connection with this
agreement, the Security Interest or the realization of the
Collateral including all legal fees, court costs, receiver’s
or agent’s remuneration and other expenses of, or of taking
or defending any action in connection with, taking possession of,
protecting, insuring, preparing for disposition, realizing,
collecting, selling, transferring, delivering or obtaining payment
of the Collateral or other lawful exercise of the powers conferred
by the Credit Agreement and the other Loan Documents are to be
added to and form a part of the Obligations.
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1.4 Attachment, Perfection and Control.
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(a)
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The Company acknowledges that (i) value has been given,
(ii) it has rights in the Collateral (other than
after-acquired Collateral), (iii) it has not agreed to
postpone the time of attachment of the Security Interest, and
(iv) it has received a duplicate original copy of this
agreement.
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(b)
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The Company will deliver to the Collateral Agent, immediately
upon receipt thereof, any and all certificates representing the
Pledged Securities and, to the extent applicable, the other
Collateral, in each case accompanied by a duly executed stock power
of attorney or similar transfer form constituting an effective
endorsement.
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(c)
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If the Company becomes entitled to receive or receives any
certificate (including, without limitation, any certificate
representing a stock dividend or any certificate issued in
connection with any reclassification, increase or reduction of
capital or any reorganization), option, warrant or right (if in
deliverable form) in respect of the Collateral, whether in addition
to, in substitution for, as a conversion of, or in exchange for,
any of the Collateral, the Company will accept it as the agent of
the Collateral Agent and hold the same in trust for the Collateral
Agent and the Secured Parties in the form received, and will
immediately deliver it to the Collateral Agent together with a duly
executed stock power of attorney or transfer form constituting an
effective endorsement, as applicable.
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(d)
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If and to the extent any of the Pledged Securities are or become
uncertificated, the Company will enter into and cause the issuer of
such Pledged Securities to enter into a Control Account Agreement
(as such term is defined in the General Security Agreement) in
order to ensure that the Collateral Agent has control (as such term
is used in the STA and the PPSA) of the uncertificated Pledged
Securities.
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(e)
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If and to the extent the Company now or hereafter has one or
more Pledged Securities Accounts, it shall take all action
necessary to cause the relevant securities intermediary to enter
into a Control Account Agreement (as such term is defined in the
General Security Agreement) with the Collateral Agent pursuant to
which the securities intermediary will agree, among other things,
to comply with entitlement orders originated by the Collateral
Agent or its nominee without further consent of the Company or any
other Person.
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Pledge Agreement — Warnaco of Canada Company (2008)
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(f)
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At the election of the Collateral Agent and immediately upon
written notice being provided by the Collateral Agent to the
Company, the Company will take all action required to
(i) permit the Pledged Securities to be transferred into and
registered in the name of the Collateral Agent or as it may direct,
and (ii) cause the Pledged Securities Account and Pledged
Security Entitlements recorded therein to be transferred to the
Collateral Agent or as it may direct so that it or its nominee
becomes the entitlement holder thereof. The Company covenants that,
at the time of any such transfer, it will provide all required
consents and approvals and cause the issuer of the Pledged
Securities or the securities intermediary, as the case may be, to
make appropriate notations on its share register or in the relevant
securities account, as applicable.
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1.5 Care and Custody of Collateral. The Collateral
Agent is not required to see to the collection of dividends on, or
exercise any option or right in connection with, the Collateral. It
has no obligation to protect or preserve the Collateral from
depreciating in value or becoming worthless and is hereby released
from all responsibility for any loss or diminution of value. The
Collateral Agent is bound to exercise in the physical keeping of
the Collateral only the same degree of care as it would exercise
with respect to its own investment property kept at the same place.
1.6 Absence of Fiduciary Relationship No implied
agreements, covenants or obligations on the part of the Collateral
Agent or any of the Secured Parties with respect to the Company, a
securities intermediary or an issuer of any of the Collateral are
to be read into this Agreement against the Collateral Agent or any
of the Secured Parties. The Collateral Agent and the Secured
Parties do not owe any fiduciary duty to the Company, any issuer of
the Collateral, any securities intermediary or any other Person.
1.7 Representations and Warranties of the Company. The
Company represents and warrants that:
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(a)
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it is the registered, legal and beneficial owner of the
Collateral;
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(b)
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the Collateral is free and clear of all liens, mortgages,
charges and security interests whatsoever other than those created
in favour of the Collateral Agent;
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(c)
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Schedule "A" correctly sets out the issuer, the certificate
number and the number and class of the Pledged Securities as at the
date hereof and the Pledged Securities represent all of the issued
and outstanding certificated and uncertificated securities owned by
the Company at the date hereof.
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(d)
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the Pledged Securities have been validly issued and are fully
paid and non-assessable;
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(e)
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Schedule "B" correctly sets out the entitlement holder,
securities intermediary and securities accounts particulars with
respect to each Pledged Securities Account as at the date hereof,
the Pledged Securities Accounts are the only securities
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Pledge Agreement — Warnaco of Canada Company (2008)
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accounts of the Company as at the date hereof and all Pledged
Security Entitlements are properly and completely described in the
Pledged Securities Accounts;
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(f)
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this agreement creates a legal, valid and binding agreement of
the Company enforceable in accordance with its terms and the
Security Interest in the Collateral is a perfected security
interest for purposes of the PPSA;
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(g)
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the Collateral Agent has control of the Collateral that consists
of investment property (including financial assets carried in the
Pledged Securities Account) (" Controlled Assets ") and the
Collateral Agent is a protected purchaser within the meaning of the
PPSA;
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(h)
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no Person other than the Collateral Agent has control or has the
right to obtain control of any Controlled Assets;
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(i)
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no Person, has any option, warrant, call, commitment,
conversion, right of exchange or other agreement or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming an option, warrant, right, call, commitment, conversion
right, right of exchange or other agreement to acquire any right or
interest in the Collateral;
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(j)
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there are no restrictions on the voting rights associated with
any of the Collateral and there are no restrictions on the right to
transfer the Collateral; and
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(k)
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the Company is not bound by nor is it a party to any unanimous
shareholder agreement or declaration (as such terms are defined in
the Canada Business Corporations Act ) relating to the
Pledged Securities.
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In addition to and not in substitution for any representation
and warranty contained in this deed, the Company does hereby
represent and warrant to and in favour of the Collateral Agent and
the Secured Parties that each representation and warranty made in
the Credit Agreement and the General Security Agreement, inasmuch
as applicable, is hereby reiterated and restated by the Company and
each such representation and warranty is hereby incorporated by
reference, mutatis mutandis , and is hereby confirmed as
true and correct as of the date hereof.
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