GENERAL SECURITY AGREEMENT
EXECUTED by the parties as of the 26th day of August, 2008.

     
TO:
  BANK OF AMERICA, N.A.,
 
  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
 
   
 
  (hereinafter the “Collateral Agent”)
 
   
GRANTED BY:
  WARNACO OF CANADA COMPANY
 
  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
 
   
 
  (hereinafter the “Debtor”)

SECTION 1 – GRANT OF SECURITY INTEREST
1.1 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:
     (a) Accounts Receivable
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
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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”);
(b) Inventory
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”);
(c) Equipment
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;
(e) Intangibles
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;
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(g) Other Property
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;
(h) Replacements, etc.
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
(i) Proceeds
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

      In the present General Security Agreement (this “Agreement”):     (a)  
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;     (b)   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;     (c)   Capitalized terms not
otherwise defined herein shall have the same meanings as ascribed to them in the
Credit Agreement, unless the context otherwise requires;     (d)   Any reference
to “Collateral” shall, unless the context otherwise requires, refer to
“Collateral or any part thereof”;     (e)   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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  (f)   “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;     (g)   “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;     (h)   “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);     (i)   “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;     (j)   “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;     (k)   “CCQ” means the Civil Code of
Quebec;     (l)   “Certificated Security” has the meaning given to such term in
the PPSA;     (m)   “CIPO” means the Canadian Intellectual Property Office;    
(n)   “Collateral” has the meaning specified in Section 1.1 hereof;

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  (o)   “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;     (p)   “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;     (q)   “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;     (r)
  “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;     (s)   “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;     (t)   “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;     (u)   “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;     (v)   “Entitlement Holder” has the
meaning given to such term in the PPSA;     (w)   “Entitlement Order” has the
meaning given to such term in the PPSA;     (x)   “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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      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);    
(y)   “Financial Assets” has the meaning given to such term in the PPSA;     (z)
  “Hedging Obligations” means all obligations of any Person under any Hedging
Contract;     (aa)   “Instrument” has the meaning given to such term in the
PPSA;     (bb)   “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;     (cc)   “Investment
Property” has the meaning given to such term in the PPSA;     (dd)   “LLC” means
each limited liability company in which the Debtor has an equity interest,
including those set forth on Schedule 2 (Pledged Collateral);     (ee)   “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;     (ff)   “Material
Intellectual Property” means Intellectual Property owned by or licensed to the
Debtor and material to Debtor’s business;     (gg)   “Partnership” means each
partnership in which the Debtor has an equity interest, including those set
forth on Schedule 2 (Pledged Collateral);     (hh)   “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;     (ii)   “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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  (jj)   “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;     (kk)   “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);     (ll)   “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;     (mm)   “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;     (nn)
  “Pledged Stock” means all Pledged Certificated Stock and all Pledged
Uncertificated Stock;     (oo)   “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;     (pp)   “Receiver” shall have the meaning
provided to such term in Section 6.4 hereof;     (qq)   “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;     (rr)   “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;     (ss)   “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;     (tt)   “Restricted Account
Letter” means a letter agreement in a form acceptable to the Administrative
Agent, executed by the Debtor;

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  (uu)   “Securities Intermediaries” has the meaning given to such term in the
PPSA;     (vv)   “Securities Account” has the meaning given to such term in the
PPSA;     (ww)   “Security Entitlement” has the meaning given to such term in
the PPSA;     (xx)   “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;     (yy)   “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;     (zz)   “Trademark License” means any agreement, whether
written or oral, providing for the grant by or to the Debtor of any right under
any Trademark.;     (aaa)   “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     (bbb)   “UCC” means the Uniform
Commercial Code as from time to time in effect in the State of New York.

1.3 Leases
     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

      Notwithstanding anything herein to the contrary:     (a)   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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  (b)   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     (c)   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.

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.
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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.
2.5 Pledged Collateral

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

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.
2.7 Accounts
     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

  (a)   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.     (b)   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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  (c)   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.     (d)   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.     (e)   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.     (f)   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.

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:
3.1 Generally
     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

  (a)   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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      (Perfection and Priority) and shall defend such security interests and
such priority against the claims and demands of all Persons.     (b)   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.     (c)   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.

3.3 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, the Debtor 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 of
organization from that referred to in Section 2.3 (Jurisdiction of Organization;
Chief Executive Office); or     (iii)   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.

  (b)   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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      and all credits granted with respect to the Collateral and all other
dealings with the Collateral.

3.4 Control
     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.
3.5 Pledged Collateral

  (a)   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.     (b)   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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  (c)   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.     (d)   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.     (e)   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 duties. The
Debtor agrees to execute and deliver to the Collateral Agent such certificates,
agreements and other documents as may be necessary to evidence, formalize or
otherwise give effect to the consents given in this clause (e).     (f)   The
Debtor shall not, and shall not permit any of its Subsidiaries (to the extent
the Stock of such Subsidiary constitutes Collateral), without the consent of the
Collateral Agent, agree to any amendment of any Constituent Document that in any
way adversely affects the perfection of the security interest of the Collateral
Agent in the Pledged Collateral pledged by the Debtor hereunder or any election
to turn any previously uncertificated Stock that is part of the Pledged
Collateral into certificated Stock.

3.6 Delivery of Instruments and Chattel Paper
     If any amount in excess of $250,000 payable under or in connection with any
Collateral owned by the Debtor shall be or become evidenced by an Instrument or
Chattel Paper, the Debtor shall promptly deliver such Instrument or Chattel
Paper to the Collateral Agent, duly indorsed in a manner satisfactory to the
Collateral Agent, or, if consented to by the Collateral Agent, shall mark all
such Instruments and Chattel Paper with the following legend: “This writing and
the obligations evidenced or secured hereby are subject to the security interest
of
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16

Bank of America, N.A., as Collateral Agent for the benefit of the Secured
Parties” (which legend shall be modified to reflect successor Collateral
Agents).
3.7 Intellectual Property

  (a)   The Debtor (either itself or through licensees) shall (and shall cause
all licensees or sublicensees thereof to) (i) continue to use each Trademark
that is Material Intellectual Property in order to maintain such Trademark in
full force and effect with respect to each class of goods for which such
Trademark is currently used, free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered under
such Trademark, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable
Requirements of Law, (iv) execute and file all documents necessary to perfect a
security interest pursuant to this Agreement in favour of the Collateral Agent
promptly upon adopting or using any mark that is confusingly similar or a
colorable imitation of such Trademark and (v) not do any act or knowingly omit
to do any act (and not permit or direct by express act or omission any licensee
or sublicensee thereof to do any act) whereby such Trademark (or any goodwill
associated therewith) may become destroyed, invalidated, impaired or harmed in
any way; provided, however, that (i) to (iii) and (v) above shall be subject to
the good faith exercise by the Debtor of its reasonable business judgment
consistent with past practices.     (b)   The Debtor shall not (and shall not
permit or direct by express act or omission any licensee or sublicensee thereof
to) do any act, or omit to do any act, whereby any Patent that is Material
Intellectual Property may become forfeited, abandoned or dedicated to the
public.     (c)   The Debtor (i) shall not (and shall not permit or direct by
express act or omission any licensee or sublicensee thereof to) do any act or
omit to do any act whereby any portion of the Copyrights that is Material
Intellectual Property may become invalidated or otherwise impaired and
(ii) shall not (and shall not permit or direct by express act or omission any
licensee or sublicensee thereof to) do any act whereby any portion of the
Copyrights that is Material Intellectual Property may fall into the public
domain.     (d)   The Debtor shall not knowingly (and shall not permit or direct
by express act or omission any licensee or sublicensee thereof to) do any act,
or knowingly omit to do any act, whereby any trade secret that is Material
Intellectual Property may become publicly available or otherwise unprotectable.
    (e)   The Debtor shall not (and shall not permit or direct by express act or
omission any licensee or sublicensee thereof to) do any act that knowingly
infringes, misappropriates, dilutes or violates any Third Party Intellectual
Property Rights.     (f)   The Debtor shall promptly inform the Collateral Agent
in writing of the acquisition by the Debtor of any Registerable Intellectual
Property, and the Debtor shall execute and deliver, at its own expense, from
time to time amendments to this Agreement or additional security agreements or
schedules as

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17

      may be required by the Collateral Agent in order that the Security
Interest shall attach to such Registerable Intellectual Property.     (g)   The
Debtor shall notify the Collateral Agent immediately if it knows, or has reason
to know, that any application for registration or recording, registration or
recording relating to any Material Intellectual Property may become forfeited,
abandoned or dedicated to the public, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in CIPO, the Federal Court of Canada or any other
court or tribunal in any other country) regarding Debtor’s ownership of, right
to use, interest in, or the validity or enforceability of, any Material
Intellectual Property or Debtor’s right to register the same or to own and
maintain the same.     (h)   As set forth below, whenever the Debtor, either by
itself or through its counsel or any agent or designee, shall file an
application for the registration or recording of any Intellectual Property with
CIPO or any similar office or agency within or outside Canada or register any
Internet domain name, the Debtor shall report such filing to the Collateral
Agent within five Business Days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Collateral Agent, the Debtor shall
execute and deliver, and have recorded, all agreements, instruments, documents
and papers as the Collateral Agent may request to evidence the Collateral
Agent’s security interest in any such Copyright, Patent, Trademark or Internet
domain name and the goodwill and intangibles of the Debtor relating thereto or
represented thereby.     (i)   The Debtor shall take all reasonable actions that
are (i) necessary (subject to the good faith exercise by the Debtor of its
reasonable business judgment consistent with past practices) or (ii) requested
by the Collateral Agent, including in any proceeding before CIPO or any similar
office or agency and any Internet domain name registrar, to maintain and pursue
each application for registration or recording (and to obtain the relevant
registration or recording) and to maintain each registration and recording of
any Copyright, Trademark, Patent or Internet domain name that is Material
Intellectual Property, including filing of applications for renewal, affidavits
of use, affidavits of incontestability and opposition and interference and
cancellation proceedings.     (j)   In the event that any Material Intellectual
Property is infringed, misappropriated, diluted or violated by a third party,
the Debtor shall notify the Collateral Agent promptly after the Debtor learns
thereof. The Debtor shall take appropriate action in response to any
infringement, misappropriation, dilution or violation of the Material
Intellectual Property, including promptly bringing suit for infringement,
misappropriation, dilution or violation and to recover all damages for such
infringement, misappropriation, dilution or violation, and shall take such other
actions may be appropriate under the circumstances to protect such Intellectual
Property; provided, however, that the foregoing shall be subject to the good
faith exercise by the Debtor of its reasonable business judgment consistent with
past practices.

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  (k)   Unless otherwise agreed to by the Collateral Agent the Debtor shall
execute and deliver to the Collateral Agent for filing in (i) the United States
Copyright Office or any similar office or agency a short-form copyright security
agreement in the form attached hereto as Annex 1 (Form of Short Form Copyright
Security Agreement) for all Copyrights of the Debtor registered therein from
time to time, (ii) in the United States Patent and Trademark Office or any
similar office or agency a short-form patent security agreement in the form
attached hereto as Annex 2 (Form of Short Form Patent Security Agreement ) for
all Patents of the Debtor registered therein from time to time, (iii) the United
States Patent and Trademark Office or any similar office or agency and with the
appropriate department or division of all appropriate States of the United
States a short-form trademark security agreement in form attached hereto as
Annex 3 (Form of Short Form Trademark Security Agreement) for all Trademarks of
the Debtor registered therein from time to time and (iv) with the appropriate
Internet domain name registrar, a duly executed form of assignment of all
Internet domain names of the Debtor to the Collateral Agent (together with
appropriate supporting documentation as may be requested by the Collateral
Agent) in form and substance reasonably acceptable to the Collateral Agent. In
the case of clause (iv) above, the Debtor hereby authorizes the Collateral Agent
to file such assignment in the Debtor’s name and to otherwise perform in the
name of the Debtor all other necessary actions to complete such assignment, and
the Debtor agrees to perform all appropriate actions deemed necessary by the
Collateral Agent for the Collateral Agent to ensure such Internet domain name is
registered in the name of the Collateral Agent.

3.8 Cash Management; Deposit Accounts

  (a)   On the Closing Date (or such later date as agreed by the Collateral
Agent), the Debtor shall cause to be delivered (i) to the Collateral Agent, a
duly executed and effective Blocked Account Letter for each existing deposit
account identified as a concentration account on Schedule 7 maintained by the
Debtor and (ii) to each Restricted Account Bank (with a copy to the Collateral
Agent), a Restricted Account Letter for each other deposit account (subject only
to clause (b) below) duly executed by the Debtor to each such deposit account.  
  (b)   The Debtor shall (i) deposit in a Blocked Account or Restricted Account
all cash and all Proceeds received by the Debtor and (ii) not establish or
maintain any deposit account with any financial or other institution other than
a Blocked Account Bank, a Restricted Account Bank, the Collateral Agent or the
Administrative Agent; provided, however, that the Debtor may at any time
maintain the following accounts not subject to this Section 3.8(b)(i) deposit
accounts or Securities Accounts (or their foreign equivalents) located outside
of Canada with cash or Cash Equivalents not in excess of an aggregate amount of
$3,000,000, (ii)  deposit accounts or Securities Accounts located in Canada with
cash or Cash Equivalents not in excess of an aggregate amount of $1,000,000 and
(iii) payroll tax, employee deductions at source, withholding tax, goods and

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      services and sales tax, and other fiduciary accounts as required for
operations in the ordinary course of business.     (c)   The Debtor shall
instruct each account debtor or other Person obligated to make a payment to the
Debtor to make payment, or to continue to make payment, as the case may be, to a
lock-box linked to a Blocked Account or a Restricted Account, as the case may
be, and the Debtor shall deposit in a Blocked Account or a Restricted Account
all Proceeds received by the Debtor from any other Person immediately upon
receipt.     (d)   In the event (i) the Debtor or a Blocked Account Bank or
Restricted Account Bank shall, after the date hereof, terminate an agreement
with respect to the maintenance of a Blocked Account or Restricted Account, as
the case may be, for any reason, (ii) the Collateral Agent shall demand
termination of a Blocked Account Letter or a Restricted Account Letter as a
result of the failure of a Blocked Account Bank or Restricted Account Bank, as
the case may be, to comply with the terms of the applicable letter agreement or
(iii) the Collateral Agent determines in its sole discretion that the financial
condition of a Blocked Account Bank or Restricted Account Bank has materially
deteriorated, then, in each case, the Debtor shall notify all of its account
debtors that were making payments to such terminated Blocked Account Bank or
Restricted Account Bank to make all future payments to such other Blocked
Account Bank or Restricted Account Bank, as specified by the Collateral Agent.  
  (e)   The Collateral Agent agrees that it shall not deliver to any Blocked
Account Bank a sweep activation notice under any Blocked Account Letter with
such Blocked Account Bank unless there has occurred and is continuing an Event
of Default or Available Credit has been less than 15% of the Aggregate Borrowing
Limit for five or more consecutive Business Days.

3.9 Cash Collateral Accounts

  (a)   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. The Debtor 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 the Debtor to issue Entitlement Orders for such investments in
Permitted Cash Equivalents as requested by the Debtor; 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

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      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 Debtor 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.

3.10 Vehicles
     Upon the request of the Collateral Agent, within 30 days after the date of
such request and, with respect to any vehicle acquired by the Debtor subsequent
to the date of any such request, within 30 days after the date of acquisition
thereof, the Debtor shall file all applications for certificates of title or
ownership indicating the Collateral Agent’s first priority security interest in
the vehicle covered by such certificate and any other necessary documentation,
in each office in each jurisdiction that the Collateral Agent shall deem
advisable to perfect its security interests in the vehicles; provided, however,
that the aggregate value of all vehicles excepted from the application of this
Section 3.10 shall not exceed $1,000,000.
3.11 Payment of Obligations
     The Debtor shall pay and discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the Collateral or in
respect of income or profits therefrom, as well as all claims of any kind
(including claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with Agreement Accounting Principles with
respect thereto have been provided on the books of the Debtor and such
proceedings could not reasonably be expected to result in the sale, forfeiture
or loss of any material portion of the Collateral or any interest therein.
SECTION 4 –  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
     All representations, warranties, covenants, agreements, undertakings and
conditions made in the Loan Documents, which, if not true, accurate and complete
when made and which, if not performed in accordance with the terms thereof, are
material, shall be considered to have been relied on by the Agents and the
Secured Parties and shall survive the execution and delivery of this Agreement
or any investigation made at any time by or on behalf of the Agents and any
disposition or payment of the Secured Obligations until repayment and
performance in full of the Secured Obligations and termination of all rights of
the Debtor that, if exercised, would result in the existence of Secured
Obligations.
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SECTION 5 – DEFAULT
5.1 Default
The Secured Obligations secured by this Agreement shall be immediately due and
payable in full and the security interests hereby constituted shall become
enforceable upon the occurrence and during the continuance of an Event of
Default (herein called a “Default”).
5.2 Demand Nature of Secured Obligations
     The Debtor agrees that the provision of defaults in section 5.1 shall not
derogate from any demand nature of the Secured Obligations as provided in the
Credit Agreement as at any time without restriction, whether or not the Debtor
has complied with the provisions of this Agreement or any other agreement or
instrument between it and the Collateral Agent or any other Secured Party. The
Debtor agrees that upon the occurrence and during the continuance of a Default
under section 5.1, the security interests hereby constituted shall become
enforceable and the Collateral Agent shall be entitled to exercise and enforce
any or all of the remedies herein provided or which may otherwise be available
to the Collateral Agent by statute, at law or in equity and, upon demand by the
Administrative Agent pursuant to Section 9.2 (Remedies) of the Credit Agreement,
all amounts secured hereby shall immediately be paid to the Collateral Agent
(for itself and on behalf of the Secured Parties) by the Debtor.
SECTION 6 –  REMEDIES ON DEFAULT
     If the security interest hereby constituted becomes enforceable, the
Collateral Agent shall have, in addition to any other rights, remedies and
powers which it may have at law, in equity or under the PPSA, the CCQ or the UCC
(whether or not the CCQ or the UCC applies to the affected Collateral) the
following rights, remedies and powers upon the occurrence and during the
continuance of an Event of Default:
6.1 Power of Entry
     The Debtor shall forthwith upon demand assemble and deliver to the
Collateral Agent possession of all of the Collateral at such place or places as
may be reasonably specified by the Collateral Agent. The Collateral Agent may
take such steps as it considers necessary or desirable to obtain possession of
all or any part of the Collateral and, to that end, the Debtor agrees that the
Collateral Agent, its servants or agents or Receiver (as hereinafter defined)
may, at any time, during the day or night, enter upon lands and premises where
the Collateral may be found for the purpose of taking possession of and/or
removing the Collateral or any part thereof. In the event of the Collateral
Agent taking possession of the Collateral, or any part thereof, the Collateral
Agent shall have the right to maintain the same upon the premises on which the
Collateral may then be situate. The Collateral Agent may take such action or do
such things as to render any Equipment unusable.
6.2 Power of Sale
     The Collateral Agent may sell, lease or otherwise dispose of all or any
part of the Collateral, as a whole or in separate parcels, by public auction,
private tender or by private
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contract, with or without notice, except as otherwise required by applicable
law, with or without advertising and without any other formality, all of which
are hereby waived by the Debtor. Such sale, lease or disposition shall be on
such terms and conditions as to credit and otherwise and as to upset or reserve
bid or price as to the Collateral Agent, in its sole discretion, may seem
advantageous. If such sale, transfer or disposition is made on credit or part
cash and part credit, the Collateral Agent need only credit against the Secured
Obligations the actual cash received at the time of the sale. Any payments made
pursuant to any credit granted at the time of the sale shall be credited against
the Secured Obligations as they are received. The Collateral Agent may buy in or
rescind or vary any contract for sale of all or any of the Collateral and may
resell without being answerable for any loss occasioned thereby. Any such sale,
lease or disposition may take place whether or not the Collateral Agent has
taken possession of the Collateral. The Collateral Agent may, before any such
sale, lease or disposition, perform any commercially reasonable repair,
processing or preparation for disposition and the amount so paid or expended
shall be deemed advanced to the Debtor by the Collateral Agent, shall become
part of the Secured Obligations, shall bear interest at the highest rate per
annum charged by the Collateral Agent on the Secured Obligations or any part
thereof and shall be secured by this Agreement.
6.3 Validity of Sale
     No person dealing with the Collateral Agent or its servants or agents shall
be concerned to inquire whether the security hereby constituted has become
enforceable, whether the powers which the Collateral Agent is purporting to
exercise have become exercisable, whether any money remains due on the security
of the Collateral, as to the necessity or expedience of the stipulations and
conditions subject to which any sale, lease or disposition shall be made,
otherwise as to the propriety or regularity of any sale or any other dealing by
the Collateral Agent with the Collateral or to see to the application of any
money paid to the Collateral Agent. In the absence of fraud on the part of such
persons, such dealings shall be deemed, so far as regards the safety and
protection of such person, to be within the powers hereby conferred and to be
valid and effective accordingly.
6.4 Receiver-Manager
     The Collateral Agent may, in addition to any other rights it may have,
appoint by instrument in writing a receiver or receiver and manager (both of
which are herein called a “Receiver”) of all or any part of the Collateral or
may institute proceedings in any court of competent jurisdiction for the
appointment of such a Receiver. Any such Receiver is hereby given and shall have
the same powers and rights and exclusions and limitations of liability as the
Collateral Agent has under this Agreement, at law or in equity. In exercising
any such powers, any such Receiver shall, to the extent permitted by law, act as
and for all purposes shall be deemed to be the agent of the Debtor and the
Collateral Agent and the Secured Parties shall not be responsible for any act or
default of any such Receiver. The Collateral Agent may appoint one or more
Receivers hereunder and may remove any such Receiver or Receivers and appoint
another or others in his or their stead from time to time. Any Receiver so
appointed may be an officer or employee of the Collateral Agent. A court need
not appoint, ratify the appointment by the Collateral Agent of or otherwise
supervise in any manner the actions of any Receiver. Upon the Debtor receiving
notice from the Collateral Agent of the taking of possession of the Collateral
or the appointment of a Receiver, all powers, functions, rights and privileges
of each
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of the directors and officers of the Debtor with respect to the Collateral shall
cease, unless specifically continued by the written consent of the Collateral
Agent.
6.5 Carrying on Business
     The Collateral Agent may carry on, or concur in the carrying on of, all or
any part of the business or undertaking of the Debtor, may, to the exclusion of
all others, including the Debtor, enter upon, occupy and use all or any of the
premises, buildings, plant and undertaking of or occupied or used by the Debtor
and may use all or any of the tools, machinery, equipment and intangibles of the
Debtor for such time as the Collateral Agent sees fit, free of charge, to carry
on the business of the Debtor and, if applicable, to manufacture or complete the
manufacture of any Inventory and to pack and ship the finished product.
6.6 Dealing with Collateral
     The Collateral Agent may seize, collect, realize, dispose of, enforce,
release to third parties or otherwise deal with the Collateral or any part
thereof in such manner, upon such terms and conditions and at such time or times
as may seem to it advisable, all of which without notice to the Debtor except as
otherwise required by any applicable law. The Collateral Agent may demand, sue
for and receive any Accounts Receivable with or without notice to the Debtor,
give such receipts, discharges and extensions of time and make such compromises
in respect of any Accounts Receivable which may, in the Agent’s absolute
discretion, seem bad or doubtful. The Collateral Agent may charge on its own
behalf and pay to others, sums for costs and expenses incurred including,
without limitation, legal fees and expenses on a solicitor and his own client
scale and Receivers’ and accounting fees, in or in connection with seizing,
collecting, realizing, disposing, enforcing or otherwise dealing with the
Collateral and in connection with the protection and enforcement of the rights
of the Collateral Agent hereunder including, without limitation, in connection
with advice with respect to any of the foregoing. The amount of such sums shall
be deemed advanced to the Debtor by the Collateral Agent, shall become part of
the Secured Obligations, shall bear interest at the highest rate per annum
charged by the Collateral Agent on the Secured Obligations or any part thereof
and shall be secured by this Agreement.
6.7 Right to Use
     For the purposes of enabling the Collateral Agent to exercise its rights
and remedies under this Agreement (including, without limiting the terms of this
Section 6, in order to take possession of, hold, preserve, process, assemble,
prepare for sale, market for sale, complete production of, advertise for sale
and sell or otherwise dispose of the Collateral) at such time as the Collateral
Agent shall be lawfully entitled to exercise such rights and remedies, the
Debtor hereby grants to the Collateral Agent (for itself and on behalf of the
Secured Parties) an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Debtor) to use, license or
sublicense all of the Debtor’s present and future property, whether real or
personal, including, without limitation, all labels, patents, copyrights, rights
of use of any name, trade secrets, trade names, trademarks, services marks, and
advertising matter, or any other property of any nature or of a similar nature
now owned or hereafter acquired by the Debtor, and wherever the same may be
located, and including such license access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
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programs used for the compilation or printout thereof and all of the Debtor’s
rights under all licenses and all franchise agreements shall inure to the
Collateral Agent.
6.8 Retention of Collateral
     Upon notice to the Debtor and subject to any obligation to dispose of any
of the Collateral, as provided in the PPSA, the Collateral Agent may elect to
retain all or any part of the Collateral in satisfaction of the Secured
Obligations or any of them.
6.9 Accounts and Payments in Respect of Intangibles

  (a)   In addition to, and not in substitution for, any similar requirement in
the Credit Agreement, if required by the Collateral Agent at any time during the
continuance of an Event of Default, any payment of Accounts Receivable or
payment in respect of Intangibles, when collected by the Debtor, shall be
forthwith (and, in any event, within two Business Days) deposited by the Debtor
in the exact form received, duly indorsed by the Debtor to the Collateral Agent,
in a Blocked Account or a Cash Collateral Account, subject to withdrawal by the
Collateral Agent as provided in Section 6.11 (Proceeds to be Turned Over To
Collateral Agent). Until so turned over, such payment shall be held by the
Debtor in trust for the Collateral Agent, segregated from other funds of the
Debtor. Each such deposit of Proceeds of Accounts Receivable and payments in
respect of Intangibles shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
    (b)   At the Collateral Agent’s request, during the continuance of an Event
of Default, the Debtor shall deliver to the Collateral Agent all original and
other documents evidencing, and relating to, the agreements and transactions
that gave rise to the Accounts Receivable or payments in respect of Intangibles,
including all original orders, invoices and shipping receipts.     (c)   Subject
to the terms of the Credit Agreement, the Collateral Agent may, without notice,
at any time during the continuance of an Event of Default, limit or terminate
the authority of the Debtor to collect its Accounts Receivable or amounts due
under Intangibles or any thereof.     (d)   The Collateral Agent in its own name
or in the name of others may at any time during the continuance of an Event of
Default communicate with account debtors to verify with them to the Collateral
Agent’s satisfaction the existence, amount and terms of any Account or amounts
due under any Intangible.     (e)   Upon the request of the Collateral Agent at
any time during the continuance of an Event of Default, the Debtor shall notify
account debtors that it has granted to the Collateral Agent a lien on and
security interest in, all of its right, title and interest in, to and under the
Accounts Receivable or Intangibles that have been collaterally assigned to the
Collateral Agent and that payments in respect thereof shall be made directly to
the Collateral Agent. In addition, the Collateral Agent may at any time during
the continuance of an Event of Default, to the extent

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      permitted by applicable law, enforce the Debtor’s rights against such
account debtors and obligors of Intangibles.     (f)   Anything herein to the
contrary notwithstanding, the Debtor shall remain liable under each of the
Accounts Receivable and payments in respect of Intangibles to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Collateral Agent nor any other Secured Party shall have any
obligation or liability under any agreement giving rise to an Account or a
payment in respect of an Intangible by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any other Secured Party of
any payment relating thereto, nor shall the Collateral Agent nor any other
Secured Party be obligated in any manner to perform any obligation of the Debtor
under or pursuant to any agreement giving rise to an Account or a payment in
respect of an Intangible, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party thereunder, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any
amounts that may have been assigned to it or to which it may be entitled at any
time or times.

6.10 Pledged Collateral

  (a)   During the continuance of an Event of Default, upon notice by the
Collateral Agent to the Debtor, (i) the Collateral Agent shall have the right to
receive any Proceeds of the Pledged Collateral and make application thereof to
the Secured Obligations in the order set forth in the Credit Agreement and
(ii) the Collateral Agent or its nominee may exercise (A) any voting, consent,
corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or
issuers of Pledged Collateral or otherwise and (B) any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any issuer of Pledged Stock and the right
to deposit and deliver any Pledged Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it; provided, however, that the
Collateral Agent shall have no duty to the Debtor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.     (b)   In order to permit the Collateral Agent to exercise
the voting and other consensual rights that it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions that it may
be entitled to receive hereunder, (i) the Debtor shall promptly execute and
deliver (or cause to be executed and delivered) to the Collateral Agent all such
proxies, dividend payment orders and other instruments as the Collateral Agent
may from time to time reasonably

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      request and (ii) without limiting the effect of clause (i) above, the
Debtor hereby grants to the Collateral Agent an irrevocable proxy to vote all or
any part of the Pledged Collateral and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Collateral would be
entitled (including giving or withholding written consents of shareholders,
partners or members, as the case may be, calling special meetings of
shareholders, partners or members, as the case may be, and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Collateral on the
record books of the issuer thereof) by any other person (including the issuer of
such Pledged Collateral or any officer or agent thereof) during the continuance
of an Event of Default and which proxy shall only terminate upon Discharge of
Lender Claims.     (c)   The Debtor hereby expressly authorizes and instructs
each issuer of any Pledged Collateral pledged hereunder by the Debtor to
(i) comply with any instruction received by it from the Collateral Agent in
writing that (A) states that an Event of Default has occurred and is continuing
and (B) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from the Debtor, and the Debtor agrees that such
issuer shall be fully protected in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividend or other payment with respect to
the Pledged Collateral directly to the Collateral Agent

6.11 Proceeds to be Turned Over To Collateral Agent
     Unless otherwise expressly provided in the Credit Agreement, all Proceeds
received by the Collateral Agent hereunder in cash or Cash Equivalents shall be
held by the Collateral Agent in a Cash Collateral Account. All Proceeds
constituting Reinvestment Prepayment Amounts (as defined in the Credit
Agreement) or the cash collateralization of Letters of Credit (as defined in the
Credit Agreement) while held by the Collateral Agent in a Cash Collateral
Account (or by the Debtor in trust for the Collateral Agent) shall continue to
be held as collateral security for the Secured Obligations and shall not
constitute payment thereof until applied as provided in the Credit Agreement.
6.12 Registration Rights

  (a)   During the continuance of an Event of Default, if the Collateral Agent
shall determine to exercise its right to sell any of the Pledged Collateral, and
if in the reasonable opinion of the Collateral Agent it is necessary or
advisable to have the Pledged Collateral, or any portion thereof, registered
under the provisions of the STA or any similar securities laws in any other
applicable jurisdiction (the “Securities Act”), the Debtor shall use its
reasonable efforts to cause the issuer thereof to (i) execute and deliver, and
cause the directors and officers of such issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Collateral Agent, necessary or advisable to register
the Pledged Collateral, or that portion thereof to be sold, under the provisions
of the Securities Act, (ii) use its reasonable efforts to cause the registration
statement relating thereto to become effective and to remain

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      effective for a period of one year from the date of the first public
offering of the Pledged Collateral, or that portion thereof to be sold and
(iii) make all amendments thereto or to the related prospectus that, in the
opinion of the Collateral Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations of any
securities commission applicable thereto. The Debtor agrees to cause such issuer
to comply with the provisions of the applicable securities laws of any
jurisdiction that the Collateral Agent shall designate and to make available to
its security holders, as soon as practicable, an earnings statement (which need
not be audited) satisfying the provisions of the Securities Act.     (b)   The
Debtor recognizes that the Collateral Agent may be unable to effect a public
sale of any Pledged Collateral by reason of certain prohibitions contained in
the Securities Act and applicable regulations or otherwise or may determine that
a public sale is impracticable or not commercially reasonable and, accordingly,
may resort to one or more private sales thereof to a restricted group of
purchasers that shall be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to the
distribution or resale thereof. The Debtor acknowledges and agrees that any such
private sale may result in prices and other terms less favourable than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner. The Collateral Agent shall be under no obligation to delay a sale of any
Pledged Collateral for the period of time necessary to permit the issuer thereof
to register such securities for public sale under the Securities Act, even if
such issuer would agree to do so.     (c)   During the continuance of an Event
of Default, the Debtor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Collateral pursuant to this Section 6.12 valid and
binding and in compliance with all other applicable Requirements of Law. The
Debtor further agrees that a breach of any covenant contained in this
Section 6.12 will cause irreparable injury to the Collateral Agent and the other
Secured Parties, that the Collateral Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.12 shall be specifically
enforceable against the Debtor, and the Debtor hereby waives and agrees not to
assert any defense against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit
Agreement.

6.13 Pay Encumbrances
     The Collateral Agent may pay any encumbrance that may exist or be
threatened against the Collateral. In addition, the Collateral Agent may borrow
money required for the maintenance, preservation or protection of the Collateral
or for the carrying on of the business or undertaking of the Debtor and may
grant further security interests in the Collateral in priority to the security
interest created hereby as security for the money so borrowed. In every such
case
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the amounts so paid or borrowed together with costs, charges and expenses
incurred in connection therewith shall be deemed to have been advanced to the
Debtor by the Collateral Agent, shall become part of the Secured Obligations,
shall bear interest at the highest rate per annum charged by the Collateral
Agent on the Secured Obligations or any part thereof and shall be secured by
this Agreement.
6.14 Application of Payments Against Secured Obligations
     Any and all payments made in respect of the Secured Obligations from time
to time and moneys realized on the Collateral shall be applied in accordance
with Section 2.13 of the Credit Agreement. Any insurance moneys received by the
Collateral Agent pursuant to this Agreement may, at the option of the Collateral
Agent, be applied to rebuilding or repairing the Collateral or be applied
against the Secured Obligations in accordance with the provisions of this
Section.
6.15 Set-Off
     The Secured Obligations will be paid by the Debtor without regard to any
equities between the Debtor and the Collateral Agent and/or any Secured Party or
any right of set-off or cross-claim. Any indebtedness owing by the Collateral
Agent and/or any Secured Party to the Debtor may be set off and applied by the
Collateral Agent against the Secured Obligations at any time or from time to
time either before or after maturity, without demand upon or notice to anyone.
6.16 Deficiency
     The Debtor shall remain liable for any deficiency if the proceeds of any
sale or other disposition of the Collateral are insufficient to pay the Secured
Obligations and the reasonable fees and disbursements of any attorney employed
by the Collateral Agent or any other Secured Party to collect such deficiency.
6.17 Agent Not Liable
     Neither the Collateral Agent nor any of the other Secured Parties shall be
(a) liable or accountable for any failure to seize, collect, realize, dispose
of, enforce or otherwise deal with the Collateral, (b) bound to institute
proceedings for any such purposes or for the purpose of preserving any rights of
the Collateral Agent, the Debtor or any other person, firm or corporation in
respect of the Collateral, or (c) liable or responsible for any loss, cost or
damage whatsoever which may arise in respect of any such failure including,
without limitation, resulting from the negligence of the Collateral Agent or any
of its officers, servants, agents, solicitors, attorneys, Receivers or otherwise
except for its, his, her or their gross negligence or willful misconduct.
Neither the Collateral Agent nor any of the other Secured Parties, nor their
respective officers, servants, agents or Receivers shall be liable by reason of
any entry into possession of the Collateral or any part thereof, to account as a
mortgagee in possession, for anything except actual receipts, for any loss on
realization, for any act or omission for which a mortgagee in possession might
be liable, for any negligence in the carrying on or occupation of the business
or undertaking of the Debtor as provided in Section 6.5 or for any loss, cost,
damage or expense whatsoever which may arise in respect of any such actions,
omissions or negligence except for its, his, her or their gross negligence or
willful misconduct.
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6.18 Extensions of Time
     The Collateral Agent and any of the Secured Parties may grant renewals,
extensions of time and other indulgences, take and give up securities, accept
compositions, grant releases and discharges, perfect or fail to perfect any
securities, release any part of the Collateral to third parties and otherwise
deal or fail to deal with the Debtor, debtors of the Debtor, guarantors,
sureties and others and with the Collateral and other securities as they may see
fit, all without prejudice to the liability of the Debtor to the Collateral
Agent and the Secured Parties or the Collateral Agent’s and Secured Parties’
rights and powers under this Agreement.
6.19 Rights in Addition
     The rights and powers conferred by this Section 6 are in supplement of and
in addition to and not in substitution for any other rights or powers the
Collateral Agent may have from time to time under this Agreement or under
applicable law. The Collateral Agent may proceed by way of any action, suit,
remedy or other proceeding at law or in equity and no such remedy for the
enforcement of the rights of the Collateral Agent shall be exclusive of or
dependent on any other such remedy. Any one or more of such remedies may from
time to time be exercised separately or in combination.
SECTION 7 – DEALING WITH COLLATERAL BY THE DEBTOR
7.1 Sale of Inventory
     Prior to the occurrence of a Default, the Debtor may, to the extent
permitted hereunder or as permitted in the Credit Agreement, in the ordinary
course of its business and on customary trade terms, lease or sell items of
Inventory, so that the purchaser thereof takes title clear of the security
interest hereby created. If such sale or lease results in an Account Receivable,
such Account Receivable shall be subject to the security interest hereby
created.
SECTION 8 – GENERAL
8.1 Security in Addition
     The security hereby constituted is not in substitution for any other
security for the Secured Obligations or for any other agreement between the
parties creating a security interest or hypothec in all or part of the
Collateral, whether heretofore or hereafter made, and such security and such
agreements shall be deemed to be continued and not affected hereby unless
expressly provided to the contrary in writing and signed by the Collateral Agent
and the Debtor. The taking of any action or proceedings or refraining from so
doing, or any other dealing with any other security for the Secured Obligations
or any part thereof, shall not release or affect the security interest created
by this Agreement and the taking of the security interest hereby created or any
proceedings hereunder for the realization of the security interest hereby
created shall not release or affect any other security held by the Collateral
Agent for the repayment of or performance of the Secured Obligations.
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8.2 Amendments in Writing
     None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with Section 11.1
(Amendments, Waivers, Etc.) of the Credit Agreement; provided, however, that
annexes to this Agreement may be supplemented (but no existing provisions may be
modified and no Collateral may be released except as provided in Section 8.11)
through amendments in a form reasonably acceptable to the Collateral Agent, in
each case duly executed by the Collateral Agent and the Debtor.
8.3 Notices
     All notices, requests and demands to or upon the Collateral Agent or the
Debtor hereunder shall be effected in the manner provided for in Section 11.8
(Notices, Etc.) of the Credit Agreement; provided, however, that any such
notice, request or demand to or upon the Debtor shall be addressed to the
Debtor’s notice address set forth in such Section 11.8 or to its principal place
of business as set forth herein.
8.4 No Waiver by Course of Conduct; Cumulative Remedies
     Neither the Collateral Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 8.2 (Amendments in
Writing)), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Collateral Agent or such other Secured Party would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.5 Successors and Assigns
     This Agreement shall be binding upon the successors and assigns of the
Debtor and shall inure to the benefit of the Collateral Agent and each other
Secured Party and their successors and assigns; provided, however, that the
Debtor may not assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Collateral Agent.
8.6 Counterparts
     This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Signature pages may
be detached from multiple counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an
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executed counterpart by telecopy or electronic transmission (in pdf format)
shall be effective as delivery of a manually executed counterpart.
8.7 Severability
     Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.8 Section Headings
     The Section titles and subtitles contained in this Agreement are, and shall
be, without substantive meaning or content of any kind whatsoever and are not
part of the agreement of the parties hereto.
8.9 Entire Agreement
     This Agreement, together with the other Loan Documents, represents the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereto concerning the Secured
Obligations.
8.10 Additional Debtors
     Pursuant to Section 7.11 (Additional Personal Property Collateral and
Guaranties) of the Credit Agreement, the Debtor shall be required to cause any
Subsidiary to execute and deliver to the Collateral Agent a General Security
Agreement substantially in the form hereof unless otherwise agreed by the
Administrative Agent.
8.11 Release of Collateral

  (a)   At the time provided in Section 10.7(b)(i) of the Credit Agreement, the
Collateral shall be released from the Liens hereby and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Collateral Agent and the Debtor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Debtor. At the request and sole
expense of the Debtor following any such termination, the Collateral Agent shall
deliver to the Debtor any Collateral of the Debtor held by the Collateral Agent
hereunder and execute and deliver to the Debtor, at the sole expense of the
Debtor, such documents as the Debtor shall reasonably request to evidence such
termination.     (b)   If the Collateral Agent shall be directed or permitted
pursuant to Section 10.7(b)(ii) or (iii) of the Credit Agreement to release any
Lien created hereby upon any Collateral (including any Collateral sold or
disposed of by the Debtor in a transaction permitted by the Credit Agreement),
such Collateral shall be released from the Lien created hereby to the extent
provided under, and subject

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      to the terms and conditions set forth in, Section 10.7(b)(ii) or (iii) of
the Credit Agreement. In connection therewith but subject to the terms of the
Credit Agreement, the Collateral Agent, at the request and sole expense of the
Debtor, shall execute and deliver to the Debtor, all releases or other documents
reasonably necessary or desirable for the release of the Lien created hereby on
such Collateral.     (c)   At the request and sole expense of the Debtor, the
Debtor shall be released from its obligations hereunder in the event that all
the capital stock of the Debtor shall be so sold or disposed (but only so long
as such sale or other disposition is permitted under the Credit Agreement);
provided, however, that the Debtor shall have delivered to the Collateral Agent,
at least ten Business Days prior to the date of the proposed release, a written
request for release identifying the Debtor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Debtor in form and
substance satisfactory to the Collateral Agent stating that such transaction is
in compliance with the Loan Documents.

8.12 Reinstatement
     The Debtor further agrees that, if any payment made by any Loan Party or
other Person and applied to any of the Secured Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the proceeds
of Collateral are required to be returned by any Secured Party to such Loan
Party or other Person, its estate, trustee, receiver or any other party,
including the Debtor, under any bankruptcy law, provincial or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
any Lien or other Collateral securing such liability shall be and remain in full
force and effect, as fully as if such payment had never been made or, if prior
thereto the Lien granted hereby or other Collateral securing such liability
hereunder shall have been released or terminated, such Lien or other Collateral
shall be reinstated in full force and effect, and such prior release or
termination shall not diminish, release, discharge, impair or otherwise affect
any Lien or other Collateral securing the obligations of the Debtor in respect
of the amount of such payment.
8.13 Submission to Jurisdiction; Service of Process

  (a)   Any legal action or proceeding with respect to this Agreement may be
brought in the courts of the Province of Ontario, and, by execution and delivery
of this Agreement, the Debtor hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
court. The Debtor hereby irrevocably waives any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, that it may now or hereafter have to the bringing of any such action
or proceeding in such respective jurisdictions.     (b)   The Debtor hereby
irrevocably consents to the service of any and all legal process, summons,
notices and documents in any suit, action or proceeding brought in Canada
arising out of or in connection with this Agreement by the

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      mailing (by registered or certified mail, postage prepaid) or delivering
of a copy of such process to the Debtor at the address specified in Section 11.8
(Notices, Etc.) of the Credit Agreement. The Debtor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.     (c)   Nothing contained in this Section 8.13 shall affect the right of
the Collateral Agent or any other Secured Party to serve process in any other
manner permitted by law or commence legal proceedings or otherwise proceed
against the Debtor in any other jurisdiction.

8.14 Further Assurances
     The Debtor shall at all times do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged or delivered all and singular every such
further acts, deeds, conveyances, instruments, transfers, assignments, security
agreements and assurances as the Collateral Agent may reasonably require in
order to give effect to the provisions and purposes of this Agreement including,
without limitation, in respect of the Collateral Agent’s enforcement of the
security and its realization on the Collateral, and for the better granting,
transferring, assigning, charging, setting over, assuring, confirming and/or
perfecting the security interest of the Collateral Agent in the Collateral
pursuant to this Agreement. The Debtor hereby constitutes and appoints any
officer of the Collateral Agent at its above address, or any Receiver appointed
by the Court or the Collateral Agent as provided herein, the true and lawful
attorney of the Debtor irrevocably with full power of substitution to do, make
and execute all such assignments, documents, acts, matters or things with the
right to use the name of the Debtor whenever and wherever it may be deemed
necessary or expedient. The Debtor hereby authorizes the Collateral Agent to
file such proofs of claim and other documents as may be necessary or advisable
in order to prove its claim in any bankruptcy, proposed winding-up or other
proceeding relating to the Debtor. Notwithstanding anything to the contrary in
this paragraph, the Collateral Agent agrees that it shall not exercise any right
under the power of attorney provided for in this paragraph unless an Event of
Default shall be continuing.
     Without limiting the generality of the foregoing, the Debtor:

  (a)   shall, upon receipt of notice to do so by the Collateral Agent, mark
conspicuously each chattel paper evidencing or relating to Accounts Receivable
and each related contract and, at the request of the Collateral Agent, each of
its records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Collateral Agent, indicating that such chattel paper,
related contract or Collateral is subject to the security interests granted
hereby;     (b)   shall, if any Accounts Receivable shall be evidenced by a
promissory note or other instrument or chattel paper, deliver and pledge to the
Collateral Agent hereunder such note, instrument or chattel paper duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Collateral Agent;

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  (c)   shall execute and file such financing or continuation statements, or
amendments, thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Collateral Agent may request, in order to perfect and
preserve the security interests granted or purported to be granted hereby;    
(d)   hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of the Debtor, where permitted by law; and
    (e)   shall furnish to the Collateral Agent from time to time, upon request,
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, all in reasonable detail.

8.15 Continuing Security Interest and Discharge
     This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until payment and
performance in full of the Secured Obligations and the termination of the Credit
Agreement, notwithstanding any dealing between the Collateral Agent and the
Debtor or any guarantor in respect of the Secured Obligations or any release,
exchange, non-perfection, amendment, waiver, consent or departure from or in
respect of any or all of the terms or provision of any security held for the
Secured Obligations.
8.16 Governing Law
     This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein,
except as required by mandatory provisions of law and except to the extent that
the validity or perfection of the security interests hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the Province of Ontario.
8.17 Provisions Reasonable
     The Debtor expressly acknowledges and agrees that the provisions of this
Agreement and, in particular, those respecting remedies and powers of the
Collateral Agent against the Debtor, its business and the Collateral upon
default, are commercially reasonable and not manifestly unreasonable.
8.18 Precedence
     In the event that any provisions of this Agreement contradict, are
inconsistent with and are otherwise incapable of being construed in conjunction
with the provisions (including any rights, remedies and covenants therein) of
the Credit Agreement, the provisions of the Credit Agreement shall take
precedence over those contained in this Agreement. Notwithstanding the
foregoing, in the event that any provision of the Credit Agreement relating to
the grant or perfection of a security interest in Collateral, if any, conflict
with, contradict, are inconsistent and are otherwise incapable of being
construed in conjunction with the provisions of this Agreement, such provisions
of this Agreement shall take precedence over those contained in the Credit
Agreement.
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8.19 Number and Gender
     In this Agreement, words importing the singular number include the plural
and vice-versa and words importing gender include all genders.
8.20 Indemnity and Expenses

  (a)   The Debtor agrees to indemnify and save harmless the Collateral Agent
and the Secured Parties from and against any and all claims, losses and
liabilities arising out of or resulting out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement).     (b)   The
Debtor will upon demand pay to the Collateral Agent the amount of any and all
expenses, including the fees and disbursements of its counsel and of any experts
and agents, which the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Collateral, (iii) the exercise or enforcement of any of the rights or
remedies of the Collateral Agent hereunder or (iv) the failure by the Debtor to
perform or observe any of the provisions hereunder.

8.21 Judgment Currency
     If, for the purposes of obtaining or enforcing judgment in any court or for
any other purpose hereunder or in connection herewith, it is necessary to
convert a sum due hereunder in any currency into another currency, such
conversion shall be carried out to the extent and in the manner provided in the
Credit Agreement.
8.22 Language
     The parties hereto acknowledge that they have requested and are satisfied
that this Agreement, as well as all notices, actions and legal proceedings be
drawn up in the English language. Les parties à cette convention reconnaissent
qu’elles ont exigé que cette convention ainsi que tous avis, actions et
procédures légales soient rédigés et exécutés en anglais et s’en déclarent
satisfaites.
[the remainder of this page is intentionally left blank]
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement at the place and as of the date first above written.

                  WARNACO OF CANADA COMPANY,         as Debtor    
 
           
 
  Per:
Name:   /s/ Lawrence R. Rutkowski
 
Lawrence R. Rutkowski    
 
  Title:   Vice-President    
 
                BANK OF AMERICA, N.A.,         as Collateral Agent    
 
           
 
  Per:   /s/ Kevin W. Corcoran    
 
           
 
  Name:   Kevin W. Corcoran    
 
  Title:   Vice President    

General Security Agreement — Warnaco of Canada Company (2008)