Exhibit 10.10
DEED OF HYPOTHEC
ON THE UNIVERSALITY OF MOVABLE PROPERTY
EXECUTED by the parties hereto as of the 26th day of August, 2008.

     
BETWEEN:
  WARNACO OF CANADA COMPANY, a company duly amalgamated under the laws of Nova
Scotia, 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 referred to as the “Grantor”)
 
   
AND:
  BANK OF AMERICA, N.A., a national banking association organized under the
federal laws of the United States of America, having a place of business at 335
Madison Avenue, New York, New York 10017 herein acting (i) for its own benefit
as Lender (acting through its Canada branch) and as Collateral Agent for its own
benefit and the benefit of the other present and future Secured Parties, and
(ii) as solidary creditor of such other present and future Secured Parties, and
any successors thereto in such capacities,
 
   
 
  (hereinafter referred to as the “Collateral Agent”)

THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
1. SECURED OBLIGATIONS
The hypothec granted by this deed secures the performance of the following
obligations (hereinafter collectively called the “Secured Obligations”):

  1.1  
the prompt payment, as and when due and payable, of all the Secured Obligations
(as such term is defined in the Credit Agreement, hereinafter defined) of the
Grantor; for the purposes of this deed, the term “Credit Agreement” shall mean
that certain credit agreement dated on or about the date hereof among, inter
alia, the Grantor, 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; unless otherwise
defined herein, all capitalized words and expressions when used herein shall
have the same meaning as ascribed thereto in the Credit Agreement;

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  1.2  
the strict performance and observance by the Grantor of all the agreements,
warranties, representations, covenants, conditions and obligations made pursuant
to this deed, the Credit Agreement or the other Loan Documents, all as now in
effect or as hereafter entered into or amended; and

  1.3  
the prompt payment, as and when due and payable, of all other amounts now or
hereafter owing by the Grantor to the Collateral Agent or any other Secured
Party under the Credit Agreement or the other Loan Documents, including by way
of guarantee or indemnity, whether now existing or hereafter incurred, matured
or unmatured, direct, indirect or contingent, including any extensions and
renewals thereof and including the payment of all amounts payable hereunder and
the legitimate costs (including, without limitation, all reasonable fees,
charges and disbursements of counsel) that the Collateral Agent may incur to
recover the obligations secured hereby and to preserve the Hypothecated Property
(as such expression is hereinbelow defined).

2. HYPOTHEC
2.1 Amount of Hypothec
To secure the performance of the Secured Obligations, the Grantor hereby
hypothecates in favour of the Collateral Agent the property described in
Section 2.2 hereof for the sum of Fifty Million Canadian dollars
(Cdn$50,000,000.00) bearing interest at the rate of Twenty-Five percent (25%)
per annum from the date hereof, compounded annually.
2.2 Description of Hypothecated Property

     
The hypothec charges the universality of all the Grantor’s movable property,
present and future, corporeal and incorporeal, of whatsoever nature and kind and
wheresoever situated (hereinafter collectively called the “Hypothecated
Property”), including, without limitation, all tools and equipment pertaining to
the enterprises of the Grantor, all claims and customer accounts, all securities
(including, without limitation, those described in Schedule “B” hereto), all
patents, trademarks and other intellectual property rights (including, without
limitation, those described in Schedule “A” hereto) and all corporeal movables
included in the assets of any of the Grantor’s enterprises kept for sale, lease
or processing in the manufacture or transformation of property intended for
sale, for lease or for use in providing a service.

2.3 Interpretation

     
The parties hereto acknowledge and confirm as follows:

  2.3.1  
that “General Security Agreement” shall mean that certain General Security
Agreement dated on or about the date hereof between the Grantor, as Debtor, and
the Collateral Agent, as same may be amended, supplemented, revised, restated or
replaced from time to time;

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  2.3.2  
that the hypothec created on the Hypothecated Property pursuant to this deed is
not and shall not be construed as a floating hypothec within the meaning of
articles 2715 et seq. of the Civil Code of Québec;

  2.3.3  
that the hypothec constituted hereunder will remain in full force and effect for
the full amount stipulated in Section 2.1 hereof until such time as an express
written discharge is executed by the Collateral Agent and delivered to the
Grantor. The hypothec, security and rights hereby created in favour of the
Collateral Agent will not be extinguished, reduced, novated or otherwise
affected by any payments made to or amounts received by the Collateral Agent,
directly or indirectly, from the Grantor or any other party or as a result of
any insurance indemnities arising from loss or damage to any of the Hypothecated
Property or by reason of the collection of any claims hypothecated hereunder;
and

  2.3.4  
that should the Secured Obligations at any time be fully extinguished without an
express discharge of the hypothec created hereunder having been granted, and
should any new Secured Obligations arise, the security created hereunder will
secure such new Secured Obligations in the same manner and to the same extent as
if there had never occurred an extinction of any of the Secured Obligations and
the Grantor is and shall remain obligated under the provisions hereof. The
Grantor shall be deemed to have obligated itself for such new Secured
Obligations pursuant to the provisions hereof and the hypothec herein created
shall secure such new Secured Obligations as contemplated by Article 2797 of the
Civil Code of Québec.

3. GRANTOR’S UNDERTAKINGS
3.1 Alienation

     
The Grantor agrees not to alienate, lease or otherwise dispose of any of the
Hypothecated Property outside the ordinary course of business of its enterprise
unless the Collateral Agent gives its prior written consent or unless otherwise
permitted under the Credit Agreement (each, an “Authorized Transaction”).
       
In the event of any alienation or rental other than an Authorized Transaction,
the Grantor (who shall not be relieved of any default resulting from such
alienation or rental) shall immediately inform the Collateral Agent of the
details of such alienation or rental and shall in particular provide the
Collateral Agent with a description of the alienated or leased property and any
property acquired in replacement, the name and address of the acquirer or
lessee, as well as details concerning the proceeds of such alienation or rental.

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3.2 Transformation
The Grantor may not, without the Collateral Agent’s prior written consent, or
unless otherwise permitted under the Credit Agreement, transform any of the
movables forming part of the Hypothecated Property either by incorporating such
movables into an immovable or by combining or mixing them with other movables so
as to form new property, unless such immovable or new property are themselves
subject or made subject to the hypothec hereby granted or unless such
transformation is made in the ordinary course of operating an enterprise of the
Grantor that is engaged in the business of manufacturing or transforming
property. In no event, however, may the Grantor transform any such property
where such transformation would result in the Collateral Agent’s security or
rights hereunder, including in particular their rank, being diminished.
In the event of any such transformation, even without the Collateral Agent’s
authorization, the Grantor (who shall not be relieved of the default resulting
from the failure to obtain authorization) shall immediately inform the
Collateral Agent of the details of such transformation and shall in particular
provide the Collateral Agent with a description of the property thereby
affected, the name and address of the owner of the property that may result
therefrom and the address where such property is located.
3.3 Notice of Change of Registered/Head Office
The Grantor shall not change the location of its registered head office or
domicile except in accordance with the Credit Agreement.
4. PROVISIONS APPLICABLE TO THE HYPOTHEC ON CLAIMS
The following provisions apply to claims owed to the Grantor and hypothecated in
favour of the Collateral Agent, including present and future rents payable under
current and future leases affecting all or part of the Hypothecated Property.
4.1 Collection
Except for those claims consisting of securities pledged to the Collateral
Agent, the Grantor shall have authority to collect payments of interest and
repayments of capital made on the claims included in the Hypothecated Property
hypothecated in favour of the Collateral Agent pursuant to this deed, as they
fall due. The Collateral Agent may withdraw this authorization by written notice
upon the occurrence of an Event of Default or an event which, with the giving of
notice or passage of time, or both, would constitute an Event of Default.
Notwithstanding the foregoing, the Collateral Agent may at any time take all
necessary steps to set up this hypothec against the debtors of the hypothecated
claims. In such event, the Grantor undertakes to remit to the Collateral Agent,
upon request, all titles, documents, registers, invoices and accounts evidencing
the claims or relating thereto, whatever the nature of their medium and whatever
the form in which they are accessible, whether written, graphic, taped, filmed,
computerized, or other.
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Any payment received by the Grantor on account of any hypothecated claim other
than pursuant to the foregoing authorization shall be received for the
Collateral Agent’s account, and, during the continuance of an Event of Default,
shall not entitle the Grantor to the amounts collected and shall be kept
separate from the Grantor’s other property at all times and remitted forthwith
by the Grantor to the Collateral Agent without compensation.
Notwithstanding the provisions of Section 3.1 hereof, the Grantor is not
authorized to alienate any claim forming a part of a universality of claims
hypothecated in favour of the Collateral Agent without the latter’s prior
written consent, or unless otherwise permitted under the Credit Agreement.
4.2 Collateral Agent’s Rights
The Collateral Agent shall not be obliged to exercise its rights to the
hypothecated claims or to ensure their recovery from the Grantor, whether by
legal proceedings or otherwise. Should the Collateral Agent decide to collect
the hypothecated claims, it shall be at liberty following the occurrence and
during the continuance of an Event of Default to negotiate such arrangements as
it deems appropriate with the Grantor or third parties, to enter into agreements
with them with respect to the claims and any security securing the claims, and
even to waive the claims and such security, the whole without the Grantor’s
consent or intervention, and the Collateral Agent shall not thereby incur any
liability toward or be accountable to the Grantor. Unless the Grantor so
requests in writing, the Collateral Agent shall not be obliged to inform the
Grantor of any irregularity in the payment of any amounts due on the claims.
Apart from its obligation to remit to the Grantor any sums collected over and
above the amount of the Secured Obligations in principal, interest and costs,
the Collateral Agent shall not be accountable to the Grantor with respect to the
status of the collections made or any transactions and arrangements entered
into.
4.3 Information
The Collateral Agent may, at its discretion, verify the existence and status of
the claims at any time. The Grantor shall provide the necessary assistance and
information for this purpose and shall take such action in this respect as the
Collateral Agent may reasonably request: in particular, consistent with
Section 7.6 of the Credit Agreement, it shall allow the Collateral Agent and its
agents to enter the premises occupied by the Grantor and to consult the
Grantor’s accounting books and registers as well as any document relating to the
claims and make copies thereof.
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The Grantor specifically authorizes the Collateral Agent to communicate with any
third party in order to obtain or transmit any personal information and any
information relating to the claims and to the Grantor for the purpose of
verifying and collecting the claims.
Where the hypothec granted by this deed affects a claim that is itself secured
by a registered hypothec, the Grantor shall inform the Collateral Agent
accordingly and shall supply all the information that the Collateral Agent may
request in this connection.
4.4 Financial Administration Act (Canada)
Where any of the claims are subject to the provisions of the Financial
Administration Act (Canada), the Grantor hereby sells, assigns and transfers the
same absolutely to the Collateral Agent so that, upon a withdrawal of
authorization as referred to in Section 4.1 hereof, the Collateral Agent shall
be free to complete the formalities required to make such assignment fully
enforceable.
5. PROVISIONS APPLICABLE TO THE HYPOTHEC ON SECURITIES
5.1 Interpretation
Unless otherwise indicated by the context, “securities” means bills of exchange,
notes, shares, warrants, bonds, debentures and other securities considered or
acknowledged as securities, as well as the renewals, substitutions and additions
to which they are subject and the securities and other property received or
issued pursuant to any transformation of such securities, along with all income
derived and all rights arising therefrom.
5.2 Delivery
The Grantor shall deliver to the Collateral Agent, or to a mutually agreed upon
third party, for the benefit of the Secured Parties, all certificates and
instruments representing or evidencing any securities, whether now existing or
hereafter acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor’s endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent.
The Collateral Agent shall have the right, following an Event of Default and
without notice to the Grantor, to transfer to or to register in its name or in
the name of its nominees any hypothecated securities. The Collateral Agent shall
have the right at any time to exchange any certificate or instrument
representing or evidencing any hypothecated securities for certificates or
instruments of smaller or larger denominations.
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The Grantor further undertakes to turn over to the Collateral Agent or to such
third party, as soon as the Grantor becomes entitled thereto, the renewals,
substitutions and additions to which such securities are subject and the
securities and other property received or issued upon the purchase, redemption,
conversion, cancellation or any other transformation thereof, along with any
income derived and any rights arising therefrom, the same, where applicable, to
be duly endorsed in blank for transfer and accompanied by any power of attorney,
document and confirmation that the Collateral Agent may reasonably require for
such purpose.
5.3 Dividends and other Distributions
Unless an Event of Default has occurred and is continuing, the Grantor may
collect all cash dividends payable in respect of the securities, provided that
all cash dividends payable in respect of the securities which are determined by
the Collateral Agent, in its absolute discretion, to represent in whole or in
part an extraordinary, liquidating or other distribution in return of capital,
shall be paid to the Collateral Agent and retained by it as part of the
Hypothecated Property. The Collateral Agent shall be entitled to receive
directly, and to retain as part of the Hypothecated Property;

  (a)  
all other or additional stock or securities or property (other than cash) paid
or distributed by way of dividend in respect of the securities;

  (b)  
all other or additional stock or other securities or property (including cash)
paid or distributed in respect of the securities by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and

  (c)  
all other or additional stock or other securities or property which may be paid
in respect of the securities by reason of any consolidation, merger, exchange of
stock, conveyance of assets, liquidation or similar corporate reorganization or
other disposition of securities.

If any sum of money or property so paid or distributed in respect of any Pledged
Collateral shall be received by the Grantor, the Grantor 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
Grantor, as additional security for the Secured Obligations, except as otherwise
permitted by the Credit Agreement.
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5.4 Voting, etc.
Until the occurrence of an Event of Default, the Grantor shall be entitled to
vote any and all securities and to give consents, waivers or ratifications in
respect thereof; provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of the Credit Agreement or this deed or any other
instrument or agreement or document relating to the Secured Obligations
(including any Loan Document) or which would have the effect of materially
impairing the position or interests of the Collateral Agent. All such rights of
the Grantor to vote and to give consents, waivers and ratifications shall cease
in case an Event of Default shall occur and be continuing whereupon the
Collateral Agent shall be entitled, without limiting its other rights and
remedies hereunder, to vote all or any part of the securities whether or not
transferred in the Collateral Agent’s name and give all consents, waivers and
ratifications in respect of the securities and otherwise act with respect
thereto as though it were the outright owner thereof.
5.5 Subsidiaries
The Grantor 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 or opposability of the security
interest or hypothecation or pledge of the Collateral Agent in, on or of the
hypothecated securities hypothecated by the Grantor hereunder or any election to
turn any previously uncertificated Stock that is part of the Pledged Collateral
into certificated Stock.
5.6 Standard of Care
The Collateral Agent shall not be:

  (a)  
obliged to protest a security, or take steps or institute proceedings to
interrupt prescription or protect the securities against depreciation or
devaluation or make them productive;

  (b)  
obliged to protect the Grantor against loss relating to a security; or

  (c)  
obliged to vote with respect to a security or a subscription, conversion or
other right pertaining thereto, or to any merger, consolidation, reorganization,
receiving order, bankruptcy, insolvency proceedings, compromise or arrangement,
or concerning the deposit of a security or otherwise, and shall not be obliged
to participate in or take any action in relation to such matters, except where
the Grantor has provided the Collateral Agent with written instructions to do so
and where, in the Collateral Agent’s opinion, the security and the rights
conferred hereunder would not be thereby diminished, and upon payment of such
indemnity or remuneration as the Collateral Agent may require.

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6. POSSESSION OF PROPERTY
This deed creates a hypothec without delivery notwithstanding the undertakings
contained in Section 5.2 hereof.
7. DEFAULT
7.1 Events of Default
The Grantor shall be considered in default hereunder upon the occurrence of an
Event of Default under the Credit Agreement.
7.2 Effects
Without limiting its right, at any time and at its discretion, to demand payment
of any Secured Obligations payable on demand and without prejudice to any rights
and remedies which it has pursuant to agreements with the Grantor or at law (in
particular with respect to hypothecated claims), the Collateral Agent, upon the
occurrence of an Event of Default under the Credit Agreement, may demand
immediate and full payment of the amounts owing on account of the Secured
Obligations, which shall forthwith become due and payable, and exercise, at its
discretion, without restriction and without any prior notice other than such
notices as are required by law, any rights and remedies which it has pursuant to
this deed or at law, including, in particular, the following hypothecary rights:

  •  
taking of possession for purposes of administration;

  •  
taking in payment;

  •  
sale by the Collateral Agent;

  •  
sale by judicial authority.

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7.3 Collateral Agent’s Rights
Irrespective of the particular remedy exercised by the Collateral Agent in the
event of a default hereunder, the following provisions shall apply in addition
to any provisions that may by law apply in the circumstances, the Grantor
expressly agreeing thereto:

  7.3.1  
the Grantor undertakes to assemble and voluntarily surrender the Hypothecated
Property to the Collateral Agent upon request, at such place or places as may be
specified by the Collateral Agent, and agrees not to put any impediment in the
way of, but rather to facilitate by all legal means, the exercise of the powers
hereby granted to the Collateral Agent and not to interfere therewith; in
addition, the Collateral Agent may, but shall not be obliged to, conduct a
verification of the Hypothecated Property, assemble or move any of such property
or take proceedings or do or take any act or action in relation to the
Hypothecated Property that it may deem advisable, the whole at the Grantor’s
expense. The Collateral Agent may take such steps as it considers necessary or
desirable to obtain possession of all or any part of the Hypothecated Property
and, to that end, the Grantor agrees that the Collateral Agent, its servants or
Collateral Agents or Receiver (as hereinafter defined) may enter upon lands and
premises where the Hypothecated Property may be found for the purpose of taking
possession of and/or removing the Hypothecated Property or any part thereof. In
the event of the Collateral Agent taking possession of the Hypothecated
Property, or any part thereof, the Collateral Agent shall have the right to
maintain the same upon the premises on which the Hypothecated Property may then
be situated. The Collateral Agent may, in a reasonable manner, take such action
or do such things as to render any Hypothecated Property unusable;

  7.3.2  
the Collateral Agent may, in addition, at its discretion and at the Grantor’s
expense, whether after the Grantor has surrendered the Hypothecated Property and
until the Collateral Agent has exercised the hypothecary right which it intends
to exercise, or whether after the Collateral Agent has chosen to take possession
of the Hypothecated Property for purposes of administration, use or operate all
or any part of the Hypothecated Property (without being obliged to make such
property productive), change the destination of or alienate such property by
onerous title (except for Hypothecated Property of little value) or charge such
property with a hypothec or other real right, enter into or renew any leases for
such amounts and on such terms and conditions as the Collateral Agent reasonably
deems appropriate, make any repairs or renovations or undertake or complete any
work;

  7.3.3  
the Collateral Agent may, in the exercise of its rights, renounce any right
belonging to the Grantor, even where no valuable consideration is received;

  7.3.4  
the Collateral Agent shall not be bound to make an inventory, take out insurance
or furnish other security to secure the performance of its obligations;

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  7.3.5  
the Collateral Agent may, at its discretion, take possession, through its
officers, agents or mandataries, of all or any part of the Hypothecated
Property, with full power to carry on, manage and conduct the Grantor’s
business; the Collateral Agent may use the Hypothecated Property or any
information that it obtains by reason of its administration for its own benefit;

  7.3.6  
the Grantor, through its officers and directors, shall forthwith execute such
documents and transfers as may be necessary to place the Collateral Agent in
legal possession of the Hypothecated Property and the business of the Grantor in
connection therewith, and thereupon all the powers, functions, rights and
privileges of each and every one of the directors and officers of the Grantor
shall cease and terminate with respect to the Hypothecated Property;

  7.3.7  
the Collateral Agent shall not be obliged to render an account with respect to
its actions in the exercise of its hypothecary rights, except as stipulated by
law. Should the Collateral Agent see fit to render an account, it may do so in
summary fashion;

  7.3.8  
for the purpose of exercising any of its rights, the Collateral Agent may make
use of any premises on which the Hypothecated Property is located, the whole at
the Grantor’s expense;

  7.3.9  
the Collateral Agent may, at its discretion, decide to sell and dispose of the
Hypothecated Property as a whole or in separate parcels, by tender, public
auction or private contract, on such date and on such terms and conditions as
the Collateral Agent may stipulate, after giving such prior notices as are
required by articles 2784 and following of the Civil Code of Québec, and the
Collateral Agent may make such sale for cash or credit upon such reasonable
conditions as to upset or reserve bid or price and as to terms of payment as it
may deem proper, and may rescind or vary any contract of sale that may have been
entered into and resell such property under any of the powers conferred by this
deed, adjourn any such sale from time to time and execute and deliver to the
purchaser or purchasers of the said property or any part thereof good and
sufficient deed or deeds for the same, the Grantor hereby giving the Collateral
Agent an irrevocable power of attorney for the purpose of making such sale and
executing such deeds, and any such sale made as aforesaid shall be a perpetual
bar in law and in equity against the Grantor and its assigns and against any
other persons who may claim the said property or any part thereof from the
Grantor or its assigns;

  7.3.10  
the Collateral Agent, or its agents or representatives, may become purchasers at
any sale of the Hypothecated Property, whether made under the power of sale
herein contained or pursuant to foreclosure or other legal proceedings; and

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  7.3.11  
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 Hypothecated Property 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 deed or at law. 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 Grantor and the Collateral Agent
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 Grantor receiving notice from the Collateral Agent of the
taking of possession of the Hypothecated Property or the appointment of a
Receiver, all powers, functions, rights and privileges of each of the directors
and officers of the Grantor with respect to the Hypothecated Property shall
cease, unless specifically continued by the written consent of the Collateral
Agent.

  7.3.12  
In addition to any of Collateral Agent’s rights contained in this deed, the
Grantor does hereby agree with the Collateral Agent and the Secured Parties,
that the Collateral Agent shall have any other rights, remedies and powers given
to the Collateral Agent under Section 6 of the General Security Agreement,
inasmuch as applicable to the Grantor in the Province of Quebec, and each such
right, remedy and power is hereby incorporated by reference, mutatis mutandis.

8. REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Representations and Warranties
In addition to and not in substitution for any representation and warranty
contained in this deed, the Grantor does hereby represent and warrant to and in
favour of the Collateral Agent and the Secured Parties that each representation
and warranty made in the Credit Agreement and the General Security Agreement,
inasmuch as applicable to the Grantor, is hereby reiterated and restated by the
Grantor and each such representation and warranty is hereby incorporated by
reference, mutatis mutandis, and is hereby confirmed as true and correct as of
the date hereof.
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8.2 Covenants and Agreements
In addition to and not in substitution for any covenant, agreement, undertaking
and condition contained in this deed, the Grantor does hereby covenant and agree
with the Collateral Agent and the Secured Parties, that it shall comply with,
and ensure the compliance of, all covenants, agreements, undertakings and
conditions given under the Credit Agreement and the General Security Agreement,
inasmuch as applicable to the Grantor, and each such covenant, agreement,
undertaking and condition is hereby incorporated by reference, mutatis mutandis.
8.3 Survival
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 Collateral Agent and
the Secured Parties and shall survive the execution and delivery of this deed or
any investigation made at any time by or on behalf of the Collateral Agent 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 Grantor that, if exercised, would result in the existence of Secured
Obligations.
9. MISCELLANEOUS PROVISIONS
9.1 Nature of the Secured Obligations
Each of the Secured Obligations of the Grantor is indivisible.
9.2 Nullity of a Provision
In the event that any provision of this deed is declared null and void or is
deemed not to have been written, the other provisions of this deed shall be
severable from such provision and shall continue to have full force and effect.
9.3 Application of Payments
Any insurance indemnity, as well as any other amount or other property received
by the Collateral Agent in the exercise of the rights conferred upon it by this
deed or by law or in any other manner with respect to any of the Hypothecated
Property, may be retained by the Collateral Agent as Hypothecated Property or
applied to the payment of the Secured Obligations, whether or not they are due.
Any amount collected by the Collateral Agent, even on account of the voluntary
performance of the Secured Obligations, shall be applied in accordance with
Section 2.13 of the Credit Agreement.
Should any of the Hypothecated Property or its proceeds be in a currency
different from that of the Secured Obligations, the Collateral Agent is hereby
authorized to convert the amount or the claim in question into the currency of
the Secured Obligations at the Collateral Agent’s rate of exchange for the
currencies concerned on the date the payment is applied.
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9.4 Rights Cumulative and Exercise of Remedies
The rights hereby created are in addition to and not in substitution for any
other right or security held by the Collateral Agent. The exercise by the
Collateral Agent of any of its rights and remedies shall not prevent it from
exercising any other right or remedy conferred upon it by this deed or any other
security or by law.
The Collateral Agent may, separately or successively, exercise the rights
conferred upon it by this deed on any part of the Hypothecated Property, without
being obliged to do so on the entire Hypothecated Property and without prejudice
to its rights and remedies with respect to the remaining Hypothecated Property,
and it shall not be in any way obliged to exercise its rights and remedies
against any other person liable for the Secured Obligations or to realize any
other security securing the Secured Obligations.
The Collateral Agent may delegate the exercise of its rights or the performance
of its obligations arising from this deed to another person upon written notice
to the Grantor and may in such case, subject to Section 11.19 (Confidentiality)
of the Credit Agreement, supply to such other person any information that it
holds on the Grantor or on the Hypothecated Property.
9.5 Amendments in Writing
None of the terms or provisions of this deed 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
schedules to this Agreement may be supplemented (but no existing provisions may
be modified and no Collateral may be released except as provided in Section 9.18
hereof) through amendments in a form reasonably acceptable to the Collateral
Agent, in each case duly executed by the Collateral Agent and the Grantor.
9.6 Notices
All notices, requests and demands to or upon the Collateral Agent or the Grantor
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 Grantor shall be addressed to the Grantor’s notice
address set forth in such Section 11.8 or to its principal place of business as
set forth herein.
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9.7 Notice of Default
The mere expiry of the time limit for performing any of the Secured Obligations
shall serve to put the Grantor in default, without any notice or demand being
required for that purpose.
9.8 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 9.5 (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.
9.9 Successors and Assigns
This Agreement shall be binding upon the successors and assigns of the Grantor
and shall inure to the benefit of the Collateral Agent and each other Secured
Party and their successors and assigns; provided, however, that the Grantor may
not assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent.
9.10 Power of Attorney
The Grantor hereby grants to the Collateral Agent and each of its officers,
agents, correspondents or mandataries, including any depositary or Receiver (as
hereinafter defined), an irrevocable power of attorney with full powers of
substitution and revocation, to do, make and execute, for the Grantor and in its
name, all such deeds, documents, transfers, assignments, hypothecs, assurances,
consents and things as the Collateral Agent may deem necessary or appropriate to
be done, made or executed by the Grantor to protect the Collateral Agent’s
rights hereunder and/or preserve the Hypothecated Property and to give effect to
all the provisions of this deed and the documents and other acts, matters and
things that the Grantor has agreed to do, make and execute or that may be
required in the exercise of the powers conferred upon the Collateral Agent by
this deed, and in particular, without limiting the generality of the foregoing,
to endorse or transfer all or any part of the securities, if any, included in
the Hypothecated Property over to the Collateral Agent or its officers, agents,
correspondents or mandataries, including any depositary, so that the Collateral
Agent or its officers, agents, correspondents or mandataries may be registered
as sole owners of such securities, and to obtain from any taxation authority at
any time, if deemed useful, any information necessary to allow the Collateral
Agent to determine the amount of the Grantor’s indebtedness to such taxation
authorities. The Grantor also grants to each of such persons holding its power
of attorney the right to use its name whenever they may deem it necessary or
appropriate to do so for the purposes hereof and the Grantor further ratifies
and confirms, and undertakes to ratify and confirm, all acts and actions done or
taken by each of such persons in connection herewith. 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.
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9.11 Indemnification
The Grantor hereby agrees and undertakes to indemnify the Collateral Agent and
the other Secured Parties and save and hold it harmless from and against any and
all losses, expenses, costs and liabilities (including reasonable legal fees and
disbursements) that the Collateral Agent and the other Secured Parties or any of
its or their agents, mandataries or persons holding its or their power of
attorney may sustain or incur in the exercise of the powers and rights conferred
upon the Collateral Agent hereunder.
9.12 Interpretation
References herein to gender shall include all genders and the singular shall
include the plural and vice versa, as required by the context.
9.13 Further Assurances
The Grantor hereby agrees to do, make and execute, at its own expense, all such
deeds, documents and things as may be necessary or advisable, in the opinion of
the Collateral Agent’s legal counsel, to give effect to the provisions of this
deed, including without limiting the generality of the foregoing, in order that
a valid and enforceable hypothec be created and maintained on any property
forming part of the Hypothecated Property as of the execution of this deed or at
any time in the future.
9.14 Divisions and Titles
The division of this deed into sections, sections and subsections and the
insertion of titles are for ease of reference only and shall not influence its
meaning or construction.
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9.15 Entire Agreement
This deed, 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.
9.16 Applicable Law
This deed shall be governed and construed in accordance with the laws in force
in the Province of Quebec. It must also be interpreted so that any Hypothecated
Property located in another jurisdiction be affected by a valid security under
the applicable law of such other jurisdiction.
9.17 Additional Grantors
Pursuant to Section 7.11 (Additional Personal Property Collateral and
Guaranties) of the Credit Agreement, the Grantor shall be required to cause any
Subsidiary to execute and deliver to the Collateral Agent a Deed of Hypothec
substantially in the form hereof unless otherwise agreed by the Administrative
Agent.
9.18 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 deed and all
obligations (other than those expressly stated to survive such termination) of
the Collateral Agent and the Grantor 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 Grantor. At the request and sole
expense of the Grantor following any such termination, the Collateral Agent
shall deliver to the Grantor any Collateral of the Grantor held by the
Collateral Agent hereunder and execute and deliver to the Grantor, at the sole
expense of the Grantor, such documents as the Grantor 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 Grantor
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
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 Grantor,
shall execute and deliver to the Grantor, 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 Grantor, the Grantor shall be released
from its obligations hereunder in the event that all the capital stock of the
Grantor 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 Grantor 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 Grantor 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 Grantor in form and substance
reasonably satisfactory to the Collateral Agent stating that such transaction is
in compliance with the Loan Documents.

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9.19 Reinstatement
The Grantor 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
Grantor, 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 Grantor in respect of the amount of
such payment.
9.20 Explanation of Contract
The Grantor confirms that the Collateral Agent has provided it with adequate
explanations concerning the nature and scope of this deed and that it has had an
opportunity to consult a lawyer, notary or other adviser in connection
therewith.
9.21 Acknowledgement
The Grantor hereby acknowledges that it has received and taken cognizance of an
original executed copy of the Loan Documents and is familiar with all the
provisions thereof.
9.22 Precedence
Except as limited herein, in the event that any provisions of this deed
contradict, are inconsistent with and are otherwise incapable of being construed
in conjunction with the provisions of the Credit Agreement or the General
Security Agreement, the provisions of the Credit Agreement or the General
Security Agreement, as applicable, shall take precedence over those contained in
this deed. Notwithstanding the foregoing, in the event that granting of security
interest provisions in the Credit Agreement or the General Security Agreement
contradict and are otherwise incapable of being construed in conjunction with
the provisions of this deed, such provisions of this deed shall take precedence
over those contained in the Credit Agreement or the General Security Agreement.
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9.23 Counterparts
This deed may be executed in any number of counterparts each of which when
executed and delivered is an original but all of which taken together constitute
one and the same instrument; any party may execute this deed by signing any
counterpart of it.
9.24 Language
The parties hereto confirm that it is their wish that this deed and all
documents relating thereto, including notices, be drawn up in the English
language. Les parties aux présentes confirment leur volonté que cet acte de même
que tous documents, y compris tous avis, s’y rapportant soient rédigés en langue
anglaise.
[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 Deed of
Hypothec at the place and as of the date first above written.

            WARNACO OF CANADA COMPANY,
as Grantor
      Per:   /s/ Lawrence R. Rutkowski         Name:   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   

Deed of Hypothec — Warnaco of Canada Company (2008)

 

 

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Schedule “A”
Intellectual Property
Nil.
Deed of Hypothec — Warnaco of Canada Company (2008)

 

 

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Schedule “B”
Securities
1. 2000 Class A shares of 4278941 Canada Inc. represented by share certificate
CA-1.
2. 225 Serie B Subserie II shares of Linda Vista de Veracruz S.A. de C.V.
Deed of Hypothec — Warnaco of Canada Company (2008)