Document:

Exhibit 10.9

Exhibit 10.9

SECURITIES PLEDGE AGREEMENT

WARNACO OF CANADA COMPANY

as Company

and

BANK OF AMERICA, N.A.

as Collateral Agent

August 26, 2008

 

 

 

SECURITIES PLEDGE AGREEMENT

Securities Pledge Agreement dated as of August 26, 2008 made by Warnaco of Canada Company (the
“Company”) to and in favour of the Collateral Agent (as hereinafter defined).

RECITALS:

	A.	 	WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof among, inter
alia, Warnaco of Canada Company, as borrower (together with its successors and permitted
assigns, the “Borrower”), the financial institutions, together with their respective
successors and assigns, listed on the signature pages thereof from time to time, as Lenders,
and the Collateral Agent, as the same may be amended, supplemented, revised, restated or
replaced from time to time (the “Credit Agreement”), the Lenders have agreed to make Loans
available to and for the benefit of the Borrower; unless otherwise defined herein, all
capitalized words and expressions when used herein shall have the same meaning as ascribed
thereto in the Credit Agreement

	B.	 	WHEREAS, the Collateral Agent is to hold for its own benefit and is to act as agent under the
Credit Agreement, inter alia, to hold as agent for the rateable benefit of itself and the
other Secured Parties, any and all security for the payment and performance of the obligations
of the Company under the Credit Agreement and the other Loan Documents.

	C.	 	WHEREAS, the Company has agreed to execute and deliver this agreement to and in favour of the
Collateral Agent as security for the payment and performance of the Company’s obligations to
the Collateral Agent and the Secured Parties under the Credit Agreement and the other Loan
Documents.

NOW THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the Company, the Company
and the Collateral Agent agree as follows:

ARTICLE I — SECURITY

1.1 Definitions and Interpretation

	 	(a)	 	Terms defined in the Personal Property Security Act (Ontario) (as amended from
time to time, the “PPSA”) and used in this agreement have the same meanings.

	 	(b)	 	Any reference to the “STA” in this agreement means the Securities Transfer Act
(Ontario), as amended from time to time.

	 	(c)	 	Any references to the “General Security Agreement” shall mean that certain
General Security Agreement dated as of or about the date hereof between the Company, as
grantor, and the Collateral Agent, as same may be amended, supplemented, revised,
restated or replaced from time to time.

	 	(d)	 	“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.

Pledge Agreement — Warnaco of Canada Company (2008)

 

 

1.2 Grant of Security.

	 	(a)	 	The Company assigns, mortgages, charges, hypothecates and pledges to the
Collateral Agent, for its own benefit as a Lender (acting through its Canada branch)
and as agent for the rateable benefit of itself and the other Secured Parties and
grants to the Collateral Agent, for its own benefit as a Lender (acting through its
Canada branch) and as agent for the rateable benefit of itself and the other Secured
Parties, a security interest in the following property and assets (collectively, the
“Collateral”): (i) all certificated and uncertificated securities registered in the
name of the Company including those as described in Schedule “A” (collectively, the
“Pledged Securities”), (ii) all securities accounts of the Company including those
described in Schedule “B” (collectively, the “Pledged Securities Accounts”), all cash
balances in the Pledged Securities Accounts and all security entitlements in respect of
financial assets from time to time listed or described on the Pledged Securities
Accounts or any statement in respect thereof, (the “Pledged Securities Entitlements”)
(iv) all options, warrants and rights, whether as an addition to, in substitution of,
or in exchange for, the Pledged Securities, the Pledged Security Accounts or the
financial assets and other property subject to the Pledged Security Entitlements, (v)
all dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any such Pledged
Securities, Pledged Security Entitlements, Pledged Securities Accounts, options,
warrants and rights; (vi) all other rights and claims of the Company in respect of, or
in connection with, the foregoing and (vii) all proceeds arising out of the foregoing;
provided, however, that the foregoing grant of security interest shall not include a
security interest in any Excluded Property; and provided, further, that, if and when
any property shall cease to be Excluded Property, the Collateral Agent for the benefit
of the Secured Parties shall have, and at all times from and after the date hereof be
deemed to have had, a security interest in such property.

	 	(b)	 	For greater certainty, the Collateral includes any substitutions or additions
arising out of any consolidation, subdivision, reclassification, stock dividend or
similar increase or decrease in, or alteration to, the capital of any issuer of the
Pledged Securities or the financial assets and other property subject to the Pledged
Security Entitlements or otherwise held in any Pledged Securities Account.

1.3 Obligations Secured.

	 	(a)	 	The assignments, mortgages, charges, hypothecations, pledges and security
interests granted hereby (the “Security Interest”) secure the payment and performance
by the Borrower of the Secured Obligations (as such term is defined in the Credit
Agreement) (collectively, and together with the expenses, costs and charges set out in
Section 1.3(b), the “Obligations”).

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	 	(b)	 	All expenses, costs and charges incurred by or on behalf of the Collateral
Agent and the Secured Parties in connection with this agreement, the Security Interest
or the realization of the Collateral including all legal fees, court costs, receiver’s
or agent’s remuneration and other expenses of, or of taking or defending any action in
connection with, taking possession of, protecting, insuring, preparing for disposition,
realizing, collecting, selling, transferring, delivering or obtaining payment of the
Collateral or other lawful exercise of the powers conferred by the Credit Agreement and
the other Loan Documents are to be added to and form a part of the Obligations.

1.4 Attachment, Perfection and Control.

	 	(a)	 	The Company acknowledges that (i) value has been given, (ii) it has rights in
the Collateral (other than after-acquired Collateral), (iii) it has not agreed to
postpone the time of attachment of the Security Interest, and (iv) it has received a
duplicate original copy of this agreement.

	 	(b)	 	The Company will deliver to the Collateral Agent, immediately upon receipt
thereof, any and all certificates representing the Pledged Securities and, to the
extent applicable, the other Collateral, in each case accompanied by a duly executed
stock power of attorney or similar transfer form constituting an effective endorsement.

	 	(c)	 	If the Company becomes entitled to receive or receives any certificate
(including, without limitation, any certificate representing a stock dividend or any
certificate issued in connection with any reclassification, increase or reduction of
capital or any reorganization), option, warrant or right (if in deliverable form) in
respect of the Collateral, whether in addition to, in substitution for, as a conversion
of, or in exchange for, any of the Collateral, the Company will accept it as the agent
of the Collateral Agent and hold the same in trust for the Collateral Agent and the
Secured Parties in the form received, and will immediately deliver it to the Collateral
Agent together with a duly executed stock power of attorney or transfer form
constituting an effective endorsement, as applicable.

	 	(d)	 	If and to the extent any of the Pledged Securities are or become
uncertificated, the Company will enter into and cause the issuer of such Pledged
Securities to enter into a Control Account Agreement (as such term is defined in the
General Security Agreement) in order to ensure that the Collateral Agent has control
(as such term is used in the STA and the PPSA) of the uncertificated Pledged
Securities.

	 	(e)	 	If and to the extent the Company now or hereafter has one or more Pledged
Securities Accounts, it shall take all action necessary to cause the relevant
securities intermediary to enter into a Control Account Agreement (as such term is
defined in the General Security Agreement) with the Collateral Agent pursuant to which
the securities intermediary will agree, among other things, to comply with entitlement
orders originated by the Collateral Agent or its nominee without further consent of the
Company or any other Person.

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	 	(f)	 	At the election of the Collateral Agent and immediately upon written notice
being provided by the Collateral Agent to the Company, the Company will take all action
required to (i) permit the Pledged Securities to be transferred into and registered in
the name of the Collateral Agent or as it may direct, and (ii) cause the Pledged
Securities Account and Pledged Security Entitlements recorded therein to be transferred
to the Collateral Agent or as it may direct so that it or its nominee becomes the
entitlement holder thereof. The Company covenants that, at the time of any such
transfer, it will provide all required consents and approvals and cause the issuer of
the Pledged Securities or the securities intermediary, as the case may be, to make
appropriate notations on its share register or in the relevant securities account, as
applicable.

1.5 Care and Custody of Collateral.

The Collateral Agent is not required to see to the collection of dividends on, or exercise any
option or right in connection with, the Collateral. It has no obligation to protect or preserve
the Collateral from depreciating in value or becoming worthless and is hereby released from all
responsibility for any loss or diminution of value. The Collateral Agent is bound to exercise in
the physical keeping of the Collateral only the same degree of care as it would exercise with
respect to its own investment property kept at the same place.

1.6 Absence of Fiduciary Relationship

No implied agreements, covenants or obligations on the part of the Collateral Agent or any of the
Secured Parties with respect to the Company, a securities intermediary or an issuer of any of the
Collateral are to be read into this Agreement against the Collateral Agent or any of the Secured
Parties. The Collateral Agent and the Secured Parties do not owe any fiduciary duty to the
Company, any issuer of the Collateral, any securities intermediary or any other Person.

1.7 Representations and Warranties of the Company.

The Company represents and warrants that:

	 	(a)	 	it is the registered, legal and beneficial owner of the Collateral;

	 	(b)	 	the Collateral is free and clear of all liens, mortgages, charges and security
interests whatsoever other than those created in favour of the Collateral Agent;

	 	(c)	 	Schedule “A” correctly sets out the issuer, the certificate number and the
number and class of the Pledged Securities as at the date hereof and the Pledged
Securities represent all of the issued and outstanding certificated and uncertificated
securities owned by the Company at the date hereof.

	 	(d)	 	the Pledged Securities have been validly issued and are fully paid and
non-assessable;

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	 	(e)	 	Schedule “B” correctly sets out the entitlement holder, securities intermediary
and securities accounts particulars with respect to each Pledged Securities Account as
at the date hereof, the Pledged Securities Accounts are the only securities accounts
of the Company as at the date hereof and all Pledged Security Entitlements are
properly and completely described in the Pledged Securities Accounts;

	 	(f)	 	this agreement creates a legal, valid and binding agreement of the Company
enforceable in accordance with its terms and the Security Interest in the Collateral is
a perfected security interest for purposes of the PPSA;

	 	(g)	 	the Collateral Agent has control of the Collateral that consists of investment
property (including financial assets carried in the Pledged Securities Account)
(“Controlled Assets”) and the Collateral Agent is a protected purchaser within the
meaning of the PPSA;

	 	(h)	 	no Person other than the Collateral Agent has control or has the right to
obtain control of any Controlled Assets;

	 	(i)	 	no Person, has any option, warrant, call, commitment, conversion, right of
exchange or other agreement or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an option, warrant, right, call, commitment,
conversion right, right of exchange or other agreement to acquire any right or interest
in the Collateral;

	 	(j)	 	there are no restrictions on the voting rights associated with any of the
Collateral and there are no restrictions on the right to transfer the Collateral; and

	 	(k)	 	the Company is not bound by nor is it a party to any unanimous shareholder
agreement or declaration (as such terms are defined in the Canada Business Corporations
Act) relating to the Pledged Securities.

In addition to and not in substitution for any representation and warranty contained in this deed,
the Company does hereby represent and warrant to and in favour of the Collateral Agent and the
Secured Parties that each representation and warranty made in the Credit Agreement and the General
Security Agreement, inasmuch as applicable, is hereby reiterated and restated by the Company and
each such representation and warranty is hereby incorporated by reference, mutatis mutandis, and is
hereby confirmed as true and correct as of the date hereof.

All representations and warranties made by the Company in this agreement (a) are material, (b) have
been relied on by the Collateral Agent and the Secured Parties, (c) will remain true and correct,
and (d) will survive the execution and delivery of this agreement, any investigation made at any
time by or on behalf of the Collateral Agent and the Secured Parties and any disposition or payment
of the Obligations.

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1.8 Covenants of the Company.

The Company will not cause or permit any Person other than the Collateral Agent to have control of
any financial asset or investment property constituting part of the Collateral.

The Company will not, without the prior written consent of the Collateral Agent, sell, exchange,
release, abandon or otherwise dispose of, absolutely or by way of security, any of its right, title
or interest in and to the Collateral, except as permitted by the Credit Agreement.

The Company will promptly deliver to the Collateral Agent copies of all notices or other
communications received by it in respect of the Collateral.

In addition to and not in substitution for any covenant, agreement, undertaking and condition
contained in this deed, the Company 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, and each such covenant, agreement, undertaking and condition is
hereby incorporated by reference, mutatis mutandis.

1.9 Rights of the Company.

	 	(a)	 	Until the Security Interest becomes enforceable, the Company may vote the
Pledged Securities, give consents, ratifications or waivers, make entitlement orders,
exercise all rights of conversion or other similar rights with respect to the
Collateral and receive all cash dividends and other distributions, money or property
relating to the Collateral. Whenever the Security Interest becomes enforceable, all
rights of the Company to vote, make entitlement orders, give consents, ratifications or
waivers, exercise other rights or receive dividends or other money or property will
cease and all such rights will become vested solely and absolutely in the Collateral
Agent, for and on behalf of the Lenders.

	 	(b)	 	Any dividends or other distributions received by the Company contrary to
Section 1.9(a) are received by the Company as trustee for the Collateral Agent and the
Secured Parties and will be immediately paid over to the Collateral Agent.

	 	(c)	 	In order to permit the Collateral Agent to exercise the voting and other rights
which it may be entitled to exercise hereunder and receive all dividends and other
distributions, money and property which it may be entitled to receive, the Company
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 request.

ARTICLE II — ENFORCEMENT

2.1 Enforcement.

The Security Interest shall be and become enforceable against the Company upon the occurrence and
during the continuance of an Event of Default (as defined in the Credit Agreement).

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2.2 Remedies.

Whenever the Security Interest becomes enforceable, the Collateral Agent may, at any time in its
sole discretion:

	 	(a)	 	realize upon or otherwise dispose of or contract to dispose of the Collateral
by sale, transfer, delivery or otherwise;

	 	(b)	 	obtain possession or control of any Collateral which it does not already hold
or control, by any method permitted by law;

	 	(c)	 	notify any parties obligated in respect of any Collateral to make payment
thereof to the Collateral Agent or as it may direct;

	 	(d)	 	file proofs of claim and other documents in order to have the claims of the
Collateral Agent and the Secured Parties lodged in any bankruptcy, winding-up or other
judicial proceeding relating to the Company;

	 	(e)	 	exchange any and all of the Collateral upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any issuer thereof, or upon
the exercise by any issuer of any right, privilege or option pertaining to any of the
Collateral, and in connection therewith, deposit and deliver or direct the sale or
other disposition of any of the Collateral with any committee, depositary, securities
intermediary, clearing house (whether CDS or otherwise), transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine; or

	 	(f)	 	exercise and enforce all rights and remedies of a holder of the Collateral as
if the Collateral Agent were the absolute owner thereof (including, if necessary,
causing the Collateral to be registered in the name of the Collateral Agent if not
already done), all without demand of performance or other demand, advertisement or
notice of any kind to or upon the Company.

Any remedy may be exercised separately or in combination and is in addition to, and not in
substitution for, any other rights the Collateral Agent and the Secured Parties may have, however
created. The Collateral Agent shall not be bound to exercise any right or remedy, and the exercise
of rights and remedies is without prejudice to the rights of the Collateral Agent and the Secured
Parties in respect of the Obligations including the right to claim for any deficiency.

2.3 Standards of Sale.

Without prejudice to the ability of the Collateral Agent to dispose of the Collateral in any manner
which is commercially reasonable, the Company acknowledges that a disposition of Collateral by the
Collateral Agent which takes place substantially in accordance with the following provisions shall
be deemed to be commercially reasonable:

	 	(a)	 	Collateral may be disposed of in whole or in part;

	 	(b)	 	Collateral may be disposed of by public auction, public tender or private
contract, with or without advertising and without any other formality;

	 	(c)	 	any assignee of such Collateral may be the Collateral Agent, a Lender or a
customer or client of such Person;

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	 	(d)	 	any sale conducted by the Collateral Agent shall be at such time and place, on
such notice and in accordance with such procedures as the Collateral Agent, in its sole
discretion, may deem advantageous;

	 	(e)	 	Collateral may be disposed of in any manner and on any terms necessary to avoid
violation of applicable law or in order to obtain any required approval of the
disposition (or of the resulting purchase) by any governmental or regulatory authority
or official;

	 	(f)	 	the Collateral Agent may establish an upset or reserve bid or price in respect
of the Collateral; and

	 	(g)	 	a disposition of Collateral may be on such terms and conditions as to credit or
otherwise as the Collateral Agent, in its sole discretion, may deem advantageous.

2.4 Dealing with the Collateral.

	 	(a)	 	The Collateral Agent and the Secured Parties are not obliged to exhaust their
recourse against the Company or any other Person or against any other security they may
hold in respect of the Obligations before realizing upon or otherwise dealing with the
Collateral in such manner as the Collateral Agent may consider desirable.

	 	(b)	 	The Collateral Agent and the Secured Parties may grant extensions or other
indulgences, take and give up security, accept compositions, grant releases and
discharges and otherwise deal with the Company and with other Persons, sureties or
security as they may see fit without prejudice to the Obligations, the liability of the
Company or the rights of the Collateral Agent and the Secured Parties in respect of the
Collateral.

	 	(c)	 	The Collateral Agent and the Secured Parties are not (i) liable or accountable
for any failure to collect, realize or obtain payment in respect of the Collateral,
(ii) bound to institute proceedings for the purpose of collecting, enforcing, realizing
or obtaining payment of the Collateral or for the purpose of preserving any rights of
any Persons, (iii) responsible for any loss occasioned by any sale or other dealing
with the Collateral or by the retention of or failure to sell or otherwise deal with
the Collateral, or (iv) bound to protect the Collateral from depreciating in value or
becoming worthless.

2.5 Appointment of Attorney.

The Company irrevocably appoints the Collateral Agent (and its officers) as attorney of the Company
(with full power of substitution) to do, make, execute and deliver in the name of and on behalf of
the Company upon the occurrence and during the continuance of an Event of Default all such acts,
documents, deeds and things which the Collateral Agent may reasonably deem necessary or advisable
to accomplish the purposes of this agreement including the endorsement and delivery of the
Collateral to the Collateral Agent and its transferees. The Collateral Agent is empowered to
exercise all rights and powers and to perform all acts of
ownership with respect to the Collateral to the same extent as the Company might do. This power of
attorney is in addition to, and not in substitution for, any stock power of attorney delivered by
the Company and such powers of attorney may be relied upon by the Collateral Agent severally or in
combination. All acts of the attorney are hereby ratified and approved, and the attorney shall not
be liable for any act, failure to act or any other matter or thing in connection therewith, except
to the extent caused by its own gross negligence or wilful misconduct. This appointment and power
of substitution, being coupled with an interest, are irrevocable and will not terminate upon the
bankruptcy, dissolution, winding up or insolvency of the Company.

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2.6 Dealings by Third Parties.

	 	(a)	 	No Person dealing with the Collateral Agent, any of the Secured Parties or an
agent or receiver thereof is required to determine (i) whether the Security Interest
has become enforceable, (ii) whether the powers which such Person is purporting to
exercise have become exercisable, (iii) whether any money remains due to the Collateral
Agent or any of the Secured Parties by the Company, (iv) the necessity or expediency of
the stipulations and conditions subject to which any sale, lease or other disposition
is made, (v) the propriety or regularity of any sale or other dealing by the Collateral
Agent, any Secured Parties or any other Person with the Collateral, or (vi) how any
money paid to the Collateral Agent, any Secured Party or agent or receiver has been
applied.

	 	(b)	 	Any purchaser of Collateral from the Collateral Agent or the Lenders shall hold
the Collateral absolutely, free from any claim or right of any kind whatever, including
any equity of redemption, of the Company. The Company waives (to the fullest extent
permitted by law) as against any such purchaser, all rights of redemption, stay or
appraisal which the Company has or may have under any rule of law or statute now
existing or hereafter adopted.

2.7 Application of Proceeds

Any and all moneys realized by the Collateral Agent, whether pursuant to this agreement or
otherwise, shall be applied by the Collateral Agent in accordance with Section 2.13 of the Credit
Agreement.

2.8 Company Liable for Deficiency

The Company is liable to the Collateral Agent and the Secured Parties for any deficiency after the
proceeds of any sale or other disposition of Collateral are received by the Collateral Agent.

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ARTICLE III — GENERAL

3.1 Notices.

All notices, requests and demands to or upon the Collateral Agent or the Company 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 Company shall
be addressed to the Company’s notice address set forth in such Section 11.8.

3.2 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 3.4 hereof), 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.

3.3 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 Company 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 Company. At the request and sole expense of the Company following
any such termination, the Collateral Agent shall deliver to the Company any Collateral
of the Company held by the Collateral Agent hereunder and execute and deliver to the
Company, at the sole expense of the Company, such documents as the Company 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 Company 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 Company, shall execute and deliver to the
Company, all releases or other documents reasonably necessary or desirable for the
release of the Lien created hereby on such Collateral.

At the request and sole expense of the Company, the Company shall be released from its obligations
hereunder in the event that all the capital stock of the Company 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 Company 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 Company
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 Company 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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3.4 Amendments; Waivers; Cumulative Remedies.

	 	(a)	 	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 schedules to this
agreement may be supplemented (but no existing provisions may be modified and no
Collateral may be released) through amendments in a form reasonably acceptable to the
Collateral Agent, in each case duly executed by the Collateral Agent and the Company.

	 	(b)	 	Neither the Collateral Agent nor any Lender shall by any act, delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Event of Default. No failure to exercise, nor
any delay in exercising, on the part of the Collateral Agent or any Lender, any right,
power or privilege hereunder operates as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder precludes any other or further
exercise thereof or the exercise of any other right, power or privilege.

	 	(c)	 	A waiver by the Collateral Agent or any Lender of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which the
Collateral Agent or such Lender would otherwise have on any future occasion.

3.5 No Merger.

This agreement does not operate by way of merger of any of the Obligations and no judgment
recovered by the Collateral Agent or any of the Secured Parties will operate by way of merger of,
or in any way affect, the Security Interest, which is in addition to, and not in substitution for,
any other security now or hereafter held by the Collateral Agent and the Secured Parties in respect
of the Obligations.

3.6 Further Assurances.

The Company shall from time to time, whether before or after the Security Interest has become
enforceable, do all acts and things and execute and deliver all transfers, assignments and
agreements as the Collateral Agent may reasonably require for (i) protecting the Collateral, (ii)
perfecting the Security Interest, (iii) obtaining control of the Collateral, (iv) exercising all
powers, authorities and discretions conferred upon the Collateral Agent, and (v) otherwise enabling
the Collateral Agent to obtain the full benefits of this agreement and the rights and powers herein
granted. The Company shall, from time to time after the Security Interest has become enforceable,
do all acts and things and execute and deliver all transfers, assignments and agreements as the
Collateral Agent may require for facilitating the sale or other disposition of the Collateral in
connection with its realization.

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3.7 Supplemental Security.

This agreement is in addition to, and without prejudice to, all other security now held or which
may hereafter be held by the Collateral Agent and the Secured Parties.

3.8 Successors and Assigns.

This agreement is binding upon the Company, its successors and assigns, and enures to the benefit
of the Collateral Agent and its successors and assigns. All rights of the Collateral Agent are
assignable and in any action brought by an assignee to enforce any such right, the Company will not
assert against the assignee any claim or defence which the Company now has or hereafter may have
against the Collateral Agent or any of the Lenders. Neither this agreement nor any rights, duties
or obligations under this agreement are assignable or transferable by the Company.

3.9 Headings, etc.

The division of this agreement into articles and sections and the insertion of headings are for
convenient reference only and are not to affect or be used in the construction or interpretation of
this agreement.

3.10 Gender and Number

Any reference in this agreement to gender includes all genders and words importing the singular
include the plural and vice versa.

3.11 Severability.

If any provision of this agreement is determined by a court of competent jurisdiction to be
illegal, invalid or unenforceable, that provision shall be severed from this agreement and be
ineffective to the extent of such illegality, invalidity or unenforceability and the remaining
provisions will continue in full force and effect.

3.12 Governing Law and Submission to Jurisdiction.

	 	(a)	 	This agreement is governed by and is to be interpreted, construed and enforced
in accordance with the laws of the Province of Ontario and the federal laws of Canada
applicable therein, without regard to conflict of law principles.

	 	(b)	 	The Company irrevocably and unconditionally (i) submits to the non-exclusive
jurisdiction of the courts of Ontario, (ii) agrees that all claims in respect of any
suit, action or proceeding may be heard and determined in such court, (iii) waives, to
the fullest extent permitted by law, any objection which it may have based upon
doctrines of venue or forum inconveniens.

Pledge Agreement — Warnaco of Canada Company (2008)

 

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3.13 Counterparts.

This agreement may be executed in any number of counterparts (including by facsimile or other
electronic means) and all such signed counterparts will together constitute one and the same
agreement.

[signature page follows]

Pledge Agreement — Warnaco of Canada Company (2008)

 

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IN WITNESS WHEREOF the Company and the Collateral Agent have executed and delivered this agreement
as of the date first above written.

	 	 	 	 	 
	 	WARNACO OF CANADA COMPANY

 	 
	 	By:  	/s/ Lawrence R. Rutkowski
 	 
	 	 	Name:  	Lawrence R. Rutkowski 	 
	 	 	Title:  	Vice-President 	 
	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Kevin W. Corcoran
 	 
	 	 	Name:  	Kevin W. Corcoran 	 
	 	 	Title:  	Vice President 	 

Pledge Agreement — Warnaco of Canada Company (2008)

 

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SCHEDULE “A”

PLEDGED 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.

Pledge Agreement — Warnaco of Canada Company (2008)

 

 

 

SCHEDULE “B”

PLEDGED SECURITIES ACCOUNTS

Nil.

Pledge Agreement — Warnaco of Canada Company (2008)Exhibit 10.10

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;

Deed of Hypothec — Warnaco of Canada Company (2008)

 

 

 

	 	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;

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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;

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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]

Deed of Hypothec — Warnaco of Canada Company (2008)

 

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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)

 

 

 

Schedule “A”

Intellectual Property

Nil.

Deed of Hypothec — Warnaco of Canada Company (2008)

 

 

 

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)

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