PLEDGE AND SECURITY AGREEMENT Dated as of August 26, 2008 among Warnaco Inc., as a Grantor and Each Other Grantor From Time to Time Party Hereto and Bank of America, N.A. as Collateral Agent Kaye Scholer LLP 425 Park Avenue New York, New York 10022
Exhibit 10.3
Execution Copy
Dated as of August 26, 2008
among
Warnaco Inc.,
as a Grantor
as a Grantor
and
Each Other Grantor
From Time to Time Party Hereto
From Time to Time Party Hereto
and
Bank of America, N.A.
as Collateral Agent
as Collateral Agent
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
This Pledge and Security Agreement (this “Agreement”), dated as of August 26, 2008,
by Warnaco Inc., a Delaware corporation (the “Borrower”), and each of the other entities
listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.11
(Additional Grantors) (each a “Grantor” and, collectively, the “Grantors”), in favor of Bank of
America, N.A. (“BofA”), as collateral agent for the Secured Parties (as defined below) (in
such capacity, the “Collateral Agent”).
W i t n e s s e t h:
Whereas, the Borrower, The Warnaco Group, Inc. (“Group”), the lenders and issuers
party thereto from time to time, BofA, as administrative agent for the Lenders and the Issuers (in
such capacity, the “Administrative Agent”) and as Collateral Agent (together with the
Administrative Agent, the “Agents”), Banc of America Securities LLC and Deutsche Bank Securities
Inc., as joint lead arrangers, Banc of America Securities LLC, Deutsche Bank Securities Inc. and
X.X. Xxxxxx Securities Inc., as joint bookrunners, Deutsche Bank Securities Inc., as sole
syndication agent, and HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A. and RBS Business
Capital, a division of RBS Asset Finance Inc., as co-documentation agents, have entered into a
certain Credit Agreement, dated as of the date hereof (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”);
Whereas, the Grantors other than the Borrower are party to the Guaranty pursuant to
which they have guaranteed the Obligations of the Borrower under the Credit Agreement;
Whereas, Warnaco of Canada Company, a Canadian corporation (the “Canadian Borrower”),
the lenders and issuers party thereto from time to time, BofA, as administrative agent and as
collateral agent, and certain other persons have entered into or will enter into a certain Credit
Agreement (as amended, supplemented or otherwise modified from time to time, the “Canadian
Facility”);
Whereas, in connection with the Canadian Facility, the Grantors will enter into the
Loan Party Canadian Facility Guaranty pursuant to which they will guarantee the Canadian Secured
Obligations of the Canadian Borrower under the Canadian Facility;
Whereas, it is a condition precedent to the effectiveness of the Credit Agreement and
of the Canadian Facility that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent;
Whereas, each Grantor will receive substantial direct and indirect benefits from the
making of the Loans, the issuance of the Letters of Credit and the granting of the other financial
accommodations to the Borrower under the Credit Agreement and from the granting of the financial
accommodations to the Canadian Borrower under the Canadian Facility;
Now, therefore, in consideration of the premises and to induce the Lenders, the
Issuers, the Administrative Agent and the Collateral Agent to enter into the Credit Agreement and
to induce the Lenders and the Issuers to make their respective extensions of credit to the Borrower
thereunder and to induce the lenders and issuers to be party to the Canadian Facility to enter into
the Canadian Facility and to make their respective extensions of credit to the Canadian Borrower
thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
ARTICLE I. Defined Terms
Section 1.1 Definitions
(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein
have the meanings given to them in the Credit Agreement.
(b) Terms used herein without definition that are defined in the UCC have the meanings given
to them in the UCC, including the following terms (which are capitalized herein):
“Account”
“Account Debtor”
“Certificated Security”
“Chattel Paper”
“Commercial Tort Claim”
“Commodity Account”
“Control Account”
“Deposit Account”
“Documents”
“Entitlement Holder”
“Entitlement Order”
“Equipment”
“Financial Asset”
“General Intangibles”
“Goods”
“Instruments”
“Inventory”
“Investment Property”
“Letter-of-Credit Right”
“Proceeds”
“Securities Account”
“Securities Intermediary”
“Security”
“Security Entitlement”
“Supporting Obligation”
“Account Debtor”
“Certificated Security”
“Chattel Paper”
“Commercial Tort Claim”
“Commodity Account”
“Control Account”
“Deposit Account”
“Documents”
“Entitlement Holder”
“Entitlement Order”
“Equipment”
“Financial Asset”
“General Intangibles”
“Goods”
“Instruments”
“Inventory”
“Investment Property”
“Letter-of-Credit Right”
“Proceeds”
“Securities Account”
“Securities Intermediary”
“Security”
“Security Entitlement”
“Supporting Obligation”
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(c) The following terms shall have the following meanings:
“Additional Pledged Collateral” means any Pledged Collateral acquired by any Grantor after the
date hereof and in which a security interest is granted pursuant to Section 2.2 (Grants of Security
Interests in Collateral), including, to the extent a security interest is granted therein pursuant
to Section 2.2 (Grants of Security Interests in Collateral), (i) all Stock and Stock Equivalents of
any Person that are acquired by any Grantor after the date hereof, together with all certificates,
instruments or other documents representing any of the foregoing and all Security Entitlements of
any Grantor in respect of any of the foregoing, (ii) all additional Indebtedness from time to time
owed to any Grantor by any obligor on the Pledged Debt Instruments and the Instruments evidencing
such Indebtedness and (iii) all interest, cash, Instruments and other property or Proceeds from
time to time received, receivable or otherwise distributed in respect of or in exchange for any of
the foregoing. “Additional Pledged Collateral” may be General Intangibles (including Intellectual
Property), Instruments or Investment Property.
“Agents” has the meaning specified in the recitals to this Agreement.
“Agreement” means this Pledge and Security Agreement (as the same may be amended, restated,
supplemented or otherwise modified from time to time).
“Blocked Account” means a deposit account maintained by any Grantor with a Blocked Account
Bank which account is the subject of an effective Blocked Account Letter, and includes all monies
on deposit therein and all certificates and instruments, if any, representing or evidencing such
Blocked Account.
“Blocked Account Bank” means a financial institution approved (such approval not to be
unreasonably withheld) by the Administrative Agent and with respect to which a Grantor has
delivered to the Collateral Agent an executed Blocked Account Letter.
“Blocked Account Letter” means a letter agreement, substantially in the form of Annex I-A
(Form of Blocked Account Letter) to this Agreement (with such changes thereto as may be agreed to
by the Administrative Agent), executed by the relevant Grantor and the Collateral Agent and
acknowledged and agreed to by the relevant Blocked Account Bank.
“Cash Collateral Account” means any Deposit Account or Securities Account that is (a)
established by the Collateral Agent from time to time in its sole discretion to receive cash and
Cash Equivalents (or purchase cash or Cash Equivalents with funds received) from any one or more of
the Grantors or their Subsidiaries or Affiliates or Persons acting on their behalf pursuant to the
Loan Documents, (b) with such depositaries and securities intermediaries as the Collateral Agent
may determine in its sole discretion, (c) in the name of the Collateral Agent (although such
account may also have words referring to the Borrower and the account’s purpose), (d) under the
control of the Collateral Agent and (e) in the case of a Securities Account, with respect to which
the Collateral Agent shall be the Entitlement Holder and the only Person authorized to give
Entitlement Orders with respect thereto, except as otherwise provided
in Section 2.3. Notwithstanding the foregoing, the Special Cash Collateral Account shall not
constitute a Cash Collateral Account.
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“Collateral” has the meaning specified in Section 2.1 (Collateral).
“Collateral Agent” shall include, in addition to the Collateral Agent referred to in the
preamble hereto, any successors and assigns to the Collateral Agent appointed pursuant to the
Credit Agreement and means the “Collateral Agent” in its capacity as collateral agent for the
benefit of the Secured Parties with respect to the Secured Obligations.
“Control Account” means a securities account maintained by any Grantor with the relevant
Approved Securities Intermediary (as defined in Annex 2 (Form of Control Account Agreement)) which
account is the subject of an effective Control Account Agreement, and includes all monies and other
assets on deposit or otherwise held therein.
“Control Account Agreement” means a letter agreement, substantially in the form of Annex 2
(with such changes as may be agreed to by the Administrative
Agent), executed by the relevant Grantor, the Collateral Agent and the relevant Approved Securities
Intermediary (as defined in Annex 2 (Form of Control Account Agreement) hereto).
“Copyright Licenses” means any agreement, whether written or oral, providing for the grant by
or to any Grantor of any right under any Copyright, including the grant of any right to use, copy,
publicly perform, display, create derivative works of, manufacture, distribute, exploit or sell
materials derived from any Copyright.
“Copyrights” means (a) all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof and all applications for
registration or recording in connection therewith, including all registrations, recordings and
applications for registration or recording in the United States Copyright Office or in any foreign
counterparts thereof, and (b) the right to obtain all renewals, reversions and extensions thereof.
“Discharge of Lender Claims” means the payment in full in cash of the principal of, interest
and premium, if any, on all Secured Obligations and Canadian Secured Obligations and, with respect
to Hedging Obligations, Hedging Obligations (as defined in the Canadian Facility) or letters of
credit outstanding thereunder, delivery of cash collateral or backstop letters of credit in respect
thereof in compliance with the terms hereof, of the Credit Agreement and of the Canadian Facility,
in each case after or concurrently with termination of all Commitments and Commitments (as defined
in the Canadian Facility), and payment in full in cash of any other Secured Obligations and
Canadian Secured Obligations that are due and payable at or prior to the time such principal and
interest are paid.
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“Excluded Equity” means, collectively, any Voting Stock of any direct Foreign Subsidiary of
any Grantor in excess of 65% of the total outstanding Voting Stock of such Subsidiary. For the
purposes of this definition, “Voting Stock” means, as to any issuer, the issued and outstanding
shares of each class of capital stock or other ownership interests of such issuer entitled to vote
(within the meaning of Treasury Regulations § 1.956-2(c)(2)).
“Excluded Property” means, collectively, (i) Excluded Equity, (ii) any permit, lease, license,
contract, instrument or other agreement held by any Grantor that validly prohibits the creation by
such Grantor of a Lien thereon, or any permit, lease, license, contract, instrument or other
agreement held by any Grantor to the extent that any Requirement of Law applicable thereto
prohibits the creation of a Lien thereon, but only, in each case, to the extent, and for so long
as, such prohibition is not removed, terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law; and (iii) any Equipment owned by any
Grantor that is Purchase-Money Collateral (as defined in the UCC) or subject to a Capital Lease if
the contract or other agreement in which such Lien is granted (or in the documentation providing
for such Capital Lease) prohibits or requires the consent of any Person other than any Grantor as a
condition to the creation of any other Lien on such Equipment; provided, however, “Excluded
Property” shall not include any Proceeds, substitutions or replacements of Excluded Property
(unless such Proceeds, substitutions or replacements would constitute Excluded Property).
“Foreign Person” means any Person not organized under the laws of any state of the United
States of America or the District of Columbia.
“Grantor” has the meaning specified in the recitals to this Agreement.
“Hedging Obligations” means all obligations of any Person under any Hedging Contract.
“Intellectual Property” means, collectively, (a) all right, title and interest of any Grantor
in intellectual property, whether arising under United States, multinational or foreign laws or
otherwise, including Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks,
Trademark Licenses, trade secrets, Internet domain names, Websites, advertising rights, rights in
designs, including registrations thereof, and rights in data, and (b) all rights to income,
royalties, proceeds and damages now or hereafter due and/or payable under and with respect thereto,
including all rights to xxx and recover at law or in equity for any past, present and future
infringement, misappropriation, dilution, violation or other impairment thereof.
“LLC” means each limited liability company in which a Grantor has an equity interest,
including those set forth on.
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“LLC Agreement” means each operating agreement with respect to a LLC, as each agreement has
heretofore been, and may hereafter be, amended, restated, supplemented or otherwise modified from
time to time.
“Material Intellectual Property” means Intellectual Property owned by or licensed to a Grantor
and material to any Grantor’s business.
“Partnership” means each partnership in which a Grantor has an equity interest, including
those set forth on.
“Partnership Agreement” means each partnership agreement governing a Partnership, as each such
agreement has heretofore been, and may hereafter be, amended, restated, supplemented or otherwise
modified.
“Patent License” means all agreements, whether written or oral, providing for the grant by or
to any Grantor of any right to manufacture, have manufactured, use, import, lease, sell or offer
for sale any product, design or process covered in whole or in part by a Patent.
“Patents” means (a) all patents of the United States or any other country or patent rights
arising under multinational laws, (b) all applications for patents of the United States or any
other country or patent rights arising under multinational laws and (c) all rights to obtain any
reissues, extensions, divisions, continuations and continuations-in-part of the foregoing.
“Pledged Certificated Stock” means all Certificated Securities and any other Stock and Stock
Equivalent of a Person evidenced by a certificate, Instrument or other equivalent document, in each
case owned by any Grantor, including all Stock listed on, but excluding Excluded Equity.
“Pledged Collateral” means, collectively, the Pledged Stock, Pledged Debt Instruments, any
other Investment Property of any Grantor (other than Pledged Stock, Pledged Debt Instruments and
other Investment Property whose value, in the aggregate, does not exceed $1,000,000), all chattel
paper, certificates or other Instruments representing any of the foregoing and all Security
Entitlements of any Grantor in respect of any of the foregoing. Pledged Collateral may be General
Intangibles, Instruments or Investment Property.
“Pledged Debt Instruments” means all right, title and interest of any Grantor in Instruments
evidencing any Indebtedness owed to such Grantor, including all Indebtedness described on, issued by the obligors named
therein.
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“Pledged Stock” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
“Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person that is not a
Pledged Certificated Stock (excluding Excluded Equity), including all right, title and interest of
any Grantor as a limited or general partner in any Partnership or as a member of any LLC and all
right, title and interest of any Grantor in, to and under any Partnership Agreement or LLC
Agreement to which it is a party.
“Restricted Account” means a deposit account maintained by any Grantor with a Restricted
Account Bank which account is the subject of an effective Restricted Account Letter, and includes
all monies on deposit therein and all certificates and instruments, if any, representing or
evidencing such Restricted Account.
“Restricted Account Bank” means a financial institution selected or approved (such approval
not to be unreasonably withheld) by the Administrative Agent and with respect to which a Grantor
has delivered an executed Restricted Account Letter.
“Restricted Account Letter” means a letter agreement, substantially in the form of Annex I-B
(Form of Restricted Account Letter) or as otherwise acceptable to the Administrative Agent,
executed by the relevant Grantor.
“Securities Act” means the Securities Act of 1933, as amended.
“Secured Parties” has the meaning specified in the Credit Agreement.
“Third Party Intellectual Property Rights” means any right, title or interest of any Person
under patent, copyright, trademark or trade secret law or any other statutory provision or common
law doctrine relating to intellectual property or proprietary rights.
“Trademark License” means any agreement, whether written or oral, providing for the grant by
or to any Grantor of any right under any Trademark.
“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, trade dress, service marks, logos and other source
or business identifiers, and, in each case, all goodwill associated therewith, whether now existing
or hereafter adopted or acquired, all registrations and recordings thereof and all applications for
registration or recording in connection therewith, in each case whether in the United States Patent
and Trademark Office or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof and all common-law rights related thereto,
and (b) the right to obtain all renewals thereof.
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“UCC” means the Uniform Commercial Code as from time to time in effect in the State of New
York; provided, however, that, in the event that, by reason of mandatory provisions of law, any of
the perfection or priority of the Collateral Agent’s
(for the benefit of the Secured Parties) security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the
term “UCC” (as it applies to such security interest) shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.
“Vehicles” means all vehicles covered by a certificate of title law of any state of the United
States of America or the District of Columbia.
Certain Other Terms
(a) In this Agreement, in the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including” and the words “to” and “until” each mean
“to but excluding” and the word “through” means “to and including.”
(b) The terms “herein,” “hereof,” “hereto” and “hereunder” and similar terms refer to this
Agreement as a whole and not to any particular Article, Section, subsection or clause in this
Agreement.
(c) References herein to an Annex, Schedule, Article, Section, subsection or clause refer to
the appropriate Annex or Schedule to, or Article, Section, subsection or clause in, this Agreement.
(d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
(e) Where the context requires, provisions relating to any Collateral, when used in relation
to a Grantor, shall refer to such Grantor’s Collateral or any relevant part thereof.
(f) Any reference in this Agreement to a Loan Document shall include all appendices, exhibits
and schedules thereto, and, unless specifically stated otherwise, all amendments, restatements,
supplements or other modifications thereto, and as the same may be in effect at any time such
reference becomes operative.
(g) The term “including” means “including without limitation” except when used in the
computation of time periods.
(h) The terms “Lender,” “Issuer,” “Administrative Agent,” “Collateral Agent” and “Secured
Party” include their respective successors.
(i) References in this Agreement to any statute shall be to such statute as amended or
modified and in effect from time to time.
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ARTICLE II. Grant of Security Interest
Section 2.1 Collateral
For the purposes of this Agreement, all of the following property now owned or at any time
hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may
acquire any right, title or interests (other than, in each case, Excluded Property) is collectively
referred to as the “Collateral”:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Letter-of-Credit Rights;
(xi) all Vehicles;
(xii) the Commercial
Tort Claims described on 6 and on any supplement thereto received by the Collateral Agent
pursuant to Section 4.10 (Notice of Commercial Tort Claims);
(xiii) all Intellectual Property and goodwill associated therewith;
(xiv) all books and records pertaining to any or all of the other property described in this
Section 2.1;
(xv) all other goods and personal property of such Grantor, whether tangible or intangible and
wherever located; and
(xvi) to the extent not otherwise included, all Proceeds of any or all of the foregoing.
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Section 2.2 Grants of Security Interests in Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of
such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of
the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a
lien on and security interest in, all of its right, title and interest in, to and under the
Collateral of such Grantor; provided, however, that the foregoing grant of security interest shall
not include a security interest in any Excluded Property; and provided, further, that, if and when
any property shall cease to be Excluded Property, the Collateral Agent for the benefit of the
Secured Parties shall have, and at all times from and after the date hereof be deemed to have had,
a security interest in such property.
Section 2.3 Cash Collateral Accounts
The Collateral Agent may establish one or more Cash Collateral Accounts with such depositaries
and Securities Intermediaries as it in its sole discretion shall determine. Each Grantor agrees
that each such Cash Collateral Account shall be under the control of the Collateral Agent and that
the Collateral Agent shall be the Entitlement Holder with respect to each such Cash Collateral
Account that is a Securities Account and the only Person authorized to give Entitlement Orders with
respect to each such Securities Account. Without limiting the foregoing, funds on deposit in any
Cash Collateral Account may be invested in Permitted Cash Equivalents at the direction of the
Collateral Agent and, except during the continuance of an Event of Default (unless otherwise agreed
to by the Administrative Agent in its sole discretion), the Collateral Agent agrees with each
Grantor to issue Entitlement Orders for such investments in Permitted Cash Equivalents as requested
by the Borrower; provided, however, that the Collateral Agent shall not have any responsibility
for, or bear any risk of loss of, any such requested investment or income thereon and the
Collateral Agent shall have no obligation to make or cause to be made any such investment absent a
request by the Borrower for a specific investment in Permitted Cash Equivalents. Neither any
Warnaco Entity nor any other Person claiming on behalf of or through any Warnaco Entity shall have
any right to demand payment of any funds held in any Cash Collateral Account at any time prior to
Discharge of Lender Claims, except (i) as provided in Section 2.9(f) of the Credit Agreement and
(ii) that the Borrower may request that the Collateral Agent apply funds in any Cash Collateral
Account directly to the immediate payment of the Loans and if paid in full then to the cash
collateralization of Letter of Credit Obligations (and not to be delivered to any Warnaco Entity).
The Collateral Agent shall apply all funds on deposit in a Cash Collateral Account as provided in
Section 2.9(f) of the Credit Agreement.
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ARTICLE III. Representations and Warranties
To induce the Lenders, the Issuers, the Collateral Agent and the Administrative Agent to enter
into the Credit Agreement, each Grantor hereby represents
and warrants each of the following to the Lenders, the Issuers, the Collateral Agent, the
Administrative Agent and the other Secured Parties:
Section 3.1 Title; No Other Liens
Except for the Liens granted to the Collateral Agent pursuant to this Agreement and the other
Liens permitted to exist on the Collateral under the Credit Agreement, such Grantor (a) is the
record and beneficial owner of the Pledged Collateral pledged by it hereunder constituting
Instruments or Certificated Securities, (b) is the Entitlement Holder of all such Pledged
Collateral constituting Investment Property held in a Securities Account and (c) has rights in or
the power to collaterally transfer each other item of Collateral in which a Lien is granted by it
hereunder, free and clear of any Lien (other than Liens for taxes not yet due and payable).
Section 3.2 Perfection and Priority
The security interests granted pursuant to this Agreement shall constitute valid and
continuing perfected security interests in favor of the Collateral Agent in the Collateral for
which perfection is governed by the UCC or filing with the United States Copyright Office or with
the United States Patent and Trademark Office upon (i) in the case of all Collateral in which a
security interest may be perfected by filing a financing statement under the UCC, the completion of
the filings and other actions specified on (which, in the case of all filings and other documents referred to on such
schedule, have been delivered to the Collateral Agent in completed and duly executed form), (ii)
the delivery to the Collateral Agent of all Collateral consisting of Instruments and Certificated
Securities, in each case properly endorsed for transfer to the Collateral Agent or in blank, (iii)
the execution of Control Account Agreements with respect to Investment Property not in certificated
form, (iv) the execution of a Blocked Account Letter with respect to all Deposit Accounts of a
Grantor as specified in Section 4.7(a)(i) hereto, (v) all appropriate filings having been made with
the United States Copyright Office and (vi) the receipt by the Collateral Agent of the consent of
the issuer or nominated person with respect to each Letter-of-Credit Right that is not a Supporting
Obligation. Such security interests shall be prior to all other Liens on the Collateral except for
Customary Permitted Liens having priority over the Collateral Agent’s Liens by operation of law or
otherwise as permitted hereunder or under the Credit Agreement.
Section 3.3 Jurisdiction of Organization; Chief Executive Office
On the Closing Date, such Grantor’s jurisdiction of organization, legal name, organizational
identification number, if any, and the location of such Grantor’s chief executive office or sole
place of business is specified on and, to the extent different from that on the Closing Date, such also lists all jurisdictions of organization, legal
names and locations of such
Grantor’s chief executive office or sole place of business for the period beginning five years
preceding the date hereof.
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Section 3.4 Inventory and Equipment
Schedule 4 (Location of Inventory and Equipment) sets forth each location at which such
Grantor’s Inventory and Equipment (other than mobile goods and Inventory or Equipment in transit)
is kept on the Closing Date.
Section 3.5 Pledged Collateral
(a) The Pledged Stock that constitutes Pledged Collateral pledged hereunder by such Grantor is
listed on and constitutes
that percentage of the issued and outstanding equity of all classes of each issuer thereof as set
forth on.
(b) All of the Pledged Stock (other than Pledged Stock in limited liability companies and
partnerships) that constitutes Pledged Collateral has been duly and validly issued and are fully
paid and nonassessable.
(c) All Pledged Collateral and, if applicable, any Additional Pledged Collateral, consisting
of Certificated Securities or Instruments has been delivered to the Collateral Agent in accordance
with Section 4.4(a) (Pledged Collateral) and Section 7.11 of the Credit Agreement.
(d) Subject to Section 4.7, all Pledged Collateral held by a Securities Intermediary in a
Securities Account is subject to a Control Account Agreement.
(e) Other than Pledged Stock constituting General Intangibles, there is no Pledged Collateral
other than (i) that represented by Certificated Securities or (ii) Instruments in the possession of
the Collateral Agent or that consisting of Financial Assets held in a Securities Account that is
subject to a Control Account Agreement.
(f) The Constituent Documents of any Person governing any Pledged Stock do not prohibit (i)
the Collateral Agent, upon the occurrence and during the continuance of an Event of Default, from
exercising all of the rights of the Grantor granting the security interest therein, and (ii) a
transferee or assignee of Stock of such Person from becoming a member, partner or, as the case may
be, other holder of such Pledged Stock to the same extent as the Grantor entitled to participate in
the management of such Person and, pursuant to the Constituent Documents of any Person governing
any Pledged Stock, upon the transfer of the entire interest of such Grantor, such Grantor shall
cease to be a member, partner or, as the case may be, other holder of such Pledged Stock.
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Section 3.6 Deposit Accounts; Securities Accounts
The only Deposit Accounts, Securities Accounts or Commodity Accounts maintained by any Grantor
on the Closing Date are those listed on Schedule 7 (Deposit Accounts and Securities Accounts),
which sets forth such information separately for each Grantor and which clearly identifies each
Deposit Account which is maintained as a concentration account by such Grantor.
Section 3.7 Accounts
No amount payable to such Grantor under or in connection with any Account is evidenced by any
Instrument or Chattel Paper that has not been delivered to the Collateral Agent, properly endorsed
for transfer, to the extent delivery is required by Section 4.5 (Delivery of Instruments and
Chattel Paper).
Section 3.8 Intellectual Property
(a) (i) sets forth a
true and complete list of all Intellectual Property of such Grantor on the date hereof (other than
licenses to commercial off-the-shelf software), separately identifying that owned by such Grantor
and that licensed by or to such Grantor and (ii) sets forth a true and complete list of all
Material Intellectual Property owned by or licensed to such Grantor on the date hereof (other than
licenses to commercial off-the-shelf software), separately identifying that owned by such Grantor
and that licensed by or to such Grantor. The Material Intellectual Property set forth on constitutes all of the material
intellectual property rights necessary for the Grantors to conduct their business as currently and
as proposed to be conducted.
(b) On the date hereof, all Material Intellectual Property owned by such Grantor is valid, in
full force and effect, subsisting, unexpired and enforceable, has not been adjudged invalid and has
not been abandoned. To the knowledge of such Grantor, the business of such Grantor, and the use of
the Material Intellectual Property in connection therewith, does not infringe, misappropriate,
dilute or violate any Third Party Intellectual Property Rights. Such Grantor is not party to or
the subject of any pending or, to such Grantor’s knowledge, threatened claim of infringement,
misappropriation, dilution or violation of any Third Party Intellectual Property Rights, and there
are no facts or circumstances that such Grantor reasonably believes are likely to form the basis
for any such claim, and such Grantor has not received written notice of any such claim, or a
written offer of a license to any Third Party Intellectual Property Rights, or any written notice
regarding the existence of any Third Party Intellectual Property Rights that would be likely to
have a Material Adverse Effect on any Grantor or otherwise would impair any Material Intellectual
Property.
(c) Except as set forth in (c), on the date hereof, none of the Material
Intellectual Property owned by such Grantor is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
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(d) No holding, decision or judgment has been rendered by any Governmental Authority
challenging such Grantor’s rights in the Material Intellectual Property or that would limit or
otherwise impair the ownership, use, validity or enforceability of any Material Intellectual
Property.
(e) No action or proceeding challenging such Grantor’s rights in the Intellectual Property or
the ownership, use, validity or enforceability of any Material Intellectual Property owned by such
Grantor is on the date hereof pending or, to the knowledge of such Grantor, threatened. There are
no claims, judgments or settlements to be paid by such Grantor relating to the Material
Intellectual Property. To such Grantor’s knowledge, no Person has been or is infringing,
misappropriating, diluting or violating the Material Intellectual Property owned by such Grantor.
(f) No Grantor is in material breach of any Copyright License, Patent License or Trademark
License and no Grantor in breach of any Material License. The consummation of the transactions
contemplated by this Agreement shall not impair any of such Grantor’s right in, cause a breach of,
or impair the validity or enforceability of, any Material Intellectual Property.
Section 3.9 Commercial Tort Claims
The only Commercial Tort Claims (with a reasonable expectation of recovery of at least
$1,000,000) of any Grantor existing on the Closing Date (regardless of whether the amount,
defendant or other material facts can be determined and regardless of whether such Commercial Tort
Claim has been asserted, threatened or has otherwise been made known to the obligee thereof or
whether litigation has been commenced for such claims) are those listed on 6, which sets forth such information separately for
each Grantor.
ARTICLE IV. Covenants
Each Grantor agrees with the Collateral Agent to the following, as long as any Secured
Obligation, Canadian Secured Obligation, Commitment or Commitment (as defined in the Canadian
Facility) remains outstanding and, in each case, unless the Requisite Lenders otherwise consent in
writing:
Section 4.1 Generally
Such Grantor shall (a) except for the security interest created by this Agreement, not create
or suffer to exist any Lien upon or with respect to any Collateral, except Liens permitted under
Section 8.2 (Liens, Etc.) of the Credit Agreement, (b) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this
Agreement, any other Loan Document, any Requirement of Law or any policy of insurance covering
the Collateral, (c) not sell, transfer or assign (by operation of law or otherwise) any Collateral
except as permitted under the Credit Agreement, (d) not enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Collateral Agent to sell, assign or
transfer any Collateral except in connection with an Asset Sale (i) that is permitted under Section
8.4 of the Credit Agreement or (ii) that is pursuant to a contract which contains a condition
precedent that consent under the Credit Agreement be obtained.
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Section 4.2 Maintenance of Perfected Security Interest; Further Documentation
(a) Such Grantor shall maintain the security interests created by this Agreement as perfected
security interests having at least the priority described in Section 3.2 (Perfection and Priority)
and shall defend such security interests and such priority against the claims and demands of all
Persons.
(b) Such Grantor shall furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request in writing, all in detail and in
form and substance reasonably satisfactory to the Collateral Agent.
(c) At any time and from time to time, upon the written request of the Collateral Agent, and
at the sole expense of such Grantor, such Grantor shall promptly and duly execute and deliver, and
have recorded, such further instruments and documents and take such further action as the
Collateral Agent may reasonably request (or be directed to request by the Administrative Agent at
the Administrative Agent’s reasonable request) for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, including the filing of any
financing or continuation statement under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby and the execution and delivery
of Blocked Account Letters or Restricted Account Letters and Control Account Agreements.
Section 4.3 Changes in Locations, Name, Etc.
(a) Except upon 15 or more days’ prior written notice to the Collateral Agent and delivery to
the Collateral Agent of (i) all additional financing statements and other documents reasonably
requested by the Collateral Agent to maintain the validity, perfection and priority of the security
interests provided for herein and (ii) if applicable, a written supplement to showing (A) any additional locations at
which Inventory or Equipment shall be kept or (B) any changes in any location where Inventory or
Equipment shall be kept that would require the Collateral Agent to take any action to maintain
perfected security interests in such Collateral, such Grantor shall not do any of the following:
(i) permit any Inventory or Equipment to be kept at a location other than those listed
on, except for
Inventory or Equipment in transit;
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(ii) change its jurisdiction of organization from that referred to in Section 3.3
(Jurisdiction of Organization; Chief Executive Office); or
(iii) change its legal name, or organizational identification number, if any, or
corporation, limited liability company or other organizational structure to such an extent
that any financing statement filed in connection with this Agreement would become
misleading.
(b) Such Grantor shall keep and maintain at its own cost and expense satisfactory and complete
records of the Collateral, including a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the Collateral.
Section 4.4 Pledged Collateral
(a) Such Grantor shall (i) deliver to the Collateral Agent for the benefit of the Secured
Parties, all certificates and Instruments representing or evidencing any Pledged Collateral
(including Additional Pledged Collateral), whether now existing or hereafter acquired, in suitable
form for transfer by delivery or, as applicable, accompanied by such 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, together, in respect of any Additional Pledged
Collateral, with a Pledge Amendment, duly executed by the Grantor, in substantially the form of
3, an acknowledgment and
agreement to a Joinder Agreement duly executed by any new Grantor, in substantially the form in the
form of 4, or such other
documentation acceptable to the Collateral Agent and (ii) maintain all other Pledged Collateral
constituting Investment Property in a Securities Account subject to a Control Account Agreement.
Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.
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 Pledged
Collateral. The Collateral Agent shall have the right at any time to exchange any certificate or
instrument representing or evidencing any Pledged Collateral for certificates or instruments of
smaller or larger denominations.
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(b) Except as provided in ARTICLE V (Remedial Provisions), such Grantor shall be entitled to
receive all cash dividends paid in respect of the Pledged Collateral (other than liquidating or
distributing dividends). Any sums paid upon or in respect of any Pledged Collateral upon the
liquidation or dissolution of any issuer of any Pledged Collateral, any distribution of capital
made on or in respect of any Pledged Collateral or any property distributed upon or with respect to
any Pledged Collateral
pursuant to the recapitalization or reclassification of the capital of any issuer of Pledged
Collateral or pursuant to the reorganization thereof (except, in each case, to the extent resulting
in cash being distributed to a Grantor) shall, unless otherwise subject to a perfected security
interest (with the priorities contemplated herein) in favor of the Collateral Agent, be delivered
to the Collateral Agent to be held by it hereunder as additional collateral security for the
Secured Obligations. If any sum of money or property so paid or distributed in respect of any
Pledged Collateral shall be received by such Grantor, such 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 such Grantor, as additional security for the
Secured Obligations.
(c) Except as provided in ARTICLE V (Remedial Provisions), such Grantor shall be entitled to
exercise all voting, consent and corporate, partnership, limited liability company and similar
rights with respect to the Pledged Collateral; provided, however, that no vote shall be cast,
consent given or right exercised or other action taken by such Grantor that would impair the
Collateral, be inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document or, without prior notice to the Collateral
Agent, enable or permit any issuer of Pledged Collateral to issue any Stock or other equity
Securities of any nature or to issue any other securities convertible into or granting the right to
purchase or exchange for any Stock or other equity Securities of any nature of any issuer of
Pledged Collateral.
(d) Such Grantor shall not grant “control” (within the meaning of such term under Article
9-106 of the UCC) over any Investment Property to any Person other than the Collateral Agent.
(e) In the case of each Grantor that is an issuer of Pledged Collateral, such Grantor agrees
to be bound by the terms of this Agreement relating to the Pledged Collateral issued by it and
shall comply with such terms insofar as such terms are applicable to it. In the case of any
Grantor that is a holder of any Stock or Stock Equivalent in any Person that is an issuer of
Pledged Collateral, such Grantor consents to (i) the exercise of the rights granted to the
Collateral Agent hereunder (including those described in Section 5.3 (Pledged Collateral)), and
(ii) the pledge by each other Grantor, pursuant to the terms hereof, of the Pledged Stock in such
Person and to the transfer of such Pledged Stock to the Collateral Agent or its nominee and to the
substitution of the Collateral Agent or its nominee as a holder of such Pledged Stock with all the
rights, powers and duties of other holders of Pledged Stock of the same class and, if the Grantor
having pledged such Pledged Stock hereunder had any right, power or duty at the time of such pledge
or at the time of such substitution beyond that of such other holders, with all such additional
rights, powers and duties. Such Grantor agrees to execute and deliver to the Collateral Agent such
certificates, agreements and other documents as may be necessary to evidence, formalize or
otherwise give effect to the consents given in this clause (e).
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(f) Such 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
of the security interest of the Collateral Agent in the Pledged Collateral pledged by such Grantor
hereunder, including any amendment electing to treat any membership interest or partnership
interest that is part of the Pledged Collateral as a “security” under Section 8-103 of the UCC, or
any election to turn any previously uncertificated Stock that is part of the Pledged Collateral
into certificated Stock.
Section 4.5 Delivery of Instruments and Chattel Paper
If any amount in excess of $250,000 payable under or in connection with any Collateral owned
by such Grantor shall be or become evidenced by an Instrument or Chattel Paper, such Grantor shall
promptly deliver such Instrument or Chattel Paper to the Collateral Agent, duly indorsed in a
manner satisfactory to the Collateral Agent, or, if consented to by the Collateral Agent, shall
xxxx all such Instruments and Chattel Paper with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest of Bank of America,
N.A., as Collateral Agent for the benefit of the Secured Parties” (which legend shall be
modified to reflect successor Collateral Agents).
Section 4.6 Intellectual Property
(a) Such Grantor (either itself or through licensees) shall (and shall cause all licensees or
sublicensees thereof to) (i) continue to use each Trademark that is Material Intellectual Property
in order to maintain such Trademark in full force and effect with respect to each class of goods
for which such Trademark is currently used, free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such Trademark, (iii)
use such Trademark with the appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) execute and file all documents necessary to
perfect a security interest pursuant to this Agreement in favor of the Collateral Agent promptly
upon adopting or using any xxxx that is confusingly similar or a colorable imitation of such
Trademark and (v) not do any act or knowingly omit to do any act (and not permit or direct by
express act or omission any licensee or sublicensee thereof to do any act) whereby such Trademark
(or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any
way; provided, however, that (i)-(iii) and (v) above shall be subject to the good faith exercise by
such Grantor of its reasonable business judgment consistent with past practices.
(b) Such Grantor shall not (and shall not permit or direct by express act or omission any
licensee or sublicensee thereof to) do any act, or omit to do any act, whereby any Patent that is
Material Intellectual Property may become forfeited, abandoned or dedicated to the public.
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(c) Such Grantor (i) shall not (and shall not permit or direct by express act or omission any
licensee or sublicensee thereof to) do any act or omit to do any act whereby any portion of the
Copyrights that is Material Intellectual Property may become invalidated or otherwise impaired and
(ii) shall not (and shall not permit or direct by express act or omission any licensee or
sublicensee thereof to) do any act whereby any portion of the Copyrights that is Material
Intellectual Property may fall into the public domain.
(d) Such Grantor shall not knowingly (and shall not permit or direct by express act or
omission any licensee or sublicensee thereof to) do any act, or knowingly omit to do any act,
whereby any trade secret that is Material Intellectual Property may become publicly available or
otherwise unprotectable.
(e) Such Grantor shall not (and shall not permit or direct by express act or omission any
licensee or sublicensee thereof to) do any act that knowingly infringes, misappropriates, dilutes
or violates any Third Party Intellectual Property Rights.
(f) Such Grantor shall notify the Collateral Agent immediately if it knows, or has reason to
know, that any application for registration or recording, registration or recording relating to any
Material Intellectual Property may become forfeited, abandoned or dedicated to the public, or of
any adverse determination or development (including the institution of, or any such determination
or development in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court or tribunal in any country) regarding such Grantor’s ownership
of, right to use, interest in, or the validity or enforceability of, any Material Intellectual
Property or such Grantor’s right to register the same or to own and maintain the same.
(g) As set forth below, whenever such Grantor, either by itself or through its counsel or any
agent or designee, shall file an application for the registration or recording of any Intellectual
Property with the United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency within or outside the United States or register any Internet domain
name, such Grantor shall report such filing to the Collateral Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon request of the Collateral
Agent, such Grantor shall execute and deliver, and have recorded, all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence the Collateral Agent’s
security interest in any such Copyright, Patent, Trademark or Internet domain name and the goodwill
and general intangibles of such Grantor relating thereto or represented thereby.
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(h) Such Grantor shall take all reasonable actions that are (i) necessary (subject to the good
faith exercise by such Grantor of its reasonable business judgment consistent with past practices)
or (ii) requested by the Collateral Agent, including in any proceeding before the United States
Patent and Trademark Office, the United States
Copyright Office or any similar office or agency and any Internet domain name registrar, to
maintain and pursue each application for registration or recording (and to obtain the relevant
registration or recording) and to maintain each registration and recording of any Copyright,
Trademark, Patent or Internet domain name that is Material Intellectual Property, including filing
of applications for renewal, affidavits of use, affidavits of incontestability and opposition and
interference and cancellation proceedings.
(i) In the event that any Material Intellectual Property is infringed, misappropriated,
diluted or violated by a third party, such Grantor shall notify the Collateral Agent promptly after
such Grantor learns thereof. Such Grantor shall take appropriate action in response to any
infringement, misappropriation, dilution or violation of the Material Intellectual Property,
including promptly bringing suit for infringement, misappropriation, dilution or violation and to
recover all damages for such infringement, misappropriation, dilution or violation, and shall take
such other actions may be appropriate under the circumstances to protect such Intellectual
Property; provided, however, that the foregoing shall be subject to the good faith
exercise by such Grantor of its reasonable business judgment consistent with past practices.
(j) Unless otherwise agreed to by the Collateral Agent such Grantor shall execute and deliver
to the Collateral Agent for filing in (i) the United States Copyright Office a short-form copyright
security agreement in the form attached hereto as 5 for all Copyrights of such Grantor, (ii) in the United States Patent
and Trademark Office a short-form patent security agreement in the form attached hereto as 6 for all Patents of such Grantor,
(iii) the United States Patent and Trademark Office and with the appropriate department or division
of all appropriate States of the United States a short-form trademark security agreement in form
attached hereto as 7 for all
Trademarks of such Grantor and (iv) with the appropriate Internet domain name registrar, a duly
executed form of assignment of all Internet domain names of such Grantor to the Collateral Agent
(together with appropriate supporting documentation as may be requested by the Collateral Agent) in
form and substance reasonably acceptable to the Collateral Agent. In the case of clause (iv)
above, such Grantor hereby authorizes the Collateral Agent to file such assignment in such
Grantor’s name and to otherwise perform in the name of such Grantor all other necessary actions to
complete such assignment, and each Grantor agrees to perform all appropriate actions deemed
necessary by the Collateral Agent for the Collateral Agent to ensure such Internet domain name is
registered in the name of the Collateral Agent.
Section 4.7 Cash Management; Deposit Accounts
(a) On the Closing Date (or such later date as agreed by the Collateral Agent), each Grantor
shall cause to be delivered (i) to the Collateral Agent, a duly executed and effective Blocked
Account Letter for each existing Deposit Account identified as a concentration account on Schedule
7 maintained by any Grantor and (ii) to each Restricted Account Bank (with a copy to the
Collateral Agent), a Restricted Account
Letter for each other Deposit Account (subject only to clause (b) below) duly executed by the
appropriate Grantor to each such Deposit Account.
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(b) Each Grantor shall (i) deposit in a Blocked Account or Restricted Account all cash and all
Proceeds received by such Grantor and (ii) not establish or maintain any Deposit Account with any
financial or other institution other than a Blocked Account Bank, a Restricted Account Bank, the
Collateral Agent or the Administrative Agent; provided, however, that the Warnaco Entities may at
any time maintain the following accounts not subject to this Section 4.7(b) (i) Deposit Accounts
or Securities Accounts (or their foreign equivalents) located outside of the United States with
cash or Cash Equivalents not in excess of an aggregate amount of $30,000,000, (ii) Deposit
Accounts or Securities Accounts located in the United States with cash or Cash Equivalents not in
excess of an aggregate amount of $10,000,000 and (iii) payroll, withholding tax and other fiduciary
accounts as required for operations in the ordinary course of business.
(c) Each Grantor shall instruct each Account Debtor or other Person obligated to make a
payment to such Grantor to make payment, or to continue to make payment, as the case may be, to a
lock-box linked to a Blocked Account or a Restricted Account, as the case may be, and each Grantor
shall deposit in a Blocked Account or a Restricted Account all Proceeds received by such Grantor
from any other Person immediately upon receipt.
(d) In the event (i) any Grantor or a Blocked Account Bank or Restricted Account Bank shall,
after the date hereof, terminate an agreement with respect to the maintenance of a Blocked Account
or Restricted Account, as the case may be, for any reason, (ii) the Collateral Agent shall demand
termination of a Blocked Account Letter or a Restricted Account Letter as a result of the failure
of a Blocked Account Bank or Restricted Account Bank, as the case may be, to comply with the terms
of the applicable letter agreement or (iii) the Collateral Agent determines in its sole discretion
that the financial condition of a Blocked Account Bank or Restricted Account Bank has materially
deteriorated, then, in each case, Group shall, or shall cause the applicable Grantor to, notify all
of its Account Debtors that were making payments to such terminated Blocked Account Bank or
Restricted Account Bank to make all future payments to such other Blocked Account Bank or
Restricted Account Bank, as specified by the Collateral Agent.
(e) The Collateral Agent agrees that it shall not deliver to any Blocked Account Bank a Sweep
Activation Notice under and as defined in any Blocked Account Letter with such Blocked Account Bank
unless there has occurred and is continuing an Event of Default or Available Credit has been less
than 15% of the Aggregate Borrowing Limit for five or more consecutive Business Days.
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Section 4.8 Vehicles
Upon the request of the Collateral Agent, within 30 days after the date of such request and,
with respect to any Vehicle acquired by such Grantor subsequent to the date of any such request,
within 30 days after the date of acquisition thereof, such Grantor shall file all applications for
certificates of title or ownership indicating the Collateral Agent’s first priority security
interest in the Vehicle covered by such certificate and any other necessary documentation, in each
office in each jurisdiction that the Collateral Agent shall deem advisable to perfect its security
interests in the Vehicles; provided, however, that the aggregate value of all Vehicles excepted
from the application of this Section 4.8 shall not exceed $1,000,000.
Section 4.9 Payment of Obligations
Such Grantor shall pay and discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as well as all claims of
any kind (including claims for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity thereof is currently
being contested in good faith by appropriate proceedings, reserves in conformity with Agreement
Accounting Principles with respect thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.
Section 4.10 Notice of Commercial Tort Claims
Such Grantor agrees that, if it shall acquire any interest in any Commercial Tort Claim with a
reasonable expectation of recovery of at least $1,000,000 (whether from another Person or because
such Commercial Tort Claim shall have come into existence), (i) such Grantor shall, immediately
upon such acquisition, deliver to the Collateral Agent, in each case in form and substance
satisfactory to the Collateral Agent, a notice of the existence and nature of such Commercial Tort
Claim and deliver a supplement to 6 containing a specific description of such Commercial Tort Claim, (ii) the provision of
Section 2.1 (Collateral) shall apply to such Commercial Tort Claim and (iii) such Grantor shall
execute and deliver to the Collateral Agent, in each case in form and substance satisfactory to the
Collateral Agent, any certificate, agreement and other document, and take all other action, deemed
by the Collateral Agent to be reasonably necessary or appropriate for the Collateral Agent to
obtain, on behalf of the Secured Parties, a first-priority, perfected security interest in all such
Commercial Tort Claims. Any supplement to 6 delivered pursuant to this Section 4.10 (Notice of Commercial Tort Claims)
shall, after the receipt thereof by the Collateral Agent, become part of 6 for all purposes hereunder other than in respect
of representations and warranties made prior to the date of such receipt.
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ARTICLE V. Remedial Provisions
Section 5.1 Code and Other Remedies
During the continuance of an Event of Default, the Collateral Agent may exercise, in addition
to all other rights and remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to any of the Secured Obligations, all rights and
remedies of a secured party under the UCC or any other applicable law. Without limiting the
generality of the foregoing, the Collateral Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such circumstances forthwith
collect, receive, appropriate and realize upon any Collateral, and may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver any Collateral (or
contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker’s board or office of the Collateral Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk. The Collateral Agent and
any other Secured Party shall have the right upon any such public sale or sales, and, to the extent
permitted by the UCC and other applicable law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of redemption of any
Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the
Collateral Agent’s request, to assemble the Collateral and make it available to the Collateral
Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere. The Collateral Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 5.1, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in
any way relating to the Collateral or the rights of the Collateral Agent and any other Secured
Party hereunder, including reasonable attorneys’ fees and disbursements, to the payment in whole or
in part of the Secured Obligations, in such order as the Credit Agreement shall prescribe, and only
after such application and after the payment by the Collateral Agent of any other amount required
by any provision of law, need the Collateral Agent, as the case may be, account for the surplus, if
any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims,
damages and demands it may acquire against the Collateral Agent or any other Secured Party arising
out of the exercise by any of them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
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Section 5.2 Accounts and Payments in Respect of General Intangibles
(a) In addition to, and not in substitution for, any similar requirement in the Credit
Agreement, if required by the Collateral Agent at any time during the
continuance of an Event of Default, any payment of Accounts or payment in respect of General
Intangibles, when collected by any Grantor, shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor
to the Collateral Agent, in a Blocked Account or a Cash Collateral Account, subject to withdrawal
by the Collateral Agent as provided in Section 5.4 (Proceeds to be Turned Over To Collateral
Agent). Until so turned over, such payment shall be held by such Grantor in trust for the
Collateral Agent, segregated from other funds of such Grantor. Each such deposit of Proceeds of
Accounts and payments in respect of General Intangibles shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included in the deposit.
(b) At the Collateral Agent’s request, during the continuance of an Event of Default, each
Grantor shall deliver to the Collateral Agent all original and other documents evidencing, and
relating to, the agreements and transactions that gave rise to the Accounts or payments in respect
of General Intangibles, including all original orders, invoices and shipping receipts.
(c) Subject to the terms of the Credit Agreement, the Collateral Agent may, without notice, at
any time during the continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any thereof.
(d) The Collateral Agent in its own name or in the name of others may at any time during the
continuance of an Event of Default communicate with Account Debtors to verify with them to the
Collateral Agent’s satisfaction the existence, amount and terms of any Account or amounts due under
any General Intangible.
(e) Upon the request of the Collateral Agent at any time during the continuance of an Event of
Default, each Grantor shall notify Account Debtors that it has granted to the Collateral Agent a
lien on and security interest in, all of its right, title and interest in, to and under the
Accounts or General Intangibles that have been collaterally assigned to the Collateral Agent and
that payments in respect thereof shall be made directly to the Collateral Agent. In addition, the
Collateral Agent may at any time during the continuance of an Event of Default, to the extent
permitted by applicable law, enforce such Grantor’s rights against such Account Debtors and
obligors of General Intangibles.
(f) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Accounts and payments in respect of General Intangibles to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in accordance with
the terms of any agreement giving rise thereto. Neither the Collateral Agent nor any other Secured
Party shall have any obligation or liability under any agreement giving rise to an Account or a
payment in respect of a General Intangible by reason of or arising out of this Agreement or the
receipt by the Collateral Agent or any other Secured Party of any payment relating thereto, nor
shall the Collateral Agent nor any other Secured Party be obligated in any manner to perform any
obligation of any Grantor under or pursuant to any agreement
giving rise to an Account or a payment in respect of a General Intangible, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any amounts that may have
been assigned to it or to which it may be entitled at any time or times.
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Section 5.3 Pledged Collateral
(a) During the continuance of an Event of Default, upon notice by the Collateral Agent to the
relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to receive any Proceeds
of the Pledged Collateral and make application thereof to the Secured Obligations in the order set
forth in the Credit Agreement and (ii) the Collateral Agent or its nominee may exercise (A) any
voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged
Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other
right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner
thereof (including the right to exchange at its discretion any of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other fundamental change in the
corporate structure of any issuer of Pledged Stock and the right to deposit and deliver any Pledged
Collateral with any committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it; provided, however, that the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(b) In order to permit the Collateral Agent to exercise the voting and other consensual rights
that it may be entitled to exercise pursuant hereto and to receive all dividends and other
distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute
and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies,
dividend payment orders and other instruments as the Collateral Agent may from time to time
reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby
grants to the Collateral Agent an irrevocable proxy to vote all or any part of the Pledged
Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding written consents of
shareholders, partners or members, as the case may be, calling special meetings of shareholders,
partners or members, as the case may be, and voting at such meetings), which proxy shall be
effective, automatically and without the necessity of any action (including any transfer of any
Pledged Collateral on the record books of the issuer thereof) by any other person (including the
issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an
Event of Default and which proxy shall only terminate upon Discharge of Lender Claims.
25
(c) Each Grantor hereby expressly authorizes and instructs each issuer of any Pledged
Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from
the Collateral Agent in writing that (A) states that an Event of Default has occurred and is
continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that such issuer shall be fully
protected in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividend or
other payment with respect to the Pledged Collateral directly to the Collateral Agent
Section 5.4 Proceeds to be Turned Over To Collateral Agent
Unless otherwise expressly provided in the Credit Agreement, all Proceeds received by the
Collateral Agent hereunder in cash or Cash Equivalents shall be held by the Collateral Agent in a
Cash Collateral Account. All Proceeds constituting Reinvestment Prepayment Amounts (as defined in
the Credit Agreement) or the cash collateralization of Letters of Credit (as defined in the Credit
Agreement) while held by the Collateral Agent in a Cash Collateral Account (or by such Grantor in
trust for the Collateral Agent) shall continue to be held as collateral security for the Secured
Obligations and shall not constitute payment thereof until applied as provided in the Credit
Agreement.
Section 5.5 Registration Rights
(a) During the continuance of an Event of Default, if the Collateral Agent shall determine to
exercise its right to sell any of the Pledged Collateral pursuant to Section 5.1 (Code and Other
Remedies), and if in the opinion of the Collateral Agent it is necessary or advisable to have the
Pledged Collateral, or any portion thereof, registered under the provisions of the Securities Act,
the relevant Grantor shall use its reasonable efforts to cause the issuer thereof to (i) execute
and deliver, and cause the directors and officers of such issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may be, in the opinion
of the Collateral Agent, necessary or advisable to register the Pledged Collateral, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use its reasonable efforts to
cause the registration statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the Pledged Collateral, or that
portion thereof to be sold and (iii) make all amendments thereto or to the related prospectus that,
in the opinion of the Collateral Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such issuer to comply with the
provisions of the securities or “Blue Sky” laws of any jurisdiction that the Collateral Agent shall
designate and to make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) satisfying the provisions of Section 11(a) of the Securities
Act.
26
(b) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of
any Pledged Collateral by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or otherwise or may
determine that a public sale is impracticable or not commercially reasonable and, accordingly, may
resort to one or more private sales thereof to a restricted group of purchasers that shall be
obliged to agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges
and agrees that any such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent
shall be under no obligation to delay a sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such issuer would agree to do
so.
(c) During the continuance of an Event of Default, each Grantor agrees to use its best efforts
to do or cause to be done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Collateral pursuant to this Section 5.5 valid and binding and in
compliance with all other applicable Requirements of Law. Each Grantor further agrees that a
breach of any covenant contained in this Section 5.5 will cause irreparable injury to the
Collateral Agent and the other Secured Parties, that the Collateral Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each
and every covenant contained in this Section 5.5 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for
specific performance of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
Section 5.6 Deficiency
Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorney employed by the Collateral Agent or any other Secured Party to
collect such deficiency.
27
ARTICLE VI. The Collateral Agent
Section 6.1 Collateral Agent’s Appointment as Attorney-in-Fact
(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to
take any appropriate action and to execute any document or instrument that may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the
foregoing, each
Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any of the following:
(i) in the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any check, draft, note, acceptance or other instrument for the payment
of moneys due under any Account or General Intangible or with respect to any other
Collateral and file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any such moneys due under any Account or General Intangible or with respect to
any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any agreement, instrument, document or paper as the Collateral Agent may request to
evidence the Collateral Agent’s security interests in such Intellectual Property and the
goodwill and General Intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against any
of the Collateral, effect any repair or pay any insurance called for by the terms of this
Agreement (including all or any part of the premiums therefor and the costs thereof);
(iv) execute, in connection with any sale provided for in Section 5.1 (Code and Other
Remedies) or Section 5.5 (Registration Rights), any endorsement, assignment or other
instrument of conveyance or transfer with respect to any of the Collateral; or
(v) (A) direct any party liable for any payment under any Collateral to make payment
of any moneys due or to become due thereunder directly to the Collateral Agent or as the
Collateral Agent shall direct, (B) ask or demand for, collect, and receive payment of and
receipt for, any moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or
express xxxx, xxxx of lading, storage or warehouse receipt, draft against debtors,
assignment, verification, notice and other document in connection with any Collateral, (D)
commence and prosecute any suit, action or proceeding at law or in equity in any court of
competent jurisdiction to collect any Collateral and to enforce any other right in respect
of any Collateral, (E) defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral, (F) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the Collateral
Agent may deem appropriate, (G) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Trademark pertains) throughout the world for
such term or terms, on such conditions, and in such manner as the Collateral Agent shall in
its sole discretion determine, including the execution and filing of any document
necessary to effectuate or record such assignment and (H) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any Collateral as
fully and completely as though the Collateral Agent were the absolute owner thereof for all
purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time,
or from time to time, all acts and things that the Collateral Agent deems necessary to
protect, preserve or realize upon any or all of the Collateral and the Collateral Agent’s
and the other Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
28
Anything in this clause (a) to the contrary notwithstanding, the Collateral Agent agrees that it
shall not exercise any right under the power of attorney provided for in this clause (a) unless an
Event of Default shall be continuing.
(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with actions undertaken as
provided in this Section 6.1, together with interest thereon at a rate per annum equal to the rate
per annum at which interest would then be payable on past due Revolving Loans that are Base Rate
Loans under the Credit Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on
demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the security interests
created hereby are released.
Section 6.2 Duty of Collateral Agent
The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession shall be to deal with it in the same manner as the
Collateral Agent deals with similar property for its own account. Neither the Collateral Agent,
any other Secured Party nor any of their respective officers, directors, employees or agents shall
be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request
of any Grantor or any other Person or to take any other action whatsoever with regard to any
Collateral. The powers conferred on the Collateral Agent hereunder are solely to protect the
Collateral Agent’s and the Secured Parties’ respective interests in the Collateral and shall not
impose any duty upon the Collateral Agent or any other Secured Party to exercise any such powers.
The Collateral Agent and the other Secured Parties shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither they nor
any of their respective officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross negligence or willful
misconduct.
29
Section 6.3 Authorization of Financing Statements
Each Grantor authorizes the Collateral Agent and each of its Affiliates, counsel and other
representatives, at any time and from time to time until Discharge of Lender Claims, to file or
record financing statements, amendments to financing statements, and other filing or recording
documents or instruments with respect to the Collateral without the signature of such Grantor in
such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect
the security interests of the Collateral Agent under this Agreement, and such financing statements
and amendments may described the Collateral covered thereby as “all assets of the debtor”, “all
personal property of the debtor”, in each case, “in which the debtor now has or at any time in the
future may acquire any right, title or interest” or words of similar effect. Each Grantor hereby
also authorizes the Collateral Agent and each of its Affiliates, counsel and other representatives,
at any time and from time to time, to file continuation statements with respect to previously filed
financing statements. A photographic or other reproduction of this Agreement shall be sufficient
as a financing statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
Section 6.4 Authority of Collateral Agent
(a) Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent
under this Agreement with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement shall, as between the
Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be
acting as agent for the Collateral Agent and the other Secured Parties, with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
(b) Each Grantor and the Collateral Agent hereby agrees and acknowledges that, to the extent
that the Collateral Agent has a security interest in or possession of any Collateral, the
Collateral Agent is holding, and shall hold, such Collateral (and the security interest therein)
for the benefit of and on behalf of each Secured Party (including the Collateral Agent) in
accordance with Section 8-301(a)(2), 9-313(a) and 9-313(c) of the UCC, if applicable.
30
ARTICLE VII. Miscellaneous
Section 7.1 Amendments in Writing
None of the terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except in accordance with Section 11.1 (Amendments, Waivers, Etc.) of the Credit
Agreement; provided, however, that annexes to this Agreement may be supplemented (but no existing
provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder
Agreements, in substantially the form of 3 and 4 respectively, in each case duly executed by the Collateral Agent and each Grantor directly affected
thereby.
Section 7.2 Notices
All notices, requests and demands to or upon the Collateral Agent or any 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 any Grantor shall
be addressed to the Borrower’s notice address set forth in such Section 11.8.
Section 7.3 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 7.1 (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.
Section 7.4 Effectiveness
This Agreement shall not become effective until the Closing Date.
Section 7.5 Successors and Assigns
This Agreement shall be binding upon the successors and assigns of each Grantor and shall
inure to the benefit of the Collateral Agent and each other Secured
Party and their successors and assigns; provided, however, that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Agent.
31
Section 7.6 Counterparts
This Agreement may be executed by one or more of the parties to this Agreement on any number
of separate counterparts (including by telecopy), each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an executed counterpart by
telecopy or electronic transmission (in pdf format) shall be effective as delivery of a manually
executed counterpart.
Section 7.7 Severability
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 7.8 Section Headings
The Article and Section titles contained in this Agreement are, and shall be, without
substantive meaning or content of any kind whatsoever and are not part of the agreement of the
parties hereto.
Section 7.9 Entire Agreement
This Agreement, together with the other Loan Documents, represents the entire agreement of the
parties and supersedes all prior agreements and understandings relating to the subject matter
hereto concerning the Secured Obligations.
Section 7.10 Governing Law
This Agreement and the rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the internal law of the State of New York.
Section 7.11 Additional Grantors
If, pursuant to Section 7.11 (Additional Personal Property Collateral and Guaranties) of the
Credit Agreement, the Borrower shall be required to cause any Subsidiary that is not a Grantor to
become a Grantor hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a
Joinder Agreement substantially in the form
of 4 and shall
thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as
a Grantor party hereto on the Closing Date.
32
Section 7.12 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 each 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 Grantors. At the request and sole expense of any
Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any
Collateral of such Grantor held by the Collateral Agent hereunder and execute and deliver to such
Grantor, at the sole expense of the Borrower, such documents as such 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 any 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 Borrower, shall execute and deliver to the
Borrower, 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 Grantors, a Grantor shall be released from its
obligations hereunder in the event that all the capital stock of such Grantor shall be so sold or
disposed (but only so long as such sale or other disposition is permitted under the Credit
Agreement and such sale or other disposition is not to another Grantor); provided, however, that
the Borrower 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 relevant 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 Borrower in form and
substance satisfactory to the Collateral Agent stating that such transaction is in compliance with
the Loan Documents.
33
Section 7.13 Reinstatement
Each 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 any Grantor, under any bankruptcy law, state 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 any Grantor in respect of the amount of such payment.
Section 7.14 Submission to Jurisdiction; Service of Process
(a) Any legal action or proceeding with respect to this Agreement may be brought in the courts
of the State of New York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, each Grantor hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.
Each Grantor hereby irrevocably waives any objection, including any objection to the laying of
venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective jurisdictions.
(b) Each Grantor hereby irrevocably consents to the service of any and all legal process,
summons, notices and documents in any suit, action or proceeding brought in the United States of
America arising out of or in connection with this Agreement by the mailing (by registered or
certified mail, postage prepaid) or delivering of a copy of such process to such Grantor at the
address specified in Section 7.2 (Notices, Etc.). Each of the Grantors agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(c) Nothing contained in this Section 7.14 shall affect the right of the Collateral Agent or
any other Secured Party to serve process in any other manner permitted by law or commence legal
proceedings or otherwise proceed against any Grantor in any other jurisdiction.
34
In witness whereof, each of the undersigned has caused this Pledge and Security
Agreement to be duly executed and delivered as of the date first above written.
Warnaco Inc., as Grantor |
||||
By: | /s/ Xxxxxxxx X. Rutowsk | |||
Name: | Xxxxxxxx X. Xxxxxxxx | |||
Title: | Executive Vice President and CFO | |||
The Warnaco Group, Inc., as Grantor |
||||
By: | /s/ Xxxxxxxx X. Rutowsk | |||
Name: | Xxxxxxxx X. Xxxxxxxx | |||
Title: | Executive Vice President and CFO | |||
[Signature Page to Pledge and Security Agreement]
Authentic Fitness On-Line, Inc. Xxxxxx Xxxxx Jeanswear Company CCC Acquisition Corp. CKJ Holdings, Inc. Designer Holdings Ltd. Xxxxx Xxxxxxx Apparel Corp. Warnaco Puerto Rico, Inc. Warnaco Retail Inc. Warnaco Swimwear Inc. Warnaco Swimwear Products Inc. XXX.xxx Inc. Warnaco U.S., Inc., as Grantors |
||||
By: | /s/ Xxxxxxxx X. Rutowsk | |||
Name: | Xxxxxxxx X. Xxxxxxxx | |||
Title: | Vice President | |||
[Signature Page to Pledge and Security Agreement]
Accepted and Agreed as of the date first above written: |
||||
Bank of America, N.A., as Collateral Agent for the Secured Parties, |
||||
By:
|
/s/ Xxxxx X. Xxxxxxxx
|
|||
Title: Vice President |
[Signature Page to Pledge and Security Agreement]
TABLE OF CONTENTS
Page | ||||
ARTICLE I. Defined Terms |
2 | |||
Section 1.1 Definitions |
2 | |||
ARTICLE II. Grant of Security Interest |
9 | |||
Section 2.1 Collateral |
9 | |||
Section 2.2 Grants of Security Interests in Collateral |
10 | |||
Section 2.3 Cash Collateral Accounts |
10 | |||
ARTICLE III. Representations and Warranties |
11 | |||
Section 3.1 Title; No Other Liens |
11 | |||
Section 3.2 Perfection and Priority |
11 | |||
Section 3.3 Jurisdiction of Organization; Chief Executive Office |
11 | |||
Section 3.4 Inventory and Equipment |
12 | |||
Section 3.5 Pledged Collateral |
12 | |||
Section 3.6 Deposit Accounts; Securities Accounts |
13 | |||
Section 3.7 Accounts |
13 | |||
Section 3.8 Intellectual Property |
13 | |||
Section 3.9 Commercial Tort Claims |
14 | |||
ARTICLE IV. Covenants |
14 | |||
Section 4.1 Generally |
14 | |||
Section 4.2 Maintenance of Perfected Security Interest; Further Documentation |
15 | |||
Section 4.3 Changes in Locations, Name, Etc. |
15 | |||
Section 4.4 Pledged Collateral |
16 | |||
Section 4.5 Delivery of Instruments and Chattel Paper |
18 | |||
Section 4.6 Intellectual Property |
18 | |||
Section 4.7 Cash Management; Deposit Accounts |
20 | |||
Section 4.8 Vehicles |
22 | |||
Section 4.9 Payment of Obligations |
22 | |||
Section 4.10 Notice of Commercial Tort Claims |
22 | |||
ARTICLE V. Remedial Provisions |
23 | |||
Section 5.1 Code and Other Remedies |
23 | |||
Section 5.2 Accounts and Payments in Respect of General Intangibles |
24 | |||
Section 5.3 Pledged Collateral |
25 | |||
Section 5.4 Proceeds to be Turned Over To Collateral Agent |
26 | |||
Section 5.5 Registration Rights |
26 | |||
Section 5.6 Deficiency |
27 | |||
ARTICLE VI. The Collateral Agent |
28 | |||
Section 6.1 Collateral Agent’s Appointment as Attorney-in-Fact |
28 | |||
Section 6.2 Duty of Collateral Agent |
29 | |||
Section 6.3 Authorization of Financing Statements |
30 | |||
Section 6.4 Authority of Collateral Agent |
30 |
i
TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
ARTICLE VII. Miscellaneous |
31 | |||
Section 7.1 Amendments in Writing |
31 | |||
Section 7.2 Notices |
31 | |||
Section 7.3 No Waiver by Course of Conduct; Cumulative Remedies |
31 | |||
Section 7.4 Effectiveness |
31 | |||
Section 7.5 Successors and Assigns |
31 | |||
Section 7.6 Counterparts |
32 | |||
Section 7.7 Severability |
32 | |||
Section 7.8 Section Headings |
32 | |||
Section 7.9 Entire Agreement |
32 | |||
Section 7.10 Governing Law |
32 | |||
Section 7.11 Additional Grantors |
32 | |||
Section 7.12 Release of Collateral |
33 | |||
Section 7.13 Reinstatement |
34 |
ii
TABLE
OF CONTENTS
ANNEXES AND SCHEDULES
Page | |||||
Annex 1-A |
Form of Blocked Account Letter | ||||
Annex 1-B |
Form of Restricted Account Letter | ||||
Annex 2 |
Form of Control Account Agreement | ||||
Annex 3 |
Form of Pledge Amendment | ||||
Annex 4 |
Form of Joinder Agreement | ||||
Annex 5 |
Form of Short Form Copyright Security Agreement | ||||
Annex 6 |
Form of Short Form Patent Security Agreement | ||||
Annex 7 |
Form of Short Form Trademark Security Agreement | ||||
Schedule 1 |
Jurisdiction of Organization; Principal Executive Office | ||||
Schedule 2 |
Pledged Collateral | ||||
Schedule 3 |
Filings | ||||
Schedule 4 |
Location of Inventory and Equipment | ||||
Schedule 5 |
Intellectual Property | ||||
Schedule 6 |
Commercial Tort Claims | ||||
Schedule 7 |
Deposit Accounts and Securities Accounts |
[Signature Page to Pledge and Security Agreement]
Annex 1-A to
Pledge and Security Agreement
Pledge and Security Agreement
Form of Blocked Account Letter
__, ____
[Deposit Account Bank]
[Address]
[Address]
Ladies and Gentlemen:
Reference
is made to account no. [_____] maintained with you (the
“Bank”) by [____] (the “Company”) into which funds are deposited from time to time (the “Account”).
[The Company][Warnaco Inc.] has entered into a Credit Agreement, dated as of August 26, 2008
(as the same may be amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among [the Company][Warnaco Inc.], The Warnaco Group, Inc., the Lenders and
Issuers party thereto, Bank of America, N.A., as Collateral Agent for the Lenders and Issuers (in
such capacity, together with any successor in such capacity, the “Collateral Agent”) and
Administrative Agent, and the other parties thereto.
Pursuant to the Pledge and Security Agreement, dated as of August 26, 2008 relating to the
Credit Agreement (as the same may be amended, restated, supplemented or otherwise modified from
time to time, the “Security Agreement”; capitalized terms defined in the Security Agreement used
(but not otherwise defined) herein shall have the meanings ascribed to them in the Security
Agreement), the Company has granted separately to the Collateral Agent, for the benefit of the
Secured Parties, a security interest in certain property of the Company, including, among other
things, accounts, inventory, equipment, instruments, general intangibles and all proceeds thereof
(the “Collateral”). Payments with respect to the Collateral are or hereafter may be made to the
Account.
By your execution of this letter agreement, you (i) agree that you shall comply with
instructions originated by the Collateral Agent directing disposition of the funds and other
property on deposit in the Account without further consent of the Company, (ii) acknowledge that
the Collateral Agent now has exclusive control of the Account, and (iii) acknowledge that all funds
in the Account shall be transferred to the Collateral Agent as provided herein (except as otherwise
provided in clause [(B)][(D)] below), that the Account is being maintained by you for the benefit
of the Collateral Agent and that all amounts and other property therein are held by you as
custodian for the Collateral Agent.
Except as provided in [clause (C)][clauses (C)(iii) and (E)] below, the Account shall not be
subject to deduction, set-off, banker’s lien, counterclaim, defense, recoupment or any other right
in favor of any person or entity other than the Collateral Agent. By your execution of this letter
agreement, you also acknowledge that, as of the date hereof, you have received no notice of any
other pledge or assignment of the Account and have not executed any agreements with third parties
covering the disposition of funds in the Account. You agree with the Collateral Agent as follows:
A. Notwithstanding anything to the contrary or any other agreement relating to the
Account, the Account is and shall be maintained for the benefit of the Collateral Agent,
shall be entitled “Bank of America, N.A. [name of Company] Account” and shall be subject to
written instructions only from an authorized officer of the Collateral Agent.
B. [A post office box (the “Lockbox”) has been rented in the name of the Company at
the [_____] post office and the address to be used for such Lockbox is:
[Insert address]
C. Your authorized representatives shall have access to the Lockbox under the
authority given by the Company to the post office and shall make regular pick-ups from the
Lockbox timed to gain maximum benefit of early presentation and availability of funds. You
shall endorse and process all checks received in the Lockbox and deposit such checks (to
the extent eligible) in the Account in accordance with the procedures set forth below .
(i) You shall follow your usual operating procedures for the handling of any
checks received from the Lockbox or other remittance received in the Account that
contains restrictive endorsements, irregularities (such as a variance between the
written and numerical amounts), undated or postdated items, missing signatures,
incorrect payees and the like.
(ii) You shall endorse and process all eligible checks and other remittance
items not covered by clause (iii) below and deposit such checks and remittance
items in the Account.
(iii) You shall mail all checks returned unpaid because of uncollected or
insufficient funds under appropriate advice to the Company (with a copy of the
notification of return to the Collateral Agent). You may charge the Account for
the amounts of any returned check that has been previously credited to the Account.
To the extent insufficient funds remain in the Account to cover any such returned
check, the Company shall indemnify you for the uncollected amount of such returned
check upon your demand.
2
(iv) You shall maintain a record of all checks and other remittance items
received in the Account and, in addition to providing the Company with photostatic
copies thereof, vouchers, enclosures and the like of such checks and remittance
items on a daily basis, furnish to the Collateral Agent a monthly statement of the
Account to Bank of America, N.A., as Collateral Agent, at the following address:
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Business Capital — Account
Executive, with a copy to the Company.]
D. Unless and until the Collateral Agent notifies you to the contrary pursuant to a
notice substantially in the form of Exhibit 1 hereto (a “Sweep Activation Notice”), you
shall make such transfers from the Account at such times and in such manner as the Company
shall from time to time instruct. From and after your receipt of a Sweep Activation
Notice, (i) you shall no longer make any transfers from the Account based upon instructions
of the Company and (ii) you shall transfer (by wire transfer or other method of transfer
mutually acceptable to you and the Collateral Agent) to the Collateral Agent, in same day
funds, on each business day, the entire balance in the Account to the following account:
Bank of America, N.A.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
ABA Number: 0000-0000-0
Account Name: Bank of America Business Capital
Account Number: [_____]
Reference: Bank of America Business Capital and Warnaco
Attn: Xxxxx Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
ABA Number: 0000-0000-0
Account Name: Bank of America Business Capital
Account Number: [_____]
Reference: Bank of America Business Capital and Warnaco
Attn: Xxxxx Xxxxx
or to such other account as the Collateral Agent may from time to time designate in
writing (the “Collateral Agent Concentration Account”).
E. All customary service charges and fees with respect to the Account shall be debited
to the Account. In the event insufficient funds remain in the Account to cover such
customary service charges and fees, the Company shall pay and indemnify you for the amounts
of such customary service charges and fees.
This letter agreement shall be binding upon and shall inure to the benefit of you, the
Company, the Collateral Agent, the Secured Parties, and the respective successors, transferees and
assigns of any of the foregoing until the payment in full of the Secured Obligations and Canadian
Secured Obligations and termination of the Commitments and Commitments (as defined in the Canadian
Facility). You may terminate the letter agreement only upon 30 days’ prior written notice to the
Company and the Collateral Agent. The Collateral Agent may terminate this letter agreement upon 10
days’ prior written notice to you and the Company. Upon such termination, you shall close the
Account and transfer all funds in the Account to the Collateral Agent
Concentration Account or as otherwise directed by the Collateral Agent. After any such
termination, you shall nonetheless remain obligated promptly to transfer to the Collateral Agent
Concentration Account or as the Collateral Agent may otherwise direct all funds and other property
received in respect of the Account.
3
Any notice, demand or other communication required or permitted to be given hereunder shall be
in writing and may be (a) personally served, (b) sent by courier service, (c) telecopied or (d)
sent by United States mail and shall be deemed to have been given when received. For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each party’s name below,
or, as to each party, at such other address as may be designated by such party in a written notice
to each other party.
This letter agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this letter agreement by telecopier or electronic
transmission (in pdf format) shall be effective as delivery of a manually executed counterpart of
this letter agreement.
This letter agreement supersedes all prior agreements, oral or written, with respect to the
subject matter hereof and may not be amended, modified or supplemented except by a writing signed
by the Collateral Agent, the Company and you.
The Company hereby agrees to indemnify and hold you, your directors, officers, agents and
employees harmless against all claims, causes of action, liabilities, lawsuits, demands and
damages, including, without limitation, all court costs and reasonable attorney fees, in each case
in any way related to or arising out of or in connection with this letter agreement or any action
taken or not taken pursuant hereto, except to the extent caused by your gross negligence or willful
misconduct.
This letter agreement shall be governed by, and construed in accordance with, the internal law
of the State of New York. Regardless of any provision in any other agreement, for purposes of the
Uniform Commercial Code as in effect in the State of New York, New York shall be deemed to be your
jurisdiction (within the meaning of Section 9-304 of the UCC).
[Signature Page Follows]
4
Upon acceptance of this letter agreement, it shall be the valid and binding obligation of the
Company, the Collateral Agent and you in accordance with its terms.
Very truly yours, | ||||||||
[NAME OF GRANTOR] | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
Address: | ||||||||
Attention: | ||||||||
Telecopy #: | ||||||||
Bank of America, N.A., as Collateral Agent |
||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
000 Xxxxxxx Xxxxxx | ||||||||
Xxx Xxxx, Xxx Xxxx 00000 | ||||||||
Attention: | Business Capital - Account Executive |
|||||||
Telecopy #: | (000) 000-0000 |
5
Acknowledged and Agreed as of the date first above written: |
||||||
[Deposit Account Bank] | ||||||
By: |
||||||
Name: | ||||||
Title: | ||||||
Address: | ||||||
Attention: | ||||||
Telecopy #: | ||||||
6
EXHIBIT 1
TO BLOCKED ACCOUNT LETTER
TO BLOCKED ACCOUNT LETTER
[FORM OF SWEEP ACTIVATION NOTICE]
VIA FACSIMILE TRANSMISSION
TO:
|
[Name of Deposit Account Bank] | |
DATED:
|
[Date] | |
ATTENTION:
|
Re: Account No.
Ladies and Gentlemen:
Pursuant to the blocked account letter agreement among [Name of Company], us and you, dated
August 26, 2008 (the “Agreement”), we hereby notify and instruct you, effective as of the date of
your receipt of this notice, (i) not to accept any direction or instruction with respect to the
Account or any funds in the Account from any person other than the undersigned and (ii) to transfer
at the close of each business day all funds deposited and collected in the Account to [the
Collateral Agent Concentration Account (as defined in the Agreement) identified in the Agreement or
otherwise previously designated by us] [account number
_____
at ].
BANK OF AMERICA, N.A., as Collateral Agent |
||||
By: | ||||
Title: | ||||
ACKNOWLEDGED AND AGREED:
[Name of Deposit Account Bank]
By: |
||||||
Title: | ||||||
Date: |
Annex 1-B to
Pledge and Security Agreement
Pledge and Security Agreement
Form of Restricted Account Letter
__, ____
[Deposit Account Bank]
[Address]
[Address]
Ladies and Gentlemen:
Reference is made to account no. [ ] maintained with you (the “Bank”) by [ ]
(the “Company”) into which funds are deposited from time to time (the “Account”).
[The Company][Warnaco Inc.] has entered into a Credit Agreement, dated as of August 26, 2008
(as the same may be amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among [the Company][Warnaco Inc.], The Warnaco Group, Inc., the Lenders and
Issuers party thereto, Bank of America, N.A., as Collateral Agent for the Lenders and Issuers (in
such capacity, together with any successor in such capacity, the “Collateral Agent”) and
Administrative Agent, and the other parties thereto.
Pursuant to the Pledge and Security Agreement, dated as of August 26, 2008 relating to the
Credit Agreement (as the same may be amended, restated, supplemented or otherwise modified from
time to time, the “Security Agreement”; capitalized terms defined in the Security Agreement used
(but not otherwise defined) herein shall have the meanings ascribed to them in the Security
Agreement), the Company has granted separately to the Collateral Agent, for the benefit of the
Secured Parties, a security interest in certain property of the Company, including, among other
things, accounts, inventory, equipment, instruments, general intangibles and all proceeds thereof
(the “Collateral”). Payments with respect to the Collateral are or hereafter may be made to the
Account.
You are advised that the Company hereby transfers to the Collateral Agent, for the Secured
Parties, exclusive control of the Account and all funds and other property on deposit therein.
From the date hereof until you receive written notice from the Collateral Agent withdrawing these
instructions, all funds in the Account shall be transferred as provided herein or otherwise as
directed by the Collateral Agent and you will comply with any other instructions originated by the
Collateral Agent directing disposition of the funds and other property on deposit in the Account
without further consent of the Company. The Account is hereafter being maintained by you for the
benefit of the Collateral Agent and all amounts and other property therein are held by you as
custodian for the Collateral Agent. Notwithstanding anything to the contrary or any other
agreement relating to the Account, the Account shall be subject to written instructions only from
an authorized officer of the Collateral Agent.
Except as provided in clauses (B)(iii) and (D) below, the Account shall not be subject to
deduction, set-off, banker’s lien, counterclaim, defense, recoupment or any other right in favor of
any person or entity other than the Collateral Agent.
You are hereby advised as follows:
A. A post office box (the “Lockbox”)1 has been rented in the name of the
Company at the [ ] post office and the address to be used for such Lockbox is:
[Insert address]
B. Your authorized representatives shall have access to the Lockbox under the
authority given by the Company to the post office and shall make regular pick-ups from the
Lockbox timed to gain maximum benefit of early presentation and availability of funds. You
shall endorse and process all checks received in the Lockbox and deposit such checks (to
the extent eligible) in the Account in accordance with the procedures set forth below:
(i) You shall follow your usual operating procedures for the handling of any
[checks received from the Lockbox or other] remittance received in the Account that
contains restrictive endorsements, irregularities (such as a variance between the
written and numerical amounts), undated or postdated items, missing signatures,
incorrect payees and the like.
(ii) You shall endorse and process all eligible checks and other remittance
items not covered by clause (iii) below and deposit such checks and remittance
items in the Account.
(iii) You shall mail all checks returned unpaid because of uncollected or
insufficient funds under appropriate advice to the Company (with a copy of the
notification of return to the Collateral Agent). You may charge the Account for
the amounts of any returned check that has been previously credited to the Account.
To the extent insufficient funds remain in the Account to cover any such returned
check, the Company shall indemnify you for the uncollected amount of such returned
check upon your demand.
(iv) You shall maintain a record of all checks and other remittance items
received in the Account and, in addition to providing the Company with photostatic
copies thereof, vouchers, enclosures and the like of such checks and remittance
items on a daily basis, furnish to the Collateral Agent a monthly statement of the
Account to Bank of America, N.A., as Collateral Agent, at the following address:
000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: [_____], with a copy to the
Company.
1 | Modify if no Lockbox for the Account. |
2
C. You shall transfer (by wire transfer or other method of transfer mutually
acceptable to you and the Company) to the Company, in same day funds, on each Tuesday and
each Thursday that is a business day (or otherwise as directed by the Collateral Agent),
the entire balance in the Account to the following account:
ABA Number:
[Bank and Address]
[Bank and Address]
Account Name:
Concentration Account
Account Number:
Reference:
Attn:
Reference:
Attn:
or to such other account as the Collateral Agent may from time to time designate in writing
(the “Concentration Account”).
D. All customary service charges and fees with respect to the Account shall be debited
to the Account. In the event insufficient funds remain in the Account to cover such
customary service charges and fees, the Company shall pay and indemnify you for the amounts
of such customary service charges and fees.
This letter agreement shall inure to the benefit of you, the Company, the Collateral Agent,
the Secured Parties and the respective successors, transferees and assigns of any of the foregoing
until the payment in full of the Secured Obligations and Canadian Secured Obligations and
termination of the Commitments and Commitments (as defined in the Canadian Facility).
The Collateral Agent may terminate this letter agreement upon 10 days’ prior written notice to
you and the Company. Upon such termination, you shall close the Account and transfer all funds in
the Account to the Concentration Account or as otherwise directed by the Collateral Agent. After
any such termination, you shall nonetheless promptly transfer to the Concentration Account or as
the Collateral Agent may otherwise direct all funds and other property received in respect of the
Account.
This letter agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this letter agreement by telecopier or electronic
transmission (in pdf format) shall be effective as delivery of a manually executed counterpart of
this letter agreement.
3
This letter agreement supersedes all prior instructions or agreements, oral or written, with
respect to the subject matter hereof and may not be amended, modified or supplemented except by a
writing signed by the Collateral Agent, the Company and you.
This letter agreement shall be governed by, and construed in accordance with, the internal law
of the State of New York.
[Signature Page Follows]
4
Upon execution of this letter agreement by the undersigned, it shall be the valid and binding
obligation of the Company and the Collateral Agent in accordance with its terms.
Very truly yours, [Name of Grantor] |
||||
By: | ||||
Name: | ||||
Title: | ||||
Bank of America, N.A., as Collateral Agent |
||||
By: | ||||
Name: | ||||
Title: | ||||
5
Annex 2 to
Pledge and Security Agreement
Pledge and Security Agreement
Form of Control Account Agreement
[Name and Address
of Approved Securities
Intermediary]
of Approved Securities
Intermediary]
__, 20__
Ladies and Gentlemen:
The undersigned (the “Pledgor”) together with certain of its affiliates
are party to a Pledge and Security Agreement dated as of August 26, 2008 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Pledge and Security
Agreement”) in favor of Bank of America, N.A., as collateral agent for the Secured Parties referred
to therein (together with its successors and assigns in such capacity, the “Collateral Agent” and
in its capacity as pledgee hereunder, the “Pledgee”) pursuant to which security interests are
granted by the Pledgor in all present and future Assets (hereinafter defined) in Account No.
(the “Account”) of the Pledgor (the “Pledge”).
In connection therewith, the Pledgor hereby instructs you (the “Approved Securities
Intermediary”) to do all of the following:
1. | maintain the Account as “_____
- Bank of America Control
Account”; |
2. | hold in the Account the assets, including, without
limitation, all financial assets, securities, security entitlements and all
other property and rights now or hereafter received in such Account
(collectively the “Assets”), including, without limitation, those assets
listed on Schedule A (List of Assets) attached hereto and made a part hereof; |
3. | provide to the Pledgee, with a duplicate copy to the Pledgor,
a monthly statement of Assets and a confirmation statement of each transaction
effected in the Account after such transaction is effected; and |
4. | honor only the instructions or entitlement orders in regard
to or in connection with the Account given by an Authorized Officer of the
Pledgee without further consent by the Pledgor, except that until such time as
the Pledgee gives a written notice to the Approved Securities Intermediary
that the Pledgor’s rights under this sentence have been terminated (on which
notice the Approved Securities Intermediary may rely exclusively), the Pledgor
acting
through an Authorized Officer of the Pledgor may (a) exercise any voting
right that it may have with respect to any Asset, (b) give instructions to
enter into purchase or sale transactions in the Account and (c) withdraw
and receive for its own use all regularly scheduled interest [and
dividends] paid with respect to the Assets [and all cash proceeds of any
sale of Assets] (“Permitted Withdrawals”); provided, however, that, unless
the Pledgee has consented to the specific transaction, the Pledgor shall
not instruct the Approved Securities Intermediary to deliver and, except
as may be required by law or by court order, the Approved Securities
Intermediary shall not deliver, cash, securities, other Assets or proceeds
from the sale of, or distributions on, any Assets out of the Account to
the Pledgor or to any other person or entity other than Permitted
Withdrawals. |
By its signature below, the Approved Securities Intermediary agrees to comply with the
entitlement orders and instructions of an Authorized Officer of the Pledgee (including, without
limitation, any instruction with respect to sales, trades, transfers and withdrawals of cash or
other of the Assets) without the consent of the Pledgor or any other person (it being understood
and agreed by the Pledgor that the Approved Securities Intermediary shall have no duty or
obligation whatsoever of any kind or character to have knowledge of the terms of the Pledge and
Security Agreement or to determine whether or not an event of default exists thereunder). The
Pledgor hereby agrees to indemnify and hold harmless the Approved Securities Intermediary, its
affiliates, officers and employees from and against all claims, causes of action, liabilities,
lawsuits, demands and damages, including, without limitation, all court costs and reasonable
attorney’s fees, that may result by reason of the Approved Securities Intermediary complying with
such instructions of the Pledgee.
The Authorized Officer of the Pledgee who shall give oral instructions hereunder shall confirm
the same in writing to the Approved Securities Intermediary within five days after such oral
instructions are given.
For the purpose of this Agreement, the term “Authorized Officer of the Pledgor” shall refer in
the singular to or
(each of whom is, on the date hereof, an
officer or director of the Pledgor) and “Authorized Officer of the Pledgee” shall refer in the
singular to any person who is a vice president or managing director of the Pledgee. In the event
that the Pledgor shall find it advisable to designate a replacement for any of its Authorized
Officers, written notice of any such replacement shall be given to the Approved Securities
Intermediary and the Pledgee.
Except with respect to the obligations and duties as set forth herein, this Agreement shall
not impose or create any obligation or duty upon the Approved Securities Intermediary greater than
or in addition to the customary and usual obligations and duties of the Approved Securities
Intermediary to the Pledgor.
2
As long as the Assets are pledged to the Pledgee, (i) the Approved Securities Intermediary
shall not invade the Assets to cover margin debits or calls in any other account of the Pledgor and
(ii) the Approved Securities Intermediary agrees that, except for liens resulting from customary
commissions, fees, or charges based upon transactions in the Account, it subordinates in favor of
the Pledgee any security interest, lien or right of setoff the Approved Securities Intermediary may
have. The Approved Securities Intermediary acknowledges that it has not received notice of any
other security interest in the Account or any of the Assets. In the event any such notice is
received, the Approved Securities Intermediary shall promptly notify the Pledgee. The Pledgor
herein represents that the Assets are free and clear of any lien or encumbrance and agrees that,
with the exception of the security interest granted to the Approved Securities Intermediary (as
described in Clause (ii) above) and Pledgee, no lien or encumbrance shall be placed by it on the
Assets without the express written consent of the Pledgee and the Approved Securities Intermediary.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and it and the rights and obligations of the parties hereto shall
be governed by, and construed and interpreted in accordance with, and the law of the Approved
Securities Intermediary’s jurisdiction for the purposes of Section 8-110 of the Uniform Commercial
Code in effect in the State of New York (the “UCC”) shall be, the law of the State of New York.
The Approved Securities Intermediary shall treat all property at any time held by the Approved
Securities Intermediary in the Account as financial assets within the meaning of the UCC. The
Approved Securities Intermediary acknowledges that this Agreement constitutes written notification
to the Approved Securities Intermediary, pursuant to the UCC and any applicable federal regulations
for the Federal Reserve Book Entry System, of the Pledgee’s security interest in the Assets. The
Pledgor, Pledgee and Approved Securities Intermediary are entering into this Agreement to provide
for the Pledgee’s control of the Assets and to confirm the first priority of the Pledgee’s security
interest in the Assets. The Approved Securities Intermediary agrees to promptly make and
thereafter maintain all necessary entries or notations in its books and records to reflect the
Pledgee’s security interest in the Assets.
If any term or provision of this Agreement is determined to be invalid or unenforceable, the
remainder of this Agreement shall be construed in all respects as if the invalid or unenforceable
term or provision were omitted. This Agreement may not be altered or amended in any manner without
the express written consent of the Pledgor, the Pledgee and the Approved Securities Intermediary.
This Agreement may be executed in any number of counterparts, all of which shall constitute one
original agreement.
The Pledgor hereby agrees to indemnify and hold you, your directors, officers, agents and
employees harmless against all claims, causes of action, liabilities, lawsuits, demands and
damages, including, without limitation, all court costs and reasonable attorney fees, in each case
in any way related to or arising out of or in connection with this letter agreement or any action
taken or not taken pursuant hereto, except to the extent caused by your gross negligence or willful
misconduct.
3
This Agreement may be terminated by the Approved Securities Intermediary upon 30 days prior
written notice to the Pledgor and the Pledgee. Upon expiration of such 30-day period, the Approved
Securities Intermediary shall be under no further obligation except to hold the Assets in
accordance with the terms of this Agreement, pending receipt of written instructions from the
Pledgor and the Pledgee, jointly, regarding the further disposition of the pledged Assets.
The Pledgor acknowledges that this Agreement supplements any existing agreement of the Pledgor
with the Approved Securities Intermediary and, except as expressly provided herein, is in no way
intended to abridge any right that the Approved Securities Intermediary might otherwise have.
4
In witness whereof, the Pledgor and the Pledgee have caused this Agreement to be
executed by their duly authorized officers all as of the date first above written.
[Name of Pledgor] |
||||
By: | ||||
Name: | ||||
Title: | ||||
Bank of America, N.A., as Collateral Agent |
||||
By: | ||||
Name: | ||||
Title: | ||||
Accepted and Agreed as of the date first above written: |
||||
[Approved Financial Intermediary] | ||||
By: |
||||
Title: |
5
Schedule A
to
Control Agreement
List of Assets for Pledged Collateral Account Number:
6
Annex 3
to
Pledge and Security Agreement
to
Pledge and Security Agreement
This Pledge Amendment, dated as of
_____ __, 20_____, is delivered pursuant to
Section 4.4(a) (Pledged Collateral) of the Pledge and Security Agreement, dated as of August 26,
2008, by Warnaco Inc. (the “Borrower”), The Warnaco Group, Inc. and the [undersigned Grantor and
the other] Subsidiaries of The Warnaco Group, Inc. from time to time party thereto as Grantors in
favor of Bank of America, N.A., as collateral agent for the Secured Parties, each as referred to
therein (as the same may be amended, restated, supplemented or otherwise modified from time to
time, the “Pledge and Security Agreement”) and the undersigned hereby agrees that this Pledge
Amendment may be attached to the Pledge and Security Agreement and that the Pledged Collateral
listed on this Pledge Amendment shall be and become part of the Collateral referred to in the
Pledge and Security Agreement and shall secure all Secured Obligations of the undersigned.
Capitalized terms used herein but not defined herein are used herein with the meaning given them in
the Pledge and Security Agreement.
[Grantor] |
||||
By: | ||||
Name: | ||||
Title: |
Pledged Stock
Number of | ||||||||
Shares, | ||||||||
Certificate | Units or | |||||||
Issuer | Class | No(s). | Par Value | Interests | ||||
Pledged Debt Instruments
Description | Certificate | Final | Principal | |||||
Issuer | of Debt | No(s). | Maturity | Amount | ||||
Acknowledged and Agreed as of the date first above written: |
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Bank of America, N.A., as Collateral Agent |
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By: |
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Title: |
2
Annex 4
to
to
Pledge and Security Agreement
This Joinder Agreement, dated as of
_____ __, 20_____, is delivered pursuant to
Section 7.11 (Additional Grantors) of the Pledge and Security Agreement, dated as of August 26,
2008, by Warnaco Inc. (the “Borrower”), The Warnaco Group, Inc. and the other Subsidiaries of The
Warnaco Group, Inc. party thereto from time to time in favor of Bank of America, N.A., as
collateral agent for the Secured Parties (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Pledge and Security Agreement”). Capitalized terms used
herein but not defined herein are used with the meanings given them in the Pledge and Security
Agreement.
By executing and delivering this Joinder Agreement, the undersigned, as provided in
Section 7.11 (Additional Grantors) of the Pledge and Security Agreement, hereby becomes a party to
the Pledge and Security Agreement as a Grantor thereunder with the same force and effect as if
originally named as a Grantor therein and, without limiting the generality of the foregoing, as
collateral security for the full, prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned, the
undersigned hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of
the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a
lien on and security interest in, all of its right, title and interest in, to and under the
Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor
thereunder.
The information set forth in Annex 1-A is hereby added to the information set forth in
Schedules 1 through 6 to the Pledge and Security Agreement. The undersigned hereby agrees that
this Joinder Agreement may be attached to the Pledge and Security Agreement and that the Pledged
Collateral listed on Annex 1-A to this Joinder Agreement shall be and become part of the Collateral
referred to in the Pledge and Security Agreement and shall secure all Secured Obligations of the
undersigned.
The undersigned hereby represents and warrants that each of the representations and warranties
contained in ARTICLE III (Representations and Warranties) of the Pledge and Security Agreement
applicable to it is true and correct on and as the date hereof as if made on and as of such date.
This Joinder Agreement shall be governed by, and construed and interpreted in accordance with,
the internal law of the State of New York.
The undersigned agrees that:
(a) Any legal action or proceeding with respect to this Joinder Agreement may be
brought in the courts of the State of New York or of the United
States of America for the Southern District of New York, and, by execution and delivery
of this Joinder Agreement, the undersigned hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid courts. The
undersigned irrevocably waives any objection, including any objection to the laying of venue
or based on the grounds of forum non conveniens, that it may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.
(b) The undersigned hereby irrevocably consents to the service of any and all legal
process, summons, notices and documents in any suit, action or proceeding brought in the
United States of America arising out of or in connection with this Joinder Agreement by the
mailing (by registered or certified mail, postage prepaid) or delivering of a copy of such
process to the undersigned at the address specified in Section 7.2 (Notices, Etc.) of the
Pledge and Security Agreement. The undersigned agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law.
(c) Nothing contained herein shall affect the right of any Agent or any other Secured
Party to serve process in any other manner permitted by law or commence legal proceedings or
otherwise proceed against the undersigned in any other jurisdiction.
[Signature page follows]
2
In witness whereof, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.
[Additional Grantor] |
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By: | ||||
Name: | ||||
Title: | ||||
Acknowledged and Agreed
as of the date first above written:
as of the date first above written:
Bank of America, N.A.,
as Collateral Agent
as Collateral Agent
By: | ||||
Name: | ||||
Title: | ||||
3
Annex 5
To
Pledge and Security Agreement
To
Pledge and Security Agreement
Copyright Security Agreement, dated as of August
_____, 2008, by each of the entities
listed on the signature pages hereof (each a “Grantor” and, collectively, the “Grantors”) in favor
of Bank of America, N.A. (“BofA”), as collateral agent for the Secured Parties (in such capacity,
together with its successors and assigns in such capacity, the “Collateral Agent”).
W i t n e s s e t h:
Whereas, pursuant to a Credit Agreement, dated as of August 26, 2008 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Warnaco Inc. (the “Borrower”), The Warnaco Group, Inc. (“Group”), the Lenders
and Issuers party thereto, BofA, as administrative agent and collateral agent for the Lenders and
Issuers, and certain other parties thereto, the Lenders and the Issuers have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the conditions set forth
therein;
Whereas, the Grantors other than the Borrower are party to a Guaranty pursuant to
which they have guaranteed the Obligations of the Borrower under the Credit Agreement; and
Whereas, all the Grantors are party to a Pledge and Security Agreement, dated as of
August 26, 2008. in favor of the Collateral Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Security Agreement”) pursuant
to which the Grantors are required to execute and deliver this Copyright Security Agreement;
Now, therefore, in consideration of the premises and to induce the Lenders, the
Issuers, the Administrative Agent and the Collateral Agent to enter into the Credit Agreement and
to induce the Lenders and the Issuers to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
Section 1. Defined Terms
Unless otherwise defined herein, terms defined in the Security Agreement and used herein have
the meaning given to them in the Security Agreement.
Section 2. Grant of Security Interest in Copyright Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of
such Grantor, hereby conveys, mortgages,
pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and
grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security
interest in, all of its right, title and interest in, to and under the following Collateral of such
Grantor (the “Copyright Collateral”):
(a) all of its Copyrights and Copyright Licenses pursuant to which it has been
granted any exclusive rights to Copyrights, including, without limitation, those
referred to on Schedule I hereto;
(b) all renewals, reversions and extensions of the foregoing; and
(c) all Proceeds of any or all of the foregoing, including, without limitation, all
rights to income, royalties, proceeds and damages now or hereafter due and/or
payable under any Copyright and with respect thereto, including, without
limitation, all rights to xxx and recover at law or in equity for any past, present
and future infringement, misappropriation, dilution, violation or other impairment
thereof.
Section 3. Security Agreement
The security interest granted pursuant to this Copyright Security Agreement is granted in
conjunction with the security interest granted to the Collateral Agent pursuant to the Security
Agreement and each Grantor hereby acknowledges and affirms that the rights and remedies of the
Collateral Agent with respect to the security interest in the Copyright Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
[Signature Pages Follow]
2
In witness whereof, each Grantor has caused this Copyright Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set forth above.
Very truly yours, [Grantor], as Grantor |
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By: | ||||
Name: | ||||
Title: | ||||
Accepted and Agreed
as of the date first above written:
as of the date first above written:
Bank of America, N.A.,
as Collateral Agent for the Secured Parties
as Collateral Agent for the Secured Parties
By: | ||||
Name: | ||||
Title: | ||||
[Signature page to Copyright Security Agreement]
Acknowledgment of Grantor
State of |
) | |||||
) | ss. | |||||
County of |
) |
On this
_____
day of
_____ __, 20_____
before me personally appeared
, proved to me on the basis of satisfactory evidence to be the person
who executed the foregoing instrument on behalf of , who being by me duly sworn did
depose and say that he is an authorized officer of said corporation, that the said instrument was
signed on behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
Notary Public
[Acknowledgement of Grantor for Copyright Security Agreement]
Schedule I
to
Copyright Security Agreement
Copyright Registrations
A. | REGISTERED COPYRIGHTS |
|
[Include Copyright Title, Country, Author, Claimant, Registration Number and Date] |
||
B. | COPYRIGHT APPLICATIONS |
|
[Include Copyright Title, Country, Claimant and Date Filed] |
||
C. | EXCLUSIVE COPYRIGHT LICENSES |
5
Annex 6
to
to
Pledge and Security Agreement
Patent Security Agreement, dated as of August
_____, 2008, by each of the entities
listed on the signature pages hereof (each a “Grantor” and, collectively, the “Grantors”) in favor
of Bank of America, N.A. (“BofA”), as collateral agent for the Secured Parties (as defined in the
Credit Agreement referred to below) (in such capacity, together with its successors and assigns in
such capacity, the “Collateral Agent”).
W i t n e s s e t h:
Whereas, pursuant to a Credit Agreement, dated as of August 26, 2008 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Warnaco Inc. (the “Borrower”), The Warnaco Group, Inc. (“Group”), the Lenders
and Issuers party thereto, BofA, as administrative agent and collateral agent for the Lenders and
Issuers, and certain other parties thereto, the Lenders and the Issuers have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the conditions set forth
therein;
Whereas, the Grantors other than the Borrower are party to a Guaranty pursuant to
which they have guaranteed the Obligations of the Borrower under the Credit Agreement; and
Whereas, all the Grantors are party to a Pledge and Security Agreement, dated as of
August 26, 2008, in favor of the Collateral Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Security Agreement”) pursuant
to which the Grantors are required to execute and deliver this Patent Security Agreement;
Now, therefore, in consideration of the premises and to induce the Lenders, the
Issuers, the Administrative Agent and the Collateral Agent to enter into the Credit Agreement and
to induce the Lenders and the Issuers to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
Section 1. Defined Terms
Unless otherwise defined herein, terms defined in the Credit Agreement or in the Security
Agreement and used herein have the meaning given to them in the Credit Agreement or the Security
Agreement.
Section 2. Grant of Security Interest in Patent Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of
such Grantor, hereby conveys, mortgages, pledges and hypothecates to the Collateral Agent for the
benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured
Parties a lien on and security interest in, all of its right, title and interest in, to and under
the following Collateral of such Grantor (the “Patent Collateral”):
(a) all of its Patents, including, without limitation, those referred to on
Schedule I hereto;
(b) all reissues, continuations, divisions, continuations, renewals and extensions
of the foregoing; and
(c) all Proceeds of any or all of the foregoing, including, without limitation, all
rights to income, royalties, proceeds and damages now or hereafter due and/or
payable under any Patent and with respect thereto, including, without limitation,
all rights to xxx and recover at law or in equity for any past, present and future
infringement, misappropriation, dilution, violation or other impairment thereof.
Section 3. Security Agreement
The security interest granted pursuant to this Patent Security Agreement is granted in
conjunction with the security interest granted to the Collateral Agent pursuant to the Security
Agreement and each Grantor hereby acknowledges and affirms that the rights and remedies of the
Collateral Agent with respect to the security interest in the Patent Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
[Signature Pages Follow]
2
In witness whereof, each Grantor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set forth above.
Very truly yours, [Grantor], as Grantor |
||||
By: | ||||
Name: | ||||
Title: | ||||
Accepted and Agreed
as of the date first above written:
as of the date first above written:
Bank of America, N.A.,
as Collateral Agent for the Secured Parties
as Collateral Agent for the Secured Parties
By: | |||
Name: | |||
Title: |
[Signature Page to patent Security Agreement]
Acknowledgement of Grantor
State of |
) | |||||
) | ss. | |||||
County of |
) |
On this
_____
day of
_____ __, 20_____
before me personally appeared , proved
to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument
on behalf of , who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged said instrument to be
the free act and deed of said corporation.
Notary Public
Acknowledgement of Grantor for Patent Security Agreement
Schedule I
to
Patent Security Agreement
Patent Registrations
A. | PATENTS |
|
[Include Patent Title, Patent Number, Country, Owner and Issue Date] |
||
B. | PATENT APPLICATIONS |
|
[Include Patent Title, Serial Number, Country, Owner and Filing Date] |
5
Annex 7
to
Pledge and Security Agreement
to
Pledge and Security Agreement
Trademark Security Agreement, dated as of August
_____, 2008, by each of the entities
listed on the signature pages hereof (each a “Grantor” and, collectively, the “Grantors”) in favor
of Bank of America, N.A. (“BofA”), as collateral agent for the Secured Parties (as defined in the
Credit Agreement referred to below) (in such capacity, together with its successors and assigns in
such capacity, the “Collateral Agent”).
W i t n e s s e t h:
Whereas, pursuant to a Credit Agreement, dated as of August 26, 2008 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Warnaco Inc. (the “Borrower”), The Warnaco Group, Inc. (“Group”), the Lenders
and Issuers party thereto, BofA, as administrative agent and collateral agent for the Lenders and
Issuers, and certain other parties thereto, the Lenders and the Issuers have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the conditions set forth
therein;
Whereas, the Grantors other than the Borrower are party to a Guaranty pursuant to
which they have guaranteed the Obligations of the Borrower under the Credit Agreement; and
Whereas, all the Grantors are party to a Pledge and Security Agreement, dated as of
August 26, 2008, in favor of the Collateral Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Security Agreement”) pursuant
to which the Grantors are required to execute and deliver this Trademark Security Agreement;
Now, therefore, in consideration of the premises and to induce the Lenders, the
Issuers, the Administrative Agent and the Collateral Agent to enter into the Credit Agreement and
to induce the Lenders and the Issuers to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
Section 1. Defined Terms
Unless otherwise defined herein, terms defined in the Credit Agreement or in the Security
Agreement and used herein have the meaning given to them in the Credit Agreement or the Security
Agreement.
Section 2. Grant of Security Interest in Trademark Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of
such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of
the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a
lien on and security interest in, all of its right, title and interest in, to and under the
following Collateral of such Grantor (the “Trademark Collateral”):
1. all of its Trademarks, including, without limitation, those referred to on Schedule I
hereto;
2. all renewals and extensions of the foregoing;
3. all goodwill of the business connected with the use of, and symbolized by, each such
Trademark; and
4. all Proceeds of any or all of the foregoing, including, without limitation, all rights to
income, royalties, proceeds and damages now or hereafter due and/or payable under any Trademark and
with respect thereto, including, without limitation, all rights to xxx and recover at law or in
equity for any past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.
Section 3. Security Agreement
The security interest granted pursuant to this Trademark Security Agreement is granted in
conjunction with the security interest granted to the Collateral Agent pursuant to the Security
Agreement and each Grantor hereby acknowledges and affirms that the rights and remedies of the
Collateral Agent with respect to the security interest in the Trademark Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
[Signature Pages Follow]
2
In witness whereof, each Grantor has caused this Trademark Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set forth above.
Very truly yours, [Grantor] as Grantor |
||||
By: | ||||
Name: | ||||
Title: | ||||
Accepted and Agreed
as of the date first above written:
as of the date first above written:
Bank of America, N.A.,
as Collateral Agent for the Secured Parties
as Collateral Agent for the Secured Parties
By: | |||
Name: | |||
Title: | V |
Signature Page to Trademark Security Agreement
Acknowledgement of Grantor
State of |
) | |||||
) | ss. | |||||
County of |
) |
On this
_____
day of
_____, 20_____
before me personally appeared , proved
to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument
on behalf of , who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged said instrument to be
the free act and deed of said corporation.
Notary Public
Acknowledgement of Grantor for Trademark Agreement
Schedule I
to
Trademark Security Agreement
Trademark Registrations
Trademark Registrations
A. | REGISTERED TRADEMARKS |
|
[Include Trademark, Country, Owner, Registration Number and Date of Registration] |
||
B. | TRADEMARK APPLICATIONS |
|
[Include Trademark, Country, Owner, Application Number and Date of Filing] |