Exhibit 10.1

 

AMENDED AND RESTATED LEASE AGREEMENT

 

1. THIS AMENDED AND RESTATED LEASE AGREEMENT (this “Lease”) made and entered
into as of November 30, 2005, between SCP Green Hagerstown, LLC, a Delaware
limited liability company (hereinafter “Landlord”), and West Marine Products,
Inc., a California corporation (hereinafter “Tenant”).

 

2. WITNESSETH: The parties hereto agree that this Lease sets forth all
agreements, covenants and conditions express or implied between the parties, and
supersedes any prior oral or written agreements between the parties with respect
to the premises hereinafter described. The following exhibits are attached to
this Lease and made a part hereof:

 

Exhibit “A” - Legal Description of Demised Premises

Exhibit “B” - Site Plan

Exhibit “C” - Subordination, Non-Disturbance, and Attornment Agreement

Exhibit “D” - Insurance

Exhibit “E” - Estoppel

 

3. DEMISED PREMISES: Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the parcel of land consisting of approximately 19.69 acres, having
an address of 19224 Longmeadow Road, in the City of Hagerstown, Washington
County, State of Maryland, and more particularly described as the “Demised
Premises” in Exhibit “A,” together with all improvements now or hereafter
erected thereon, including but not limited to the existing building containing
approximately 287,300 square feet (the “Building”) and all rights and
appurtenances thereunto belonging. The Building is shown outlined on Exhibit
“B.”

 

Tenant acknowledges that it occupied the Demised Premises prior to the
Commencement Date, it has accepted the Demised Premises and accepts the same in
the condition they are in on the Commencement Date, it being expressly agreed
that neither Landlord nor any person acting under Landlord has made or implied
any representations or warranties concerning this Lease, the Demised Premises,
the Building or their condition or suitability for Tenant’s use. To the extent
permitted by applicable law, and without limitation of Landlord’s express
obligations under Section 12 below, Tenant waives any right or remedy otherwise
accruing to Tenant on account of the condition or suitability of the Demised
Premises or the Building, or title to the Demised Premises, and Tenant agrees
that it takes the Demised Premises and the Bulding “as-is”, with all faults and
without any such representation or warranty, including any implied warranties.

 

Landlord has not actually received any written notice of any violation of any
applicable zoning, fire codes, and other federal, state, and local rules,
regulations, law statutes, and ordinances relating to the Demised Premises, the
Building or HAZARDOUS SUBSTANCES (as such term is defined below).

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4. TERM AND COMMENCEMENT: The term of this Lease (hereinafter “Term”) shall
commence on December 1, 2006 (hereinafter “Commencement Date”) and shall expire
five (5) years after the Commencement Date, at 11:59 p.m., Eastern Daylight
Savings Time, on November 30, 2011, unless sooner terminated or extended
pursuant to the express terms set forth in this Lease.

 

5. RENEWAL OPTION: Landlord grants to Tenant one (1) option to extend the Term
for one (1) separate consecutive additional period (hereinafter “Renewal
Period”) of five (5) years on the same terms and conditions as set forth in this
Lease for the Term except that Fixed Rent (as such term is defined below) during
the Renewal Period shall be as set forth hereinafter. Tenant may exercise the
Renewal Period by providing written notice to Landlord at least nine (9) months
before the expiration of the Term of Tenant’s desire to renew said Lease.
Failure to timely deliver such written notice shall be deemed an irrevocable
election by Tenant not to extend the Term. If Tenant shall exercise the Renewal
Term in accordance with this Section 5, the provisions of this Section 5 shall
be self-operative, but upon request by either party the parties shall execute an
amendment to this Lease acknowledging the Renewal Term. Notwithstanding the
foregoing, Tenant’s exercise of its option to extend the Term shall be void, at
Landlord’s election, if either at the time the option is exercised or at the
time the Renewal Period is to commence, Tenant is in monetary default under the
Lease (beyond any applicable notice and cure periods) or if Tenant is in
material breach of any of Tenant’s maintenance and repair obligations under this
Lease (beyond any applicable notice and cure periods).

 

6. RENT: Tenant agrees to pay to Landlord during the Term the monthly sum of
Forty Six Thousand Dollars ($46,000) ($552,000 annually) (unless such rent shall
be abated or diminished pursuant to the express provisions set forth in this
Lease) (hereinafter “Fixed Rent”) in advance, not later than the first
(1st) business day of each calendar month, commencing with the Commencement
Date, prorated for any partial month during the term using a fraction, the
numerator of which is the number of days in such month during the Term, and the
denominator of which is the number of days in such month. All payments of Fixed
Rent shall be made to Landlord, whose Federal Identification Number is
20-0784159, or to such other person or corporation or at such other place as
shall be designated by Landlord, in writing, delivered to Tenant at least ten
(10) days prior to the next ensuing rent payment date. Landlord and Tenant agree
that the monthly Fixed Rent for the Renewal Period, if exercised, shall be Fifty
Thousand Six Hundred Dollars ($50,600) ($607,200 annually). All sums payable by
Tenant under this Lease other than Fixed Rent shall be deemed “Additional Rent”.
The term “rent” shall mean Fixed Rent and Additional Rent.

 

7. AUTHORITY; QUIET ENJOYMENT: Landlord and Tenant each covenant that they have
the full right and authority to execute and deliver this Lease. Landlord agrees
that upon Tenant’s paying all rent and performing and observing all covenants,
conditions and other provisions on its part to be performed and observed, Tenant
may peaceably and quietly have, hold and enjoy the Demised Premises during the
Term without disturbance by Landlord or anyone claiming by, through or under it,
subject always to the terms of this Lease, provisions of law, and rights or
interests of record to which this Lease may be or become subject and
subordinate.

 

8. SUBORDINATION AND SUPERIORITY OF LEASE: Tenant agrees that this Lease and the
rights of Tenant hereunder will be subject and subordinate to the present or
future lien

 

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of any first mortgage (and at Landlord’s election, to the lien of any
subordinate mortgage or mortgages) and to the rights of any lessor under any
ground or improvements lease of the Demised Premises (collectively referred to
in this Lease as a “mortgage” and the holder or lessor thereof from time to time
as a “mortgagee”), and to all advances and interest thereunder and all
modifications, renewals, extensions and consolidations thereof; and that Tenant
shall attorn to any such mortgagee succeeding to Landlord’s interest in the
Property by foreclosure, deed in lieu of foreclosure, or otherwise, promptly
after the giving of notice by such mortgagee requiring such attornment, provided
however, that the mortgagee of any mortgage executes and delivers to Tenant an
agreement in the form attached hereto as Exhibit “C” (or otherwise on any
commercially reasonable form containing terms not materially less favorable to
Tenant than those set forth in Exhibit “C” and otherwise reasonably acceptable
to Tenant) in which the mortgagee agrees that Tenant shall not be disturbed in
its possession upon Tenant’s attornment to such mortgagee as Landlord and
performance of its Lease covenants and further provided that the subordination
of this Lease to any mortgage entered into after the date of this Lease shall be
upon the express condition that so long as Tenant is not in default beyond any
applicable notice and cure periods under this Lease and Tenant agrees to attorn
to the purchaser at a foreclosure sale, Tenant’s rights under this Lease shall
be recognized by such purchaser. Tenant agrees that any mortgagee may at its
option unilaterally elect to subordinate, in whole or in part and by instrument
in form and substance satisfactory to such mortgagee alone, the lien of its
mortgage (or the priority of its ground lease) to some or all provisions of this
Lease; provided that such instrument shall contain terms not materially less
favorable than those set forth in Exhibit “C”.

 

Tenant agrees that this Lease shall survive the merger of estates of any ground
(or improvements) lessor and lessee. Until a mortgagee (either superior or
subordinate to this Lease) forecloses Landlord’s equity of redemption (or
terminates in the case of a ground or improvements lease) or operates the
Demised Premises, through a receiver or otherwise, no mortgagee shall be liable
for failure to perform any of Landlord’s obligations (and such mortgagee shall
thereafter be liable only after it succeeds to and holds Landlord’s interest and
then only as limited herein). Subject to the provisions of any subordination,
non-disturbance and attornment agreement entered into by Tenant and any
mortgagee, any mortgagee (or any other successor to Landlord acquiring the
Property by foreclosure, deed in lieu of foreclosure, or otherwise) shall not be
(i) liable for any previous act or omission of Landlord under the Lease, unless
such act or omission continues after the date of such attornment; (ii) subject
to any credit, demand, claim, counterclaim, offset or defense which theretofore
accrued to Tenant against Landlord (other than a credit pursuant to the express
provisions of Section 12 and Section 13.2 below of which such a mortgagee has
been given written notice pursuant to the provisions of Section 12 and
Section 13.2); (iii) bound by any prepayment of more than two months’ payment of
Fixed Rent or Additional Rent (except estimated payments of Additional Rent)
unless and to the extent such amounts have been actually received by such a
mortgagee; (iv) required to account for any security deposit of Tenant other
than any security deposit actually delivered to such mortgagee by Landlord; or
(v) bound by any obligation to make any payment to Tenant or grant any credits,
except for services, repairs, maintenance and restoration provided for under the
Lease to be performed by Landlord after the date of such attornment. Tenant
shall give notice of any alleged non-performance on the part of Landlord to any
mortgagee of which Tenant has received written notice, simultaneously with the
default notice delivered to Landlord; and Tenant agrees that such mortgagee
shall have a separate, consecutive reasonable cure period of no

 

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less than 30 days (to be reasonably extended in the same manner Landlord’s 30
day cure period is to be extended) following Landlord’s cure period during which
such mortgagee may, but need not, cure any non-performance by Landlord. The
foregoing shall not relieve such mortgagee of the obligation to remedy or cure
any conditions at the Demised Premises the existence of which constitutes a
Landlord default under the Lease and which continue at the time of such
mortgagee’s taking title to the Property. The agreements in this Lease with
respect to the rights and powers of a mortgagee constitute a continuing offer to
any person which may be accepted by taking a mortgage (or entering into a ground
or improvements lease) of the Demised Premises.

 

If from time to time Landlord assigns this Lease or the rents payable hereunder
to any person, whether such assignment is conditional in nature or otherwise,
such assignment shall not be deemed an assumption by the assignee of any
obligations of Landlord prior to the date of such assignment; but the assignee
shall be responsible only for non-performance of Landlord’s obligations which
occur after it succeeds to and only while it holds Landlord’s interest in the
Demised Premises.

 

The provisions of this paragraph shall be self-operative; nevertheless, Tenant
agrees to execute, acknowledge and deliver any subordination, attornment or
priority agreements or other instruments conforming to the provisions of this
Section 8 (and being otherwise commercially reasonable and reasonably acceptable
to Tenant) from time to time requested by Landlord or any mortgagee in
furtherance of the foregoing, and further agrees that its failure to do so
within fifteen (15) business days after written demand shall be subject to the
default provisions of this Lease (including but not limited to any applicable
notice and cure periods).

 

9. POSSESSION:

 

At the expiration or earlier termination of this Lease, Tenant (and all persons
claiming by, through or under it) shall, without the necessity of any notice,
surrender to Landlord the Demised Premises (including any tenant work and all
replacements thereof, except such additions or alterations constructed after the
Commencement Date as Landlord may direct to be removed in writing at the time of
Landlord’s approval thereof, which shall be removed by Tenant and the Demised
Premises restored to their pre-existing condition) and all keys to the Demised
Premises, remove all of its trade fixtures and personal property not bolted or
otherwise attached to the Demised Premises (and such trade fixtures and other
property bolted or attached to the Demised Premises as Landlord may direct or,
except as set forth below, as Tenant may desire), and all Tenant’s signs
wherever located, in each case repairing damage to the Demised Premises which
results in the course of such removal (including the filling of all floor holes
and the replacement of all damaged ceiling tiles). Tenant shall yield up the
Demised Premises broom-clean and in good order, repair and condition, reasonable
wear and tear and damage by casualty and taking (to the extent expressly
provided in this Lease only) excepted. Any property not so removed within thirty
(30) days after the expiration or termination of the Lease shall be deemed
abandoned and may be removed and disposed of by Landlord in such manner as
Landlord shall determine, and Tenant shall pay to Landlord the reasonable cost
and expense incurred by it in effecting such removal and disposition and in
making any required repairs to the Demised Premises. In no event, however, shall
Tenant remove any of the following materials or equipment (which shall be deemed
Landlord’s property), without Landlord’s prior written consent: any power wiring
or wiring panels; lighting or lighting fixtures; doors,

 

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windows, or wall coverings; drapes, blinds or other window coverings; installed
carpets or other installed floor coverings; any built-in heating or air
conditioning equipment; fencing or security gates; or other similar building
operating equipment.

 

10. ASSIGNMENT AND SUBLETTING: Tenant may assign this Lease or sublet the
Demised Premises or any part thereof, with the prior written consent of Landlord
(which shall not be unreasonably withheld or delayed). Notwithstanding the
foregoing, the following transactions shall not require the consent of Landlord
provided that Landlord shall receive prior notice thereof plus reasonable
evidence upon closing that the transaction is in fact one of the following:

 

(a) Any transfer to an entity succeeding to substantially all of the business
and assets of Tenant, whether by way of a sale of assets, merger, consolidation
or otherwise; and

 

(b) Any transfer to an entity controlling Tenant, directly or indirectly
controlled and beneficially owned by Tenant, or under common control with
Tenant. For purposes of this clause (b), control shall mean possession of more
than 50 percent ownership of the shares of beneficial interest of the entity in
question together and/or the power to control and manage the affairs thereof
either directly or by election of directors and/or officers.

 

Notwithstanding any such subletting or assignment (whether or not Landlord’s
consent is required therefor), Tenant shall remain directly and primarily liable
at all times for the performance of all the terms and conditions of this Lease.

 

11. MODIFICATIONS: During the Term hereof, Landlord shall not take action to
materially modify the appearance of the exterior of the Building (or modes of
ingress or egress thereto) or to substantially reduce the number of parking
spaces available at the Demised Premises; provided, however, that the foregoing
shall in no way interfere with Landlord’s performance of its obligations under
Section 12 below.

 

12. LANDLORD’S REPAIRS:

 

Landlord shall, at its sole cost and expense, maintain the following in good
working order and repair and replace as reasonably needed throughout the Term:
(x) the roof of the Building and (y) the structural supports and foundation of
the Building (provided that Landlord shall not be responsible for any costs or
expenses related to such roof, structural supports and foundation that are
actually caused by Tenant, other than in the customary and reasonable use of the
Demised Premises pursuant to the terms and provisions of this Lease). Without
limitation of any right expressly granted to Tenant pursuant to the provisions
of this Section 12, Tenant hereby waives the benefit of any present or future
law that provides Tenant the right to repair the Demised Premises or Building at
Landlord’s expense or to terminate this Lease because of the condition of the
Building or the Demised Premises.

 

If Landlord shall default in its obligations under this Section 12 and such
default affects Tenant’s use of the Demised Premises for a period of thirty
(30) days after written notice thereof from Tenant (or, if such default cannot
reasonably be cured within such thirty (30) day period, such

 

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longer period as is reasonably required under the circumstances so long as
Landlord has in good faith commenced such cure within such thirty (30) day
period and thereafter prosecutes the same with reasonable diligence to
completion) or, in an emergency event where there is imminent danger to person
or property, such notice as is reasonable under the circumstances, then Tenant
may (but shall not be obligated) immediately or at any time thereafter, upon
written notice to Landlord, perform the obligation of Landlord under this
Section 12. If Tenant, in connection therewith, makes any expenditure or incurs
any obligations for the payment of money, then Landlord shall reimburse Tenant
all sums so paid or incurred (along with an administrative charge of five
percent (5%) thereon), within thirty (30) days after written demand to Landlord
therefor accompanied by reasonable back-up documentation.

 

In the event that Landlord has not reimbursed such amounts to Tenant within such
thirty (30) day period, then Tenant may receive a credit against Fixed Rent due
under this Lease pursuant to the express provisions of this paragraph. After the
expiration of such thirty (30) day period, Tenant shall provide written notice
that Landlord has not reimbursed such amounts to Landlord and any mortgagee of
Landlord of whom Tenant has been given written notice (and such notice shall
include, at a minimum, the amount due to Tenant as well as a copy of Tenant’s
original reimbursement request to Landlord [including the back-up documentation
submitted therewith]). If such reimbursement has not been paid to Tenant within
sixty (60) days after Landlord and, if applicable, such mortgagee(s) have been
given such notice, then Tenant shall receive a credit against the following
payment of Fixed Rent due to Landlord equal to the amount of such unpaid
reimbursement plus the applicable administrative charge; provided that (x) in
the event Landlord disputes in good faith any amounts claimed by Tenant, Tenant
shall not be entitled to a credit with respect to such disputed amounts (but may
receive a credit with respect to any amounts not in dispute) until the dispute
is resolved by arbitration as set forth below and (y) such credit shall not
exceed twenty-five percent (25%) of the amount of Fixed Rent due for any given
month.

 

If Landlord disputes in good faith any amount claimed by Tenant under this
Section 12, and if such dispute has not been settled by agreement, either party
may submit the dispute to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association within ninety
(90) days after Tenant’s second written demand for reimbursement was submitted
to Landlord and, if applicable, Landlord’s mortgagee(s). The arbitration panel
shall consist of one (1) person selected by each of Landlord and Tenant, and a
third arbitrator jointly selected by the first two arbitrators. The arbitration
shall be conducted in Baltimore, Maryland. None of the arbitrators shall have a
then existing contractual or attorney-client relationship with Landlord or
Tenant. The arbitrators shall render a written decision stating the reasons
therefor. The decision of the arbitrators shall be final and binding on Landlord
and Tenant and judgment thereon may be entered in any court of competent
jurisdiction. The prevailing party in such proceeding shall be entitled to claim
and collect its reasonably incurred third-party attorneys’ fees in connection
with such arbitration from the other party, as well as any reasonable costs
incurred on account of payment to the three arbitrators.

 

13. TENANT’S REPAIRS AND ALTERATIONS:

 

Subject to Landlord’s express obligations set forth in Section 12 above, Tenant
shall clean, maintain, repair and secure the Demised Premises, all improvements
and appurtenances

 

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thereto, all access areas thereof, and all utilities, facilities, installations
and equipment used in connection therewith, and shall pay all costs and expenses
of so doing, keeping the Demised Premises in good order, repair and condition,
reasonable wear and tear, and damage by casualty and taking (to the extent
expressly provided in this Lease only) excepted. Without limiting the generality
of the foregoing and subject to Landlord’s express obligations set forth in
Section 12 above, Tenant shall keep all exterior walls, all interior walls,
floor surfaces and coverings, glass, windows, doors, and partitions, all
fixtures and equipment, all utilities, pipes and drains and other above-ground
level installations used in connection with the Demised Premises in such good
order, repair and condition, shall provide all cleaning, painting and floor
covering to the Demised Premises, and shall remove all refuse from and provide
its own janitorial services for the Demised Premises. Tenant shall keep in good
order, condition and repair all building systems (including the heating,
ventilation, air conditioning, plumbing, electrical, utility, and safety
systems). Tenant’s maintenance obligations shall also include, without
limitation, gardening and landscaping; snow removal; maintenance of signs;
rental or lease payments paid by Tenant for rented or leased personal property
used in the operation or maintenance of the Demised Premises; fees for required
licenses and permits required by Tenant; sweeping and striping of pavement;
general maintenance; painting; lighting; and similar items. If any portion of
the Demised Premises or any system or equipment in the Demised Premises that
Tenant shall be obligated to repair cannot be fully repaired or restored, Tenant
shall promptly replace such portion of the Demised Premises or system or
equipment. Tenant shall maintain a preventive maintenance contract providing for
the regular inspection and maintenance of the heating and air conditioning
system by a heating and air conditioning contractor, such contract and such
contractor to be approved by Landlord.

 

13.1 TENANT’S SIGNAGE:

 

(A) Subject to the terms and provisions of this Lease and all applicable law,
Tenant may erect or authorize the installation of signs on the Demised Premises
(including the exterior of the Building).

 

(B) Subject to the terms and provisions of this Lease, Tenant may at any time or
from time to time remove its building or other signage or change them to reflect
new designs. Tenant may use its standard colors and logo in all signage.
Landlord shall not and may not install or maintain, or permit anyone other than
Tenant to install, maintain, remove or modify, any signs or communications
equipment on the exterior or roof of the Demised Premises or within the air
space above the Demised Premises, other than any signs required by any
governmental authority, lender or insurance provider of Landlord (provided that
any such signage required by Landlord’s lender or insurance company shall not
impair the visibility of Tenant’s signage), during the Term of this Lease or any
extensions or renewals thereof. Landlord shall not alter, modify, remove,
relocate or replace any of Tenant’s signs.

 

13.2 TENANT IMPROVEMENT ALLOWANCE: Upon Tenant’s execution and delivery of this
Lease, Tenant shall also provide to Landlord an estoppel certificate in the form
attached as Exhibit “E”. So long as such estoppel certificate has been so
provided to Landlord, Landlord shall reimburse Tenant the sum of Two Hundred
Thousand Dollars ($200,000.00) (the “Allowance”) for Tenant improvements to the
Demised Premises within sixty (60) days after the date

 

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of this Lease. In the event that Landlord has not paid the Allowance to Tenant
prior to the expiration of such sixty (60) day period, then Tenant may receive a
credit against Fixed Rent due under this Lease pursuant to the express
provisions of this paragraph. After the expiration of such sixty (60) day
period, Tenant shall provide written notice to Landlord and any mortgagee of
Landlord of whom Tenant has been given written notice that Tenant is entitled to
a credit against Fixed Rent pursuant to this Section 13.2. If the Allowance has
not been paid to Tenant within thirty (30) days after Landlord and, if
applicable, such mortgagee(s) have been given such notice, then Tenant shall
receive a credit against Fixed Rent due to Landlord equal to the amount of the
Allowance (along with an administrative charge of five percent [5%] thereon).

 

14. COMPLIANCE WITH LAWS: Tenant shall use the Demised Premises only as
permitted under federal, state, and local laws, regulations and orders
applicable from time to time, including without limitation municipal by-laws,
land use and zoning laws, environmental laws and regulations (including all laws
and regulations regulating the production, use, and disposal of any pollutant or
toxic or hazardous material), and occupational health and safety laws. Tenant
shall procure all approvals, licenses and permits necessary therefor, in each
case giving Landlord true and complete copies of the same (and, at Landlord’s
request, all applications therefor). Tenant shall promptly comply with all
present and future laws applicable to Tenant’s use of the Demised Premises or
Tenant’s signs thereon, foreseen or unforeseen, and whether or not the same
interfere with Tenant’s use and enjoyment of the Demised Premises (provided,
however, that the parties acknowledge that Tenant is entitled to contest
applicable laws so long as such contest does not interfere with Tenant’s
obligations under this Lease), and shall comply with all requirements reasonable
in light of the use Tenant is making of the Demised Premises of insurance
inspection or rating bureaus having jurisdiction. If Tenant’s use of the Demised
Premises results in any increase in the premium for any insurance required by
this Lease to be carried by Landlord, then upon Landlord’s notice to Tenant of
such increase Tenant shall pay the same to Landlord upon demand as Additional
Rent. Except to the extent applicable with respect to Landlord’s express
obligations set forth in Section 12, Tenant shall bear the sole risk of all
present or future laws affecting the Demised Premises or appurtenances thereto,
and Landlord shall not be liable for (nor suffer any reduction in any rent on
account of) any interruption, impairment or prohibition affecting the Demised
Premises or Tenant’s use thereof resulting from the enforcement of such laws.

 

15. TENANT’S FIXTURES, EQUIPMENT AND INVENTORY; TENANT’S LENDER’S RIGHTS:

 

(A) Subject to the terms and provisions of this Lease, Tenant may install or
locate in or upon the Demised Premises (including the Building) such fixtures
(trade or otherwise), inventory and equipment including but not limited to
satellite dishes, antennae or other telecommunications equipment, as Tenant
deems desirable and all of said items shall remain Tenant’s property whether or
not affixed or attached to the Demised Premises. Tenant may remove said
fixtures, inventory and equipment from the Demised Premises at any time and from
time to time during the Term (subject to the terms and provisions of this
Lease). Landlord shall not acquire any rights in any trade fixtures, inventory
or equipment, nor shall it mortgage, pledge or encumber said trade fixtures,
inventory or equipment. Landlord hereby waives, disclaims and releases any and
all statutory and contractual lien rights and rights of levy, distraint, and
possession for sale for unpaid

 

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rent which Landlord may have on any of Tenant’s trade fixtures, inventory or
equipment. Tenant shall, within thirty (30) days after expiration of the Term,
repair any damage to the Demised Premises caused by Tenant’s removal of any
fixtures, inventory or equipment, to the extent such removal is permitted under
this Lease.

 

(B) Tenant may enter into loan arrangements from time to time with lenders and
grant to such lenders liens on its present and future assets, including without
limitation, inventory, equipment and trade fixtures which may be installed or
located in the Demised Premises (but not including any fixtures, as such term is
defined in the Uniform Commercial Code). Landlord agrees for the benefit of such
lenders that during the Term of this Lease, at the option of such lenders, the
Tenant’s property may remain upon the Demised Premises (without such lenders
being deemed to be taking possession of the Demised Premises) for a period of 45
days after (i) such lender’s receipt of written notice from the Landlord
directing removal of Tenant’s property or (ii) Landlord’s receipt of written
notice from such lenders (or an agent acting on their behalf) stating that
Tenant is in default in payment or performance of obligations owed to such
lenders. If such lenders use this option, during said 45-day period, such
lenders shall pay rent to the Landlord in an amount equal to the rent due for
such period provided under the Lease prorated per diem on the basis of a 30-day
month Any such a lender of Tenant entering the Demised Premises shall be
responsible for and shall indemnify and save harmless Landlord, absent the gross
negligence or willful misconduct of Landlord, from any physical damage and/or
damage of any kind to the Demised Premises or the Building and/or personal
injury, in each case, caused by such lender’s entry into the Demised Premises
and/or its removal of collateral therefrom. If Landlord is provided with the
names and addresses of such lenders (or their agent), Landlord agrees (i) use
commercially reasonable efforts to provide such lenders with concurrent notice
of default of this lease, and (ii) that this Subsection (B) of this Section 15
may not be amended, modified, supplemented or replaced without the written
consent of such lenders (any such amendment, modification, supplement or
replacement without such consent being null and void). Landlord acknowledges
that Tenant currently has secured credit arrangements with Wells Fargo Bank,
National Association, in its capacity as administrative agent (the
“Administrative Agent”) for a syndicate of lenders. Administrative Agent’s
notice address for the purpose of this Section 15 is Wells Fargo Bank, National
Association; 65 West Alisal Street, 2nd Floor; Salinas, CA 93901; Attn: Patrick
Bishop; Telecopier: (831) 757-7345; Telephone: (831) 754-5078. Without
limitation of the foregoing provisions, Landlord acknowledges that Landlord is
subject to that certain Landlord Subordination recorded in Liber 2076, Folio 707
of the Washington County Land Records.

 

16. UTILITIES: Tenant shall pay, directly to all such providers, all charges and
deposits for gas, water, sewer, electricity, telecommunications, and other
energy, utilities and services used or consumed on the Demised Premises during
the Term. It is understood and agreed that Landlord (i) shall be under no
obligation whatsoever to furnish any such services to the Demised Premises and
(ii) shall not be liable for (nor suffer any reduction in any rent on account
of) any interruption or failure to supply the same, unless such interruption or
failure is actually caused by the negligence or willful misconduct of Landlord
or Landlord’s agents, employees or contractors.

 

16.1 TRASH REMOVAL: Tenant shall have Tenant’s trash removed from the Demised
Premises regularly, at Tenant’s cost.

 

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17. INSURANCE: Commencing on the Commencement Date and continuing throughout the
Term, Landlord and Tenant, as applicable, shall maintain insurance as described
in the attached Exhibit “D”.

 

18. DAMAGE BY CASUALTY:

 

(A) If the Demised Premises is damaged or destroyed in whole or in part by fire,
the elements, subsidence of sublateral or subjacent support or other casualty,
Landlord shall repair and restore the Demised Premises with reasonable
promptness, subject to reasonable delays for insurance adjustments and delays
caused by matters beyond Landlord’s reasonable control, but Landlord shall not
be obligated to expend for repairing or restoring the damage an amount in excess
of the proceeds of insurance actually received by Landlord for application to
the repair of such damage. If in Landlord’s reasonable estimate the Demised
Premises cannot be restored within six (6) months from the date of such fire or
casualty, then Landlord shall give notice to Tenant of such estimate within
ninety (90) days after such fire or casualty. Tenant may elect by written notice
given to Landlord within sixty (60) days following the date of such notice from
Landlord to terminate this Lease effective as of the date of Tenant’s notice. If
any such damage (i) renders 50% or more of the Building untenantable or
(ii) renders general Building systems inoperable and such systems cannot be
repaired in Landlord’s reasonable estimate within six (6) months from the date
of such damage or (iii) occurs within the last year of the Term, Landlord or
Tenant shall have the right to terminate this Lease as of the date of such
damage upon written notice given to the other party at any time within ninety
(90) days after the date of such damage. Landlord shall have no liability to
Tenant, and Tenant shall not be entitled to terminate this Lease, by virtue of
any delays in completion of such repairs and restoration provided that Tenant
shall have the right to terminate the Lease if such repairs are not completed
within such 6-month period, subject to extension for delays caused by Force
Majeure (as such term is defined in Section 46), by notice given within thirty
(30) days after such repair period expires, which notice shall be deemed
withdrawn if the restoration is completed within thirty (30) days after such
notice is delivered to Landlord. Fixed Rent and additional rent, however, shall
abate on those portions of the Demised Premises as are, from time to time,
untenantable and, in fact, unoccupied by Tenant as a result of such damage. All
insurance proceeds and such other funds as may be necessary to complete the
restoration of the Demised Premises shall be paid by Landlord to Landlord’s
first mortgagee for the Demised Premises or such other depository institution
reasonably acceptable to Landlord and Tenant, less such actual and reasonable
attorneys’ fees or other expenses as are incurred by the depository, Landlord,
Landlord’s mortgagee or Tenant, in the collection and/or administration thereof,
which shall be paid out of such proceeds, in trust, to be used for the
restoration and repair of the Demised Premises in accordance with the provisions
of this Lease. The provisions of the immediately preceding sentence to the
contrary notwithstanding, the proceeds of any rent loss or business interruption
insurance then in effect shall be paid to Landlord (when and as due and payable)
for the rent accruing before such restoration is completed. Any balance of such
proceeds remaining after such payments are made shall, upon completion of the
restoration, be paid to Landlord or as Landlord may direct. Any proceeds which
are separately paid on account of any damage to or destruction of any Tenant’s
personal property or inventory shall be paid directly to Tenant. The depository
shall disburse the insurance and restoration proceeds to Landlord or as Landlord
may direct, from time to time as such restoration progresses, to pay or
reimburse Landlord for the cost of such restoration, upon Landlord’s written
request accompanied by evidence that an amount equaling the amount requested is
then due and

 

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payable or has been paid, and is properly a part of such cost. Disbursements
shall be made from time to time in an amount not exceeding the hard and soft
costs of the restoration, less any customary retainage, and otherwise in
accordance with customary construction practices employed by prudent
construction lenders.

 

(B) If Tenant is not actually open for business during all or any part of the
period (“Restoration Period”) from the date of such damage or destruction as
aforesaid until the date the Building and the Demised Premises is redelivered to
Tenant in accordance with the terms of this Lease, all Rent or other sums
payable hereunder shall abate for such period as Tenant is not open for business
without causing default by Tenant. If Tenant is open for business during the
Restoration Period, the Rent and other sums payable hereunder shall abate in
proportion to the usable space; provided, however, that if Landlord does not
proceed diligently with restoration of the Demised Premises, all Rent and other
sums payable hereunder shall abate without causing default by Tenant.

 

(C) Upon any termination of this Lease pursuant to this Section 18, the
insurance proceeds payable to Landlord under the insurance to be maintained
pursuant to Exhibit “D” (less any amounts payable to Tenant with respect to
Tenant’s personal property and inventory and less any amounts payable under
business interruption and/or rent loss insurance for the period following such
termination), shall be assigned and/or paid over to Landlord and Landlord and
Tenant shall be relieved of any further obligations hereunder except for
obligations accrued as of the date of termination.

 

19. WAIVER OF SUBROGATION: Landlord and Tenant each hereby waive any and every
claim for recovery from the other for any and all loss of or damage to the
Building or Demised Premises or to the contents thereof, which loss or damage is
covered by valid and collectible property insurance policies. Landlord waives
any and every claim against Tenant for any and all loss of or damage to the
Building or the Demised Premises or contents thereof, which would have been
covered had the insurance policies required to be maintained by Landlord by this
Lease been in force, to the extent that such loss or damage would have been
recoverable under such insurance policies. Tenant waives any and every claim
against Landlord for any and all loss of, or damage to, the Building or Demised
Premises or the contents thereof which would have been covered had Tenant
maintained the insurance policies required to be maintained by Tenant under this
Lease been in force, to the extent that such loss or damage would have been
recoverable under such insurance policies. Inasmuch as this mutual waiver will
preclude the assignment of any such claim by subrogation (or otherwise) to an
insurance company (or any other person), Landlord and Tenant each agree to give
to each insurance company which has issued, or in the future may issue, to it
policies of property insurance, written notice of the terms of this mutual
waiver, and to have said insurance policies properly endorsed, if necessary, to
prevent the invalidation of said insurance coverage by reason of said waiver.

 

20. EMINENT DOMAIN:

 

If the Demised Premises or the Building (or any portion of the Building, the
loss of which would require reconfiguration or restoration of the Building which
Landlord reasonably estimates will cost in excess of 25% of the current
replacement cost of the Building) shall be taken or

 

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condemned by any competent authority for any public or quasi-public use or
purpose, Landlord or Tenant shall have the right, exercisable at its sole
direction, to cancel the Lease upon not less than sixty (60) days’ notice prior
to the date of cancellation designated in the notice. No money or other
consideration shall be payable by Landlord to Tenant for the right of
cancellation and Tenant shall have no right to share in the condemnation award
or in any judgment for damages caused by such taking or condemnation (except for
Tenant’s relocation expenses and any unamortized costs of tenant improvements
that have been paid for by Tenant, in each instance specifically so designated
by the court or authority having jurisdiction over the matter).

 

If any such taking (i) renders 25% or more of the Building untenantable (or
prohibits reasonable access to the Building or renders the parking at the
Demised Premises non-compliant with applicable zoning laws) or (ii) renders
general Building systems inoperable and such systems cannot be repaired in
Landlord’s reasonable estimate within six (6) months from the date of such
taking or (iii) occurs within the last year of the Term, Landlord or Tenant
shall have the right to terminate this Lease as of the date of such taking upon
written notice given to the other at any time within one hundred twenty
(120) days after the date of such taking. If this Lease is not terminated and
canceled because of any such taking or appropriation, Landlord shall with
reasonable promptness, subject to reasonable delays for insurance adjustments
and delays caused by Force Majeure, restore (to the extent insurance proceeds
are available therefor) the Demised Premises and/or access to a condition as
nearly comparable as practicable to the condition existing just before such
taking or appropriation within six (6) months after such taking. Landlord shall
have no liability to Tenant, and Tenant shall not be entitled to terminate this
Lease, by virtue of any delays in completion of such repairs and restoration
unless such repairs are not completed within such six (6) month period, in which
event Tenant shall have the right to terminate the Lease if such repairs are not
completed within such six (6) period, subject to extension for Force Majeure, by
notice given within 30 days after such repair period expires, which notice shall
be deemed withdrawn if the restoration is completed within 30 days after such
notice is delivered to Landlord.

 

Fixed Rent and Additional Rent shall abate on those portions of the Demised
Premises as are, from time to time, untenantable and, in fact, unoccupied by
Tenant as a result of such taking.

 

21. PERMITS AND LICENSES. Landlord agrees upon request of Tenant to execute or
join in the execution of any application for permits and licenses which may be
necessary in connection with any construction, alterations, improvements and/or
repairs permitted under this Lease.

 

22. INTENTIONALLY DELETED.

 

23. INTENTIONALLY DELETED.

 

24. INTENTIONALLY DELETED.

 

25. TENANT’S DEFAULT: (a) If Tenant fails to pay Fixed Rent or any Additional
Rent or other sum or charge hereunder within ten (10) days after written notice
that the same is due; or (b) (intentionally), or (c) (intentionally deleted), or
(d) if any assignment shall be made by Tenant

 

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(or any assignee or sublessee of Tenant) for the benefit of creditors, or (e) if
Tenant’s leasehold interest shall be taken on execution or by other process of
law, or (f) if a petition is filed by Tenant (or any assignee or sublessee of
Tenant) for adjudication as a bankrupt, or for reorganization or an arrangement
under any provision of any bankruptcy act then in force and effect, or (g) if an
involuntary petition under the provisions of any bankruptcy act is filed against
Tenant (or any assignee or sublessee of Tenant) and such involuntary petition is
not dismissed within sixty (60) days thereafter, or (h) if Tenant (or any
assignee or sublessee of Tenant) shall be declared bankrupt or insolvent
according to law, or (i) if a receiver, trustee or assignee shall be petitioned
for and not contested by Tenant for the whole or any part of Tenant’s (or such
assignee’s or sublessee’s) property, or if a receiver, trustee or assignee shall
be appointed over Tenant’s (or such other person’s) objection and not be removed
within sixty (60) days thereafter, or (j) (reserved), or (k) if Tenant fails to
perform any other material covenant, agreement or condition hereunder and such
default continues for thirty (30) days after notice (provided, however, that
such thirty (30) day period shall be reasonably extended for up to an additional
sixty (60) days in the case of non-monetary default if the matter complained of
can be cured, but the cure cannot be completed within such thirty (30) day
period and Tenant begins promptly to cure within such period and thereafter
diligently completes the cure; if such matters cannot be cured then there shall
be no cure period), then, and in any such case, Landlord and its agents and
employees lawfully may, in addition to and not in derogation of any remedies for
any preceding breach, immediately or at any time thereafter, enter into and upon
the Demised Premises or any part thereof in the name of the whole, or mail or
deliver a notice of termination of the Term addressed to Tenant at the Demised
Premises or at any other address herein provided, and thereby terminate this
Lease and repossess the same as of Landlord’s former estate. Upon such entry or
mailing or delivery, as the case may be, the Term shall terminate, all executory
rights of Tenant and all obligations of Landlord under this Lease shall
immediately cease, and Landlord may expel Tenant and all persons claiming by,
through or under Tenant and remove its and their effects without being deemed
guilty of any manner of trespass and without prejudice to any remedies which
might otherwise be used for arrears of rent or prior breach of covenants; and
Tenant, to the extent permitted by applicable law, hereby waives all statutory
and equitable rights to its leasehold (including without limitation rights in
the nature of further cure or of redemption, if any). Landlord may, without
notice (but subject to applicable law), store Tenant’s effects (and those of any
person claiming by, through or under Tenant) at the expense and risk of Tenant
and, if Landlord so elects, may sell such effects at public auction or auctions
or at private sale or sales after seven (7) days notice to Tenant (which notice
Tenant agrees is reasonable) and apply the net proceeds to the payment of all
sums due to Landlord from Tenant, if any, and pay over the balance, if any, to
Tenant. If any payment of Fixed Rent, Additional Rent, or other payment due from
Tenant to Landlord is not paid within five (5) days after the date due, then
Landlord may, at its option, in addition to all other remedies hereunder, impose
a late charge on Tenant equal to 3% of the amount in question, which late charge
will be due within ten (10) days of demand as Additional Rent (provided,
however, that no such charge shall be imposed for the first such late payment
during any calendar year during the Term).

 

26. REMEDIES FOR TENANT DEFAULT:

 

(a) Reletting Expenses Damages. If this Lease is terminated for default, then
Tenant covenants, as an additional cumulative obligation after such termination,
to pay all of

 

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Landlord’s reasonable costs and expenses related thereto or in collecting
amounts due hereunder, including reasonable attorneys fees, and all of
Landlord’s reasonable expenses in connection with such reletting, including
without limitation, brokerage commissions (to the extent the same are allocable
to the Term), fees for legal services and expenses of preparing the Demised
Premises for reletting (other than tenant inducements and tenant improvements)
(“Reletting Expenses”). It is agreed by Tenant that Landlord may (i) relet the
Demised Premises or any part or parts thereof for a term or terms which may at
Landlord’s option be equal to or less than or exceed the period which would
otherwise have constituted the balance of the Term, and may grant such tenant
inducements as Landlord in its sole but commercially reasonable judgment
considers advisable, and (ii) make such alterations, repairs and decorations in
the Demised Premises as Landlord in its sole discretion considers advisable, and
no action of Landlord in accordance with the foregoing nor any failure to relet
or to collect rent under any reletting shall operate or be construed to release
or reduce Tenant’s liability. Landlord’s Reletting Expenses together with all
sums otherwise provided for in this Lease, whether incurred prior to or after
such termination, shall be due and payable immediately from time to time upon
notice from Landlord.

 

(b) Termination Damages. If this Lease is terminated for default, then unless
and until Landlord elects lump sum liquidated damages described in (c) below
Tenant covenants, as an additional cumulative obligation after any such
termination, to pay punctually to Landlord all the sums and perform all the
obligations which Tenant covenants in this Lease to pay and to perform in the
same manner and to the same extent and at the same time as if this Lease had not
been terminated. In calculating the amounts to be paid by Tenant pursuant to the
preceding sentence Tenant shall be credited with the net proceeds of any rent
then actually received by Landlord from a reletting of the Demised Premises
after deducting all sums provided for in this Lease to be paid by Tenant and not
then paid.

 

(c) Lump Sum Liquidated Damages. If this Lease is terminated for default, then
Tenant covenants, as an additional cumulative obligation after termination, to
pay forthwith to Landlord at Landlord’s election made by written notice to
Tenant at any time within one year after termination, as liquidated damages a
single lump sum payment equal to the sum of all sums provided for in this Lease
to be paid by Tenant and not then paid at the time of such election, plus the
present value (calculated at the Federal Reserve discount rate or equivalent) of
the excess of all of the rent reserved for the residue of the Term over all of
the fair market rent reasonably projected by Landlord to be received on account
of the Demised Premises during such period, which rent from reletting shall be
reduced by reasonable projections of vacancies and by Landlord’s Reletting
Expenses described above to the extent not theretofore paid to Landlord.

 

27. LANDLORD’S DEFAULT: In no event shall Landlord be in default unless notice
thereof has been given to Landlord (and all mortgagees of which Tenant has
written notice) and Landlord (or any such mortgagee at its sole discretion)
fails to perform within 30 days (provided, however, that such 30 day period
shall be reasonably extended if such cure cannot reasonably be completed in such
30 day period and such performance begins within such period and thereafter is
diligently pursued, or if such mortgagee notifies Tenant within such period that
it intends to cure on behalf of Landlord and thereafter begins curing within
such period, or if later within 30 days after acquiring possession of the

 

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Property if the cure requires the mortgagee to obtain possession of the
Property, and diligently pursues curing with reasonable promptness). Any
mortgagee notice and cure periods set forth in any subordination, nondisturbance
and attornment agreement then in effect under Section 8 shall control to the
extent the same differ from the foregoing. The time periods set forth in this
Section 27 shall not limit in any way Tenant’s right to self-help expressly set
forth in Section 12 of this Lease.

 

28. HAZARDOUS SUBSTANCES:

 

(A) As used in this Lease, “HAZARDOUS SUBSTANCES” shall be defined as any
substance that is biologically or chemically active or is a hazardous, toxic, or
dangerous waste, substance (including, but not limited to, petroleum derivative
substances), or material defined as such in (or for purposes of) any state,
federal or local environmental laws, regulations, decrees or ordinances or in
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended, or in any of the so called state or local “Super Fund”, “Super Lien” or
“Cleanup Lien” laws or any other federal, state or local regulation, order or
decree relating to or imposing liability or standards of conduct concerning any
such substances or materials or any amendments or successor statutes thereto.

 

(B) Tenant covenants, represents and warrants that no HAZARDOUS SUBSTANCES will
be used, stored or disposed of in, on or about the Demised Premises (other than
use or storage of items customarily sold or utilized for marine and boating
supplies or accessories and cleaning supplies, in accordance with all applicable
laws and regulations) and that during the Term of this Lease or any Renewal
Period thereof, no HAZARDOUS SUBSTANCES will be discharged on the Demised
Premises by Tenant or anyone under its direction or control in violation of
applicable law or regulations. Tenant agrees that such representations and
warranties shall survive any termination of this Lease, and Tenant agrees to
indemnify and hold harmless the Landlord and its mortgagees from any and all
costs, expenses, claims and damages, including but not limited to reasonable
attorneys’ fees and costs of remediation, actually arising from Tenant’s breach
of any of the foregoing covenants, representations and warranties, but subject
to any limitation on damages applicable to Tenant that is expressly set forth in
Section 47 below.

 

29. NOTICE: All notices or demands required or permitted to be given or served
pursuant to this Lease shall be deemed to have been given or served only if in
writing, postage pre-paid and shall be sent by U.S. Certified Mail with Return
Receipt Requested or by overnight courier to:

 

LANDLORD:   TENANT: SCP Green Hagerstown, LLC   West Marine Products, Inc. c/o
STAG Capital Partners, LLC   Attn: Real Estate Department 93 Summer Street   500
Westridge Drive Third Floor, Suite 31   Watsonville, California 95076 Boston,
Massachusetts 02110    

 

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Such addresses may be changed from time to time by either party by serving
notice as above provided. Such notices shall be effective upon receipt or
refusal of receipt by the party to whom such notice is addressed.

 

30. REAL ESTATE TAXES:

 

(A) Tenant shall pay, as Additional Rent, directly to the relevant taxing
authority, all real estate taxes, general or special assessments, sewer and
water charges and other charges imposed upon the Demised Premises, or
impositions or agreed payments in lieu thereof or voluntary payments made in
connection with the provision of governmental services or improvements of
benefit to the Building or the Demised Premises (including any so-called
linkage, impact or voluntary betterment payments), and all penalty and interest
thereon (if due to Tenant’s failure to make timely payments on account of
Taxes), assessed or imposed against the Demised Premises or the property of
which the Demised Premises are a part (including without limitation any personal
property taxes levied on such property or on fixtures or equipment used in
connection therewith), or upon Landlord by virtue of its ownership thereof
(other than mechanics or other liens due to the acts of Landlord, its agents or
contractors) allocable to the Term (hereinafter “Taxes”) prior to delinquency.
In the event that Landlord receives any bill for Taxes, Landlord will provide
the same to Tenant by overnight delivery within five (5) days after Landlord’s
receipt thereof. If during the Term the present system of ad valorem taxation of
property shall be changed so that, in lieu of or in addition to the whole or any
part of such ad valorem tax, there shall be assessed, levied or imposed on such
property or Demised Premises or on Landlord any kind or nature of federal,
state, county, municipal or other governmental capital levy, income, sales,
franchise, excise or similar tax, assessment, levy, charge or fee (as distinct
from the federal and state income tax in effect on the Commencement Date)
measured by or based in whole or in part upon Building rents or any other
incidents, benefits or measures of real property or real property operations and
imposed on owners of real estate generally, then any and all of such taxes,
assessments, levies, charges and fees shall be included within the term Taxes,
but only to the extent the same are applicable to the Demised Premises. Upon
Tenant’s execution of this Lease, Landlord shall cause the Washington County
Treasurer to issue real estate tax bills directly to the Tenant.

 

(B) (Intentionally omitted).

 

(C) Tenant shall have the right to protest and/or contest any Taxes which are
required to be paid by Tenant hereunder by appropriate administrative or legal
proceedings, provided, however:

 

(1) Such protest or contest shall not cause or result in a sale or foreclosure
of the Demised Premises;

 

(2) Tenant shall diligently prosecute such protest and/or contest; and

 

(3) Tenant shall be responsible for the payment of any penalties, interest or
fees with respect to the Taxes protested or contested.

 

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(D) If Tenant shall fail to pay any Taxes in accordance with paragraph (A); or
fail to discharge or bond any lien within thirty (30) days after Tenant becomes
aware thereof, Landlord shall have the right, after prior written notice thereof
to Tenant, to pay or discharge such Taxes on behalf of Tenant. Any amount so
paid by Landlord on behalf of Tenant shall be deemed Additional Rent hereunder
and shall be paid by Tenant within ten (10) business days of written demand
thereof by Landlord, together with an administrative charge pursuant to
Section 34.

 

31. USE; ALTERATIONS: Tenant may use the Demised Premises as a warehouse and/or
office for the distribution of supplies, equipment and apparel for marine and
boating uses, together with activities related thereto, including storage of
Tenant’s merchandise, or for any other lawful purpose. Tenant shall be
responsible for all fines or penalties imposed by law arising by reason of the
violation by Tenant of any laws, rules, ordinances or regulations relating to
the conduct of business in the Demised Premises issued by any governmental
authority having jurisdiction over the Demised Premises.

 

Tenant may operate its business on the Demised Premises, subject to the terms of
this Lease, as Tenant deems best and there shall be no restrictions upon Tenant
or upon the operation of its business except under applicable law or as set
forth in this Lease. Tenant shall not have any obligation to continuously use or
occupy the Demised Premises or conduct business therein during the Term and
Tenant shall have the right (at any time and from time to time) to discontinue
the use and occupancy of the Demised Premises or cease the conduct of business
therein; provided, however, that neither the cessation of Tenant’s use or
occupancy of the Demised Premises nor the discontinuation of the conduct of
business therein shall relieve or discharge Tenant from its obligation to pay
Fixed Rent, Additional Rent or other amounts payable by Tenant and perform the
obligations required by this Lease in the time and manner set forth herein.

 

Tenant shall not make any installations, alterations, additions, or improvements
in or to the Demised Premises, including, without limitation, any apertures in
the walls, partitions, ceilings or floors, without on each occasion obtaining
the prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed, except that only prior notice and a
description of and plans, if any, for the work (but no approval) shall be
required for any interior or exterior work costing less than $200,000 in the
aggregate during any twelve-month period that does not affect the Building’s
structure or mechanical, electrical, or other building systems. Any such work so
approved by Landlord shall be performed substantially in accordance with plans
and specifications therefor approved by Landlord. Tenant shall not perform any
work in or to the Demised Premises that would in Landlord’s reasonable judgment
(i) materially affect any structural component of the Building (including,
without limitation, exterior walls, exterior windows, core walls, columns,
roofs, or floor slabs) or (ii) in any respect be incompatible with the
electrical or mechanical components or systems of the Building. Tenant shall
procure at Tenant’s sole expense all necessary permits and licenses before
undertaking any work on the Property and shall perform all such work in a good
and workmanlike manner employing materials of good quality and so as to conform
with all applicable zoning, building, fire, health and other codes, regulations,
ordinances and laws and with all applicable insurance requirements. Tenant shall
require all contractors employed by Tenant to carry insurance in types and
amounts that are commercially reasonable in consideration of the particular
Tenant work project (including without limitation worker’s compensation
insurance in accordance

 

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with statutory requirements and commercial general liability insurance covering
such contractors on or about the Demised Premises with a combined single limit
not less than $1,000,000) and shall submit certificates evidencing such coverage
to Landlord prior to the commencement of any such work. Landlord may inspect the
work of Tenant at reasonable times in accordance with Section 40 and give notice
of observed defects. Upon completion of any such Tenant work project with a
total cost in excess of $100,000, Tenant shall provide Landlord with any “as
built” plans, copies of all construction contracts and proof of payment for all
labor and materials.

 

32. REAL ESTATE FEES: Tenant shall not be liable for any broker or real estate
commissions in connection with this Lease, and Landlord shall be solely
responsible therefor. Tenant warrants and represents that it has not been
represented by any broker or finder in connection with this transaction and
agrees to indemnify and save Landlord harmless from all loss, claim, damage or
expense (including reasonable attorneys’ fees of counsel of Landlord’s choice)
arising from Tenant’s breach of this representation and warranty. Landlord
warrants and represents that it has not been represented by any broker or finder
in connection with this transaction and agrees to indemnify and save Tenant
harmless from all loss, claim, damage or expense (including reasonable
attorneys’ fees of counsel of Tenant’s choice) arising from Landlord’s breach of
this representation and warranty. The foregoing warranties and representations
of Landlord and Tenant shall survive the expiration of the Term or any early
termination of this Lease. Tenant makes no representation or warranty concerning
any brokers, finders, or other parties that may have represented Landlord in
connection with the negotiation of this Lease. Landlord makes no representation
or warranty concerning any brokers, finders, or other parties that may have
represented Tenant in connection with the negotiation of this Lease.

 

33. LIENS AND ENCUMBRANCES: Tenant shall not create or suffer, shall keep
Landlord’s property, the Demised Premises and Tenant’s leasehold free of, and
shall promptly remove and discharge, any lien, notice of contract, charge,
security interest, mortgage or other encumbrance which arises for any reason,
voluntarily or involuntarily, as a result of any act or omission by Tenant or
persons claiming by, through or under Tenant, or any of their agents, employees
or independent contractors, including without limitation liens which arise by
reason of labor or materials furnished or claimed to have been furnished to
Tenant or for the Demised Premises.

 

34. LANDLORD’S CURE RIGHT; INTEREST: If Tenant shall neglect or fail to perform
or observe any covenant or condition of this Lease and shall not cure such
default within the applicable cure period, Landlord may, at its option, without
waiving any claim for breach, at any time thereafter cure such default for the
account of Tenant (and if required in connection therewith, enter the Premises
in accordance with Section 40 of this Lease), and any amount paid or any
liability incurred by Landlord in so doing shall be deemed paid or incurred for
the account of Tenant, and Tenant shall reimburse Landlord therefor, together
with an administrative charge as provided below, payable on demand as Additional
Rent. Notwithstanding any other provision herein concerning cure periods,
Landlord may cure any default for the account of Tenant after such notice to
Tenant, if any, as is reasonable under the circumstances (including telephonic
notice) if the curing of such default prior to the expiration of the applicable
cure period is reasonably necessary to prevent likely damage to the Demised
Premises or other improvements or possible injury to persons, or to protect

 

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Landlord’s interest in its property or the Demised Premises. Tenant shall pay to
Landlord on demand as Additional Rent all of the costs and expenses of Landlord,
including such administrative charge and reasonable attorneys’ fees, incurred in
enforcing any covenant or condition of this Lease. Without limiting any of other
rights or remedies set forth in this Lease, any sum due under this Section 34
(or due under any provision of this Lease referencing this Section 34) shall
bear an administrative charge of five percent (5%) upon the amount due, payable
immediately upon demand as Additional Rent.

 

35. EXISTING LEASE: Landlord and Tenant are, respectively, the current
“Landlord” and “Tenant” under that certain Lease Agreement dated December 1,
1986, by and between Indian Creek Company, as landlord, and Boat America
Corporation, as tenant (the “Existing Lease”). Upon the Commencement Date, this
Lease shall amend and restate the Existing Lease in its entirety and renew the
term thereof.

 

36. GENERAL PROVISIONS:

 

(A) The captions and numbered Sections of this Lease are inserted for
convenience only and are not a part of this Lease and do not in any way limit or
amplify the terms and provisions of this Lease.

 

(B) If more than one person or corporation is named as Landlord in this Lease
and executed the same as Landlord, then the word “Landlord” wherever used in
this Lease shall refer to all such persons or corporations, and the liability of
such persons or corporations for compliance with or for the performance of all
the terms, covenants and provisions of this Lease shall be joint and several.

 

(C) All the provisions of this Lease shall be construed as covenants and
agreements as though the words importing such covenants and agreements were used
in each separate Section hereof, and all the provisions hereof shall bind and
inure to the benefit of the parties hereto, their respective heirs, legal
representatives, successors and assigns.

 

(D) No amendment or modification of this Lease shall be effective unless in
writing and executed by duly authorized representatives of both Landlord and
Tenant.

 

(E) The Sections of this Lease are intended to be severable. If any Section or
provision of this Lease shall be held to be unenforceable by any court of
competent jurisdiction, this Lease shall be construed as though such Section had
not been included in it. If any Section or provision of this Lease shall be
subject to two constructions, one of which would render such Section or
provision invalid, then such Section or provision shall be given that
construction which would render it valid.

 

(F) Upon request of Tenant, Landlord shall promptly complete an IRS Form W-9 so
that Tenant may report the payments made by Tenant to Landlord under this Lease
as required by applicable governmental authorities.

 

19

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(G) This Lease shall not be strictly construed against Tenant as the draft or
writing of Tenant or because of any presumption arising out of terms favorable
to Tenant.

 

(H) Whenever required in the context of this Lease, the singular shall include
the plural and the plural shall include the singular. The masculine, feminine
and neuter genders shall each include the other. In any provision relating to
the conduct, acts or omissions of Tenant, the term “Tenant” shall include
Tenant’s agents, employees, contractors, invitees, successors or others using
the Demised Premises with Tenant’s expressed or implied permission.

 

(I) This Lease shall be construed and enforced in accordance with the laws of
the State of Maryland.

 

(J) Subject to the remaining provisions of this Lease, this Lease shall be
binding upon and shall inure to the benefit of, the parties hereto, and their
respective successors and assigns.

 

(K) LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY SUMMARY PROCEEDING IN
ANY EMERGENCY OR OTHER STATUTORY REMEDY, OR IN ANY ACTION BASED, IN WHOLE OR IN
PART, ON NON-PAYMENT OF RENT OR OTHER DEFAULT UNDER THIS LEASE; AND TENANT
FURTHER AGREES THAT IT SHALL NOT INTERPOSE ANY COUNTERCLAIM OR SET-OFF IN ANY
SUCH PROCEEDING, EXCEPT TO THE EXTENT THAT TENANT WOULD HAVE NO RIGHT TO
COMMENCE AN INDEPENDENT PROCEEDING TO SEEK TO RECOVER ON ACCOUNT OF SUCH CLAIM.

 

(L) If legal proceedings shall be instituted by either party to this Lease as a
result of a default under this Lease, the prevailing party in such proceeding
shall be entitled to claim and collect its reasonably incurred third-party
attorneys’ fees and court costs at both the trial and appellate levels.

 

37. NO OPTION: The submission of this Lease for examination does not constitute
a reservation of or option for the Demised Premises and this Lease becomes
effective as a Lease only upon execution and delivery thereof by Landlord and
Tenant.

 

38. ESTOPPEL AGREEMENT: Landlord and Tenant each shall, from time to time, upon
at least fifteen (15) business days’ prior notice by the other, execute,
acknowledge and deliver to a prospective purchaser or mortgagee, a statement
executed by both Landlord and Tenant certifying that this Lease is unmodified
and in full force and effect (or, if there have been modifications, that the
same is in full force and effect as modified and stating the modifications),
stating the dates to which the Fixed Rent and Additional Rent have been paid,
and stating whether or not there exists any defaults by Landlord or Tenant under
this Lease, and, if so, specifying each such default.

 

39. NET LEASE; TRUE LEASE: This Lease is an absolutely triple net lease to
Landlord, except and to the extent as expressly set forth herein. It is the
intent of the parties hereto that the Fixed Rent payable under this Lease shall
be an absolutely net return to Landlord and that

 

20

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Tenant shall pay all costs and expenses relating to the Demised Premises except
as otherwise expressly set forth in this Lease. Without limiting the generality
of the preceding sentence, except as expressly set forth in this Lease, Tenant
shall at its sole cost and expense (which expense shall be deemed Additional
Rent hereunder) be responsible for payment of all Taxes, all electricity,
telecommunication service, gas, water, sewer, telephone, refuse disposal, and
other charges for utilities and services supplied to the Demised Premises,
insurance costs, amounts due under any Title Document (defined below) and all
costs of cleaning, maintaining and repairing the Demised Premises in accordance
with the terms of this Lease. Any amount or obligation herein relating to the
Demised Premises that is not expressly declared to be that of Landlord shall be
deemed to be an obligation of Tenant to be performed by Tenant at Tenant’s
expense, and Tenant’s liability for the payment of any of the same which shall
become payable during the Term is hereby expressly provided to survive the Term.
Except as expressly provided in Section 12 and Section 13.2 of this Lease, Fixed
Rent, Additional Rent, and all other sums payable hereunder by Tenant, shall be
paid without notice or demand (but subject to any applicable notice and cure
periods provided pursuant to the express terms of this Lease), and without set
off, counterclaim, recoupment, abatement, suspension, deduction, or defense
(other than payment) whatsoever, so that this Lease shall yield net to Landlord
the Fixed Rent under all circumstances and conditions whether now or hereinafter
existing and whether or not within the contemplation of the parties. Except as
otherwise expressly set forth in this Lease with respect to certain events of
casualty or condemnation, Tenant shall in no event have any right to terminate
this Lease. It is the intention of the parties hereto that the obligations of
Tenant hereunder shall be separate and independent covenants and agreements,
that the Fixed Rent, the Additional Rent, and all other sums payable by Tenant
hereunder shall, except as expressly provided in Section 12 and Section 13.2,
continue to be payable in all events, and that the obligations of Tenant
hereunder shall continue unaffected, unless the requirement to pay or perform
the same shall have been terminated pursuant to an express provision of this
Lease. As used herein, the term “Title Documents” means any and all easements,
covenants, conditions, and restrictions, industrial park association agreements,
and other agreements, encumbrances, and restrictions of record affecting all or
part of the Demised Premises, as the same may now exist, or as the same may
hereafter be created or amended without materially expanding the obligations of
Tenant without Tenant’s approval (which approval shall not be unreasonably
withheld), but excluding any mortgage.

 

Landlord and Tenant agree that the parties intend this Lease to constitute a
lease and not a financing arrangement. Each party shall reflect the transaction
represented hereby in all applicable books, records and reports (including
income tax filings) in a manner consistent with “true lease” treatment rather
than “financing” treatment, subject to future modifications of accounting or tax
rules or guidelines and subject to contrary determinations or positions by
governmental agencies or the like.

 

40. LANDLORD’S RIGHT TO ENTER: Landlord and its agents or employees may upon
reasonable prior notice enter the Demised Premises during business hours (and in
case of emergency at any time) for the purpose of performing repairs or
replacements, or exercising any of the rights reserved to Landlord herein, and
similarly upon at least two (2) business days’ prior written notice, may show
the Demised Premises to prospective purchasers and lenders, and during the last
nine (9) months of the Term to prospective tenants, and may keep affixed in
suitable places notices for letting (during the last nine (9) months of the
Term) and selling. Except in case of emergency,

 

21

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Landlord shall be subject in entering the Demised Premises to reasonable
security conditions, if any, set forth by Tenant in writing to Landlord. If
Tenant so desires, a representative of Tenant may accompany Landlord or its
agents in any entry onto the Demised Premises under this Lease.

 

41. INTENTIONALLY DELETED.

 

42. TENANT’S FINANCIAL CONDITION: Within ten (10) business days after request
from Landlord from time to time, Tenant shall deliver to Landlord Tenant’s
financial statements, including audited annual financial statements, balance
sheets, income statements, and statements of cash flow, certified by Tenant’s
Treasurer or Chief Financial Officer, in each case for the latest available two
(2) fiscal years (the latest year ending no more than six (6) months prior to
Landlord’s request). Such financial statements shall be delivered to Landlord’s
mortgagees and lenders and prospective mortgagees, lenders and purchasers. The
foregoing requirement to deliver financial statements shall not be applicable at
any time during which Tenant’s financial statements are public available through
the SEC.

 

43. LIMITATION OF LANDLORD’S LIABILITY: Landlord shall be liable only for
breaches of Landlord’s obligations occurring while Landlord is owner of the fee
of which the Demised Premises are a part (provided, however, that if Landlord
shall ever sell and lease-back such fee, or the ground thereof or the
improvements thereon, then “fee” shall, in such event, be deemed to mean
Landlord’s leasehold interest and further provided that any such subsequent
Landlord assumes Landlord’s obligations hereunder). Tenant (and all persons
claiming by, through or under Tenant) agrees to look solely to Landlord’s
interest from time to time in the Demised Premises (including the uncollected
rents, issues, profits, and proceeds thereof, subject to the superior rights of
mortgagees therein) for satisfaction of any claim or recovery of any judgment
from Landlord; it being agreed that neither Landlord nor any trustee,
beneficiary, partner, member, manager, shareholder, agent or employee of
Landlord shall ever be personally or individually liable for any claim or
judgment, or otherwise, to Tenant (or such persons). In no event shall Landlord
or Tenant ever be liable for indirect or consequential damages (provided,
however, that Tenant shall be liable for such indirect or consequential damages
pursuant to Section 49 below); nor shall Landlord ever be answerable or liable
in any equitable judicial proceeding or order beyond the extent of such interest
in the Demised Premises.

 

44. MEMORANDUM OF LEASE: Neither party shall record this Lease, but each party
will, upon request of the other, execute a recordable memorandum of lease in a
form reasonably approved by Landlord and, upon termination, a like notice of
termination of lease; and Tenant irrevocably appoints Landlord as its
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver such notice of termination of lease in Tenant’s name, place and stead if
Tenant fails so to do with sixty (60) days of any written request. The party
requesting the recording of a memorandum shall bear the cost of transfer and
recordation tax due in connection therewith.

 

45. WAIVERS: All waivers shall be in writing and signed by the waiving party.
Landlord’s failure to enforce any provision of this Lease or its acceptance of
rent shall not be a waiver and shall not prevent Landlord from enforcing that
provision or any other provision of this Lease in the future. Tenant’s failure
to enforce any provision of this Lease pursuant to the express

 

22

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terms hereof shall not be a waiver and shall not prevent Tenant from enforcing
that provision or any other provision of this Lease pursuant to the express
terms hereof in the future. No statement on a payment check from Tenant or in a
letter accompanying a payment check shall be binding on Landlord. Landlord may,
with or without notice to Tenant, negotiate such check without being bound by to
the conditions of such statement.

 

46. FORCE MAJEURE: If either party cannot perform any of its obligations due to
events beyond such party’s reasonable control, the time provided for performing
such obligations shall be extended by a period of time equal to the duration of
such events. Events beyond the parties’ reasonable control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and extreme weather conditions (any of the foregoing constituting
“Force Majeure”) but exclude financial circumstances. Notwithstanding the
foregoing, the events listed in this Section 46 shall not excuse Tenant’s
failure to pay any Fixed Rent or Additional Rent due under this Lease.

 

47. WAIVER OF CLAIM – INDEMNIFICATION: Without limiting any other provisions
hereof, but subject to the provisions of Section 19 hereof, Tenant agrees to
defend, protect, indemnify and save Landlord and its partners, affiliates,
officers, agents, servants and employees and Landlord’s management, leasing and
development agents and Landlord’s mortgagee(s) from time to time from and
against all liability to third parties arising out of the use of the Demised
Premises by, or the acts or omissions of, Tenant or its servants, agents,
employees, contractors, suppliers, workers or invitees. To the extent not
prohibited by law and subject to the waiver of subrogation contained in
Section 19, Landlord and its partners, affiliates, officers, agents, servants
and employees shall not be liable for any damage either to person, property or
business resulting from the loss of the use thereof sustained by Tenant or by
other persons due to the Building or any part thereof or any appurtenances
thereto becoming out of repair, or due to the happening of any accident or event
in or about the Building, including the Demised Premises, or due to any act or
neglect of any tenant or occupant of the Building or of any other person, unless
and then only to the extent caused by the negligence or willful misconduct of
Landlord or its agents, employees or contractors or a breach of the express
provisions of this Lease (subject to any applicable notice and cure periods).
This provision shall apply particularly, but not exclusively, to damage caused
by gas, electricity, snow, ice, frost, steam, sewage, sewer gas or odors, fire,
water or by the bursting or leaking of pipes, faucets, sprinklers, plumbing
fixtures and windows, and except as provided above, shall apply without
distinction as to the person whose act or neglect was responsible for the damage
and shall apply whether the damage was due to any of the causes specifically
enumerated above or to some other cause of an entirely different kind. Tenant
further agrees that all personal property upon the Demised Premises, or upon
loading docks, recovering and holding areas, or freight elevators of the
Building, shall be at the risk of Tenant only, and that Landlord shall not be
liable for any loss or damage thereto or theft thereof, unless and to the extent
the same is actually caused by the negligence or willful misconduct of Landlord
or its agents, employees or contractors or a breach of the express provisions of
this Lease (subject to any applicable notice and cure periods). The provisions
of this Section 47 shall survive the expiration or earlier termination of the
Lease, and shall not derogate from the abatement and termination rights set
forth in Section 48.

 

23

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Landlord shall save Tenant, its directors, officers, agents and employees
harmless and indemnified against any claim, loss or cost, whether in law or in
equity, arising out of any injury, loss, theft or damage to any person or
property while on or in the Demised Premises if and to the extent the same are
actually due to the negligence or willful misconduct of the Landlord, its
employees, contractors or agents.

 

48. INTERRUPTION: In case Landlord is prevented or delayed from making any
repairs or replacements or furnishing any services or performing any other
covenant or duty to be performed on Landlord’s part by reason of any cause
reasonably beyond Landlord’s control, Landlord shall not be liable to Tenant
therefor, nor shall the same give rise to a claim in Tenant’s favor that such
failure constitutes actual or constructive, total or partial, eviction from the
Demised Premises. Landlord reserves the right to stop any service or utility
system, when necessary by reason of accident or emergency, or until necessary
repairs have been completed; provided, however, that in each instance of
stoppage, Landlord shall give Tenant such notice as is practicable under the
circumstances of the expected duration of such stoppage and will exercise
reasonable diligence to eliminate the cause thereof. Except in case of emergency
repairs Landlord will give Tenant reasonable advance notice of any contemplated
stoppage and will use reasonable efforts to avoid unnecessary inconvenience to
Tenant by reason thereof.

 

49. HOLDING OVER: If Tenant (or anyone claiming by, through or under Tenant)
shall remain in possession of the Demised Premises or any part thereof after the
expiration or earlier termination of this Lease with respect to any portion of
the Demised Premises without any agreement in writing executed with Landlord,
the person remaining in possession shall be deemed a tenant at sufferance,
Tenant shall thereafter pay Fixed Rent at 125% of the amount payable for the
twelve month period immediately preceding such expiration or termination and
with all Additional Rent payable and covenants of Tenant in force as otherwise
herein provided, and Tenant shall be liable to Landlord for all damages directly
arising from such breach, and for indirect or consequential damages relating
only to any loss of any replacement tenant(s) for the Demised Premises of which
Tenant had written notice. After acceptance of the full amount of such rent by
Landlord the person remaining in possession shall be deemed a tenant from
month-to-month at such rent and otherwise subject to and having agreed to
perform all of the provisions of this Lease, but Landlord will not be deemed to
have relinquished any claims for damages.

 

24

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.

 

LANDLORD:   TENANT:

SCP Green Hagerstown, LLC, a Delaware

limited liability company

 

West Marine Products, Inc., a California

corporation

By:

 

/s/ Benjamin S. Butcher

--------------------------------------------------------------------------------

 

By:

 

/s/ Eric Nelson

--------------------------------------------------------------------------------

Title:

 

Benjamin S. Butcher, Authorized Person

 

Title:

 

Eric Nelson, Chief Financial Officer

 

25

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EXHIBIT “A”

 

Demised Premises:

 

Situate on the northern side of Longmeadow Road near its intersection with the
Western Maryland Railway Company right-of-way near Paramount, Election District
No. 27, Washington County, Maryland and more particularly described in
accordance with a recent survey by Davis, Renn & Shrader, Inc. as follows:
Beginning at a 5/8” Re-bar set in the north margin line of Long Meadow Road said
Re-bar being also at the end of the 5th or S. 86º 09’ 45” E. 219.50 feet line of
a conveyance from the Mitchel-Tyler Company to the Washington County
Commissioners recorded in Liber 443, folio 461 among the Washington County land
records and running thence with said Road right-of-way and said 5th line
reversed, N. 86º 09’ 45” W. 219.50’ to a 5/8” Re-bar set in the north margin
line of Longmeadow road; thence with the 4th line of said conveyance reversed
and corrected in a recent survey by Davis, Renn & Shrader, Inc., N. 03º 57’ 38”
W. 20.03’ to a 5/8” Re-bar set; thence with the north margin line of Longmeadow
Road and the 3rd line of said conveyance reversed N. 86º 09’ 45” W. 216.50’ to a
5/8” Re-bar set; thence with the east margin line of Porter Chemical Road and
with the remaining portion, after the aforesaid conveyance from Harold M. Porter
to Mitchel-Tyler Company recorded in Liber 376, folio 603 of Washington County
land records, N. 26º 29’ 46” E. 2,154.96’ to a recovered iron pin in concrete;
thence with the 3rd line of the said Porter conveyance S. 63º 30’ 14” E. 412.50’
to a recovered iron pin in concrete in the western margin line of the Western
Maryland Railway Company, now the C.S.X. Railroad; thence binding thereon and
running with the remainder of the 4th line of the said Porter conveyance, S. 26º
29’ 46” W. 2,004.26’; to the place of beginning containing 19.69 acres, more or
less.

 

TOGETHER WITH a non-exclusive right of way for ingress to and egress from the
Land described above, in common with others, over the bed of the 50 foot street
running northward from the Longmeadow Church Road along the west side and with
the fourth (4th) line of the land described above.

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EXHIBIT “B”

 

[ALTA/ACSM Land Title Survey prepared for Stag Capital Partners, LLC by Davis
Renn & Associates, Inc. depicting the parcel of land on which the Hagerstown
distribution center is constructed, including the distribution center building,
certain rights-of-way, the parking lot and a railroad siding adjacent to the
distribution center.]

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EXHIBIT “C”

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

Tenant Name:   West Marine Products, Inc. Trade Name:   West Marine, Boat US
Room/Unit No.:   N/A

 

THIS AGREEMENT is dated the          day of                     , 2005, and is
made by and among                                          (“Mortgagee”), WEST
MARINE PRODUCTS, INC. a California corporation, having an address at 500
Westridge Drive, Watsonville, CA 95076, Atten: Real Estate Dept., MS G-6
(“Tenant”), and SCP Green Hagerstown, LLC, a Delaware limited liability company
(“Landlord).

 

RECITALS:

 

A. Tenant has entered into a Lease Agreement (the “Lease”) dated October     ,
2005 with SCP Green Hagerstown, LLC (“Landlord”) covering the premises on the
property known as 19224 Longmeadow Rd., Hagerstown, MD 21742 within, more
particularly described as shown on Exhibit A, attached hereto (the “Premises” or
the “Real Property”).

 

B. Mortgagee has agreed to make or has made a mortgage loan in the amount of
                                         to Landlord, secured by a mortgage of
the Real Property (the “Mortgage”), and the parties desire to set forth their
agreement herein.

 

NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

 

1. The Lease and all extensions, renewals, replacements or modifications thereof
are and shall be subject and subordinate to the Mortgage and all terms and
conditions thereof insofar as it affects the Real Property of which the Premises
form a part, and to all renewals, modifications, consolidations, replacements
and extensions thereof, to the full extent of amounts secured thereby and
interest thereon.

 

2. Tenant shall attorn to and recognize any purchaser at a foreclosure sale
under the Mortgage, any transferee who acquires the Premises by deed in lieu of
foreclosure, and the successors and assigns of such purchaser(s), as its
landlord for the unexpired balance (and any renewals or extensions, if
exercised) of the term of the Lease on the same terms and conditions set forth
in the Lease.

 

3. If it becomes necessary to foreclose the Mortgage, Mortgagee shall neither
terminate the Lease nor join Tenant in summary or foreclosure proceedings for
the purpose of terminating the Lease so long as Tenant is not in default under
any of the terms, covenants, or

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conditions of the Lease beyond any applicable notice and cure periods. Lender,
by its acceptance of this Agreement, agrees that in the event Lender or any
other party takes possession of the Demised Premises and/or other such premises
as noteholder-in-possession, by foreclosure of the Mortgage or by acquisition of
title in lieu of foreclosure, that Lender or such other party shall not affect
or disturb Tenant’s right to possession or Tenant’s other rights under the Lease
in the exercise of Lender’s or such other party’s rights, so long as Tenant is
not then in default under any of the terms, covenants, or conditions of the
Lease beyond the curative periods applicable thereto under the Lease.

 

4. If Mortgagee succeeds to the interest of Landlord under the Lease, Mortgagee
shall not be: (a) liable for the return of any security deposit unless such
deposit has been delivered to Mortgagee by Landlord or is in an escrow fund
available to Mortgagee, (b) bound by any rent or additional rent that Tenant
might have paid more than two (2) months in advance to any prior landlord
(including Landlord), (c) bound by any material amendment, modification, or
termination of the Lease made without Mortgagee’s prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed), or
(d) personally liable under the Lease, Mortgagee’s liability thereunder being
limited to its interest in the Real Property.

 

5. This Agreement shall be binding on and shall inure to the benefit of the
parties hereto and their successors and assigns.

 

6. Tenant shall give Mortgagee, by commercial overnight delivery service, a copy
of any notice of default served on Landlord at the same time such notice is sent
to the Landlord, addressed to Mortgagee at Mortgagee’s address set forth above
or at such other address as to which Tenant has been notified in writing.
Mortgagee shall have the right, but not the obligation, to cure such default
within the time period specified in the Lease. Should Tenant not give Mortgagee
a copy of any such Notice of default at the time it is addressed to Landlord,
such failure shall not be deemed a breach of this Agreement, but Mortgagee shall
have the same period of time allowed in the Lease in which to cure the default
complained of, should Mortgagee elect to do so, running from the date of
Mortgagee’s actual receipt of a copy of such Notice.

 

7. Landlord has agreed under the Mortgage and other loan documents that rentals
payable under the Lease shall be paid directly by Tenant to Mortgagee upon
default by Landlord under the Mortgage. After receipt of notice from Mortgagee
to Tenant, at the address set forth above or at such other address as to which
Tenant has notified Mortgagee in writing, at least ten (10) days prior to the
date that the next rental payment is due under the Lease, sent by registered or
certified mail, return receipt requested, that rentals under the Lease should be
paid to Mortgagee, Tenant shall pay to Mortgagee, or at the direction of
Mortgagee, all monies due or to become due to Landlord under the Lease. Tenant
shall have no responsibility to ascertain whether such demand by Mortgagee is
permitted under the Mortgage, or to inquire into the existence of a default.
Landlord hereby waives any right, claim, or demand it may now or hereafter have
against Tenant by reason of such payment to Mortgagee, and any such payment
shall discharge the obligations of Tenant to make such payment to Landlord.

 

8. Tenant’s subordination is upon and subject to the express conditions that:

 

a. So long as Tenant continues to pay the rent as provided for in the Lease and
otherwise complies with all the terms and provisions thereof, Lender shall not
disturb the rights of possession of Tenant in and to the Premises or other
premises as set forth in the Lease, notwithstanding any foreclosures or
proceedings in lieu thereof affecting the Premises and/or such other premises
and whether or not Tenant is made a party thereto; and

--------------------------------------------------------------------------------

b. If the Premises or other such premises or any part thereof is damaged or
destroyed by casualty or by the exercise of any right of eminent domain, the
proceeds of any insurance or condemnation award relating thereto shall be made
available for the purpose of repair or restoration thereof as provided for in
the Lease; and

 

c. Upon passing of title to the Real Property to the Lender or to any other
party in any foreclosure or proceedings in lieu thereof, the party acquiring
such title shall thereupon during the period of such party’s ownership, by
virtue of such acquisition of title and continued ownership and without the
execution of any further instruments or documents, be deemed to be the Landlord
for all purposes of the Lease during the period of such ownership and be deemed
to have assumed the full and complete performance of all the obligations of
Landlord as set forth in the Lease which accrue during the period of such
ownership; and

 

d. If Lender shall take possession of the Premises without acquiring title
thereto, but in such a manner as to be entitled to receive rents therefrom,
Lender shall, in addition, be deemed to have assumed all the obligations of
Landlord set forth in the Lease accruing during such period of possession.

 

e. Upon any default or claimed default of Landlord to Mortgagee, the rights of
Tenant under the Lease shall not be terminated or disturbed except in accordance
with the terms and provisions of the Lease.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.

 

WITNESSES:   MORTGAGEE:    

 

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  By:  

 

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Name:        

 

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  Its:  

 

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Name:             TENANT:     WEST MARINE PRODUCTS, INC.

 

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  By:  

 

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Name:             Printed Name  

 

--------------------------------------------------------------------------------

 

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  Its:  

 

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Name:             LANDLORD:

 

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  SCP GREEN HAGERSTOWN, LLC Name:             By:     SCP Green Manager, LLC,
its manager

 

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Name:   By:         Its:    

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STATE OF CALIFORNIA)     :   ss. SANTA CRUZ COUNTY )    

 

On                     , before me, the undersigned Notary Public, personally
appeared                                         , known to me to be the person
whose name is subscribed to the within instrument, and acknowledged to me he or
she executed the same in her or his authorized capacity, and that by his or her
signature on the instrument, the entity upon behalf of which the person acted
executed the within instrument.

 

WITNESS my hand and official seal:             

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         NOTARY PUBLIC     

 

STATE/COMMONWEALTH OF                                          

                                          County, ss.

 

On this          day of                     , 200  , before me, the undersigned
notary public, personally appeared                                         ,
proved to me through satisfactory evidence of identification, which was
                                                             , to be the person
whose name is signed on the preceding or attached document, and acknowledged to
me that (he) (she) signed it voluntarily for its stated purpose, as
                                         of WEST MARINE PRODUCTS, INC., a
                                        .

 

 

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(official signature and seal of notary) Name:  

 

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My commission expires:  

 

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COMMONWEALTH OF MASSACHUSETTS                                           County,
ss.

 

On this          day of                     , 20    , before me, the undersigned
notary public, personally appeared                     , proved to me through
satisfactory evidence of identification, which was
                                                             , to be the person
whose name is signed on the preceding or attached document, and acknowledged to
me that (he) (she) signed it voluntarily for its stated purpose, as Manager of
SCP Green Manager, LLC, a Delaware limited liability company.

 

 

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(official signature and seal of notary) Name:  

 

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My commission expires:  

 

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Exhibit A

 

Situate on the northern side of Longmeadow Road near its intersection with the
Western Maryland Railway Company right-of-way near Paramount, Election District
No. 27, Washington County, Maryland and more particularly described in
accordance with a recent survey by Davis, Renn & Shrader, Inc. as follows:
Beginning at a 5/8” Re-bar set in the north margin line of Long Meadow Road said
Re-bar being also at the end of the 5th or S. 86º 09’ 45” E. 219.50 feet line of
a conveyance from the Mitchel-Tyler Company to the Washington County
Commissioners recorded in Liber 443, folio 461 among the Washington County land
records and running thence with said Road right-of-way and said 5th line
reversed, N. 86º 09’ 45” W. 219.50’ to a 5/8” Re-bar set in the north margin
line of Longmeadow road; thence with the 4th line of said conveyance reversed
and corrected in a recent survey by Davis, Renn & Shrader, Inc., N. 03º 57’ 38”
W. 20.03’ to a 5/8” Re-bar set; thence with the north margin line of Longmeadow
Road and the 3rd line of said conveyance reversed N. 86º 09’ 45” W. 216.50’ to a
5/8” Re-bar set; thence with the east margin line of Porter Chemical Road and
with the remaining portion, after the aforesaid conveyance from Harold M. Porter
to Mitchel-Tyler Company recorded in Liber 376, folio 603 of Washington County
land records, N. 26º 29’ 46” E. 2,154.96’ to a recovered iron pin in concrete;
thence with the 3rd line of the said Porter conveyance S. 63º 30’ 14” E. 412.50’
to a recovered iron pin in concrete in the western margin line of the Western
Maryland Railway Company, now the C.S.X. Railroad; thence binding thereon and
running with the remainder of the 4th line of the said Porter conveyance, S. 26º
29’ 46” W. 2,004.26’; to the place of beginning containing 19.69 acres, more or
less.

 

TOGETHER WITH a non-exclusive right of way for ingress to and egress from the
Land described above, in common with others, over the bed of the 50 foot street
running northward from the Longmeadow Church Road along the west side and with
the fourth (4th ) line of the land described above.

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EXHIBIT “D”

 

Insurance

 

This Exhibit D shall be incorporated into the Lease, and where terms of this
Exhibit conflict with these terms within the Lease, the terms of this Exhibit
shall prevail and govern the Lease.

 

I. INSURANCE

 

  (a) Coverage. At Tenant’s sole cost and expense (to be reimbursed to Landlord
within 30 days of Landlord’s written request therefor, which shall include
reasonable back up documentation), but not more than once annually, Landlord
shall purchase and maintain insurance during the entire Term of the Lease and
any period Tenant (or any party claiming by, through or under Tenant) occupies
any portion of the Demised Premises, for the benefit of the Tenant and Landlord
(as their interest may appear) with terms and coverages reasonably satisfactory
to Landlord and Tenant, and with insurers having a minimum A.M. Best rating of
at least A-/X, and with such increases in limits as Landlord and Tenant may from
time to time reasonably require, but initially Landlord shall maintain the
following coverages in the following amounts:

 

  (i) Property insurance covering property damage and business interruption for
the entire Demised Premises. Covered property shall include the Building,
boilers and machinery and all tenant improvements. Such insurance shall name
Tenant, Landlord and Landlord’s mortgagee(s) from time to time as additional
loss payees as their interests may appear. Such insurance shall be written on an
“all risk” of physical loss or damage basis including but not limited to the
perils of fire, extended coverage, windstorm, vandalism, malicious mischief,
terrorism (certified and uncertified), sprinkler leakage, flood, windstorm and
earthquake, for the full replacement cost value of at least Seven Million
Dollars ($7,000,000) of the covered items without depreciation and other
endorsements as Landlord shall reasonably request from time to time, including
demolition, ordinance or law, and increased cost of construction and in amounts
that meet any co-insurance clause of the policies of insurance with a deductible
amount not to exceed $50,000. Such insurance shall include rent continuation
coverage of no less than twelve (12) months.

 

  (ii) Commercial General Liability Insurance (to be provided at Landlord’s sole
cost and expense) naming Landlord, Landlord’s management, leasing and
development agents and Landlord’s mortgagee(s) from time to time as additional
insureds, with coverage for premises/operations, personal and advertising
injury, products/completed operations and contractual liability with combined
single limits of liability of not less than $1,000,000 for bodily injury and
property damage per occurrence and not less than 2,000,000 in the aggregate and
excess liability insurance with a limit not less than $10,000,000 per occurrence
and aggregate.

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  (b) Tenant’s Coverage. At Tenant’s sole cost and expense, Tenant shall
purchase and maintain insurance during the entire Term of the Lease and any
period Tenant (or any party claiming by, through or under Tenant) occupies any
portion of the Demised Premises, for the benefit of the Tenant and Landlord (as
their interest may appear) with terms and coverages reasonably satisfactory to
Landlord and Tenant, and with insurers having a minimum A.M. Best rating of at
least A-/X, and with such increases in limits as Landlord and Tenant may from
time to time reasonably require, but initially Tenant shall maintain the
following coverages in the following amounts:

 

  (i) Commercial General Liability Insurance naming Tenant, Landlord, Landlord’s
management, leasing and development agents and Landlord’s mortgagee(s) from time
to time as additional insureds, with coverage for premises/operations, personal
and advertising injury, products/completed operations and contractual liability
with combined single limits of liability of not less than $1,000,000 for bodily
injury and property damage per occurrence and not less than 2,000,000 in the
aggregate and excess liability insurance with a limit not less than $10,000,000
per occurrence and aggregate.

 

  (ii) Property insurance covering office furniture, trade fixtures, office
equipment, merchandise and all other items of Tenant’s property on the Demised
Premises

 

  (iii) Workers’ Compensation Insurance and Employers Liability Insurance with
statutory limits and automobile liability insurance (coverage must include owed,
leased, hired and non owned vehicles) with a limit of at least $1,000,000.

 

Landlord and Tenant shall, prior to the commencement of the Term and on each
anniversary of the Commencement Date and/or renewal date thereof, furnish to
each other certificate(s) (ACCORD Form 27) evidencing such coverage, which
certificate(s) shall state that such insurance coverage may not be changed or
cancelled unless the provider endeavors to provide at least thirty (30) days’
prior written notice to each of Landlord and Tenant.

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EXHIBIT “E”

 

Estoppel

 

ESTOPPEL CERTIFICATE

 

TO:    LANDLORD:    SCP Green Hagerstown, LLC      LENDER:    Connecticut
General Life Insurance Company, having an address c/o CIGNA Investments, Inc.,
280 Trumbull Street, Hartford, Connecticut 06103, Attn: Debt Asset Management,
H-11-H      TENANT:    West Marine Products, Inc.      PROPERTY:    19224
Longmeadow Rd., Hagerstown, MD 21742

 

West Marine Products, Inc., a California corporation (herein called “Tenant”),
is the lessee of certain space consisting of approximately 287,300 square feet
(the “Demised Premises”), the property above identified, under the terms of a
lease (the “Lease”) with Landlord. As of the date of this Estoppel Certificate
(Certificate”), Landlord and Tenant hereby certify, to the best of their
knowledge, as follows:

 

1. The Lease, dated October __, 2005, has not been modified, supplemented, or
amended in any way. The expiration date of the current term of the Lease is
November 30, 2011, excluding renewals and extensions. Tenant has the option to
renew the Lease for one additional term of five (5) years.

 

2. The monthly Rent currently payable under the Lease is $46,000.00, and has
been paid through                     , 2005. Tenant has not paid a security
deposit. No offset, claim, defense or counterclaim presently exists against Rent
or Additional Rent payable by Tenant or against any other performance or
obligation otherwise due from Tenant under the Lease, and no event has occurred
and no condition exists, which with the giving of notice or the passage of time,
or both, would constitute a default under the Lease. Notwithstanding anything
contained in this Certificate to the contrary, nothing in this Certificate shall
limit, prejudice or affect either Tenant’s right to audit, inspect or confirm
any Additional Rent charges payable or paid by Tenant with respect to the
current year or any prior years of the Lease term, or Tenant’s rights under the
Lease or applicable law with respect to same. No Additional Rent is due to
Landlord for any year prior to the present year with the exception of any
year-end adjustment that may be made between the actual amounts owed and any
impounded amounts paid during this year.

 

For purposes of this Certificate, “Tenant’s knowledge,” shall mean and be
limited to the actual knowledge of the individuals signing this Certificate on
behalf of Tenant (without imputation of any knowledge from any of Tenant’s other
employees, agents, contractors or attorneys and without any investigation or
inquiry).

 

[Signatures Follow On Next Page]

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WITNESS execution of this Estoppel Certificate:

 

SCP GREEN HAGERSTOWN, LLC   WEST MARINE PRODUCTS, INC. By:  

 

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  By:  

 

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    Printed Name       Printed Name         Title:  

 

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        Dated:                     , 2005