EXHIBIT 10.1

 

 
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
 
by and among
 
WEST MARINE PRODUCTS, INC.
 
and
 
EACH OF THE PERSONS THAT ARE SIGNATORIES HERETO AS BORROWERS
as Borrowers,
 
-and-
 
EACH OF THE PERSONS THAT ARE SIGNATORIES HERETO AS GUARANTORS
as Guarantors,
 
-and-
 
THE LENDERS THAT ARE SIGNATORIES HERETO
as Lenders,
 
-and-
 
WELLS FARGO RETAIL FINANCE, LLC
as Agent,
 
-and-
 
WELLS FARGO CAPITAL FINANCE, LLC
as Sole Lead Arranger and Sole Bookrunner
 
Dated as of August 23, 2010

 

 
 

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TABLE OF CONTENTS
 

   
Page
     
Section 1.
DEFINITIONS AND CONSTRUCTION.
2
     
1.1.
Definitions
2
1.2.
Accounting Terms
34
1.3.
Code
34
1.4.
Construction
34
1.5.
Schedules and Exhibits
35
     
Section 2.
LOAN AND TERMS OF PAYMENT.
35
     
2.1.
Revolver Advances
35
2.2.
Borrowing Procedures and Settlements.
36
2.3.
Payments and Reductions.
44
2.4.
Overadvances
47
2.5.
Interest Rates, Letter of Credit Fee, Rates, Payments, and Calculations.
47
2.6.
Cash Management.
50
2.7.
Crediting Payments; Float Charge.
52
2.8.
Designated Account
52
2.9.
Maintenance of Loan Account; Statements of Obligations
53
2.10.
Fees
53
2.11.
Letters of Credit.
53
2.12.
LIBOR Option.
57
2.13.
Capital Requirements
60
2.14.
Joint and Several Liability of Borrowers.
60
2.15.
Replacement of Lenders under Certain Circumstances
63
     
Section 3.
CONDITIONS; TERM OF AGREEMENT.
63
     
3.1.
Conditions Precedent to Effectiveness of Agreement
63
3.2.
Conditions Precedent to all Extensions of Credit
65
3.3.
Term
66
3.4.
Effect of Termination
66
3.5.
Early Termination by Borrowers
67
     
Section 4.
CREATION OF SECURITY INTEREST.
67
     
4.1.
Grant of Security Interest
67
4.2.
Other Collateral
67
4.3.
Collection of Accounts, General Intangibles, and Negotiable or Transferable
Collateral
68
4.4.
Authorization to File Financing Statements.
69
4.5.
Power of Attorney
69
4.6.
Right to Inspect; Inventories, Appraisals and Audits
70
4.7.
Control Agreements
71
4.8.
Grant of Non-Exclusive License
71
     
Section 5.
REPRESENTATIONS AND WARRANTIES.
72
     
5.1.
No Encumbrances
72
5.2.
Eligible Accounts
72

 
 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
5.3.
Eligible Inventory
72
5.4.
Location of Inventory
73
5.5.
Inventory Records
73
5.6.
Jurisdiction of Incorporation; Location of Chief Executive Office; FEIN;
Organizational ID Number.
73
5.7.
Due Organization and Qualification; Subsidiaries.
74
5.8.
Due Authorization; No Conflict.
74
5.9.
Litigation.
75
5.10.
No Material Adverse Change
75
5.11.
Solvency.
75
5.12.
Employee Benefits
76
5.13.
Environmental Condition
76
5.14.
Brokerage Fees
76
5.15.
Intellectual Property
76
5.16.
Leases
76
5.17.
Deposit Accounts
76
5.18.
Complete Disclosure
77
5.19.
Credit Card Receipts
77
5.20.
Holding Company and Investment Company Acts
77
5.21.
Absence of Financing Statements, etc
77
5.22.
Certain Transactions
77
5.23.
Regulations U and X
77
5.24.
Labor Relations
78
5.25.
Indebtedness
78
5.26.
Payment of Taxes
78
5.27.
Foreign Assets Control Regulations, Etc
79
     
Section 6.
AFFIRMATIVE COVENANTS.
79
     
6.1.
Accounting System
79
6.2.
Collateral Reporting
79
6.3.
Financial Statements, Reports, Certificates
80
6.4.
Returns
81
6.5.
Maintenance of Properties.
82
6.6.
Taxes
82
6.7.
Insurance
82
6.8.
Location of Eligible Inventory
83
6.9.
Compliance with Laws
83
6.10.
Leases
83
6.11.
Existence
83
6.12.
Environmental
83
6.13.
Disclosure Updates
84
6.14.
Formation of Subsidiaries
84
6.15.
Notice to Agent.
84
6.16.
Further Assurances
85

 
 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
Section 7.
NEGATIVE COVENANTS.
86
     
7.1.
Indebtedness
86
7.2.
Liens
87
7.3.
Restrictions on Negative Pledges and Upstream Limitation.
87
7.4.
Restrictions on Fundamental Changes
88
7.5.
Disposal of Assets; Sale and Leaseback
89
7.6.
Change Name
89
7.7.
Prepayments and Amendments on Subordinated Obligations
89
7.8.
Consignments
89
7.9.
Distributions
90
7.10.
Accounting Methods
90
7.11.
Investments, Acquisitions
90
7.12.
Transactions with Affiliates
90
7.13.
Suspension
90
7.14.
Use of Proceeds
90
7.15.
Store Closings
91
7.16.
Securities Accounts
91
7.17.
Employee Benefit Plans
91
7.18.
Deposit Accounts, Credit Card Agreements, etc
91
7.19.
Minimum Adjusted Availability
92
     
Section 8.
EVENTS OF DEFAULT.
92
     
Section 9.
THE LENDER GROUP’S RIGHTS AND REMEDIES.
94
     
9.1.
Rights and Remedies
94
9.2.
Securities and Deposits
97
9.3.
Standards for Exercising Rights and Remedies
97
9.4.
Remedies Cumulative
98
     
Section 10.
TAXES AND EXPENSES.
98
     
Section 11.
WAIVERS; INDEMNIFICATION.
98
     
11.1.
Demand; Protest; etc
98
11.2.
The Lender Group’s Liability for Collateral
99
11.3.
Indemnification
99
     
Section 12.
NOTICES.
100
     
Section 13.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
101
     
Section 14.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
102
     
14.1.
Assignments and Participations.
102
14.2.
Successors
105

 
 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
Section 15.
AMENDMENTS; WAIVERS.
106
     
15.1.
Amendments and Waivers
106
15.2.
Replacement of Holdout Lender
107
15.3.
No Waivers; Cumulative Remedies
107
     
Section 16.
AGENT; THE LENDER GROUP.
108
     
16.1.
Appointment and Authorization of Agent
108
16.2.
Delegation of Duties
108
16.3.
Liability of Agent
108
16.4.
Reliance by Agent.
109
16.5.
Notice of Default or Event of Default
109
16.6.
Credit Decision
110
16.7.
Costs and Expenses; Indemnification
111
16.8.
Successor Agent
111
16.9.
Agent in Individual Capacity
112
16.10.
Lender in Individual Capacity
112
16.11.
Payments to, and Distributions by, Agent.
112
16.12.
Duties in the Case of Enforcement
113
16.13.
Agent May File Proofs of Claim.
113
16.14.
Withholding Taxes.
114
16.15.
Collateral Matters.
117
16.16.
Restrictions on Actions by Lenders; Sharing of Payments.
118
16.17.
Agency for Perfection
118
16.18.
Payments by Agent to Lenders
119
16.19.
Concerning the Collateral and Related Loan Documents
119
16.20.
Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information
119
16.21.
Several Obligations; No Liability
120
16.22.
Legal Representation of Agent
120
     
Section 17.
GUARANTY
121
     
17.1.
Guarantees by the Guarantors
121
17.2.
Guarantees Absolute
121
17.3.
Effectiveness; Enforcement
122
17.4.
Waiver
123
17.5.
Subordination; Subrogation
123
17.6.
Payments
123
17.7.
Receipt of Information.
123
     
Section 18.
GENERAL PROVISIONS.
124
     
18.1.
Expenses
124
18.2.
Effectiveness
124
18.3.
Section Headings
124
18.4.
Interpretation
125

 
 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
18.5.
Severability of Provisions
125
18.6.
Amendments in Writing
125
18.7.
Counterparts; Telefacsimile Execution
125
18.8.
Revival and Reinstatement of Obligations
125
18.9.
Confidentiality
126
18.10.
Integration
126
18.11.
West Marine Products as Agent for Borrowers
126
18.12.
Judgment Currency; Contractual Currency.
127
18.13.
USA Patriot Act
128
18.14.
Amendment and Restatement of Existing Loan Agreement
128

 
 
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EXHIBITS AND SCHEDULES
 
Exhibit A-1
Form of Assignment and Acceptance

Exhibit B-1
Form of Borrowing Base Certificate

Exhibit L-1
Form of Loan Request/LIBOR Notice

Exhibit N-1
Form of Note

Schedule A-1
Agent’s Account

Schedule B-1
Approved Brokers and Forwarders

Schedule C-1
Commitments

Schedule D-1
Designated Account

Schedule P-1
Permitted Liens

Schedule 2.11
Existing Letters of Credit

Schedule 5.4
Eligible Inventory Locations

Schedule 5.6
States of Organization, Chief Executive Offices, FEINS

Schedule 5.7(b)
Capitalization of Loan Parties’ Subsidiaries

Schedule 5.9
Litigation

Schedule 5.11
Entities Not Solvent

Schedule 5.13
Environmental Matters

Schedule 5.17
Deposit Accounts and Securities Accounts

Schedule 5.19
Credit Card Receipts

Schedule 5.25
Permitted Indebtedness

Schedule 6.2
Collateral Reporting

Schedule 7.12
Loan Parties’ Affiliates

Schedule 7.18
Deposit Accounts, Credit Card Agreements

 
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AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
 
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as amended, modified,
supplemented or restated and in effect from time to time, this “Agreement”) is
entered into as of August 23, 2010 by and among, on the one hand, the lenders
identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each
individually as, a “Lender” and collectively as, the “Lenders”), WELLS FARGO
BANK, NATIONAL ASSOCIATION, a national banking association, as issuing bank, and
WELLS FARGO RETAIL FINANCE, LLC, a Delaware limited liability company, as the
arranger and administrative agent for the Lenders, and, on the other hand, WEST
MARINE PRODUCTS, INC., a California corporation (“West Marine Products”), and
each Person identified on the signature pages hereof as a “Borrower” (such
Persons, together with West Marine Products, are referred to hereinafter each
individually as, a “Borrower” and, collectively, as the “Borrowers”) and each
Person identified on the signature pages hereof as a “Guarantor” (such Persons
are referred to hereinafter each individually as, a “Guarantor” and,
collectively, as the “Guarantors”).
 
WITNESSETH:
 
WHEREAS, the Borrowers and the Guarantors have entered into a Loan and Security
Agreement, dated as of December 29, 2005 (as amended and in effect, the
“Existing Loan Agreement”), among (i) the Borrowers, (ii) the Guarantors, (iii)
the “Lenders” party to, and as defined in, the Existing Loan Agreement (the
“Existing Lenders”), (iv) Wells Fargo Retail Finance, LLC, as “Agent”, and (vi)
Wells Fargo Bank, National Association, as “Issuing Lender”;
 
WHEREAS, immediately prior to the Effective Date (as defined herein), certain of
the Existing Lenders (the “Assigning Lenders”) have assigned all of their
rights, obligations and Commitments under the Existing Loan Agreement to WFRF
(as defined herein);
 
WHEREAS, all of the rights, obligations and Commitments of the Assigning Lenders
assigned to WFRF under the Existing Loan Agreement are hereby terminated as of
the Effective Date, and all of the rights, obligations and Commitments of the
remaining Existing Lenders are hereby reallocated among the Lenders hereunder in
accordance with Schedule C-1 hereto; and
 
WHEREAS, in accordance with Section 15.1 of the Existing Loan Agreement, the
Borrowers, the Guarantors, Agent, the Issuing Lender and the Lenders desire to
extend the Maturity Date (as defined in the Existing Loan Agreement) and to
amend and restate the other provisions of the Existing Loan Agreement, as
provided herein.
 
NOW, THEREFORE, in consideration of the mutual agreements set forth in this
Agreement, and for good and valuable consideration, the receipt of which is
hereby acknowledged, the undersigned hereby agree that the Existing Loan
Agreement shall be amended and restated in its entirety to read as follows (it
being agreed that this Agreement shall not be deemed to evidence or result in a
novation or repayment and reborrowing of the Obligations under, and as defined
in, the Existing Loan Agreement):

 

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The parties agree as follows:
 
Section 1.
DEFINITIONS AND CONSTRUCTION.

 
1.1.        Definitions
 
.  As used in this Agreement, the following terms shall have the following
definitions:
 
“Accelerated Borrowing Base Delivery Event” means either (a) the occurrence and
continuance of any Event of Default, or (b) the period commencing with the
failure by Borrowers to maintain Adjusted Availability in an amount of not less
than twenty percent (20%) of the Borrowing Base at any time and, in each case,
ending with the occurrence of an Accelerated Borrowing Base Delivery Termination
Event.
 
“Accelerated Borrowing Base Delivery Termination Event” means either (a) if the
Accelerated Borrowing Base Delivery Event arises as a result of the occurrence
of an Event of Default, such Event of Default shall have been waived, and/or
(ii) if the Accelerated Borrowing Base Delivery Event arises as a result of
Borrowers’ failure to maintain Adjusted Availability as required in clause (b)
of the definition thereof, the Borrowers shall have maintained Adjusted
Availability in an amount of not less than twenty percent (20%) of the Borrowing
Base for thirty (30) consecutive calendar days, as evidenced by a Borrowing Base
Certificate delivered to Agent.  The termination of an Accelerated Borrowing
Base Delivery Event as provided herein shall in no way limit, waive or delay the
occurrence of a subsequent Accelerated Borrowing Base Delivery Event in the
event that the conditions set forth in this definition again arise.
 
“Accordion Activation” has the meaning set forth in Section 2.2(h).
 
“Accordion Activation Date” has the meaning set forth in Section 2.2(h).
 
“Accordion Amount” has the meaning set forth in Section 2.2(h).
 
“Accordion Lenders” has the meaning set forth in Section 2.2(h).
 
“Account Debtor” means any Person who is or who may become obligated under, with
respect to, or on account of, an Account.
 
“Accounts” means an “account” (as such term is defined in the Code), and any and
all supporting obligations in respect thereof.
 
“ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic funds transfers through the
direct Federal Reserve Fedline system) provided by a Bank Product Provider for
the account of any Loan Party or its Subsidiaries.
 
“Adjusted Availability” means, as of any date of determination, if such date is
a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount as determined by Agent at any time, in its Permitted Discretion equal to
(x) the Borrowing Base, minus (y) the Revolver Usage (in each case, determined
after giving effect to all sublimits and Reserves then applicable hereunder).

 
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“Adjustment Date” means the first day of each Fiscal Quarter; provided that the
first Adjustment Date after the Effective Date shall be January 2, 2011.
 
“Administrative Borrower” has the meaning set forth in Section 18.11.
 
“Advances” has the meaning set forth in Section 2.1.
 
“Affiliate” means, as to any Person, (a) any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person or (b) each of such Person’s officers, directors (or comparable
managers), joint venturers and partners; provided, however, that in no case
shall Agent or any Lender be deemed to be an Affiliate of any Loan Party or any
of its Subsidiaries for purposes of this Agreement.  As used in this definition,
“control” (and the correlative terms, “controlled by” and “under common control
with”) shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
Stock, by contract or otherwise); provided, however, that, for purposes of the
definition of “Eligible Accounts” and Section 7.12 hereof, any Person that owns
directly or indirectly 10% or more of the Stock having ordinary voting power for
the election of directors or other members of the governing body of a Person or
10% or more of the partnership or other ownership interests of a Person (other
than as a limited partner of such Person) shall be deemed to control such
Person.
 
“Agent” means WFRF, solely in its capacity as administrative agent for Lenders
hereunder and any other holder of Obligations, and any successor thereto.
 
“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, partners, investors, attorneys, and agents.
 
“Agent’s Account” means the account identified on Schedule A-1.
 
“Agent’s Liens” means the Liens granted by the Loan Parties or their
Subsidiaries to Agent under this Agreement or the other Loan Documents.
 
“Agreement” has the meaning set forth in the preamble hereto.
 
“Applicable Margin” means:
 
(a)           From and after the Effective Date until the first Adjustment Date,
the percentages set forth in Level II of the pricing grid below, unless average
Availability does not support the requirements of Level II or lower, in which
event the Applicable Margin will be set at Level III.  In no event shall the
Applicable Margin be set at Level I prior to the first Adjustment Date (even if
the Availability requirements for Level I have been met); and

 
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(b)           For the period commencing on the First Adjustment Date and for
each period commencing on an Adjustment Date thereafter through the date
immediately preceding the next Adjustment Date (each a “Rate Adjustment
Period”), the percentages set forth below with respect to Availability based on
the average Availability for the Fiscal Quarter most recently ended prior to the
applicable Rate Adjustment Period:
 
Level
      
Performance Criteria
      
Prime Rate
Margin
        
LIBOR Rate
Margin
                       
I
 
Availability greater
than or equal to
$100,000,000
    1.50 %     2.50 %                      
II
 
Availability greater
than or equal to
$50,000,000 but less
than $100,000,000
    1.75 %     2.75 %                      
III
 
Availability less than
$50,000,000
    2.00 %     3.00 %

 
Notwithstanding the foregoing, if Administrative Borrower fails to deliver any
Borrowing Base Certificate pursuant to Section 6.2 hereof then, for the period
commencing on the next Adjustment Date to occur subsequent to such failure
through the date immediately following the date on which such Borrowing Base
Certificate is delivered, the Applicable Margin shall be the highest Applicable
Margin set forth above.
 
“Approved Broker or Forwarder” means a customs broker or freight forwarder
selected by Borrowing Group acceptable to Agent in its Permitted Discretion (and
which may be affiliated with one of the Lender Group) to perform port of entry
services, to accept and process Inventory imported by a member of the Borrowing
Group and who has executed and delivered to Agent a customs broker agreement or
freight forwarder agreement, as applicable, in form and substance reasonably
satisfactory to Agent, which agreement has also been duly executed and delivered
to Agent by the applicable member of the Borrowing Group.  For the avoidance of
doubt, each of the customs brokers and freight forwarders listed on Schedule B-1
attached hereto are acceptable to Agent and, upon execution and delivery of a
customs broker agreement or freight forwarder agreement, as applicable, in form
and substance reasonably satisfactory to Agent, each shall be an Approved Broker
or Forwarder for purposes of this Agreement.
 
“Assignee” has the meaning set forth in Section 14.1(a).
 
“Assigning Lenders” has the meaning set forth in the recitals to this Agreement.
 
“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.
 
“Authorized Person” means the Chief Executive Officer, President, Chief
Financial Officer, Secretary, Assistant Secretary, Controller or Assistant
Controller of any Loan Party.

 
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“Availability” means, as of any date of determination, if such date is a
Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount as determined by Agent at any time, in its Permitted Discretion equal to
(x) the lesser of (i) the Maximum Revolver Amount and (ii) the Borrowing Base,
minus (y) the Revolver Usage (in each case, determined after giving effect to
all sublimits and Reserves then applicable hereunder).
 
“Bailee Acknowledgment” means a record in form and substance satisfactory to
Agent (determined in its Permitted Discretion) authenticated by any bailee,
warehouseman or other third party in possession of any Inventory acknowledging
that it holds possession of the applicable Inventory for the benefit of Agent,
on behalf of the Lender Group.
 
“Bank Products” means any financial accommodation extended to any Loan Party or
its Subsidiaries by a Bank Product Provider (other than pursuant to this
Agreement) including:  (a) credit cards, (b) credit card processing services,
(c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management,
including controlled disbursement, accounts or services, or (g) transactions
under any Hedge Agreement.
 
“Bank Product Agreements” means those certain cash management service agreements
entered into from time to time by any Loan Party in connection with any of the
Bank Products.
 
“Bank Product Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by any Loan Party to a Bank
Product Provider pursuant to or evidenced by the Bank Product Agreements and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all such amounts that a Borrower is obligated to reimburse to
Agent or any member of the Lender Group as a result of Agent or such member of
the Lender Group purchasing participations or executing indemnities or
reimbursement obligations with respect to the Bank Products provided to such
Loan Party or its Subsidiaries pursuant to the Bank Product Agreements.
 
“Bank Product Provider” means Wells Fargo, any Lender or any of their respective
Affiliates in its capacity as a provider of Bank Products pursuant to a Bank
Product Agreement.
 
“Bank Product Reserves” means, as of any date of determination, the amount of
reserves that Agent in its Permitted Discretion has established (based upon the
applicable Bank Product Provider’s exposure in respect of then extant Bank
Products) for Bank Products then provided or outstanding.
 
“Bankruptcy Code” means Title 11 of the United States Code, as in effect from
time to time.

 
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“Base LIBOR Rate” means, for any Interest Period with respect to a LIBOR Rate
Loan, the rate of interest per annum equal to (i) the British Bankers
Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
Agent from time to time) at approximately 11:00 a.m., London time, two (2)
Business Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, divided by (ii) a number equal to 1.00 minus
the Eurocurrency Reserve Rate.  If the rate described above is not available at
such time for any reason, then the LIBOR Rate for such Interest Period shall be
the rate per annum determined by Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the LIBO Rate Loan being made, continued or
converted by Wells Fargo and with a term equivalent to such Interest Period
would be offered to Wells Fargo by major banks in the London interbank
eurodollar market in which Wells Fargo participates at their request at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the
commencement of such Interest Period.
 
“Benefit Plan” means, collectively, (a) a “defined benefit plan” (as defined in
Section 3(35) of ERISA) subject to Title IV of ERISA for which any Loan Party or
any Subsidiary or ERISA Affiliate of any Loan Party has been an “employer” (as
defined in Section 3(5) of ERISA) within the past six years and (b) any
“registered pension plan” as defined in subsection 248(1) of the Income Tax Act
(Canada) that is a defined benefit plan in which any Loan Party or any
Subsidiary has been a participating employer within the past six years.
 
“Board of Directors” means the board of directors (or comparable managers) of
Parent or any committee thereof duly authorized to act on behalf thereof.
 
“Books” means all of each Loan Party’s and its Subsidiaries’ now owned or
hereafter acquired books and records (including, without limitation, all of its
Records indicating, summarizing, or evidencing its assets (including the
Collateral) or liabilities, all of each Loan Party’s or its Subsidiaries’
Records relating to its or their business operations or financial condition or
relating to its or their account debtors and amounts owing from account debtors,
and all of each Loan Party’s or its Subsidiaries’ goods or General Intangibles
related to such information).
 
“Borrower” and “Borrowers” have the respective meanings set forth in the
preamble to this Agreement.
 
“Borrowing” means a borrowing hereunder consisting of Advances made on the same
day by Lenders (or Agent, on behalf thereof), or by Swing Lender in the case of
Swing Loans, in each case, to Administrative Borrower, as the case may be.
 
“Borrowing Base” means, as of any date of determination, an amount equal to:
 
(a)           the lesser of (i) 85% of the Net Retail Liquidation Value of
Eligible Inventory owned by a member of the Borrowing Group and (ii) 75% of the
Cost of Eligible Inventory owned by a member of the Borrowing Group; provided,
however, that during the Seasonal Period, the advance rate shall be the lesser
of (x) 90% of the Net Retail Liquidation Value of Eligible Inventory owned by a
member of the Borrowing Group and (y) 80% of the Cost of Eligible Inventory
owned by a member of the Borrowing Group, plus

 
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(b)           85% of the face amount of Eligible Credit Card Receivables of a
member of the Borrowing Group, plus
 
(c)           85% of the face amount of Eligible Accounts (other than Eligible
Accounts constituting Eligible Credit Card Receivables and included in clause
(b) above) of a member of the Borrowing Group, plus
 
(d)          100% of cash and Cash Equivalents pledged to Agent and held by
Agent in a segregated investment account (a “Segregated Account”), minus
 
(e)           the aggregate of such Reserves as may have been established by
Agent from time to time in its Permitted Discretion.
 
“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1,
with respect to the Borrowing Base and as such form may be revised from time to
time by Agent in its Permitted Discretion.
 
“Borrowing Group” means, collectively, each Borrower and West Marine Canada.
 
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the States of New York or
Massachusetts, except that, if a determination of a Business Day shall relate to
a LIBOR Rate Loan, the term “Business Day” also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
 
“Business Plan” means, collectively, (a) the set of Projections of Parent and
its Subsidiaries for the period following the Effective Date through the Fiscal
Year ending January 1, 2011 (on a month by month basis), and (b) the Projections
provided by Parent from time to time pursuant to Section 6.3(c) for each Fiscal
Year after the Fiscal Year ending January 1, 2011, in form and substance
(including as to scope and underlying assumptions) reasonably satisfactory to
Agent, in each case, together with any amendment, modification or revision
thereto approved by Agent in its Permitted Discretion.
 
“Canadian Dollars” means the lawful currency of Canada.
 
“Capitalized Lease” means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
 
“Capitalized Lease Obligation” means any Indebtedness represented by obligations
under a Capitalized Lease that are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with GAAP.
 
“Cash Dominion Event” means either (a) the occurrence and continuance of any
Event of Default, or (b) the failure by Borrowers to maintain Adjusted
Availability in an amount of not less than fifteen percent (15%) of the
Borrowing Base at any time.

 
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“Cash Dominion Release Event” means either (a) if the Cash Dominion Event arises
as a result of the occurrence of an Event of Default, such Event of Default
shall have been waived, and/or (b) if the Cash Dominion Event arises as a result
of Borrowers’ failure to maintain Adjusted Availability as required in clause
(b) of the definition thereof, Borrowers shall have maintained Adjusted
Availability in an amount of not less than twenty percent (20%) of the Borrowing
Base for a period of thirty (30) consecutive calendar days, as evidenced by a
Borrowing Base Certificate delivered to Agent; provided, however, that no more
than two (2) Cash Dominion Release Events may occur in any 365 day period and no
more than six (6) Cash Dominion Release Events may occur from and after the
Effective Date.
 
“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the highest ratings obtainable from either S&P or
Moody’s, (c) commercial paper maturing no more than 1 year from the date of
acquisition thereof and, at the time of acquisition, having a rating of A-1 or
P-1, or better, from S&P or Moody’s, respectively, (d) certificates of deposit
or bankers’ acceptances maturing within 1 year from the date of acquisition
thereof issued by any bank organized under the laws of the United States having
at the date of acquisition thereof combined capital and surplus of not less than
$250,000,000, (e) demand Deposit Accounts maintained with any bank organized
under the laws of the United States or any state thereof so long as the amount
maintained with any individual bank is less than $100,000 and is insured by the
Federal Deposit Insurance Corporation, and (f) Investments in money market funds
substantially all of whose assets are invested in the types of assets described
in clauses (a) through (e) above.
 
“Cash Management Bank” has the meaning set forth in Section 2.6(a).
 
“Change of Control” means (a) any “person” or “group” (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act) (excluding for this purpose any
member of the Repass Control Group) becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of (i) 33 1/3%, or
more, of the Stock of Parent, having the right to vote for the election of
members of the Board of Directors, and (ii) a percentage that is greater than
the percentage of Stock of Parent having the right to vote for the election of
members of the Board of Directors that is then beneficially owned by the Repass
Control Group, or (b) Parent or a Borrower shall cease to own and control,
directly or indirectly, 100% of the outstanding capital stock or other equity
interests of any Subsidiary of Parent, including the Borrowers, or a Subsidiary
of such Borrower, as the case may be, other than with respect to (i) any
Subsidiary the Stock of which was sold or otherwise disposed of in a transaction
permitted by Section 7.4, or (ii) any Subsidiary that is merged or consolidated
in a transaction permitted by Section 7.4, or (c) a majority of the members of
the Board of Directors do not constitute Continuing Directors.
 
“Closing Date” means December 29, 2005.

 
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“Code” means the New York Uniform Commercial Code, as in effect from time to
time.
 
“Collateral” means, collectively: (i) in respect of West Marine Canada, all
personal property in which Liens are purported to be granted pursuant to the
Security Agreement to which West Marine Canada is a party as security for the
Obligations; and (ii) in respect of the Loan Parties, all right, title and
interest of each Loan Party in and to each of the following, wherever located
and whether now owned or hereafter acquired or arising:
 
(a)          all of its Accounts,
 
(b)          all of its Books relating to the Specified Collateral,
 
(c)          all of its Deposit Accounts (other than Deposit Accounts relating
to payroll obligations, tax liabilities, third party funds and segregated
accounts into which proceeds of assets that do not constitute Specified
Collateral are deposited),
 
(d)          all of its Documents (including, without limitation, all bills of
lading, warehouse receipts and other documents of title, whether negotiable or
non-negotiable) covering any Inventory,
 
(e)          all of its General Intangibles directly arising out of or directly
relating to the Specified Collateral,
 
(f)           all of its Inventory,
 
(g)          all of its Investment Property consisting of cash and Cash
Equivalents (including all Cash Equivalents held in Securities Accounts)
directly relating to the Specified Collateral, and any cash or Cash Equivalents
held in a Segregated Account,
 
(h)          all of its Negotiable or Transferable Collateral directly arising
out of or directly relating to the Specified Collateral,
 
(i)           money (other than money placed into an escrow account in
connection with sale leaseback transactions permitted by Section 7.5 or arising
from the proceeds of assets that do not constitute Specified Collateral), and
 
(j)           all Proceeds and products of any of the foregoing, whether
tangible or intangible, including proceeds of insurance covering any or all of
the foregoing, and any and all Collateral, money, or other tangible or
intangible property resulting or arising directly from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein.
 
“Collateral Access Agreement” means a waiver or consent in form and substance
reasonably satisfactory to Agent executed by a lessor of Real Property leased by
a member of the Borrowing Group or any other Person having a Lien upon, or
having rights or interests in, the Inventory pledged hereunder and shall include
a Bailee Acknowledgment.

 
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“Collateral Documents” means, collectively, each Security Agreement, each
Guaranty, each Collateral Access Agreement, each Control Agreement, each Credit
Card Agreement, each Bailee Acknowledgment, and all other instruments or
documents delivered by a Loan Party pursuant to this Agreement or any of the
other Loan Documents in order to grant to Agent, for the benefit of the Lender
Group and the Bank Product Providers, a Lien on any Collateral of that Loan
Party as security for the Obligations.
 
“Collections” means all cash, checks, credit card slips or receipts, notes,
instruments, and other items of payment (including insurance proceeds and
proceeds of cash sales) of the Borrowing Group received from the sale or other
disposition of Collateral.
 
“Commitment” means, with respect to each Lender, its Commitment, and, with
respect to all Lenders, their Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule
C-1 (as the same may be adjusted pursuant to an Accordion Activation or an
Assignment and Acceptance) or in the Assignment and Acceptance pursuant to which
such Lender became a Lender hereunder in accordance with the provisions of
Section 14.1.
 
“Concentration Account” has the meaning set forth in Section 2.6(a).
 
“Confirmation Agreement” means that certain Confirmation and Amendment of
Ancillary Loan Documents, dated as of the Effective Date, among the Loan Parties
and Agent.
 
“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Parent on the Effective Date, and (b) any
individual who becomes a member of the Board of Directors after the Effective
Date if such individual was appointed or nominated for election to the Board of
Directors by, or whose appointment or nomination was approved by, a majority of
the then Continuing Directors.
 
“Contractual Currency” has the meaning set forth in Section 18.12(d).
 
“Control Agreement” means an agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by the applicable member of the
Borrowing Group, Agent, and the applicable securities intermediary or bank,
which agreement is sufficient to give Agent “control” over the subject
Securities Account, Deposit Account or Investment Property in accordance with
the Code.
 
“Cost” means the calculated cost of purchases, as determined from invoices
received by a member of the Borrowing Group, such member of the Borrowing
Group’s purchase journal or stock ledger, based upon such member of the
Borrowing Group’s accounting practices, known to Agent, which practices are in
effect on the date on which this Agreement was executed or subsequently adopted
with the written approval of Agent.  “Cost” does not include the value of any
capitalized costs unrelated to the acquisitions of Inventory used in the
Borrowing Group’s calculation of cost of goods sold, but may include other
charges used in such member of the Borrowing Group’s determination of cost of
goods sold and bringing goods to market, all within Agent’s Permitted Discretion
and in accordance with GAAP.

 
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“Credit Card Agreements” means those certain credit card receipts agreements,
each in form and substance reasonably satisfactory to Agent and each of which is
among Agent, the applicable member of the Borrowing Group and the applicable
Credit Card Processors.
 
“Credit Card Issuer” means, collectively, the issuers of (a) MasterCard or Visa
bank credit or debit cards or other bank credit or debit cards issued through
MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International,
American Express, Discover, and Diners Club (or their respective successors),
and (b) private label credit cards (other than co-branded credit cards with any
of the issuers listed in clause (a) above) of any member of the Borrowing Group;
provided, however, Accounts due from private label credit card issuers (other
than co-branded credit cards with any of the issuers listed in clause (a) above)
shall not be included in Eligible Credit Card Receivables unless and until (i)
Agent has completed a review of such Accounts, including, without limitation,
any agreements between a member of the Borrowing Group and a private label
credit card provider, the results of which shall be satisfactory to Agent in its
Permitted Discretion, and (ii) Agent has notified Administrative Borrower of its
consent to such inclusion and to the amount of any Reserves which shall be taken
in connection with such inclusion.  Accordingly, the Borrowing Group acknowledge
and agree that Accounts due from private label credit card issuers shall not be
included in the calculation of the Borrowing Base on the Effective Date.
 
“Credit Card Processor” means any Person that acts as a credit card
clearinghouse or processor with respect to any sales transactions involving
credit card purchases by customers using credit cards issued by any Credit Card
Issuer.
 
“Daily Balance” means, with respect to each day during the term of this
Agreement, the amount of an Obligation owed at the end of such day.
 
“Debtor Relief Law” means, collectively, the Bankruptcy Code, the Bankruptcy and
Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the
Winding-up Act (Canada), and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, dissolution or similar debtor relief
laws of the United States, Canada or other applicable jurisdictions from time to
time in effect and affecting the rights of creditors generally.
 
“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.
 
“Defaulting Lender” means any Lender that fails to make any Advance (or other
extension of credit) that it is required to make hereunder on the date that it
is required to do so hereunder.
 
“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Prime Rate, and (b) thereafter, the interest
rate then applicable to Advances that are Prime Rate Loans.
 
“Deposit Account” means any checking or other deposit account (as that term is
defined in the Code).

 
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“Designated Account” means, collectively, the Deposit Accounts of Administrative
Borrower identified on Schedule D-1.
 
“Designated Account Bank” means the banks identified on Schedule D-1.
 
“Documents” means any document (as that term is defined in the Code).
 
“Dollars” or “$” means United States dollars.
 
“Domestic Subsidiary” means each direct or indirect Subsidiary of Parent formed
under the laws of the United States, any state thereof or the District of
Columbia.
 
“Effective Date” means the date on which Agent sends Administrative Borrower a
written notice that each of the conditions precedent set forth in Section 3.1
either have been satisfied or have been waived.
 
“Eligible Accounts” means those Accounts created by a member of the Borrowing
Group in the ordinary course of its business in connection with or that arise
out of its rendering of services or sale of goods, that comply with each of the
representations and warranties respecting Eligible Accounts made in the Loan
Documents, and that are not excluded as ineligible by virtue of one or more of
the excluding criteria set forth below; provided, however, that such criteria
may be revised from time to time by Agent in Agent’s Permitted Discretion.  In
determining the amount to be included, Eligible Accounts shall be calculated net
of customer deposits and unapplied cash.  Eligible Accounts shall not include
the following:
 
(a)           Accounts that the Account Debtor has failed to pay within 60 days
of original invoice due date or Accounts with selling terms of more than 60
days;
 
(b)           Accounts owed by an Account Debtor (or its Affiliates) where 50%
or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above;
 
(c)           Accounts with respect to which the Account Debtor is an Affiliate
of a member of the Borrowing Group or an employee or agent of a member of the
Borrowing Group or any Affiliate of a member of the Borrowing Group;
 
(d)           Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional;
 
(e)           Accounts that are not payable in Dollars or, in the case of
Accounts owing to West Marine Canada, Canadian Dollars;

 
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(f)          (i) in the case of Accounts owing to any member of the Borrowing
Group (other than West Marine Canada) with respect to which the Account Debtor
either (x) does not maintain its chief executive office in the United States,
Puerto Rico or a Permitted Overseas Account Jurisdiction, or (y) is not
organized under the laws of the United States, any state thereof, the District
of Columbia, Puerto Rico or a Permitted Overseas Account Jurisdiction, or (z) is
the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, and
(ii) in the case of Accounts owing to West Marine Canada with respect to which
the Account Debtor either (x) does not maintain its chief executive office in
Canada, the United States or a Permitted Overseas Account Jurisdiction, or (y)
is not organized under the laws of Canada, any province or territory thereof,
the United States, any state thereof, the District of Columbia, Puerto Rico or a
Permitted Overseas Account Jurisdiction, or (z) is the government of any foreign
country or sovereign state, or of any state, province, territory, municipality,
or other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, in each case unless (1) the
Account is supported by an irrevocable letter of credit reasonably satisfactory
to Agent (as to form, substance, and issuer or domestic confirming bank) that
has been delivered to Agent and is directly drawable by Agent, or (2) the
Account is covered by credit insurance in form, substance, and amount, and by an
insurer, reasonably satisfactory to Agent;
 
(g)          Accounts with respect to which the Account Debtor is (i) the United
States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which the applicable Borrower
has complied, to the reasonable satisfaction of Agent, with the Assignment of
Claims Act, 31 USC § 3727), or (ii) any state of the United States, (iii) Canada
or any department, agency, or instrumentality of Canada or (iv) any province or
territory of Canada;
 
(h)          Accounts with respect to which the Account Debtor has or has
asserted a right of set-off, or has disputed its obligation to pay all or any
portion of the Account, to the extent of such claim, right of set-off, or
dispute;
 
(i)           Accounts with respect to an Account Debtor whose total obligations
owing to the members of the Borrowing Group, in the aggregate, exceed 10% (such
percentage, as applied to a particular Account Debtor, being subject to
reduction by Agent in its Permitted Discretion if the creditworthiness of such
Account Debtor deteriorates) of all Eligible Accounts, to the extent of the
obligations owing by such Account Debtor in excess of such percentage; provided,
however, that, in each case, the amount of Eligible Accounts that are excluded
because they exceed the foregoing percentage shall be determined by Agent based
on all of the otherwise Eligible Accounts prior to giving effect to any
eliminations based upon the foregoing concentration limit;
 
(j)           Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
any member of the Borrowing Group has received notice of an imminent Insolvency
Proceeding or a material impairment of the financial condition of such Account
Debtor;
 
(k)          Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor’s financial
condition;

 
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(l)           Accounts that are not subject to a valid and perfected first
priority Agent’s Lien;
 
(m)         Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor; or
 
(n)          Accounts that represent the right to receive progress payments or
other advance billings that are due prior to the completion of performance by
any member of the Borrowing Group of the subject contract for goods or services.
 
Notwithstanding the foregoing, that portion of the Borrowing Base attributable
to Eligible Accounts shall not exceed $10,000,000 at any time during the period
commencing on the Effective Date through and including the first anniversary of
the Effective Date.  The foregoing amount shall be increased on each anniversary
of the Effective Date thereafter, commencing on the first anniversary of the
Effective Date, by an amount equal to ten percent (10%) of the amount then
permitted hereunder in the immediately preceding period, provided that no Event
of Default has occurred and is continuing on and as of the effective date of
each such increase.
 
“Eligible Boat Show Location” means any location within the United States or in
a province or territory of Canada in which a PPSA financing statement has been
filed naming West Marine Canada as debtor and Agent as secured party, in each
case, in which Inventory is temporarily stored for any period up to fourteen
consecutive days in connection with any “boat show”.
 
“Eligible Credit Card Receivables” means Eligible Accounts due to a member of
the Borrowing Group on a non recourse basis (other than customary charge backs
and customary fees) from a Credit Card Issuer or Credit Card Processor arising
in the ordinary course of business and net of such Credit Card Issuer’s or
Credit Card Processor’s expenses and chargebacks, which have been earned by
performance and are not deemed by Agent in its Permitted Discretion to be
ineligible for inclusion in the calculation of the Borrowing Base by virtue of
one or more of the excluding criteria set forth below.  Unless otherwise
approved in writing by Agent, none of the following shall be deemed to be
Eligible Credit Card Receivables:
 
(a)           Eligible Accounts that have been outstanding for more than five
(5) days from the date of the applicable sale;
 
(b)          Eligible Accounts which are disputed, subject to recourse against a
member of the Borrowing Group, or with respect to which a claim, counterclaim,
offset or chargeback has been asserted (to the extent of such dispute, claim,
counterclaim, offset or chargeback); or
 
(c)           Eligible Accounts, the collection of which, Agent, in its
Permitted Discretion, believes to be doubtful by reason of the applicable
Account Debtor’s financial condition.

 
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“Eligible In-Transit Inventory” means Inventory of the applicable member of the
Borrowing Group that would not otherwise qualify as Eligible Inventory
(notwithstanding clause (x) of the definition thereof) solely because such
Inventory is not (x) at an Eligible Inventory Location, (y) in transit among or
to such Eligible Inventory Locations or (z) at a Permitted Overseas Inventory
Jurisdiction, and which meets all of the following criteria, which criteria may
be revised by Agent in its Permitted Discretion from time to time after the
Effective Date:
 
(a)           such Inventory currently is in transit (whether by vessel, air, or
land) to (i) an Eligible Inventory Location or a Permitted Overseas Inventory
Jurisdiction that is either a store location or subject of a Bailee
Acknowledgment or a Collateral Access Agreement, (ii) a location at which the
inventory ledger balance of the Inventory located at such location is (or will
be) less than $100,000 in the aggregate or (iii) an Eligible Boat Show Location
at which the inventory ledger balance of the Inventory located at such location
is (or will be) less than $2,500,000 in the aggregate;
 
(b)           title to such Inventory has passed to the applicable member of the
Borrowing Group;
 
(c)           such Inventory is insured against types of loss, damage, hazards,
and risks, and in amounts, satisfactory to Agent in its Permitted Discretion;
 
(d)           such Inventory is either (i) the subject of a negotiable document
of title that (x) is in the name of Agent, a member of the Borrowing Group or an
Approved Broker or Forwarder and has not been consigned to any third parties
other than to Agent, a member of the Borrowing Group or an Approved Broker or
Forwarder (either directly or by means of endorsements), (y) was issued by the
carrier or consolidator respecting the subject Inventory, and (z) is in the
possession of Agent, a member of the Borrowing Group or an Approved Broker or
Forwarder; or (ii) at a port of entry in a State of the United States or a
Permitted Overseas Inventory Jurisdiction or, in the case of Inventory owned by
West Marine Puerto Rico, Puerto Rico or, in the case of Inventory owned by West
Marine Canada, in a province or territory of Canada in which a PPSA financing
statement has been filed naming West Marine Canada as debtor and Agent as
secured party; and
 
(e)           Administrative Borrower has, concurrently with the delivery of any
Borrowing Base Certificate, provided a certificate to Agent that certifies that,
to the knowledge of the Borrowing Group, such Inventory meets all of the
Borrowing Group’s representations and warranties contained in the Loan Documents
concerning Eligible Inventory, that the Borrowing Group knows of no reason why
such Inventory would not be accepted by the applicable member of the Borrowing
Group when it arrives in the United States, Puerto Rico, Canada or a Permitted
Overseas Inventory Jurisdiction, as applicable, and that the shipment as
evidenced by the documents conforms to the related order documents.
 
Notwithstanding the foregoing, that portion of the Borrowing Base attributable
to Eligible In-Transit Inventory shall not exceed ten percent (10%) of the
Borrowing Base at any time.

 
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In addition, Agent may revise from time to time the foregoing criteria with
respect to Inventory being subject to a negotiable document of title and modify
such criteria to include Inventory subject to non-negotiable documents and other
related parameters so long as Agent shall be satisfied in its Permitted
Discretion that (i) Agent shall have a valid and perfected first priority Lien
in such Inventory and (ii) the Borrowing Group shall provide to Agent all other
documentation, including opinions of counsel, reasonably satisfactory to Agent
which in Agent’s Permitted Discretion is appropriate to evidence Agent’s
perfected first priority Lien in such Inventory.
 
“Eligible Inventory” means, without duplication, (x) Eligible In-Transit
Inventory, and (y) Inventory of the Borrowing Group of such types, character,
qualities and quantities, as Agent in its Permitted Discretion from time to time
determines to be acceptable for borrowing, and which Inventory (i) is located at
an Eligible Inventory Location or at a Permitted Overseas Inventory Jurisdiction
of one of the members of the Borrowing Group (or in-transit to or between any
Eligible Inventory Location), (ii) complies with each of the representations and
warranties respecting Eligible Inventory made by the Borrowing Group in the Loan
Documents and (iii) in which Agent has a perfected first priority
Lien.  Notwithstanding the foregoing, (i) that portion of the Borrowing Base
attributable to Eligible Inventory of West Marine Canada shall not exceed 10% of
the Borrowing Base at any time and (ii) that portion of the Borrowing Base
attributable to Eligible Inventory of West Marine Puerto Rico shall not exceed
10% of the Borrowing Base at any time.
 
“Eligible Inventory Locations” means, collectively, in respect of the Borrowing
Group, the locations in the United States and Puerto Rico and, in respect of
West Marine Canada, the locations in Canada, in each case, identified on
Schedule 5.4 attached hereto, as updated from time to time by Administrative
Borrower pursuant to Section 5.4, and any Eligible Boat Show Location.
 
“Eligible Transferee” means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender and (e) any
other Person approved by Agent and the Issuing Lender.
 
“Environmental Actions” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other communication, each, by or from any
Governmental Authority, or any third party involving (x) violations of
Environmental Laws or (y) releases of Hazardous Materials from (a) any assets,
properties, or businesses of any Loan Party, any Subsidiary of any Loan Party or
any predecessor in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by any
Loan Party, any Subsidiary of any Loan Party or any predecessor in interest.

 
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“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on any Loan Party or
any Subsidiary of any Loan Party, relating to the environment, employee health
and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 USC §1251 et seq. the Toxic Substances Control Act, 15
USC §2601 et seq. the Clean Air Act, 42 USC §7401 et seq.; the Safe Drinking
Water Act, 42 USC §3803 et seq.; the Oil Pollution Act of 1990, 33 USC §2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC
§11001 et seq.; the Hazardous Material Transportation Act, 49 USC §1801 et seq.;
and the Occupational Safety and Health Act, 29 USC §651 et seq. (to the extent
it regulates occupational exposure to Hazardous Materials); any state and local
or foreign counterparts or equivalents, in each case as amended from time to
time.
 
“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred by any Loan Party as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
 
“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.
 
“ERISA Affiliate” means any Person which is treated as a single employer with a
Borrower under §414 of IRC.
 
“ERISA Reportable Event” means a reportable event with respect to a Guaranteed
Pension Plan within the meaning of §4043 of ERISA and the regulations
promulgated thereunder.
 
“Europe” means, collectively, Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden,
the United Kingdom (or its political subdivisions) and Switzerland.
 
“Eurocurrency Reserve Rate”  means for any day with respect to a LIBOR Rate
Loan, the maximum rate (expressed as a decimal) at which any bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against “Eurocurrency
Liabilities” (as that term is used in Regulation D), if such liabilities were
outstanding.  The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
 

“Event of Default” has the meaning set forth in Section 8.
 
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“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.
 
“Excluded Taxes” means, with respect to Agent, any Lender, the Issuing Lender or
any other recipient of any payment to be made by or on account of any obligation
of any Loan Party hereunder, (a) Taxes imposed on or measured by its overall net
income (however denominated), and franchise Taxes imposed on it (in lieu of net
income Taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable principal
office is located or, in which its applicable lending office is located, (b) any
branch profits Taxes imposed by the United States or any similar Tax imposed by
any other jurisdiction in which a Loan Party or Lender is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by a Loan
Party under Section 2.15), any withholding Tax that is imposed on amounts
payable to such Foreign Lender pursuant to any law in effect (including pursuant
to FATCA) at the time such Foreign Lender becomes a party hereto (or designates
a new lending office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a change in law) to comply with Section
16.14(a) through (c), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from a Loan Party with
respect to such withholding tax pursuant to Section 16.14(i).
 
“Existing Loan Agreement” has the meaning set forth in the recitals to this
Agreement.
 
“Existing Lenders” has the meaning set forth in the recitals to this Agreement.
 
“Existing Letters of Credit” has the meaning set forth in Section 2.11(a).
 
“FATCA” means The Foreign Account Tax Compliance Act of 2009, as set forth in
Sections 1471 through 1474 of the IRC, any amendments thereto, and any
regulations thereunder or official governmental interpretations thereof.
 
“Fee Letter” means that certain fee letter, dated as of the Effective Date,
between Borrowers and Agent.
 
“FEIN” means Federal Employer Identification Number.
 
“Fiscal Month” means one of the three fiscal periods in a Fiscal Quarter, the
first of such periods comprised of four weeks, the second of such periods
comprised of four weeks, and the third of such periods comprised of five weeks,
with each of the weeks in a Fiscal Quarter ending on a Saturday (except that the
last fiscal period in the last Fiscal Quarter of a 53 week year shall be six
weeks).  There are twelve Fiscal Months in a Fiscal Year.
 
“Fiscal Quarter” means any fiscal quarter of any Loan Party and its
Subsidiaries.
 
“Fiscal Year” the fiscal year of any Loan Party and its Subsidiaries ending on
the Saturday closest to December 31 of any calendar year.

 
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“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which a Borrower is resident for tax
purposes.  For purposes of this definition, the United States, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
 
“Foreign Subsidiary” means any Subsidiary of Parent that is not a Domestic
Subsidiary.
 
“Fund” means any Person (other than a natural person) that is (or will be)
primarily engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
 
“Funding Date” means the date on which a Borrowing occurs.
 
“Funding Losses” has the meaning set forth in Section 2.12(b)(2).
 
“GAAP” means generally accepted accounting principles that are (i) recognized as
such by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or any generally recognized successor of any of
the foregoing), and (ii) consistently applied with past financial statements of
Loan Parties adopting the same principles.  If any change in any accounting
practice is required by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or any successor of any of the
foregoing) in order for such principle or practice to continue as a generally
accepted accounting principle or practice, all reports and financial statements
required hereunder or in connection herewith may be prepared in accordance with
such change, but all calculations and determinations to be made hereunder may be
made in accordance with such change only after notice of such change is given to
each Lender, and Administrative Borrower and Required Lenders agree to such
change.
 
“General Intangibles” means general intangibles (as that term is defined in the
Code).
 
“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, unanimous shareholders agreements or
declarations, or other organizational documents of such Person.
 
“Governmental Authority” means any foreign, federal, state, provincial,
municipal, local, or other governmental or administrative body, instrumentality,
department, or agency or any court, tribunal, administrative hearing body,
arbitration panel, commission, or other similar dispute-resolving panel or body.
 
“Guaranteed Obligations” has the meaning assigned to such term in Section 17
hereof.
 
“Guaranteed Pension Plan” means any employee pension benefit plan within the
meaning of §3(2) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

 
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 “Guarantor” and “Guarantors” have the respective meanings set forth in the
preamble to this Agreement and, as of the Effective Date, shall include,
collectively, the Parent and West Marine Canada and, on and after the Effective
Date, shall include, collectively, each other Person executing a joinder to this
Agreement as “Guarantor” and a “Loan Party” hereunder.
 
“Guaranty” means the guaranty set forth in Section 17 hereof.
 
“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
 
“Hedge Agreement” means any and all transactions, agreements, or documents now
existing or hereafter entered into between a Loan Party and a Bank Product
Provider, which provide for an interest rate, credit, commodity or equity swap,
cap, floor, collar, forward foreign exchange transaction, currency swap, cross
currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging such Loan
Party’s exposure to fluctuations in interest or exchange rates, loan, credit
exchange, security or currency valuations or commodity prices.
 
“Holdout Lender” has the meaning set forth in Section 15.2.
 
“Indebtedness” as to any Person means, without duplication: (a) all obligations
for borrowed money; (b) all obligations evidenced by bonds, debentures, notes,
or other similar instruments and all reimbursement or other obligations in
respect of letters of credit, bankers acceptances, interest rate swaps, or other
financial products; (c) all obligations as a lessee under Capital Leases; (d)
all obligations or liabilities of others secured by a Lien on any asset of a
Person or its Subsidiaries, irrespective of whether such obligation or liability
is assumed; (e) all obligations to pay the deferred purchase price of assets
(other than trade payables incurred in the ordinary course of business); (f) all
obligations owing under hedge agreements or similar agreements; (g) every
obligation of such Person (an “equity related purchase obligation”) to purchase,
redeem, retire or otherwise acquire for value any shares of Stock issued by such
Person or any rights measured by the value of such Stock; (h) every obligation
in respect of Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent that such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such terms are
enforceable under applicable law; (i) any obligation guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (h) above; and (j)
every obligation of such Person under any Synthetic Lease.

 
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“Indemnified Liabilities” has the meaning set forth in Section 11.3.
 
“Indemnified Person” has the meaning set forth in Section 11.3.
 
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision any Debtor Relief Law, or under any other state, provincial,
federal or foreign bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
 
“Insurance Reserves” means such reserves as may be established from time to time
during the continuance of a Cash Dominion Event by Agent in its Permitted
Discretion with respect to the insurance of the Loan Parties.
 
“Interest Payment Date” means (a) as to any Prime Rate Loan, on the first day of
the calendar month with respect to interest accrued during such prior calendar
month; and (b) as to any LIBOR Rate Loan, the last day of such Interest Period.
 
“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Prime Rate Loan to a
LIBOR Rate Loan) and ending 1, 2 or 3 months thereafter, as applicable;
provided, however, that (i) interest shall accrue at the applicable rate based
upon the LIBOR Rate from and including the first day of each Interest Period to,
but excluding, the day on which any Interest Period expires, (ii) any Interest
Period that would end on a day that is not a Business Day shall be extended to
the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (iii) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2 or 3 months after the date on which the Interest Period
began, as applicable, and (iv) Borrowers (or Administrative Borrower on behalf
thereof) may not elect an Interest Period which will end after the Maturity
Date; provided further any Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date.
 
“Inventory” means “inventory” (as that term is defined in the Code).
 
“Inventory Reserves” means such reserves as may be established from time to time
by Agent in its Permitted Discretion with respect to the determination of the
saleability, at retail, of the Eligible Inventory or which reflect such other
factors as affect the market value of the Eligible Inventory.  Without limiting
the generality of the foregoing, Inventory Reserves may include (but are not
limited to) (a) reserves based on obsolescence or inventory shrinkage, (b) the
estimated reclamation claims of unpaid sellers of Inventory sold to a member of
the Borrowing Group, (c) change in Inventory character, composition or mix, (d)
imbalance of Inventory, retail markdowns or markups inconsistent with prior
period practice and performance, current Business Plan, or advertising calendar
and planned advertising events, (e) the change in the Net Retail Liquidation
Value of the Inventory, or (f) as reasonably required by Agent to protect
Collateral value based upon changes to the ordinary course of business of the
Borrowing Group.

 
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“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, or capital contributions (excluding (a) commissions, loans and similar
advances to officers and employees of such Person made in the ordinary course of
business, and (b) bona fide Accounts arising in the ordinary course of business
consistent with past practice), purchases or other acquisitions of Indebtedness,
Stock, or all or substantially all of the assets of such other Person (or of any
division or business line of such other Person), and any other items that are or
would be classified as investments on a balance sheet prepared in accordance
with GAAP.
 
“Investment Property” means “investment property” (as that term is defined in
the Code), and any and all supporting obligations in respect thereof.
 
“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.
 
“IRS” means the United States Internal Revenue Service or any successor thereto.
 
“Issuing Lender” means Wells Fargo in its capacity as Issuing Lender for the
purpose of issuing Letters of Credit and its successors and assigns.
 
“Judgment Conversion Date” has the meaning set forth in Section 18.12(a).
 
“Judgment Currency” has the meaning set forth in Section 18.12(a).
 
“L/C Authorized Person” means any officer or employee of a Borrower.
 
“L/C Disbursement” means a payment made by the Issuing Lender pursuant to a
Letter of Credit.
 
“Lender” and “Lenders” have the respective meanings set forth in the preamble to
this Agreement, and shall include Accordion Lenders, Issuing Lender, Swing
Lender and any other Person made a party to this Agreement in accordance with
the provisions of Section 14.1.
 
“Lender Group” means, individually and collectively, Agent, each Lender
(including the Issuing Lender) and each Affiliate of Agent or any Lender that is
party to a Loan Document.
 
“Lender Group Expenses” has the meaning set forth in Section 18.1 hereof.
 
“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, and the officers, directors, employees, attorneys
and agents of such Lender.
 
“Letter of Credit” has the meaning set forth in Section 2.11(a).

 
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“Letter of Credit Sublimit” means $50,000,000.
 
“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit, plus the aggregate amount
of all unreimbursed L/C Disbursement Obligations (other than L/C Disbursement
Obligations which, pursuant to Section 2.11(d), have been deemed Advances
hereunder).
 
“LIBOR Deadline” has the meaning set forth in Section 2.12(b)(1).
 
“LIBOR Notice” means a written notice substantially in the form of Exhibit L-1.
 
“LIBOR Option” has the meaning set forth in Section 2.12(a).
 
“LIBOR Rate” means, for each Interest Period, the rate per annum determined by
Agent (rounded upwards, if necessary, to the next 1/100%) by dividing (a) the
Base LIBOR Rate for such Interest Period, by (b) 100% minus the Reserve
Percentage.  The LIBOR Rate shall be adjusted on and as of the effective day of
any change in the Reserve Percentage.
 
“LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the LIBOR Rate.
 
“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, whether such interest is based
on the common law, statute, or contract, whether such interest is recorded or
perfected, and whether such interest is contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, including the lien or security interest arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, security agreement, conditional sale, trust receipt or other title
retention agreement, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
 
“Loan Account” has the meaning set forth in Section 2.9.
 
“Loan Documents” means this Agreement, the Collateral Documents, the Bank
Product Agreements, the Fee Letter, the Perfection Certificate, the Confirmation
Agreement, the Letters of Credit, any certificates (including without
limitation, the Borrowing Base Certificate) from time to time delivered by any
Loan Party pursuant to this Agreement or any other Loan Document, any Note or
Notes executed by the Borrowers in connection with this Agreement and payable to
a member of the Lender Group, Uniform Commercial Code financing statements and
PPSA financing statements required under this Agreement, and any other agreement
entered into, now or in the future, by any Loan Party and the Lender Group in
connection with this Agreement.
 
“Loan Party” means the Parent, each Borrower, each Guarantor and any other
Person which may hereafter become a party as a borrower or guarantor to any Loan
Document, and “Loan Parties” means all such Persons, collectively.

 
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“Local Account” has the meaning set forth in Section 2.6(a).
 
“Material Adverse Change” means any event, occurrence or circumstance which (a)
has any material adverse effect whatsoever upon the validity or enforceability
of any Loan Document, (b) has a material adverse effect upon the business,
operations, results of operations, assets, liabilities or financial condition of
the Loan Parties taken as a whole, (c) has materially impaired the ability of
the Loan Parties taken as a whole to perform their obligations under the Loan
Documents to which they are a party, including, without limitation, to pay the
Obligations or Guaranteed Obligations, as applicable, or the ability of the
Lender Group to enforce the Obligations or realize upon the Collateral, (d) has
a material adverse effect on the rights and remedies of Agent or any Lender
under this Agreement, the other Loan Documents or any related document,
instrument or agreement, (e) has a material adverse effect on the value of the
Collateral or the amount Agent would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral or (f) results in a material impairment of the validity,
enforceability, attachment, perfection or priority of Agent’s Liens with respect
to the Collateral.
 
“Maturity Date” means August 23, 2014, as such date may be modified pursuant to
Section 3.4.
 
“Maximum Revolver Amount” means the aggregate amount of all Advances and Letter
of Credit Usage that may be borrowed by or made to Borrowers under this
Agreement, as such amount may be increased or decreased from time to time in
accordance with this Agreement; provided, however, that the Maximum Revolver
Amount shall in no event exceed (a) $140,000,000 prior to any exercise by the
Borrowers of an Accordion Activation and (b) up to $165,000,000 after Borrowers’
exercise of any Accordion Activation, as may be reduced by Borrowers from time
to time in accordance with Section 3.5.
 
“Minimum Adjusted Availability Requirement” means, as of any date of
determination, the greater of (a) $7,000,000 or (b) ten percent (10%) of the
Borrowing Base.
 
“Moody’s” means Moody’s Investors Service, Inc., or its successor.
 
“Multiemployer Plan” means any multiemployer plan within the meaning of §3(37)
of ERISA maintained or contributed to by any Loan Party or any ERISA Affiliate.
 
“Negotiable or Transferable Collateral” means collectively, letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
 
“Net Liquidation Percentage” means, at any date of determination, the percentage
of the Cost value of the Borrowing Group’s Eligible Inventory that is estimated
to be recoverable in an orderly liquidation of such Eligible Inventory, net of
liquidation expenses, such percentage to be as determined from time to time by
Agent in its Permitted Discretion or by a qualified appraisal company selected
by Agent.

 
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“Net Retail Liquidation Value” means, at any date of determination, the result
(expressed in Dollars) of the Net Liquidation Percentage times the Cost value of
Eligible Inventory as of such date.
 
“Note” or “Notes” means one or more of the promissory notes issued pursuant to
Section 2.2(i) to evidence the Advances hereunder and substantially in the form
of Exhibit N-1 annexed hereto, as amended, endorsed or otherwise modified from
time to time.
 
“Obligation Currency” has the meaning set forth in Section 18.12(a).
 
“Obligations” means (a) all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
Bankruptcy and Insolvency Act (Canada) or Companies’ Creditors Arrangement Act
(Canada) would have accrued), contingent reimbursement obligations with respect
to outstanding Letters of Credit, premiums, liabilities (including all amounts
charged to Borrowers’ Loan Accounts pursuant hereto), obligations, fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the provisions of
the Bankruptcy Code, Bankruptcy and Insolvency Act (Canada) or Companies’
Creditors Arrangement Act (Canada) would have accrued), guaranties, covenants,
and duties of any kind and description owing by any Loan Party to the Lender
Group pursuant to or evidenced by the Loan Documents or Hedge Agreements and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all interest not paid when due and all Lender Group Expenses that
the Loan Parties are required to pay or reimburse by the Loan Documents, by law,
or otherwise, and (b) all Bank Product Obligations.  Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, and supplements, thereto and thereof, as applicable, both prior
and subsequent to any Insolvency Proceeding.  For the purposes of
Sections 2.5(a) and 16.1, the definition of Required Lenders, and determining
whether an Overadvance has occurred under Section 2.2, the term “Obligations”
shall not include Bank Product Obligations.
 
“Originating Lender” has the meaning set forth in Section 14.1(e).
 
“Overadvance” has the meaning set forth in Section 2.4.
 
“Parent” means West Marine, Inc., a Delaware corporation.
 
“Participant” has the meaning set forth in Section 14.1(e).
 
“PBGC” means the Pension Benefit Guaranty Corporation created by §4002 of ERISA
and any successor entity or entities having similar responsibilities.
 
“Perfection Certificate” means the Perfection Certificate submitted by
Administrative Borrower to Agent with respect to each Loan Party, together with
such Loan Party’s completed responses to the inquiries set forth therein, the
form and substance of each such response to be satisfactory to Agent.

 
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“Permitted Acquisitions” means acquisitions of all or substantially all of the
assets of a Person in or of any division or business line of a Person or Stock
of a Person; provided that: (a) Agent shall receive at least three (3) Business
Days prior written notice of such acquisition, which notice shall include a
reasonably detailed description of such acquisition; (b) such assets are located
in the United States or Puerto Rico (or, subject to the prior written consent of
Agent, assets located in Australia or Europe) or, in the case of acquisitions by
West Marine Canada, Canada, as applicable (except that such location requirement
shall not apply to acquisitions of assets or stores from a licensee or
franchisee of any Loan Party) and are those assets of a business that would
comply with Section 6.5(c), and which business would not subject Agent or any
Lender to regulatory or third party approvals in connection with the exercise of
its rights and remedies under this Agreement or any Loan Documents; (c) no
Default or Event of Default exists prior to or immediately after the execution
of the definitive agreement for such acquisition; (d) Agent is granted, to the
extent and in accordance with the scope required by Section 4, a valid first
priority perfected security interest in the assets so acquired to the extent
such assets fall within the definition of the term “Collateral” (subject to any
Permitted Liens) and the applicable Loan Party shall have delivered to Agent
evidence reasonably satisfactory to Agent that all liens and encumbrances with
respect to the assets so acquired, other than Permitted Liens, have been
discharged in full; (e) the seller of such assets or capital Stock is not an
Affiliate of any Loan Party; (f) the terms of such acquisition are on an arm’s
length basis; (g) Section 6.14 is complied with at the time of consummation of
such acquisition (or concurrently therewith); (h) the board of directors and (if
required by applicable law) the shareholders, or the equivalent thereof, of the
business to be acquired has approved such acquisition in the event such
Permitted Acquisition would result in a change of control of the acquired
Person; (i) the applicable Loan Party shall have delivered to Agent certified
copies of the acquisition agreements and all other material documents, contracts
and agreements entered into by such Loan Party in connection therewith; (j) no
additional Indebtedness shall be incurred assumed or otherwise be reflected on a
consolidated balance sheet of Parent after giving effect to such acquisition,
except (i) Advances made hereunder, (ii) ordinary course trade payables, accrued
expenses and unsecured Indebtedness of Loan Parties and (iii) Indebtedness
otherwise permitted under Section 7.1; and (k) after giving effect to any such
acquisition, Availability shall not be less than $30,000,000 and Administrative
Borrower shall have delivered to Agent a Borrowing Base Certificate and
Projections demonstrating that Borrowers shall have Availability of at least
$30,000,000 at all times for the six month period immediately succeeding such
acquisition.
 
In addition, the Accounts so acquired shall not be included in Eligible Accounts
and the Inventory so acquired shall not be included in Eligible Inventory,
unless and until (i) Agent has completed a review of such assets (which Agent
shall do within a commercially reasonable period following a written request
from Administrative Borrower for the same), the results of which shall be
satisfactory to Agent in its Permitted Discretion, and (ii) Agent has notified
Administrative Borrower in writing of its consent to such inclusion and to the
amount of any Reserves which shall be taken in connection with such inclusion.
 
“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment exercised in a manner consistent with its customary practices.

 
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“Permitted Dispositions” means: (a) sales or other dispositions by any Loan
Party of property that (i) is substantially worn, damaged, or obsolete in the
ordinary course of business or (ii) does not constitute Collateral, provided
that, in respect of sales and other dispositions of property that does not
constitute Collateral, (x) Agent shall have received at least three (3) Business
Days’ prior written notice of such sale or other disposition by the applicable
Loan Party in any transaction that has, together with any directly related
transactions or series of similar transactions, a book value in excess of
$5,000,000 in the aggregate, and (y) no Default or Event of Default exists prior
to or immediately after giving effect to such sale or other disposition; (b)
sales by any Loan Party of Inventory to buyers in the ordinary course of
business; (c) the use or transfer of money or Cash Equivalents by any Loan Party
in a manner that is not prohibited by the terms of this Agreement or the other
Loan Documents; (d) the licensing by any Loan Party, on a non-exclusive basis,
of patents, trademarks, copyrights, and other intellectual property rights in
the ordinary course of business; (e) a disposition between the Loan Parties; (f)
the surrender or waiver of contract rights or the disposition, settlement,
release or surrender of contract, tort or other claims of any kind in the
ordinary course of business; and (g) any disposition for collection of defaulted
receivables that arose in the ordinary course of business.
 
“Permitted Investments” means: (a) Investments in cash and Cash Equivalents; (b)
Investments in negotiable instruments for collection; (c) advances or deposits
made in connection with purchases of goods or services in the ordinary course of
business or Permitted Acquisitions; (d) Investments received in settlement of
amounts due to a Loan Party effected in the ordinary course of business or owing
to such Loan Party as a result of Insolvency Proceedings involving an Account
Debtor or upon the foreclosure or enforcement of any Lien in favor of such Loan
Party; (e) (i) Investments in Parent, (ii) Investments in a Borrower, (iii)
Investments in a Subsidiary of any Borrower that is a Guarantor hereunder, and
(iv) to the extent otherwise permitted hereunder, Investments in any Person who,
simultaneously with such Investment, becomes a Subsidiary of Parent and complies
with Section 6.14 hereof; (f) other Investments so long as after giving effect
to such Investments, Availability shall not be less than $30,000,000 and
Administrative Borrower shall have delivered to Agent a Borrowing Base
Certificate and Projections demonstrating that Borrowers shall have Availability
of at least $30,000,000 at all times for the six month period immediately
succeeding such Investments; (g) Investments the net aggregate book value of
which does not at any time exceed the amount of $1,000,000; (h) Investments
ear-marked in the applicable Loan Party’s books of account to satisfy such
Borrower’s liability under any non-qualified deferred compensation plan for the
benefit of their current or former employees or directors; and (i) so long as
the Revolver Usage (other than Letter of Credit Usage) is equal to $0,
investments in (x) commercial notes and bonds or variable rate demand notes,
issued by any commercial institution with a rating of not less than A, as
determined by S&P or Moody’s, (y) Eurodollar deposits, and (z) money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in the definition of “Cash Equivalents” or subclauses (x) or (y)
hereof; provided that, notwithstanding the foregoing clauses (a) through (i)
above, no such Investments shall be permitted during the continuance of a
Default or Event of Default.

 
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“Permitted Liens” means: (a) Liens securing Obligations held by Agent for the
benefit of Agent, Lenders and Bank Product Providers; (b) Liens for unpaid taxes
or other governmental charges or accruals that either (i) are not yet
delinquent, or (ii) do not constitute an Event of Default hereunder and are the
subject of Permitted Protests; (c) existing Liens set forth on Schedule P-1; (d)
the interests of lessors under operating leases (including the interests of
lessors under any leases that have been converted from operating leases to
Capitalized Leases pursuant to any change in GAAP); (e) purchase money Liens or
the interests of lessors under Capitalized Leases to the extent that such Liens
or interests secure Permitted Purchase Money Indebtedness and so long as such
Lien attaches only to the asset purchased or acquired and the proceeds thereof;
(f) Liens arising by operation of law including those in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, processors, or suppliers,
incurred in the ordinary course of Borrowers’ business and not in connection
with the borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests; (g) Liens arising
from deposits made in connection with obtaining worker’s compensation or other
unemployment insurance; (h) Liens or deposits to secure performance of bids,
tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money; (i) Liens granted as security for surety
and performance bonds in the ordinary course of business or appeal bonds; (j)
Liens resulting from any judgment or award that is not an Event of Default
hereunder; (k) with respect to any Real Property, easements, rights of way,
minor encroachments, and zoning restrictions that do not materially interfere
with or impair the use or operation thereof; (l) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (m) Liens resulting from the
filing of precautionary UCC financing statements and PPSA financing statements
relating to operating leases of any Loan Party which are entered into in the
ordinary course of business and which are limited solely to the assets subject
thereto; (n) Liens on money placed in an escrow account in connection with sale
leaseback transactions permitted by Section 7.5, a Permitted Acquisition or
Permitted Disposition; (o) Liens consisting of any right of offset or bankers’
lien, on bank deposit accounts (other than the Concentration Accounts and
Deposit Accounts subject to a Control Agreement) maintained in the ordinary
course of business so long as such bank deposit accounts are (i) not established
or maintained for the purpose of providing such right of offset or bankers’
lien, and Liens of a collecting bank arising under the Code or the PPSA and (ii)
under customary account agreements on checks and other items of payment in the
course of collection; (p) Liens on property or assets not constituting
Collateral, provided that Agent shall have received at least three (3) Business
Days’ prior written notice of the filing, registration, recording or imposition
of any such Liens on property granted in any transaction which has, together
with any directly related transactions or series of similar transactions, a book
value in excess of $5,000,000; and (q) Liens on property at the time a Loan
Party acquired the property, including any acquisition by means of a merger or
consolidation with or into such Loan Party; provided, however, that such Liens
are not created, incurred or assumed in connection with, or in contemplation of,
such acquisition; provided, further, however, that such Lien may not extend to
any other property owned by such Loan Party.
 
“Permitted Overseas Account Jurisdiction” means any of Australia or a
jurisdiction located within Europe, provided that, in respect of Accounts
arising from Account Debtors located in such jurisdictions, (i) Agent shall have
received (to the extent Agent shall have requested the same) an audit in form,
scope and substance reasonably satisfactory to Agent and such other documents
and information as Agent shall have reasonably requested and shall have
determined, in its Permitted Discretion, to be acceptable as a component of the
Borrowing Base, (ii) all steps have been taken to grant and record, under the
applicable local law, a first priority perfected Lien to Agent in such Accounts
and (iii) Agent shall have determined in its Permitted Discretion that it is
able to realize on such Accounts in a manner and with a priority similar to
Agent’s rights in the United States and Canada.

 
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“Permitted Overseas Inventory Jurisdiction” means any of Australia or a
jurisdiction located within Europe, provided that, in respect of the Inventory
located in such jurisdiction, (i) Agent shall have received (to the extent Agent
shall have requested the same) an audit and an appraisal in form, scope and
substance reasonably satisfactory to Agent and such other documents and
information as Agent shall have reasonably requested and shall have determined,
in its Permitted Discretion, to be acceptable as a component of the Borrowing
Base, (ii) all steps have been taken to grant and record, under the applicable
local law, a first priority perfected Lien to Agent in such Inventory and (iii)
Agent shall have determined in its Permitted Discretion that it is able to
realize on such Inventory in a manner and with a priority similar to Agent’s
rights in the United States and Canada.
 
“Permitted Protest” means the right of any Loan Party to protest any Lien (other
than any such Lien that secures the Obligations), taxes (other than payroll
taxes or taxes that are the subject of a United States federal Tax Lien or
Canadian federal, provincial or territorial Tax Lien), or other amount payable
to a third party, provided that (a) a reserve with respect to such obligation is
established on the Books in such amount as is required under GAAP, (b) any such
protest is instituted promptly and prosecuted diligently by such Loan Party in
good faith, and (c) Agent is satisfied that, while any such protest is pending,
there will be no impairment of the enforceability, validity, perfection or
priority of any of Agent’s Liens.
 
“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate
amount outstanding at any one time not in excess of $35,000,000 (plus any
Indebtedness incurred as a result of the conversion of an operating lease into a
Capitalized Lease pursuant to a change in GAAP).  In no event shall Permitted
Purchase Money Indebtedness include Indebtedness incurred for the purpose of
financing all or any part of the acquisition Cost of any Inventory.
 
“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and any Governmental Authority.
 
“PPSA” means the Personal Property Security Act (Ontario), or, where the context
requires, the legislation of other provinces or territories in Canada relating
to security in personal property generally, including Accounts Receivable and
Inventory, as adopted by and in effect from time to time in such provinces or
territories in Canada, as applicable.

 
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“Prime Rate” means, for any day, a fluctuating rate per annum equal to the
highest of (a) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%), (b) the LIBOR Rate for a one-month interest
period (as determined on such day) plus one percent (1.00%), or (c) the rate of
interest in effect for such day as publicly announced from time to time by Wells
Fargo as its “prime rate.”  The “prime rate” is a rate set by Wells Fargo based
upon various factors including Wells Fargo’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in Wells Fargo’s “prime rate” announced by Wells Fargo shall
take effect at the opening of business on the day specified in the public
announcement of such change.  If, for any reason, Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Rate or the LIBOR Rate for any reason,
including the inability or failure of Agent to obtain sufficient quotations
thereof in accordance with the terms hereof, the Prime Rate shall be determined
without regard to clauses (a) or (b) of the first sentence of this definition,
as applicable, until the circumstances giving rise to such inability no longer
exist.
 
“Prime Rate Loan” means the portion of the Advances that bears interest at a
rate determined by reference to the Prime Rate.
 
“Proceeds” means “proceeds” (as that term is defined in the Code).
 
“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent
with Parent’s historical financial statements and on a Fiscal Month-by-month
basis, together with appropriate supporting details and a statement of
underlying assumptions in form and substance reasonably acceptable to Agent.
 
“Pro Rata Share” means, as of any date of determination:
 
(a)           with respect to a Lender’s obligation to make Advances and receive
payments of principal, interest, fees, costs, and expenses with respect thereto,
(i) prior to the Commitment being terminated or reduced to zero, the percentage
obtained by dividing (y) such Lender’s Commitment, by (z) the aggregate
Commitments of all Lenders, and (ii) from and after the time that the
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (y) the aggregate outstanding principal amount of such Lender’s
Advances by (z) the aggregate outstanding principal amount of all Advances,
 
(b)           with respect to a Lender’s obligation to participate in Letters of
Credit, to reimburse the Issuing Lender with respect to Letters of Credit, and
to receive payments of fees with respect thereto, (i) prior to the Commitment
being terminated or reduced to zero, the percentage obtained by dividing (y)
such Lender’s Commitment, by (z) the aggregate Commitments of all Lenders, and
(ii) from and after the time that the Commitment has been terminated or reduced
to zero, the percentage obtained by dividing (y) the aggregate outstanding
principal amount of such Lender’s Advances by (z) the aggregate outstanding
principal amount of all Advances, and
 
(c)           with respect to all other matters as to a particular Lender
(including the indemnification obligations arising under Section 16.7), the
percentage obtained by dividing (i) such Lender’s Commitment by (ii) the
aggregate amount of Commitments of all Lenders; provided, however, that in the
event the Commitments have been terminated or reduced to zero, Pro Rata Share
under this clause shall be the percentage obtained by dividing (A) the aggregate
outstanding principal amount of such Lender’s Advances, by (B) the aggregate
outstanding principal amount of all Advances.

 
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“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
90 days after, the acquisition of any fixed assets for the purpose of financing
all or any part of the acquisition cost thereof, together with any refinancings
thereof permitted under Section 7.1(d).
 
“Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Loan Party and the improvements thereto.
 
“Record” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.
 
“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (d) conduct any other
actions authorized by 42 USC §9601.
 
“Rent Reserves” means such reserves as may be established from time to time by
Agent in its Permitted Discretion with respect to up to three (3) month’s rent
obligations of the Borrowing Group for leased properties located in
Pennsylvania, Virginia and Washington (or such other state(s), province(s) or
other jurisdictions in which a landlord’s claim for rent has priority by
operation of applicable law over the Lien of Agent in the Collateral) for which
Agent has not received a Collateral Access Agreement.
 
“Repass Control Group” means, collectively Randolph K. Repass, his estate,
executors, administrators and heirs, and his lineal descendants, any private
foundation or other charitable entity controlled by him or his estate,
executors, administrators or heirs, or his lineal descendants, and any
corporation, partnership, limited liability company, trust or other entity in
which he or his estate, executors, administrators or heirs, or his lineal
descendants have a direct or indirect beneficial interest or voting control of
greater than fifty percent (50%).
 
“Replacement Lender” has the meaning set forth in Section 15.2.
 
“Report” has the meaning set forth in Section 16.20.
 
“Required Lenders” means, at any time, subject to Section 2.2(i), two or more
Lenders whose aggregate Pro Rata Shares (calculated under clause (c) of the
definition of Pro Rata Shares) exceeds 50%.
 
“Reserves” means such reserves as Agent from time to time determines in its
Permitted Discretion as being appropriate (a) to reflect impediments to Lender
Group’s ability to realize upon the Collateral, (b) to reflect claims and
liabilities that Agent determines will need to be satisfied in connection with
the realization upon the Collateral, (c) to reflect criteria, events,
conditions, contingencies or risks which adversely affect any component of the
Borrowing Base, or the assets, business, financial performance or financial
condition of any Loan Party, or (d) to reflect that a Default or an Event of
Default then exists, including, without limitation, Bank Product Reserves,
Inventory Reserves, Insurance Reserves and Rent Reserves.

 
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“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor Governmental Authority) for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to
as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.
 
“Revolver Usage” means, as of any date of determination, the sum of (a) the then
extant amount of outstanding Advances, plus (b) the then extant amount of the
Letter of Credit Usage.
 
“Riemer” has the meaning set forth in Section 16.22.
 
“S&P” means Standard & Poor’s Rating Group, or its successor.
 
“SEC” means the United States Securities and Exchange Commission and any
successor thereto.
 
“Seasonal Period” means the period commencing on February 1 through and
including May 1 of each Fiscal Year.
 
“Securities Account” means a “securities account” as that term is defined in the
Code.
 
“Security Agreement” means, collectively, (i) the General Security Agreement of
West Marine Canada in favor of Agent, dated as of the Closing Date, and (ii)
each other security agreement executed by any Person after the Effective Date
pursuant to this Agreement, in favor of Agent and in form, scope and substance
reasonably satisfactory to Agent, in each case, as amended and in effect from
time to time.
 
“Segregated Account” has the meaning set forth in the definition of “Borrowing
Base”.
 
“Settlement” has the meaning set forth in Section 2.2(f)(1).
 
“Settlement Date” has the meaning set forth in Section 2.2(f)(1).
 
“Solvent” means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s
debts.

 
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“Specified Collateral” means all Accounts and Inventory of any of the Loan
Parties, whether now owned or hereafter acquired, and all proceeds and products
of the foregoing.
 
“Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).
 
“Subordinated Obligations” means, as of any date of determination (without
duplication), any unsecured Indebtedness of a Loan Party that has been
subordinated in right of payment to the Obligations in a manner reasonably
satisfactory to Agent and contains such subordination, blockage and other terms
and conditions with respect to the Obligations as Agent may reasonably require.
 
“Subsidiary” of a Person means a corporation, partnership, limited liability
company, unlimited company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
 
“Swing Lender” means WFRF in its capacity as the Swing Lender hereunder.
 
“Swing Loan(s)” has the meaning set forth in Section 2.2(d)(1).
 
“Swing Loan Commitment Amount” means $20,000,000.
 
“Synthetic Lease” means any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for United States income tax purposes.
 
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.
 
“Termination Date” means the earlier to occur of (a) the Maturity Date, (b) the
termination of this Agreement by the Lenders pursuant to Section 3.3 hereof and
(c) the termination of the Commitments by Borrowers pursuant to Section 3.5.
 
“Unused Line Fee” has the meaning set forth in Section 2.10(a).
 
“Voidable Transfer” has the meaning set forth in Section 18.8.
 
“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association, and its successors.
 
“West Marine Canada” means West Marine Canada Corp., a Nova Scotia unlimited
company.

 
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“West Marine Products” has the meaning set forth in the preamble to this
Agreement.
 
“West Marine Puerto Rico” means West Marine Puerto Rico, Inc., a California
corporation.
 
“WFRF” means Wells Fargo Retail Finance, LLC, a Delaware limited liability
company, and its successors.
 
1.2.          Accounting Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with GAAP applied on a consistent basis
by the accounting entity to which they refer.  When used herein, the term
“financial statements” shall include the notes and schedules thereto.  Whenever
the term “Borrowers” or the term “Parent” is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.  Unless otherwise expressly provided herein or unless Required
Lenders otherwise consent, all financial statements and reports furnished to
Agent or any Lender hereunder shall be prepared, all financial computations and
determinations pursuant hereto shall be made, and all terms of an accounting or
financial nature shall be construed, in accordance with GAAP.
 
1.3.         Code.  Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth from time to time in the Code
unless otherwise defined herein, with the term “instrument” being that defined
under Article 9 of the Code.
 
1.4.         Construction.  Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “including”,
“include” and “includes” are not limiting.  The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be.  Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise
specified.  Any reference in this Agreement or in the other Loan Documents to
any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein).  Any reference herein to the repayment in full or
satisfaction in full of the Obligations shall mean the repayment in full in cash
(or cash collateralized in accordance with the terms hereof) of all Obligations
other than contingent indemnification Obligations that, at such time, are not
required to be repaid or cash collateralized pursuant to the provisions of this
Agreement.  Any reference herein to any Person shall be construed to include
such Person’s successors and assigns.  Any requirement of a writing contained
herein or in the other Loan Documents shall be satisfied by the transmission of
a Record.  This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.  All
such limitations, tests and measurements are, however, cumulative and are to be
performed in accordance with the terms thereof.  Text which is shown in italics
(except for parenthesized italicized text), shown in bold, shown IN ALL CAPITAL
LETTERS, or in any combination of the foregoing, shall be deemed to be
conspicuous.  The words “may not” are prohibitive and not permissive.  Any
reference to a Person’s “knowledge” (or words of similar import) are to such
Person’s knowledge assuming that such Person has undertaken reasonable and
diligent investigation with respect to the subject of such “knowledge” (whether
or not such investigation has actually been undertaken).  To the extent that
this Agreement refers to ratings by S&P and Moody’s and to the extent that a
rating from one of such Persons ceases to be available, then the rating by
whichever of S&P or Moody’s continues to be available shall be used as the sole
rating for purposes of this Agreement.
 
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1.5.          Schedules and Exhibits.  All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
 
Section 2.              LOAN AND TERMS OF PAYMENT.
 
2.1.         Revolver Advances.  Subject to the terms and conditions of this
Agreement, and during the period commencing on the Effective Date and ending on
the Termination Date, each Lender agrees (severally and not jointly or jointly
and severally) to make advances (“Advances”) to Borrowers in an amount at any
one time outstanding not to exceed such Lender’s Pro Rata Share of an amount
equal to the lesser of (A) the Maximum Revolver Amount less Revolver Usage, or
(B) the Borrowing Base less Revolver Usage.  Anything to the contrary in this
Section 2.1 notwithstanding, Agent shall have the right without declaring an
Event of Default, to reduce its inventory advance rates or establish Reserves in
such amounts, and with respect to such matters, as Agent in its Permitted
Discretion shall deem necessary or appropriate, against the Borrowing Base,
including Reserves with respect to (i) sums that the Loan Parties are required
to pay (such as taxes, assessments, insurance premiums, or, in the case of
leased assets, rents or other amounts payable under such leases) and have failed
to pay under any Section of this Agreement or any other Loan Document, (ii)
amounts as determined by Agent in its Permitted Discretion based on
noncompliance with the covenants set forth in Sections 6 and 7, (iii) Bank
Products then provided or outstanding (based upon the applicable Bank Products
Provider’s reasonable determination of the credit exposure in respect of then
extant Bank Products), and (iv) amounts owing by the Loan Parties or their
Subsidiaries to any Person to the extent secured by a Lien on, or trust over,
any of the Collateral (other than any existing Permitted Lien set forth on
Schedule P-1 which is specifically identified thereon as entitled to have
priority over Agent’s Liens), which Lien or trust, in the Permitted Discretion
of Agent, likely would have a priority superior to Agent’s Liens (such as Liens
or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen,
laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or
other taxes which are given priority under applicable law) in and to such item
of the Collateral.  Amounts borrowed pursuant to this Section 2.1 may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time prior to the Termination Date.
 
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2.2.          Borrowing Procedures and Settlements.

(a)          Procedure for Borrowing.  Each Borrowing shall be made by an
irrevocable written request by an Authorized Person of Administrative Borrower
delivered to Agent (which notice must be received by Agent no later than 11:00
a.m. (New York, New York time) on the Business Day that is the requested Funding
Date with respect to Prime Rate Loans (and, subject to Section 2.12(b), with
respect to LIBOR Rate Loans) specifying (i) the amount of such Borrowing, and
(ii) the requested Funding Date, which shall be a Business Day.  At Agent’s
election, in lieu of delivering the above-described written request, any
Authorized Person of Administrative Borrower may give Agent telephonic notice of
such request by the required time.  In such circumstances, Borrowers agree that
any such telephonic notice will be confirmed in writing within 24 hours of the
giving of such notice and failure to provide such written confirmation shall not
affect the validity of the request.
 
(b)          Agent’s Election.  Promptly after receipt of a request for a
Borrowing pursuant to Section 2.2(a), Agent shall elect, in its discretion, (i)
to have the terms of Section 2.2(c) apply to such requested Borrowing, or (ii)
to request Swing Lender to make a Swing Loan pursuant to the terms of Section
2.2(d) in the amount of the requested Borrowing; provided, however, Swing Loans
at any one time outstanding may not exceed the Swing Loan Commitment Amount;
provided, further, that if (1) Swing Lender declines in its sole discretion to
make a Swing Loan pursuant to Section 2.2(d), Agent shall elect to have the
terms of Section 2.2 (c) apply to such requested Borrowing, and (2) if a notice
requesting a LIBOR Rate Loan has been timely delivered pursuant to Section
2.12(b) and which is otherwise in accordance with Section 2.12(b), Agent shall
not have the option to request Swing Lender to make such Borrowing as a Swing
Loan.
 
(c)          Making of Loans.
 
(1)           In the event that Agent shall elect to have the terms of this
Section 2.2(c) apply to a requested Borrowing as described in Section 2.2(b),
then promptly after receipt of a request for a Borrowing pursuant to Section
2.2(a), Agent shall notify the Lenders, not later than 10:00 a.m. (New York, New
York time) on the Funding Date applicable thereto, by telecopy, telephone, or
other similar form of transmission, of the requested Borrowing.  Each Lender
shall make the amount of such Lender’s Pro Rata Share of the requested Advance
available to Agent in immediately available funds, to Agent’s Account, not later
than 2:00 p.m. (New York, New York time) on the Funding Date applicable
thereto.  After Agent’s receipt of the proceeds of such Advances, upon
satisfaction of the applicable conditions precedent set forth in Section 3
hereof, Agent shall make the proceeds thereof available to Administrative
Borrower on the applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to Administrative Borrower’s
Designated Account or as otherwise directed by Administrative Borrower in the
applicable request for a Borrowing; provided, however, that, subject to the
provisions of Section 2.2(a), Agent shall not request any Lender to make, and no
Lender shall have the obligation to make, any Advance if Agent shall have actual
knowledge that (i) one or more of the applicable conditions precedent set forth
in Section 3 will not be satisfied on the requested Funding Date for the
Borrowing unless such condition has been waived, or (ii) the requested Borrowing
would result in Availability being less than $0 on such Funding Date.

 
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(2)           Unless Agent receives notice from a Lender on or prior to the
Effective Date or, with respect to any Borrowing after the Effective Date, prior
to 12:00 p.m. (New York, New York time) on the date of such Borrowing, that such
Lender will not make available as and when required hereunder to Agent for the
account of Borrowers the amount of that Lender’s Pro Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding Date and Agent
may (but shall not be so required), in reliance upon such assumption, make
available to Borrowers on such date a corresponding amount.  If and to the
extent any Lender shall not have made its full amount available to Agent in
immediately available funds and Agent in such circumstances has made available
to Borrowers such amount, that Lender shall be deemed a Defaulting Lender and
shall on the Business Day following such Funding Date make such amount available
to Agent, together with interest at the Defaulting Lender Rate for each day
during such period.  A notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent manifest
error.  If such amount is so made available, such payment to Agent shall
constitute such Lender’s Advance on the date of Borrowing for all purposes of
this Agreement.  If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify Administrative Borrower of
such failure to fund and, upon demand by Agent, Borrowers shall pay such amount
to Agent for Agent’s account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Advances composing such
Borrowing.  The failure of any Lender to make any Advance on any Funding Date
shall not relieve any other Lender of any obligation hereunder to make an
Advance on such Funding Date, but no Lender shall be responsible for the failure
of any other Lender to make the Advance to be made by such other Lender on any
Funding Date.  The Defaulting Lender shall be liable to the Borrowers for any
Funding Losses and breakage costs incurred by the Borrowers as a result of the
failure of such Defaulting Lender to make such Advance.
 
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(d)          Making of Swing Loans.
 
(1)           In the event Agent shall elect, with the consent of Swing Lender,
as a Lender, to have the terms of this Section 2.2(d) apply to a requested
Borrowing as described in Section 2.2(b), Swing Lender as a Lender shall make
such Advance in the amount of such Borrowing (any such Advance made solely by
Swing Lender as a Lender pursuant to this Section 2.2(d) being referred to as a
“Swing Loan” and such Advances being referred to collectively as “Swing Loans”)
available to Borrowers on the Funding Date applicable thereto by transferring
immediately available funds to Administrative Borrower’s Designated Account or
as otherwise directed by Administrative Borrower in the applicable request for a
Borrowing.  Each Swing Loan shall be deemed to be an Advance hereunder and shall
be subject to all the terms and conditions applicable to other Advances, except
that no such Swing Loan shall be eligible to be a LIBOR Rate Loan and all
payments on any Swing Loan shall be payable to Swing Lender as a Lender solely
for its own account (and for the account of the holder of any participation
interest with respect to such Swing Loan).  Subject to the provisions of Section
2.2(g), Agent shall not request Swing Lender as a Lender to make, and Swing
Lender as a Lender shall not make, any Swing Loan if Agent has actual knowledge
that (i) one or more of the applicable conditions precedent set forth in Section
3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (ii) the requested Borrowing
would result in Availability being equal to (or less than) $0 on such Funding
Date.  Swing Lender as a Lender shall not otherwise be required to determine
whether the applicable conditions precedent set forth in Section 3 have been
satisfied on the Funding Date applicable thereto prior to making, in its sole
discretion, any Swing Loan.
 
(2)           The Swing Loans shall be secured by Agent’s Liens, constitute
Advances and Obligations hereunder, and bear interest at the rate applicable
from time to time to Advances that are Prime Rate Loans.
 
(e)           [Reserved]
 
(f)           Settlement.  It is agreed that each Lender’s funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender’s Pro
Rata Share of the outstanding Advances.  Such agreement notwithstanding, Agent,
Swing Lender, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances and the Swing Loans shall take place on a periodic basis
in accordance with the following provisions:

 
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(1)           Agent shall request settlement (“Settlement”) with the Lenders on
a periodic basis contemplated to be weekly, or on a more frequent basis if so
determined by Agent, (i) on behalf of Swing Lender, with respect to each
outstanding Swing Loan, and (ii) with respect to Borrowers’ or their
Subsidiaries’ Collections received (if applicable), as to each by notifying the
Lenders by telecopy, telephone, or other similar form of transmission, of such
requested Settlement, no later than 2:00 p.m. (New York, New York time) on the
Business Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the “Settlement Date”).  Such notice of
a Settlement Date shall include a summary statement of the amount of outstanding
Advances and Swing Loans for the period since the prior Settlement
Date.  Subject to the terms and conditions contained herein (including Section
2.2(a)): (y) if a Lender’s balance of the Advances (including Swing Loans)
exceeds such Lender’s Pro Rata Share of the Advances (including Swing Loans) as
of a Settlement Date, then Agent shall, by no later than 12:00 p.m. (New York,
New York time) on the Settlement Date, transfer in immediately available funds
to the account of such Lender (as such Lender may designate), an amount such
that each such Lender shall, upon receipt of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances (including Swing Loans), and
(z) if a Lender’s balance of the Advances (including Swing Loans) is less than
such Lender’s Pro Rata Share of the Advances (including Swing Loans) as of a
Settlement Date, such Lender shall no later than 12:00 p.m. (New York, New York
time) on the Settlement Date transfer in immediately available funds to Agent’s
Account, an amount such that each such Lender shall, upon transfer of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans).  Such amounts made available to Agent under clause (z)
of the immediately preceding sentence shall be applied against the amounts of
the Swing Loan and, together with the portion of such Swing Loan representing
Swing Lender’s Pro Rata Share thereof, shall constitute Advances of such
Lenders.  If any such amount is not made available to Agent by any Lender on the
Settlement Date applicable thereto to the extent required by the terms hereof,
Agent shall be entitled to recover for its account such amount on demand from
such Lender together with interest thereon at the Defaulting Lender Rate.
 
(2)           In determining whether a Lender’s balance of the Advances, and
Swing Loans is less than, equal to, or greater than such Lender’s Pro Rata Share
of the Advances and Swing Loans as of a Settlement Date, Agent shall, as part of
the relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to principal, interest and fees
payable by Borrowers and allocable to the Lenders hereunder, and proceeds of
Collateral.  To the extent that a net amount is owed to any such Lender after
such application, such net amount shall be distributed by Agent to that Lender
as part of such next Settlement.
 
(3)           Between Settlement Dates, Agent may pay over to Swing Lender any
payments received by Agent, that in accordance with the terms of this Agreement
would be applied to the reduction of the Advances, for application to the Swing
Loans.  During the period between Settlement Dates, Swing Lender with respect to
Swing Loans and each Lender with respect to the Advances (other than Swing
Loans), shall be entitled to interest, payable by Borrowers as set forth herein,
at the applicable rate or rates payable under this Agreement.

 
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(g)           Optional Overadvances.  Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and Agent or Swing Lender, as applicable, may, but is not obligated
to, knowingly and intentionally, continue to make Advances (including Swing
Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would
be created, so long as (i) after giving effect to such Advances (including Swing
Loans), the then extant amount of the Revolver Usage does not exceed the
Borrowing Base by more than five percent (5%) of the then available Borrowing
Base, (ii) after giving effect to such Advances (including Swing Loans) the
outstanding Revolver Usage (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) does not exceed the
Commitments, and (iii) at the time of the making of any such Advance (including
any Swing Loan), Agent does not believe, in good faith, that the Overadvance
created by such Advance will be outstanding for more than 45 consecutive
days.  Agent or Swing Lender, as applicable, may, but is not obligated to, make
such Overadvance, from time to time in Agent’s or Swing Lender’s sole
discretion, (1) after the occurrence and during the continuance of a Default or
an Event of Default, or (2) at any time that any of the other applicable
conditions precedent set forth in Section 3 have not been satisfied, to make
Advances to Borrowers on behalf of Lenders that Agent, in its Permitted
Discretion deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product Obligations), or (C) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
Section 10.  The foregoing provisions are for the exclusive benefit of Agent,
Swing Lender, and Lenders and are not intended to benefit Borrowers in any
way.  The Advances and Swing Loans, as applicable, that are made pursuant to
this Section 2.2(g) shall not be eligible for the LIBOR Option and the rate of
interest applicable thereto shall be the rate applicable to Advances that are
Prime Rate Loans under Section 2.5(d).
 
In the event Agent obtains actual knowledge that the Revolver Usage exceeds the
amounts permitted by the preceding paragraph, regardless of the amount of, or
reason for, such excess, Agent shall notify Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and Lenders shall, together with
Agent, jointly determine the terms of arrangements that shall be implemented
with Borrowers  and intended to reduce, within a reasonable time, the
outstanding principal amount of the Advances to Borrowers to an amount permitted
by the preceding paragraph.  In the event Agent or any Lender disagrees over the
terms of reduction or repayment of any Overadvance, the terms of reduction or
repayment thereof shall be implemented according to the determination of the
Required Lenders.
 
Each Lender shall be obligated to settle with Agent as provided in Section
2.2(f) for the amount of such Lender’s Pro Rata Share of any unintentional
Overadvances by Agent reported to such Lender, any intentional Overadvances made
as permitted under this Section 2.2(g), and any Overadvances resulting from the
charging to the Loan Account of interest, fees, or Lender Group Expenses.
 
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(h)          Accordion Option.

(1)           Request for Increase.  Unless a Default or an Event of Default has
occurred and is then continuing, so long as Borrowers shall not have elected to
permanently reduce the Commitments hereunder and except as otherwise provided
herein, Administrative Borrower may make a maximum of two (2) requests that the
Lenders increase their Commitments hereunder in minimum increments of $5,000,000
(each such increase, an “Accordion Activation” and the amount of each such
increase, an “Accordion Amount”); provided that (i) Administrative Borrower
shall have made such request to Agent (which shall promptly notify the Lenders)
on or subsequent to the Effective Date but no later than one hundred eighty
(180) days prior to the Termination Date, (ii) in no event shall the Commitments
be increased pursuant to this Section 2.2(h) by an amount which exceeds, in the
aggregate, $25,000,000, (iii) no Default or Event of Default will occur as a
result of such Accordion Activation, (iv) no default or event of default will
occur under any other agreement of Indebtedness as a result of such Accordion
Activation, (v) Borrowers shall pay Agent (for the ratable benefit of the
Accordion Lenders, subject to any letter agreement between Agent and the
Accordion Lenders), such fees and other compensation as Borrowers, Agent and the
Accordion Lenders shall agree based upon current market conditions at the time
of such Accordion Activation, and (vi) Borrowers shall pay Agent (solely for its
own benefit) such arrangement fees as Borrowers and Agent shall agree.  At the
time of making any such request, Administrative Borrower (in consultation with
Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten (10) Business Days from the
date of delivery of such notice to the Lenders).
 
(2)           Lender Elections to Increase.  Each Lender shall notify Agent
within the time period specified whether or not such Lender agrees to increase
its Commitment and, if so, whether by an amount equal to, greater than, or less
than its Pro Rata Share of such requested Accordion Activation.  Any Lender not
responding within such time period shall be deemed to have declined to increase
its Commitment.
 
(3)           Notification by Agent; Accordion Lenders.  Agent shall notify
Administrative Borrower and each Lender of the Lenders’ responses to each
request for an Accordion Activation made hereunder.  To achieve the full amount
of a requested Accordion Activation, to the extent that the existing Lenders
decline to increase their Commitments, or decline to increase their Commitments
to the amount requested by Administrative Borrower, Agent, in consultation with
Administrative Borrower, will use its reasonable efforts to arrange for other
Eligible Transferees to become a Lender hereunder and to issue commitments in an
amount equal to the amount of the increase in the Commitments requested by
Administrative Borrower and not accepted by the existing Lenders (each, an
“Accordion Lender”); provided, however, that without the consent of Agent, at no
time shall the Commitment of any Accordion Lender be less than $5,000,000.
 
(4)           Effective Date and Allocations.  If the Commitments are increased
in accordance with this Section 2.2(h), Agent, in consultation with
Administrative Borrower, shall determine the effective date (the “Accordion
Activation Date”) and the final allocation of such increase.  Agent shall
promptly notify Administrative Borrower and the Lenders of the final allocation
of such increase and the Accordion Activation Date and, on the Accordion
Activation Date, (i) the Commitments under, and for all purposes of, this
Agreement shall be increased by the amount of such Accordion Activation, and
(ii) Schedule C-1 annexed hereto shall be deemed to be amended to reflect
(A) the name, address, Commitment, and Pro Rata Share of each Lender, and
(B) the Maximum Revolver Amount and Commitments as increased by such Accordion
Activation.

 
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(i)           Defaulting Lender; Notations; Failure to Perform; Notes;
Additional Advances.
 
(1)           Defaulting Lender.  Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrowers to Agent for the Defaulting
Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender,
Agent shall promptly transfer any such payments to each other non-Defaulting
Lender ratably in accordance with their Commitments (but only to the extent that
such Defaulting Lender’s Advance was funded by the other Lenders) or, if so
directed by Administrative Borrower and if no Default or Event of Default has
occurred and is continuing (and to the extent such Defaulting Lender’s Advance
was not funded by the other Lenders), retain the same to be re-advanced to
Borrowers as if such Defaulting Lender had made Advances to applicable
Borrowers.  Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to the applicable Borrowers for the account of such
Defaulting Lender the amount of all such payments received and retained by Agent
for the account of such Defaulting Lender.  Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents and for calculating
Unused Line Fees pursuant to Section 2.10(a), such Defaulting Lender shall be
deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be
zero.  This Section shall remain effective with respect to such Lender until (x)
the Obligations under this Agreement shall have been declared or shall have
become immediately due and payable, (y) the non-Defaulting Lenders, Agent and
Administrative Borrower shall have waived such Defaulting Lender’s default in
writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to Agent all amounts owing by Defaulting Lender in respect
thereof.  The operation of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by Borrowers of
their duties and obligations hereunder to Agent or to Lenders other than such
Defaulting Lender.  Any such failure to fund by any Defaulting Lender shall
constitute a material breach by such Defaulting Lender of this Agreement and
shall entitle Administrative Borrower at its option, upon written notice to
Agent, to arrange for a substitute Lender to assume the Commitment of such
Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent
and an Eligible Transferee.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being repaid its share of the outstanding Obligations (other
than Bank Product Obligations) without any premium or penalty of any kind
whatsoever; provided however, that any such assumption of the Commitment of such
Defaulting Lender shall not be deemed to constitute a waiver of any of the
Lender Groups’ or Borrowers’ rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund.

 
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(2)           Notation.  Agent shall record on its books the principal amount of
the Advances owing to each Lender, including the Swing Loans owing to Swing
Lender, and the interests therein of each Lender, from time to time and such
records shall, absent manifest error, be presumed to be correct and
accurate.  In addition, each Lender is authorized, at such Lender’s option, to
note the date and amount of each payment or prepayment of principal of such
Lender’s Advances in its books and records, including computer records.  In the
event of any conflict between the accounts or records maintained by any Lender
and the accounts and records maintained by Agent in respect of such matters the
account and records of Agent shall control in the absence of manifest error.
 
(3)           Lenders’ Failure to Perform. All Advances (other than Swing Loans)
shall be made by Lenders contemporaneously and in accordance with their Pro Rata
Shares of Advances.  It is understood that (i) no Lender shall be responsible
for any failure by any other Lender to perform its obligation to make any
Advance (or other extension of credit) hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligations hereunder, and (ii) no failure by any Lender
to perform its obligations hereunder shall excuse any other Lender from its
obligations hereunder.
 
(4)           Notes.  Each Borrower shall execute and deliver on the Effective
Date (or such other date on which a Lender may become a party hereto in
accordance with Section 14.1 or an Accordion Lender in accordance with Section
2.2(h)) to Agent for each Lender which so requests a Note to evidence that
Lender’s Advances, in the principal amount of that Lender’s Commitment, duly
completed and with appropriate insertions.
 
(5)           Additional Advances.  Lenders shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause
the Revolver Usage to exceed the Maximum Revolver Amount.
 
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2.3.         Payments and Reductions.
 
(a)           Payments by Borrowers.

 
(1)           Except as otherwise expressly provided herein, all payments by
Borrowers shall be made to Agent’s Account for the account of Agent or Lenders,
as the case may be, such payments shall be made in immediately available funds,
no later than 2:30 p.m. (New York, New York time) on the date specified
herein.  Any payment received by Agent later than 2:30 p.m. (New York, New York
time), shall be deemed to have been received on the following Business Day and
any applicable interest or fee shall continue to accrue until such following
Business Day.
 
(2)           Unless Agent receives notice from Administrative Borrower prior to
the date on which any payment is due to Lenders that Borrowers will not make
such payment in full as and when required, Agent may assume that Borrowers have
made (or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender.  If and to the extent Borrowers do not make
such payment in full to Agent on the date when due, each Lender severally shall
repay to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
 
(b)          Apportionment and Application of Payments.
 
(1)           Except as otherwise provided with respect to Defaulting Lenders,
aggregate principal and interest payments shall be apportioned ratably among
Lenders (according to the unpaid principal balance of the Obligations to which
such payments relate held by each Lender) and payments of fees and expenses
(other than fees or expenses that are for Agent’s separate account, after giving
effect to any letter agreements between Agent and individual Lenders) shall be
apportioned ratably among Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee relates.  All payments shall
be remitted to Agent and all such payments, and (other than payments received
while no Event of Default has occurred and is continuing and which relate to the
payment of principal of or interest on specific Obligations or which relate to
the payment of specific fees), and all proceeds of Accounts or other Collateral
received by Agent, shall be applied as follows:
 
A.          first, to pay any Lender Group Expenses then due to Agent under the
Loan Documents, until paid in full,
 
B.           second, to pay any fees then due to Agent (for its separate
account, after giving effect to any letter agreements between Agent and the
individual Lenders) under the Loan Documents, until paid in full,

 
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C.           third, to pay interest due in respect of all Swing Loans, until
paid in full,
 
D.           fourth, to pay the principal of all Swing Loans, until paid in
full,
 
E.           fifth, to pay all outstanding reimbursement obligations for
drawings made under Letters of Credit, until paid in full,
 
F.           sixth, to pay all interest and fees due in respect of all Advances
(other than Swing Loans), until paid in full,
 
G.           seventh, so long as no Event of Default has occurred and is
continuing, and at Agent’s election (which election Agent agrees will not be
made if an Overadvance would be created thereby), to pay all outstanding
Obligations with respect to amounts then due and owing by any Loan Party to
Agent or any Affiliate of Agent in respect of Bank Products, until paid in full,
 
H.          eighth, to pay all principal outstanding under outstanding Advances
(other than Swing Loans) to the Borrowers that are Prime Rate Loans based on
each Lender’s Pro Rata Share, until paid in full,
 
I.            ninth, to pay all principal outstanding under outstanding Advances
(other than Swing Loans) to the Borrowers that are LIBOR Rate Loans and all
breakage costs due in respect of such repayment based on each Lender’s Pro Rata
Share or, at Administrative Borrower’s option, to fund a cash collateral deposit
to Agent sufficient to pay, and with direction to pay, all such outstanding
LIBOR Rate Loans on the last day of the then pending Interest Period for such
LIBOR Rate Loans,
 
J.            tenth, if an Event of Default has occurred and is continuing, (i)
to Agent, to be held by Agent, for the benefit of Issuing Lender and Lenders, as
cash collateral in an amount up to 105% of the then extant Letter of Credit
Usage until paid in full, and (ii) to Agent, to be held by Agent, for the
benefit of the Bank Product Providers, as cash collateral in an amount up to the
amount of the Bank Product Reserves established prior to the occurrence of, and
not in contemplation of, the subject Event of Default until Loan Parties’
obligations in respect of the then extant Bank Products have been paid in full
or the cash collateral amount has been exhausted, in each case, based on such
Issuing Lender’s, Lender’s or Bank Product Provider’s Pro Rata Share,

 
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K.          eleventh, if an Event of Default has occurred and is continuing, to
pay any other Obligations (including the provision of amounts to Agent, to be
held by Agent, for the benefit of the Bank Product Providers, as cash collateral
in an amount up to the amount determined by Agent in its Permitted Discretion as
the amount necessary to secure Loan Parties’ obligations in respect of the then
extant Bank Products to be paid first to Agent and its Affiliates, until paid in
full, and thereafter ratably among the other Bank Product Providers),
 
L.           twelfth, to pay any Lender Group Expenses then due to the Lenders
under the Loan Documents based on each Lender’s Pro Rata Share, until paid in
full, and
 
M.         thirteenth, to Borrowers (to be wired to the Designated Account or,
upon  three (3) Business Days’ prior written notice, as otherwise directed by
Administrative Borrower) or such other Person as may be entitled thereto under
applicable law.
 
(2)           Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
Section 2.2(f).
 
(3)           In each instance, so long as no Event of Default has occurred and
is continuing, this Section 2.3(b) shall not be deemed to apply to any payment
by Borrowers specified by Borrowers to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement.
 
(4)           For purposes of Article II of this Agreement, “paid in full” means
payment of all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense reimbursements,
whether or not the same would be or is allowed or disallowed in whole or in part
in any Insolvency Proceeding.
 
(5)           In the event of a direct conflict between the priority provisions
of this Section 2.3 and other provisions contained in any other Loan Document,
it is the intention of the parties hereto that such priority provisions in such
documents shall be read together and construed, to the fullest extent possible,
to be in concert with each other.  In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions of this
Section 2.3 shall control and govern.
 
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2.4.          Overadvances.  If, at any time or for any reason, the amount of
Obligations of Borrowers (other than Bank Product Obligations) owed by Borrowers
to the Lenders pursuant to Section 2.1 or Section 2.11 is greater than either
the Dollar or percentage limitations set forth in Section 2.1 or Section 2.11,
as applicable (an “Overadvance”), Borrowers immediately shall pay to Agent in
cash, the amount of such excess, which amount shall be used by Agent to reduce
the Obligations of Borrowers in accordance with the priorities set forth in
Section 2.1 and 2.3(b).  In addition, Borrowers hereby promise to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lender Group as and when due and payable under the terms
of this Agreement and the other Loan Documents.
 
2.5.         Interest Rates, Letter of Credit Fee, Rates, Payments, and
Calculations.
 
(a)           Interest Rates.  Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit and Bank Product Obligations)
that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof as follows (i) if the relevant
Obligation is an Advance that is a LIBOR Rate Loan, during each Interest Period
applicable thereto, at a per annum rate equal to the LIBOR Rate plus the
Applicable Margin for LIBOR Rate Loans, and (ii) if the relevant Obligation is
an Advance that is a Prime Rate Loan, at a per annum rate equal to the Prime
Rate plus the Applicable Margin (if any) for Prime Rate Loans.
 
(b)           Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable
benefit of Lenders with a Commitment, subject to any letter agreement between
Agent and individual Lenders), a Letter of Credit fee (in addition to the
charges, commissions, fees, and costs set forth in Section 2.11(c)) which shall
accrue at a per annum rate equal to (i) with respect to standby Letters of
Credit, the Applicable Margin for LIBOR Rate Loans times the Daily Balance of
the undrawn amount of all outstanding standby Letters of Credit and (ii) with
respect to commercial Letters of Credit, the Applicable Margin for LIBOR Rate
Loans minus one-half of one percent (0.50%) times the Daily Balance of the
undrawn amount of all outstanding commercial Letters of Credit.
 
(c)           Default Rate. Upon the occurrence and during the continuation of
an Event of Default, at the election of Agent or the Required Lenders,
 
(1)           all Obligations (except for undrawn Letters of Credit and except
for Bank Product Obligations) that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on the Daily Balance thereof at
a per annum rate equal to two (2) percentage points above the per annum rate
otherwise applicable hereunder, and
 
(2)           the Letter of Credit fee provided for above shall be increased to
two (2) percentage points above the per annum rate otherwise applicable
hereunder.

 
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(d)           Payment.  Interest on (i) LIBOR Rate Loans and Prime Rate Loans
shall be payable on each Interest Payment Date, and (ii) Letter of Credit fees
and all other fees payable hereunder shall be due and payable, in arrears, on
the first day of each month at any time that Obligations or Commitments are
outstanding.  Borrowers hereby authorize Agent, from time to time, without prior
notice to Borrowers, to charge such interest and fees, all Lender Group Expenses
(as and when incurred), the charges, commissions, fees, and costs provided for
in Section 2.11 (as and when accrued or incurred), and all other payments as and
when due and payable under any Loan Document (including any amounts due and
payable to the Bank Product Providers in respect of Bank Products up to the
amount of the then extant Bank Product Reserve) to Borrowers’ Loan Account,
which amounts thereafter shall constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances hereunder.  Any interest not
paid when due shall be compounded by being charged to the Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances that are Prime Rate Loans hereunder.
 
(e)           Computation. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed.  In the event the Prime Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Prime Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Prime Rate.
 
For the purposes of the Interest Act (Canada) and disclosure under such act,
whenever interest is to be paid under this Agreement is to be calculated on the
basis of a year of 360, 365 or 366 days or any other period of time that is less
than a calendar year, the yearly rate of interest to which the rate determined
pursuant to such calculation is equivalent is the rate so determined multiplied
by the actual number of days in the year in which the same is to be ascertained
and divided by 360, 365 or 366 (or such other period of time), as the case may
be.
 
In calculating interest or fees payable under this Agreement for any period,
unless otherwise expressly stated, the first day of a period shall be included
in such calculation and the last day of such period shall be excluded in such
calculation.

 
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(f)           Intent to Limit Charges to Maximum Lawful Rate.  The Lender Group
and Borrowers intend to contract in strict compliance with applicable usury law
from time to time in effect.  In furtherance thereof each Lender stipulates and
agrees that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable Law from time to time in effect.  No
Borrower nor any present or future guarantors, endorsers, or other Persons
hereafter becoming liable for payment of any Obligation shall ever be liable for
unearned interest thereon or shall ever be required to pay interest thereon in
excess of the maximum amount that may be lawfully contracted for, charged, or
received under applicable Law from time to time in effect, and the provisions of
this section shall control over all other provisions of the Loan Documents which
may be in conflict or apparent conflict herewith.  The Lender Group expressly
disavows any intention to contract for, charge, or collect excessive unearned
interest or finance charges in the event the maturity of any Obligation is
accelerated.  If (i) the maturity of any Obligation is accelerated for any
reason, (ii) any Obligation is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum under
applicable Law, or (iii) any Lender or any other holder of any or all of the
Obligations shall otherwise collect moneys which are determined to constitute
interest which would otherwise increase the interest on any or all of the
Obligations to an amount in excess of that permitted to be charged by applicable
Law then in effect, then all sums determined to constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce the then
outstanding principal of the related Obligations or, at such Lender’s or
holder’s option, promptly returned to Borrower or the other payor thereof upon
such determination.  In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the maximum amount permitted under
applicable Law, the Lender Group shall to the greatest extent permitted under
applicable Law, (i) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (ii) exclude voluntary prepayments and the
effects thereof, and (iii) amortize, prorate, allocate, and spread the total
amount of interest throughout the entire contemplated term of the instruments
evidencing the Obligations in accordance with the amounts outstanding from time
to time thereunder and the maximum legal rate of interest from time to time in
effect under applicable Law in order to lawfully contract for, charge, or
receive the maximum amount of interest permitted under applicable Law.  As used
in this section the term “applicable Law” means the Laws of the State of New
York or the Laws of the United States of America, whichever Laws allow the
greater interest, as such Laws now exist or may be changed or amended or come
into effect in the future.
 
For purposes of the Criminal Code (Canada), in no event shall the combination of
interest and costs payable by West Marine Canada pursuant to this Agreement
exceed that rate which is 1% less then the effective annual rate of interest
which is prohibited under Section 347 of the Criminal Code (Canada) as amended
from time to time (the “Maximum Amount”) and if any payment, collection or
demand payable by West Marine Canada pursuant to this Agreement is determined to
exceed the Maximum Amount then such payment, collection or demand will be deemed
to have been made by mutual mistake of the Loan Party and the Lender and the
amount of such payment or collection will at the option of the Lender, be
refunded to the relevant Loan Party or be applied to the Advances (whether or
not due and payable), and not to the payment of interest as defined in Section
347 of the Criminal Code (Canada) as amended from time to time.
 
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2.6.         Cash Management.

(a)           The Borrowing Group (i) shall establish and maintain cash
management services of a type and on terms reasonably satisfactory to Agent at
one or more of the banks (a “Cash Management Bank”) set forth on Schedule 7.18
(as updated pursuant to Section 2.6(d) and Section 6.13), (ii) shall promptly,
and in any event no later than the first Business Day after the date of receipt
thereof, cause all Collections of Borrowing Group or cash proceeds of Accounts
of the Borrowing Group to be deposited only into local Deposit Accounts (“Local
Accounts”) or concentration accounts (“Concentration Accounts”), each set forth
on Schedule 7.18 (as updated pursuant to Section 2.6(d) and Section 6.13) and
(iii) after the occurrence and during the continuance of a Cash Dominion Event,
at the request of Agent, shall promptly cause all Collections of the Borrowing
Group (x) in jurisdictions other than Canada and Puerto Rico in an amount
greater than $10,000 then held in each such Local Account to be transferred no
less frequently than once each day to, and only to, a Concentration Account or
Agent’s Account, (y) in Puerto Rico in an amount greater than $100,000 then held
in each such Local Account in Puerto Rico to be transferred no less frequently
than once each Fiscal Month to, and only to, a Concentration Account or Agent’s
Account and (z) in Canada in an amount greater than $500,000 then held in each
such Local Account in Canada to be transferred no less frequently than once each
Fiscal Month to, and only to, a Concentration Account or Agent’s Account.  If,
notwithstanding the provisions of this Section 2.6, after the occurrence and
during the continuance of a Cash Dominion Event, any member of the Borrowing
Group receives or otherwise has dominion over or control of any Collections,
such member of the Borrowing Group shall hold such Collections in trust for
Agent and shall not commingle such Collections with any other funds of such
member of the Borrowing Group or deposit such Collections in any account of such
member of the Borrowing Group except as instructed by Agent.
 
(b)           The Borrowing Group shall establish and maintain Control
Agreements with Agent and each Cash Management Bank with respect to each
Concentration Account.  Each such Control Agreement shall provide, among other
things, that after the occurrence and during the continuance of a Cash Dominion
Event, (i) upon notice from Agent, the Cash Management Bank will comply with
instructions of Agent directing the disposition of funds in the Concentration
Account without further consent by such member of the Borrowing Group, (ii) the
Cash Management Bank has no rights of set-off or recoupment or any other claim
against the applicable Concentration Account, other than for payment of its
service fees and other charges directly related to the administration of such
Concentration Account and for returned checks or other items of payment, and
(iii) as set forth in the applicable Control Agreement, the Cash Management Bank
will immediately forward by daily sweep all amounts in the applicable
Concentration Accounts in excess of $10,000 to Agent’s Account
 
(c)           The Borrowing Group shall establish and maintain Credit Card
Agreements with Agent and each Credit Card Processor set forth in Schedule 7.18
(as updated pursuant to Section 2.6(d) and Section 6.13).  Each such Credit Card
Agreement shall provide, among other things, that each such Credit Card
Processor shall transfer all proceeds due with respect to credit card charges
for sales (net of expenses, fees and chargebacks of the Credit Card Issuer or
Credit Card Processor) by the Borrowing Group received by it (or other amounts
payable by such Credit Card Processor) into a designated Concentration Account
on at least a weekly basis.  The Borrowing Group shall not attempt to change any
direction or designation set forth in the Credit Card Agreements regarding
payment of charges without the prior written consent of Agent.

 
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(d)           (i)  So long as no Cash Dominion Event has occurred and is
continuing, Administrative Borrower may amend Schedule 7.18 to add or replace a
Cash Management Bank or Deposit Account; provided, however, that prior to the
time of the opening of any Concentration Account, the applicable Loan Party and
such prospective Cash Management Bank shall have executed and delivered to Agent
a Control Agreement in accordance with Section 2.6(b) above.  The Borrowing
Group shall close any of their Deposit Accounts (and establish replacement cash
management accounts in accordance with the foregoing sentence) promptly and in
any event within 30 days of notice from Agent that the creditworthiness of any
Cash Management Bank is no longer acceptable in Agent’s reasonable judgment, or
as promptly as practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Concentration Accounts
or Agent’s liability under any Control Agreement with such Cash Management Bank
is no longer acceptable in Agent’s reasonable judgment.  If, notwithstanding the
provisions of this Section 2.6, after the occurrence and during the continuance
of a Cash Dominion Event, any member of the Borrowing Group receives or
otherwise has dominion over or control of any Collections, such member of the
Borrowing Group shall hold such Collections in trust for Agent and shall not
commingle such Collections with any of the Borrowing Group’s other funds or
deposit such Collections in any account of the Borrowing Group except as
instructed by Agent.
 
(ii)           So long as no Cash Dominion Event has occurred and is continuing,
Administrative Borrower may amend Schedule 7.18 to add or replace a Credit Card
Processor; provided, however, that prior to the time of executing any credit
card processing agreement, the applicable Loan Party and such prospective Credit
Card Processor shall have executed and delivered to Agent a Credit Card
Agreement in accordance with Section 2.6(c) above.  The Borrowing Group shall
terminate any arrangement with any Credit Card Processor (and establish
replacement arrangements in accordance with the foregoing sentence) promptly and
in any event within 60 days of notice from Agent that the operating performance,
funds transfer or performance of the Credit Card Processor or Agent’s liability
under any Credit Card Agreement with such Credit Card Processor is no longer
acceptable in Agent’s reasonable judgment.
 
(e)           After the occurrence and during the continuance of a Cash Dominion
Event, (i) the Deposit Accounts to the extent constituting Collateral shall be
cash collateral accounts, with all cash, checks and similar items of payment in
such accounts securing payment of the Obligations and (ii) any amounts deposited
in Agent’s Account shall be applied to the Obligations in accordance with
Section 2.3(b) hereof.
 
(f)           (i) Within thirty (30) days after the commencement of a Cash
Dominion Event, the Borrowers shall deliver to Agent updated Schedules 5.4,
5.17, 5.19 and 7.18, to the extent there has been a change to the information
set forth therein.
 
(ii)           Upon the occurrence of a Cash Dominion Event and at the request
of Agent, the applicable Loan Party shall use its commercially reasonable
efforts to establish and maintain a Control Agreement with Agent and each Cash
Management Bank with respect to any Deposit Account reasonably requested by
Agent.  In the event that a Cash Dominion Release Event shall have occurred
after the applicable Loan Party shall have delivered such Control Agreement,
such Control Agreement shall remain in effect notwithstanding the Cash Dominion
Release Event.
 
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(g)           Unless Agent has delivered to the bank holding a Concentration
Account or Deposit Account subject to a Control Agreement upon the occurrence of
a Cash Dominion Event a notice that it is exercising exclusive control over such
Concentration Account or Deposit Account, all amounts held in such Concentration
Account or Deposit Account may be used by the Loan Parties for their general
corporate purposes.
 
(h)           In the event of any Cash Dominion Release Event, Agent shall,
promptly following the written request of Administrative Borrower, notify the
applicable Cash Management Bank to withdraw the then applicable notice of
exclusive control.
 
2.7.         Crediting Payments; Float Charge.
 
(a)           The receipt of any payment item by Agent or by the Cash Management
Banks pursuant to the Control Agreements or otherwise shall not be considered a
payment on account unless such payment item is a wire transfer of immediately
available federal funds made to Agent’s Account or unless and until such payment
item is honored when presented for payment.  Should any payment item not be
honored when presented for payment, then Borrowers shall be deemed not to have
made such payment and interest shall be calculated accordingly.  Anything to the
contrary contained herein notwithstanding, any payment item shall be deemed
received by Agent only if it is received into Agent’s Account on a Business Day
on or before 2:30 p.m. (New York, New York time).  If any payment item is
received into Agent’s Account on a non-Business Day or after 2:30 p.m. (New
York, New York time) on a Business Day, it shall be deemed to have been received
by Agent as of the opening of business on the immediately following Business
Day.
 
(b)           After the occurrence and during the continuance of a Cash Dominion
Event, Agent shall be entitled to charge the Borrowing Group for 1 Business Day
of ‘clearance’ or ‘float’ at the rate then applicable under Section 2.5 to
Advances that are Prime Rate Loans on all Collections that are received by
Borrowing Group and their Subsidiaries (regardless of whether forwarded by the
Cash Management Banks to Agent or otherwise).  This clearance or float charge on
all Collections of the Borrowing Group and their Subsidiaries is acknowledged by
the parties to constitute an integral aspect of the pricing of the financing of
Borrowers and shall apply irrespective of whether or not there are any
outstanding monetary Obligations; the effect of such clearance or float charge
being the equivalent of charging interest on such Collections through the
completion of a period ending 1 Business Day after the receipt thereof.  The
parties acknowledge and agree that the economic benefit of the foregoing
provisions of this Section 2.7 shall be for the exclusive benefit of Agent.
 
2.8.          Designated Account.  Agent is authorized to make the Advances
under this Agreement based upon telephonic or other instructions received from
any Authorized Person of Administrative Borrower, or without instructions if
pursuant to Section 2.2(g), and Issuing Lender is authorized to issue the
Letters of Credit under this Agreement based upon telephonic or other
instructions received from any L/C Authorized Person.  Agent shall be entitled
to rely, and shall be fully protected in relying upon, any Letter of Credit,
draft, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document believed by it to be genuine and correct and to have been signed,
sent or made by an L/C Authorized Person.  Administrative Borrower agrees to
establish and maintain the Designated Account with the Designated Account Bank
for the purpose of receiving the proceeds of the Advances requested by Borrowers
and made by Agent or Lenders hereunder.  Any Advance or Swing Loans requested by
Borrowers and made by Agent or Lenders hereunder shall be made to the Designated
Account, unless otherwise directed by Administrative Borrower upon  three (3)
Business Days’ prior written notice.

 
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2.9.          Maintenance of Loan Account; Statements of Obligations.  Agent
shall maintain an account on its books in the name of Borrowers (the “Loan
Account”) on which the applicable Borrowers will be charged with the Advances
(including Swing Loans) made by Agent, Swing Lender, or Lenders to applicable
Borrowers or for applicable Borrowers’ account, the Letters of Credit issued by
Issuing Lender for Borrowers’ account, and with all other payment Obligations
hereunder or under the other Loan Documents (except for Bank Product
Obligations), including, accrued interest, fees and expenses, and Lender Group
Expenses.  In accordance with Sections 2.6 and 2.7, the Loan Account will be
credited with all payments received by Agent from Borrowers or for Borrowers’
account, including all amounts received in Agent’s Account from any Cash
Management Bank.  Agent shall render monthly statements regarding the Loan
Account to Administrative Borrower including principal, interest, fees, and
including an itemization of all charges and expenses constituting Lender Group
Expenses owing, and such statements, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements.
 
2.10.       Fees.  Borrowers shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
Lenders in accordance with the terms of letter agreements between Agent and
individual Lenders:
 
(a)           Unused Line Fee.  On the first day of each month during the term
of this Agreement, an unused line fee (the “Unused Line Fee”) in the amount
equal to one-half of one percent (0.50%) per annum times the result of (A) the
Maximum Revolver Amount, less (B) the average Daily Balance of the Revolver
Usage during the immediately preceding month; and
 
(b)           Fee Letter Fees.  As and when due and payable under the terms of
the Fee Letter, the fees set forth in the Fee Letter.
 
2.11.      Letters of Credit.

(a)           Subject to the terms and conditions of this Agreement, the Issuing
Lender agrees to issue letters of credit for the account of any Borrower (each,
a “Letter of Credit”).  To request the issuance of a Letter of Credit (or the
amendment, renewal, or extension of an outstanding Letter of Credit),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the
requested date of issuance, amendment, renewal, or extension) a notice signed by
a L/C Authorized Person requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed, or extended, the date
of issuance, amendment, renewal, or extension, the date on which such Letter of
Credit is to expire, the amount of such Letter of Credit, the identity of the
Borrower for whose account such Letter of Credit is to be issued, the name and
address of the beneficiary thereof, and such other information as shall be
necessary to prepare, amend, renew, or extend such Letter of Credit.  The
Issuing Lender shall have no obligation to issue a Letter of Credit if any of
the following would result after giving effect to the requested Letter of
Credit:
 
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(1)           the Letter of Credit Usage would exceed the Borrowing Base minus
the then extant amount of outstanding Advances, or
 
(2)           the Letter of Credit Usage would exceed Letter of Credit Sublimit,
or
 
(3)           the Letter of Credit Usage would exceed the Maximum Revolver
Amount less the then extant amount of outstanding Advances.
 
Pursuant to the Existing Loan Agreement, Wells Fargo has, prior to the Effective
Date, issued the standby and commercial letters of credit described on Schedule
2.11 for the account of a Borrower (the “Existing Letters of Credit”).  The Loan
Parties and the Lenders hereby agree that, subject to the satisfaction of the
conditions precedent set forth in Section 3.1, the Existing Letters of Credit
shall be treated as Letters of Credit issued by the Issuing Bank hereunder for
all purposes of this Agreement.
 
(b)           Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.11(d), each Lender agrees to fund its Pro Rata Share of
the Advance deemed made pursuant to Section 2.11(d) on the same terms and
conditions as if the applicable Borrower or Borrowers had requested such Advance
and Agent shall promptly pay to Issuing Lender the amounts so received by it
from the applicable Lenders.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Lender or the Lenders, the Issuing
Lender shall be deemed to have granted to each Lender, and each Lender shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the undrawn face amount of such Letter of Credit,
and each such Lender agrees to pay to Agent, for the account of the Issuing
Lender, such Lender’s Pro Rata Share of any payments made by the Issuing Lender
under such Letter of Credit.  In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of
each L/C Disbursement made on account of a Borrower by the Issuing Lender and
not reimbursed by the applicable Borrower or Borrowers on the date due as
provided in clause (d) of this Section, or of any reimbursement payment required
to be refunded to any Borrower for any reason.  Each Lender acknowledges and
agrees that its obligation to deliver to Agent, for the account of the Issuing
Lender, an amount equal to its respective Pro Rata Share of each L/C
Disbursement made by the Issuing Lender pursuant to this Section 2.11(b) shall
be absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in Section 3 hereof.  If any such Lender
fails to make available to Agent the amount of such Lender’s Pro Rata Share of
each L/C Disbursement on account of Borrowers made by the Issuing Lender in
respect of such Letter of Credit as provided in this Section, such Lender shall
be deemed to be a Defaulting Lender and Agent (for the account of the Issuing
Lender) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in full.

 
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(c)           Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless from any loss, cost, expense, or liability, and
reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit.  Each Borrower agrees to be bound by
Issuing Lender’s interpretations of any Letter of Credit issued by Issuing
Lender to or for such Borrower’s account, even though this interpretation may be
different from such Borrower’s own, and each Borrower understands and agrees
that the Lender Group shall not be liable for any error, negligence, or mistake,
whether of omission or commission (except, as to any member of the Lender Group,
to the extent caused by its gross negligence or willful misconduct), in
following Borrowers’ instructions or those contained in any Letter of Credit or
any modifications, amendments, or supplements thereto.  Each Borrower hereby
agrees to indemnify, save, defend, and hold the Lender Group harmless with
respect to any loss, cost, expense (including reasonable attorneys fees), or
liability incurred by the Lender Group under any Letter of Credit as a result of
the Lender Group’s indemnification of any Issuing Lender.
 
THE FOREGOING INDEMNIFICATIONS SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ANY MEMBER OF THE LENDER GROUP.
 
No member of the Lender Group shall be entitled under this section to receive
indemnification for that portion, if any, of any liabilities and costs which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment.

 
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(d)           Each Letter of Credit shall be in form and substance acceptable to
the Issuing Lender (in the exercise of its Permitted Discretion), including the
requirement that the amounts payable thereunder must be payable in Dollars.  If
Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers
shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an
amount equal to such L/C Disbursement.  All such payments shall be made no later
than (i) 2:30 p.m. (New York, New York time) on the date that such L/C
Disbursement is made, if Administrative Borrower shall have received written or
telephonic notice of such L/C Disbursement prior to 1:00 p.m. (New York, New
York time) on such date, or (ii) if such notice has not been received by
Administrative Borrower prior to 1:00 p.m. (New York, New York time) on such
date, then not later than 2:30 p.m. (New York, New York time) on the next
Business Day after Administrative Borrower receives such notice, and, in the
absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance to the applicable Borrower
hereunder and, thereafter, shall bear interest at the applicable rate for such
Letter of Credit.  To the extent an L/C Disbursement is deemed to be an Advance
hereunder, a Borrower’s obligation to reimburse such L/C Disbursement shall be
discharged and replaced by the resulting Advance.  Promptly following receipt by
Agent of any payment from the applicable Borrower pursuant to this paragraph,
Agent shall distribute such payment to the Issuing Lender or, to the extent that
the applicable Lenders have made payments pursuant to Section 2.11(b) to
reimburse the Issuing Lender, as applicable, then to such Lenders and the
Issuing Lender as their interest may appear.
 
(e)           Any and all usual and customary charges, commissions, fees, and
costs incurred by the Issuing Lender relating to Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, (i) the Issuing Lender may
charge customary issuance fees with respect to the issuance of any Letter of
Credit hereunder and (ii) the Issuing Lender also imposes a schedule of charges
for amendments, extensions, drawings, and renewals.
 
(f)           If by reason of (i) any change after the Effective Date in any
applicable law, treaty, rule, or regulation or in the interpretation or
application thereof by any Governmental Authority, or (ii) compliance by the
Issuing Lender or the Lender Group with any direction, request, or requirement
received after the Effective Date (irrespective of whether having the force of
law) of any Governmental Authority or monetary authority including, Regulation D
of the Federal Reserve Board as from time to time in effect (and any successor
thereto):
 
(1)           any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
 
(2)           there shall be imposed on the Issuing Lender or the Lender Group
any other condition regarding any Letter of Credit issued pursuant hereto;
 
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guarantying, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay within three (3)
Business Days after demand such amounts as Agent may specify to be necessary to
compensate the Lender Group for such additional cost or reduced receipt,
together with interest on such amount from the date of such demand until payment
in full thereof at the rate then applicable to Prime Rate Loans hereunder.  The
determination by Agent of any amount due pursuant to this Section, as set forth
in a certificate setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest or demonstrable error, be final and conclusive
and binding on all of the parties hereto.

 
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2.12.       LIBOR Option.
 
(a)           Interest and Interest Payment Dates. In lieu of having interest
charged at the rate based upon the Prime Rate, Borrowers shall have the option
(the “LIBOR Option”) to have interest on all or a portion of the Advances be
charged at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate
Loans shall be payable on the earliest of (i) the Interest Payment Date
applicable to LIBOR Rate Loans, (ii) the occurrence of an Event of Default in
consequence of which the Required Lenders or Agent on behalf thereof have
elected to accelerate the maturity of all or any portion of the Obligations, or
(iii) termination of this Agreement pursuant to the terms hereof.  On the last
day of each applicable Interest Period, unless Administrative Borrower properly
has exercised the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Prime Rate Loans of the same type hereunder.  At any
time that an Event of Default has occurred and is continuing, Borrowers no
longer shall have the option to request that Advances bear interest at the LIBOR
Rate and Agent shall have the right to convert the interest rate on all
outstanding LIBOR Rate Loans at the end of the applicable Interest Period to the
rate then applicable to Prime Rate Loans hereunder.
 
(b)           LIBOR Election.
 
(1)           Administrative Borrower may, at any time and from time to time, so
long as no Event of Default has occurred and is continuing, elect to exercise
the LIBOR Option by notifying Agent prior to 5:00 p.m. (New York, New York time)
at least two (2) Business Days prior to the commencement of the proposed
Interest Period (the “LIBOR Deadline”).  Notice of Administrative Borrower’s
election of the LIBOR Option for a permitted portion of the Advances and an
Interest Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent, before the LIBOR Deadline (to be confirmed by delivery
to Agent of a LIBOR Notice received by Agent prior to 6:00 p.m. (New York, New
York time) on the same day).  Promptly upon its receipt of each such LIBOR
Notice, Agent shall provide a copy thereof to each Lender.

 
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(2)           Each LIBOR Notice shall be irrevocable and binding on
Borrowers.  In connection with each LIBOR Rate Loan, each Borrower shall
indemnify, defend, and hold Agent and Lenders harmless against any loss, cost,
or expense incurred by Agent or any Lender as a result of (a) the payment of any
principal of any LIBOR Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, and expenses, collectively, “Funding
Losses”).  Funding Losses shall, with respect to Agent or any Lender, be deemed
to equal the amount determined by Agent or such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would
have been applicable thereto, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period therefor), minus (ii) the amount of interest that would accrue
on such principal amount for such period at the interest rate which Agent or
such Lender would be offered were it to be offered, at the commencement of such
period, Dollar deposits of a comparable amount and period in the London
interbank market.  A certificate of Agent or a Lender delivered to
Administrative Borrower setting forth in reasonable detail the calculation of
any amount or amounts that Agent or such Lender is entitled to receive pursuant
to this Section 2.12 shall be conclusive absent manifest error.
 
(3)           Borrowers shall have not more than ten (10) LIBOR Rate Loans in
effect at any given time.  Borrowers only may exercise the LIBOR Option for
LIBOR Rate Loans of at least $1,000,000 and integral multiples of $100,000 in
excess thereof.
 
(c)           Prepayments of LIBOR Rate Loans.  Borrowers may prepay LIBOR Rate
Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any mandatory prepayment (whether
or not through the required application by Agent of proceeds of Borrowers’ and
their Subsidiaries’ Collections in accordance with Section 2.3(b)), if
applicable or for any other reason, including early termination of the term of
this Agreement or acceleration of all or any portion of the Obligations pursuant
to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and
Lenders and their Participants harmless against any and all Funding Losses in
accordance with clause (b) above.
 
(d)           Special Provisions Applicable to LIBOR Rate.
 
(1)           The LIBOR Rate may be adjusted by Agent with respect to any Lender
on a prospective basis to take into account any additional or increased costs to
such Lender of maintaining or obtaining any eurodollar deposits or increased
costs due to changes in applicable law occurring subsequent to the commencement
of the then applicable Interest Period, including changes in tax laws (except as
set forth in Section 16.14 and the imposition of, or any change in the rate of,
any Excluded Tax payable by such Lender) and changes in the reserve requirements
imposed by the Board of Governors of the Federal Reserve System (or any
successor), excluding the Reserve Percentage, which additional or increased
costs would increase the cost of funding loans bearing interest at the LIBOR
Rate.  In any such event, the affected Lender shall promptly give Administrative
Borrower and Agent notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Administrative Borrower may, by notice to
such affected Lender (y) require such Lender to furnish to Administrative
Borrower a statement setting forth in reasonable detail the basis for adjusting
such LIBOR Rate and the method for determining the amount of such adjustment, or
(z) repay the LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under clause (b)(ii) above) or convert such LIBOR
Rate Loans to Prime Rate Loans.

 
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(2)           In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
of application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Advances or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, (x)
such Lender shall promptly give notice of such changed circumstances to Agent,
and Administrative Borrower and Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender’s notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans of such Lender, and
interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue
interest at the rate then applicable to Prime Rate Loans.  The Lenders and the
Borrowers hereby agree that, at any time when one or more of the Lenders has
delivered such notice of changed circumstances as provided herein and when a
request for Borrowing has be delivered by Administrative Borrower which includes
a request for a LIBOR Rate Loan, the Lenders shall each fund their Pro Rata
Share of such Advances as set forth in this Agreement, provided that the amount
of such Borrowing funded by the Lenders not subject to such notice shall be
LIBOR Rate Loans and the amount of such Borrowing funded by the Lenders subject
to such notice shall be Prime Rate Loans.
 
(3)           Each Lender at such time having as its lending office an office
outside the United States agrees to use reasonable efforts to designate a
different lending office if such designation will avoid the need for any
adjustments or payments under clauses (1) or (2) above and would not, in the
good faith judgment of such Lender, otherwise be disadvantageous to such
Lender.  Any Lender that has given a notice pursuant to Section 2.12(d)(1) or
Section 2.1(d)(2) shall promptly withdraw such notice upon the cessation of the
circumstances that gave rise to the issuance of such notice.
 
(e)           No Requirement of Matched Funding.  Anything to the contrary
contained herein notwithstanding, neither Agent nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.  The provisions of this Section shall apply as if each Lender or its
Participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.

 
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2.13.       Capital Requirements.  If any Lender determines that (i) the
adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies, or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, after the date hereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law) after the date hereof, has the effect of reducing the return
on such Lender’s or such holding company’s capital as a consequence of such
Lender’s Commitments hereunder to a level below that which such Lender or such
holding company could have achieved but for such adoption, change, or compliance
(taking into consideration such Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity’s capital) by any amount deemed by such Lender to be material, then
such Lender may notify Administrative Borrower and Agent thereof.  Following
receipt of such notice, Borrowers agree to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is determined,
payable within 90 days after presentation by such Lender of a statement in the
amount and setting forth in reasonable detail such Lender’s calculation thereof
and the assumptions upon which such calculation was based (which statement shall
be deemed true and correct absent manifest error).  Notwithstanding anything to
the contrary in this Section, Borrowers will not be required to compensate any
Lender pursuant to this Section for any reduction incurred more than 180 days
before such Lender notified Administrative Borrower of the change in law (or
other circumstance) giving rise to such reduction.  In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
 
2.14.       Joint and Several Liability of Borrowers.
 
(a)           Each Borrower is accepting joint and several liability hereunder
and under the other Loan Documents in consideration of the financial
accommodations to be provided by Agent and Lenders under this Agreement, for the
mutual benefit, directly and indirectly, of each Borrower  and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.
 
(b)           Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 2.14), it being the intention of
Borrowers that all the Obligations shall be the joint and several obligations of
Borrowers without preferences or distinction among them.
 
(c)           If and to the extent that any of Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such
event, the other Persons composing Borrowers will make such payment with respect
to, or perform, such Obligation.

 
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(d)           The Obligations of Borrowers under the provisions of this Section
2.14 constitute the absolute and unconditional, full recourse Obligations of
each Borrower enforceable against each such Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
 
(e)           Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several liability,
as applicable, notice of any Advances, Letters of Credit issued under or
pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any
action at any time taken or omitted by Agent or Lenders under or in respect of
any of the Obligations, any requirement of diligence or to mitigate damages, any
and all suretyship defenses and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this
Agreement).  Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Person
composing Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by Agent or Lenders in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any Person composing Borrowers.  Without
limiting the generality of the foregoing, each Borrower assents to any other
action or delay in acting or failure to act on the part of any of Agent or any
Lender with respect to the failure by any Person composing Borrowers to comply
with any of its respective Obligations, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder, which might, but
for the provisions of this Section 2.14 afford grounds for terminating,
discharging or relieving any Borrower, in whole or in part, from any of its
Obligations under this Section 2.14, it being the intention of each Borrower
that, so long as any of the Obligations hereunder remain unsatisfied, the
Obligations of such Borrower under this Section 2.14 shall not be discharged
except by performance and then only to the extent of such performance.  The
Obligations of each Borrower under this Section 2.14 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any other
Borrower or any Agent or Lender.  The joint and several liability of Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
constitution or place of formation of any of Borrowers or any Agent or Lender.

 
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(f)           Each Borrower represents and warrants to Agent and Lenders that
such Borrower is currently informed of the financial condition of Borrowers and
of all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations.  Each Borrower further
represents and warrants to Agent and Lenders that such Borrower has read and
understands the terms and conditions of the Loan Documents.  Each Borrower
hereby covenants that such Borrower will continue to keep informed of Borrowers’
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.
 
(g)           Each Borrower waives all rights and defenses arising out of an
election of remedies by Agent or any Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Agent’s or such Lender’s rights of
subrogation and reimbursement against such Borrower by the operation of Section
580(d) of the California Code of Civil Procedure or otherwise.
 
(h)           The provisions of this Section 2.14 are made for the benefit of
Agent, Lenders and their respective successors and assigns, and may be enforced
by it or them from time to time against any or all Borrowers as often as
occasion therefor may arise and without requirement on the part of any such
Agent, Lender, successor or assign first to marshal any of its or their claims
or to exercise any of its or their rights against any of the other Borrowers or
to exhaust any remedies available to it or them against any of the other
Borrowers or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy.  The provisions of
this Section 2.14 shall remain in effect until all of the Obligations shall have
been paid in full or otherwise fully satisfied.  If at any time, any payment, or
any part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by any Agent or Lender upon the
insolvency, bankruptcy or reorganization of any of Borrowers, or otherwise, the
provisions of this Section 2.14 will forthwith be reinstated in effect, as
though such payment had not been made.
 
(i)           Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to Agent or Lenders with respect to any of the
Obligations or any collateral security therefor until such time as all of the
Obligations have been paid in full in cash.  Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.

 
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(j)           Each Borrower hereby agrees that, after the occurrence and during
the continuance of any Default or Event of Default, the payment of any amounts
due with respect to the indebtedness owing by any Borrower to any other Borrower
is hereby subordinated to the prior payment in full in cash of the
Obligations.  Each Borrower hereby agrees that after the occurrence and during
the continuance of any Default or Event of Default, such Borrower will not
demand, sue for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Borrower until the Obligations shall have been paid in
full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with Section 2.3(b).
 
2.15.       Replacement of Lenders under Certain Circumstances.  Borrowers shall
be permitted to replace a Defaulting Lender and any Lender (or any participant)
that gives notice under Section 2.12(d) or requests compensation, reimbursement
or other payment pursuant to Section 2.13 or Section 16.14 for a reason that is
not generally applicable to any other Lender (or participant) or if no other
Lender (or participant) is making a request for compensation, reimbursement or
other payment pursuant to such Sections; provided, however, that (a) such
replacement does not conflict with any applicable Law, (b) no Default or Event
of Default exists prior to or immediately after giving effect to such
replacement, (c) prior to any such replacement, such Lender (or participant)
shall have taken no action for a period of 60 days to eliminate the need for
payment of amounts owing pursuant to Section 2.13 or Section 16.14, (d) the
replacement financial institution shall purchase or acquire, at par, all Notes
and other amounts owing hereunder and under any other Loan Document to such
replaced Lender (or participant) on or prior to the date of replacement, (e) the
replacement financial institution, if not already a Lender (or participant),
shall be reasonably satisfactory to Agent, (f) Borrowers shall pay all
additional amounts (if any) required pursuant to Section 2.13 or Section 16.14,
as the case may be, in respect of any period prior to the date on which such
replacement shall be consummated, (g) any such replacement shall not be deemed
to be a waiver of any rights provided hereunder that Borrowers, Agent or any
other Lender (or participant) shall have against the replaced Lender (or
participant), and (h) if such replacement is to become a Lender, such
replacement shall be an Eligible Transferee.  Such replacement shall be done in
accordance with the provisions of Section 14.1; provided, however, that to the
extent required to be paid, Borrowers shall be obligated to pay any registration
and processing fee referred to therein.
 
Section 3.
CONDITIONS; TERM OF AGREEMENT.

 
3.1.         Conditions Precedent to Effectiveness of Agreement.  The
effectiveness of this Agreement is subject to the fulfillment, to the
satisfaction of Agent in its Permitted Discretion, of each of the conditions
precedent set forth below:
 
(a)           Agent shall have received results of searches or other evidence
reasonably satisfactory to Agent (in each case dated as of a date reasonably
satisfactory to Agent) indicating the absence of Liens on the assets of the Loan
Parties, except for Permitted Liens and Liens for which termination statements
and releases, satisfactions and discharges of any mortgages, and releases or
subordination agreements satisfactory to Agent are being tendered on the
Effective Date or other arrangements satisfactory to Agent for the delivery of
such termination statements and releases, satisfactions and discharges have been
made;

 
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(b)           Agent shall have received appropriate financing statements on Form
UCC-1 and PPSA financing statements to be duly filed in such office or offices
as may be necessary or, in the opinion of Agent, desirable to perfect Agent’s
Liens in and to the Collateral;
 
(c)           Agent shall have received each of the following documents, in form
and substance satisfactory to Agent in its Permitted Discretion, duly executed,
and each such document shall be in full force and effect:
 
(1)           this Agreement,
 
(2)           the Confirmation Agreement,
 
(3)           the Perfection Certificate,
 
(4)           the Fee Letter,
 
(5)           the Notes, and
 
(6)           all other Loan Documents required to be executed and delivered in
connection herewith on the Effective Date, each duly executed by the applicable
Loan Parties.
 
(d)           Agent shall have received a certificate from the Secretary of each
Loan Party attesting to the resolutions of such Loan Party’s Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which such Loan Party is a party and authorizing
specific officers of such Loan Party to execute the same;
 
(e)           Agent shall have received copies of the Loan Parties’ Governing
Documents, as amended, modified, or supplemented to the Effective Date,
certified by the Secretary of such Loan Party;
 
(f)           Agent shall have received a certificate of status with respect to
each Loan Party, dated within 30 days of the Effective Date, such certificate to
be issued by the appropriate officer of the jurisdiction of organization of such
Loan Party, which certificate shall indicate that such Loan Party is in good
standing in such jurisdiction;
 
(g)           Agent shall have received certificates of status with respect to
each Loan Party, each dated within 30 days of the Effective Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Loan Party) in which its failure
to be duly qualified or licensed would constitute a Material Adverse Change,
which certificates shall indicate that such Loan Party is in good standing in
such jurisdictions;
 
(h)           Agent shall have received certificates of insurance, together with
the endorsements thereto, as are required by Section 6.7, the form and substance
of which shall be reasonably satisfactory to Agent;
 
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(i)           Agent shall have received Collateral Access Agreements with
respect to the corporate headquarters in the United States and Canada and each
warehouse and distribution center, if any (other than a retail store location),
leased by each member of the Borrowing Group;
 
(j)            Agent shall have received opinions from the Loan Parties’ counsel
in form and substance reasonably satisfactory to Agent;
 
(k)           Borrowers shall have delivered a Borrowing Base Certificate
demonstrating Availability in an amount no less than $50,000,000 after giving
effect to the initial extensions of credit hereunder and the payment of all fees
and expenses required to be paid by Borrowers on the Effective Date under this
Agreement or the other Loan Documents;
 
(l)            Borrowers shall have paid all reasonable Lender Group Expenses
incurred by Agent in connection with the transactions evidenced by this
Agreement;
 
(m)          Borrowers shall have paid all fees and expenses (including, without
limitation, reasonable fees and expenses of counsel to Agent) then due and
payable as set forth in the Fee Letter;
 
(n)           Agent shall have received evidence satisfactory to Agent in
Agent’s Permitted Discretion that each Loan Party has received all consents, all
licenses, approvals or evidence of other actions required by any Governmental
Authority in connection with the execution and delivery by such Loan Party of
this Agreement or any other Loan Document or with the consummation of the
transactions contemplated hereby and thereby;
 
(o)           Agent shall have received a certificate signed by an Authorized
Person of Administrative Borrower certifying that (i) the conditions specified
in Sections 3.2(a), (b) and (c) have been satisfied and (ii) as of the Effective
Date, after giving effect to the transactions contemplated hereby, the Loan
Parties taken as a whole are Solvent; and
 
(p)           all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance reasonably satisfactory to Agent.
 
Upon satisfaction or waiver of the foregoing conditions, Agent shall notify
Administrative Borrower that the same have been satisfied or waived and that
this Agreement shall have become effective.
 
3.2.         Conditions Precedent to all Extensions of Credit.  The obligation
of the Lender Group (or any member thereof) to make any Advances hereunder at
any time (or to extend any other credit hereunder) shall be subject to the
following conditions precedent:
 
(a)           the representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct in all material respects on
and as of the date of such extension of credit, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date, in which case they were true and correct in all
material respects as of such earlier date);
 
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(b)           no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
 
(c)           no injunction, writ, restraining order, or other order of any
nature restricting or prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by any Governmental Authority
against any Borrower, Agent or any Lender; and
 
(d)           Agent shall have received the most recent Borrowing Base
Certificate required to be delivered to Agent in accordance with Section 6.2.
 
3.3.          Term.  This Agreement shall become effective upon notice from
Agent to Administrative Borrower that the conditions set forth in Section 3.1
have been satisfied or waived and upon the execution and delivery hereof by
Borrowers, Agent and Lenders and shall continue in full force and effect for a
term ending on the Maturity Date.  The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
 
3.4.          Effect of Termination.  On the Termination Date, all Obligations
(including contingent reimbursement obligations of Borrowers with respect to any
outstanding Letters of Credit, and including all Bank Products Obligations to
the extent provided in the related Bank Product Agreements) immediately shall
become due and payable without notice or demand (including (a) either (i)
Borrowers providing cash collateral to be held by Agent for the benefit of the
Lenders in an amount equal to 105% of the then extant Letter of Credit Usage, or
(ii) causing the original Letters of Credit to be returned to the Issuing
Lender, and (b) providing cash collateral (in an amount reasonably determined by
Agent as sufficient to satisfy the reasonably estimated credit exposure) to be
held by Agent for the benefit of the Bank Product Providers with respect to the
then extant Bank Products Obligations).  No termination of this Agreement,
however, shall relieve or discharge Borrowers or their Subsidiaries of their
duties, Obligations, or covenants hereunder and Agent’s Liens in the Collateral
shall remain in effect until all Obligations have been paid in full in cash and
the Lender Group’s obligations to provide additional credit hereunder have been
terminated.  When this Agreement has been terminated and all of the Obligations
have been paid in full in cash and the Lender Group’s obligations to provide
additional credit under the Loan Documents have been terminated irrevocably,
Agent will, at Borrowers’ sole expense, execute and deliver any UCC termination
statements, lien releases, mortgage releases, re-assignments of trademarks,
discharges of security interests, and other similar discharge or release
documents (and, if applicable, in recordable form) as are reasonably necessary
to release, as of record, Agent’s Liens and all notices of security interests
and liens previously filed by Agent with respect to the Obligations.

 
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3.5.         Early Termination by Borrowers.  Borrowers have the option, at any
time upon 3 Business Days prior written notice by Administrative Borrower to
Agent, to (a) permanently reduce the Commitment in the minimum amount of
$1,000,000 and integral multiples of $100,000 in excess thereof and (b)
terminate this Agreement by paying to Agent, in cash, the Obligations (including
(x) either (i) providing cash collateral to be held by Agent for the benefit of
the Lenders in an amount equal to 105% of the then extant Letter of Credit Usage
or (ii) causing the original Letters of Credit to be returned to the Issuing
Lender, and (y) providing cash collateral (in an amount determined by Agent as
sufficient to satisfy the reasonably estimated credit exposure) to be held by
Agent for the benefit of the Bank Product Providers with respect to the then
extant Bank Products Obligations), in full.  If Administrative Borrower has sent
a notice of termination pursuant to the provisions of this Section, then the
Commitments shall terminate and Borrowers shall be obligated to repay the
Obligations (including (a) either (i) Borrowers providing cash collateral to be
held by Agent for the benefit of those Lenders with a Commitment in an amount
equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the
original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral (in an amount determined by Agent as sufficient to
satisfy the reasonably estimated credit exposure) to be held by Agent for the
benefit of the Bank Product Providers with respect to the then extant Bank
Products Obligations), in full on the date set forth as the date of termination
of this Agreement in such notice.
 
Section 4.
CREATION OF SECURITY INTEREST.

 
4.1.         Grant of Security Interest.  Each Loan Party hereby grants to
Agent, for the benefit of the Lender Group and the Bank Product Providers, a
continuing security interest in all of its right, title, and interest in all
currently existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of any and all of the Obligations in accordance with the
terms and conditions of the Loan Documents and in order to secure prompt
performance by each Loan Party of each of their covenants and duties under the
Loan Documents.  Agent’s Liens in and to the Collateral shall attach to all
Collateral without further act on the part of Agent or any Loan Party.  Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions or any other disposition
permitted under Section 7.4 or Section 7.5, each Loan Party and its Subsidiaries
have no authority, express or implied, to dispose of any item or portion of the
Collateral (it being understood, with respect to any such Permitted Disposition
of Collateral, Agent’s Liens in and to such Collateral shall be released
automatically upon consummation of such Permitted Disposition, and the proceeds
and products of such Permitted Disposition shall be subject to Agent’s Liens).
 
4.2.          Other Collateral.  Each Loan Party agrees to take the following
actions at any time but only if direct proceeds or products of the Specified
Collateral constitutes any of the following:
 
(a)           In the event that any Collateral, including proceeds, is evidenced
by or consists of Negotiable or Transferable Collateral in an original face
amount in excess of $250,000, and if and to the extent that Agent determines
that perfection or priority of Agent’s security interest is dependent on or
enhanced by possession, such Loan Party immediately upon the request of Agent,
shall endorse and deliver physical possession of such Negotiable or Transferable
Collateral to Agent accompanied by such instruments of transfer or assignment
duly executed in blank as Agent may from time to time reasonably specify, unless
such Negotiable or Transferable Collateral is promptly deposited into a Deposit
Account.
 
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(b)           If any Loan Party shall acquire any certificated securities, such
Loan Party shall forthwith endorse, assign and deliver the same to Agent,
accompanied by such instruments of transfer or assignment duly executed in blank
as Agent may from time to time reasonably specify.  If any securities now or
hereafter acquired by any Loan Party are uncertificated and are issued to such
Loan Party or its nominee directly by the issuer thereof, such Loan Party shall
immediately notify Agent thereof and, at Agent’s reasonable request and option,
either (a) use commercially reasonable efforts to cause the issuer to enter into
a Control Agreement, or (b) pursuant to an agreement in form and substance
reasonably satisfactory to Agent, arrange for Agent to become the registered
owner of the securities.  If any securities, whether certificated or
uncertificated, or other Investment Property now or hereafter acquired by any
Loan Party are held by such Loan Party or its nominee through a securities
intermediary or commodity intermediary, such Loan Party shall promptly notify
Agent thereof and, at Agent’s request and option, either (i) use commercially
reasonable efforts to cause such securities intermediary or (as the case may be)
commodity intermediary to enter into a Control Agreement, or (ii) pursuant to an
agreement in form and substance reasonably satisfactory to Agent, in the case of
financial assets or other Investment Property held through a securities
intermediary, arrange for Agent to become the entitlement holder with respect to
such Investment Property, with such Loan Party being permitted, only with the
consent of Agent during the continuance of a Cash Dominion Event , to exercise
rights to withdraw or otherwise deal with such Investment Property.  The
provisions of this paragraph shall not apply to any financial assets credited to
a securities account for which Agent is the securities intermediary.
 
(c)           If any Loan Party acquires an interest in any electronic chattel
paper or any “transferable record,” as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in §16
of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Loan Party shall promptly notify Agent thereof and, at the
request and option of Agent, shall take such action as Agent may reasonably
request to vest in Agent control, under §9-105 of the Code, of such electronic
chattel paper or control under Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, §16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record.
 
4.3.         Collection of Accounts, General Intangibles, and Negotiable or
Transferable Collateral.  At any time after the occurrence and during the
continuation of an Event of Default, Agent or Agent’s designee may (a) notify
Account Debtors of any Loan Party that such Loan Party’s Accounts, have been
assigned to Agent or that Agent has a security interest therein, or (b) collect
such Loan Party’s Accounts directly and charge the collection costs and expenses
to the Loan Account.  Subject to Section 2.6, each Loan Party agrees that it
will hold in trust for the Lender Group, as the Lender Group’s trustee, any of
its or its Subsidiaries’ Collections that it receives without commingling the
same with other funds of such Loan Party and immediately will deliver such
Collections to Agent or a Cash Management Bank in their original form as
received by such Loan Party or its Subsidiaries, together with any necessary
endorsements or assignments.
 
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4.4.         Authorization to File Financing Statements.
 
(a)           Each Loan Party hereby irrevocably authorizes Agent at any time
and from time to time to file in any filing office in any Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral and (b) provide any other information required by part 5 of Article 9
of the Code or such other jurisdiction for the sufficiency or filing office
acceptance of any financing statement or amendment, including whether such Loan
Party is an organization, the type of organization and any organizational
identification number issued to such Loan Party.  Each Loan Party agrees to
furnish any such information to Agent promptly upon request.  Each Loan Party
also ratifies its authorization for Agent to have filed in any Code jurisdiction
any like initial financing statements or amendments thereto if filed prior to
the date hereof.
 
(b)           Each Loan Party further agrees, upon the request of Agent and at
Agent’s option, to take any and all other actions as Agent may determine in its
Permitted Discretion to be necessary or useful for the attachment, perfection
and first priority of, and the ability of Agent to enforce, Agent’s Lien in any
and all of the Collateral, including (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Code, to the extent, if any, that Parent or such Borrower’s signature
thereon is required therefor, (b) causing Agent’s name to be noted as secured
party on any certificate of title for a titled good if such notation is a
condition to attachment, perfection or priority of, or ability of Agent to
enforce, Agent’s security interest in such Collateral, (c) complying with any
provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Agent to enforce, Agent’s security
interest in such Collateral, (d) using commercially reasonable effort to obtain
governmental and other third party waivers, consents and approvals, in form and
substance reasonably satisfactory to Agent, including any consent of any
licensor, lessor or other person obligated on Collateral, (e) using commercially
reasonable effort to obtain waivers from mortgagees and landlords in form and
substance reasonably satisfactory to Agent, and (f) taking all actions under any
earlier versions of the Code or under any other law, as determined by Agent in
its Permitted Discretion to be applicable in any relevant Code or other
jurisdiction, including any foreign jurisdiction.
 
4.5.          Power of Attorney.  Each Loan Party hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent’s officers, employees, or
agents designated by Agent) as such Loan Party’s true and lawful attorney, with
power to (a) if such Loan Party refuses to, or fails timely to execute and
deliver any of the documents described in Section 4.4, sign the name of such
Loan Party on any of the documents described in Section 4.4, (b) at any time
that an Event of Default has occurred and is continuing, sign such Loan Party’s
on any invoice or bill of lading relating to the Collateral, drafts against
Account Debtors, or notices to Account Debtors, (c) send requests for
verification of such Loan Party’s or its Subsidiaries’ Accounts, (d) after the
occurrence of and during the continuation of an Event of Default, endorse such
Loan Party’s name, as applicable, on any of its payment items (including all of
its Collections) that may come into the Lender Group’s possession, (e) at any
time that an Event of Default has occurred and is continuing, make, settle, and
adjust all claims under such Loan Party’s policies of insurance relating to the
Collateral, as applicable, and make all determinations and decisions with
respect to such policies of insurance, and (f) at any time that an Event of
Default has occurred and is continuing, settle and adjust disputes and claims
respecting such Loan Party’s or its Subsidiaries’ Accounts, chattel paper, or
General Intangibles constituting Collateral directly with Account Debtors or
other Persons obligated on any of the Collateral, for amounts and upon terms
that Agent determines to be reasonable, and Agent may cause to be executed and
delivered any documents and releases that Agent reasonably determines to be
necessary.  The appointment of Agent as each Loan Party’s attorney, and each and
every one of its rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully and finally repaid and
performed and the Lender Group’s obligations to extend credit hereunder are
terminated.
 
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4.6.          Right to Inspect; Inventories, Appraisals and Audits.  Agent
(through any of its respective officers, employees, or agents) shall have the
right, from time to time hereafter (which shall be at reasonable times following
reasonable notice to Administrative Borrower, prior to the occurrence of and
during the continuation of an Event of Default) to inspect the Books and make
copies or abstracts thereof and to check, test, and appraise the Collateral in
order to verify the amount, quality, value, condition of, or any other matter
relating to, the Collateral.  Without limiting the generality of the foregoing:
 
(a)           At Borrowers’ expense, an inventory appraiser acceptable to Agent
may conduct physical inventory counts (i.e., cycle counts) at the Borrowing
Group’s store locations one (1) time per Fiscal Year, and at each distribution
center at least one (1) time per Fiscal Quarter at such times as shall be
determined by Agent with notice to Administrative Borrower.  Administrative
Borrower shall, within 45 days following the completion of each inventory
conducted by it, provide Agent with an aggregate reconciliation of the results
of such inventory and shall post such results to the Borrowing Group’s stock
ledger and general ledger, as applicable.  Agent, in its Permitted Discretion,
if a Cash Dominion Event exists, may, and shall at the Required Lenders’
direction, cause one (1) additional inventory per Fiscal Year to be taken (at
the expense of  Borrowers).
 
(b)           Upon the request of Agent from time to time, Borrowers will obtain
and deliver to Agent, or, if Agent so elects, will cooperate with Agent in
Agent’s obtaining, a report of an independent collateral auditor satisfactory to
Agent (which may be affiliated with one of Lenders) with respect to the Books
and Accounts and Inventory components included in the Borrowing Base, which
report shall indicate whether or not the information set forth in the Borrowing
Base Certificate most recently delivered is accurate and complete in all
material respects based upon a review by such auditors of the Accounts
(including verification with respect to the amount, aging, identity and credit
of the respective account debtors and the billing practices of Loan Parties) and
Inventory (including verification as to the value, location and respective
types); provided, however, except during a Cash Dominion Event, Borrowers shall
not be obligated to pay for more than two (2) such reports in any 12 month
period; provided, further, that prior to the occurrence of a Cash Dominion
Event, Borrowers shall be obligated to pay for any commercial finance exams
conducted in connection with Borrowers’ request to add Eligible Accounts or
Accounts with respect to Permitted Acquisitions to the Borrowing Base.

 
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(c)           Agent may from time to time obtain inventory appraisals conducted
by such appraisers as are satisfactory to Agent or conduct inventory
appraisals.  In addition, if Agent determines that there have been changes in
markdowns, inventory mix and composition, accounting methods or any other
factors affecting the value of the Collateral, Agent may in its Permitted
Discretion have the Inventory reappraised by a qualified appraisal company
selected by Agent from time to time after the Effective Date for the purpose of
redetermining the Net Liquidation Percentage of the Eligible Inventory portion
of the Collateral and, as a result, redetermining the Borrowing Base.  Prior to
the occurrence of a Cash Dominion Event, Borrowers shall not be obligated to pay
for more than two (2) appraisals pursuant to this Section 4.6(c) in any 12 month
period; provided, that, prior to the occurrence of a Cash Dominion Event,
Borrowers shall be obligated to pay for any inventory appraisals (i) conducted
in connection with Borrowers’ request to add Inventory with respect to Permitted
Acquisitions to the Borrowing Base, and (ii) Inventory at a port of entry in a
State of the United States, a province of Canada or from a third party location
to an Eligible Inventory Location.
 
4.7.          Control Agreements.  Following the occurrence and during the
continuance of a Cash Dominion Event, the Borrowing Group agree that they will
not, and will not permit their Subsidiaries to, transfer assets out of any of
their Deposit Accounts or Securities Accounts, except in accordance with Section
2.6 and, to the extent applicable, the Control Agreements.  Following the
occurrence and during the continuance of a Cash Dominion Event, the Borrowing
Group agrees that they will and will cause their Subsidiaries to take any or all
reasonable steps that Agent requests in order for Agent to obtain control in
accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code or under
applicable Canadian law with respect to any of its or their Securities Accounts,
Deposit Accounts, electronic chattel paper, Investment Property, and
letter-of-credit rights that constitute Collateral.  No arrangement contemplated
hereby or by any Control Agreement in respect of any Deposit Accounts,
Securities Accounts or other Investment Property shall be modified by any Loan
Party without the prior written consent of Agent.  Subject to Section 2.6, upon
the occurrence and during the continuance of a Default or Event of Default,
Agent may notify any bank or securities intermediary to liquidate the applicable
Deposit Account or Securities Account or any related Investment Property (in
each case to the extent subject to a Control Agreement) of the Loan Parties
maintained or held thereby and remit the proceeds thereof to Agent’s Account.
 
4.8.          Grant of Non-Exclusive License. For the purpose of enabling Agent
to exercise Agent’s rights and remedies under Section 9.1 (including, without
limitation, in order to take possession of, hold, preserve, process, assemble,
prepare for sale, market for sale, sell or otherwise dispose of the Collateral)
at such time as Agent shall be lawfully entitled to exercise Agent’s rights and
remedies under Section 9.1, each member of the Borrowing Group hereby (i) grants
to Agent, for the benefit of Agent and the other Lenders, a royalty free,
non-exclusive, irrevocable license, such license being limited to Agent’s
exercise of Agent’s rights and remedies under Section 9.1 including, without
limitation, in connection with any completion of the manufacture of Inventory or
any sale or other disposition of Inventory (a) to use, apply, and affix any
trademark, trade name, logo, or the like in which any member of the Borrowing
Group now or hereafter has rights, (b) to use, license or sublicense any
intellectual property, computer software now owned, held or hereafter acquired
by such member of the Borrowing Group, including in such license access to all
media and to the extent to which any of the licensed items may be recorded or
stored and to all computer software programs such and to the extent used for the
compilation or print out thereof, provided that Agent’s use of the property
described in sub-clauses (a) and (b) above will comply with all applicable law
and the terms of any license or other written agreement pursuant to which the
applicable Loan Party has rights to hold or use such intellectual property that
is the subject of such license to the extent not otherwise avoided by any
applicable law, and (c) to use any and all General Intangibles (other than those
referred to in clause (a) or (b) above) and any and all furniture, fixtures and
equipment contained in any  premises owned or occupied by any member of the
Borrowing Group in connection with the storage or maintenance of the Collateral
or the exercise of Agent’s rights and remedies under Section 9.1, and (ii)
without limiting the provisions of Section 9.1(f), agrees to provide Agent
and/or its agents with access to, and the right to use, any such premises owned
or occupied by any member of the Borrowing Group.  
 
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Section 5.            REPRESENTATIONS AND WARRANTIES.
 
In order to induce the Lender Group to enter into this Agreement, each Loan
Party makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete, in all material respects, as of the
date hereof, and shall be true, correct, and complete, in all material respects,
as of the Effective Date, and at and as of the date of the making of each
Advance (or other extension of credit) made thereafter, as though made on and as
of the date of such Advance (or other extension of credit) (except to the extent
that such representations and warranties relate solely to an earlier date) and
such representations and warranties shall survive the execution and delivery of
this Agreement:
 
5.1.        No Encumbrances.  Each Loan Party has good and valid title to its
Collateral (subject to exceptions that do not, in the aggregate, materially
impair the Collateral of the Loan Parties taken as a whole), and in each case,
free and clear of Liens except for Permitted Liens.  All other information set
forth on the Perfection Certificates pertaining to the Collateral is accurate
and complete in all material respects, except for changes permitted hereunder.
 
5.2.        Eligible Accounts.  The Eligible Accounts are bona fide existing
payment obligations of Account Debtors created by the sale and delivery of
Inventory or the rendition of services to such Account Debtors in the ordinary
course of the Borrowing Group’s business, owed to the Borrowing Group without
any known defenses, disputes, offsets, counterclaims, or rights of return or
cancellation (other than contingent customer rights of return and charge back
rights arising, in each case, in the ordinary course of business).  As to each
Account that is identified by Administrative Borrower as an Eligible Account in
a Borrowing Base Certificate submitted to Agent, such Account is not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Accounts.  
 
5.3.        Eligible Inventory.  All Eligible Inventory is of good and
merchantable quality, free from known defects.

 
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5.4.        Location of Inventory.  Schedule 5.4 (as such Schedule may be
updated by notice to Agent to include additional locations, provided that such
additional locations are within the United States, Puerto Rico or a Permitted
Overseas Inventory Jurisdiction or, in the case of West Marine Canada, a
province or territory of Canada in which all steps necessary to perfect Agent’s
Lien on such Collateral (including the filing of PPSA financing statements
naming West Marine Canada as debtor and Agent as secured party) have been taken)
sets forth all locations owned by a member of the Borrowing Group, leased by a
member of the Borrowing Group and the subject of a Collateral Access Agreement
or leased by a member of the Borrowing Group and constituting a retail store
location, in each case, at which the Inventory of the Borrowing Group and their
Subsidiaries is located or between which it is in transit (other than (x)
locations at which Inventory the aggregate inventory ledger balance of such
Inventory is less than $100,000 at all times is located and (y) Eligible Boat
Show Locations).  Other than with respect to Eligible In-Transit Inventory, all
of the Eligible Inventory of the Loan Parties and their Subsidiaries is used or
held for use in their business and is fit for such purposes.
 
5.5.        Inventory Records.  Each Loan Party keeps records which are correct
and accurate in all material respects itemizing and describing the type,
quality, and quantity of its and its Subsidiaries’ Inventory and the book value
thereof.
 
5.6.        Jurisdiction of Incorporation; Location of Chief Executive Office;
FEIN; Organizational ID Number.
 
(a)           The jurisdiction of organization of each Loan Party and each of
its Subsidiaries is set forth on Schedule 5.6 (as such Schedule may, subject to
Section 7.6, be updated by notice to Agent pursuant to Section 6.8 and Section
6.13).
 
(b)           The chief executive office of each Loan Party and each of its
Subsidiaries is located at the address indicated on Schedule 5.6 (as such
Schedule may, subject to Section 7.6, be updated by notice to Agent pursuant to
Section 6.8 and Section 6.13).
 
(c)           Each Loan Parties’ and each of its Subsidiaries’ FEIN and
organizational identification number, if any, are identified on Schedule 5.6 (as
such Schedule may, subject to Section 7.6, be updated by notice to Agent
pursuant to Section 6.8 and Section 6.13).
 
(d)           The Loan Parties have previously delivered to Agent a Perfection
Certificate.  Each Loan Party represents and warrants to Lender Group that, as
of the Effective Date: (i) each Loan Parties’ exact legal name is that indicated
on the Perfection Certificate and on the signature page hereof; (ii) each Loan
Party is an organization of the type, and is organized in the jurisdiction, set
forth in the Perfection Certificate; (iii) the Perfection Certificate accurately
sets forth such Loan Party’s organizational identification number or accurately
states that such Loan Party has none; (iv) the Perfection Certificate accurately
sets forth such Loan Party’s place of business or, if more than one, its chief
executive office, as well as such Loan Party’s mailing address, if different;
(v) all other information set forth on the Perfection Certificate pertaining to
such Loan Party is accurate and complete in all material respects as of the
Effective Date; and (vi) there has been no change in any of such information
since the date on which the Perfection Certificate was signed by such Loan
Party.
 
 
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5.7.        Due Organization and Qualification; Subsidiaries.
 
(a)           Each Loan Party is (a) duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and (b) has all
requisite corporate (or the equivalent company) power to own its property and
conduct its business as now conducted and as presently contemplated and (c)
qualified to do business in any state or province where the failure to be so
qualified reasonably could be expected to cause a Material Adverse Change.
 
(b)           Set forth on Schedule 5.7(b) (as such Schedule may be updated by
notice to Agent) is a complete and accurate list of each Loan Party’s direct and
indirect Subsidiaries, showing: (i) the jurisdiction of their organization; (ii)
the number of shares of each class of common and preferred Stock authorized for
each of such Subsidiaries; and (iii) the number and the percentage of the
outstanding shares of each such class owned directly or indirectly by the
applicable Loan Party.  All of the outstanding capital Stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
 
5.8.        Due Authorization; No Conflict.
 
(a)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of this Agreement and the other Loan Documents to which it is a
party and the transactions contemplated hereby and thereby are within the
corporate (or the equivalent) authority of such Loan Party and have been duly
authorized by all necessary corporate or other organization action on the part
of such Loan Party.
 
(b)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of this Agreement and the other Loan Documents to which it is a
party does not and will not (i) violate any provision of federal, state, or
local statute, law, rule or regulation applicable to such Loan Party (other than
any such local statute, law, rule or regulation that is not violated in any
material respect) or any order, judgment, decree, writ, injunction, license or
permit of any court or other Governmental Authority binding on such Loan Party,
(ii) violate any provision of the Governing Documents of such Loan Party or
require any approval of such Loan Party’s interest holder, (iii) conflict with,
result in a breach or termination of, or constitute (with due notice or lapse of
time or both) a default under any material contractual obligation of such Loan
Party, unless such conflict, breach, termination or default could not reasonably
be expected to cause a Material Adverse Change, (iv) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of such Loan Party, other than Permitted Liens, or (v) require any
approval of any Person under any material contractual obligation of such Loan
Party, other than (x) consents or approvals that have been obtained and that are
still in force and effect and (y) consents or approvals the failure to obtain
which could not reasonably be expected to have a Material Adverse Change.
 
(c)           Other than the filing of Uniform Commercial Code financing
statements and the PPSA financing statements, the execution, delivery, and
performance by each Loan Party of this Agreement and the other Loan Documents to
which such Loan Party is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than consents or approvals that have been obtained
and that are still in force and effect.

 
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(d)           As to each Loan Party, this Agreement and the other Loan Documents
to which such Loan Party is a party, and all other documents contemplated hereby
and thereby, when executed and delivered by such Loan Party will be the legally
valid and binding obligations of such Loan Party, enforceable against such Loan
Party in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance laws, fraudulent transfer laws or similar laws relating to or
limiting creditors’ rights generally and general principles of equity.
 
(e)           Agent’s Liens are validly created, perfected and first priority
Liens, subject only to Permitted Liens.
 
5.9.        Litigation.
 
(a)           Other than those matters disclosed on Schedule 5.9, there are no
actions, suits, or proceedings or investigations pending or, to the knowledge of
Borrowers, threatened against any Loan Party, as applicable, except for (i)
matters that are fully covered by insurance (subject to customary deductibles),
and (ii) matters  that could not reasonably be expected to result in a Material
Adverse Change.
 
(b)           There are no actions, suits, proceedings or investigations pending
or, to the knowledge of Borrowers, threatened against any Loan Party, as
applicable, that question the validity or enforceability of this Agreement or
any other Loan Document or any action taken or to be taken by any Loan Party in
connection therewith.
 
5.10.     No Material Adverse Change.  All financial statements relating to the
Loan Parties and their Subsidiaries that have been delivered by Borrowers to the
Lender Group have been prepared in all material respects in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in
all material respects, the Loan Parties’ and their Subsidiaries’ financial
condition as of the date thereof and results of operations for the period then
ended.  There has not been a Material Adverse Change with respect to the Loan
Parties since the date of the most recent financial statements submitted to the
Lender Group on or before the Effective Date.
 
5.11.     Solvency.
 
(a)           Except as set forth on Schedule 5.11, the Loan Parties taken as a
whole are Solvent.
 
(b)           No transfer of property is being made by any Loan Party and no
obligation is being incurred by any Loan Party in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of any
Loan Party.

 
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5.12.     Employee Benefits.  As of the Effective Date, no Loan Party or any of
their ERISA Affiliates maintains or contributes to any Benefit Plan.
 
5.13.     Environmental Condition.  Except as set forth on Schedule 5.13 and
except for other matters that could not reasonably be expected to result in a
Material Adverse Change, (a) to the Loan Parties’ knowledge, none of the Loan
Parties’ or their Subsidiaries’ properties or assets has ever been used by such
Loan Party or its Subsidiaries, or by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such production, storage, handling, treatment,
release or transport was in violation in any material respect of applicable
Environmental Law, (b) to Loan Parties’ knowledge, no Loan Parties’ owned Real
Property has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c)
none of the Loan Parties nor any of their Subsidiaries has received notice that
a Lien arising under any Environmental Law has attached to any revenues or to
any Real Property owned or operated by such Loan Party, and (d) none of the Loan
Parties nor any of their Subsidiaries has received a summons, citation, notice,
or directive from the Environmental Protection Agency or any other federal,
state or provincial governmental agency concerning any action or omission by
such Loan Party or such Subsidiary resulting in the releasing or disposing of
Hazardous Materials into the environment in violation of any applicable
Environmental Law.
 
5.14.     Brokerage Fees.  No Loan Party has utilized the services of any broker
or finder in connection with obtaining financing from the Lender Group under
this Agreement and no brokerage commission or finders fee is payable by any Loan
Party or its Subsidiaries in connection herewith.
 
5.15.     Intellectual Property.  Each Loan Party owns, or holds licenses in,
all trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of the business of the Loan Parties, taken as
a whole, as currently conducted, except where the failure to do so, in the
aggregate, would not result in a Material Adverse Change.
 
5.16.     Leases.  Except where the failure to do so could not reasonably be
expected to result in a Material Adverse Change, each Loan Party enjoys peaceful
and undisturbed possession under all leases (including Capitalized Leases)
material to their business and to which they are a party or under which they are
operating and each of such leases is valid and subsisting and no material
default by such Loan Party exists under such lease.
 
5.17.     Deposit Accounts.  Set forth on Schedule 5.17 (as such Schedule may be
updated from time to time by Administrative Borrower by notice to Agent) are all
of Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities
Accounts containing any Collateral, including, with respect to each bank or
securities intermediary (i) the name and location of such Person, and (ii) the
account numbers of the Deposit Accounts or Securities Accounts containing any
Collateral maintained with such Person.
 

 
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5.18.     Complete Disclosure.  All factual information (taken as a whole)
furnished by or on behalf of each Loan Party in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of such Loan Party in writing to Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information not misleading in any material respect (other than
industry-wide risks normally associated with the types of businesses conducted
by such Loan Party) at such time in light of the circumstances under which such
information was provided.  On the Effective Date, the Projections represent, and
as of the date on which any other Projections are delivered to Agent, such
additional Projections represent the good faith estimate of the Loan Parties’
and their and their Subsidiaries’ future performance for the periods covered
thereby, it being understood that such Projections as to future events are not
to be viewed as facts and that actual results during the period or period
covered by Projections may differ from the projected results and no assurance
can be given that the projections will be realized.
 
5.19.     Credit Card Receipts.  Schedule 5.19 (as such Schedule may be updated
from time to time by Administrative Borrower by notice to Agent) sets forth each
of Loan Parties’ Credit Card Issuers, Credit Card Processors and all
arrangements to which the Loan Parties are a party with respect to the payment
to Loan Parties of the proceeds of all credit card charges for sales by Loan
Parties.
 
5.20.     Holding Company and Investment Company Acts.  No Loan Party is a
“holding company”, or a “subsidiary company” of a “holding company, or an
“affiliate” of a “holding company”, as such terms are defined in the Public
Utility Holding Company Act of 2005; nor is it a “public utility” as such term
is defined in the Federal Power Act, as amended; nor is it an “investment
company”, or an “affiliated company” or a “principal underwriter” of an
“investment company”, as such terms are defined in the Investment Company Act of
1940.
 
5.21.     Absence of Financing Statements, etc.  Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future Lien on any assets of any Loan
Party.
 
5.22.     Certain Transactions.  Except to the extent permitted pursuant to the
terms of Section 7.12, none of the officers, directors, or employees of any Loan
Party is presently a party to any transaction with any Loan Party (other than
for services as employees, officers and directors, including, without
limitation, such salary, bonus, employee stock option and other employee
compensation arrangements in the ordinary course of business, including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Loan Parties, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner).
 
5.23.     Regulations U and X.  No portion of any Advance is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any “margin security” or “margin stock” as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.

 
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5.24.     Labor Relations.  As of the Effective Date, no Loan Party is a party
to any collective bargaining or other contract with a labor union covering any
of its employees.  To the Loan Party’s knowledge, no Loan Party has committed an
unfair labor practice which is likely to provide the basis for any work
stoppage, strike or unfair labor practice claim by an employee of any Loan Party
that could reasonably be expected to result in a Material Adverse Change.  Each
Loan Party has complied in all material respects with all applicable
laws, decrees, orders, judgments, statutes, laws, rules and regulations relating
to employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar taxes, occupational safety and health, and plant closing including
all applicable provisions of the federal Fair Labor Standards Act, as amended,
except for any failure to comply that could not reasonably be expected to result
in a Material Adverse Change.  There is not presently pending and, to Borrowers’
knowledge, there is not threatened any of the following that could reasonably be
expected to result in a Material Adverse Change:
 
(a)           Any strike, slowdown, picketing, or work stoppage against any Loan
Party by any of its employees.
 
(b)           Any proceeding against or affecting any Loan Party relating to the
alleged violation of any applicable law, decree, order, judgment, statute, law,
rule or regulation pertaining to labor relations or before the National Labor
Relations Board, the Equal Employment Opportunity Commission, or any comparable
governmental body, organizational activity, or other labor or employment dispute
against or affecting Parent or Borrowers, which, if determined adversely to
Borrowers would cause a Material Adverse Change.
 
(c)           Any lockout of any employees by any Loan Party (and no such action
is contemplated by Borrowers).
 
(d)           Any application for the certification of a collective bargaining
agent as a representative of any of the employees of any Loan Party.
 
5.25.     Indebtedness.  Set forth on Schedule 5.25 is a true and complete list
of all Indebtedness of each Loan Party not listed in the consolidated financial
statements of Parent provided to Agent on or prior to the Effective Date or
otherwise permitted under Section 7.1, outstanding immediately prior to the
Effective Date that is to remain outstanding after the Effective Date and such
Schedule accurately reflects the aggregate principal amount of such
Indebtedness.
 
5.26.     Payment of Taxes.  Each Loan Party (i) has filed, or caused to be
filed or included in, (a) all Federal tax returns, and (b) all material state,
local and foreign tax returns which are required to be filed, and (ii) has paid,
or made provision for the payment of, all taxes shown thereon to be due or
pursuant to any assessment received by such Loan Party, except (A) such taxes,
if any, as are being contested in good faith by appropriate proceedings and as
to which adequate reserves in accordance with GAAP have been established and
maintained and (B) immaterial taxes; in each case, so long as no material
property of such Loan Party is at impending risk of being seized, levied upon or
forfeited.  The Loan Parties do not intend to treat the Advances, Letters of
Credit and/or related transactions hereunder as being a “reportable transaction”
(within the meaning of Treasury Regulation Section 1.6011-4).

 
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5.27.     Foreign Assets Control Regulations, Etc.  None of the requesting or
borrowing of the Advances, the requesting or issuance, extension or renewal of
any Letter of Credit or the use of the proceeds of any thereof will to the Loan
Party’s knowledge violate the Trading With the Enemy Act (50 USC §1 et seq., as
amended) (the “Trading With the Enemy Act”) or any of the foreign assets control
regulations of the United States Treasury Department (31 C.F.R., Subtitle B,
Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any
enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56)).  Furthermore, none of Loan Parties
nor any of their Subsidiaries or other Affiliates (x) is or to the Loan Party’s
knowledge will become a “blocked person” as described in the Executive Order,
the Trading With the Enemy Act or the Foreign Assets Control Regulations or (y)
knowingly engages or will knowingly engage in any dealings or transactions, or
be otherwise associated, with any such “blocked person”.
 
Section 6.             AFFIRMATIVE COVENANTS.
 
Each Loan Party covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties shall, and
shall cause each of their respective Subsidiaries to, do all of the following:
 
6.1.        Accounting System.  Maintain a system of accounting that enables
Parent to produce financial statements in all material respects in accordance
with GAAP and each Loan Party to maintain records pertaining to the Collateral
that contain information as from time to time reasonably may be requested by
Agent.  The Loan Parties also shall keep an inventory reporting system that
shows all additions, sales, claims, returns, and allowances with respect to the
Inventory.  Each Loan Party shall further (a) maintain in accordance with GAAP
in all material respects adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties and the properties of such Loan Party, contingencies and other
reserves and (b) at all times engage independent certified public accountants of
recognized national standing as the independent certified public accountants of
the Loan Parties and will not permit more than ninety (90) days to elapse
between the cessation of such firm’s (or any successor firm’s) engagement as the
independent certified public accountants of the Loan Parties and the appointment
in such capacity of a successor firm registered with the Public Company
Accounting Oversight Board.
 
6.2.        Collateral Reporting.  Provide Agent (and if so requested by Agent,
with copies for each Lender) with the documents set forth on Schedule 6.2 in
accordance with the delivery schedule set forth thereon.

 
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6.3.        Financial Statements, Reports, Certificates.  Deliver to Agent, with
copies to each Lender:
 
(a)           as soon as available, but in any event within forty-five (45) days
after the end of each Fiscal Month during each of Parent’s Fiscal Years,
 
(1)           a company prepared consolidated balance sheet, income statement,
and statement of cash flow covering Parent’s and its Subsidiaries’ operations
during such period, together with, in comparison form, the figures for the
corresponding month end and year to date periods of the previous Fiscal Year and
the figures set forth in the Projections delivered on or before the Effective
Date or pursuant to Section 6.3(c) hereof,
 
(2)           a certificate signed by the chief financial officer, chief
accounting officer, vice president or treasurer of Parent to the effect that:
 
(A)           the financial statements delivered hereunder have been prepared in
all material respects in accordance with GAAP (except for the lack of footnotes
and being subject to year-end audit adjustments) and fairly present in all
material respects the financial condition of Parent and its Subsidiaries, and
 
(B)           there does not exist any condition or event that constitutes a
Default or Event of Default (or, to the extent of any non-compliance, describing
such non-compliance as to which he or she may have knowledge and what action the
Loan Parties have taken, are taking, or propose to take with respect thereto),
 
(b)           as soon as available, but in any event within ninety (90) days
after the end of each of Parent’s Fiscal Years, consolidated financial
statements of Parent and its Subsidiaries for each such Fiscal Year, audited by
independent certified public accountants of recognized national standing and
certified, without being subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit, by
such accountants to have been prepared in accordance with GAAP (such audited
financial statements to include a balance sheet, income statement, and statement
of cash flow and, if prepared, any letter to management from such accountants),
 
(c)           as soon as available, but in any event within sixty (60) days
after the end of each of Parent’s Fiscal Years, copies of Parent’s Projections,
in form and substance (including as to scope and underlying assumptions)
satisfactory to Agent, in its Permitted Discretion, for the forthcoming Fiscal
Year, on a Fiscal Month by month basis, and the two subsequent Fiscal Years,
certified by the chief financial officer, chief accounting officer, vice
president or treasurer of Parent as being such officer’s good faith reasonable
estimate of the financial performance of Parent and its Subsidiaries during the
period covered thereby, it being understood that such Projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any Projections may differ from the projected results and
no assurance can be given that the Projections will be realized,

 
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(d)           if and when filed by any Loan Party,
 
(1)           Form 10-Q quarterly reports, Form 10-K annual reports, and Form
8-K current reports,
 
(2)           any other filings made by any Loan Party with the SEC,
 
(3)           upon request by Agent, in its Permitted Discretion, copies of any
Loan Party’s federal income tax returns, and any amendments thereto, filed with
the IRS, and
 
(4)           any other information that is provided by Parent to its
stockholders generally,
 
(provided that, for purposes of this clause (d), any information to be delivered
hereunder shall be deemed to have been delivered when posted on the such Loan
Party’s website or otherwise made available on the website of the SEC).
 
(e)           as soon as a Loan Party has knowledge of any event or condition
that constitutes a Default or an Event of Default, notice thereof together with
a reasonably detailed description thereof and a statement of the curative action
that such Loan Party proposes to take with respect thereto,
 
(f)           promptly after the commencement thereof, but in any event within
ten (10) Business Days after the service of process with respect thereto on any
Loan Party, notice of all actions, suits, or proceedings brought by or against
such Loan Party before any Governmental Authority which could reasonably be
expected to result in a Material Adverse Change, and
 
(g)           upon the request of Agent in its Permitted Discretion, any other
report reasonably requested relating to the financial condition of any Loan
Party.
 
Parent agrees to cooperate with Agent to allow Agent to consult with its
independent certified public accountants if Agent reasonably requests the right
to do so (and Agent shall notify Parent as to the timing of such consultation
and permit Parent to be present thereat or to otherwise participate therein) and
that, in such connection, their independent certified public accountants are
authorized to communicate with Agent and to release to Agent whatever financial
information concerning Loan Parties or their Subsidiaries that Agent reasonably
may request.
 
6.4.        Returns.  Account for returns of inventory and customer credits and
record the effects thereof on the general ledger on the same basis and in
accordance with the usual and customary practices of the applicable Loan Party,
as they exist at the time of the execution and delivery of this Agreement,
except as required by GAAP.

 
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6.5.        Maintenance of Properties.
 
(a)           Maintain and preserve all of their properties which are necessary
or useful in the proper conduct to their business in good working order and
condition, ordinary wear and tear excepted, except as could not reasonably be
expected to result in a Material Adverse Change;
 
(b)           Cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of such Loan Party
may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, except as could not
reasonably be expected to result in a Material Adverse Change;
 
(c)           In respect of the Loan Parties and their Subsidiaries, continue to
engage in the businesses of selling boats and boating related products at the
retail and wholesale level, and similar or related lines of business; and
 
(d)           Comply at all times with all provisions of all leases to which it
is a party as lessee, so as to prevent any loss or forfeiture thereof or
thereunder, except to the extent the failure to comply could not reasonably be
expected to result in a Material Adverse Change.
 
6.6.        Taxes.  Cause all material assessments and taxes, whether real,
personal, or otherwise, due, payable or to be remitted by, or imposed, levied,
or assessed against each Loan Party and its Subsidiaries, or any of their
respective assets to be paid or remitted in full, before delinquency or before
the expiration of any extension period, as well as all material claims for labor
materials or supplies that if unpaid might by law become a Lien or charge upon
its property (other than a Permitted Lien), except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted
Protest.  Each Loan Party will and will cause its Subsidiaries to make timely
payment, remittance or deposit of all federal, material state and other material
tax payments and withholding taxes required of them by applicable laws,
including those laws concerning F.I.C.A., F.U.T.A., state disability, goods and
services and sales taxes, and local, state, provincial, foreign and federal
income taxes, and will, upon reasonable request, furnish Agent with proof
reasonably satisfactory to Agent indicating that the applicable Loan Party or
its respective Subsidiary has made such payments or deposits.
 
6.7.        Insurance.  At the Loan Parties’ expense, maintain insurance
(including, without limitation, by means of self-insurance) respecting each Loan
Party’s assets wherever located, covering loss or damage by fire, theft,
explosion, and other hazards and risks and also shall maintain business
interruption, public liability, and product liability insurance, as well as
insurance against larceny, embezzlement, and criminal misappropriation, all as
ordinarily are insured against by other Persons engaged in the same or similar
business.  All such policies of insurance shall be in such amounts which are
customary for Persons engaged in the same or similar business and with
nationally recognized insurance companies.  Loan Parties shall deliver copies of
all such policies relating to the Collateral to Agent and copies of all other
policies of insurance if reasonably requested by Agent.  Loan Parties shall also
deliver a lender’s loss payable endorsement and certificates of insurance naming
Agent as lender loss payee as its interest may appear with respect to all
policies of property or similar insurance relating to the Collateral.  Loan
Parties shall deliver a certificate of insurance naming Agent and the Lenders as
additional insureds with respect to all policies of liability insurance.  Each
such policy of insurance or endorsement shall contain a clause requiring the
insurer to give not less than thirty (30) days prior written notice to Agent (or
ten (10) days prior written notice in the event of cancellation due to
non-payment of premium) in the event of cancellation of the policy for any
reason whatsoever.

 
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6.8.        Location of Eligible Inventory.  Keep Loan Parties’ and their
Subsidiaries’ Eligible Inventory (other than Eligible In-Transit Inventory) only
at Eligible Inventory Locations (or in transit to or between such Eligible
Inventory Locations) and their chief executive offices only at the locations
identified on Schedule 5.4 and Schedule 5.6, as applicable; provided, however,
that Administrative Borrower may amend Schedule 5.4 and Schedule 5.6 so long as
any new location is within the United States, Puerto Rico or a Permitted
Overseas Inventory Jurisdiction or, in the case of West Marine Canada, a
province or territory of Canada in which all steps necessary to perfect Agent’s
Lien on such Collateral (including the filing of PPSA financing statements
naming West Marine Canada as debtor and Agent as secured party) have been taken
and in respect of any new warehouse, distribution center, chief executive office
or location where such Loan Party’s books and records are maintained, Agent
shall have received a Collateral Access Agreement.
 
6.9.        Compliance with Laws.  Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
except to the extent the non-compliance with which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Change.
 
6.10.     Leases.  Pay when due all rents and other amounts payable under any
leases to which each Loan Party or any of its Subsidiaries is a party or by
which such Loan Party’s properties and assets are bound, unless such payments
are the subject of a Permitted Protest or unless nonpayment of such rents and
other amounts individually or in the aggregate could not reasonably be expected
to result in a Material Adverse Change.
 
6.11.     Existence.  At all times preserve and keep in full force and effect
each Loan Party’s valid existence and good standing and any rights and
franchises material to their businesses except as otherwise permitted pursuant
to Section 7.4.
 
6.12.     Environmental.  Except for such Environmental Liens, failures to
comply, releases, Environmental Actions, notices, citations or orders which
individually or in the aggregate could not reasonably be expected to result in a
Material Adverse Change (a) keep any property either owned or operated by any
Loan Party or any of its Subsidiaries free of any Environmental Liens or post
bonds or other financial assurances sufficient to satisfy the obligations or
liability evidenced by such Environmental Liens, (b) comply with all applicable
Environmental Laws and provide to Agent documentation of such compliance which
Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material of any reportable quantity from or onto property owned or
operated by any Loan Party or any of its Subsidiaries and take any Remedial
Actions required to abate said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly, but in any event within 5 days
of its receipt thereof, provide Agent with written notice of any of the
following:  (i) notice that an Environmental Lien has been filed against any of
the real or personal property of any Loan Party or any of its Subsidiaries, (ii)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against any Loan Party or any of its Subsidiaries, and (iii)
notice of a violation, citation, or other administrative order.

 
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6.13.     Disclosure Updates.  Promptly and in no event later than five (5)
Business Days after obtaining knowledge thereof, notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in any
material respect (other than industry-wide risks normally associated with the
types of businesses conducted by the Loan Parties and their Subsidiaries) in
light of the circumstances in which made; provided that Projections and
Schedules furnished to the Lender Group shall be deemed to be updated as and
when delivered pursuant to the terms hereof; provided further that,
notwithstanding anything else in this Agreement to the contrary, except during
the continuation of a Cash Dominion Event, the Loan Parties shall only be
obligated to update the information contained in the Schedules on a quarterly
basis.  The foregoing to the contrary notwithstanding, any notification pursuant
to the foregoing provision will not cure or remedy the effect of the prior
untrue statement of a material fact or omission of any material fact nor shall
any such notification have the affect of amending or modifying this Agreement or
any of the Schedules hereto.
 
6.14.     Formation of Subsidiaries.  At the time that any Loan Party forms any
direct or indirect Subsidiary or acquires any direct or indirect Subsidiary
after the Effective Date, such Loan Party shall (a) cause such new Subsidiary to
provide to Agent a joinder to this Agreement, allonges to Notes, and other
security documents, as well as appropriate UCC-1 financing statements, PPSA
registrations or such other financing statements, all in form and substance
reasonably satisfactory to Agent (including being sufficient to grant Agent a
first priority Lien (subject to Permitted Liens) in and to the Collateral of
such newly formed or acquired Subsidiary), and (b) provide to Agent all other
documentation, including one or more opinions of counsel reasonably satisfactory
to Agent, which in its Permitted Discretion is appropriate with respect to the
execution and delivery of the applicable documentation referred to above,
unless, in respect of a new Foreign Subsidiary, the taking of the foregoing
actions would give rise to a material adverse tax liability to any Loan
Party.  Any document, agreement, or instrument executed or issued pursuant to
this Section 6.14 shall be a Loan Document.
 
6.15.     Notice to Agent.
 
(a)           Administrative Borrower shall provide Agent with written notice
promptly upon the occurrence of any of the following events, which written
notice shall state with reasonable particularity the facts and circumstances of
the event for which such notice is being given:
 
(1)           Any change in the Authorized Persons of Administrative Borrower;

 
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(2)           The completion of any physical count of all or a material portion
of Borrowing Group’s Inventory (together with a copy of the results thereof
certified by Administrative Borrower);
 
(3)           Any cessation by any Loan Party of their making payment to its
creditors generally as such Loan Party’s debts become due;
 
(4)           Any failure by any Loan Party to pay rent on a timely basis at ten
percent (10%) or more of any of the Loan Parties’ locations, and as and when
such rent payment is due;
 
(5)           Any Material Adverse Change;
 
(6)           The occurrence of any Default or Event of Default;
 
(7)           Any discharge by Parent of its independent accountants or any
withdrawal or resignation by such independent accountants from their acting in
such capacity;
 
(8)           If any Loan Party receives notice of any material default or any
action is taken in respect of a material claimed default (whether or not
constituting a default) under the Credit Card Agreements;
 
(9)           Any judgment not covered by insurance final or otherwise against
any Loan Party or any of its Subsidiaries in an amount in excess of $10,000,000;
 
(10)         Any set-off, claims, withholdings or other defenses to which any of
the Collateral, or Agent’s rights with respect to the Collateral, are subject in
an amount in excess of $25,000,000 in respect of any such event; or
 
(11)         The obtaining of an organization identification number by any Loan
Party which did not have one on the Effective Date, together with such number.
 
(b)           Administrative Borrower shall provide Agent, when so distributed,
with copies of any materials distributed to the shareholders of Parent (provided
that, for purposes of this clause (b), any materials to be delivered hereunder
shall be deemed to have been delivered when posted on Parent’s website or
otherwise made available on the website of the SEC).
 
6.16.     Further Assurances. Cooperate with Agent and execute such further
instruments and documents as Agent shall reasonably request to carry out to its
reasonable satisfaction the transactions contemplated by this Agreement and the
other Loan Documents.

 
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Section 7.            NEGATIVE COVENANTS.
 
Each Loan Party covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties shall not,
and shall cause each of the Subsidiaries of the Loan Parties not to, do any of
the following:
 
7.1.       Indebtedness.  Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
 
(a)           Indebtedness evidenced by this Agreement and the other Loan
Documents;
 
(b)           existing Indebtedness set forth on Schedule 5.25;
 
(c)           Permitted Purchase Money Indebtedness;
 
(d)           refinancings, renewals, or extensions of Indebtedness permitted
under clauses (b) and (c) of this Section 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) such refinancings,
renewals, or extensions do not result in an increase in the then extant
principal amount of the Indebtedness so refinanced, renewed, or extended (other
than with respect to unpaid accrued interest and premiums thereon and
underwriting discounts, defeasance costs, fees, commissions and expenses
incurred in connection therewith) or add one or more Loan Parties as liable with
respect thereto if such additional Loan Party were not liable with respect to
the original Indebtedness, (ii) such refinancings, renewals, or extensions do
not result in a shortening of the average weighted maturity of the Indebtedness
so refinanced, renewed, or extended, nor are they on terms or conditions, that,
taken as a whole, are materially more burdensome or restrictive to the
applicable Loan Party, (iii) if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations, then the terms
and conditions of the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Lender Group as those that were applicable to the refinanced, renewed, or
extended Indebtedness, and (iv) the Indebtedness that is refinanced, renewed, or
extended is not recourse to any Person that is liable on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness that was refinanced, renewed, or extended;
 
(e)           endorsement of instruments or other payment items for deposit;
 
(f)           Indebtedness composing Permitted Investments;
 
(g)           Indebtedness of a Loan Party to another Loan Party;
 
(h)           Indebtedness of a Borrower or a Subsidiary of a Borrower in
respect of hedge agreements entered into by such Person with the purpose and
effect of fixing interest rates on a principal amount of Indebtedness of such
Person that is accruing interest at a variable rate, provided that each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who at the time the contract is made has long-term obligations
rated A or Aa3 or better, respectively, by S&P and Moody’s;

 
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(i)            Indebtedness of a Person that becomes a Loan Party and was
incurred by such Person prior to becoming a Loan Party so long as such
Indebtedness was not incurred in contemplation of such Person becoming a Loan
Party;
 
(j)            Indebtedness secured by Permitted Liens of the types described in
clauses (c), (g), (i), (o), (p) and (q) of the definition of “Permitted Liens”
to the extent that such Permitted Liens are secured by property or assets not
constituting Collateral; provided that, in the case of clause (p), the amount of
Indebtedness secured by such property or assets does not exceed 90% of the fair
market value of such property or assets,
 
(k)           Subordinated Obligations in such principal amounts as may be
approved by Agent in its Permitted Discretion;
 
(l)            Guarantees of Indebtedness that is permitted pursuant to this
Agreement;
 
(m)          Indebtedness incurred in connection with any non-qualified deferred
compensation plan for the benefit of current or former employees or directors of
any Loan Party or any Subsidiary of any Loan Party; and
 
(n)           other unsecured Indebtedness of any Loan Party, in an aggregate
amount not to exceed at any time $50,000,000.
 
7.2.       Liens.  Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to the Collateral, of any kind, whether
now owned or hereafter acquired, or any income or profits therefrom, except for
Permitted Liens (including Liens that are replacements of Permitted Liens to the
extent that the original Indebtedness is refinanced, renewed, or extended under
Section 7.1(d) and so long as the replacement Liens only encumber those assets
that secured the refinanced, renewed, or extended Indebtedness).
 
7.3.       Restrictions on Negative Pledges and Upstream Limitation.
 
(a)           Enter into or permit to exist any arrangement or agreement (other
than this Agreement and the other Loan Documents) which directly or indirectly
prohibits any Loan Party from creating, assuming or incurring any Lien upon the
Collateral whether now owned or hereafter acquired; or
 
(b)           Enter into any agreement, contract or arrangement (other than this
Agreement and the other Loan Documents) restricting the ability of any
Subsidiary of any Borrowers to pay or make dividends or distributions in cash or
kind to Borrowers, to make loans, advances or other payments of whatsoever
nature to the Loan Parties, or to make transfers or distributions of all or any
part of its assets to the Loan Parties;
 
in each case other than (i) customary anti-assignment provisions contained in
contracts, (ii) customary restrictions contained in asset sale agreements
limiting the transfer of such assets pending the closing of such sale, (iii) any
limitation or restriction contained in any Permitted Lien to the extent such
limitation or restriction restricts the transfer of property subject to such
Permitted Lien and does not affect the Lien of Agent securing the Obligations
and (iv) any restriction that does not apply, directly or indirectly, to the
Liens securing the Obligations.

 
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7.4.       Restrictions on Fundamental Changes.  (a) Enter into any merger,
amalgamation or consolidation, (b) liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution), or (c) convey, sell, lease, license,
assign, transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its assets, except:
 
(1)           any Borrower may be merged or amalgamated with or into another
Borrower, or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to any
Borrower; provided that (i) at the time of any such event, no Event of Default
shall exist or shall result from such event and (ii) in the case of such an
event, a Borrower shall be the continuing or surviving Person;
 
(2)           (A) any Domestic Subsidiary of a Borrower may be merged or
amalgamated with or into another Domestic Subsidiary of a Borrower, or be
liquidated, wound up or dissolved, or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to any Domestic Subsidiary of a
Borrower, provided that at the time of any such event no Event of Default shall
exist or shall result from such event, and (B) any Domestic Subsidiary of a
Borrower may be merged with and into a Borrower, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to any Borrower; provided that at the time of any
such event, no Event of Default shall exist or shall result from such event;
 
(3)           (A) any Foreign Subsidiary of a Borrower may be merged or
amalgamated with or into another Foreign Subsidiary of a Borrower, or be
liquidated, wound up or dissolved, or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to any Foreign Subsidiary of a
Borrower, provided that at the time of any such event no Event of Default shall
exist or shall result from such event, and (B) any Foreign Subsidiary of a
Borrower may be merged with and into a Borrower, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to any Borrower; provided that at the time of any
such event, no Event of Default shall exist or shall result from such event;
 
(4)           in connection with (1) sales or closures of stores or distribution
centers in the normal course of business and (2) dispositions of Inventory and
other assets located at such locations (or used in connection with the operation
thereof) and related non-depreciated leasehold interests related thereto, in
each case on reasonable terms consistent with such Person’s usual practice in
connection with such sales or closures;

 
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(5)           Permitted Dispositions and other dispositions permitted under
Section 7.5; and
 
(6)           non-cash accounting adjustments that might constitute a
disposition.
 
7.5.       Disposal of Assets; Sale and Leaseback.  Other than Permitted
Dispositions, and dispositions permitted by Section 7.4, convey, sell, assign,
transfer, or otherwise dispose of any of the assets of any Loan Party.  The Loan
Parties will not, and will not permit any Subsidiary of any Loan Party to, enter
into any arrangement, directly or indirectly, whereby such Person shall sell or
transfer any Collateral owned by it in order then or thereafter to lease such
Collateral or lease other property that such Person intends to use for
substantially the same purpose as the property being sold or transferred.
 
7.6.       Change Name.  Change any Loan Party’s name, FEIN, organizational
identification number, type of organization, jurisdiction of organization or
other legal structure or relocate such Loan Party’s chief executive office to a
new location, in each case, without giving at least 30 days prior written notice
by Administrative Borrower to Agent of such change and so long as, at the time
of such written notification, Parent, such Loan Party provides any financing
statements or like registration documents necessary to perfect and continue
perfected Agent’s Liens.
 
7.7.       Prepayments and Amendments on Subordinated Obligations.  Prepay,
redeem, defease, purchase or otherwise acquire any Subordinated Obligations; or
directly or indirectly, amend, modify, alter, increase or change any of the
terms or conditions of any agreement, instrument, document, indenture, or other
writing, evidencing or relating to any Subordinated Obligations permitted under
Section 7.1 in a manner adverse to the Lender Group.
 
7.8.       Consignments.  Consign any of their Inventory or sell any of their
Inventory on bill and hold, sale or return, sale on approval, or other
conditional terms of sale, except rights of purchasers to return Inventory
pursuant to a Loan Party’s or any of its Subsidiaries’ return policy; provided
that any Loan Party may sell or otherwise dispose of Inventory on any of the
foregoing consignment or other arrangements so long as the aggregate amount of
such consigned Inventory does not exceed $10,000,000 in the aggregate; provided,
further, that if any Loan Party is the consignor in any such arrangement of any
consigned Inventory located in the United States or a state or political
subdivision thereof in an amount that exceeds $250,000, individually or in the
aggregate, then such Loan Party shall cause (i) all UCC filings against the
consignee of such United States consigned Inventory to be filed, (ii) all
notices to known holders of conflicting security interests (after reasonable
investigation therefor and conduct searching for the same) in the inventory of
such consignee to be given, in each case, as necessary under the UCC to perfect
and otherwise make public such Person’s interest in such United States consigned
Inventory and (iii) any relevant UCC filings to be assigned to Agent.

 
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7.9.       Distributions.  Other than distributions or declaration and payment
of dividends by a Loan Party to another Loan Party, make any distribution or
declare or pay any dividends (in cash or other property, other than common Stock
or options or rights with respect to common Stock) on, or purchase, acquire,
redeem, or retire any of Parent’s Stock, of any class, whether now or hereafter
outstanding; provided, however, that Parent may purchase, acquire, redeem or
retire any of Parent’s Stock or may pay cash dividends on Parent’s Stock so long
as (i) at the time of such purchase, acquisition redemption, retirement, payment
and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing and (ii) immediately after giving effect thereto,
Availability shall be at least equal to $30,000,000 and Administrative Borrower
shall have delivered to Agent a Borrowing Base Certificate and Projections
evidencing the maintenance of Availability of at least $30,000,000 for the
period of six (6) months immediately subsequent to such purchase, acquisition,
redemption or retirement of any Parent’s or payment of cash dividends on any of
Parent’s Stock.
 
7.10.     Accounting Methods.  Modify or change their Fiscal Year or their
method of accounting (except upon prior notice to Agent and other than as may be
required to conform to GAAP or as otherwise permitted by GAAP).
 
7.11.     Investments, Acquisitions.  Except for Permitted Investments and
Permitted Acquisitions, directly or indirectly, make or acquire any Investment,
or incur any liabilities (including contingent obligations) for or in connection
with any Investment; provided, however, that such Investments will be considered
Investments permitted by this Section 7.11 only if all actions have been taken
to the satisfaction of Agent to provide to Agent, for the benefit of Lenders and
Agent, a first priority perfected security interest in all of such Investments
(to the extent such Investments constitute Collateral) free of all Liens other
than Permitted Liens.
 
7.12.     Transactions with Affiliates.  Engage in any transaction with any
Affiliate (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of Loan Parties, any corporation, unlimited
company, partnership, trust or other entity in which any such Affiliate has a
substantial interest or is an officer, director, trustee or partner, on terms
more favorable to such Person (taken as a whole) than would have been obtainable
on an arm’s-length basis except (a) reasonable and customary fees and other
consideration paid to members of the board of directors of Parent, (b)
compensation and benefit arrangements for officers and other employees of Loan
Parties and their Subsidiaries entered into in the ordinary course of business
and (c) transactions among Loan Parties and their wholly-owned Subsidiaries in
the ordinary course of business consistent with past practices.  Each Affiliate
of Loan Parties is listed on Schedule 7.12 (as such Schedule may be updated from
time to time by Administrative Borrower by notice to Agent).
 
7.13.     Suspension.  Suspend or go out of a substantial portion of their
business.
 
7.14.     Use of Proceeds.  Use the proceeds of the Advances for any purpose
other than (a) to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and (b) consistent with the terms and
conditions hereof, for general working capital purposes and general corporate
purposes, including making dividends and distributions to the extent permitted
by this Agreement.

 
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7.15.     Store Closings.  Close any location at which the Loan Parties
maintain, offer for sale or store any of the Collateral unless such closing, in
any Fiscal Year, results in no more than a 10% store reduction from the
aggregate number of stores open as of the first day of such Fiscal Year.
 
7.16.     Securities Accounts.  Establish or maintain any Securities Account the
assets of which constitute Collateral unless Agent shall have received a Control
Agreement in respect of such Securities Account subject to the provisions of
Section 2.6.  If a Cash Dominion Event has occurred and is continuing, no Loan
Party shall transfer assets constituting Collateral out of any Securities
Account.
 
7.17.     Employee Benefit Plans.  Except as could not reasonably be expected to
result in a Material Adverse Change,
 
(a)           Engage in any “prohibited transaction” within the meaning of §406
of ERISA or §4975 of the IRC; or
 
(b)           permit any Guaranteed Pension Plan to incur an “accumulated
funding deficiency”, as such term is defined in §302 of ERISA, whether or not
such deficiency is or may be waived; or
 
(c)           fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of any Loan Party
pursuant to §302(f) or §4068 of ERISA; or
 
(d)           amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to §307 of ERISA or §401(a)(29) of the IRC; or
 
(e)           permit or take any action which would result in the aggregate
benefit liabilities (within the meaning of §4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans,
disregarding for this purpose the benefit liabilities and assets of any such
Plan with assets in excess of benefit liabilities, by more than $10,000,000, or
 
(f)           fail to comply with any material Canadian federal, provincial or
local statute, law, rule, regulation, ordinance, code in respect of Benefit
Plans.
 
7.18.     Deposit Accounts, Credit Card Agreements, etc.  Except as provided in
Section 2.6(c) and (d) hereof, (a)  establish any Deposit Accounts, credit card
clearinghouse or processors, other than those Deposit Accounts, Credit Card
Agreements and other accounts, all listed on Schedule 7.18 (as updated pursuant
to Section 2.6(d) and Section 6.13), (b) directly or indirectly fail to comply
in any material respect with any Control Agreement or other bank agency or lock
box agreement in favor of Agent for the benefit of the Lender Group with respect
to such account, (c) deposit into any of the payroll accounts listed on Schedule
7.18 any significant amounts in excess of amounts necessary to pay current
payroll obligations from such accounts or (d) change any direction or
designation relating to any Credit Card Processor.

 
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7.19.     Minimum Adjusted Availability.  Borrowers shall at all times maintain
Adjusted Availability at least equal to the Minimum Adjusted Availability
Requirement.
 
Section 8.            EVENTS OF DEFAULT.
 
Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:
 
8.1.       Any Loan Party fails to pay any principal on any of the Advances or
any reimbursement obligation in respect of any Letter of Credit, or any portion
thereof, on the date when due; or any Loan Party fails to pay any interest owing
under the Loan Documents or any fees, or any portion thereof, within five (5)
Business Days after the date when due; or fails to pay any other amount payable
to the Lenders or Agent under any Loan Document, or any portion thereof, within
five (5) Business Days after written demand therefor;
 
8.2.       (a)           Any Loan Party shall fail to comply with any of its
covenants contained in Section 6.2, 6.3, 6.7, 6.8, 6.15 or 7 (provided that, in
the case of any such failure to comply with the covenants contained in any of
Sections 6.2 (other than any failure to deliver a Borrowing Base Certificate),
6.3 (other than Section 6.3(e)) or 6.15 (other than Section 6.15(a)(6)), such
failure shall continue for five Business Days after Administrative Borrower
first obtains knowledge of such failure); (b) any Loan Party shall fail to
perform any term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in this Section 8) for
thirty (30) days after (i) such Loan Party has actual knowledge of such failure
to perform or (ii) written notice of such failure has been given to
Administrative Borrower by Agent; and (c) any representation or warranty of any
Loan Party in this Agreement or any of the other Loan Documents or any Record or
in any other document or instrument delivered pursuant to or in connection with
this Agreement shall prove to have been false in any material respect upon the
date when made or deemed to have been made or repeated.
 
8.3.       If any material portion of any Loan Party’s assets is attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person and such writ, distress warrant or levy is not
discharged within sixty (60) days (or, in the case of West Marine Canada, 30
days) of the date on which such writ, distress warrant or levy is filed;
 
8.4.       If an Insolvency Proceeding is commenced by any Loan Party or any
Subsidiary of any Loan Party;
 
8.5.       If an Insolvency Proceeding is commenced against any Loan Party or
any Subsidiary of any Loan Party, and any of the following events
occur:  (a) such Person consents to the institution of the Insolvency Proceeding
against it, (b) the petition commencing the Insolvency Proceeding is not timely
controverted; provided, however, that, during the pendency of such period, each
member of the Lender Group shall be relieved of its obligations to extend credit
hereunder, (c) the petition commencing the Insolvency Proceeding is not
dismissed within sixty (60) calendar days of the date of the filing thereof;
provided, however, that, during the pendency of such period, each member of the
Lender Group shall be relieved of its obligation to extend credit hereunder,
(d) a trustee, custodian, liquidator, monitor, receiver, interim receiver or
receiver manager is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, such Loan Party, or (e) an order for relief shall
have been entered therein;

 
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8.6.       If any Loan Party or any Subsidiary of any Loan Party is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
 
8.7.       If any Loan Party suffers the entry against it of a final judgment
for the payment of money in excess of $10,000,000 (not covered by insurance),
and such judgment is unstayed and undischarged for a period of thirty (30)
consecutive days after the date of entry thereof;
 
8.8.       If there is a default in any material agreement to which any Loan
Party or any Subsidiary of any Loan Party is a party relative to such Person’s
Indebtedness involving an aggregate amount of $20,000,000, or more, and such
default (a) occurs at the final maturity of the obligations thereunder, or (b)
results in a right by the other party thereto, irrespective of whether
exercised, to accelerate the maturity of such Person’s obligations thereunder,
or to terminate such agreement;
 
8.9.       If any Loan Party or any Subsidiary of any Loan Party makes any
payment on account of Indebtedness that has been contractually subordinated in
right of payment to the payment of the Obligations, except to the extent such
payment is permitted by the terms of the subordination provisions applicable to
such Indebtedness;
 
8.10.     If any of the Loan Documents shall be cancelled, terminated, revoked
or rescinded or Agent’s Liens in the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Loan Documents, in each
case otherwise than in accordance with the terms thereof or this Agreement or
with the express prior written agreement, consent or approval of Lenders, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of any Loan
Party that is a party thereto or any of their respective stockholders, or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
 
8.11.     Any Loan Party or any ERISA Affiliate incurs any liability to the PBGC
or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate
amount exceeding $10,000,000, or any Loan Party or any ERISA Affiliate is
assessed withdrawal liability pursuant to Title IV of ERISA by a Multiemployer
Plan requiring aggregate annual payments exceeding $10,000,000, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an ERISA
Reportable Event, or a failure to make a required installment or other payment
(within the meaning of §302(f)(1) of ERISA), provided that Agent determines in
its Permitted Discretion that such event (A) could be expected to result in
liability of such Loan Party or any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $10,000,000 and (B)
could constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC, for the appointment by the appropriate United States District Court of
a trustee to administer such Guaranteed Pension Plan or for the imposition of a
lien in favor of such Guaranteed Pension Plan; or (ii) the appointment by a
United States District Court of a trustee to administer such Guaranteed Pension
Plan; or (iii) the institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;

 
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8.12.     Any Loan Party or any Subsidiary of any Loan Party shall be convicted
for a state, federal or foreign crime, a punishment for which in any such case
could include the forfeiture of any assets of such Person included in the
Borrowing Base or any assets of such Person not included in the Borrowing Base
but having a fair market value in excess of $10,000,000; or
 
8.13.     A Change of Control shall occur.
 
Section 9.            THE LENDER GROUP’S RIGHTS AND REMEDIES.
 
9.1.       Rights and Remedies.  Upon the occurrence, and during the
continuation, of an Event of Default, Agent may, and upon instruction of the
Required Lenders (at their election but without notice of their election and
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Loan Parties) Agent shall exercise any of the
rights and remedies of a secured party under the Code or Canadian law and any
other rights and remedies provided for in this Agreement or any other Loan
Document or otherwise available to it at law or in equity on behalf of the
Lender Group and Agent may or, acting upon the instructions of the Required
Lenders, shall do the same on behalf of the Lender Group, such rights and
remedies to include the following, all of which are authorized by the Loan
Parties:
 
(a)           Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable,
provided that, in the event of any Event of Default under Sections 8.4 or 8.5,
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from Agent or any Lender;
 
(b)           Cease advancing money or extending credit to or for the benefit of
Borrowers under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrowers and the Lender Group, provided that, in the
event of any Event of Default under Sections 8.4 or 8.5, any unused portion of
the credit hereunder shall forthwith terminate and each Lender shall be relieved
of all further obligations to make Advances to Borrowers and the Issuing Lender
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit;
 
(c)           Terminate this Agreement and any of the other Loan Documents as to
any future liability or obligation of the Lender Group, but without affecting
any of Agent’s Liens in the Collateral and without affecting the Obligations,
provided that, in the event of any Event of Default under Sections 8.4 or 8.5,
any unused portion of the credit hereunder shall forthwith terminate and each
Lender shall be relieved of all further obligations to make Advances to
Borrowers and the Issuing Lender shall be relieved of all further obligations to
issue, extend or renew Letters of Credit;

 
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(d)           Notify Account Debtors and other Persons obligated on the
Collateral to make payment or otherwise render performance to or for Agent, and,
to the extent permitted under the Code or Canadian law, as applicable, enforce
the obligations of Account Debtors and other Persons obligated on the Collateral
and exercise the rights of the Loan Parties with respect to such obligations and
any property that may secure such obligations;
 
(e)           Take any proceeds of the Collateral;
 
(f)            Settle or adjust disputes and claims directly with Loan Parties’
Account Debtors for amounts and upon terms which Agent considers advisable, and
in such cases, Agent will credit the Loan Account with only the net amounts
received by Agent in payment of such disputed Accounts after deducting all
Lender Group Expenses incurred or expended in connection therewith;
 
(g)           Cause the Loan Parties to hold all of their returned Inventory in
trust for the Lender Group and segregate all returned Inventory from all other
assets of the Loan Parties or in Loan Parties’ possession and conspicuously
label said returned Inventory as the property of the Lender Group;
 
(h)           Without notice to or demand upon any Loan Party, make such
payments and do such acts as Agent considers necessary or reasonable to protect
its security interests in the Collateral.  In addition to the rights granted
pursuant to Section 4.8.  Each Loan Party agrees to assemble the Collateral if
Agent so requires, and to make the Collateral available to Agent at a place that
Agent may designate which is reasonably convenient to both parties.  Each Loan
Party authorizes Agent to enter the premises where the Collateral is located, to
take and maintain possession of the Collateral, or any part of it, to utilize
its assets in accordance with Section 4.8 and to pay, purchase, contest, or
compromise any Lien that in Agent’s determination appears to conflict with
Agent’s Liens in and to the Collateral and to pay all expenses incurred in
connection therewith and to charge Borrowers’ Loan Account therefor.  With
respect to any Loan Party’s owned or leased premises, each Loan Party hereby
grants Agent a license to enter into possession of such premises and to occupy
the same, without charge, in order to exercise any of the Lender Group’s rights
or remedies provided herein, at law, in equity, or otherwise;
 
(i)            Without notice to any Loan Party (such notice being expressly
waived), and without constituting a retention of any collateral in satisfaction
of an obligation (within the meaning of the Code or the PPSA), set off and apply
to the Obligations any and all (i) balances and deposits of any Loan Party held
by the Lender Group (including any amounts received in the Deposit Accounts or
Securities Accounts subject to Control Agreements), or (ii) Indebtedness at any
time owing to or for the credit or the account of any Loan Party held by the
Lender Group, provided that Agent will endeavor to notify Administrative
Borrower of any such set-off after the occurrence thereof but the failure to so
notify Administrative Borrower shall not give rise to any liability to Agent nor
in any manner whatsoever affect the rights of Agent under this Agreement or
under any Loan Document;
 
 
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(j)            Hold, as cash collateral, any and all balances and deposits of
any Loan Party held by the Lender Group, and any amounts received in the Deposit
Accounts or Securities Account subject to Control Agreements, to secure the full
and final repayment of all of the Obligations;
 
(k)           Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral and, as set forth in Section 4.8, use any intellectual property;
 
(l)            Sell or cause to be sold, the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Loan Parties’
premises) as Agent determines is commercially reasonable.  It is not necessary
that the Collateral be present at any such sale;
 
(m)           Agent shall give notice of the disposition of the Collateral as
follows:
 
(1)           Agent shall give Administrative Borrower (for the benefit of the
applicable Loan Party) a notice in writing of the time and place of public sale,
or, if the sale is a private sale or some other disposition other than a public
sale is to be made of the Collateral, the time on or after which the private
sale or other disposition is to be made; and
 
(2)           The notice shall be personally delivered or mailed, postage
prepaid, to Administrative Borrower as provided in Section 12, at least 10 days
before the earliest time of disposition set forth in the notice; no notice needs
to be given prior to the disposition of any portion of the Collateral that is
perishable or threatens to decline speedily in value or that is of a type
customarily sold on a recognized market;
 
(3)           The Loan Parties hereby acknowledge that 10 days prior written
notice of such sale or sales shall be reasonable notice; in addition the Loan
Parties waive any and all rights that they have to a judicial hearing in advance
of the enforcement of any of Agent’s rights and remedies hereunder, including
its right if a Default exists to take immediate possession of Collateral and to
exercise its rights and remedies with respect thereto;
 
(n)           Agent, on behalf of the Lender Group may credit bid and purchase
at any public sale;
 
(o)           Agent may seek the appointment of a receiver or keeper to take
possession of all or any portion of the Collateral or to operate same and, to
the maximum extent permitted by law, may seek the appointment of such a receiver
without the requirement of prior notice or a hearing;
 
(p)           Agent shall have the rights and remedies of a secured party under
the Code and any additional rights and remedies as may be provided to a secured
party in any jurisdiction in which Collateral is located;

 
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(q)           The Lender Group shall have all other rights and remedies
available to it at law or in equity pursuant to any other Loan Documents and
whether or not Lenders shall have accelerated the maturity of the Obligations
pursuant to this Section 9.1, each Lender, if owed any amount with respect to
the Obligations, may, with the consent of Required Lenders or Agent but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law, or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Lender are
evidenced, included as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender; and
 
(r)           Any deficiency that exists after disposition of the Collateral as
provided above, will be paid immediately by the Loan Parties.  Any excess will
be returned, without interest and subject to the rights of third Persons, by
Agent to Administrative Borrower (for the benefit of the applicable Loan Party).
 
9.2.       Securities and Deposits.  Agent may, at any time during the
continuation of a Cash Dominion Event, at its option, transfer to itself or any
nominee any securities constituting Collateral, receive any income thereon and
hold such income as additional Collateral or apply it to the
Obligations.  Whether or not any Obligations are due, during the continuation of
a Cash Dominion Event, Agent may demand, sue for, collect, or make any
settlement or compromise which it deems desirable with respect to the
Collateral.
 
9.3.       Standards for Exercising Rights and Remedies.  Each Loan Party hereby
acknowledges and agrees that in connection with the exercise of its rights and
remedies hereunder Agent may (but shall not have any obligation to): (a) incur
expenses to prepare Collateral for disposition or otherwise complete raw
material or work in process into finished goods or other finished products for
disposition; (b) remove Liens on or any adverse claims against Collateral; (c)
exercise collection remedies against Account Debtors and other persons obligated
on Collateral directly or through the use of collection agencies and other
collection specialists; (d) advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature; (e) contact other persons, whether or not in the same
business as the Loan Parties, for expressions of interest in acquiring all or
any portion of the Collateral; (f) hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature; (g) dispose of Collateral by utilizing internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capability of doing so, or that match buyers and
sellers of assets; (h) dispose of assets in wholesale rather than retail
markets; (i) disclaim disposition warranties; (j) purchase insurance or credit
enhancements to insure Agent against risks of loss, collection or disposition of
Collateral or to provide to Agent a guaranteed return from the collection or
disposition of Collateral; (k) to the extent deemed appropriate by Agent, obtain
the services of brokers, investment bankers, consultants and other professionals
to assist Agent in the collection or disposition of any of the Collateral; or
(l) conduct going out of business sales and otherwise liquidate the
inventory.  The Loan Parties acknowledge that the purpose of this Section 9.3 is
to provide non-exhaustive indications of what actions or omissions by Agent
would fulfill Agent’s duties under the Code or any other relevant jurisdiction
in Agent’s exercise of remedies against the Collateral and that other actions or
omissions by Agent shall not be deemed to fail to fulfill such duties solely on
account of not being indicated in this Section 9.3.  Without limitation upon the
foregoing, nothing contained in this Section 9.3 shall be construed to grant any
rights to the Loan Parties or to impose any duties on Agent that would not have
been granted or imposed by this Agreement or by applicable law in the absence of
this Section 9.3.

 
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9.4.         Remedies Cumulative.  The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative and may be exercised simultaneously.  The Lender Group shall have
all other rights and remedies not inconsistent herewith as provided under the
Code, by law, or in equity.  No exercise by the Lender Group of one right or
remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver.  No delay by the Lender
Group shall constitute a waiver, election, or acquiescence by it.
 
Section 10.           TAXES AND EXPENSES.
 
If any Loan Party fails to pay (prior to delinquency or within the applicable
grace period) any monies (whether taxes, assessments, insurance premiums, or, in
the case of leased properties or assets, rents or other amounts payable under
such leases) due to third Persons (other than any monies that are the subject of
a Permitted Protest), or fails to make any deposits or furnish any required
proof of payment or deposit, all as required under the terms of this Agreement,
then, Agent, in its sole discretion and without prior notice to any Loan Party
(but with subsequent notice to Administrative Borrower), may do any or all of
the following:  (a) make payment of the same or any part thereof, (b) set up
such reserves in Borrowers’ Loan Account as Agent reasonably deems necessary to
protect the Lender Group from the exposure created by such failure, or (c) in
the case of the failure to comply with Section 6.7 hereof, obtain and maintain
insurance policies of the type described in Section 6.7 and take any action with
respect to such policies as Agent deems prudent.  Any such amounts paid by Agent
shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement.  Agent need not inquire as to, or contest the validity of, any such
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
 
Section 11.           WAIVERS; INDEMNIFICATION.
 
11.1.       Demand; Protest; etc.  Each Loan Party waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which any such Borrower may in any way be liable.

 
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11.2.       The Lender Group’s Liability for Collateral.  Each Loan Party hereby
agrees that:  (a) so long as the Lender Group complies with its obligations, if
any, under this Agreement, the Code or the PPSA, Agent shall not in any way or
manner be liable or responsible for:  (i) the safekeeping of the Collateral,
(ii) any loss or damage thereto occurring or arising in any manner or fashion
from any cause, (iii) any diminution in the value thereof, or (iv) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other
Person, and (b) all risk of loss, damage, or destruction of the Collateral shall
be borne by Loan Parties.  Each Loan Party shall remain obligated and liable
under each contract or agreement comprised in the Collateral to be observed or
performed by Loan Parties thereunder.  Neither Agent nor any Lender shall have
any obligation or liability under any such contract or agreement by reason or
arising out of this Agreement or the receipt by Agent or any Lender of any
payment relating to any of the Collateral, not shall Agent or any Lender be
obligated in any manner to perform any of the obligations of the Loan Parties
under or pursuant to any such contract or agreement, to make inquiry as to the
nature or sufficiency of any payment received by Agent or any Lender in respect
of the Collateral or as to the sufficiency of any performance by any party under
any such contract or agreement, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to Agent or to which Agent or any Lender may be entitled to
at any time or times.  Agent’s sole duty with respect to the custody,
safe-keeping and physical preservation of the Collateral in its possession,
under §9-207 of the Code, or otherwise, shall be to deal with such Collateral in
the same manner as Agent deals with similar property for its own account.
 
11.3.       Indemnification.  Each Loan Party shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an “Indemnified Person”) harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, and damages, and all reasonable attorneys fees and
disbursements and other costs and expenses actually incurred in connection
therewith (as and when they are incurred and irrespective of whether suit is
brought), at any time asserted against, imposed upon, or incurred by any of them
(a) in connection with or as a result of or related to the execution, delivery,
enforcement, performance, or administration (including any restructuring or
workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby or the monitoring of the Loan
Parties’ and their Subsidiaries’ compliance with the terms of the Loan
Documents, (b) any actual or proposed use by any Borrower or any of its
Subsidiaries of the proceeds of any of the Advances or Letters of Credit, (c)
the reversal or withdrawal of any provisional credits granted by Agent upon the
transfer of funds from lock box, bank agency, concentration accounts or
otherwise under any cash management arrangements with any Loan Party or any
Subsidiary or in connection with the provisional honoring of funds transfers,
checks or other items, and (d) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the
proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto (all the foregoing, collectively, the
“Indemnified Liabilities”).  The foregoing to the contrary notwithstanding, the
Loan Parties shall have no obligation to any Indemnified Person under this
Section 11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person.  If, and to the extent that the
obligations of the Loan Parties under this Section 11.3 are unenforceable for
any reason, each Loan Party hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law.  This provision shall survive the termination of this Agreement
and the repayment of the Obligations.  If any Indemnified Person makes any
payment to any other Indemnified Person with respect to an Indemnified Liability
as to which the Loan Parties were required to indemnify the Indemnified Person
receiving such payment, the Indemnified Person making such payment is entitled
to be indemnified and reimbursed by the Loan Parties with respect thereto.

 
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THE FOREGOING INDEMNIFICATIONS SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ANY INDEMNIFIED PERSON.
 
No Indemnified Person shall be entitled under this section to receive
indemnification for that portion, if any, of any liabilities and costs which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment.
 
Section 12.           NOTICES.
 
Unless otherwise provided in this Agreement, all notices or demands by Borrowers
or Agent to the other relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) may be
personally delivered, sent by telefacsimile, electronic mail, overnight courier
service or first class (or air) mail and shall be deemed to have been given: (i)
if delivered in person, when delivered, (ii) if delivered by telecopy or
electronic mail, on the date of transmission if transmitted on a Business Day
before 5:00 p.m. (eastern time) or, if not, on the next succeeding Business Day,
provided that, in the case of electronic mail, a copy of such notice is promptly
sent by any other approved means of transmission of notices set forth herein,
(iii) if delivered by overnight courier, on the first Business Day after
delivery to such courier properly addressed, or (iv) if delivered by first class
(or air) mail, four Business Days after deposit in the mail, with postage
prepaid and properly addressed:
 
If to Administrative
 
Borrower for any Loan Party:
WEST MARINE PRODUCTS, INC.
 
500 Westridge Drive
 
Watsonville, California  95076
 
Attn: Thomas Moran, Senior Vice President and Chief
Financial Officer
 
and: Pam Fields, General Counsel
 
Fax No. (831) 768-5489
 
Telephone No: (831) 761-4489

with copies to:
DOW LOHNES PLLC
 
1200 New Hampshire Ave., N.W.
 
Washington, DC  20036
 
Attn:   Timothy J. Kelley
 
Fax No: (202) 776-2222
 
Telephone No.:  (202) 776-2000

 
 
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If to Agent:
WELLS FARGO RETAIL FINANCE, LLC
 
One Boston Place, 18th Floor
 
Boston, Massachusetts  02108
 
Attn:  Joseph Burt
 
Fax No.  (866) 617-3988
 
Telephone No.: (617) 854-7279
   
with copies to:
RIEMER & BRAUNSTEIN LLP
 
Three Center Plaza
 
Boston, Massachusetts, MA 02108
 
Attn:  Kevin J. Simard, Esq.
 
Fax No.  (617) 692-3431
 
Telephone No.: (617) 880-3431

 
Agent and Loan Parties may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other party.
 
Section 13.          CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
 
(a)           THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (OTHER THAN CHOICE-OF-LAW PRINCIPLES AND THE
LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN THE LAWS OF THE STATE OF NEW YORK) AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
 
(b)           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE TRIED AND
LITIGATED IN THE FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW
YORK, NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
LOAN PARTIES’ COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  LOAN PARTIES AND THE
LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).

 
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(c)           LOAN PARTIES AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS.  LOAN PARTIES AND THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
 
(d)           Except as prohibited by law, each party hereto hereby waives any
right it may have to claim or recover in any litigation arising under this
Agreement or any other Loan Document any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.  Each party hereto (a) certifies that no representative, agent or
attorney of any other party hereto has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waivers and (b) acknowledges that such other party has been induced to
enter into this Agreement, the other Loan Documents to which it is a party by,
among other things, the waivers and certifications contained herein.
 
Section 14.          ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
 
14.1.     Assignments and Participations.
 
(a)           Any Lender may assign and delegate to one or more assignees (each
an “Assignee”) that are Eligible Transferees all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$10,000,000, provided that, so long as no Event of Default has occurred and is
continuing, any such assignment shall require the consent of Administrative
Borrower (which consent shall not be unreasonably withheld, delayed or
conditioned); provided, however, that Borrowers and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance, and (iii) the
assignor Lender or Assignee has paid to Agent for Agent’s separate account a
processing fee in the amount of $3,500.  Anything contained herein to the
contrary notwithstanding, the payment of any fees shall not be required and the
Assignee need not be an Eligible Transferee if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of the assigning
Lender.

 
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(b)           From and after the date that Agent notifies the assignor Lender
(with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except with respect to Section 11.3 hereof) and be released from any future
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall effect
a novation between Borrowers and the Assignee; provided, however, that nothing
contained herein shall release any assigning Lender from obligations that
survive the termination of this Agreement, including such assigning Lender’s
obligations under Section 16 and Section 18.9 of this Agreement.
 
(c)           By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows:  (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (5) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
 
(d)           Immediately upon Agent’s receipt of the required processing fee
payment and the fully executed Assignment and Acceptance, this Agreement shall
be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment of the
Commitments arising therefrom.  The Commitment allocated to each Assignee shall
reduce such Commitments of the assigning Lender pro tanto.

 
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(e)           Any Lender may at any time, with the written consent of Agent,
sell to one or more commercial banks, financial institutions, or other Persons
not Affiliates of such Lender (a “Participant”) participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the “Originating Lender”) hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); provided, however, that (i) the Originating Lender shall remain a
“Lender” for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a “Lender” hereunder or under the other Loan
Documents and the Originating Lender’s obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrowers, Agent, and Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender’s rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums; and (v) all amounts
payable by Borrowers hereunder shall be determined as if such Lender had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement.  The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collections of Borrowers or their Subsidiaries, the Collateral, or otherwise in
respect of the Obligations.  No Participant shall have the right to participate
directly in the making of decisions by Lenders among themselves.
 
(f)           In connection with any such assignment or participation or
proposed assignment or participation, a Lender may, subject to Section 18.9,
disclose all documents and information which it now or hereafter may have
relating to Borrowers or Borrowers’ business.

 
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(g)           Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement to secure obligations of such
Lender, including without limitation (a) any pledge or assignment to secure
obligations to any of the twelve Federal Reserve Banks organized under §4 of the
Federal Reserve Act, 12 USC §341 and (b) with respect to any Lender that is a
Fund, to any lender or any trustee for, or any other representative of, holders
of obligations owed or securities issued by such Fund as security for such
obligations or securities or any institutional custodian for such Fund or for
such lender; provided that no such grant shall release such Lender from any of
its obligations hereunder, provide any voting rights hereunder to the secured
party thereof, substitute any such secured party for such Lender as a party
hereto or affect any rights or obligations of Borrowers or Agent hereunder.
 
(h)           If any assignee Lender is an Affiliate of any Borrower, then any
such assignee Lender shall have no right to vote as a Lender hereunder or under
any of the other Loan Documents for purposes of granting consents or waivers or
for purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to Agent pursuant to Section 9, and
the determination of the Required Lenders shall for all purposes of this
Agreement and the other Loan Documents be made without regard to such assignee
Lender’s interest in any of the Obligations.  If any Lender sells a
participating interest in any of the Obligations to a Participant, and such
Participant is a Borrower or an Affiliate of a Borrower, then such transferor
Lender shall promptly notify Agent of the sale of such participation.  A
transferor Lender shall have no right to vote as a Lender hereunder or under any
of the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or modifications to any of the Loan Documents
or for purposes of making requests to Agent pursuant to Section 10 to the extent
that such participation is beneficially owned by a Borrower or any Affiliate of
a Borrower, and the determination of the Required Lenders shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard to
the interest of such transferor Lender in the Obligations to the extent of such
participation.
 
14.2.      Successors.  This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without Lenders’ prior written consent and any prohibited assignment shall be
absolutely void ab initio.  No consent to assignment by Lenders shall release
any Borrower from its Obligations.  A Lender may assign this Agreement and the
other Loan Documents and its rights and duties hereunder and thereunder pursuant
to Section 14.1 hereof and, except as expressly required pursuant to Section
14.1 hereof, no consent or approval by any Borrower is required in connection
with any such assignment.

 
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Section 15.           AMENDMENTS; WAIVERS.
 
15.1.       Amendments and Waivers.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Administrative Borrower (on behalf of all
Borrowers) (and in respect of Section 17, the Guarantors) and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of Lenders
affected thereby and Administrative Borrower (on behalf of all Borrowers) and
acknowledged by Agent, do any of the following:
 
(a)           increase or extend any Commitment of any Lender,
 
(b)          postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
 
(c)           reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
 
(d)          change the percentage of the Commitments that is required to take
any action hereunder,
 
(e)          amend or modify this Section or any other provision of this
Agreement providing for consent or other action by all Lenders,
 
(f)           release Collateral other than as permitted by Section 16.15,
 
(g)          change the definition of “Required Lenders” or “Pro Rata Share”,
 
(h)          contractually subordinate any of Agent’s Liens,
 
(i)           release any Borrower or any other Loan Party from any obligation
for the payment of money owed to any Lender under this Agreement except pursuant
to a transaction expressly permitted under Section 7.4;
 
(j)           change the definition of “Borrowing Base” or the definitions of
“Eligible Accounts”, “Eligible Credit Card Receivables”, “Eligible In-Transit
Inventory”, “Eligible Inventory”, “Maximum Revolver Amount” or any component
definition contained in the foregoing terms; or
 
(k)          amend any of the provisions of this Section 15.1.
 
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document.  The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.

 
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15.2.      Replacement of Holdout Lender.  If any action to be taken by the
Lender Group or Agent hereunder requires the unanimous consent, authorization or
agreement of all Lenders, and a Lender (“Holdout Lender”) fails to give its
consent, authorization or agreement and the Required Lenders shall have
consented thereto, then Administrative Borrower, upon at least 5 Business Days
prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute lenders that have agreed to become a
Lender hereunder or in the case of an existing Lender shall have agreed to
increase such Lender’s Commitment (each, a “Replacement Lender”), and the
Holdout Lender shall have no right to refuse to be replaced hereunder, provided
that (i) such Holdout Lender shall have received payment in an amount equal to
the outstanding principal of its Advances, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents and (ii) such Replacement Lender is an Eligible Transferee.  Such
notice to replace the Holdout Lender shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
 
Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance
Agreement, subject only to the Holdout Lender being repaid its share of the
applicable outstanding Obligations without any premium or penalty of any kind
whatsoever.  If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance.  The replacement of any Holdout Lender shall be
made in accordance with the terms of Section 14.1.  Until such time as the
Replacement Lender shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender’s Pro Rata Share of Advances.
 
15.3.      No Waivers; Cumulative Remedies.  No failure by Agent or any Lender
to exercise any right, remedy, or option under this Agreement or, any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof.  No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated.  No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by the Loan Parties of
any provision of this Agreement.  Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

 
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Section 16.           AGENT; THE LENDER GROUP.
 
16.1.      Appointment and Authorization of Agent.  Each Lender hereby
designates and appoints WFRF as its representative under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes Agent to
execute and deliver each of the other Loan Documents on its behalf and to take
such other action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.  Agent
agrees to act as such on the express conditions contained in this Section
16.  Any provision to the contrary contained elsewhere in this Agreement or in
any other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
“Agent” is for convenience only, that WFRF is merely the representative of
Lenders, and only has the contractual duties set forth herein.  Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents.  Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect:  (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, and related matters, (b) execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections of Borrowers and their Subsidiaries as provided in the Loan
Documents, (e) open and maintain such bank accounts and cash management accounts
as Agent deems necessary and appropriate in accordance with the Loan Documents
for the foregoing purposes with respect to the Collateral and the Collections of
Borrowers and their Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
 
16.2.      Delegation of Duties.  Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that Agent selects as
long as such selection was made without gross negligence or willful misconduct.
 
16.3.      Liability of Agent.  None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of Lenders for any recital,
statement, representation or warranty made by any Loan Party or Affiliate of any
Loan Party, or any officer or director thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the Books or properties of any Loan Party or the books or records or
properties of any of any Loan Party’s Subsidiaries or Affiliates.

 
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16.4.      Reliance by Agent.
 
(a)           Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Loan Parties or counsel to
any Lender), independent accountants and other experts selected by Agent.  Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable.  If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.  Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all Lenders.
 
(b)           For purposes of determining compliance with the conditions set
forth in Section 3.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender, unless
an officer of Agent active upon Borrowers’ account shall have received notice
from such Lender not less than 2 days prior to the Effective Date specifying
such Lender’s objection thereto and such objection shall not have been withdrawn
by notice to Agent to such effect on or prior to the Effective Date.
 
16.5.      Notice of Default or Event of Default.  Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.”  Agent promptly
will notify Lenders of its receipt of any such notice or of any Event of Default
of which Agent has actual knowledge.  If any Lender obtains actual knowledge of
any Event of Default, such Lender promptly shall notify the other Lenders and
Agent of such Event of Default.  Each Lender shall be solely responsible for
giving any notices to its Participants, if any.  Subject to Section 16.4, Agent
shall take such action with respect to such Default or Event of Default as may
be requested by the Required Lenders in accordance with Section 9; provided,
however, that unless and until Agent has received any such request, Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable.

 
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16.6.      Credit Decision.  Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of the Loan
Parties or Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender.  Each Lender represents to
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrowers and any other Person party to a Loan Document, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to
Borrowers.  Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrowers and
any other Person party to a Loan Document.  Except for notices, reports, and
other documents expressly herein required to be furnished to Lenders by Agent,
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of Borrowers and any
other Person party to a Loan Document that may come into the possession of any
of the Agent-Related Persons.

 
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16.7.      Costs and Expenses; Indemnification.  Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, attorneys fees and
expenses, fees and expenses of financial accountants, advisors, consultants, and
appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to the Loan Agreement or
otherwise.  Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of the Borrowing Group received by Agent to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders.  In the event Agent is not reimbursed
for such costs and expenses from the Collections of the Borrowing Group received
by Agent, each Lender hereby agrees that it is and shall be obligated to pay to
or reimburse Agent for the amount of such Lender’s Pro Rata Share
thereof.  Whether or not the transactions contemplated hereby are consummated,
Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrowing Group and without limiting the
obligation of the Borrowing Group to do so), according to their Pro Rata Shares,
from and against any and all Indemnified Liabilities; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting from such Person’s gross
negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder.  Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender’s Pro Rata Share of any costs
or out-of-pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers.  The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
 
16.8.      Successor Agent.  Agent may resign as Agent upon 45 days notice to
the Lenders and Administrative Borrower.  If Agent resigns under this Agreement,
the Required Lenders shall appoint a successor Agent for the Lenders, with, so
long as no Event of Default then exists, the consent of Administrative Borrower,
which consent shall not be unreasonably withheld or delayed.  If no successor
Agent is appointed prior to the effective date of the resignation of Agent,
Agent may appoint, after consulting with the Lenders, a successor Agent.  If
Agent has materially breached or failed to perform any material provision of
this Agreement or of applicable law, the Required Lenders may agree in writing
to remove and replace Agent with a successor Agent from among the Lenders.  In
any such event, upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers, and
duties of the retiring Agent and the term “Agent” shall mean such successor
Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be
terminated.  After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 16 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.  If no
successor Agent has accepted appointment as Agent by the date which is 45 days
following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above.

 
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16.9.      Agent in Individual Capacity.  WFRF and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though WFRF were not Agent hereunder, and, in each case, without notice to or
consent of the other members of the Lender Group.  The other members of the
Lender Group acknowledge that, pursuant to such activities, WFRF or its
Affiliates may receive information regarding Borrowers or their Affiliates and
any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to Lenders, and Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to
them.  The terms “Lender” and “Lenders” include WFRF in its individual capacity.
 
16.10.    Lender in Individual Capacity.  Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group.  The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrowers
or such other Person and that prohibit the disclosure of such information to
Lenders, and Lenders acknowledge that, in such circumstances (and in the absence
of a waiver of such confidentiality obligations, which waiver such Lender will
use its reasonable best efforts to obtain), such Lender not shall be under any
obligation to provide such information to them.  With respect to the Swing
Loans, Swing Lender shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not the
sub-agent of Agent.
 
16.11.    Payments to, and Distributions by, Agent.
 
(a)           A payment by any Loan Party to Agent hereunder or under any of the
other Loan Documents for the account of any Lender shall constitute a payment to
such Lender. Agent agrees promptly to distribute to each Lender such Lender’s
Pro Rata Share of payments received by Agent for the account of Lenders except
as otherwise expressly provided herein or in any of the other Loan Documents.

 
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(b)           If in the reasonable opinion of Agent the distribution of any
amount received by it in such capacity hereunder or under any of the other Loan
Documents might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a court of
competent jurisdiction.  If a court of competent jurisdiction shall adjudge that
any amount received and distributed by Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
 
16.12.    Duties in the Case of Enforcement.  In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, Agent shall, if (a) so requested by the
Required Lenders, and (b) Lenders have provided to Agent such additional
indemnities and assurances against expenses and liabilities as Agent may
reasonably request, proceed to enforce the provisions of this Agreement and the
other Loan Documents authorizing the sale or other disposition of all or any
part of the Collateral and exercise all or any such other legal and equitable
and other rights or remedies as it may have in respect of such Collateral.  The
Required Lenders may direct Agent in writing as to the method and the extent of
any such sale or other disposition, Lenders hereby agreeing to indemnify and
hold Agent, harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided that Agent need
not comply with any such direction to the extent that Agent reasonably believes
Agent’s compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
 
THE FOREGOING INDEMNIFICATIONS SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY AGENT.
 
Agent shall not be entitled under this section to receive indemnification for
that portion, if any, of any liabilities and costs which is proximately caused
by its own individual gross negligence or willful misconduct, as determined in a
final judgment.
 
16.13.    Agent May File Proofs of Claim.
 
(a)           In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial, administrative or like proceeding or any assignment for the
benefit of creditors relative to any Loan Party, Agent (irrespective of whether
the principal of any Advance, or Obligations with respect to the Letters of
Credit shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Agent shall have made any demand on any
Loan Party) shall be entitled and empowered, by intervention in such proceeding,
under any such assignment or otherwise:
 
(1)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Advances, or Obligations in
respect of the Letters of Credit and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lender Group (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lender
Group and their respective agents and counsel and all other amounts due the
Lender Group under Sections 2.10, 2.11 and 11.3) allowed in such proceeding or
under any such assignment; and

 
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(2)           to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
 
(b)           Any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such proceeding or under any such
assignment is hereby authorized by each Lender to make such payments to Agent
and, in the event that Agent shall consent to the making of such payments
directly to Lenders, nevertheless to pay to Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of Agent and its
agents and counsel, and any other amounts due Agent under Sections 2.10, 2.11
and 11.3.
 
(c)           Nothing contained herein shall authorize Agent to consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations owed to such Lender or the
rights of any Lender or to authorize Agent to vote in respect of the claim of
any Lender in any such proceeding or under any such assignment.
 
16.14.    Withholding Taxes.
 
(a)          Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a Loan
Party is resident for tax purposes, or any treaty to which such jurisdiction is
a party, with respect to payments hereunder or under any Note or other Loan
Document shall deliver to Agent and Administrative Borrower, at the time or
times prescribed by applicable law or reasonably requested by Agent or
Administrative Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if
requested by Agent or Administrative Borrower, shall deliver such other
documentation prescribed by applicable law or reasonably requested by Agent or
Administrative Borrower as will enable Agent or Administrative Borrower to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.
 
(b)          Without limiting the generality of Section 16.14(a), on or prior to
the date on which such a Lender becomes a Lender hereunder and from time to time
as reasonably requested in writing by Agent or Administrative Borrower (but only
if such Foreign Lender is legally entitled to do so), each Lender that is a
United States person that is not a “domestic” corporation (as defined in Section
7701 of the IRC) shall provide each of Agent and Administrative Borrower with
one properly completed and duly executed original IRS Form W-9 (or any successor
or other form thereto).
 
(c)          Without limiting the generality of Section 16.14(a), on or prior to
the date on which such Foreign Lender becomes a Lender hereunder and from time
to time as reasonably requested in writing by Agent or Administrative Borrower
(but only if such Foreign Lender is legally entitled to do so), each Lender that
is organized under the laws of a jurisdiction outside the United States shall
provide each of Agent and Administrative Borrower with:

 
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(1)           in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the IRC, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank” within
the meaning of section 881(c)(3)(A) of the IRC, (B) a “10 percent shareholder”
of the Borrower within the meaning of section 881(c)(3)(B) of the IRC, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the IRC
and (y) a properly completed and duly executed original of IRS Form W-8BEN (or
any successor thereto); or
 
(2)           in the case of a Foreign Lender claiming the benefits of an
exemption from, or a reduction of, withholding tax under a United States tax
treaty, a properly completed and duly executed original IRS Form W-8BEN (or any
successor thereto);
 
(3)           in the case of a Foreign Lender claiming interest paid under this
Agreement or under any Note or other Loan Document is exempt from United States
withholding tax because it is effectively connected with a United States trade
or business of such Lender, two properly completed and executed originals of IRS
Form W-8ECI (or any successor thereto); and
 
(4)           such other form or forms as may be required under the IRC or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding tax.
 
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.  Such Lender shall deliver such new forms and documents
prescribed by the IRS upon the expiration or obsolescence of any previously
delivered forms or other documents referred to in this Section, or after the
occurrence of any event requiring a change in the most recent forms or other
documents delivered by such Lender.
 
(d)           If any Lender claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form W-8BEN and such
Lender sells or assigns pursuant to Section 14.1(a) all or part of the
Obligations of Borrowers to such Lender, such Lender agrees to notify Agent and
Administrative Borrower of the percentage amount in which it is no longer the
beneficial owner of Obligations of Borrowers to such Lender.  To the extent of
such percentage amount, Agent and Administrative Borrower will treat such
Lender’s IRS Form W-8BEN as no longer valid.
 
(e)           If any Lender is entitled to a reduction in the applicable
withholding tax, Agent or Administrative Borrower may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction.  If the forms or other documentation
required by subsections (a), (b) or (c) of this Section are not delivered to
Agent and Administrative Borrower, then Agent or Administrative Borrower may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.

 
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(f)           If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent or a Loan Party did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent and Administrative Borrower of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason), such Lender shall
indemnify and hold Agent and such Loan Party harmless for all amounts paid,
directly or indirectly, by Agent or such Loan Party as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to Agent or such Loan Party under this
Section, together with all costs and expenses (including attorneys fees and
expenses).  The obligation of Lenders under this subsection shall survive the
payment of all Obligations and the resignation or replacement of Agent.
 
(g)           Each Lender agrees that, in the event that a Loan Party is
required to indemnify or pay additional amounts to or for the account of any
Lender pursuant to this Section 16.14 or Section 17.6, each Lender shall, upon
prior written notice by Administrative Borrower to Agent and such Lender
requesting the same, use reasonable efforts to designate a new lending office
for funding or booking its Obligations under this Agreement or under any Note or
other Loan Document or to assign its rights and obligations hereunder or
thereunder to another of its offices, branches or affiliates if such designation
or assignment (i) would eliminate or reduce amounts payable pursuant to this
Section 16.14 or Section 17.6 in the future, and (ii) would not subject such
Lender to any unreimbursed costs or expenses, and (iii) would not, in such
Lender’s reasonable judgment, otherwise be materially disadvantageous to such
Lender.
 
(h)           Any Lender that becomes aware that it is entitled to receive a
refund (whether by way of a direct payment or by offset) that such Lender can
reasonably determine is allocable to or resulting from any increase in the
amounts paid by a Loan Party or any indemnification by a Loan Party under this
Section 16.14 or Section 17.6 shall promptly notify such Loan Party of the
availability of such refund and shall, within thirty days after the receipt of a
request from such Loan Party, take reasonable steps to apply for such refund
with Loan Party being responsible for any incremental costs associated with such
refund request.  If any Lender receives any such refund (as described in the
preceding sentence), so long as no Default or Event of Default has occurred and
is continuing, such Lender shall promptly pay the amount of such refund
(together with any interest received thereon) to such Loan Party; provided,
however, that such Loan Party, upon the request of the applicable Lender, shall
promptly repay the amount paid over to such Loan Party in the event such Lender
is required to repay such refund to the applicable authority.
 
(i)           Each Loan Party agrees to pay its Obligations in U.S. Dollars and
all payments by such Loan Party hereunder or under any other Loan Document to
which it is a party shall be made without set-off or counterclaim and shall be
free and clear of and without deduction for any foreign or domestic Taxes,
compulsory loans, restrictions or conditions of any nature now or hereafter
assessed, imposed or levied by any jurisdiction or any political subdivision
thereof or taxing or other authority therein (but excluding any Excluded Taxes)
unless such Loan Party is required by law to make such deduction or withholding;
provided that, if a Loan Party shall be required by applicable law to deduct any
Taxes from such payments, then the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section), Agent, Lender or Issuing Lender, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made.

 
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(j)           Each Loan Party shall indemnify the Agent-Related Person, the
Lender-Related Persons and each Participant for the full amount of Taxes (other
than Excluded Taxes) imposed by any jurisdiction on amounts payable under
Section 16.14 or Section 17.6 paid by such Agent-Related Person, Lender-Related
Person or Participant, and any liability (including penalties, interest and
expenses, unless such penalties, interest or expenses arose as a result of a
delay by such Agent-Related Person, Lender-Related Person or Participant, as the
case may be) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted.  Any payment pursuant to such
indemnification shall be made within 30 days after the date any Agent-Related
Person, Lender-Related Persons or Participant makes written demand therefor.  A
certificate as to the amount of such payment or liability delivered to the
Borrower by any Agent-Related Person, Lender-Related Persons or Participant
(with a copy to Agent and Administrative Borrower) shall be conclusive absent
manifest error.
 
16.15.    Collateral Matters.
 
(a)           Lenders hereby irrevocably authorize Agent, at its option and in
its sole discretion, to release any Lien on any Collateral or other property of
any Loan Party on which Agent has a Lien (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Administrative Borrower
certifies to Agent that the sale or disposition is permitted under Section 7.4
or Section 7.5 of this Agreement or the other Loan Documents (and Agent may rely
conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Loan Party owned any interest at the
time Agent’s Lien was granted nor at any time thereafter, (iv) constituting
property leased to a Loan Party under a lease that has expired or is terminated
in a transaction permitted under this Agreement or (v) on which Agent has a
recorded Lien but which does not constitute Collateral.  Except as provided
above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of Lenders, or (z) otherwise,
the Required Lenders.  Upon request by Agent or Administrative Borrower at any
time, Lenders will confirm in writing Agent’s authority to release any such
Liens on particular types or items of Collateral pursuant to this Section 16.15;
provided, however, that (1) Agent shall not be required to execute any document
necessary to evidence such release on terms that, in Agent’s opinion, would
expose Agent to liability or create any obligation or entail any consequence
other than the release of such Lien without recourse, representation, or
warranty, and (2) such release shall not in any manner discharge, affect, or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of Borrowers in respect of) all interests retained by
Borrowers, including, the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.

 
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(b)           Agent shall have no obligation whatsoever to any of Lenders to
assure that the Collateral exists or is owned by the applicable Loan Parties or
is cared for, protected, or insured or has been encumbered, or that Agent’s
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent’s own interest in the Collateral in its capacity as
a Lender and that Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing, except as otherwise provided herein.
 
16.16.    Restrictions on Actions by Lenders; Sharing of Payments.
 
(a)           Each Lender agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent after the occurrence and during the
continuance of an Event of Default, set off against the Obligations, any amounts
owing by such Lender to any Loan Party or any deposit accounts of any Loan Party
now or hereafter maintained with such Lender.  Each Lender further agrees that
it shall not, unless specifically requested to do so in writing by Agent, take
or cause to be taken any action, including, the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.
 
(b)           If, at any time or times any Lender shall receive (i) by payment,
foreclosure, set-off, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to the
other Lenders so that such excess payment received shall be applied ratably as
among Lenders in accordance with their Pro Rata Shares; provided, however, that
to the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
 
16.17.    Agency for Perfection.  Agent hereby appoints each other member of the
Lender Group as its agent (and each other member of the Lender Group hereby
accepts such appointment) for the purpose of perfecting Agent’s Liens in assets
which, in accordance with Article 9 of the Code can be perfected only by
possession or control.  Should any other member of the Lender Group obtain
possession or control of any such Collateral, such other member of the Lender
Group shall notify Agent thereof, and, promptly upon Agent’s request therefor
shall deliver possession or control of such Collateral to Agent or in accordance
with Agent’s instructions.

 
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16.18.    Payments by Agent to Lenders.  All payments to be made by Agent to
Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent.  Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, or interest of the Obligations.
 
16.19.    Concerning the Collateral and Related Loan Documents.  Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents.  Each member of the Lender Group agrees that any
action taken by Agent in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all Lenders.
 
16.20.    Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information.  By becoming a party to this Agreement,
each Lender:
 
(a)           is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a “Report” and collectively, “Reports”) prepared by Agent, and
Agent shall so furnish each Lender with such Reports,
 
(b)          expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
 
(c)          expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrowers
and will rely significantly upon the Books, as well as on representations of
Borrowers’ personnel,
 
(d)          agrees to keep all Reports and other material, non-public
information regarding the Loan Parties and their operations, assets, and the
Business Plan in a confidential manner in accordance with Section 18.9, and
 
(e)           without limiting the generality of any other indemnification
provision contained in this Agreement, agrees:  (i) to hold Agent and any such
other Lender preparing a Report harmless from any action the indemnifying Lender
may take or fail to take or any conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender’s participation in, or the indemnifying Lender’s purchase
of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.

 
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In addition to the foregoing:  (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender, (y) to the extent that Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from Borrowers, any Lender may, from time to time,
reasonably request Agent to exercise such right as specified in such Lender’s
notice to Agent, whereupon Agent promptly shall request of Administrative
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Administrative Borrower, Agent promptly
shall provide a copy of same to such Lender, and (z) any time that Agent renders
to Administrative Borrower a statement regarding the Loan Account, Agent shall
send a copy of such statement to each Lender.
 
16.21.    Several Obligations; No Liability.  Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of Agent in its capacity as such, and not by or in favor of Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective
Commitments.  Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender.  Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group.  No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
 
16.22.    Legal Representation of Agent.  In connection with the negotiation,
drafting, and execution of this Agreement and the other Loan Documents, or in
connection with future legal representation relating to loan administration,
amendments, modifications, waivers, or enforcement of remedies, Riemer &
Braunstein LLP (“Riemer”) only has represented and only shall represent WFRF in
its capacity as Agent and as a Lender.  Each other Lender hereby acknowledges
that Riemer does not represent it in connection with any such matters.

 
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Section 17.           GUARANTY
 
17.1.      Guarantees by the Guarantors.  For value received and hereby
acknowledged and as an inducement to the Lenders and Agent to make the Advances,
and the Issuing Lender to issue, extend and renew Letters of Credit for the
account of the Borrowers, each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees (i) the full punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all
Obligations of the Borrowers now or hereafter existing whether for principal,
interest, fees, expenses or otherwise, and (ii) the strict performance and
observance by the Borrowers of all agreements, warranties and covenants
applicable to the Borrowers in this Agreement and the other Loan Documents and
(iii) the obligations of the Borrowers under this Agreement and the other Loan
Documents (such Obligations collectively being hereafter referred to as the
“Guaranteed Obligations”).
 
17.2.      Guarantees Absolute.  The Guarantors guarantee that the Guaranteed
Obligations will be paid strictly in accordance with the terms hereof,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Lenders with
respect thereto.  The liability of the Guarantors under their guarantees of the
Guaranteed Obligations shall be absolute and unconditional irrespective of:
 
(a)          any Loan Party’s lack of authorization, execution, validity or
enforceability of this Agreement or any other Loan Document and any amendment
hereof (with regard to such Guaranteed Obligations), or any other obligation,
agreement or instrument relating thereto (it being agreed by each Guarantor that
its Guaranteed Obligations shall not be discharged prior to the final and
complete satisfaction of all of the Obligations) or any failure to obtain any
necessary governmental consent or approvals or necessary third party consents or
approvals;
 
(b)          any Agent’s or any Lender’s exercise or enforcement of, or failure
or delay in exercising or enforcing, legal proceedings to collect the
Obligations or the Guaranteed Obligations or any power, right or remedy with
respect to any of the Obligations or the Guaranteed Obligations, including (i)
any suspension of any Agent’s or any Lender’s right to enforce any Guarantor’s
Guaranteed Obligations, or (ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed Obligations or
any other amendment or waiver of or any consent to departure from this Agreement
or the other Loan Documents (with regard to such Guaranteed Obligations) or any
other agreement or instrument governing or evidencing any of the Guaranteed
Obligations;
 
(c)          any exchange, release, unenforceability, non-opposability or
non-perfection of any Collateral, or any release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
 
(d)          any change in ownership of any of the Loan Parties;
 
(e)          any acceptance of any partial payment(s) from any of the Loan
Parties;
 
(f)           any insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors, appointment of
a receiver, interim receiver, receiver and manager, monitor or trustee for all
or any part of any Loan Parties’ assets;

 
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(g)          any assignment, participation or other transfer or reallocation, in
whole or in part (whether or not subject to a conversion of an Advance of one
type into an Advance of another type or a conversion from one currency to
another), of any Agent’s or any Lender’s interest in and rights under this
Agreement or any other Loan Document, or of any Agent’s or any Lender’s interest
in the Obligations or the Guaranteed Obligations;
 
(h)          any cancellation, renunciation or surrender of any pledge, guaranty
or any debt instrument evidencing the Obligations or the Guaranteed Obligations;
 
(i)           any Agent’s or any Lender’s vote, claim, distribution, election,
acceptance, action or inaction in any proceeding under the applicable Debtor
Relief Law related to the Obligations or the Guaranteed Obligations; or
 
(j)           any other action or circumstance, other than payment, which might
otherwise constitute a defense available to, or a discharge of, any Borrower in
respect of its Guaranteed Obligations (other than the defense of payment in full
in cash).
 
The guarantees contained in this Section 17 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any Guaranteed
Obligation is rescinded or must otherwise be returned by any Agent or any Lender
upon the insolvency, bankruptcy or reorganization of any Loan Party or
otherwise, all as though such payment had not been made.
 
17.3.      Effectiveness; Enforcement.  The guarantee of the Guarantors
hereunder shall be effective and shall be deemed to be made with respect to each
Advance made to and each Letter of Credit issued for the account of the
Borrowers as of the time it is made, issued or accepted, as applicable.  No
invalidity, irregularity or unenforceability by reason of the applicable Debtor
Relief Law, or any law or order of any government or agency thereof purporting
to reduce, amend or otherwise affect any liability of any Guarantor, and no
defect in or insufficiency or want of powers of any Guarantor or irregular or
improperly recorded exercise thereof, shall impair, affect, be a defense to or
claim against any other Guarantor.  Each guarantee hereunder is a continuing
guarantee and shall (a) survive any termination of this Agreement, and (b)
remain in full force and effect until payment in full of, and performance of,
the Guaranteed Obligations to which such guarantee relates and all other amounts
payable thereunder, all the Commitments shall have expired and been terminated,
all of the Letters of Credit shall have expired or been terminated or which have
been cash collateralized as provided in this Agreement and all lending and other
credit commitments of the Lenders in respect thereof have terminated.  The
guarantee of West Marine Canada under this Agreement is made for the benefit of
Agent and the Lenders and their successors and assigns, and may be enforced from
time to time as often as occasion therefor may arise and without requirement on
the part of Agent or the Lenders first to exercise any rights against the
Borrowers, or to resort to any other source or means of obtaining payment of any
of the Guaranteed Obligations or to elect any other remedy.

 
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17.4.      Waiver.  Each Guarantor hereby renounces the benefits of division and
discussion with respect to their respective guarantees.  Each Guarantor hereby
waives promptness, diligence, protest, notice of protest, all suretyship
defenses, notice of acceptance and any other notice with respect to any of its
Guaranteed Obligations and its guarantee and any requirement that Agent or any
Lender secure, render enforceable or opposable, perfect or protect any security
interest or Lien on any property subject thereto or exhaust any right or take
any action against any Borrower, any Loan Party or any other person or any
Collateral.  Each Guarantor also irrevocably waives, to the fullest extent
permitted by law, all defenses which at any time may be available to it in
respect of its Guaranteed Obligations by virtue of any statute of limitations,
valuation, stay, moratorium law or similar law now or hereinafter in effect.
 
17.5.      Subordination; Subrogation.  Until the payment and performance in
full of all the Obligations, each Guarantor agrees not to exercise and each
Guarantor hereby waives any rights against the other Guarantors as a result of
payment by such Guarantor hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and such Guarantor will not prove any
claim in competition with Agent or any Lender in respect of any payment
hereunder in any proceedings of any nature under the applicable Debtor Relief
Law; no Guarantor will claim any set-off, recoupment or counterclaim against the
other Guarantors in respect of any liability of one Guarantor to the other
Guarantor; and each Guarantor waives any benefit of and any right to participate
in any Collateral which may be held by any Lender or any Agent.  Each Guarantor
agrees that, after the occurrence and during the continuance of any Default or
Event of Default, such Guarantor will not demand, sue for or otherwise attempt
to collect any Indebtedness of the other Loan Parties to such Guarantor until
all of the Obligations of the other Loan Parties shall have been paid in
full.  If, notwithstanding the foregoing sentence, any Guarantor shall collect,
enforce or receive any amounts in respect of the Indebtedness of the other Loan
Parties in violation of the foregoing sentence while any Obligations of the
other Loan Parties are still outstanding, such amounts shall be collected,
enforced and received by such Guarantor as trustee for the Lenders and Agent and
be paid over to Agent, for the benefit of the Lenders and Agent, on account of
the Obligations of such Guarantor without affecting in any manner the liability
of the Guarantors under the other provisions hereof.  The provisions of this
section shall survive the expiration or termination of this Agreement and the
other Loan Documents.
 
17.6.      Payments.  Each Guarantor agrees to pay its Guaranteed Obligations in
U.S. Dollars and all payments by such Guarantor hereunder shall be made without
set-off or counterclaim and shall be free and clear of and without deduction for
any foreign or domestic Taxes, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein (but
excluding any Excluded Taxes) unless such Guarantor is required by law to make
such deduction or withholding, provided that, if a Guarantor shall be required
by applicable law to deduct any Taxes from such payments, then the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
Agent, Lender or Issuing Lender, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made.
 
17.7.      Receipt of Information.
 
Each Guarantor acknowledges and confirms that it itself has established its own
adequate means of obtaining from the other Loan Parties on a continuing basis
all information desired by such Guarantor concerning the financial condition of
the other Loan Parties and that such Guarantor will look to the other Loan
Parties and not to Agent or any Lender in order to keep adequately informed of
changes in the other Loan Parties’ financial condition.
 

 
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Section 18.
GENERAL PROVISIONS.

 
18.1.       Expenses.  Whether or not the transactions contemplated hereby shall
be consummated, the Borrowers jointly and severally agree to pay promptly all
(a) costs or expenses (including taxes, and insurance premiums) required to be
paid by a Borrower or its Subsidiaries under any of the Loan Documents that are
paid, advanced, or incurred by Agent, (b) fees or charges paid or incurred by
Agent in connection with the Lender Group’s transactions with the Loan Parties
or their Subsidiaries, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC and PPSA searches), filing, recording,
publication, appraisal (including periodic collateral appraisals or business
valuations), (c) costs and expenses incurred by Agent in the disbursement of
funds to or for the account of Borrowers or other members of the Lender Group
(by wire transfer or otherwise), (d) charges paid or incurred by Agent resulting
from the dishonor of checks, (e) costs and expenses paid or incurred by Agent,
and after the occurrence and during the continuance of an Event of Default, any
member of the Lender Group, to correct any default or enforce any provision of
the Loan Documents or in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale, or advertising to
sell the Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to audit examinations
of the Books permitted by the Loan Documents, (g) costs and expenses of third
party claims or any other suit paid or incurred by the Lender Group in enforcing
or defending the Loan Documents, (h) costs and expenses (including attorneys
fees) incurred by Agent in advising, structuring, drafting, reviewing,
administering, syndicating, or amending the Loan Documents and the other
instrument mentioned herein, in connection with each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
or the cancellation of any Loan Document upon payment in full in cash of all of
the Obligations or pursuant to any terms of such Loan Document providing for
such cancellation, and (i) Agent’s costs and expenses (including, but not
limited to, attorneys, accountants, consultants, and other advisors fees and
expenses) incurred in terminating, enforcing (including, but not limited to
attorneys, accountants, consultants, and other advisors fees and expenses
incurred in connection with a “workout,” a “restructuring,” or an Insolvency
Proceeding concerning any Loan Party or any Subsidiary of a Loan Party or in
exercising rights or remedies under the Loan Documents), preserving or defending
the Loan Documents, irrespective of whether suit is brought, in the
administration of the Loan Documents after a Default exists, or in taking any
Remedial Action concerning the Collateral (collectively, such fees, costs,
expenses and other liabilities set forth in clauses (a) through (i) above
hereinafter referred to as the “Lender Group Expenses”).
 
18.2.       Effectiveness.  This Agreement shall be binding and deemed effective
when executed by Borrowers, Agent, and each Lender whose signature is provided
for on the signature pages hereof.
 
18.3.       Section Headings.  Headings and numbers have been set forth herein
for convenience only.  Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.

 
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18.4.       Interpretation.  Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under any rule of construction or otherwise.  On the
contrary, this Agreement has been reviewed by all parties and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
 
18.5.       Severability of Provisions.  Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
 
18.6.       Amendments in Writing.  This Agreement only can be amended by a
writing in accordance with Section 15.1.
 
18.7.       Counterparts; Telefacsimile Execution.  This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement.  Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic transmission shall be equally as effective as
delivery of an original executed counterpart of this Agreement.  Any party
delivering an executed counterpart of this Agreement by telefacsimile or other
electronic transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this
Agreement.  The foregoing shall apply to each other Loan Document mutatis
mutandis.
 
18.8.       Revival and Reinstatement of Obligations.  If the incurrence or
payment of the Obligations by any Loan Party or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights, including
provisions of the applicable Debtor Relief Law relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a “Voidable Transfer”), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.

 
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18.9.       Confidentiality.  Agent and Lenders each individually (and not
jointly or jointly and severally) agree that material, non-public information
regarding the Loan Parties and their Subsidiaries, their operations, assets, and
the Business Plan shall be treated by Agent and Lenders in a confidential
manner, and shall not be disclosed by Agent and Lenders to Persons who are not
parties to this Agreement, except:  (a) to attorneys for and other advisors,
accountants, auditors, and consultants to any member of the Lender Group who
have been notified of the confidential nature of such information, (b) to
Subsidiaries and Affiliates of any member of the Lender Group (including the
Bank Product Providers), provided that any such Subsidiary or Affiliate shall
have agreed to receive such information hereunder subject to the terms of this
Section 18.9, (c) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (d) as may be agreed to in advance by
Administrative Borrower or its Subsidiaries or as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process, (e) as
to any such information that is or becomes generally available to the public
(other than as a result of prohibited disclosure by or on behalf of Agent or
Lenders), (f) in connection with any assignment, prospective assignment, sale,
prospective sale, participation or prospective participations, or pledge or
prospective pledge of any Lender’s interest under this Agreement, provided that
any such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall have
agreed in writing to receive such information hereunder subject to the terms of
this Section, and (g) in connection with any litigation or other adversary
proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents.  The provisions of this Section 18.9
shall survive for 2 years after the payment in full of the Obligations.
 
18.10.     Integration.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
 
18.11.     West Marine Products as Agent for Borrowers.  Each Borrower hereby
irrevocably appoints West Marine Products as the borrowing agent and
attorney-in-fact for all Borrowers (the “Administrative Borrower”) which
appointment shall remain in full force and effect unless and until Agent shall
have received prior written notice signed by each Borrower that such appointment
has been revoked and that another Borrower has been appointed Administrative
Borrower.  Each Borrower hereby irrevocably appoints and authorizes
Administrative Borrower (i) to provide Agent with all notices with respect to
Advances and Letters of Credit obtained for the benefit of any Borrower and all
other notices and instructions under this Agreement and (ii) to take such action
as Administrative Borrower deems appropriate on its behalf to obtain Advances
and Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement.  It is
understood that the handling of the Loan Account and Collateral of Borrowers in
a combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing powers
of Borrowers in the most efficient and economical manner and at their request,
and that Lender Group shall not incur liability to any Borrower as a result
thereof.  Each Borrower expects to derive benefit, directly or indirectly, from
the handling of the Loan Account and the Collateral in a combined fashion since
the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group.  To induce the Lender Group to
do so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify each member of the Lender Group and hold each member of the
Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third
party whosoever, arising from or incurred by reason of (a) the handling of the
Loan Account and Collateral of Borrowers as herein provided, (b) the Lender
Group’s relying on any instructions of Administrative Borrower, or (c) any other
action taken by the Lender Group hereunder or under the other Loan Documents,
except that Borrowers will have no liability to the relevant Agent-Related
Person or Lender-Related Person under this Section 18.11 with respect to any
liability that has been finally determined by a court of competent jurisdiction
to have resulted from the gross negligence or willful misconduct of such
Agent-Related Person or Lender-Related Person, as the case may be.

 
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18.12.     Judgment Currency; Contractual Currency.
 
(a)           If, for the purpose of obtaining or enforcing judgment against any
Loan Party in any court in any jurisdiction, it becomes necessary to convert
into any other currency (such other currency being hereinafter in this
Section 18.12 referred to as the “Judgment Currency”) an amount due under any
Loan Document in any currency (the “Obligation Currency”) other than the
Judgment Currency, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding (i) the date of actual
payment of the amount due, in the case of any proceeding in the courts of any
jurisdiction that will give effect to such conversion being made on such date,
or (ii) the date on which the judgment is given, in the case of any proceeding
in the courts of any other jurisdiction (the applicable date as of which such
conversion is made pursuant to this Section 18.12 being hereinafter referred to
as the “Judgment Conversion Date”).
 
(b)           If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 18.12(a), there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of actual receipt
for value of the amount due, the applicable Borrower shall pay such additional
or lesser amount as may be necessary to ensure that the amount actually received
in the Judgment Currency, when converted at the rate of exchange prevailing on
the date of payment, will produce the amount of the Obligation Currency which
could have been purchased with the amount of the Judgment Currency stipulated in
the judgment or judicial order at the rate of exchange prevailing on the
Judgment Conversion Date.  Any amount due from a Borrower under this
Section 18.12(b) shall be due as a separate debt and shall not be affected by
judgment being obtained for any other amounts due under or in respect of any of
the Loan Documents.
 
(c)           The term “rate of exchange” in this Section 18.12 means the rate
of exchange at which Agent would, on the relevant date at or about 12:00 p.m.
(New York, New York time), be able to sell the Obligation Currency against the
Judgment Currency to prime banks.
 
(d)           Any amount received or recovered by Agent or any Lender in respect
of any sum expressed to be due to them (whether for itself or as trustee for any
other person) from any Loan Party under this Agreement or under any of the other
Loan Documents in a currency other than the currency (the “Contractual
Currency”) in which such sum is so expressed to be due (whether as a result of,
or from the enforcement of, any judgment or order of a court or tribunal of any
jurisdiction, the winding-up of a Loan Party or otherwise) shall only constitute
a discharge of such Loan Party to the extent of the amount of the contractual
currency that such Agent or Lender is able, in accordance with its usual
practice, to purchase with the amount of the currency so received or recovered
on the date of receipt or recovery (or, if later, the first date on which such
purchase is practicable).  If the amount of the Contractual Currency so
purchased is less than the amount of the Contractual Currency so expressed to be
due, such Loan Party shall indemnify such Agent and Lender against any loss
sustained by it as a result, including the cost of making any such purchase
other than losses resulting from the gross negligence or willful misconduct of
the Person seeking such indemnification, and if the amount of the Contractual
Currency so purchased is more than the amount of the Contractual Currency so
expressed to be due, Agent or such Lender shall reimburse the Borrowers for such
excess.

 
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18.13.     USA Patriot Act.  Each Lender that is subject to the Act (as
hereinafter defined) and Agent (for itself and not on behalf of any Lender)
hereby notifies Borrowers that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain verify and record information that identified
Borrowers, which information includes the name and address of Borrowers and
other information that will allow such Lender or Agent, as applicable, to
identify Borrowers in accordance with the Act.
 
18.14.     Amendment and Restatement of Existing Loan Agreement.  Upon
satisfaction of the conditions precedent to the effectiveness of this Agreement,
(a) this Agreement shall amend and restate the Existing Loan Agreement in its
entirety (except to the extent that definitions from the Existing Loan Agreement
are incorporated herein by reference) and (b) the rights and obligations of the
parties under the Existing Loan Agreement shall be subsumed within, and be
governed by, this Agreement; provided, however, that the Borrowers hereby agree
that (i) the Letter of Credit Usage under, and as defined in, the Existing Loan
Agreement on the Effective Date shall be Letter of Credit Usage hereunder, and
(ii) all Obligations of the Loan Parties under, and as defined in, the Existing
Loan Agreement shall remain outstanding, shall constitute continuing Obligations
secured by the Collateral, and this Agreement shall not be deemed to evidence or
result in a novation or repayment and reborrowing of such Obligations.
 
[Signature pages to follow.]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 

 
Borrowers:
     
WEST MARINE PRODUCTS, INC., a California corporation
       
By:
/s/ Thomas R. Moran
 
Name: Thomas R. Moran
 
Title: SVP/CFO
     
WEST MARINE PUERTO RICO, INC., a California corporation
       
By:
/s/ Thomas R. Moran
 
Name: Thomas R. Moran
 
Title: SVP/CFO
     
W MARINE MANAGEMENT COMPANY, INC., a California corporation
       
By:
/s/ Thomas R. Moran
 
Name: Thomas R. Moran
 
Title: SVP/CFO

(Signature Page to Loan Agreement)

 
 

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

 

 
Parent and a Guarantor:
     
WEST MARINE, INC., a Delaware corporation
     
By:
/s/ Thomas R. Moran
 
Name: Thomas R. Moran
 
Title: SVP/CFO
     
West Marine Canada and a Guarantor:
     
WEST MARINE CANADA CORP., a Nova Scotia unlimited company
     
By:
/s/ Thomas R. Moran
 
Name: Thomas R. Moran
 
Title: SVP/CFO

(Signature Page to Loan Agreement)

 
 

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

 

 
WELLS FARGO RETAIL FINANCE, LLC, as Agent and as a Lender
     
By:
 /s/ Joseph Burt
 
Name:  Joseph Burt
 
Title:    Director
     
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Issuing Lender
       
By:
 /s/ Joseph Burt
 
Name:  Joseph Burt
 
Title:    Director

 
(Signature Page to Loan Agreement)

 
 

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

 

 
BANK OF AMERICA, N.A., as a Lender
     
By:
 /s/ Richard D. Hill, Jr.
 
Name: Richard D. Hill, Jr.
 
Title: Managing Director

 
(Signature Page to Loan Agreement)

 
 

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UNION BANK, N.A., as a Lender
     
By:
 /s/ Theresa L. Rocha
 
Name: Theresa L. Rocha
 
Title: Vice President

(Signature Page to Loan Agreement)

 
 

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

 

Exhibit A-1

FORM OF
ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (this “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert Name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Loan Agreement identified below (as amended,
amended and restated or otherwise modified and in effect from time to time, the
“Loan Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part
of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Loan Agreement, as of the Effective Date inserted by the
Agent as contemplated below, (a) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Loan Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, any letters of credit, guarantees, and swingline
loans included in such facilities) and (b) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Loan Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (a)
above (the rights and obligations sold and assigned pursuant to clauses (a) and
(b) above being referred to herein collectively as, the “Assigned
Interest”).  Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Acceptance, without
representation or warranty by the Assignor.

1.
Assignor:
___________________________
     
2.
Assignee:
___________________________
     
3.
Borrowers:
West Marine Products, Inc., West Marine Puerto Rico, Inc. and W. Marine
Management Company, Inc.
     
4.
Agent:
Wells Fargo Retail Finance, LLC,
 
 
as Agent under the Loan Agreement
     
5.    
Loan Agreement:     
Amended and Restated Loan and Security Agreement dated as of August 23, 2010, as
amended, amended and restated or otherwise modified and in effect from time to
time, among West Marine Products, Inc., each of the Persons identified as
borrowers on the signature pages thereof, each of the Persons identified as
guarantors on the signature pages thereof, the Lenders party thereto and Wells
Fargo Retail Finance, LLC, as Agent.

 
 

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

 

6.  
Assigned Interest:

Aggregate Amount of
Commitment/
Advances for all
Lenders
 
Amount of
Commitment/
Advances
Assigned
   
Amount of
Accordion
Commitment
   
Percentage Assigned
of Commitment/
Advances1
 
$
  $       $           %

Effective Date:   ______________

The terms set forth in this Assignment and Acceptance are hereby agreed to by:
 

 
ASSIGNOR
         
[Name of Assignor]
           
By:
     
       
Title:
           
ASSIGNEE
          
[Name of Assignee]
           
By:
   
       
Title:
 

Consented to and Accepted:

Wells Fargo Retail Finance, LLC, as Agent

By:
     
Title:
 

 

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

1 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 
 

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

 

West Marine Products Inc., as Administrative Borrower2

By:
        
Title:
 

 

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

2 As set forth in Section 14.1 of the Loan Agreement, Administrative Borrower
consent is only required so long as no Event of Default has occurred and is
continuing.

 
 

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

 
 
ANNEX 1

Amended and Restated Loan and Security Agreement dated as of August 23, 2010 (as
amended, amended and restated or otherwise modified and in effect from time to
time, the “Loan Agreement”) among West Marine Products, Inc., each of the
Persons identified as borrowers on the signature pages thereof, each of the
Persons identified as guarantors on the signature pages thereof, the Lenders
party thereto and Wells Fargo Retail Finance, LLC, as Agent
 
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE

1.      Representations and Warranties.

1.1    Assignor.  The Assignor: (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan
Agreement or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrowers, any of
their Subsidiaries or Affiliates, or any other Person obligated in respect of
any Loan Document or (iv) the performance or observance by the Borrowers, any of
their Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

1.2.   Assignee.  The Assignee: (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Loan Agreement, (ii) it meets all
requirements of an Eligible Transferee under the Loan Agreement (subject to
receipt of such consents or notice obligations as may be required under the Loan
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Loan Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, and
(iv) it has received a copy of the Loan Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 6.3 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Lender; and (b) agrees that (i) it will, independently
and without reliance on the Agent, the Assignor or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 
 

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

 

2.      Payments.  From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to, on or after the Effective Date.  The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.

3.      General Provisions.  This Assignment and Acceptance shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Acceptance may be executed in any
number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance.  This
Assignment and Acceptance shall be determined under, governed by, and construed
in accordance with the laws of the State of New York (other than choice-of-law
principles and the law of such State that would require the application of the
laws of a jurisdiction other than the laws of the State of New York).

 
 

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

 
Exhibit B-1

FORM OF
BORROWING BASE CERTIFICATE
 
__________ __, ____

The undersigned, West Marine Products, Inc. (“West Marine Products”), hereby
certifies pursuant to the Amended and Restated Loan and Security Agreement,
dated as of August 23, 2010 (as amended, amended and restated or otherwise
modified and in effect from time to time, the “Loan Agreement”), among West
Marine Products, each of the Persons identified as borrowers on the signature
pages thereof (such Persons, together with West Marine Products, individually a
“Borrower” and, collectively, the “Borrowers”), each of the Persons identified
as guarantors on the signature pages thereof, the financial institutions from
time to time party to the Loan Agreement as Lenders thereunder (the “Lenders”),
Wells Fargo Bank, National Association, as Issuing Lender, and Wells Fargo
Retail Finance, LLC, as Agent for the Lenders (the “Agent”) that (a) the
information set forth in this Borrowing Base Certificate was true and correct as
of the last day of the period specified herein, (b) this Borrowing Base
Certificate has been prepared in accordance with the applicable provisions of
the Loan Agreement and the various components thereof, and (c) except as set
forth on Schedule 1 attached hereto, as of the date of this Borrowing Base
Certificate, there exists no Default or Event of Default or condition which
would, with either or both the giving of notice or the lapse of time, result in
a Default or Event of Default.

Except as otherwise specified in this Borrowing Base Certificate, capitalized
terms used herein without definition have the same meanings herein as in the
Loan Agreement.

[Remainder of Page Intentionally Left Blank]
 

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

 
IN WITNESS WHEREOF, the undersigned officer has executed this Borrowing Base
Certificate as of the date first written above.

 
WEST MARINE PRODUCTS, INC., as
Administrative Borrower
     
By:____________________________________
 
Name
 
Title:

 

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SCHEDULE 1

 

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

West Marine Products, Inc.
Certificate #:
0
Borrowing Base Certificate
Date:       
__/__/2010      
Fax to Phil Carmichael @ (617) 523-4027
     

BORROWING BASE CALCULATION
                                           
ACCOUNTS RECEIVABLE
                                             
Eligible Credit Card Receivables
As of:
 
__/__/2010
        $ -  
Advance Rate
              85.0 %        
Credit Card Receivables Availability
                    -                              
Wholesale Receivables
As of:
 
__/__/2010
            0  
Less: Ineligible Wholesale A/R
As of:
 
__/__/2010
            0  
Less: Dilution @ 15% of Wholesale A/R
As of:
 
__/__/2010
    15.0 %     0  
Eligible Wholesale Receivables capped @ $10,000M
            10,000       0  
Advance Rate
              85.0 %        
Wholesale Receivables Availability
                    0                              
Total Accounts Receivable Availability
                  0                              
INVENTORY
                                                     
Beginning Perpetual Inventory Balance
As of:
 
__/__/2010
            -                              
Add: Purchases
                      -  
Add: Other adjustments
                      0  
Total Inventory additions
                      0                              
Total Inventory for sale
                      -  
Less: Cost of Sales
                      0  
Add: Returns
                      0  
Less: Other adjustments
                      0  
Total Reductions
                      -                              
Ending Inventory
As of:
 
__/__/2010
            -                              
Shrink Allowance
As of:
 
__/__/2010
            -  
Shrink Base (Fixed @ $250k)
As of:
 
__/__/2010
            (250 )
Ineligible Inventory
As of:
 
__/__/2010
            0  
Total Ineligible Inventory
                      (250 )                            
Eligible Inventory
As of:
 
__/__/2010
            (250 )
Advance Rate
                      0.0 %
Total Inventory Availability
                      0                              
Total Collateral Availability
                      0                              
Availability Reserves:
                     
Gift Certificates @ 50% of total
As of:
 
__/__/2010
    50.0 %     -  
Merchandise Credits @ 50% of total
As of:
 
__/__/2010
    50.0 %     -  
Landlord Lien States (VA, WA, PA)
As of:
 
__/__/2010
            -  
Customer Deposits
As of:
 
__/__/2010
            -  
West Advantage Reserves (Marked up 60% of GL Balance), @ 50% of total
As of:
 
__/__/2010
    60.0 %     -  
Texas Ad Valorem Assessment
As of:
 
__/__/2010
            -  
Gift Certificates Class Action Settlement @ 50% of total
          50.0 %     -  
Warranties - Amount due to 3rd parties
                  -  
Boat US Memberships - Amount due to 3rd parties
                  -  
Texas Sales Taxes
                  -  
Canadian Sales Taxes
                  -  
Litigation Settlement - Lawsuits that have been settled but not covered by
insurance
                -                          
Total Availability Reserves
                      0                              
Borrowing Base
                    $ 0                              
Minimum Adjusted Availability Requirement (Greater of (i) $7,000,000 or (ii)
10.0% of the Borrowing Base)
                $ 0                          
TOTAL BORROWING BASE Capped at $140,000
                  $ 0                              
(Memo: Suppressed Availability)
                    $ 0                              
Beginning Principal Balance
As of:
 
__/__/2010
            -  
Advances
                      -  
Fees
                      -  
Adjustments
                      -  
Payments
Through:
                -  
Ending Principal Balance
                      -                              
Net Availability prior to today's request
                      -  
Today's advance request
                         
Ending Loan Balance
                      -  
Total L/C's
Documentary:
0     +
Standby:
       
0     =
      -  
Total Obligations
                      -                              
Availability
                      -  

 
The undersigned officer of West Marine Products, Inc. ("Borrower") a Delaware
corporation, represents and warrants that the information set forth above is
true and complete.  The undersigned grants a security interest in the collateral
reflected above to Wells Fargo Retail Finance, LLC.  The Borrower represents and
warrants that (a) said collateral complies with their representations, warrants,
and covenants contained in the Amended and Restated Loan and Security Agreement
between lender and undersigned; and (b) no "Event of Default" (as defined in the
Amended and Restated Loan and Security Agreement ) is presently in existence.
 
Authorized Signer:
 
Thomas R. Moran
Signature:
   
                                                 
WFRF Account Executive:
 
Joseph Burt
Signature:
   
             
NOTES:
         

 
 
Page 1 of 1

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

 
Exhibit L-1

FORM OF LOAN REQUEST/LIBOR NOTICE

Wells Fargo Retail Finance, LLC, as Agent
under the below referenced Loan Agreement
One Boston Place, 18th Floor
Boston, MA 02108
Attn: Joseph Burt

Reference is made to that certain Amended and Restated Loan and Security
Agreement, dated as of August 23, 2010 (as amended, amended and restated or
otherwise modified and in effect from time to time, the “Loan Agreement”), among
West Marine Products, Inc. (“West Marine Products”), each of the Persons
identified as borrowers on the signature pages thereof (such Persons, together
with West Marine Products, individually a “Borrower” and, collectively, the
“Borrowers”), each of the Persons identified as guarantors on the signature
pages thereof, the financial institutions from time to time party to the Loan
Agreement as Lenders thereunder, Wells Fargo Bank, National Association, as
Issuing Lender, and Wells Fargo Retail Finance, LLC, as Agent for the Lenders
(the “Agent”). Capitalized terms used herein without definition shall have the
same meanings as in the Loan Agreement.

By this Loan Request/LIBOR Notice the Administrative Borrower hereby requests
[the Advance specified herein be made to the Borrowers] [the conversion of the
Advances specified herein]:

(1)
The proposed [Borrowing] [conversion] [continuation] is to consist of Advances.

(2)
The Funding Date of the proposed [Borrowing] [conversion] is __________, which
is a Business Day.

(3)
The aggregate amount of the proposed [Borrowing] [conversion] [continuation] is
$_________.

(4)
[The proposed Borrowing is to be comprised of [LIBOR Rate] [Prime Rate] Loans.]
[The Advances are to be converted into or continued as [LIBOR Rate] [Prime Rate]
Loans.]

[(5)
The duration of the Interest Period for the LIBOR Rate Loans included in this
proposed [Borrowing] [conversion] [continuation] shall be [1, 2 or 3] month(s)]

The Borrowers confirm that this Loan Request/LIBOR Notice obligates the
Borrowers to accept the requested [Borrowing] [conversion] [continuation] on
such date.
 

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

 
The Administrative Borrower, for itself and on behalf of the other Loan Parties,
represents and warrants that (i) as of the date hereof and as of the Funding
Date of each Advance requested above, with respect to a new Borrowing requested
hereby and not with respect to any continuation or conversion of existing
Advances, that each representation or warranty contained in or pursuant to any
Loan Document is true and correct in all material respects with the same effect
as if made at and as of the date hereof and as of the Funding Date of such
Advance requested above (except to the extent any representation or warranty
expressly relates to an earlier date), and (ii) no Default or Event of Default
has occurred and is continuing on the date hereof, nor will any thereof occur as
a result of making the requested Advance, continuation or conversion.

 
WEST MARINE PRODUCTS, INC., a California corporation, as Administrative
Borrower, on behalf of itself and each of the other Loan Parties.
     
By: __________________________
 
Name: ________________________
 
Title: _________________________

Acknowledged by:

WELLS FARGO RETAIL FINANCE, LLC,
as Agent

By: __________________________
 
Name: ________________________
 
Title: _________________________
 

-2-

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

Exhibit N-1

 
FORM OF NOTE
 
$________________
[Date]

 
FOR VALUE RECEIVED, the undersigned, West Marine Products, Inc., a California
corporation, West Marine Puerto Rico, Inc., a California corporation, and W.
Marine Management Company, Inc., a California corporation (collectively the
“Borrowers”), hereby jointly and severally promise to pay to the order of
_____________________________________ (“Lender”), at the Agent’s (as defined
below) office at One Boston Place, 18th Floor, Boston, Massachusetts, 02108:
 
(a)           prior to or on the Maturity Date the principal amount of [_____]
Dollars ($[____]) or, if less, the aggregate unpaid principal amount of Advances
made by the Lender to the Borrowers pursuant to that certain Amended and
Restated Loan and Security Agreement, dated as of August 23, 2010 (as amended,
amended and restated or otherwise modified and in effect from time to time, the
“Loan Agreement”), among the Borrowers, each of the Persons identified as
guarantors on the signature pages thereof, the Lender and the other financial
institutions from time to time party thereto (collectively, the “Lenders”) and
Wells Fargo Retail Finance, LLC, as agent for the Lenders (the “Agent”);
 
(b)           the principal outstanding hereunder from time to time at the times
provided in the Loan Agreement; and
 
(c)           interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the Maturity Date at the
times and at the rates provided in the Loan Agreement.
 
This Note evidences borrowings under and has been issued by the Borrowers in
accordance with the terms of the Loan Agreement.  The Lender and any holder
hereof is entitled to the benefits of the Loan Agreement and the other Loan
Documents, and may enforce the agreements of the Borrowers contained therein,
and any holder hereof may exercise the respective remedies provided for thereby
or otherwise available in respect thereof, all in accordance with the respective
terms thereof.  All capitalized terms used in this Note and not otherwise
defined herein shall have the same meanings herein as in the Loan Agreement.
 
The Borrowers irrevocably authorize the Lender to make or cause to be made, at
or about the time of each Advance or at the time of receipt of any payment of
principal of this Note, an appropriate notation on the grid attached to this
Note, or the continuation of such grid, or any other similar record, including
computer records, reflecting the making of such Advances or (as the case may be)
the receipt of such payment.  The outstanding amount of the Advances set forth
on the grid attached to this Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by the Lender with
respect to any Advances shall be prima facie evidence of the principal amount
thereof owing and unpaid to the Lender, but the failure to record, or any error
in so recording, any such amount on any such grid, continuation or other record
shall not limit or otherwise affect the obligation of the Borrowers hereunder or
under the Loan Agreement to make payments of principal of and interest on this
Note when due.

 

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

 
 
The Borrowers have the right in certain circumstances and the obligation under
certain other circumstances to prepay the whole or part of the principal of this
Note on the terms and conditions specified in the Loan Agreement.
 
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Loan Agreement.
 
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
 
The Borrowers and every endorser and guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and assent to any extension or postponement
of the time of payment or any other indulgence, to any substitution, exchange or
release of collateral and to the addition or release of any other party or
person primarily or secondarily liable.
 
THIS NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (OTHER THAN CHOICE-OF-LAW PRINCIPLES AND THE LAW OF SUCH STATE THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN THE LAWS
OF THE STATE OF NEW YORK).  THE BORROWERS AGREE THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR ANY FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN §12 OF THE LOAN
AGREEMENT.  THE BORROWERS HEREBY WAIVE ANY OBJECTION THAT THEY MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT FORUM.
 
[Remainder of Page Intentionally Left Blank]

 
-2-

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

 
 
IN WITNESS WHEREOF, each of the undersigned has caused this Note to be signed in
its corporate name by its duly authorized officer as of the day and year first
above written.

 
WEST MARINE PRODUCTS, INC.,
 
a California corporation
     
By:
     
Name:
   
Title:
     
WEST MARINE PUERTO RICO, INC.,
 
a California corporation
     
By:
     
Name:
   
Title:
     
W MARINE MANAGEMENT COMPANY,
INC.,  a California corporation
     
By:
     
Name:
   
Title:

 
(Note Signature Page)
 
 

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

 

Date
 
Amount of
Advance
   
Amount of
Principal Paid or
Prepaid
   
Balance of
Principal
Unpaid
   
Notation Made
By:
                                                                               
                                                                               
           

 
 

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

 
 
Schedule A-1
Agent’s Account
 
An account at a bank designated by Agent from time to time as the account into
which Borrowers shall make all payments to Agent for the benefit of the Lender
Group and into which the Lender Group shall make all payments to Agent under
this Agreement and the other Loan Documents; unless and until Agent notifies
Administrative Borrower and the Lender Group to the contrary, Agent’s Account
shall be that certain deposit account bearing account number 4945088607 and
maintained by Agent with Wells Fargo, ABA 121-000-248.

 
 

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

 

Schedule B-1
 
Approved Brokers and Forwarders
 
DHL Global Forwarding (Canada) Inc. (f/k/a DHL Danzas Air & Ocean)
 
MIQ, LLC (d/b/a Meridian IQ)
 
FedEx Trade Networks Transport & Brokerage, Inc.

 
2

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

 
 
Schedule C-1
Commitments
 
ADVANCES
 
Lender
 
Commitment
 
Wells Fargo Retail Finance, LLC
  $ 85,000,000  
Union Bank, N.A.
  $ 30,000,000  
Bank of America, N.A.
  $ 25,000,000  
TOTAL:
  $ 140,000,000  

 
 

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

 

Schedule D-1
Designated Account
 
An account number 4171269558 of Administrative Borrower maintained with
Administrative Borrower’s Designated Account Bank, or such other deposit account
of Administrative Borrower (located within the United States) that has been
designated as such, in writing, by Administrative Borrower to Agent.
 
“Designated Account Bank” means Wells Fargo Central Coast RCBO, whose office is
located at 65 W. Alisal Street, Salinas, California  93901, and whose ABA number
is 121-000-248 with respect to Agent.

 
 

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

 

Schedule P-1
Permitted Liens
 
The Liens described on the financing statements listed on the following UCC
Summary Report.
 
UCC SUMMARY REPORT
 
Debtor
Searched
 
Juris.
 
Filing
Office
 
Sec'd Party
 
Filing
Type
 
File Date
 
File
Number
                         
West Marine, Inc.
 
DE
 
SOS
 
OceanGrafix, LLC
 
UCC-1
 
3/4/2009
 
90685732

 
 

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

 
[schedule211pg01.jpg]
 

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

 
Schedule 5.4
Eligible Inventory Locations
 
Owned Or Leased West Marine Products, Inc. Stores
 
#
 
ST
 
LOCATION
 
ADDRESS
 
CITY
 
ZIP
 
PHONE#
                         
540
 
AK
 
West Marine
 
8401 Dimond D Blvd
 
Anchorage
 
99515
 
(907) 349-5299
1260
 
AK
 
West Marine
 
415 Alice Loop
 
Sitka
 
99835
 
(907) 747-2997
172
 
AL
 
West Marine
 
3747 Government Blvd
 
Mobile
 
36693
 
(251) 661-6244
542
 
AL
 
West Marine
 
25907 Canal Road
 
Orange Beach
 
36561
 
(251) 981-2750
1240
 
AL
 
West Marine
 
1723 Montgomery Hwy, Ste 111
 
Birmingham
 
35244
 
(205) 988-8909
1749
 
AL
 
West Marine
 
3654 Airport Blvd.
 
Mobile
 
36608
 
(251) 414-5447
5509
 
AL
 
West Marine
 
5004 Dauphin Island Parkway
 
Mobile
 
36605-9644
 
(251) 471-4006
515
 
AZ
 
West Marine
 
1628-1 East Southern Ave
 
Tempe
 
85282
 
(480) 897-6300
523
 
AZ
 
West Marine
 
4239 West Bell Rd
 
Phoenix
 
85053
 
(602) 564-6680
1266
 
AZ
 
West Marine
 
1517 Industrial Blvd
 
Lake Havasu City
 
86403
 
(928) 505-4444
2
 
CA
 
West Marine
 
2200 Livingston St
 
Oakland
 
94606
 
(510) 532-5230
3
 
CA
 
West Marine
 
295 Harbor Dr
 
Sausalito
 
94965
 
(415) 332-0202
4
 
CA
 
West Marine
 
2450 17th Ave
 
Santa Cruz
 
95062
 
(831) 476-1800
5
 
CA
 
West Marine
 
608 Dubuque Ave
 
S. San Francisco
 
94080
 
(650) 873-4044
6
 
CA
 
West Marine
 
1810 Field Ave
 
Stockton
 
95203
 
(209) 464-2922
7
 
CA
 
West Marine
 
9500 Micron Ave #116
 
Sacramento
 
95827-2618
 
(916) 366-3300
8
 
CA
 
West Marine
 
375-C Saratoga Ave
 
San Jose
 
95129
 
(408) 246-1147
11
 
CA
 
West Marine
 
4750 Admiralty Wy
 
Marina Del Rey
 
90292
 
(310) 823-5357
12
 
CA
 
West Marine
 
251 Marina Dr
 
Long Beach
 
90803
 
(562) 598-9400
13
 
CA
 
West Marine
 
203 N Harbor Blvd
 
San Pedro
 
90731
 
(310) 833-0717
14
 
CA
 
West Marine
 
900 West Coast Hwy
 
Newport Beach
 
92663
 
(949) 645-1711
15
 
CA
 
West Marine
 
34235 Pacific Coast Hwy
 
Dana Point
 
92629
 
(949) 493-4455
16
 
CA
 
West Marine
 
1250 Rosecrans
 
San Diego
 
92106
 
(619) 225-8844
17
 
CA
 
West Marine
 
4051 E Main St
 
Ventura
 
93003
 
(805) 654-8233
19
 
CA
 
West Marine
 
34467 Golden Lantern
 
Dana Point
 
92629
 
(949) 240-8200
20
 
CA
 
West Marine
 
2040 North Tustin
 
Orange
 
92865
 
(714) 279-9700
122
 
CA
 
West Marine
 
4645 Century Blvd
 
Pittsburg
 
94565-7107
 
(925) 778-1560
127
 
CA
 
West Marine
 
730 Buena Vista Avenue
 
Alameda
 
94501-2156
 
(510) 521-4865
150
 
CA
 
West Marine
 
630 Bay Blvd
 
Chula Vista
 
91910
 
(619) 422-1904
191
 
CA
 
West Marine
 
2607 Bechelli Lane
 
Redding
 
96002
 
(530) 226-1400
546
 
CA
 
West Marine
 
501 Canal Blvd # D
 
Richmond
 
94804
 
(510) 965-9922
557
 
CA
 
West Marine
 
26-A South Calle Cesar Chavez
 
Santa Barbara
 
93103-3641
 
(805) 564-1005
573
 
CA
 
West Marine
 
2620-B Ingraham Street
 
San Diego
 
92109
 
(619) 223-1145
577
 
CA
 
West Marine
 
2024 Del Monte, Suite A
 
Monterey
 
93940-3740
 
(831) 375-1870
583
 
CA
 
West Marine
 
4445 Granite Dr., Suite 501
 
Rocklin
 
95677-2157
 
(916) 632-9140
588
 
CA
 
West Marine
 
521 Contra Costa Blvd
 
Pleasant Hill
 
94523-1203
 
(925) 288-1696
616
 
CA
 
West Marine Hub
 
1250 Rosecrans
 
San Diego
 
92106
 
(619) 225-8844

 
Page 1 of Schedule 5.4

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

 
 
1214
 
CA
 
West Marine
 
2885 Santa Rosa Ave, Suite C
 
Santa Rosa
 
95407
 
(707) 579-4076
1215
 
CA
 
West Marine
 
1719 Oceanside Blvd
 
Oceanside
 
92054
 
(760) 435-9290
1224
 
CA
 
West Marine
 
10081 Indiana Ave, Ste A-3
 
Riverside
 
92503
 
(951) 354-5282
1235
 
CA
 
West Marine
 
3334 W Shaw Ave
 
Fresno
 
93711
 
(559) 271-1490
1244
 
CA
 
West Marine
 
7 Pacific Coast Hwy
 
Hermosa Beach
 
90254
 
(310) 374-5242
1263
 
CA
 
West Marine
 
1119 Industrial Rd., ste no. 2
 
San Carlos
 
94070
 
(650) 593-2070
1268
 
CA
 
West Marine
 
727 W Channel Islands Blvd
 
Port Hueneme
 
93041
 
(805) 382-2223
1731
 
CA
 
West Marine
 
16390 Pacific Coast Hwy.
 
Huntington Beach
 
92649
 
(562) 592-5302
1733
 
CA
 
West Marine
 
3717 Rosecrans Street
 
San Diego
 
92110
 
(619) 298-3020
1778
 
CA
 
West Marine
 
377 East Coast Highway
 
Newport Beach
 
92660
 
(949) 673-0028
5541
 
CA
 
Concept
 
132C Harbor Wy.
 
Santa Barbara
 
93109
 
(805) 564-1334
193
 
CO
 
West Marine
 
6148 East County Line Rd
 
Highlands Ranch
 
80126
 
(303) 221-4656
45
 
CT
 
West Marine
 
266 E Main St. #A-11
 
Clinton
 
06413
 
(860) 664-4060
87
 
CT
 
West Marine
 
14 B Clara Dr
 
Mystic
 
06355
 
(860) 536-1455
89
 
CT
 
West Marine
 
470 Bridgeport Ave #U-Z
 
Milford
 
06460
 
(203) 877-4004
93
 
CT
 
West Marine
 
401 Shippan Ave
 
Stamford
 
06902
 
(203) 969-7727
103
 
CT
 
West Marine
 
1201 Kings Hwy East
 
Fairfield
 
06824
 
(203) 330-1100
129
 
CT
 
West Marine
 
33 Business Park Dr
 
Branford
 
06405
 
(203) 481-3465
556
 
CT
 
West Marine
 
351 N. Frontage Rd., Unit D-1
 
New London
 
06320
 
(860) 444-8755
621
 
CT
 
West Marine Hub
 
33 Business Park Dr
 
Branford
 
06405
 
(203) 481-3465
1203
 
CT
 
West Marine
 
99 Water Street
 
Norwalk
 
06854-3012
 
(203) 854-6545
1211
 
CT
 
West Marine
 
940 Boston Post Road
 
Old Saybrook
 
06475-2128
 
(860) 395-5431
535
 
DE
 
West Marine
 
18578 Coastal Highway
 
Rehoboth Beach
 
19971
 
(302) 644-9424
563
 
DE
 
West Marine
 
1142 Pulaski Hwy
 
Bear
 
19701
 
(302) 836-2766
1739
 
DE
 
West Marine
 
132 Sunset Blvd. #20
 
New Castle
 
19720
 
(302) 325-9550
30
 
FL
 
West Marine
 
16215 Biscayne Blvd
 
N. Miami Beach
 
33160
 
(305) 947-6333
31
 
FL
 
West Marine
 
3635 S Dixie Hwy
 
Miami
 
33133
 
(305) 444-5520
32
 
FL
 
West Marine
 
2300 S Federal Hwy
 
Ft. Lauderdale
 
33316
 
(954) 527-5540
33
 
FL
 
West Marine
 
12189 US Hwy 1 #23
 
N. Palm Beach
 
33408
 
(561) 775-1434
34
 
FL
 
West Marine
 
4415 Roosevelt Blvd
 
Jacksonville
 
32210
 
(904) 388-7510
35
 
FL
 
West Marine
 
110 N Federal Hwy
 
Deerfield Beach
 
33441
 
(954) 427-6165
36
 
FL
 
West Marine
 
5001 34th St. South
 
St. Petersburg
 
33711
 
(727) 867-5700
37
 
FL
 
West Marine
 
1520 Colonial Blvd
 
Ft. Myers
 
33907
 
(239) 275-6077
38
 
FL
 
West Marine
 
1509 N Harbor City Blvd
 
Melbourne
 
32935
 
(321) 242-9600
59
 
FL
 
West Marine
 
1875 North US Hwy 1
 
Ft. Pierce
 
34946
 
(772) 460-9044
61
 
FL
 
West Marine
 
725 Caroline St
 
Key West
 
33040
 
(305) 295-0999
62
 
FL
 
West Marine
 
4545 SE Dixie Hwy Blvd
 
Stuart
 
34997
 
(772) 223-1515
63
 
FL
 
West Marine
 
3979 South Tamiami Trail
 
Sarasota
 
34231
 
(941) 924-6777
64
 
FL
 
West Marine
 
103400 Overseas Hwy #124
 
Key Largo
 
33037
 
(305) 453-9050
65
 
FL
 
West Marine
 
3500 Barrancas Ave
 
Pensacola
 
32507
 
(850) 453-0010
66
 
FL
 
West Marine
 
2025 Davis Blvd
 
Naples
 
34104
 
(239) 793-7722
68
 
FL
 
West Marine
 
125 Basin St Ste 140
 
Daytona Beach
 
32114
 
(386) 226-9966
112
 
FL
 
West Marine
 
1401 Old Dixie Hwy
 
Lake Park
 
33403
 
(561) 863-1440
114
 
FL
 
West Marine
 
19407 S Dixie Hwy
 
Cutler Bay
 
33157
 
(305) 232-0811
117
 
FL
 
West Marine
 
2000 34th St, No US 19
 
St. Petersburg
 
33713
 
(727) 327-0072

 
Page 2 of Schedule 5.4

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

 
 
118
 
FL
 
West Marine
 
3905 W Cypress St
 
Tampa
 
33607
 
(813) 348-0521
131
 
FL
 
West Marine
 
8687 Coral Wy
 
Miami
 
33155
 
(305) 263-7465
139
 
FL
 
West Marine
 
2400 S Ridgewood/US 1
 
S. Daytona
 
32119
 
(386) 760-0660
141
 
FL
 
West Marine
 
1201 N Federal Hwy #1A
 
Ft. Lauderdale
 
33304
 
(954) 564-6767
144
 
FL
 
West Marine
 
3346 US 19 North
 
Holiday
 
34691
 
(727) 846-1903
146
 
FL
 
West Marine
 
160 SE Hwy 19
 
Crystal River
 
34429
 
(352) 563-0003
155
 
FL
 
West Marine
 
4265 Tamiami Trail
 
Port Charlotte
 
33980-2512
 
(941) 625-2700
156
 
FL
 
West Marine
 
4248 W Tennessee St
 
Tallahassee
 
32304
 
(850) 574-3309
162
 
FL
 
West Marine
 
1951 West Copans Rd
 
Pompano Beach
 
33064
 
(954) 960-0560
163
 
FL
 
West Marine
 
3523 NW Federal Hwy
 
Jensen Beach
 
34957
 
(772) 692-3092
164
 
FL
 
West Marine
 
311 Blanding Blvd
 
Orange park
 
32073
 
(904) 276-4343
170
 
FL
 
West Marine
 
7160 North Davis Hwy
 
Pensacola
 
32504
 
(850) 476-2720
171
 
FL
 
West Marine
 
1388 West 15th St
 
Panama City
 
32401
 
(850) 763-1844
510
 
FL
 
West Marine
 
1089 North Collier Blvd., Suite 403
 
Marco Island
 
34145-2555
 
(239) 642-7060
547
 
FL
 
West Marine
 
1030 S Ponce De Leon Blvd
 
St. Augustine
 
32084
 
(904) 810-5353
548
 
FL
 
West Marine
 
1860 Tamiami Trail South
 
Venice
 
34293
 
(941) 408-8288
549
 
FL
 
West Marine
 
862-B Hwy 98 East
 
Destin
 
32541
 
(850) 269-0636
550
 
FL
 
West Marine
 
4569 14th St West
 
Bradenton
 
34207
 
(941) 753-3585
565
 
FL
 
West Marine
 
1012 Cape Coral Pkwy. East
 
Cape Coral
 
33904-9159
 
(239) 540-7300
569
 
FL
 
West Marine
 
14180 Beach Blvd. Unit 4
 
Jacksonville
 
32250
 
(904) 821-5033
617
 
FL
 
West Marine Hub
 
17220 San Carlos Blvd
 
Ft. Myers
 
33931
 
(239) 481-7447
623
 
FL
 
West Marine Hub
 
103400 Overseas Hwy #124
 
Key Largo
 
33037
 
(305) 453-9050
625
 
FL
 
West Marine Hub
 
3500 Barrancas Ave
 
Pensacola
 
32507
 
(850) 453-0010
632
 
FL
 
West Marine Hub
 
2300 S Federal Hwy
 
Ft. Lauderdale
 
33316
 
(954) 527-5540
1098
 
FL
 
West Marine
 
7478 S. Orange Blossom Trl Suite A
 
Orlando
 
32809-5781
 
(407) 857-7337
1099
 
FL
 
West Marine
 
11735 S. Dixie Highway
 
Pinecrest
 
33156-4438
 
(305) 259-5800
1200
 
FL
 
West Marine
 
2225 Thomas Drive
 
Panama City Bch
 
32408
 
(850) 234-2717
1201
 
FL
 
West Marine
 
28520 Bonita Crossings Blvd Ste 1
 
Bonita Springs
 
34135-3205
 
(239) 947-7666
1209
 
FL
 
West Marine
 
320 W. Merritt Island Causeway
 
Merritt Island
 
32953-4728
 
(321) 452-4661
1217
 
FL
 
West Marine
 
161 N US Hwy 1
 
Jupiter
 
33469
 
(561) 745-3013
1218
 
FL
 
West Marine
 
1107 3rd Sreet SW
 
Winter Haven
 
33880
 
(863) 401-2500
1220
 
FL
 
West Marine
 
2275 South Federal Hwy, Ste 20
 
Delray Beach
 
33483
 
(561) 266-8489
1227
 
FL
 
West Marine
 
1516 W. Brandon Blvd
 
Brandon
 
33511
 
(813) 657-5553
1239
 
FL
 
West Marine
 
700 Tamiami Trail
 
Punta Gorda
 
33950
 
(941) 637-0019
1242
 
FL
 
West Marine
 
1721 Gulf to Bay Blvd
 
Clearwater
 
33755
 
(727) 447-5320
1248
 
FL
 
West Marine
 
5790 2nd Ave.
 
Stock Island
 
33040
 
(305) 294-2025
1251
 
FL
 
West Marine
 
1170 8th Ave. West, Units 3 & 4
 
Palmetto
 
34221
 
(941) 721-4621
1254
 
FL
 
West Marine
 
100 N Entrance Rd #40
 
Sanford
 
32771
 
(407) 330-7400
1256
 
FL
 
West Marine
 
670 Lee Rd.
 
Orlando
 
32810
 
(407) 644-8557
1262
 
FL
 
West Marine
 
1001 W. New Haven Ave
 
West Melbourne
 
32904
 
(321) 837-1113
1272
 
FL
 
West Marine
 
17220 San Carlos Blvd
 
Ft. Myers Beach
 
33931
 
(239) 432-9800
1273
 
FL
 
West Marine
 
1720 E Hallandale Beach Blvd
 
Hallandale
 
33009
 
(954) 457-3848
1274
 
FL
 
West Marine
 
4874 Big Island Dr.
 
Jacksonville
 
32246
 
(904) 520-4650

 
Page 3 of Schedule 5.4

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

 
 
1277
 
FL
 
West Marine
 
2109 Overseas Hwy
 
Marathon
 
33050
 
(305) 289-1009
1287
 
FL
 
West Marine
 
99 Eglin Parkway, NE
 
Ft. Walton Beach
 
32548
 
(850) 244-4551
1720
 
FL
 
West Marine
 
12901 McGregor Blvd.
 
Ft. Myers
 
33919
 
(239) 481-7447
1722
 
FL
 
West Marine
 
1900-B Okeechobee Blvd.
 
West Palm Beach
 
33409
 
(561) 684-4900
1729
 
FL
 
West Marine
 
3360 East Tamiami Trail
 
Naples
 
34112
 
(239) 774-3233
1744
 
FL
 
West Marine
 
1140 E. Altamonte Drive, #1037
 
Altamonte Springs
 
32701
 
(407) 339-8005
1757
 
FL
 
West Marine
 
12195 Biscayne Blvd.
 
N. Miami
 
33181
 
(305) 895-1870
1758
 
FL
 
West Marine
 
451 S. Federal Hwy.
 
Pompano Beach
 
33062
 
(954) 782-6181
1762
 
FL
 
West Marine
 
2595 S E Federal Hwy
 
Stuart
 
34994-4532
 
(772) 283-2335
1768
 
FL
 
West Marine
 
41286 U.S. Hwy. 19 North
 
Tarpon Springs
 
34689
 
(727) 939-1754
5501
 
FL
 
West Marine
 
1720 S. McCall Rd., Suite F
 
Englewood
 
34223-4865
 
(941) 473-2070
5506
 
FL
 
West Marine
 
474 - 21st Street
 
Vero Beach
 
32960-5454
 
(772) 562-2166
5507
 
FL
 
West Marine
 
203 - 150th Avenue
 
Madeira Beach
 
33708
 
(727) 392-4939
5510
 
FL
 
West Marine
 
119 First Avenue N., #M122
 
St. Petersburg
 
33701-3307
 
(727) 822-6565
5511
 
FL
 
West Marine
 
3324 E. Bay Drive
 
Holmes Beach
 
00003-4217
 
(941) 778-4858
5512
 
FL
 
West Marine
 
268 Apollo Beach Blvd
 
Apollo Beach
 
33572-2261
 
(813) 645-6144
135
 
GA
 
West Marine
 
2510 Cobb Pkwy
 
Smyrna
 
30080
 
(770) 612-9944
137
 
GA
 
West Marine
 
7700 Abercorn St
 
Savannah
 
31406
 
(912) 352-2660
507
 
GA
 
West Marine
 
592 Bobby Jones Expwy
 
Augusta
 
30907
 
(706) 650-1939
559
 
GA
 
West Marine
 
4989 Friendship Road
 
Buford
 
30518
 
(770) 614-5111
1225
 
GA
 
West Marine
 
1919 Glynn Ave., Ste 1
 
Brunswick
 
31520
 
(912) 264-6222
18
 
HI
 
West Marine
 
111 Sand Island Access Rd
 
Honolulu
 
96819
 
(808) 845-9900
618
 
HI
 
West Marine Hub
 
111 Sand Island Access Rd
 
Honolulu
 
96819
 
(808) 845-9900
71
 
IL
 
West Marine
 
627 W North Ave
 
Chicago
 
60610
 
(312) 654-1818
76
 
IL
 
West Marine
 
2 West Grand Ave
 
Fox Lake
 
60020
 
(847) 973-2221
152
 
IL
 
West Marine
 
229 Skokie Valley Rd
 
Highland Park
 
60035
 
(847) 831-0100
521
 
IL
 
West Marine
 
1707-7th St
 
Winthrop Harbor
 
60096
 
(847) 746-2015
1727
 
IL
 
West Marine
 
63 West Rand Road
 
Arlington Heights
 
60004
 
(847) 398-0606
1745
 
IL
 
West Marine
 
567 East Roosevelt Road
 
Lombard
 
60148
 
(630) 792-1550
100
 
IN
 
West Marine
 
3221 Franklin St
 
Michigan City
 
46360
 
(219) 874-9722
186
 
IN
 
West Marine
 
6370 East 82nd St
 
Indianapolis
 
46250
 
(317) 841-0826
54
 
LA
 
West Marine
 
827 Harrison Ave
 
New Orleans
 
70124
 
(504) 482-5090
508
 
LA
 
West Marine
 
8350 N Florida Blvd
 
Baton Rouge
 
70806
 
(225) 216-3055
514
 
LA
 
West Marine
 
2668 Johnston St. #B-2
 
Lafayette
 
70503
 
(337) 231-0000
1202
 
LA
 
West Marine
 
1803 N. Causeway Blvd.
 
Mandeville
 
70471-3111
 
(985) 727-9443
1221
 
LA
 
West Marine
 
1731 Martin Luther King Blvd. Ste B
 
Houma
 
70360
 
(985) 223-9908
1223
 
LA
 
West Marine
 
1702 West Prien Lake Rd.
 
Lake Charles
 
70601-8361
 
(337) 479-8077
1270
 
LA
 
West Marine
 
4010 Pontchartrain Dr
 
Slidell
 
70458
 
(985) 641-1135
43
 
MA
 
West Marine
 
243 Newbury St (US Rt 1)
 
Peabody
 
01960
 
(978) 535-7332
46
 
MA
 
West Marine
 
66 Wood Rd
 
Braintree
 
02184
 
(781) 356-2100
83
 
MA
 
West Marine
 
77 Scranton Ave
 
Falmouth
 
02540
 
(508) 457-6500
86
 
MA
 
West Marine
 
137 Popes Island
 
New Bedford
 
02740
 
(508) 994-1122
107
 
MA
 
West Marine
 
1060 Fall River Ave
 
Seekonk
 
02771
 
(508) 336-5004

 
Page 4 of Schedule 5.4

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

 
 
119
 
MA
 
West Marine
 
120 Allied Drive
 
Dedham
 
02026
 
(781) 329-2430
120
 
MA
 
West Marine
 
406 Washington St
 
Woburn
 
01801
 
(781) 933-3290
512
 
MA
 
West Marine
 
43 Home Depot Drive
 
Plymouth
 
02360-2669
 
(508) 830-3150
609
 
MA
 
West Marine Hub
 
276 Falmouth Rd, Ste C
 
Hyannis
 
02601
 
(508) 862-2700
620
 
MA
 
West Marine Hub
 
406 Washington St
 
Woburn
 
01801
 
(781) 933-3290
1228
 
MA
 
West Marine
 
32 Atlantic Ave.
 
Marblehead
 
01945
 
(781) 639-6451
1269
 
MA
 
West Marine
 
276 Falmouth Rd, Ste C
 
Hyannis
 
02601
 
(508) 862-2700
1755
 
MA
 
West Marine
 
29 Berdon Way
 
Fairhaven
 
02719
 
(508) 992-8484
1760
 
MA
 
West Marine
 
139 Endicott Street
 
Danvers
 
01923
 
(978) 777-5940
5504
 
MA
 
West Marine
 
354 Front Street, Suite D
 
Marion
 
02738-1528
 
(508) 748-3833
5540
 
MA
 
West Marine
 
52 Beach Rd.
 
Vineyard Haven
 
2568
 
(508) 693-2906
41
 
MD
 
West Marine
 
113 Hillsmere Dr
 
Annapolis
 
21403
 
(410) 268-0129
143
 
MD
 
West Marine
 
2122 DiDonato Dr
 
Chester
 
21619
 
(410) 604-1752
178
 
MD
 
West Marine
 
8226 Ocean GateWy
 
Easton
 
21601
 
(410) 770-3080
179
 
MD
 
West Marine
 
2700 Lighthouse Pt E #100
 
Baltimore
 
21224
 
(410) 563-8905
180
 
MD
 
West Marine
 
389 Deale Rd
 
Tracy's Landing
 
20779
 
(301) 889-0004
516
 
MD
 
West Marine
 
3257 Solomon's Island Rd
 
Edgewater
 
21037
 
(410) 956-8920
537
 
MD
 
West Marine
 
475 N. Mauldin Ave
 
North East
 
21901
 
(410) 287-6600
560
 
MD
 
West Marine
 
21386 Rock Hall Avenue
 
Rock Hall
 
21661
 
(410) 639-9959
562
 
MD
 
West Marine
 
14030 H.G. Trueman Road
 
Solomons
 
20688
 
(410) 326-6006
1213
 
MD
 
West Marine
 
1026 Pulaski Hwy., Unit 13
 
Havre de Grace
 
21078
 
(410) 939-6282
1238
 
MD
 
West Marine
 
12638 Ocean Gateway, Units 1-5
 
Ocean City
 
21842
 
(410) 213-7543
1243
 
MD
 
West Marine
 
4195 Mountain Road
 
Pasadena
 
21122
 
(410) 437-2617
1281
 
MD
 
West Marine
 
8640 Pulaski Hwy Suite 105
 
Baltimore
 
21237
 
(410) 687-8290
1711
 
MD
 
West Marine
 
5250 Randolph Road
 
Rockville
 
20852
 
(301) 230-0945
1724
 
MD
 
West Marine
 
6651-20 Governer Ritchie Hwy.
 
Glen Burnie
 
21061
 
(410) 761-5901
1738
 
MD
 
West Marine
 
163A Jennifer Road
 
Annapolis
 
21401
 
(410) 573-5744
84
 
ME
 
West Marine
 
127 Marginal Wy
 
Portland
 
04101
 
(207) 761-7600
541
 
ME
 
West Marine
 
11 Apple Lane
 
Southwest Harbor
 
04679
 
(207) 244-0300
57
 
MI
 
West Marine
 
30060 S River Rd
 
Harrison Township
 
48045
 
(586) 465-5401
74
 
MI
 
West Marine
 
12513 James St
 
Holland
 
49424
 
(616) 399-0099
77
 
MI
 
West Marine
 
25050 Jefferson Ave
 
St. Clair Shores
 
48080
 
(586) 771-4700
78
 
MI
 
West Marine
 
2492 Henry St. #B
 
Muskegon
 
49441
 
(231) 759-7709
79
 
MI
 
West Marine
 
789 E Big Beaver Rd
 
Troy
 
48083
 
(248) 528-2112
96
 
MI
 
West Marine
 
4128 Wilder Rd
 
Bay City
 
48706
 
(989) 667-2100
154
 
MI
 
West Marine
 
2975 28th St, SE
 
Grand Rapids
 
49512
 
(616) 954-9822
184
 
MI
 
West Marine
 
2840 East Saginaw #1
 
Lansing
 
48912
 
(517) 485-2406
526
 
MI
 
West Marine
 
105 West Mitchell St
 
Petoskey
 
49770
 
(231) 348-7558
543
 
MI
 
West Marine
 
3500 Market Place Circle
 
Traverse City
 
49684
 
(231) 922-2300
627
 
MI
 
West Marine Hub
 
30060 S River Rd
 
Harrison Township
 
48045
 
(586) 465-5401
1233
 
MI
 
West Marine
 
810 Jackson St.
 
Grand Haven
 
49417
 
(616) 842-8960
1234
 
MI
 
West Marine
 
401 Michigan St.
 
Algonac
 
48001
 
(810) 794-2874
1713
 
MI
 
West Marine
 
2212 E. 14 Mile Road
 
Warren
 
48092
 
(586) 939-5050
1756
 
MI
 
West Marine
 
10610 Telegraph Road
 
Taylor
 
48180
 
(313) 295-7220
194
 
MN
 
West Marine
 
13889 Ridgedale Dr
 
Minnetonka
 
55305
 
(952) 545-5540

 
Page 5 of Schedule 5.4

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

 
 
1252
 
MN
 
West Marine
 
422 E. Mulberry
 
Stillwater
 
55082
 
(651) 275-0889
1737
 
MN
 
West Marine
 
8537 Lyndale Avenue South
 
Bloomington
 
55420
 
(952) 885-0661
182
 
MO
 
West Marine
 
3872 HIGHWAY 54
 
Osage Beach
 
65065
 
(573) 302-0552
190
 
MO
 
West Marine
 
1355 South 5th St. #150
 
St. Charles
 
63301
 
(636) 949-8866
174
 
MS
 
West Marine
 
2406 Pass Rd
 
Biloxi
 
39531
 
(228) 388-9090
136
 
NC
 
West Marine
 
3601 M. King, Jr. Blvd
 
New Bern
 
28562
 
(252) 636-0650
138
 
NC
 
West Marine
 
5000 So. Croatan Hwy., Units 30-32
 
Nags Head
 
27959
 
(252) 441-1101
506
 
NC
 
West Marine
 
20420 West Catawba Ave.
 
Cornelius
 
28031-5255
 
(704) 895-5299
527
 
NC
 
West Marine
 
3027 Capital Blvd #111
 
Raleigh
 
27604
 
(919) 871-6384
1226
 
NC
 
West Marine
 
330 Bridge St.
 
Washington
 
27889
 
(252) 975-6688
1253
 
NC
 
West Marine
 
13000 York Rd. Suite #K
 
Charlotte
 
28278
 
(704) 588-1020
1267
 
NC
 
West Marine
 
1930 Eastwood Rd Ste 102
 
Wilmington
 
28403
 
(910) 256-7878
1280
 
NC
 
West Marine
 
5160 US Hwy 70 West
 
Morehead City
 
28557
 
(252) 240-2909
5534
 
NC
 
West Marine
 
1104 Broad St Ext
 
Oriental
 
28571-9786
 
(252) 249-3200
153
 
NH
 
West Marine
 
775 Lafayette Rd #2
 
Portsmouth
 
03801
 
(603) 436-8300
534
 
NH
 
West Marine
 
308 Lafayette Rd
 
Seabrook
 
03874
 
(603) 474-7997
95
 
NJ
 
West Marine
 
1851 Hwy 35
 
South Amboy
 
08879
 
(732) 525-2221
101
 
NJ
 
West Marine
 
494 Market St
 
Perth Amboy
 
08861
 
(732) 442-5700
106
 
NJ
 
West Marine
 
258 New Rd (Rte 9)
 
Somers Point
 
08244
 
(609) 601-0061
110
 
NJ
 
West Marine
 
1215 Route 73
 
Mt. Laurel
 
08054
 
(856) 231-4600
111
 
NJ
 
West Marine
 
Rt. 35 & 36 (Off Max Plaza)
 
Eatontown
 
07724
 
(732) 542-8282
121
 
NJ
 
West Marine
 
2391 Hwy 36
 
Atlantic Highlands
 
07716
 
(732) 872-8100
130
 
NJ
 
West Marine
 
213 Route 37 East
 
Tom's River
 
08753
 
(732) 341-0710
148
 
NJ
 
West Marine
 
100 Route 17 South
 
Lodi
 
07644
 
(201) 712-1111
188
 
NJ
 
West Marine
 
791 Route 109
 
Cape May
 
08204
 
(609) 898-8245
606
 
NJ
 
West Marine Hub
 
51 Chambersbridge Rd.
 
Brick
 
08723
 
(732) 864-8140
1229
 
NJ
 
West Marine
 
825 8th Ave.
 
Belmar
 
07719
 
(732) 280-1771
1259
 
NJ
 
West Marine
 
424 E. Main St.
 
Little Egg Harbor
 
08087
 
(609) 296-6243
1276
 
NJ
 
West Marine
 
51 Chambersbridge Rd.
 
Brick
 
08723
 
(732) 864-8140
525
 
NV
 
West Marine
 
252 E. Lake Mead Dr.
 
Henderson
 
89015
 
(702) 567-1166
1219
 
NV
 
West Marine
 
2505 Mill St.
 
Reno
 
89502
 
(775) 329-2552
73
 
NY
 
West Marine
 
2192 Niagra St
 
Buffalo
 
14207
 
(716) 875-0500
80
 
NY
 
West Marine
 
3955 Long Beach Rd
 
Island Park
 
11558
 
(516) 431-0399
126
 
NY
 
West Marine
 
147 Sunrise Hwy
 
West Islip
 
11795
 
(631) 669-8585
132
 
NY
 
West Marine
 
12 West 37th
 
New York City
 
10018
 
(212) 594-6065
157
 
NY
 
West Marine
 
5000 Nesconset Hwy
 
Port Jefferson
 
11776
 
(631) 331-9280
517
 
NY
 
West Marine
 
21214 Pioneer Plaza Dr
 
Watertown
 
13601
 
(315) 788-8490
533
 
NY
 
West Marine
 
605 Troy Schenectady Rd
 
Latham
 
12110
 
(518) 783-7700
536
 
NY
 
West Marine
 
16 Soundview Marketplace
 
Port Washington
 
11050
 
(516) 944-1729
566
 
NY
 
West Marine
 
405 West Sunrise Highway
 
Patchogue
 
11772
 
(631) 289-5533
626
 
NY
 
West Marine Hub
 
147 Sunrise Hwy
 
West Islip
 
11795
 
(631) 669-8585
1207
 
NY
 
West Marine
 
56 New York Ave
 
Huntington
 
11743
 
(631) 427-4210
1232
 
NY
 
West Marine
 
91 S Route 9W, Ste 3
 
West Haverstraw
 
10993
 
(845) 429-7095
1249
 
NY
 
West Marine
 
1089 Old Country Rd.
 
Riverhead
 
11901
 
(631) 727-2498
1763
 
NY
 
West Marine
 
1850 Ridge Road East
 
Irondequoit
 
14622
 
(585) 323-2040

 
Page 6 of Schedule 5.4

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

 
 
1765
 
NY
 
West Marine
 
7909 1/2 Route 11
 
Cicero
 
13039
 
(315) 699-0001
1766
 
NY
 
West Marine
 
527 Montauk Highway
 
West Babylon
 
11704
 
(631) 422-9780
1769
 
NY
 
West Marine
 
1445 Niagara Falls Blvd.
 
Amherst
 
14228
 
(716) 803-1357
55
 
OH
 
West Marine
 
207 E Water St
 
Sandusky
 
44870
 
(419) 621-4700
70
 
OH
 
West Marine
 
4036 E Harbor Rd
 
Port Clinton
 
43452
 
(419) 734-9122
75
 
OH
 
West Marine
 
6176 N Summit Bldg. F
 
Toledo
 
43611
 
(419) 727-8989
161
 
OH
 
West Marine
 
24781 Lorain Rd
 
North Olmstead
 
44070
 
(440) 979-0795
522
 
OH
 
West Marine
 
2827 Festival Lane #405-6
 
Dublin
 
43017
 
(614) 336-4420
1241
 
OH
 
West Marine
 
4721 Liberty Ave.
 
Vermillion
 
44089
 
(440) 963-2005
1718
 
OH
 
West Marine
 
1577 St. Clair Avenue East
 
Cleveland
 
44114
 
(216) 781-6110
528
 
OK
 
West Marine
 
4317-A South Sheridan Rd
 
Tulsa
 
74145
 
(918) 665-2101
21
 
OR
 
West Marine
 
1176 N Hayden Meadows Dr
 
Portland
 
97217
 
(503) 289-9822
1205
 
OR
 
West Marine
 
15230 SW Sequoia Pkwy., Suite 190
 
Tigard
 
97224
 
(503) 624-6090
524
 
PA
 
West Marine
 
4885 McKnight Rd #19
 
Pittsburgh
 
15237
 
(412) 369-5800
1212
 
PA
 
West Marine
 
2126 Street Road
 
Bensalem
 
19020
 
(215) 245-0250
44
 
RI
 
West Marine
 
1000 Division St
 
East Greenwich
 
02818
 
(401) 884-0900
545
 
RI
 
West Marine
 
91 Point Judith Rd
 
Narragansett
 
02882
 
(401) 788-9977
602
 
RI
 
West Marine Hub
 
379 West Main Rd
 
Middletown
 
02842
 
(401) 841-9880
1246
 
RI
 
West Marine
 
379 West Main Rd
 
Middletown
 
02842
 
(401) 841-9880
134
 
SC
 
West Marine
 
5641 Rivers Ave
 
N. Charleston
 
29406
 
(843) 529-0094
197
 
SC
 
West Marine
 
Dutch Square Ctr, Unit 98
 
Columbia
 
29210
 
(803) 750-5034
511
 
SC
 
West Marine
 
3501 Clemson Blvd, #110
 
Anderson
 
29621
 
(864) 222-1676
518
 
SC
 
West Marine
 
900 B Hwy 17 North
 
N. Myrtle Beach
 
29582
 
(843) 280-1327
567
 
SC
 
West Marine
 
890 William Hilton Pkwy, Unit 108
 
Hilton Head Island
 
29928-3422
 
(843) 686-5351
604
 
SC
 
West Marine Hub
 
975 Savannah Hwy Ste. 133
 
Charleston
 
29407
 
(843) 402-6988
1208
 
SC
 
West Marine
 
12078 Highway 17 Bypass, Unit A
 
Murrells Inlet
 
29576
 
(843) 357-6208
1237
 
SC
 
West Marine
 
1440 Ben Sawyer Blvd. , Suite 1109
 
Mt. Pleasant
 
29464
 
(843) 881-2272
1264
 
SC
 
West Marine
 
975 Savannah Hwy Ste. 133
 
Charleston
 
29407
 
(843) 402-6988
1751
 
SC
 
West Marine
 
2049 Savannah Hwy #90
 
Charleston
 
29407
 
(843) 763-6360
5547
 
SC
 
West Marine
 
1347 Ribaut Road, Suite G
 
Port Royal
 
29935
 
(843) 522-8297
538
 
TN
 
West Marine
 
5566 Old Hickory Blvd
 
Hermitage
 
37076
 
(615) 232-8911
1250
 
TN
 
West Marine
 
7812 Kingston Pike
 
Knoxville
 
37919
 
(865) 690-9744
50
 
TX
 
West Marine
 
9070 Research Blvd # 201
 
Austin
 
78758
 
(512) 302-1406
52
 
TX
 
West Marine
 
10400 N Central Expwy #A
 
Dallas
 
75231
 
(214) 265-7776
58
 
TX
 
West Marine
 
6999 Blanco Rd
 
San Antonio
 
78216
 
(210) 348-0770
94
 
TX
 
West Marine
 
7625 S Padre Island Dr
 
Corpus Christi
 
78412
 
(361) 980-1765
196
 
TX
 
West Marine
 
132 FM1960 #E
 
Houston
 
77073
 
(281) 821-3132
198
 
TX
 
West Marine
 
349 West I30
 
Garland
 
75043
 
(972) 303-2948
199
 
TX
 
West Marine
 
5926 Broadway
 
Galveston
 
77551
 
(409) 741-8052
564
 
TX
 
West Marine
 
1401 Marina Bay Drive
 
Kemah
 
77565
 
(281) 535-0820
572
 
TX
 
West Marine
 
3101 NASA Road 1
 
Seabrook
 
77586-6436
 
(281) 326-1447
580
 
TX
 
West Marine
 
3612 West FM 120
 
Denison
 
75020-1552
 
(903) 463-4223
624
 
TX
 
West Marine Hub
 
1401 Marina Bay Drive
 
Kemah
 
77565
 
(281) 535-0820
1261
 
TX
 
West Marine
 
2260 S. Stemmons Freeway
 
Lewisville
 
75067
 
(972) 459-7869
1712
 
TX
 
West Marine
 
7280 Wynnwood
 
Houston
 
77008
 
(713) 880-2160

 
Page 7 of Schedule 5.4

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

 
 
539
 
UT
 
West Marine
 
23 West 7200 S. St
 
Midvale
 
84047
 
(801) 565-3615
47
 
VA
 
West Marine
 
601 South Patrick St
 
Alexandria
 
22314
 
(703) 549-7020
48
 
VA
 
West Marine
 
2121 W Mercury Blvd
 
Hampton
 
23666
 
(757) 825-4900
85
 
VA
 
West Marine
 
2865 Lynnhaven Dr, #B4
 
Virginia Beach
 
23451
 
(757) 496-9996
105
 
VA
 
West Marine
 
5616 Virginia Beach Blvd
 
Norfolk
 
23502
 
(757) 466-1826
169
 
VA
 
West Marine
 
10819 W Broad St
 
Glen Allen
 
23060
 
(804) 346-9502
183
 
VA
 
West Marine
 
13330 Gordon Blvd
 
Woodbridge
 
22191
 
(703) 492-6225
187
 
VA
 
West Marine
 
15758 General Puller Hwy.
 
Deltaville
 
23043-2032
 
(804) 776-0400
1777
 
VA
 
West Marine
 
34 Irma's Lane
 
Deltaville
 
23043
 
(804) 776-8583
5520
 
VA
 
West Marine
 
3841-G East Little Creek Road
 
Norfolk
 
23518
 
(757) 587-0088
5545
 
VA
 
West Marine
 
1795 George Washington Memorial Hwy.
 
Gloucester Point
 
23062
 
(804) 642-3470
185
 
VT
 
West Marine
 
861 Williston Rd
 
Burlington
 
05403
 
(802) 865-8064
23
 
WA
 
West Marine
 
6317 Seaview Ave NW
 
Seattle
 
98107
 
(206) 789-4640
24
 
WA
 
West Marine
 
3212 Twentieth St E
 
Tacoma
 
98424
 
(253) 926-2533
25
 
WA
 
West Marine
 
918 Commercial Ave
 
Anacortes
 
98221
 
(360) 293-4262
26
 
WA
 
West Marine
 
13211 Northup Wy
 
Bellevue
 
98005
 
(425) 641-4065
27
 
WA
 
West Marine
 
5971 State Hwy 303 NE
 
Bremerton
 
98310
 
(360) 479-2200
28
 
WA
 
West Marine
 
3560 Meridian St
 
Bellingham
 
98225
 
(360) 650-1100
29
 
WA
 
West Marine
 
1716 West Marine View Dr
 
Everett
 
98201
 
(425) 303-1880
177
 
WA
 
West Marine
 
5306 East Sprague Ave
 
Spokane
 
99212
 
(509) 533-5532
181
 
WA
 
West Marine
 
2428 Washington St
 
Port Townsend
 
98368
 
(360) 379-1612
531
 
WA
 
West Marine
 
2020 Harrison Ave NW #A16
 
Olympia
 
98502
 
(360) 352-1244
611
 
WA
 
West Marine Hub
 
1275 Westlake Ave North
 
Seattle
 
98109
 
(206) 926-0363
1271
 
WA
 
West Marine
 
1275 Westlake Ave North
 
Seattle
 
98109
 
(206) 926-0356
5505
 
WA
 
West Marine
 
313 Spring Street - PO Box 1742
 
Friday Harbor
 
98250-8056
 
(360) 378-1086
5508
 
WA
 
West Marine
 
439 Peace Portal Drive, Suite B
 
Blaine
 
98230-4014
 
(360) 332-1918
5536
 
WA
 
West Marine
 
3119 Judson St.Suite A
 
Gig Harbor
 
98335
 
(253) 858-6250
88
 
WI
 
West Marine
 
427 South Main St
 
Racine
 
53403
 
(262) 637-3500
189
 
WI
 
West Marine
 
2455 W Broadway St
 
Madison
 
53713
 
(608) 221-8708
1230
 
WI
 
West Marine
 
1449 Green Bay Rd.
 
Sturgeon Bay
 
54235
 
(920) 746-4520
1735
 
WI
 
West Marine
 
4141 S. 76th Street
 
Greenfield
 
53220
 
(414) 543-8300
1773
 
WI
 
West Marine
 
2700 West College Ave #20
 
Appleton
 
54914-2918
 
(920) 731-0535

 
Owned or Leased West Marine Puerto Rico, Inc. Stores
 
#
 
ST
 
LOCATION
 
ADDRESS
 
CITY
 
ZIP
 
PHONE #
                         
544
 
PR
 
West Marine
 
4186 Carretera Estatal #3
 
Fajardo
 
00738
 
(787) 801-2700
                         
574
 
PR
 
West Marine
 
197 Calle Federico Costa
 
San Juan
 
00918-1307
 
(787) 777-0814

 
Owned or Leased West Marine Canada Corp. Stores
 
 
Page 8 of Schedule 5.4

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

 
 
#
 
ST
 
LOCATION
 
ADDRESS
 
CITY
 
ZIP
 
PHONE #
                         
3901
 
BC
 
West Marine
 
2210 Beacon Avenue
 
Sidney
 
V8L1X1
 
(250) 654-0045
                         
3902
 
BC
 
West Marine
 
1601 West 2nd Avenue
 
Vancouver
 
V6J1H3
 
(604) 730-4093
                         
3904
 
BC
 
West Marine
 
2000 Island Highway North, Ste 120
 
Nanaimo
 
V9S 5W3
 
(250) 758-8048
                         
3905
 
BC
 
West Marine
 
2929 Douglas Street
 
Victoria
 
V8T 4M8
 
(250) 380-4097
                         
3910
 
BC
 
West Marine
 
8331 River Road
 
Richmond
 
V6X 1Y1
 
(604) 233-2327
                         
3903
 
ON
 
West Marine
 
177 Lake Shore Blvd. East
 
Toronto
 
M5A 1B7
 
(416) 203-2884
                         
3906
 
ON
 
West Marine
 
900 King Street
 
Midland
 
L4R 4L1
 
(705) 526-2745
                         
3909
 
ON
 
West Marine
 
1036 Princess Street, Unit D3
 
Kingston
 
K7L 1H2
 
(613) 549-3658
                         
3911
 
ON
 
West Marine
 
33 Mapleview Drive
 
Barrie
 
L4N 9H5
 
(705) 735-6059
                         
3912
 
ON
 
West Marine
 
485 Trafalgar Rd
 
Oakville
 
L6J 7Z5
 
(905) 339-1755

Leased Locations Subject to Collateral Access Agreement:
 
1.
Lease dated as of June 15, 1995, between John E. Van Valkenburgh and Carl D.
Panattoni and West Marine Products, Inc., for the Hollister, California
distribution facility, as amended by that certain Addendum dated as of June 3,
1996, that certain First Amendment dated as of March 23, 1999, that certain
Second Amendment dated as of June 11, 2002, that certain Third Amendment dated
as of April 1, 2003, and that certain Landlord Subordination dated April 3,
2003.

 
2.
Net Lease Agreement dated as of March 11, 1997, between Cabot Industrial Venture
A, LLC, a Delaware limited liability company, as successor to Cabot Industrial
Properties, L.P., a Delaware limited partnership, as successor to W/H No. 31,
L.L.C., a South Carolina limited liability company, and West Marine, Inc., for
the Rock Hill, South Carolina distribution facility, as amended by that certain
First Amendment dated as of August 11, 1998, that certain Second Amendment dated
as of April 18, 2000, that certain Landlord Subordination dated as of February
11, 2003, and that certain Third Amendment dated as of July 26, 2004, and as
assigned by West Marine, Inc. to West Marine Products pursuant to that certain
Assignment and Assumption Agreement dated as of December 28, 2005.

 
3.
Lease dated June 26, 1997, between Watsonville Freeholders, a California limited
partnership, and West Marine Products, Inc., for the Watsonville, California
corporate offices, as amended by that certain First Amendment of Lease, dated
July 27, 2005, that certain Second Amendment of Lease, dated December 22, 2005
that certain Third Amendment of Lease, dated November 30, 2006, and that certain
Fourth Amendment of Lease, dated July 29, 2009.

 
Page 9 of Schedule 5.4

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

 

Schedule 5.6
States of Organization, Chief Executive Offices, FEINS
 
The chief executive office for each of the Loan Parties is 500 Westridge Drive,
Watsonville, California 95076

 
COMPANY NAME
     
FEIN
 
DATE OF
FORMATION
 
JURISDICTION OF
FORMATION
 
ORGANIZATIONAL
ID
                     
West Marine, Inc.
 
1
 
77-0355502
 
09/24/93
 
Delaware
 
2352363
                     
West Marine Products, Inc.
 
2
 
94-2374523
 
11/17/76
 
California
 
C0803061
                     
West Marine Puerto Rico, Inc.
 
2
 
77-0510676
 
04/05/99
 
California
 
C2159447
                     
W Marine Management Company, Inc.
 
2
 
77-0464151
 
07/24/97
 
California
 
C2031344
                     
West Marine Canada Corp.
 
3
 
98-0359219 IRS, 3059505 CCRA
 
08/27/01
 
Nova Scotia
   

1 = Parent company
2 = Wholly owned subsidiary of West Marine, Inc.
3 = Foreign Corporation, wholly owned subsidiary of W Marine Management Company,
Inc.

 
 

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

 

Schedule 5.7(b)
Capitalization of Loan Parties’ Subsidiaries
 
West Marine Entity
 
Form of Entity;
Jurisdiction of
Organization
 
No. of Shares Issued and
Outstanding
 
Owner of Issued and
Outstanding Shares
             
West Marine Products, Inc.
 
California corporation
 
6,142,970 shares
 
West Marine, Inc. (100%)
             
West Marine Puerto Rico, Inc.
 
California corporation
 
1,000 shares
 
West Marine, Inc. (100%)
             
W Marine Management Company, Inc.
 
California corporation
 
1,000 shares
 
West Marine, Inc. (100%)
             
West Marine Canada Corp.
 
Nova Scotia unlimited company
 
1,000 shares  common stock; 6,000,000 shares preferred stock
 
W Marine Management Company, Inc. (100%)

 
 

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

 

Schedule 5.9
Litigation
 
None.

 
 

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

 

Schedule 5.11
Entities Not Solvent
 
None.

 
 

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

 

Schedule 5.13
Environmental Matters
 
None.

 
 

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

 

Schedule 5.17
Deposit Accounts and Securities Accounts Containing Collateral
 
Securities Accounts and Deposit Accounts Other Than Payroll Accounts:
 
BANK NAME
 
BANK ACCT#
 
LOCATION
         
Amegy Bank
 
6701003569
 
TX
         
American Bank of Texas
 
702831570
 
TX
         
Associated Bank of the West
 
2223058740
 
WI
         
Banco Popular de Puerto Rico – Concentration Account
 
111219957
 
PR
         
Banco Popular de Puerto Rico – Depository Account
 
111-219949
 
PR
         
Bank of America – Concentration Account
 
1487950180
 
CA
         
Bank of Hampton Roads
 
100021778
 
VA
         
Bank of Waukegan
 
41900515
 
IL
         
Central Bank of the Ozarks
 
027119
 
MO
         
Chase
 
5113501167
 
LA
         
Fifth/Third Bank
 
7910187421
 
MI
         
First Citizen Bank and Trust
 
4712016217
 
RI
         
First Hawaiian Bank
 
46012739
 
HI
         
First VA/BBT
 
5233851584
 
VA
         
First National Bank of Bar Harbor
 
85104772
 
ME
         
Huntington National Bank of OH
 
01701614448
 
OH
         
Key Bank of Vermont
 
454680019758
 
VT
         
Lake Region Bank (Solutran) NSF Check
 
455128-F
 
MN

 
Page 1 of Schedule 5.17

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

 
 
BANK NAME
 
BANK ACCT#
 
LOCATION
         
M & I Bank of WI
 
0003815889
 
WI
         
Mechanics Bank
 
13007920
 
CA
         
PNC Bank of NJ
 
8103767112
 
NJ
         
Regions Bank
 
2500049334
 
AL
         
Royal Bank of Canada – Concentration Account
 
00010-1150689
 
Canada
         
Royal Bank of Canada – Depository Account
 
00010-1150705
 
Canada
         
Sandhills Bank
 
305003311
 
SC
         
Sovereign Bank
 
75-20-2000109
 
CT
         
Sun Trust Bank
 
215252200318
 
FL
         
Tallahassee State Bank of Florida
 
1280172601
 
FL
         
Wachovia
 
2030060929636
 
NJ
         
Wells Fargo AMEX
 
417-1102338
 
CA
         
Wells Fargo – AP Clearing
 
9600 029733
 
CA
         
Wells Fargo - Catalog
 
494-41863862
 
CA
         
Wells Fargo – Concentration Account
 
417-1263213
 
CA
         
Wells Fargo - Corporate
 
494-4183870
 
CA
         
Wells Fargo – Discover
 
417-1104649
 
CA
         
Wells Fargo - Galley
 
494-4250901
 
CA
         
Wells Fargo IBS-Investment Account
 
13107859
 
CA
         
Wells Fargo – Port Supply
 
494-4183854
 
CA
         
Wells Fargo US Postage Account
 
417-1265325
 
CA
         
Wells Fargo – Velocity Rebate
 
412-1879787
 
CA

 
Page 2 of Schedule 5.17

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

 
 
BANK NAME
 
BANK ACCT#
 
LOCATION
         
Wells Fargo – Visa/Master card – deposit detail rept.
 
417-1119696
 
CA
         
Wells Fargo – West Marine Finance Company Overland Express Sweep
 
417-1269558
 
CA
         
Wells Fargo – W Marine Management Co.
 
417-0862601
 
CA
         
Wells Fargo – West Marine, Inc.
 
417-0866933
 
CA

 
Page 3 of Schedule 5.17

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

 

Schedule 5.19
Credit Card Receipts
 
Credit Card Issuer:     Barclays Bank Delaware (formerly known as Juniper Bank
prior to May 25, 2006)
 
Credit Card Processors and Agreements:
 
 
1.
Visa and MasterCard Transactions:  Processed by First National Bank of Omaha
pursuant to Major Merchant Agreement dated May 23, 1997.

 
 
2.
Discover:  Processed by Discover Card Services, Inc. pursuant to Agreement dated
May 22, 1990.

 
 
3.
American Express:  Processed by American Express pursuant to Acceptance
Agreement dated October 2005.

 
 
4.
Visa (Canada):  Processed by Moneris pursuant to Visa National Account Merchant
Agreement dated February 1, 2006.

 
 
5.
Debit Card: Processed by Moneris pursuant to National Account Merchant Debit
Card and Terminal Agreement dated February 1, 2006.

 
 
 

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

 

Schedule 5.25
Permitted Indebtedness
 
None.

 
 

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

 
 
SCHEDULE 6.2
 
Collateral Reporting
 
Borrowers shall provide Agent (and if so requested by Agent, with copies for
each Lender) with the following documents at the following times in form
satisfactory to Agent:
 
(a)           Monthly Reporting.  In respect of each Fiscal Month,
Administrative Borrower shall provide to Agent original counterparts of (each in
such form as Agent from time to time may specify):
 
(i)          Borrowing Base Certificate.  Prior to the occurrence of an
Accelerated Borrowing Base Delivery Event, Administrative Borrower shall provide
to Agent, on or before the twelfth (12th) day of each Fiscal Month, a signed
Borrowing Base Certificate in respect of the Borrowing Base as of the last day
of the immediately preceding Fiscal Period; provided, however that upon the
occurrence and during the continuance of an Accelerated Borrowing Base Delivery
Event, Administrative Borrower shall provide to Agent, on or before Friday of
each week, a signed Borrowing Base Certificate in respect of the Borrowing Base
as of the close of business on the preceding Saturday.  Such Certificate may be
sent to Agent electronically (with an electronic signature) or by facsimile
transmission, provided, further, that in each case, upon request by Agent, the
original thereof is forwarded to Agent on the date of such transmission.  No
adjustments to the Borrowing Base Certificate may be made without supporting
documentation and such other documentation as may be reasonably requested by
Agent from time to time.
 
(ii)         Other Reports. Within 15 days after the end of each Fiscal Month
for the immediately preceding Fiscal Month:
 
(1)           purchases and accounts payable analysis report in Agent’s format;
 
(2)           sales audit report and Inventory summary by location and
merchandise class;
 
(3)           inventory certificate in Agent’s format;
 
(4)           rent, tax and insurance compliance certificate in Agent’s format;
 
(5)           a Collateral activity summary or “roll forward” inventory report;
 
(6)           a detailed aging, by total, of the Accounts of Borrowers, together
with a reconciliation to the detailed calculation of the Borrowing Base
previously provided to Agent; and

 
 

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

 

(7)           a detailed report regarding Borrowers’ cash and Cash Equivalents.
 
(b)           Monthly Reconciliation Reports.  Within 30 days of the end of each
Fiscal Month for the immediately preceding month:
 
(1)           reconciliation of the stock ledger to the general ledger and the
calculation of availability; and
 
(2)           statement of store activity in Agent’s format.
 
(c)           For purposes of items (b)(1) and (b)(2) above, the first
“preceding Fiscal Month” in respect of which the items required by that Section
shall be provided shall be the Fiscal Month ending August 28, 2010.
 
 
2

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

 
 
Schedule 7.12
Loan Parties’ Affiliates
 
Randolph K. Repass and Geoffrey A. Eisenberg, jointly (with Mr. Repass owning a
majority interest) through the following entities:
 
·
Watsonville Freeholders, a California limited partnership (landlord of
Watsonville, CA support center)

 
·
Partnership that is the landlord of the Santa Cruz, CA store

Randolph K. Repass individually and through the following entities:
 
·
FBO Trust, Randolph K. Repass, as trustee (landlord of Palo Alto, CA store)

 
·
Corporate landlord of New Bedford, MA store

 
·
Partnership that is the landlord of Braintree, MA store

 
See also Schedule 5.6.

 
 

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

 

Schedule 7.18
Deposit Accounts And Credit Card Agreements
 
BANK NAME (All Depository Accounts)
 
BANK ACCT#
     
Amegy Bank
 
6701003569
     
American Bank of Texas
 
702831570
     
Associated Bank of the West
 
2223058740
     
Banco Popular de Puerto Rico – Concentration Account
 
111219957
     
Banco Popular de Puerto Rico – Depository Account
 
111219949
     
Banco Popular de Puerto Rico – Payroll Acct
 
111219841
     
Bank of America – Concentration Account
 
1487950180
     
Bank of Hampton Roads
 
100021778
     
Bank of Waukegan
 
41900515
     
Central Bank of the Ozarks
 
027119
     
Chase Bank
 
5113501167
     
Fifth/Third Bank
 
7910187421
     
First Citizen Bank and Trust
 
4712016217
     
First Hawaiian Bank
 
46012739
     
First VA/BBT
 
5233851584
     
First National Bank of Bar Harbor
 
85104772
     
Huntington National Bank of OH
 
01701614448
     
Key Bank of Vermont
 
454680019758
     
Lake Region Bank (Solutran) NSF Check
 
455128-F
     
M & I Bank of WI
 
0003815889

 
Page 1 of Schedule 7.18

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BANK NAME (All Depository Accounts)
 
BANK ACCT#
     
Mechanics Bank
 
13007920
     
PNC Bank of NJ
 
8103767112
     
Regions Bank
 
2500049334
     
Royal Bank of Canada – Concentration Account
 
00010-1150689
     
Royal Bank of Canada – Depository Account
 
00010-1150705
     
Royal Bank of Canada – Payroll Account
 
00010-1150697
     
Sandhills Bank
 
305003311
     
Sovereign Bank
 
75-20-2000109
     
Sun Trust Bank
 
215252200318
     
Tallahassee State Bank of Florida
 
1280172601
     
Wachovia
 
2030060929636
     
Wells Fargo AMEX
 
417-1102338
     
Wells Fargo – AP Clearing
 
9600 029733
     
Wells Fargo – Blue Cross
 
9600 029748
     
Wells Fargo - Catalog
 
494-4183862
     
Wells Fargo Concentration
 
417-1263213
     
Wells Fargo - Corporate
 
494-4183870
     
Wells Fargo – Discover
 
417-1104649
     
Wells Fargo – Flexible Benefits
 
417-1266158
     
Wells Fargo - Galley
 
494-4250901
     
Wells Fargo – IBS – Investment Account
 
13107859
     
Wells Fargo - Payroll
 
417-264229

 
Page 2 of Schedule 7.18

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BANK NAME (All Depository Accounts)
 
BANK ACCT#
Wells Fargo – Port Supply
 
494-4183854
     
Wells Fargo US Postage Account
 
417-1265325
     
Wells Fargo – Velocity Rebate
 
412-1879787
     
Wells Fargo – Visa/Master card – deposit detail rept.
 
417-1119696
     
Wells Fargo – West Marine Finance Company Overland Express Sweep
 
417-1269558
     
Wells Fargo – W Marine Management Co.
 
417-0862601
     
Wells Fargo – West Marine, Inc.
 
417-0866933

 
Credit Card Agreements:
 
See Schedule 5.19

 
Page 3 of Schedule 7.18

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