Document:

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

    
      
        	 
      

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    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

                

        

      

    

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    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

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    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

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    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

                

        

      

    

     

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    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

            

    

    
      
         

      

      
        vi

        
          

        

      

      
         

      

    

    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):

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    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).

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “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

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “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.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    “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

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “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.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “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.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    “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.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    “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;

     

    
      
         

      

      
        95

        
          

        

      

      
         

      

    

    (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;

    
      
         

      

      
        96

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        97

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        98

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        99

        
          

        

      

      
         

      

    

    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

                

        

      

    

     

    
      
         

      

      
        100

        
          

        

      

      
         

      

    

     

    
      
        
          	
                  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).

    
      
         

      

      
        101

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        102

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        103

        
          

        

      

      
         

      

    

    (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.

    
      
         

      

      
        122

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
        123

        
          

        

      

      
         

      

    

    
      	
              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.

    
      
         

      

      
        124

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        125

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        126

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        127

        
          

        

      

      
         

      

    

    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.]

    
      
         

      

      
        128

        
          

        

      

      
         

      

    

    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)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  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:

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      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

                  

          

        

      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    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

          
            

          

        

        
           

        

      

    

     

    
      
        	
                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

          
            

          

        

        
           

        

      

    

     

    
      
        	
                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 7.18MILLBURN
MULTI-MARKETS FUND L.P.

     

    THIRD
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	 
      	 
      	 	
                                                          Page

                                                        	 
	 	 	 	 	 	 
	
                                                          1.

                                                        	
                                                          Formation
      of Limited Partnership; Partnership Name.

                                                        	 	 	1	 
	 	 	 	 	 	 
	
                                                          2.

                                                        	
                                                          Principal
      Place of Business.

                                                        	 	 	1	 
	 	 	 	 	 	 
	
                                                          3.

                                                        	
                                                          Business.

                                                        	 	 	2	 
	 	 	 	 	 	 
	
                                                          4.

                                                        	
                                                          Term,
      Dissolution and Fiscal Year.

                                                        	 	 	3	 
	 	 	 	 	 	 
	
                                                          5.

                                                        	
                                                          Units
      and Capital Contributions.

                                                        	 	 	3	 
	 	 	 	 	 	 
	
                                                          6.

                                                        	
                                                          Allocation
      of Profits and Losses.

                                                        	 	 	4	 
	 	 	 	 	 	 
	
                                                          7.

                                                        	
                                                          Duties
      of the General Partner.

                                                        	 	 	6	 
	 	 	 	 	 	 
	
                                                          8.

                                                        	
                                                          Reports
      to Limited Partners.

                                                        	 	 	6	 
	 	 	 	 	 	 
	
                                                          9.

                                                        	
                                                          Non-Assignability
      and Redemptions.

                                                        	 	 	7	 
	 	 	 	 	 	 
	
                                                          10.

                                                        	
                                                          Special
      Power of Attorney.

                                                        	 	 	9	 
	 	 	 	 	 	 
	
                                                          11.

                                                        	
                                                          Voluntary
      or Involuntary Redemption of a Partner; Removal of General
      Partner

                                                        	 	 	9	 
	 	 	 	 	 	 
	
                                                          12.

                                                        	
                                                          No
      Personal Liability for Return of Capital.

                                                        	 	 	9	 
	 	 	 	 	 	 
	
                                                          13.

                                                        	
                                                          Standard
      of Liability and Indemnification.

                                                        	 	 	9	 
	 	 	 	 	 	 
	
                                                          14.

                                                        	
                                                          Additional
      Limited Partners.

                                                        	 	 	10	 
	 	 	 	 	 	 
	
                                                          15.

                                                        	
                                                          Amendments
      with Consent of the General Partner.

                                                        	 	 	10	 
	 	 	 	 	 	 
	
                                                          16.

                                                        	
                                                          Governing
      Law.

                                                        	 	 	11	 
	 	 	 	 	 	 
	
                                                          17.

                                                        	
                                                          Miscellaneous.

                                                        	 	 	11	 

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    
   

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

    

    MILLBURN
MULTI-MARKETS FUND L.P.

     

    THIRD
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

     

    This
Third Amended and Restated Limited Partnership Agreement (this “Agreement”)
dated as of August 27, 2010, by and among Millburn Ridgefield Corporation, a
Delaware corporation (the “General Partner”), and the other parties who become
parties to this Agreement, whether by execution of a counterpart of this
Agreement or by execution of a separate instrument pursuant to which such party
agrees to be bound by the terms of this Agreement (collectively, “Limited
Partners”) (the General Partner and Limited Partners may be collectively
referred to herein as “Partners”).

     

    WITNESSETH:

     

    WHEREAS, the parties hereto
desire to continue a limited partnership for the purposes set forth herein, and
to set forth the terms pursuant to which the Partnership shall be
governed;

     

    WHEREAS, this Agreement
amends and restates in its entirety the Partnership’s previous second amended
and restated limited partnership agreement;

     

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

     

    1.           Formation of Limited Partnership;
Partnership Name.

     

    (a)          The
Partners do hereby form a limited partnership under the Delaware Revised Uniform
Limited Partnership Act, as amended and in effect on the date hereof (the
“Act”).  The name of the limited partnership is Millburn Multi-Markets
Fund L.P. (the “Partnership”).

     

    The
General Partner has executed and filed a Certificate of Limited Partnership in
accordance with the provisions of the Act and shall execute, file and record, as
appropriate, such amendments, assumed name certificates and other documents as
are or become necessary or advisable as determined by the General Partner, and
shall take all steps which the General Partner may deem necessary or advisable
to allow the Partnership to conduct business in any jurisdiction where the
Partnership conducts business and to otherwise provide that Limited Partners
will have limited liability with respect to the activities of the Partnership in
all such jurisdictions.  Each Limited Partner hereby undertakes to
furnish to the General Partner a power of attorney which may be filed with the
Certificate of Limited Partnership and any amendments thereto and such
additional information as is required from it to complete such documents and to
execute and cooperate in the filing or recording of such documents at the
request of the General Partner, provided that no Limited Partner shall in any
respect participate in the management of the Partnership.  The General
Partner shall have the authority to reorganize the Partnership, or to merge the
Partnership into a new limited partnership organized under the laws of any State
in the United States, provided that such reorganization or merger does not have
a material adverse effect on the Limited Partners.

     

    2.           Principal Place of
Business.

     

    The
principal office of the Partnership shall be 411 West Putnam Avenue, Greenwich,
Connecticut 06830, or such other place as the General Partner may
designate.

     

    The
address of the registered office of the Partnership in the State of Delaware is
c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Newcastle County, Delaware  19801, and the name and
address of the registered agent for service of process on the Partnership in the
State of Delaware is The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, Newcastle County,
Delaware  19801.

     

    The
General Partner may change the registered office and registered agent of the
Partnership upon notice to the Limited Partners.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           Business.

     

    The
Partnership will operate as a “feeder fund,” investing all of its assets in
Millburn Multi-Markets Trading, L.P., a Delaware limited partnership (the
“Master Fund”), except for such capital as the General Partner determines is
reasonably necessary or appropriate to pay any fees, expenses or other costs
related to the Partnership.  Subject to the general limitation of
investing all of its assets in the Master Fund, the business and purpose of the
Partnership, through its investment in the Master Fund, is to trade, buy, sell
or otherwise acquire, hold or dispose of commodities and currencies including
futures and forward contracts, options contracts, and any other rights
pertaining thereto.  The objective of the Partnership business,
through its investment in the Master Fund, is appreciation of its assets through
speculative trading.

     

    The
Partnership shall have the following purposes, through its investment in the
Master Fund:

     

    (a)          to
purchase, sell, write and invest and trade in, within and without the United
States, on margin or otherwise, government and government agency bonds,
debentures, notes, letters of credit, bankers’ acceptances, commercial paper,
other securities, rights and options, including puts and calls, with respect to
any of the foregoing (collectively, “Securities”), including the making and
covering of short sales of Securities;

     

    (b)          to
purchase, sell, write and invest and trade in, within or without the United
States, on margin or otherwise, commodities, commodity futures and forward
contracts and rights and options, including puts and calls, with respect to
commodities and commodity futures and forward contracts (collectively,
“Commodity Interests”), including the making and covering of short sales of
Commodity Interests;

     

    (c)          to
purchase, sell and invest in all manner of physical and “spot” market
commodities within and without the United States;

     

    (d)          to
purchase, sell, write and invest and trade in, within and without the United
States, on margin or otherwise, foreign currencies, foreign currency futures
contracts, foreign currency forward contracts and rights and options relating
thereto (collectively, “Currency Interests”), including the making and covering
of short sales of Currency Interests;

     

    (e)          to
lend monies to third parties;

     

    (f)           to
purchase, sell, write and invest and trade in, within and without the United
States, on margin or otherwise, “swaps,” “swaptions,” “floors,” “collars,” “swap
agreements” within the meaning of the Part 35 regulations of the Commodity
Futures Trading Commission (“CFTC”), “hybrid instruments” within the meaning of
the Part 34 regulations of the CFTC, and excluded derivative transactions,
hybrid instruments and excluded swap transactions within the meaning of Section
2 of the Commodity Exchange Act and all manner of “over-the-counter”
instruments, including the making and covering of short sales in any of the
foregoing;

     

    (g)          to
engage in any form of trading or investment activity within or without the
United States which the general partner of the Master Fund (the “Master Fund
GP”)  deems appropriate, without restriction or limitation, and to
refrain from trading or investing in the Master Fund GP’s  absolute
discretion; and

     

    (h)          to
engage in any other lawful act or activity within or without the United States
for which limited partnerships may be organized under the laws of the State in
which the Partnership is then organized.

     

    The
Partnership shall have the power to enter into, make and perform all contracts
and other undertakings, and engage in all activities and transactions as may be
necessary or advisable to the carrying out of the foregoing purposes, including,
without limitation, but subject to the general limitation of investing all of
its assets in the Master Fund, except for any capital as the General Partner
determines is reasonable necessary or appropriate to pay any fees, expenses or
other costs related to the Partnership, the power:

     

    (aa)        to
borrow money from banks, brokers or any of the Partners, and to secure the
payment of any obligations of the Partnership by hypothecation or pledge of all
or part of the assets of the Partnership;

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (bb)

            	
              to
      exercise all rights, powers, privileges and other incidents of ownership
      or possession with respect to the assets of the
    Partnership;

            

    

     

    
      	
               
      

            	
              (cc)

            	
              to
      open, maintain and close bank, brokerage and other
    accounts;

            

    

     

    (dd)        to
maintain one or more offices within or without the State of Connecticut and in
connection therewith to rent or acquire office space, engage personnel and do
such other acts as the General Partner may deem to be advisable or necessary in
connection with such offices and personnel, all at the Partnership’s expense;
and

     

    (ee)        to
take such actions as the General Partner may deem to be necessary or advisable
in connection with the foregoing, including the retention of agents, independent
contractors, attorneys, accountants and investment counselors, and the
preparation and filing of all Partnership tax returns.

     

    4.           Term, Dissolution and Fiscal
Year.

     

    (a)          Term.  The
term of the Partnership commenced on the day the Certificate of Limited
Partnership was filed with the Office of the Secretary of State of the State of
Delaware pursuant to the provisions of the Act and shall end upon the first to
occur of the following:  (1) withdrawal, insolvency, bankruptcy
or dissolution of the General Partner; or (2) any event which shall make it
unlawful for the existence of the Partnership to continue.

     

    (b)          Dissolution.  Upon
the occurrence of an event causing the termination of the Partnership, the
Partnership shall terminate and be dissolved.  Dissolution, payment of
creditors and distribution of the Partnership assets shall be effected in
accordance with the Act, and the General Partner and each Limited Partner (and
any assignee the assignment to which the General Partner has consented) shall
share in the assets of each Series (as defined in Paragraph 5(a)) in which it is
invested pro rata in
the ratio of the total of all capital accounts attributable to the Units (as
defined in Paragraph 5(a)) of such Series held by such Partner to the total of
all capital accounts attributable to the Series, less any amount owed by such
Partner (or assignee) to the Partnership and attributable to that
Series.

     

    (c)          Fiscal
Year.  The fiscal year of the Partnership shall begin
January 1 of each year and end on December 31 of each
year.

     

    5.           Units and Capital
Contributions.

     

    (a)          Offering of
Units.  The beneficial interests in the Partnership shall
consist of two types: a general liability interest and units of limited
partnership interest (“Units”).  The General Partner shall acquire the
general liability interest, and Limited Partners shall all acquire
Units.  The General Partner may, from time to time, authorize the
designation of the Units into one or more series (“Series”).  Units
may be sold by the General Partner or its agents on behalf of the Partnership,
at the General Partner’s discretion, to persons desiring to become Limited
Partners.  Upon the initial contribution by the General Partner to the
Partnership, the General Partner will become the holder of the general liability
interest of the Partnership.  The General Partner’s general liability
interest shall be accounted for on a Unit-equivalent basis, but may receive
allocations on an aggregate basis so as to simplify the Partnership’s
accounting.  The amount of the purchase price of Units purchased by a
Limited Partner shall constitute such Limited Partner’s initial capital
contribution.  The aggregate of all contributions shall be available
to the Partnership to carry on its business and no interest shall be paid on any
such contribution.  There is no maximum amount of funds which may be
contributed to the Partnership.

     

    (b)          Partners’
Contributions.  The General Partner shall maintain a sufficient
investment in the Partnership for the Partnership to be treated as a partnership
for federal income tax purposes.  Each Partner shall contribute cash
to the Partnership, although the General Partner shall have discretion to accept
other assets valued at fair market value.  The aggregate of all
contributions shall be available to the Partnership to carry on its business and
no interest shall be paid on any such contribution.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (c)          Limited Liability
of Limited Partners.  Each Unit, when
purchased by a Limited Partner, shall be fully paid and
non-assessable.  No Limited Partner shall be liable for Partnership
obligations in excess of the capital contributed by it, plus its share of
profits, if any, including its obligation, as required by law under certain
circumstances, to return to the Partnership distributions and returns of
contributions.  Each Limited Partner hereby agrees with the General
Partner that, upon written demand therefor by the General Partner, such Limited
Partner will promptly return to the Partnership all amounts for which such
Limited Partner may be liable to the Partnership or its creditors under the
Act.

     

    (d)          Return of Limited
Partners’ Capital Contributions.  Except to the extent that a
Limited Partner shall be entitled to redeem all or a portion of its Units in
accordance with the terms of this Agreement, no Limited Partner shall have any
right to demand the return of its capital contributions or any profits added
thereto, except upon termination and dissolution of the
Partnership.  In no event shall a Limited Partner be entitled to
demand or receive property other than cash.

     

    (e)          Distributions.  The
General Partner shall have sole discretion in determining what distributions, if
any, the Partnership will make to its Limited Partners.  No Limited
Partner shall have the right to demand or receive property other than cash upon
redemption of all or part of such Limited Partner’s Units.  The
Partnership may pay all distributions (including distributions made in respect
of redemptions) in cash or in kind.

     

    (f)           Contributions by
Employee Benefit Plans and Plan Asset Entities.  The General Partner may
determine to not accept contributions for Units if doing so would cause the
assets of the Master Fund to constitute “plan assets” for purposes of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), with
respect to any “employee benefit plan” as defined in and subject to ERISA or
with respect to any “plan” as defined in and subject to Section 4975 of the
Code.  If rejection of subscriptions by any person, including but not
limited to any such employee benefit plan, such other plan or account, or
entities that are treated as holding such plan assets, is necessary to avoid
causing the assets of the Master Fund to be such plan assets, the General
Partner will effect such rejections as the General Partner, in its sole
discretion, determines.

     

    6.           Allocation of Profits and
Losses.

     

    (a)          Capital
Accounts.  A capital account shall be established for each Unit
and for the General Partner.  The initial balance of each capital
account shall be the amount contributed to the Partnership in respect of a Unit
or by the General Partner.

     

    (b)          Monthly and
Yearly Allocations.  As of the close of business (as determined
by the General Partner) of the last day of each month or of the fiscal year, as
the case may be, the following determinations and allocations shall be
made:

     

    
      	
               
      

            	
              (1)

            	
              The
      Net Assets of the Partnership (as defined in Paragraph 6(d)) shall be
      determined.

            

    

     

    
      	
               
      

            	
              (2)

            	
              The
      General Partner shall allocate to each Series all Net Assets attributable
      to such Series.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Subject
      to subparagraph (4), any increase or decrease in Net Assets of a Series as
      of the end of the month, including net interest income, shall be credited
      or charged (A) equally to the capital account of each Unit of such Series
      and (B) pro rata
      to the capital account of the General Partner in the ratio that the
      balance of such account bears to the balance of all capital accounts
      attributable to the Series.

            

    

     

    
      	
               
      

            	
              (4)

            	
              The
      amount of any distributions made in respect of a Unit and any amount paid
      upon partial redemption of Units or upon withdrawal of part or all of the
      General Partner’s interest shall be charged to the capital account of such
      Unit or of the General Partner, as applicable.  The capital
      account of any Unit redeemed shall be
  eliminated.

            

    

     

    (c)           Allocation of
Profit and Loss for Federal Income Tax Purposes.  In each
fiscal year, items of income, deduction, gain or loss that are recognized for
income tax purposes (including any capital gain or loss required to be taken
into account under Section 1256 of the Code) shall be allocated among the
Partners in such manner as to reflect equitably amounts credited to or charged
against each capital account established with respect to each such Partner,
whether in such fiscal year or in prior fiscal years.  To this end,
the Partnership shall establish a tax capital account with respect to each
Partner and maintain records which shall show the extent to which the capital
account of each Unit and the General Partner is, as of the last day of each
fiscal year, comprised of amounts which have not been reflected in the tax
account of the Partners.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    The
General Partner may, in its sole discretion, elect to use an “aggregate”
allocation method permitted under Sections 704(b) and (c) of the Code and the
regulations thereunder; otherwise, to the extent deemed by the General Partner
to be feasible and equitable, taxable income and gains in each fiscal year shall
be allocated among the Partners who have benefited from the Partnership’s income
and gains, and tax deductions and losses in each fiscal year shall be allocated
among the Partners who have borne the Partnership’s deductions and
losses.

     

    In the
event a Limited Partner redeems all or some of its Units, the General Partner
may in its sole discretion make a special allocation to the Partner for federal
income tax purposes of the gains or losses recognized by the
Partnership.  The allocation of such gains shall be in such a manner
as will reduce the amount, if any, by which the aggregate balance of such
Partner’s capital accounts (or, with respect to a partial redemption, the
portion thereof attributable to the Units being redeemed) exceeds its federal
income tax basis in its Units (or, with respect to a partial redemption, the
Units being redeemed) before such allocation.  The allocation of such
losses shall be in such a manner as will reduce the amount, if any, by which the
balance of such Partner’s federal income tax basis in its Units (or, with
respect to a partial redemption, the Units being redeemed) exceeds the aggregate
balance of such Partner’s capital accounts (or, with respect to a partial
redemption, the portion thereof attributable to the Units being redeemed) before
such allocation.

     

    Any
elections or other decisions relating to allocations under this Paragraph 6(c)
will be made in any manner that the General Partner determines reasonably
reflects the purpose and intention of this Agreement.  The tax
allocations set forth in this Paragraph 6(c) are intended to allocate items of
Partnership income, gains, losses and deductions (ordinary, short-term and
long-term) in accordance with Sections 704(b) and (c) of the Code.

     

    (d)          Net Assets;
Accounting.  Net Assets of the Partnership shall be determined
primarily based on the Partnership’s investment in the Master
Fund.  The Master Fund’s net assets equal the sum of all cash, plus
treasury bills, notes or other securities at market value, plus the market value
of all open futures, forward, over the counter swap or other trading positions
maintained by the Partnership, less all liabilities of the Partnership
determined in accordance with the accounting principles set forth
below.  Net Assets of the Partnership shall be determined in
accordance with generally accepted accounting principles under the accrual basis
of accounting.  The market value of all Partnership and Master Fund’s
assets and liabilities, for all purposes hereunder, shall be determined in
accordance with the General Partner’s Valuation Policies and Procedures, a copy
of which is available to Limited Partners upon request.  The General
Partner may reduce the valuation of any asset by reserves established to reflect
contingencies, liabilities, uncertain valuations or other factors, which the
General Partner determines, in its absolute discretion, reduce, or might reduce,
the value of such asset.  All determinations of value by the General
Partner shall be final and conclusive as to all Partners, absent bad faith, and
the General Partner shall be absolutely protected in relying upon valuations
furnished to the General Partner by third parties believed by the General
Partner, without independent investigation, to be made in good faith and
reliable.  The net asset value per Unit of a Series shall equal the
Net Assets of such Series divided by the number of its Units outstanding as of
any given valuation date.

     

    (e)          Expenses.  The
Partnership shall bear all of its own expenses (which may be paid by the Master
Fund on behalf of the Partnership), including, but not limited
to:  (a) all expenses that the General Partner reasonably determines
to be incurred in connection with the Partnership’s investment activities, which
will be conducted by investing all of the Partnership’s assets in the Master
Fund, except for any capital as the General Partner determines is reasonably
necessary or appropriate to pay any fees, expenses or other costs related to the
Partnership; any taxes to which the Partnership is subject; regulatory fees and
interest charges; (b) expenses incurred in connection with the organization of
the Partnership and the initial offering of the Units, which have been paid by
the General Partner and shall be reimbursed by the Partnership in 60 equal
monthly installments beginning with the commencement of the Partnership’s
operations; provided,
however, that to the extent the reimbursed amount of such organizational
and initial offering costs exceeds in the aggregate for any month 1/12 of 0.05%
(0.05% per annum) of the Partnership’s month-end net asset value, such excess
will not be reimbursed by the Partnership but will be borne by the General
Partner; provided further,
that the Partnership’s obligation to reimburse the General Partner for
such expenses shall terminate if the Partnership is terminated prior to the end
of such 60 month period; (c) amounts due to persons not affiliated with the
General Partner for providing operating, administrative, custody, legal,
accounting, audit and tax services to the Partnership or to the General Partner
with respect to the activities of the Partnership; registration and filing fees;
and the cost of the ongoing offering of the Units; and (d) any fees or other
compensation payable to the General Partner or any of its affiliates by the
Partnership as an investor in any Master Fund, including, without limitation,
management and administrative fees and profit shares; ongoing sales commissions
and all other fees and expenses payable directly, or indirectly through the
General Partner, by the Partnership or any Master Fund to third-parties that
assist in the placement or sales of the Units; and the Partnership’s pro rata share, as an
investor in any Master Fund, of the investment and operating expenses and
organizational costs of such Master Fund.  The Partnership also shall
bear all of its extraordinary expenses (including, without limitation, any
litigation-related or indemnification expenses), if any.  The General
Partner may waive, reduce or rebate management fees, administrative fees and
profit shares payable to any Master Fund for which the General Partner serves as
general partner, manager or adviser, with respect to any Limited Partner without
entitling any other Limited Partner to a similar waiver, reduction or
rebate.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Appropriate
reserves may be created, accrued and charged to the Partners’ capital accounts
and any sub-accounts thereof for contingent liabilities, if any, as of the date
any such contingent liability becomes known to the General Partner.

     

    (f)           Prior Period
Adjustments.  The General Partner may determine to treat any
liability or expenditure of the Partnership which becomes fixed or is incurred
in an accounting period subsequent to the accounting period to which such
liability or expenditure relates as either (i) arising in the accounting period
in which such liability becomes fixed or such expenditure is incurred or (ii)
arising in such prior accounting period, in which case such liability or
expenditure shall be charged to persons who were Partners during such prior
accounting period (whether or not such persons are Partners during the
accounting period in which such liability is fixed or such expenditure is
incurred) in accordance with the ratio the capital accounts of the Units held by
such Limited Partner, or the capital account of the General Partner, as
applicable, bear to the balance of all capital accounts as of the beginning of
such prior accounting period, and the Partnership may collect amounts previously
distributed to such persons in accordance with the provisions of Paragraph
9(e).

     

    7.           Duties of the General
Partner.

     

    (a)          Management of the
Partnership.  The General Partner, to the exclusion of the
Limited Partners, shall conduct and manage the business of the
Partnership.  The General Partner shall cause the Partnership to
invest all of the Partnership’s assets in the Master Fund, except for such
capital as the General Partner determines is reasonably necessary or appropriate
to pay any fees, expenses or other costs related to the
Partnership.  No person dealing with the General Partner shall be
required to determine its authority to make any undertaking on behalf of the
Partnership, nor to determine any facts or circumstances bearing upon the
existence of its authority.  No Limited Partner, as such, shall be
entitled to any salary, draw or other compensation from the
Partnership.

     

    (b)          Services of Third
Parties.  The General Partner may engage and compensate on
behalf of the Partnership from funds of the Partnership (subject to Paragraph
6(e)) such persons, firms or corporations, including any affiliated person or
entity or any other person or entity, as the General Partner in its sole
judgment shall deem advisable for the conduct and operation of the business of
the Partnership.

     

    (c)          Limitation on
Trading Activity of the General Partner.  In no case shall the
General Partner or any of its principals take advantage of their knowledge of
trades made or contemplated on behalf of the Partnership, which will be made by
the Master Fund, for their own trading; nor shall they knowingly trade in any
manner to the detriment of the Partnership, either directly or indirectly, or in
any manner take any advantage of their position with respect to the
Partnership.  Direct trading between the Partnership and any account
of, or managed by, the General Partner or any of its principals is
prohibited.

     

    8.           Reports to Limited
Partners.

     

    The
General Partner shall keep and retain such books and records relating to the
business of the Partnership as the General Partner may deem necessary or
advisable and as may be required by law, including the rules and regulations of
the CFTC.  The Partnership books shall be audited annually by an
independent certified public accountant.  The Partnership will cause
each Partner to receive as soon as practicable after the close of each fiscal
year certified financial statements of the Partnership for the fiscal year then
ended.  In addition, the General Partner will report monthly to each
Limited Partner the following information:  the value of such Limited
Partner’s Units, and such other information as the General Partner may deem
appropriate and as may be required by the rules and regulations of the
CFTC.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    9.           Non-Assignability and
Redemptions.

     

    (a)          Non-Assignability.  Each
Limited Partner expressly agrees that it (i) is purchasing Units for investment
and not with a view to the assignment, transfer or disposition of any Units and
(ii) will not assign, transfer or otherwise dispose of, by gift or otherwise,
any of its Units or any part or all of its right, title and interest in the
capital or profits of the Partnership without giving written notice of the
assignment, transfer or disposition to the General Partner, which notice shall
include evidence satisfactory to the General Partner that the proposed
assignment, transfer or disposition would not violate any state or federal
statute, regulation, court order, judicial decree or rule of law, and receiving
the prior written consent of the General Partner.  No assignee, except
with the consent of the General Partner (which consent may be withheld at its
sole and absolute discretion), may become a substituted Limited
Partner.  If an assignment, transfer or disposition occurs by reason
of the death of a Limited Partner or assignee, or by operation of law, such
written notice may be given by the duly authorized representative of the estate
of the Limited Partner or assignee and shall be supported by such proof of legal
authority and valid assignment as may reasonably be requested by the General
Partner.  The General Partner need not, however, consent to any such
assignment, and if the General Partner does not consent, the assignee shall have
the rights described in the following paragraph.

     

    Each
Limited Partner agrees that with the consent of the General Partner any assignee
may become a substituted Limited Partner without the further act or consent of
any Limited Partner.  Each Limited Partner agrees that it has no right
to consent to and will not consent to any person’s or entity’s becoming a
substituted Limited Partner, except as set forth in the preceding
sentence.  If the General Partner withholds consent, an assignee shall
not become a substituted Limited Partner and shall not have any of the rights of
a Limited Partner, except that the assignee shall be entitled to receive that
share of capital or profits and shall have that right of redemption and all
other economic benefits of ownership to which its assignor would otherwise have
been entitled and shall remain subject to the other terms of this Agreement
binding upon Limited Partners.

     

    (b)          Redemptions.  A
Limited Partner (or any assignee thereof) may redeem any part or all of its
Units effective as of the end of the first month ending at least fifteen days
after a request for redemption in acceptable form has been delivered to the
General Partner.  The General Partner may, in its discretion, permit
redemptions (i) on shorter notice or (ii) as of a date other than a
month-end.  Upon redemption, a Limited Partner (or any assignee
thereof) shall receive an amount equal to the value of the Units redeemed as of
the effective date of redemption, less any amount owing by such Partner (and its
assignee, if any) to the Partnership pursuant to Paragraph 13(c).  An
assignee shall not be entitled to redeem until the General Partner has received
written notice of and has consented to (as described in subparagraph (a)
above) the assignment, transfer or disposition under which the assignee claims
an interest in the Units to be redeemed and shall have no claim against the
Partnership or the General Partner with respect to distributions or amounts paid
on redemption of Units prior to the receipt by the General Partner of such
notice.  A redemption charge of 2% of the net asset value of Series A
Units redeemed applies to Series A Units redeemed on or before the sixth
month-end after they are issued.  A redemption charge of 1% of the net
asset value of Series A Units redeemed applies to Series A Units redeemed after
the sixth, but on or before the eleventh, month-end after they are
issued.  Payment will be made within a reasonable time of the date of
redemption.  In the event of a default or delay in payments due the
Partnership from commodity brokers, banks or other persons, or under similar
circumstances, the Partnership may in turn delay payment to Limited Partners
requesting redemption of Units of the proportionate part of the value of the
Units represented by the sums which are the subject of such default or
delay.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (c)          Suspension of the
Determination of Net Assets and Redemptions.  Anything herein
to the contrary notwithstanding, the General Partner may suspend the
determination of Net Assets and/or suspend redemptions of Units in whole or in
part by reason of:  (i) a redemptions that would result in violation
by the Partnership, the General Partner or any of their respective affiliates of
applicable securities or commodities laws or regulations or any other law of the
United States or any other jurisdiction applicable to the Partnership, the
General Partner or any of their respective affiliates (including but not limited
to anti-money laundering laws and regulations applicable to the Partnership, the
General Partner or any of the other service providers of the Partnership); (ii)
any exchange or quotation system on which a significant portion of the assets of
the Partnership is regularly traded or quoted is closed (other than for
holidays) or trading thereon is generally suspended or limited; (iii) the prices
or values of any assets of the Partnership cannot reasonably be promptly and
accurately ascertained for any reason; (iv) trading by the Partnership, any
exchange or quotation system is suspended or limited and the General Partner
determines that such suspension or limitation is material to the Partnership;
(v) it is not possible to determine the exact Net Assets of the Partnership;
(vi) the General Partner determines in its sole discretion that a redemption
could result in assets of the Master Fund becoming “plan assets” for purposes of
ERISA or Section 4975 of the Code with respect to any “employee benefit plan” as
defined in and subject to ERISA or with respect to any “plan” as defined in and
subject to Section 4975 of the Code; (vii) in order to effect orderly
liquidation of the Partnership necessary to effect redemptions; or (viii) the
determination of net assets, withdrawals or redemptions have been suspended or
otherwise limited by any Master Fund.  No interest will be paid with
respect to amounts affected by suspension of the determination of Net Assets or
redemptions.

     

    Notice of any suspension will be given
to any Limited Partner who has requested a redemption.  If a
redemption request is not withdrawn by a Limited Partner following notification
of a suspension, the redemption will be completed as of the end of the first
month ending at least fifteen days after the termination of the
suspension.

     

    Notwithstanding anything to the
contrary in this Agreement, the General Partner, by written notice to any
Limited Partner, may suspend payment of redemption proceeds to such Limited
Partner if the General Partner reasonably deems it necessary to do so to comply
with anti-money laundering laws and regulations applicable to the Partnership,
the General Partner or any of the Partnership’s other service
providers.

     

    (d)          Chargebacks to
Current or Former Partners.  Even if a Limited Partner has
rightfully received the return in whole or in part of the value of its Units,
whether upon redemption or distribution, it shall nevertheless remain liable to
the Partnership for any sum, not in excess of the amount returned, plus interest
from the date of redemption or distribution in an amount deemed equitable by the
General Partner for loans of comparable maturity, to the extent necessary to
discharge such Partner’s allocable share of any loss, liability or expense
attributable to events arising before such return.  Any Limited
Partner found liable to the Partnership under this Paragraph 9(e) shall also be
liable for any and all costs and expenses incurred by the Partnership, including
but not limited to attorneys’ fees and costs of litigation, in connection with
seeking the return of the amounts due hereunder.

     

    Each
Partner agrees, by subscribing for Units, to repay, if such Partner has redeemed
Units or received a distribution from the Partnership, and irrespective of
whether such Partner remains a Partner, to the Partnership any amount (including
interest from the date of redemption or distribution) which the General Partner
may reasonably determine to be due to the Partnership from such Partner, for
example, due to any claims arising (prior or subsequent to such Partner’s
withdrawal from the Partnership) relating to events or circumstances (whether
known or unknown at the time of such Partner’s withdrawal) in existence while
such Partner was a Partner in the Partnership, or in the event that the net
asset value at which such Partner was permitted to redeem Units is later
determined to have been overstated or otherwise miscalculated due to
circumstances, whether known or unknown to the General Partner, in effect as of
the date of such whole or partial redemption.  In no event shall any
provision of this Paragraph 9(e) require any Limited Partner to repay to the
Partnership any amounts in excess of the amounts distributed to such Limited
Partner by the Partnership or redeemed from the Partnership by such Limited
Partner, plus interest thereon as provided above.

     

    (e)          No Guarantee of
Return of Capital. No provision of this
Agreement shall be construed as guaranteeing the return, either by the General
Partner or by the Partnership, of all or any part of the capital contributions
made to the Partnership by any Limited Partner.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    10.         Special Power of
Attorney.

    Each
Limited Partner by the execution of this Agreement (directly or by power of
attorney), or by otherwise acquiring Units and becoming a Limited Partner in
accordance with the terms hereof, does hereby irrevocably constitute and appoint
the General Partner, with power of substitution, as its true and lawful
attorney-in-fact, in its name, place and stead, to execute, acknowledge, swear
to, file and record on its behalf in the appropriate public offices (i) this
Agreement and a Certificate of Limited Partnership including amendments thereof;
(ii) all instruments which the General Partner deems necessary or appropriate to
reflect any amendment, change or modification of the Partnership in accordance
with the terms of this Agreement; (iii) certificates of assumed name; and (iv)
customer agreements with commodity brokerage firms.  The Power of
Attorney granted herein shall be irrevocable and deemed to be a power coupled
with an interest and shall survive the incapacity or death of a Limited
Partner.  Each Limited Partner hereby agrees to be bound by any
representation made by the General Partner and by any successor thereto, acting
in good faith pursuant to such Power of Attorney, and each Limited Partner
hereby waives any and all defenses which may be available to contest, negate or
disaffirm the action of the General Partner and any successor thereto, taken in
good faith under such Power of Attorney.  Each Limited Partner agrees
to execute a special Power of Attorney on a document separate from this
Agreement.  In the event of any conflict between this Agreement and
any instrument filed by such attorney pursuant to the Power of Attorney granted
in this Paragraph, this Agreement shall control.

     

    11.         Voluntary or Involuntary Redemption
of a Partner; Removal of General Partner

     

    (a)          Subject
to Paragraph 11(b), the Partnership shall terminate and be dissolved upon the
withdrawal, insolvency or dissolution of the General Partner.  The
General Partner agrees that it will not voluntarily withdraw as General Partner
of the Partnership except upon six months’ written notice to the Limited
Partners, or with the consent of the owners of more than fifty percent of the
aggregate value of outstanding Units.  The death, incompetency,
withdrawal, insolvency or dissolution of a Limited Partner shall not terminate
or dissolve the Partnership and such Limited Partner, its estate, custodian or
personal representative shall have no right to redeem the value of such Limited
Partner’s Units except as provided in Paragraph 9 hereof.  Any Limited
Partner may be required to redeem its Units and withdraw as a Limited Partner as
of the end of any month on ten days’ written notice at the sole discretion of
the General Partner.  In addition, the General Partner may require a
Limited Partner to redeem all or a portion of such Limited Partner’s Units if
the General Partner considers doing so to be desirable for the protection of the
Partnership, and may do so to the extent necessary to prevent the assets of the
Master Fund from constituting “plan assets” for purposes of ERISA or Section
4975 of the Code with respect to any “employee benefit plan” as defined in and
subject to ERISA or with respect to any “plan” as defined in and subject to
Section 4975 of the Code.  Any mandatory redemptions effected to avoid
causing the assets of the Partnership to constitute “plan assets” will be
effected in such manner as the General Partner, in its sole discretion,
determines.  The General Partner will attempt to give all affected
Limited Partners prior notice of such mandatory redemption but may effect such
redemption without prior notice.  Each Limited Partner (and any other
assignee) expressly agrees that in the event of its death, it waives on behalf
of itself and its estate, and directs the legal representatives of its estate
and any person interested therein to waive, the furnishing of any inventory,
accounting or appraisal of the assets of the Partnership and any right to an
audit or examination of the books of the Partnership.  Nothing in this
Paragraph 11 shall, however, waive any right given elsewhere in this
Agreement for a Limited Partner to be informed of the Net Assets of the
Partnership and the value of such Limited Partner’s Units, to receive periodic
reports, audited financial statements and other information from the General
Partner or the Partnership or to redeem or transfer Units.

     

    (b)          Removal of
General Partner.  The General
Partner may be removed as general partner upon an affirmative vote of Limited
Partners owning more than fifty percent of the aggregate value of the Units then
owned by Limited Partners.  Solely for purposes of the preceding
sentence, Units owned by the General Partner, its affiliates and their
respective officers and employees shall be deemed not to be owned by Limited
Partners.  Following such a vote, the Limited Partners may elect a
replacement General Partner upon the affirmative vote of Limited Partners owning
more than fifty percent of the aggregate value of the Units then owned by
Limited Partners.

     

    12.         No Personal Liability for Return of
Capital.

     

    The
General Partner shall not be personally liable for the return or payment of all
or any portion of the capital or profits of any Partner (or assignee), it being
expressly agreed that any such return of capital or profits made pursuant to
this Agreement shall be made solely from the assets (which shall not include any
right of contribution from the General Partner) of the Partnership.

     

    13.         Standard of Liability and
Indemnification.

     

    (a)          Standard of
Liability.  The General Partner and its affiliates shall have
no liability to the Partnership or to any Partner for any loss suffered by the
Partnership which arises out of any action or inaction of the General Partner or
its affiliates if the General Partner or its affiliates, in good faith,
determined that such course of conduct was in the best interest of the
Partnership and such course of conduct did not constitute gross negligence or
reckless or intentional misconduct of the General Partner or its
affiliates.

    
      
         

      

      
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    (b)          Indemnification
of General Partner.  The Partnership shall indemnify, defend
and hold harmless the General Partner and its affiliates, principals and
employees from and against any loss, liability, damage, cost or expense
(including legal fees and expenses incurred in defense of any demands, claims or
lawsuits) arising from actions or omissions concerning business or activities
undertaken by or on behalf of the Partnership from any source, including without
limitation any demands, claims or lawsuits initiated by a Limited Partner (or
assignee) or resulting from or relating to the offer and sale of Units; provided
that the conduct which was the basis for such liability was not found by a court
of competent jurisdiction upon entry of a final judgment to be the result of
gross negligence or reckless or intentional misconduct.  Nothing
contained herein shall increase the liability of any Limited Partner to the
Partnership beyond the amount of its capital and profits, if any, in the
Partnership.  All rights to indemnification and payment of legal fees
and expenses shall not be affected by the termination of the Partnership or the
withdrawal or insolvency of the General Partner.

     

    Indemnification
of amounts reasonably claimed to be due to an indemnified party hereunder shall
be advanced to such party upon such party’s written undertaking to repay,
without interest, the amounts so advanced in the event, and to the extent, that
indemnification is determined not to be due hereunder.

     

    Notwithstanding
the foregoing, federal and state securities laws, and other applicable law,
impose liabilities under certain circumstances on persons who act in good
faith.  Therefore, nothing herein shall in any way constitute a waiver
or limitation of any rights which the Partnership or the Limited Partners may
have under the securities laws or other applicable law.

     

    (c)          Indemnification
of Partnership.  In the event the Partnership is made a party
to any claim, dispute or litigation or otherwise incurs any loss or expense as a
result of or in connection with any Partner’s (or assignee’s) obligations or
liabilities unrelated to the Partnership’s business, such Partner (or assignees
cumulatively) shall indemnify and reimburse the Partnership for all loss and
expense incurred, including reasonable attorneys’ fees.

     

    14.         Additional Limited
Partners.

     

    The
Partnership may from time to time offer and sell additional Units at the sole
discretion of the General Partner.  A subscriber for Units shall
become a Limited Partner upon the acceptance of the subscription price for such
Units by the Partnership.

     

    15.         Amendments with Consent of the
General Partner.

     

    If at any
time during the term of the Partnership the General Partner shall deem it
necessary or desirable to amend this Agreement, such amendment shall be
effective if embodied in an instrument approved by the General Partner and by
Limited Partners owning more than fifty percent of the aggregate value of the
Units then owned by Limited Partners.  Any such supplemental or
amendatory agreement shall be adhered to and have the same effect from and after
its effective date as if the same had originally been embodied in and formed a
part of this Agreement; provided, however, that no such supplemental or
amendatory agreement shall, without the consent of all affected Limited
Partners, modify the percentage of profits, losses or distributions to which any
Partner is entitled.  In addition, reduction of the capital account of
any Unit or modification of the percentage of profits, losses or distributions
to which any Unit’s capital account is entitled hereunder shall not be effected
by amendment or supplement to this Agreement without the consent of the Partner
holding such Unit.  Any amendment of the two immediately preceding
sentences shall require the consent of all Partners.  For purposes of
obtaining approval of any proposed amendment to this Agreement requiring less
than unanimous consent or not requiring specific consent, the General Partner
may require a response within a specified time, but not less than fifteen (15)
days, and failure by any Limited Partner to respond within such time Period
shall constitute approval of such proposed amendment.  The foregoing
notwithstanding, the General Partner may amend this Agreement without the
consent of the Limited Partners to clarify any inaccuracy or ambiguity or
reconcile any inconsistency or with respect to administrative matters; to
preserve the status of the Partnership as a partnership for federal income tax
purposes; to prevent the Partnership from becoming subject to the Investment
Company Act of 1940, as amended; to avoid the assets of the Master Fund being
treated for any purpose of ERISA or Section 4975 of the Code as assets of any
“employee benefit plan” as defined in and subject to ERISA or of any “plan” as
defined in and subject to Section 4975 of the Code (or any corresponding
provisions of succeeding law) or to avoid the Partnership’s engaging in a
prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the
Code; and to make any other change that does not have a material adverse impact
on the Limited Partners.

    
      
         

      

      
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    16.         Governing Law.

     

    THE
VALIDITY AND CONSTRUCTION OF THIS AGREEMENT SHALL BE DETERMINED AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.

     

    17.         Benefit Plan
Investors.

     

    (a)          Investment in
Accordance with Law.  Each Limited Partner that is, or is
investing assets on behalf of, an “employee benefit plan,” as defined in, and
subject to the fiduciary responsibility provisions of, ERISA or a “plan,” as
defined in and subject to Section 4975 of the Code (each such employee benefit
plan and plan, a “Plan”), and each fiduciary thereof who has caused the Plan to
become a Limited Partner (a “Plan Fiduciary”), represents and warrants that (a)
the Plan Fiduciary has considered an investment in the Partnership for such Plan
in light of the risks relating thereto; (b) the Plan Fiduciary has determined
that, in view of such considerations, the investment in the Partnership for such
Plan is consistent with the Plan Fiduciary’s responsibilities under ERISA; (c)
the investment in the Partnership by the Plan does not violate and is not
otherwise inconsistent with the terms of any legal document constituting the
Plan or any trust agreement thereunder; (d) the Plan’s investment in the
Partnership has been duly authorized and approved by all necessary parties; (e)
none of the General Partner, any of the brokerage firms identified in the
Memorandum as executing or clearing transactions on behalf of the Partnership,
any selling agent, the Partnership’s administrator, any of their respective
affiliates or any of their respective agents or employees:  (i) has
investment discretion with respect to the investment of assets of the Plan used
to purchase Units; (ii) has authority or responsibility to or regularly gives
investment advice with respect to the assets of the Plan used to purchase Units
for a fee and pursuant to an agreement or understanding that such advice will
serve as a primary basis for investment decisions with respect to the Plan and
that such advice will be based on the particular investment needs of the Plan;
or (iii) is an employer maintaining or contributing to the Plan; and (f) the
Plan Fiduciary (i) is authorized to make, and is responsible for, the decision
for the Plan to invest in the Partnership, including the determination that such
investment is consistent with the requirement imposed by Section 404 of ERISA
that Plan investments be diversified so as to minimize the risks of large
losses; (ii) is independent of the General Partner, each of the brokerage firms
identified in the Memorandum as executing or clearing transactions on behalf of
the Partnership, each selling agent, the Partnership’s administrator, and each
of their respective affiliates, (iii) is qualified to make such investment
decision and (iv) directs the General Partner to invest all of the Partnership’s
assets in the Master Fund, except for such capital as the General Partner
determines is reasonably necessary or appropriate to pay any fees, expenses or
other costs related to the Partnership.

     

    (b)          Disclosures and
Restrictions Regarding Benefit Plan Investors.  Each Limited
Partner that is a “benefit plan investor” (defined as any Plan and any entity
(“Plan Assets Entity”) deemed for any purpose of ERISA or Section 4975 of the
Code to hold assets of any Plan) represents that the individual signing the
Subscription Agreement and Power of Attorney on behalf of such Limited Partner
has disclosed such Limited Partner’s status as a benefit plan investor by
accurately responding to the applicable questions in the Subscription Agreement
and Power of Attorney.  Each Limited Partner that is not a “benefit
plan investor” represents and agrees that if at a later date such Limited
Partner becomes a benefit plan investor, such Limited Partner will immediately
notify the General Partner of such change of status.  In addition,
each Plan Assets Entity agrees to promptly provide information to the General
Partner, upon the General Partner’s reasonable request, regarding the percentage
of the Plan Assets Entity’s equity interests held by benefit plan
investors.

     

    18.         Miscellaneous.

     

    (a)          Priority Among
Limited Partners.  Except as
otherwise provided in this Agreement, no Limited Partner shall be entitled to
any priority or preference over any other Limited Partner in regard to the
affairs of the Partnership.

    
      
         

      

      
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    (b)          Notices.  All notices under
this Agreement, other than reports by the General Partner to the Limited
Partners, shall be in writing and shall be effective upon personal delivery, or
if sent by registered or certified mail, postage prepaid, addressed to the last
known address of the party to whom such notice is to be given, then upon the
deposit of such notice in the United States mail.  Reports by the
General Partner to the Limited Partners shall be in writing and shall be sent by
first class mail to the last known address of each Limited Partner or, if agreed
by the Limited Partner, by e-mail or other electronic form of
distribution.

     

    (c)          Binding
Effect.  This Agreement
shall inure to and be binding upon all of the parties, their successors, assigns
as permitted herein, custodians, executors, administrators, estates, heirs,
legal survivors and personal representatives.  For purposes of
determining the rights of any Partner or assignee hereunder, the Partnership and
the General Partner may rely upon the Partnership records as to who are Partners
and assignees and all Partners and assignees agree that their rights shall be
determined and that they shall be bound thereby.

     

    (d)          Captions.  Captions in no
way define, limit, extend or describe the scope of this Agreement nor the effect
of any of its provisions.

     

    (e)          Confidentiality.  Each Limited
Partner agrees that it and anyone having knowledge through it shall not make
independent use of or knowingly disclose to any other person any aspect of the
General Partner’s trading method, except that a Limited Partner may communicate
such information in confidence to its personal attorneys, accountants and tax
advisers as is relevant to their services.

     

    (f)           Consent to
Jurisdiction.  All controversies
arising hereunder or in connection with the affairs of the Partnership shall be
brought in the state or federal courts located in the State of Connecticut and
all Partners and permitted assignees hereby irrevocably consent to such
jurisdiction and venue.

     

    (g)          Powers of Limited
Partners.  The Limited
Partners shall take no part in the conduct or control of the Partnership
business and shall have no authority or power to act for or to bind the
Partnership.

     

    (h)          Manner of
Execution.  This Agreement may be executed by power-of-attorney
embodied in a Subscription Agreement and Power of Attorney or similar instrument
with the same effect as if the parties executing the Subscription Agreement and
Power of Attorney or similar instrument had all executed one counterpart of this
Agreement; provided that this Agreement may also be executed in several
counterparts provided that each separate counterpart shall have been executed by
the General Partner.

     

    (i)           Tax Elections;
Determination of Matters Not Provided for in this
Agreement.  The General Partner is designated as the “Tax
Matters Partner” for the Partnership and shall be empowered to make or revoke
any elections now or hereafter required or permitted to be made by the Code or
any state or local tax law.

     

    The General Partner shall be empowered
to decide in a fair and equitable manner any questions arising with respect to
this Partnership or to this Agreement, and to make such provisions as the
General Partner deems to be in, or not opposed to, the best interests of the
Partnership but which are not specifically set forth herein.

    

    (j)           Entire
Agreement. This Agreement sets
forth the entire agreement and understanding of the parties with respect to the
subject matter hereof and amends, restates and supersedes all prior agreements
and undertakings with respect hereto.

    

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remainder of this page is intentionally left blank.]

    
      
         

      

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

    

    
      
        
          	
                  General
      Partner

                
	
                  Millburn
      Ridgefield Corporation

                
	 
      	 
      
	
                  By:

                	 
      
	
                  George
      E. Crapple

                
	
                  Co-Chairman
      and

                
	
                  Co–Chief
      Executive Officer

                

        

      

    

    
      
      

    

       

      
        
           

        

        
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