Unassociated Document


    Exhibit
10.1

    


    LOAN
AGREEMENT

    


    Between

    


    ZIONS
FIRST NATIONAL BANK

    Lender

    


    and

    


    BLACK
DIAMOND EQUIPMENT, LTD.

    BLACK
DIAMOND RETAIL, INC.

    CLARUS
CORPORATION

    EVEREST/SAPPHIRE
ACQUISITION, LLC

    Co-Borrowers

    


    Effective
Date:  May 28, 2010

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    LOAN
AGREEMENT

    


    This Loan
Agreement is made and entered into by and between Zions First National Bank,
Black Diamond Equipment, Ltd., Black Diamond Retail, Inc., Clarus Corporation,
and Everest/Sapphire Acquisition, LLC.

     

    For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     

    
      	
              1. 

            	
              Definitions

            


    

     

    1.1           Definitions

     

    Terms
defined in the singular shall have the same meaning when used in the plural and
vice versa.  As used herein, the term:

     

    “Accounting
Standards” means (i) in the case of financial statements and reports, conformity
with generally accepted accounting principles fairly representing the financial
condition as of the date thereof and the results of operations for the period or
periods covered thereby, consistent in all material respects with other
financial statements of that company previously delivered to Lender in
connection with the Loan, and (ii) in the case of calculations, definitions, and
covenants, generally accepted accounting principles consistent in all material
respects with those used in the preparation of financial statements of Borrowers
previously delivered to Lender.

     

    “Assumption
Agreement” means an agreement whereby a company which is the subject of a
Permitted Acquisition agrees to become a Borrower and be bound by the terms and
conditions of the Loan Documents, in substantially the form of Exhibit
F.

     

    “Banking
Business Day” means any day not a Saturday, Sunday, legal holiday in the State
of Utah, or day on which national banks in the State of Utah are authorized to
close.

     

    “BD
Merger Agreement” means that certain Agreement and Plan of Merger dated May 7,
2010, by and among Clarus, Everest, BDEL, Sapphire Merger Corp., and Ed McCall
as Stockholder’s representative of BDEL, a copy of which is attached hereto as
Exhibit D.

     

    “BD-Asia”
means Black Diamond Equipment Asia Ltd., a company whose registered office is
located in Guangdong, China.

     

    “BDEL”
means Black Diamond Equipment, Ltd., a corporation organized and existing under
the laws of the State of Delaware.

     

    “BDEAG”
means Black Diamond Equipment AG, a limited company whose registered office is
in Reinach, canton Basellandschaft, Switzerland.

     

    “BD-Retail”
means Black Diamond Retail, Inc., a corporation organized and existing under the
laws of the State of Delaware.

     

    
      
        
        

      

      
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    “Borrowers”
means BDEL, BD-Retail, Clarus, Everest, and any entities which execute and
deliver a Substitute Promissory Note and Assumption Agreement in connection with
a Permitted Acquisition to become obligated as a Borrower hereunder as provided
in Section 5.17 Mergers, Consolidations,
Acquisitions, Sale of Assets, or any of them, their successors, and, if
permitted, assigns.

     

    “Clarus”
means Clarus Corporation, a corporation organized and existing under the laws of
the State of Delaware.

     

    “Consolidated
Financial Statements” means the consolidated financial statements of Clarus and
its Subsidiaries prepared in accordance with Accounting Standards.

     

    “CS Loan”
shall have the meaning set forth in Section 2.9 Payment of Prior Loans and
Release of Liens and Security Interests.

     

    “Debt”
means, without duplication, (a) indebtedness or liability for borrowed money;
(b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations as lessee under capital
leases; (e) current liabilities in respect of unfunded vested benefits under
Plans covered by ERISA; (f) obligations under letters of credit; (g) obligations
under acceptance facilities; (h) all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business), and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any person or entity, or otherwise to assure a creditor against loss; and (i)
obligations secured by any mortgage, deed of trust, lien, pledge, or security
interest or other charge or encumbrance on property, whether or not the
obligations have been assumed.

     

    “EBITDA”
means earnings (excluding extraordinary gains and losses realized other than in
the ordinary course of business and excluding the sale or writedown of
intangible or capital assets) before Interest Expense, Income Tax Expense,
depreciation, amortization, other non-cash charges, LIFO conversion charges,
Restructuring Expenses, and Transaction Expenses.

     

    “Effective
Date” shall mean the date the parties intend this Loan Agreement to become
binding and enforceable, which is the date stated at the conclusion of this Loan
Agreement.

     

    “Environmental
Condition” shall mean any condition involving or relating to Hazardous Materials
and/or the environment affecting the Real Property, whether or not yet
discovered, which is reasonably likely to or does result in any damage, loss,
cost, expense, claim, demand, order, or liability to or against Borrowers or
Lender by any third party (including, without limitation, any government
entity), including, without limitation, any condition resulting from the
operation of Borrowers’ business and/or operations in the vicinity of the Real
Property and/or any activity or operation formerly conducted by any person or
entity on or off the Real Property.

     

    “Environmental
Health and Safety Law” shall mean any legal requirement that requires or relates
to:

     

    a.           advising
appropriate authorities, employees, or the public of intended or actual releases
of Hazardous Materials, violations of discharge limits or other prohibitions,
and of the commencement of activities, such as resource extraction or
construction, that do or could have significant impact on the
environment;

     

    
      
        
        

      

      
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    b.           preventing
or reducing to acceptable levels the release of Hazardous
Materials;

     

    c.           reducing
the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;

     

    d.           assuring
that products are designed, formulated, packaged, and used so that they do not
present unreasonable risks to human health or the environment when used or
disposed of;

     

    e.           protecting
resources, species, or ecological amenities;

     

    f.           use,
storage, transportation, sale, or transfer of Hazardous Materials or other
potentially harmful substances;

     

    g.           cleaning
up Hazardous Materials that have been released, preventing the threat of
release, and/or paying the costs of such clean up or prevention; or

     

    h.           making
responsible parties pay for damages done to the health of others or the
environment or permitting self-appointed representatives of the public interest
to recover for injuries done to public assets.

     

    “Event of
Default” shall have the meaning set forth in Section 6.1 Events of
Default.

     

    “Everest”
means Everest/Sapphire Acquisition, LLC, a limited liability company organized
and existing under the laws of the State of Delaware.

     

    “Existing
Debt” means the existing debt of Borrowers and its Subsidiaries as set forth on
Exhibit B attached hereto and incorporated hereby.

     

    “Fiscal
Year End” means December 31 for any year.

     

    “GMP”
means Gregory Mountain Products, LLC, a limited liability company organized and
existing under the laws of the State of Delaware.

     

    “GMP
Closing” means the closing of the transactions contemplated by the GMP Merger
Agreement.

     

    “GMP
Merger Agreement” means that certain Agreement and Plan of Merger, dated as of
May 7, 2010, by and among Clarus, Everest, Everest Merger Corp., Gregory
Mountain Products, Inc., Kanders GMP Holdings, LLC and Schiller Gregory
Investment Company, LLC, a copy of which is attached hereto as Exhibit
E.

     

    
      
        
        

      

      
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    “Hazardous
Materials” means (i) “hazardous waste” as defined by the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 et. seq.), including any future amendments thereto, and regulations
promulgated thereunder, and as the term may be defined by any contemporary state
counterpart to such act; (ii) “hazardous substance” as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et. seq.), including any future amendments thereto, and
regulations promulgated thereunder, and as the term may be defined by any
contemporary state counterpart of such act; (iii) asbestos; (iv) polychlorinated
biphenyls; (v) underground or above ground storage tanks, whether empty or
filled or partially filled with any substance; (vi) any substance the presence
of which is or becomes prohibited by any federal, state, or local law,
ordinance, rule, or regulation; and (vii) any substance which under any federal,
state, or local law, ordinance, rule or regulation requires special handling or
notification in its collection, storage, treatment, transportation, use or
disposal.

     

    “Income
Tax Expense” means expenditures and accruals for federal and state income taxes
and foreign income taxes, each determined in accordance with Accounting
Standards.

     

    “Intercompany
Loans” means any loan or extension of credit from Borrowers or Subsidiaries to
any Borrower or Subsidiary, now existing or in the future, including, without
limitation, (i) that certain Intercompany Debt Agreement by and between BDEL and
BD-Asia dated April 1, 2008, as amended by (a) the Amendment to Intercompany
Debt Agreement dated January 22, 2009, increasing the revolving line of credit
to five million dollars ($5,000,000.00), (b) the Amendment to Intercompany Debt
Agreement dated January 22, 2009, extending the maturity date of the loan to
April 1, 2010, (c) the Amendment to Intercompany Debt Agreement dated April 1,
2010, extending the maturity date of the loan to April 1, 2011, and (d) the
Amended and Restated Intercompany Debt Agreement by and between BDEL and BD-Asia
dated the date hereof (collectively, the “BD-Asia Intercompany Debt Agreement”);
and (ii) that certain Intercompany Debt Agreement by and between BDEL and BDEAG
dated the date hereof.

     

    “Interest
Expense” means expenditures and accruals for interest determined in accordance
with Accounting Standards.

     

    “Interest
Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into between Borrowers and
Lender and/or affiliates of Lender which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, equity or
equity transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures, including but not limited to
the ISDA Master Agreement and Schedule thereto, both dated as of August 31,
2005, and the Confirmation (as such term is defined in the ISDA Master
Agreement) between Lender, BDEL and BD-Retail executed in connection with an
interest rate derivative transaction in the notional amount of four million
dollars ($4,000,000.00) dated on or about September 14, 2005 and that certain
Foreign Exchange Agreement by and between BDEL and California Bank & Trust
dated July 31, 2009.

     

    “Lender”
means Zions First National Bank, its successors, and assigns.

     

    
      
        
        

      

      
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    “Loan”
means the loan to be made pursuant to Section 2 Loan
Description.

     

    “Loan
Agreement” means this agreement, together with any exhibits, amendments,
addendums and modifications.

     

    “Loan
Documents” means the Loan Agreement, Promissory Note, all other agreements and
documents contemplated by any of the aforesaid documents, and all amendments,
modifications, addendums, and replacements, whether presently existing or
created in the future.

     

    “Loan
Hold Back” means ten million dollars ($10,000,000.00) of the Loan which will be
held back and not available for disbursement except upon fulfillment of the
conditions set forth in Section 2.6 Loan Hold
Back.

     

    “Loan
Hold Back Termination Event” shall have the meaning set forth in Section 2.1
Amount of
Loan.

     

    “Material
Adverse Effect” means a material adverse effect on Borrowers’ financial
condition, conduct of its business, or ability to perform its obligations under
the Loan Documents.

     

    “Organizational
Documents” means, in the case of a corporation, its Articles of Incorporation or
Certificate of Incorporation and By-Laws; in the case of a general partnership,
its Articles of Partnership; in the case of a limited partnership, its Articles
of Limited Partnership; in the case of a limited liability company, its Articles
of Organization or Certificate of Formation and Operating Agreement or
Regulations, if any; in the case of a limited liability partnership, its
Articles of Limited Liability Partnership; and all amendments, modifications,
and changes to any of the foregoing which are currently in effect.

     

    “Permitted
Acquisitions” shall have the meaning set forth in Section 5.17 Mergers, Consolidations,
Acquisitions, Sale of Assets.

     

    “Permitted
Business” means any business in which the Borrowers are currently engaged or any
other business in the outdoor recreation industry, including without limitation,
climbing, hiking, skiing and camping products, and any business reasonably
similar, ancillary, related or complementary thereto, or a reasonable extension,
development or expansion thereof.

     

    “Prior
Loans” shall have the meaning set forth in Section 2.9 Payment of Prior Loans and
Release of Liens and Security Interests.

     

    “Prior
Zions Loan” shall have the meaning set forth in Section 2.9 Payment of Prior Loans and
Release of Liens and Security Interests.

     

    “Promissory
Note” means the Promissory Note to be executed by Borrowers pursuant to Section
2.3 Promissory
Note in the form of Exhibit A hereto, which is incorporated herein by
reference, any Substitute Promissory Note, and any and all renewals, extensions,
modifications, and replacements thereof.

     

    “Real
Property” means any and all real property or improvements thereon owned or
leased by Borrowers or in which Borrowers have any other interest of any nature
whatsoever.

     

    
      
        
        

      

      
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    “Responsible
Officer” means, with respect to any Borrower, the chairman, vice chairman, chief
executive officer, chief financial officer, vice president, treasurer or
controller of such Borrower.

     

    “Restructuring
Expenses” means those non-recurring expenses not to exceed (other than in
respect to non-cash expenses) a cumulative amount of one million five hundred
thousand dollars ($1,500,000.00) in the aggregate that are associated with the
restructuring, consolidation and integration of the operations of Clarus, BDEL,
BD-Retail, BD-Asia, BDEAG, Everest, and GMP, and any future Permitted
Acquisitions, including, but not limited to, relocation expenses, lease breakage
fees and cash severance payments made in connection with Permitted
Acquisitions.

     

    “Senior
Net Debt” means Debt minus cash on hand, cash equivalents, marketable
securities, and Subordinated Debt.

     

    “Subordinated
Debt” means those certain 5% Unsecured Subordinated Notes not to exceed an
aggregate amount of up to twenty-three million dollars ($23,000,000.00), to be
executed by Clarus: (i) at the GMP Closing in favor of Kanders GMP Holdings, LLC
and Schiller Gregory Investment Company, LLC; and (ii) at or after the GMP
Closing in favor of the following individuals: (a) Jim BoisD’Enghien, (b) John
Sears, (c) Dion Goldsworthy, (d) Wayne Gregory, and (e) Jason
Dunlap.

     

    “Subsidiaries”
means any existing or future domestic or foreign corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned by any Borrower, or the management of which
is otherwise controlled by any Borrower, directly, or indirectly through one or
more intermediaries, including, without limitation, BDEAG and
BD-Asia.

     

    “Substitute
Promissory Note” means a modified Promissory Note executed by all Borrowers and
any future Subsidiary of Borrowers, modified to add the new Subsidiary as a
Borrower.

     

    “Trailing
Twelve Month” means the twelve (12) calendar month period immediately preceding
the date of calculation.

     

    “Transaction
Expenses” means (i) reasonable and customary costs and fees paid or accrued in
connection with the closing of the BD Merger Agreement, GMP Merger Agreement,
and the Loan Documents, and (ii) reasonable and customary costs and fees paid or
accrued in connection with the closing of future Permitted Acquisitions,
including in the case of (i) and (ii) above, all legal accounting, banking and
underwriting fees and expenses, commissions, discounts and other issuance
expenses.

     

    
      
        
        

      

      
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              2. 

            	
              Loan
      Description

            


    

     

    2.1           Amount of
Loan

     

    Upon
fulfillment of all conditions precedent set forth in this Loan Agreement, and so
long as no Event of Default exists which has not been waived or timely cured,
and no other breach has occurred which has not been waived or timely cured under
the Loan Documents, Lender agrees to loan Borrowers up to thirty-five million
dollars ($35,000,000.00).  Twenty-five million dollars
($25,000,000.00) of the Loan is available for immediate
disbursement.  The remaining ten million dollars ($10,000,000.00)
constitutes the Loan Hold Back and will be available for disbursement only upon
satisfaction of the terms and conditions provided in Section 2.6 Loan Hold
Back.  However, the Loan Hold Back shall no longer be available
for disbursement after a Responsible Officer of Clarus provides written notice
to Lender that (i) the GMP Closing has not occurred, and (ii) Clarus elects to
reduce the Loan by ten million dollars ($10,000,000.00) representing the amount
of the Loan Hold Back (“Loan Hold Back Termination Event”).

     

    2.2           Nature and Duration of
Loan

     

    The Loan
shall be payable in full upon the date and upon the terms and conditions
provided in the Promissory Note.  Lender and Borrowers intend the Loan
to be in the nature of a line of credit under which Borrowers may repeatedly
draw funds on a revolving basis in accordance with the terms and conditions of
this Loan Agreement and the Promissory Note.  The right of Borrowers
to draw funds and the obligation of Lender to advance funds shall not accrue
until all of the conditions set forth in Section 3 Conditions to Loan
Disbursements have been fully satisfied, and shall terminate upon the
earlier of: (a) upon occurrence of an Event of Default or (b) upon maturity of
the Promissory Note, unless the Promissory Note is renewed or extended by Lender
in which case such termination shall occur upon the maturity of the final
renewal or extension of the Promissory Note.  Upon such termination,
any and all amounts owing to Lender pursuant to the Promissory Note and this
Loan Agreement shall thereupon be due and payable in full.

     

    Borrowers
may request that Lender or Lender’s affiliates issue letters of credit against
the Promissory Note.  All requests for issuance of letters of credit
shall be subject to approval of Lender.  Borrowers shall pay all fees
and charges for issuance of letters of credit customarily charged by Lender,
except stand-by letters of credit shall be subject to an additional upfront fee
as follows:  (i) three and five-tenth percent (3.5%) per annum at all
times that Borrowers’ Senior Net Debt to Trailing Twelve Month EBITDA ratio is
greater than or equal to two and five-tenths (2.5); and (ii) two and
seventy-five hundredths percent (2.75%) per annum at all times that Borrowers’
Senior Net Debt to Trailing Twelve Month EBITDA ratio is less than two and
five-tenths (2.5).

     

    Upon
issuance of a letter of credit against the Promissory Note, an amount of the
Promissory Note equal to the amount of the letter of credit shall be frozen and
unavailable for disbursement upon request of Borrowers so long as the letter of
credit is outstanding.  Upon payment by Lender of any drawing on any
letter of credit issued against the Promissory Note, Lender may remove the
aforesaid freeze and disburse funds under the Promissory Note to reimburse
Lender for the amount of the drawing.

     

    
      
        
        

      

      
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    2.3           Consideration Among
Co-Borrowers

     

    The
transactions evidenced by the Loan Documents are in the best interests of
Borrowers, including non-Borrower Subsidiaries, and creditors of Borrowers,
including non-Borrower Subsidiaries.  Borrowers and non-Borrower
Subsidiaries are a single integrated financial enterprise and each of the
Borrowers and non-Borrower Subsidiaries receives a substantial benefit from the
availability of credit under the Loan Documents.  Borrowers and
non-Borrower Subsidiaries would not be able to obtain financing in the amounts
or upon terms as favorable as provided in the Loan Documents on an individual
basis.  The Loan will enable each of the Borrowers and non-Borrower
Subsidiaries to operate their business more efficiently, more profitably, and to
expand their businesses.  The direct and indirect benefits that inure
to each of the Borrowers and non-Borrower Subsidiaries by entering into the Loan
Documents constitute substantially more than “reasonable equivalent value” (as
such term is used in § 548 of the United States Bankruptcy Code) and “valuable
consideration”, “fair value”, and “fair consideration” (as such terms are used
in state fraudulent transfer law).

     

    2.4           Promissory
Note

     

    The Loan
shall be evidenced by the Promissory Note.  The Promissory Note shall
be executed and delivered to Lender upon execution and delivery of this Loan
Agreement.

     

    2.5           Notice and Manner of
Borrowing

     

    Requests
for advances on the Promissory Note shall be given in writing or orally no later
than 1:00 p.m. Mountain Time of the Banking Business Day on which the advance is
to be made.

     

    Disbursements
under the Loan may be made upon request by any of the Borrowers without further
approval or authorization from the other Borrowers.  Each Borrower
hereby authorizes and ratifies all such requests by the other
Borrowers.  Disbursements under the Loan may be made automatically
pursuant to a cash manager program linked to one or more depository accounts of
any of the Borrowers.

     

    2.6           Loan Hold
Back

     

    The Loan
Hold Back shall not be available for disbursement unless and until all of the
following conditions have been met:  (i) No Event of Default or event
which, with the giving of notice or passage of time or both, would become an
Event of Default has occurred which has not been waived or timely cured; (ii)
the acquisition of GMP has been completed upon substantially the terms set forth
in the GMP Merger Agreement, and copies of the executed merger documentation
having been received by Lender; (iii) GMP has executed an Assumption Agreement;
(iv) all Borrowers have executed a Substitute Promissory Note; and (v) Lender
has received executed subordination agreements concerning the Subordinated Debt
from Schiller Gregory Investment Company and Kanders GMP Holdings,
LLC.

     

    
      
        
        

      

      
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    2.7           Funding
Fee

     

    Upon
execution and delivery of this Loan Agreement, Borrowers shall pay Lender a
funding fee of ten thousand dollars ($10,000.00).  No portion of such
fee shall be refunded in the event of early termination of this Loan Agreement
or any termination or reduction of the right of Borrowers to request advances
under this Loan Agreement.  Lender is authorized and directed upon
execution of this Loan Agreement and fulfillment of all conditions precedent
hereunder, to disburse a sufficient amount of the Loan proceeds to pay the loan
fee in full.

     

    2.8           Unused Commitment
Fee

     

    Borrowers
shall pay to Lender an unused commitment fee for the Loan for so long as this
Loan Agreement is in effect.  The unused commitment fee shall be the
unused portion of the Loan (including the Loan Hold Back until the occurrence of
the Loan Hold Back Termination Event, at which time the Loan Hold Back shall not
be included in the unused portion of the Loan), calculated on the average unused
portion of the Loan each calendar month, multiplied by the following applicable
rate: (i) six tenths percent (0.6%) per annum, at all times that Borrowers’
ratio of consolidated Senior Net Debt to Trailing Twelve Month EBITDA is greater
than or equal to two and five-tenths (2.5), and (ii) four and five-hundredths
percent (0.45%) per annum, at all times that Borrowers’ ratio of consolidated
Senior Net Debt to Trailing Twelve Month EBITDA is less than two and five-tenths
(2.5).  Letters of credit issued hereunder which are outstanding shall
be considered usage in the calculation of the unused commitment
fee.

     

    The
unused commitment fee shall be calculated, adjusted and payable on a quarterly
basis.

     

    2.9           Payment of Prior
Loans and
Release of Liens and Security Interests

     

    This Loan
succeeds and replaces the loan evidenced by that certain Promissory Note
(Revolving Line of Credit) dated August 28, 2009 executed by BDEL and BD-Retail
in favor of Lender in the original principal amount of thirty million dollars
($30,000,000.00) (the “Prior Zions Loan”).  The proceeds of this Loan
shall also pay off that unsecured loan from Credit Suisse with a borrowing limit
of CHF 4,000,000 (the “CS Loan”) (collectively, the Prior Zions Loan and CS Loan
are the “Prior Loans”).  Lender is authorized and directed to disburse
a sufficient amount of the funds pursuant to the Promissory Note to pay all
obligations owing on the Prior Loans pursuant to payoff letters or disbursement
instructions provided to Borrowers in connection with each of the Prior
Loans.

     

    Upon
Lender’s receipt of payment in full for the Prior Zions Loan, Lender shall (a)
release all security interests, liens, and assignments securing the Prior Zions
Loan, including termination of all UCC Financing Statements, (b) return to BDEL
of the original stock certificates and the Intercompany Debt Agreement and its
amendments in Lender’s possession, and (c) record a deed of reconveyance for the
Trust Deed against the real property of BDEL located at 2084 East 3900 South,
Salt Lake City, Utah 84124.

     

    
      	
              3. 

            	
              Conditions to Loan
      Disbursements

            


    

     

    3.1           Conditions to Loan
Disbursements

     

    Lender’s
obligation to make disbursements of the Loan is expressly subject to, and shall
not arise until all of the conditions set forth below have been
satisfied.  All of the documents referred to below must be in a form
and substance acceptable to Lender.

     

    
      
        
        

      

      
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    a.           All
of the Loan Documents and all other documents contemplated to be delivered to
Lender prior to funding have been fully executed and delivered to
Lender.

     

    b.           All
other conditions precedent provided in or contemplated by the Loan Documents or
any other agreement or document have been performed.

     

    c.           As
of the date of disbursement of all or any portion of the Loan, the following
shall be true and correct:  (i) all representations and warranties
made by Borrowers in the Loan Documents are true and correct in all material
respects as of the date of such disbursement; and (ii) no Event of Default has
occurred which has not been waived or timely cured and no conditions exist and
no event has occurred, which, with the passage of time or the giving of notice,
or both, would constitute an Event of Default.

     

    d.           The
transaction contemplated by the BD Merger Agreement has been, or simultaneously
with funding of the Loan, will be completed and closed upon substantially the
terms set forth in the BD Merger Agreement and Lender has received a Borrowers’
certificate from Clarus, BDEL and Everest confirming such closing. 

     

    All
conditions precedent set forth in this Loan Agreement and any of the Loan
Documents are for the sole benefit of Lender and may be waived unilaterally by
Lender.

     

    3.2           No Default, Adverse Change,
False or Misleading Statement

     

    Lender’s
obligation to advance any funds at any time pursuant to this Loan Agreement and
the Promissory Note shall, at Lender’s sole discretion, terminate upon the
occurrence of any Event of Default, any event which could have a Material
Adverse Effect, or upon the reasonable determination by Lender that any of
Borrowers’ representations made in any of the Loan Documents were false in any
material respects or materially misleading when made.  Upon the
exercise of such discretion, Lender shall be relieved of all further obligations
under the Loan Documents.

     

    
      	
              4. 

            	
              Representations and
      Warranties

            


    

     

    4.1           Organization and
Qualification

     

    BDEL
represents and warrants that it is a corporation duly organized and existing in
good standing under the laws of the State of Delaware, and that it is qualified
and in good standing as a foreign corporation in the State of Utah under the
name Black Diamond Equipment, Ltd.

     

    BD-Retail
represents and warrants that it is a corporation duly organized and existing in
good standing under the laws of the State of Delaware, and that it is qualified
and in good standing as a foreign corporation in the State of Utah.

     

    Clarus
represents and warrants that it is a corporation duly organized and existing in
good standing under the laws of the State of Delaware, and that it is qualified
and in good standing as a foreign corporation in the States of Connecticut and
Utah.

     

    
      
        
        

      

      
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    Everest
represents and warrants that it is a limited liability company duly organized
and existing in good standing under the laws of the State of Delaware, and that
it is qualified and in good standing as a foreign corporation in the State of
Utah.

     

    Each
Borrower represents and warrants that it is duly qualified to do business in
each jurisdiction where the conduct of its business requires qualification,
except where the failure to so qualify could not reasonably be expected to have
a Material Adverse Effect on Clarus and its Subsidiaries, taken as a
whole.

     

    Each
Borrower represents and warrants that it has the full power and authority to own
its property and to conduct the business in which it engages and to enter into
and perform its obligations under the Loan Documents.

     

    Each
Borrower represents and warrants that it has delivered to Lender or Lender’s
counsel accurate and complete copies of such Borrower’s Organizational Documents
which are operative and in effect as of the Effective Date.

     

    4.2           Authorization

     

    Borrowers
represent and warrant that the execution, delivery, and performance by Borrowers
of the Loan Documents has been duly authorized by all necessary action on the
part of Borrowers and do not violate the Borrowers’ Organizational Documents or
any resolution of the Board of Directors or similar body of Borrowers, do not
and will not contravene any provision of, or constitute a default under, any
indenture, mortgage, contract, or other instrument to which Borrowers are a
party or by which they are bound, and that upon execution and delivery thereof,
the Loan Documents will constitute legal, valid, and binding agreements and
obligations of Borrowers, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and similar laws affecting rights
of creditors generally, and general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law.

     

    4.3           Corporate
Relationships

     

    Borrowers
represent and warrant that as of the Effective Date (i) BDEL owns all of the
issued and outstanding stock of all classes of BD-Retail, BDEAG and BD-Asia,
(ii) Everest is a wholly owned subsidiary of Clarus; and (iii) BDEL is a wholly
owned subsidiary of Everest.  GMP will be a wholly owned subsidiary of
Everest upon the GMP Closing.

     

    4.4           No Governmental Approval
Necessary

     

    Borrowers
represent and warrant that no consent by, approval of, giving of notice to,
registration with, or taking of any other action with respect to or by any
federal, state, or local governmental authority or organization is required for
Borrowers’ execution, delivery, or performance of the Loan Documents, except
where any failure to so obtain such consent or approval or take any other action
could not reasonably be expected to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    4.5           Accuracy of Financial
Statements

     

    Borrowers
represent and warrant that all of the audited consolidated financial statements
of BDEL and its Subsidiaries for the years ended June 30, 2008 and 2009 have
been prepared in accordance with Accounting Standards, except as set forth on
Schedule 4.5.

     

    Borrowers
represent and warrant that all of the unaudited financial statements heretofore
delivered to Lender in connection with this Loan fairly present in all material
respects Borrowers’ financial condition as of the date thereof and the results
of Borrowers’ operations for the period or periods covered thereby and are
consistent in all material respects with other financial statements previously
delivered to Lender.

     

    Borrowers
represent and warrant that since the dates of the most recent audited and
unaudited financial statements delivered to Lender, there has been no event
which would have a Material Adverse Effect on its financial
condition.

     

    Borrowers
represent and warrant that the management financial projections attached hereto
as Exhibit G and all of their pro forma financial statements heretofore
delivered to Lender have been prepared consistently with Borrowers’ actual
financial statements and fairly present in all material respects Borrowers’
anticipated financial condition and the anticipated results of Borrowers’
operation for the period or periods covered thereby.

     

    4.6           No Pending or Threatened
Litigation

     

    Borrowers
represent and warrant that, except as set forth on Schedule 4.6, there are no
actions, suits, or proceedings pending or, to Borrowers’ knowledge, threatened
against or affecting Borrowers in any court or before any governmental
commission, board, or authority which, if adversely determined, would have a
Material Adverse Effect.

     

    4.7           Full and Accurate
Disclosure

     

    Borrowers
represent and warrant that this Loan Agreement, the financial statements
referred to herein and any loan application submitted to Lender, and all other
statements furnished by Borrowers to Lender in connection herewith contain no
untrue statement of a material fact and omit no material fact necessary to make
the statements contained therein or herein not misleading in any material
respect.  Borrowers represent and warrant that it has not failed to
disclose, by submission of the Schedules to the BD Merger Agreement and the
Schedules to the GMP Merger Agreement, or otherwise in writing to Lender any
fact that would have a Material Adverse Effect.

     

    
      
        
        

      

      
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    4.8           Compliance with
ERISA

     

    Borrowers
represent and warrant that Borrowers are in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974 (“ERISA”), as amended, and the regulations and published interpretations
thereunder.  Neither a Reportable Event as set forth in Section 4043
of ERISA or the regulations thereunder (“Reportable Event”) nor a prohibited
transaction as set forth in Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986, as amended, has occurred and is continuing with respect to
any employee benefit plan established, maintained, or to which contributions
have been made by Borrowers or any trade or business (whether or not
incorporated) which together with Borrowers would be treated as a single
employer under Section 4001 of ERISA (“ERISA Affiliate”) for its employees which
is covered by Title I or Title IV of ERISA (“Plan”); no notice of intent to
terminate a Plan has been filed nor has any Plan been terminated which is
subject to Title IV of ERISA; no circumstances exist that constitute grounds
under Section 4042 of ERISA entitling the Pension Benefit Guaranty Corporation
(“PBGC”) to institute proceedings to terminate, or appoint a trustee to
administer a Plan, nor has the PBGC instituted any such proceedings; neither
Borrowers nor any ERISA Affiliate has completely or partially withdrawn under
Section 4201 or 4204 of ERISA from any Plan described in Section 4001(a)(3) of
ERISA which covers employees of Borrowers or any ERISA Affiliate
(“Multi-employer Plan”); Borrowers and each ERISA Affiliate has met its minimum
funding requirements under ERISA with respect to all of its Plans and the
present fair market value of all Plan assets equals or exceeds the present value
of all vested benefits under or all claims reasonably anticipated against each
Plan, as determined on the most recent valuation date of the Plan and in
accordance with the provisions of ERISA and the regulations thereunder and the
applicable statements of the Financial Accounting Standards Board (“FASB”) for
calculating the potential liability of Borrowers or any ERISA Affiliate under
any Plan; neither Borrowers nor any ERISA Affiliate has incurred any liability
to the PBGC (except payment of premiums, which is current) under
ERISA.

     

    Borrowers,
each ERISA Affiliate and each group health plan (as defined in ERISA Section
733) sponsored by Borrowers and each ERISA Affiliate, or in which Borrowers or
any ERISA Affiliate is a participating employer, are in material compliance
with, have satisfied and continue to satisfy (to the extent applicable) all
requirements for continuation of group health coverage under Section 4980B of
the Internal Revenue Code and Sections 601 et seq. of ERISA, and are in
compliance with, have satisfied and continue to satisfy Part 7 of ERISA and all
corresponding and similar state laws relating to portability, access and
renewability of group health benefits and other requirements included in Part
7.

     

    4.9           Compliance with USA Patriot
Act

     

    Borrowers
represent and warrant that they are not subject to any law, regulation, or list
of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list) that prohibits or limits Lender from making any
advance or extension of credit to Borrowers or from otherwise conducting
business with Borrowers.

     

    4.10         Compliance with All Other
Applicable Law

     

    Borrowers
represent and warrant that, except as set forth on Schedule 4.10, they have
complied in all material respects with all applicable statutes, rules,
regulations, orders, and restrictions of any domestic or foreign government, or
any instrumentality or agency thereof having jurisdiction over the conduct of
Borrowers’ business or the ownership of its properties, the failure to comply
with which could reasonably be expected to have a Material Adverse Effect on
Clarus and its Subsidiaries, taken as a whole.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    4.11         Environmental
Representations and Warranties

     

    Borrowers
represent and warrant that, except as set forth on Schedule 4.11, no Hazardous
Materials are now located on, in, or under the Real Property, nor is there any
Environmental Condition on, in, or under the Real Property and neither Borrowers
nor, to Borrowers’ knowledge, after due inquiry and investigation, any other
person has ever caused or permitted any Hazardous Materials to be placed, held,
used, stored, released, generated, located or disposed of on, in or under the
Real Property, or any part thereof, nor caused or allowed an Environmental
Condition to exist on, in or under the Real Property, except in the ordinary
course of Borrowers’ business under conditions that are generally recognized to
be appropriate and safe and that are in compliance with all applicable
Environmental Health and Safety Laws.  Borrowers further represent and
warrant that no investigation, administrative order, consent order and
agreement, litigation or settlement with respect to Hazardous Materials and/or
an Environmental Condition is proposed, threatened, anticipated or in existence
with respect to the Real Property.

     

    4.12         Operation of
Business

     

    Borrowers
represent and warrant that, except as set forth on Schedule 4.12, Borrowers
possess all material licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct its business
substantially as now conducted and as presently proposed to be conducted, and
Borrowers are not in violation of any valid rights of others which would have a
Material Adverse Effect on Borrowers with respect to any of the
foregoing.

     

    4.13         Payment of
Taxes

     

    Borrowers
represent and warrant that Borrowers have filed all material tax returns
(federal, state, and local) required to be filed and have paid all material
taxes, assessments, and governmental charges and levies, including interest and
penalties, on Borrowers’ assets, business and income, except such as are being
contested in good faith by proper proceedings and as to which adequate reserves
are maintained.

     

    4.14         Solvency

     

    Borrowers
represent and warrant that immediately before and immediately after the closing
of the BD Merger Agreement and of the GMP Merger Agreement, the parties to each
agreement are solvent and able to pay their debts as the debts become
due.

     

    
      	
              5. 

            	
              Borrowers’
      Covenants

            


    

     

    Borrowers
make the following agreements and covenants, which shall continue so long as
this Loan Agreement is in effect and so long as Borrowers are indebted to Lender
for obligations arising out of, identified in, or contemplated by this Loan
Agreement.

     

    5.1           Use of
Proceeds

     

    Borrowers
shall use the proceeds of the Loan for general corporate purposes, including
funds for working capital, capital expenditures, loans and/or investments in
wholly-owned foreign Subsidiaries, the issuance of letters of credit and
Permitted Acquisitions, including the transactions contemplated by the BD Merger
Agreement and GMP Merger Agreement.

     

    
      
        
        

      

      
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    Borrowers
shall not, directly or indirectly, use any of the proceeds of the Loan for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, or to
extend credit to any person or entity for the purpose of purchasing or carrying
any such margin stock or for any purpose which violates, or is inconsistent
with, Regulation X of said Board of Governors, or for any other purpose not
permitted by Section 7 of the Securities Exchange Act of 1934, as amended, or by
any of the rules and regulations respecting the extension of credit promulgated
thereunder.

     

    5.2           Continued Compliance with
ERISA

     

    Borrowers
covenant that, with respect to all Plans (as defined in Section 4.8 Compliance with
ERISA) which Borrowers or any ERISA Affiliate currently maintains or to
which Borrowers or any ERISA Affiliate is a sponsoring or participating
employer, fiduciary, party in interest or disqualified person or which Borrowers
or any ERISA Affiliate may hereafter adopt, Borrowers and each ERISA Affiliate
shall continue to comply in all material respects with all applicable provisions
of the Internal Revenue Code and ERISA and with all representations made in
Section 4.8 Compliance
with ERISA, including, without limitation, conformance with all notice
and reporting requirements, funding standards, prohibited transaction rules,
multi-employer plan rules, necessary reserve requirements, and health care
continuation, coverage and portability requirements, except where the failure to
so comply would not have a Material Adverse Effect on Clarus and its
Subsidiaries, taken as a whole.

     

    5.3           Continued Compliance with
USA Patriot Act

     

    Borrowers
shall (a) not be or become subject at any time to any law, regulation, or list
of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list) that prohibits or limits Lender from making any
advance or extension of credit to Borrowers or from otherwise conducting
business with Borrowers, and (b) provide documentary and other evidence of
Borrowers’ identity as may reasonably be requested by Lender at any time to
enable Lender to verify Borrowers’ identity or to comply with any applicable law
or regulation, including, without limitation, Section 326 of the USA Patriot Act
of 2001, 31 U.S.C. Section 5318.

     

    5.4           Continued Compliance with
Applicable Law

     

    Borrowers
shall conduct their business in a lawful manner and in material compliance with
all applicable federal, state, and local laws, ordinances, rules, regulations,
and orders; shall maintain in good standing all licenses and organizational or
other qualifications reasonably necessary to its business and existence; and
shall not engage in any business not authorized by and not in accordance with
its Organizational Documents and other governing documents.

     

    5.5           Prior Consent for Amendment
or Change

     

    Except as
set forth in Schedule 5.5 or changes that would not have any adverse effect on
Lender, Borrowers shall not modify, amend, waive, or otherwise alter, or fail to
enforce, their Organizational Documents or other governing documents without
Lender’s prior written consent.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    5.6           Payment of Taxes and
Obligations

     

    Borrowers
shall pay when due all material taxes, assessments, and governmental charges and
levies on Borrowers’ assets, business, and income, and all material obligations
of Borrowers of whatever nature, except such as are being contested in good
faith by proper proceedings and as to which adequate reserves are
maintained.

     

    5.7           Financial Statements and
Reports

     

    Borrowers
shall provide Lender with such financial statements and reports concerning
Borrowers and Subsidiaries as Lender may reasonably request.  Audited
financial statements and reports shall be prepared in accordance with Accounting
Standards.  Unaudited financial statements and reports shall fairly
present in all material respects Borrowers’ financial condition as of the date
thereof and the results of Borrowers’ operations for the period or periods
covered thereby and shall be consistent in all material respects with other
financial statements previously delivered to Lender in connection with this
Loan.

     

    Until
requested otherwise by Lender, Borrowers shall provide the following financial
statements and reports to Lender:

     

    a.           Annual
audited Consolidated Financial Statements for each fiscal year of Clarus,
together with an annual budget for the upcoming fiscal year, to be delivered to
Lender within one hundred five (105) days of such Fiscal Year
End.  Borrowers shall also submit to Lender copies of any management
letters or other reports submitted by independent certified public accountants
in connection with the examination of the financial statements of Borrowers made
by such accountants.

     

    b.           Quarterly
Consolidated Financial Statements for each fiscal quarter of Clarus, to be
delivered within forty-five (45) days of the end of the fiscal
quarter.  The quarterly financial statements shall include a
certification by a Responsible Officer of Clarus that the quarterly financial
statements fairly represent Borrowers’ financial condition in all material
respects as of the date thereof and the results of the operations of the period
covered thereby and are consistent, except as disclosed in the footnotes
thereto, in all material respects with other financial statements previously
delivered to Lender.

     

    c.           Together
with each of the annual and quarterly Consolidated Financial Statements required
to be delivered pursuant to the provisions of paragraphs (a) and (b) above,
Borrowers shall submit to Lender a compliance certificate in a form reasonably
acceptable to Lender certifying that Borrowers are in compliance with all terms
and conditions of this Loan Agreement, including compliance with the financial
covenants provided in Section 5.14 Financial
Covenants.  The compliance certificate shall include the data
and calculations supporting all financial covenants, whether in compliance or
not, and shall be signed by a Responsible Officer of Clarus.

     

    
      
        
        

      

      
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    5.8           Insurance

     

    Borrowers
shall maintain insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in the same or a similar business and similarly
situated, which insurance may provide for reasonable deductibility from coverage
thereof.

     

    5.9           Inspection

     

    Borrowers
shall at any reasonable time during normal business hours and from time to time
permit Lender or any representative of Lender to examine and make copies of and
abstracts from the records and books of account of, and visit and inspect the
properties and assets of, Borrowers, and to discuss the affairs, finances, and
accounts of Borrowers with any of Borrowers’ officers and directors and with
Borrowers’ independent accountants.

     

    5.10         Operation of
Business

     

    Borrowers
shall maintain all material licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, necessary in the operation of
their business.  Borrowers shall continue to engage in a Permitted
Business.

     

    5.11         Maintenance of Records and
Properties

     

    Borrowers
shall keep adequate records and books of account in which complete entries will
be made in accordance with Accounting Standards.  Borrowers shall
maintain, keep and preserve all of their material properties (tangible and
intangible) necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted.

     

    5.12         Notice of
Claims

     

    Borrowers
shall promptly notify Lender in writing of all actions, suits or proceedings
filed against or affecting Borrowers in any court or before any governmental
commission, board, or authority which, if adversely determined, would have a
Material Adverse Effect.

     

    5.13         Environmental
Covenants

     

    Borrowers
covenant that they will:

     

    a.           Not
permit the presence, use, disposal, storage or release of any Hazardous
Materials on, in, or under the Real Property, except in the ordinary course of
Borrowers’ business under conditions that are generally recognized to be
appropriate and safe and that are in compliance with all applicable
Environmental Health and Safety Laws.

     

    b.           Not
permit any substance, activity or Environmental Condition on, in, under or
affecting the Real Property which is in violation of any Environmental Health
and Safety Laws.

     

    c.           Comply
in all material respects with the provisions of all Environmental Health and
Safety Laws.

     

    
      
        
        

      

      
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    d.           Notify
Lender promptly of any discharge of Hazardous Materials, Environmental
Condition, or environmental complaint or notice received from any governmental
agency or any other party.

     

    e.           Upon
any discharge of Hazardous Materials or upon the occurrence of any Environmental
Condition, immediately contain and remediate the same in compliance with all
Environmental Health and Safety Laws, promptly pay any fine or penalty assessed
in connection therewith, and immediately notify Lender of such
events.

     

    f.           Permit
Lender to inspect the Real Property for Hazardous Materials and Environmental
Conditions, to conduct tests thereon, and to inspect all books, correspondence,
and records pertaining thereto.

     

    g.           From
time to time upon Lender’s request, and at Borrowers’ expense, provide a Phase 1
report (including all validated and unvalidated data generated for such reports)
of a qualified independent environmental engineer reasonably acceptable to
Lender, reasonably satisfactory to Lender in scope, form, and content, and
provide to Lender such other and further assurances reasonably satisfactory to
Lender, that Borrowers are in compliance with these covenants concerning
Hazardous Materials and Environmental Conditions, and that any past violation
thereof has been corrected in compliance with all applicable Environmental
Health and Safety Laws.

     

    h.           Immediately
advise Lender of any additional, supplemental, new, or other information
concerning any Hazardous Materials or Environmental Conditions relating to the
Real Property.

     

    5.14        Financial
Covenants

     

    Except as
otherwise provided herein, each of the accounting terms used in this Section
5.14 shall have the meanings used in accordance with Accounting
Standards.  Each of the financial covenants listed below shall be
tested on a quarterly basis.

     

    a.           Minimum
EBITDA.  Clarus and its Subsidiaries, on a consolidated basis,
measured quarterly, shall maintain Trailing Twelve Month EBITDA as
follows:

     

    (i)           Until
the GMP Closing, commencing on the Effective Date and through December 31, 2010,
not less than six million dollars ($6,000,000.00); plus one million dollars
($1,000,000.00) per year, commencing on March 31, 2011 and on each March 31
thereafter.

     

    (ii)           After
the GMP Closing, not less than eight  million dollars ($8,000,000.00);
plus one million dollars ($1,000,000.00) per year, commencing on March 31, 2011
and on each March 31 thereafter

     

    EBITDA
shall be adjusted on a pro forma basis for future Permitted Acquisitions, such
adjustments to be subject to approval by Lender.  For purposes of
calculating Trailing Twelve Month EBITDA, the maximum amount of
EBITDA  loss for Clarus (on a stand alone basis) prior to the
Effective Date shall be deemed to be two hundred eight thousand three hundred
thirty-three dollars and thirty-three cents ($208,333.33) for each month before
the Effective Date for purposes of determining the applicable Trailing Twelve
Month EBITDA calculation (or two million five hundred thousand dollars
($2,500,000.00) for the entire twelve (12) month period immediately prior to the
Effective Date).

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    b.           Tangible Net
Worth.  Clarus and its Subsidiaries will maintain at all times,
on a consolidated basis, a tangible net worth, measured quarterly, as
follows:

     

    (i)           If
the GMP Closing occurs prior to June 30, 2010, then commencing on June 30, 2010
and through March 31, 2011, not less than ninety percent (90%) of actual
tangible net worth on June 30, 2010, plus an increase of one million dollars
($1,000,000.00) per year, commencing on March 31, 2011 and on each March 31
thereafter.

     

    (ii)           If
the GMP Closing occurs after June 30, 2010, commencing on the last day of the
quarterly period in which the GMP Closing occurs, and through March 31, 2011,
not less than ninety percent (90%) of actual tangible net worth on such
quarterly period end, plus an increase of one million dollars ($1,000,000.00)
per year, commencing on March 31, 2011 and on each March 31
thereafter.

     

    Tangible
net worth means the excess of total assets over total liabilities, excluding,
however, from the determination of total assets all assets which would be
classified as intangible assets under generally accepted accounting principles,
including, without limitation, goodwill, licenses, patents, trademarks, trade
names, copyrights, and franchises.

     

    c.           Asset
Coverage.  Borrowers shall at all times maintain a positive
amount of Asset Coverage.  Asset Coverage shall be adjusted on a pro
forma basis for future Permitted Acquisitions, such adjustments to be subject to
approval by Lender.

     

    Asset
Coverage means seventy-five percent (75%) of the sum of the net book value (as
determined by Lender) of the accounts receivable, inventory and property, plant
and equipment, less Total Senior Net Liabilities of Clarus and its Subsidiaries
on a consolidated basis, as reflected on Clarus’ financial
statements.

     

    Total
Senior Net Liabilities means total liabilities minus cash on hand and cash
equivalents, marketable securities, Subordinated Debt and deferred tax
liabilities.

     

    
      
        
        

      

      
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    5.15         Negative
Pledge

     

    Borrowers
will not, and will not allow any Subsidiary to, create, incur, assume, or suffer
to exist any mortgage, deed of trust, pledge, lien, security interest,
hypothecation, assignment, deposit arrangement, or other preferential
arrangement, charge, or encumbrance (including, without limitation, any
conditional sale, other title retention agreement, or finance lease) of any
nature, upon or with respect to any of its domestic or foreign properties or
assets, now owned or hereafter acquired, or sign or file, under the Uniform
Commercial Code of any jurisdiction, a financing statement under which Borrowers
appears as debtor, or sign any security agreement authorizing any secured party
thereunder to file such financing statement, except (a) those contemplated by
this Loan Agreement; (b) liens arising in the ordinary course of business (such
as liens of carriers, warehousemen, mechanics, repairmen, and materialmen) and
other similar liens imposed by law for sums not yet due and payable or, if due
and payable, those being contested in good faith by appropriate proceedings and
for which appropriate reserves are maintained in accordance with Accounting
Standards; (c) easements, rights of way, restrictions, minor defects or
irregularities in title or other similar liens which alone or in the aggregate
do not interfere in any material way with the ordinary conduct of the business
of Borrowers; (d) liens for taxes and assessments not yet due and payable or, if
due and payable, those being contested in good faith by appropriate proceedings
and for which appropriate reserves are maintained in accordance with Accounting
Standards; (e) Permitted Liens set forth on Schedule 5.15 hereto; (f) liens
securing Debt not to exceed an aggregate outstanding amount of three million
dollars ($3,000,000.00), except as authorized by prior written consent of
Lender; (g) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, employment and unemployment insurance and other
social security legislation, other than any lien imposed by ERISA; (h) deposits
to secure the performance of bids, trade contracts and leases (other than Debt),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, or arising as a result of process payments under
government contracts to the extent required or imposed by applicable laws, all
to the extent incurred in the ordinary course of business; and (i) liens granted
by a Borrower in favor of a licensor under any intellectual property license
agreement entered into by such Borrower, as licensee, in the ordinary course of
such Borrower’s business; provided, that such liens do
not encumber any property other than the intellectual property licensed by such
Borrower pursuant to the applicable license agreement and the property
manufactured or sold by such Borrower utilizing such intellectual
property.

     

    Borrowers
will not, and will not allow any Subsidiary to, enter into any agreement with
any third party (each a “Negative Pledge”) whereby any Borrower or such
Subsidiary is prohibited from creating, incurring, assuming or suffering to
exist any mortgage, deed of trust, pledge, lien, security interest,
hypothecation, assignment, deposit arrangement, or other preferential
arrangement, charge, or encumbrance (including, without limitation, any
conditional sale, other title retention agreement, or finance lease) of any
nature, upon or with respect to any of its properties or assets, now owned or
hereafter acquired, or from signing or filing, under the Uniform Commercial Code
of any jurisdiction, a financing statement under which Borrowers or any of its
Subsidiaries appear as debtor, or signing any security agreement authorizing any
secured party thereunder to file such financing statement, or enter into any
agreement with any third party whereby Borrowers’ or such Subsidiary’s rights to
do any of the foregoing are limited or restricted in any way, other than
standard and customary Negative Pledge provisions in property acquired with the
proceeds of any capital lease or purchase money financing that extend and apply
only to such acquired property.

     

    5.16         Restriction on
Debt

     

    Borrowers
will not, and will not allow any Subsidiary to, create, incur, assume, or suffer
to exist any Debt except as permitted by this Section 5.16.

     

    
      
        
        

      

      
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    Permitted
exceptions to this covenant are:  (a) the Loan; (b) Intercompany
Loans; (c) obligations under Interest Rate Management Transactions with Lender
or its affiliates; (d) Debt, not to exceed an aggregate outstanding principal
amount of three million dollars ($3,000,000.00), which amount includes Existing
Debt and debt authorized under Section 5.15(e) and (f) of this Loan Agreement;
(e) the Subordinated Debt; (f) any foreign currency or interest rate hedge in
the ordinary course of business; (g) contingent obligations of  (A)
the Borrowers in respect of Debt otherwise permitted hereunder of the Borrowers,
and (B) the Borrowers for customary and commercially reasonable indemnification
obligations incurred in good faith in connection with any Permitted Acquisitions
or otherwise in connection with contractual obligations entered into in the
ordinary course of business; and (h) obligations for deferred compensation
related to the GMP Merger paid or payable solely in stock.

     

    5.17         Mergers, Consolidations,
Acquisitions, Sale of Assets

     

    None of
the Borrowers shall wind up, liquidate, or dissolve itself, reorganize, merge,
or consolidate into, acquire, or convey, sell, assign, transfer, lease, or
otherwise dispose of (whether in one transaction or a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to any person or entity except in connection with Permitted
Acquisitions.

     

    Permitted
Acquisitions means the GMP Merger and mergers, consolidations or acquisitions
meeting the following requirements:

     

    a.           At
the time of completion of the Permitted Acquisition, no Event of Default which
has not been waived or timely cured or event which, with the passage of time or
giving of notice or both, without cure, would constitute an Event of Default,
exists.

     

    b.           Prior
to closing of the Permitted Acquisition, Borrowers shall present information
concerning the business conducted by the potential Permitted Acquisition to
Lender and Lender shall respond to Borrowers as to whether or not the potential
Permitted Acquisition is deemed to be a Permitted Business within five (5)
Banking Business Days.

     

    c.           Prior
to the closing of the Permitted Acquisition, Borrowers shall have provided
Lender with a pro forma compliance certificate in the form provided in Section
5.7 Financial
Statements and Reports, showing that upon completion of the Permitted
Acquisition, Borrowers will be in compliance with the financial covenants
provided in Section 5.14 Financial
Covenants.  The method and information used in the calculation
of the financial covenants for the pro forma compliance certificate shall be
acceptable to Lender.

     

    d.           If
the Permitted Acquisition is a merger or a consolidation, either (i) one of the
Borrowers will be the surviving entity, or (ii) the acquiring company will
become a wholly-owned Subsidiary of one of the Borrowers.

     

    e.           If
the Permitted Acquisition is an acquisition of ownership interests in a company,
the acquired company will be a wholly owned subsidiary of one of the
Borrowers.

     

    
      
        
        

      

      
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    f.           If
the Permitted Acquisition is an acquisition of ownership interests in a company
or is a merger where a Borrower is not the surviving company and the company is
not a foreign Subsidiary, within fifteen (15) days of completion of the
Permitted Acquisition, Borrowers and the company which is the subject of the
Permitted Acquisition will execute and deliver a Substitute Promissory Note and
the company which is the subject of the Permitted Acquisition shall execute an
Assumption Agreement.  Borrowers hereby consent and agree to the
addition of any such acquired company as an additional Borrower hereunder
through the execution of the Assumption Agreement.

     

    5.18        Change in
Control

     

    a.           No
Change of Control of Clarus shall occur.

     

    Change of
Control means (i) the acquisition by any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under such Act) of forty  percent (40%) or more of the outstanding
common stock of Clarus, other than a “person” or “group” that includes Warren B.
Kanders; or (ii)  during any 24-month period individuals who at the
beginning of such period constituted the Board of Directors of Clarus (together
with any new directors whose election by the Board of Directors or whose
nomination for election by the shareholders of Clarus was approved by a vote of
a majority of the directors who either were directors at the beginning of such
period or whose election or nomination was previously so approved) ceasing for
any reason to constitute a majority of the Board of Directors of
Clarus.

     

    b.           Clarus
shall own, either directly or indirectly, all of the equity interests of each of
the other Borrowers.

     

    5.19        Loans and
Distributions

     

    Upon the
occurrence of an Event of Default which has not been waived or timely cured or
an event which with the passage of time or giving of notice or both, without
waiver or timely cure, would constitute an Event of Default, Clarus shall not
(i) declare or pay any dividends, (ii) purchase, redeem, retire or otherwise
acquire for value any of its capital stock or equity interests now or hereafter
outstanding, (iii) make any distribution of assets to its stockholders,
investors, or equity holders, whether in cash, assets, or in obligations of
Borrowers, (iv) allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption, or retirement of
any shares of its capital stock or equity interests, or (v) make any other
distribution by reduction of capital or otherwise in respect of any shares of
its capital stock or equity interests.

     

    Borrowers
shall not make any loans or pay any advances of any nature whatsoever to any
person or entity, except advances in the ordinary course of business to vendors,
suppliers, and contractors and Intercompany Loans.  Borrowers shall
notify Lender in writing within ten (10) days after amending or creating a new
Intercompany Loan, which amendment or new Intercompany Loan agreement shall be
substantially in the form of Exhibit C.

     

    
      
        
        

      

      
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    5.20        GMP
Merger

     

    The GMP
Merger shall be completed within ninety (90) days of the Effective
Date.  Upon the GMP Closing, the lien upon all assets of GMP held by
Wells Fargo Bank shall be released.

     

    5.21        Subordinated
Debt

     

    Upon
execution of each promissory note constituting Subordinated Debt, Borrowers and
the payee on the promissory note shall simultaneously execute a subordination
agreement in substantially the form of Exhibit H hereto.  The original
Subordination Agreements shall be promptly delivered to Lender.

     

    
      	
              6. 

            	
              Default

            


    

     

    6.1          Events of
Default

     

    Time is
of the essence of this Loan Agreement.  The occurrence of any of the
following events shall constitute a default under this Loan Agreement and under
the Loan Documents and shall be termed an “Event of Default”:

     

    a.           Borrowers
fail in the payment or performance of any obligation, covenant, agreement, or
liability created by any of the Loan Documents.

     

    b.           Any
representation, warranty, or financial statement made by or on behalf of
Borrowers in any of the Loan Documents, or any document contemplated by the Loan
Documents, is materially false or materially misleading.

     

    c.           Default
occurs or Borrowers fail to comply with any term in any of the Loan
Documents.

     

    d.           Any
indebtedness of Borrowers or Subsidiaries in an aggregate amount in excess of
seven hundred thousand dollars ($700,000.00) under any note, indenture or any
other debt instrument is accelerated, excluding this Loan.

     

    e.           Default
or an event which, with the passage of time or the giving of notice or both,
would constitute a default, by Borrowers or Subsidiaries, having an aggregate
liability to the Borrowers in excess of seven hundred thousand dollars
($700,000.00), occurs on any note, indenture, contract, agreement or any other
debt instrument.

     

    f.           Borrowers
are dissolved or substantially cease business operations.

     

    g.           A
receiver, trustee, or custodian is appointed for any part of Borrowers’
property, or any part of Borrowers’ property is assigned for the benefit of
creditors.

     

    h.           Any
proceeding is commenced or petition filed under any bankruptcy or insolvency law
by or against Borrowers.

     

    
      
        
        

      

      
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    i.           Any
judgment or regulatory fine is entered against Borrowers which may materially
affect Borrowers.

     

    j.           Borrowers
become insolvent or fail to pay their debts as they mature.

     

    k.           Default
occurs or Borrowers fail to comply with any term in any Interest Rate Management
Transaction.

     

    l.           Failure
to close the GMP Merger in the time provided in Section 5.20 GMP
Merger.

     

    6.2          Cure
Periods

     

    Borrowers
shall not be entitled to any notice of an Event of Default.  Borrowers
shall not have any right to cure any Event of Default under Section 6.1(a), (f),
(g), (h), (i), (j), or (k).  For any other Event of Default, Borrowers
may cure such default within ten (10) Banking Business Days of the occurrence of
the default, or if it is commercially unreasonable to cure such default within
ten (10) Banking Business Days and with Lender's consent, within such longer
period of time as is reasonably necessary to accomplish the cure, provided (i)
Borrowers promptly commence such cure, (ii) such cure period does not exceed
ninety (90) days under any circumstances, and (iii) Borrowers shall pay to
Lender all of Lender’s reasonable costs to confirm that the Event of Default has
been cured.  If an Event of Default is cured, provided Borrowers
immediately pay all of Lender’s reasonable enforcement costs, including
attorneys’ fees, incurred through the date Lender received notice of the cure,
Lender shall cease its enforcement actions and remedies, including any
acceleration remedy provided herein or elsewhere in the Loan Documents, and the
parties shall proceed under the Loan Documents as if no default has occurred.
Notwithstanding Lender’s obligation to terminate its remedies upon a cure as set
forth above, Lender shall have no obligation to suspend or delay its enforcement
of its rights and remedies under the Loan Documents and at law during any
applicable cure period after the expiration of the initial ten (10) Banking
Business Days.  In no event shall Borrowers have the right to cure
Events of Default more than three (3) times during the term of this
Agreement.

     

    An Event
of Default shall not exist during any cure period.  If the cure period
expires without Borrowers having cured the Event of Default and the Event of
Default is not waived, the Event of Default shall be deemed to have occurred as
of the date the event or omission giving rise to the Event of Default first
occurred.  Furthermore, if during the cure period any proceeding is
commenced or petition filed under any bankruptcy or insolvency law by or against
Borrowers, the cure period shall terminate upon such commencement or filing and
the Event of Default shall be deemed to have occurred as of the date the event
or omission giving rise to the Event of Default first occurred.

     

    6.3          No Waiver of Event of
Default

     

    No course
of dealing or delay or failure to assert any Event of Default shall constitute a
waiver of that Event of Default or of any prior or subsequent Event of
Default.

     

    
      
        
        

      

      
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              7. 

            	
              Remedies

            


    

     

    7.1           Remedies upon Event of
Default

     

    Upon the
occurrence of an Event of Default, and at any time thereafter, all or any
portion of the obligations due or to become due from Borrowers to Lender,
whether arising under this Loan Agreement, the Promissory Note, or otherwise, at
the option of Lender and without notice to Borrowers of the exercise of such
option, shall accelerate and become at once due and payable in full, and Lender
shall have all rights and remedies created by or arising from the Loan
Documents, and all other rights and remedies existing at law, in equity, or by
statute.

     

    Additionally,
Lender shall have the right, immediately and without prior notice or demand, to
set off against Borrowers’ obligations to Lender, whether or not due, all money
and other amounts owed by Lender in any capacity to Borrowers, including,
without limitation, checking accounts, savings accounts, and other depository
accounts, and Lender shall be deemed to have exercised such right of setoff and
to have made a charge against any such money or amounts immediately upon
occurrence of an Event of Default, even though such charge is entered on
Lender’s books subsequently thereto.

     

    7.2           Rights and Remedies
Cumulative

     

    The
rights and remedies herein conferred are cumulative and not exclusive of any
other rights or remedies and shall be in addition to every other right, power,
and remedy that Lender may have, whether specifically granted herein or
hereafter existing at law, in equity, or by statute.  Any and all such
rights and remedies may be exercised from time to time and as often and in such
order as Lender may deem expedient.

     

    7.3           No Waiver of
Rights

     

    No delay
or omission in the exercise or pursuance by Lender of any right, power, or
remedy shall impair any such right, power, or remedy or shall be construed to be
a waiver thereof.

     

    
      	
              8. 

            	
              General
      Provisions

            


    

     

    8.1           Governing
Agreement

     

    In the
event of conflict or inconsistency between this Loan Agreement and the other
Loan Documents, excluding the Promissory Note and any Interest Rate Management
Transactions, the terms, provisions and intent of this Loan Agreement shall
govern.

     

    8.2           Borrowers’ Obligations
Cumulative

     

    Every
obligation, covenant, condition, provision, warranty, agreement, liability, and
undertaking of Borrowers contained in the Loan Documents shall be deemed
cumulative and not in derogation or substitution of any of the other
obligations, covenants, conditions, provisions, warranties, agreements,
liabilities, or undertakings of Borrowers contained herein or
therein.

     

    
      
        
        

      

      
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    8.3           Co-Borrowers

     

    All
obligations of Borrowers under this Loan Agreement and  the Loan
Documents shall be joint and several.  Each reference to Borrowers in
the Loan Documents shall be deemed to refer to each Borrower individually and
collectively and each obligation to be performed by Borrowers hereunder shall be
performed by each Borrower.

     

    Each of
the Borrowers hereby irrevocably appoints the other as its agent and
attorney-in-fact for all purposes related to the Loan Documents, including,
without limitation, making requests for advances, giving and receiving of
notices and other communications, and the making of all certifications and
reports required pursuant to the Loan Documents.  The action of any of
the Borrowers with respect to any advance and the requests, notices, reports and
other materials submitted by any of the Borrowers shall bind each of the
Borrowers.

     

    Lender
shall have no responsibility to inquire into the apportionment, allocation or
disposition of any advances.

     

    Each of
the Borrowers hereby agrees to indemnify Lender and to hold Lender harmless,
pursuant to Section 8.12 Indemnification, from
and against any and all liabilities and damages (including contract, tort and
equitable claims) which may be awarded against Lender, and for all reasonable
attorneys fees, legal expenses and other expenses incurred in defending such
claims, arising from or related in any manner to the joint nature of the
borrowings hereunder or the status of Borrowers as co-borrowers.

     

    Each of
the Borrowers represents and warrants that each of the Borrowers is engaged in
operations that require financing on such a joint basis with each other and that
each of the Borrowers will derive benefit, directly or indirectly, from the
advances made under the Loan Agreement.

     

    Each of
the Borrowers shall be a direct, primary and independent obligor and shall not
be a guarantor, accommodation party or other person secondarily liable for the
Loan, on the Promissory Note, or under any of the Loan Documents.

     

    8.4           Payment of Expenses and
Attorney’s Fees

     

    Borrowers
shall pay all reasonable expenses of Lender relating to the negotiation,
drafting of documents, documentation of the Loan, and administration and
supervision of the Loan, including, without limitation, title insurance,
recording fees, filing fees, and reasonable attorneys fees and legal expenses,
whether incurred in making the Loan, in future amendments or modifications to
the Loan Documents, or in ongoing administration and supervision of the
Loan.

     

    Upon
occurrence of an Event of Default which has not been waived or timely cured,
Borrowers agree to pay appraisal fees, environmental inspection fees and field
examination expenses upon request of Lender, and all costs and expenses,
including reasonable attorney fees and legal expenses, incurred by Lender in
enforcing, or exercising any remedies under, the Loan Documents, and any other
rights and remedies.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Borrowers
agree to pay all expenses, including reasonable attorney fees and legal
expenses, incurred by Lender in any bankruptcy proceedings of any type involving
Borrowers, the Loan Documents, including, without limitation, expenses incurred
in modifying or lifting the automatic stay, determining adequate protection, use
of cash collateral or relating to any plan of reorganization.

     

    8.5           Right to Perform for
Borrowers

     

    During
the existence of an Event of Default, Lender may, in its sole discretion and
without any duty to do so, elect to discharge taxes, tax liens, security
interests, or any other encumbrance upon any property or asset of Borrowers, to
pay any filing, recording, or other charges payable by Borrowers, or to perform
any other obligation of Borrowers under this Loan Agreement.

     

    8.6           Assignability

     

    Borrowers
may not assign or transfer any of the Loan Documents and any such purported
assignment or transfer is void.

     

    Lender
may assign or transfer any of the Loan Documents.  Funding of this
Loan may be provided by an affiliate of Lender.

     

    8.7           Third Party
Beneficiaries

     

    The Loan
Documents are made for the sole and exclusive benefit of Borrowers and Lender
and are not intended to benefit any other third party.  No third party
may claim any right or benefit or seek to enforce any term or provision of the
Loan Documents.

     

    8.8           Governing
Law

     

    The Loan
Documents shall be governed by and construed in accordance with the laws of the
State of Utah, except to the extent that any such document expressly provides
otherwise.

     

    8.9           Severability of Invalid
Provisions

     

    Any
provision of this Loan Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction only, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     

    8.10         Interpretation of Loan
Agreement

     

    The
article and section headings in this Loan Agreement are inserted for convenience
only and shall not be considered part of the Loan Agreement nor be used in its
interpretation.

     

    All
references in this Loan Agreement to the singular shall be deemed to include the
plural when the context so requires, and vice versa.  References in
the collective or conjunctive shall also include the disjunctive unless the
context otherwise clearly requires a different interpretation.

     

    
      
        
        

      

      
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    8.11         Survival and Binding Effect
of Representations, Warranties, and Covenants

     

    All
agreements, representations, warranties, and covenants made herein by Borrowers
shall survive the execution and delivery of this Loan Agreement and shall
continue in effect so long as any obligation to Lender contemplated by this Loan
Agreement is outstanding and unpaid, notwithstanding any termination of this
Loan Agreement.  All agreements, representations, warranties, and
covenants made herein by Borrowers shall survive any bankruptcy proceedings
involving Borrowers.  All agreements, representations, warranties, and
covenants in this Loan Agreement shall bind the party making the same, its
successors and, in Lender’s case, assigns, and all rights and remedies in this
Loan Agreement shall inure to the benefit of and be enforceable by each party
for whom made, their respective successors and, in Lender’s case,
assigns.

     

    8.12         Indemnification

     

    Borrowers
hereby agree to indemnify Lender for all liabilities and damages (including
contract, tort and equitable claims) which may be awarded against Lender, and
for all reasonable attorneys fees, legal expenses and other expenses incurred in
defending such claims, arising from or relating in any manner to the
negotiation, execution or performance by Lender of the Loan Documents (including
all reasonable attorneys fees, legal expenses and other expenses incurred in
defending any such claims brought by Borrowers if Borrowers do not prevail in
such actions), excluding only claims based upon breach or default by Lender or
gross negligence or willful misconduct of Lender.  Lender shall have
sole and complete control of the defense of any such claims and is hereby given
authority to settle or otherwise compromise any such claims as Lender in good
faith determines shall be in its best interests.

     

    8.13         Environmental
Indemnification

     

    Borrowers
shall indemnify Lender for any and all claims and liabilities, and for damages
which may be awarded or incurred by Lender, and for all reasonable attorney
fees, legal expenses, and other out-of-pocket expenses arising from or related
in any manner, directly or indirectly, to (i) Hazardous Materials located on,
in, or under the Real Property; (ii) any Environmental Condition on, in, or
under the Real Property; (iii) any material violation of or non compliance with
any Environmental Health and Safety Law; (iv) any material breach or violation
of Section 4.11 Environmental
Representations and Warranties and/or Section 5.13 Environmental
Covenants; and/or (v) any activity or omission, whether occurring on or
off the Real Property, whether prior to or during the term of the loans secured
hereby, and whether by Borrowers or any other person or entity, relating to
Hazardous Materials or an Environmental Condition.  The
indemnification obligations of Borrowers under this Section shall survive any
reconveyance, release, or foreclosure of the Real Property, any transfer in lieu
of foreclosure, and satisfaction of the obligations secured hereby.

     

    Lender
shall have the sole and complete control of the defense of any such
claims.  Lender is hereby authorized to settle or otherwise compromise
any such claims as Lender in good faith determines shall be in its best
interests.

     

    
      
        
        

      

      
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    8.14        Interest on Expenses and
Indemnification, Order of Application

     

    All
expenses, out-of-pocket costs, attorneys fees and legal expenses, amounts
advanced in performance of obligations of Borrowers, and indemnification amounts
owing by Borrowers to Lender under or pursuant to this Loan Agreement and/or the
Promissory Note shall be due and payable upon demand.  If not paid
upon demand, all such obligations shall bear interest at the default rate
provided in the Promissory Note from the date of disbursement until paid to
Lender, both before and after judgment.  Lender is authorized to
disburse funds under the Promissory Note for payment of all such
obligations.

     

    All
payments and recoveries shall be applied to payment of the foregoing
obligations, the Promissory Note, and all other amounts owing to Lender by
Borrowers in such order and priority as determined by Lender.  Unless
provided otherwise in the Promissory Note, payments on the Promissory Note shall
be applied first to accrued interest and the remainder, if any, to
principal.

     

    8.15        Limitation of Consequential
Damages

     

    Lender
and its officers, directors, employees, representatives, agents, and attorneys,
shall not be liable to Borrowers for consequential damages arising from or
relating to any breach of contract, tort, or other wrong in connection with the
negotiation, documentation, administration or collection of the
Loan.

     

    8.16        Waiver and Release of
Claims

     

    Borrowers
(i) represent that they have no defenses to or setoffs against any indebtedness
or other obligations owing to Lender or its affiliates (the “Obligations”), nor
claims against Lender or its affiliates for any matter whatsoever, related or
unrelated to the Obligations, and (ii) release Lender and its affiliates from
all claims, causes of action, and costs, in law or equity, existing as of the
date of this Loan Agreement, which Borrowers have or may have by reason of any
matter of any conceivable kind or character whatsoever, related or unrelated to
the Obligations, including the subject matter of this Loan Agreement, excluding
recordation of lien releases and delivery of collateral under the Prior Zions
Loan.  This provision shall not apply to claims for performance of
express contractual obligations owing to Borrowers by Lender or its
affiliates.

     

    8.17        Revival
Clause

     

    If the
incurring of any debt by Borrowers or the payment of any money or transfer of
property to Lender by or on behalf of Borrowers should for any reason
subsequently be determined to be “voidable” or “avoidable” in whole or in part
within the meaning of any state or federal law (collectively “voidable
transfers”), including, without limitation, fraudulent conveyances or
preferential transfers under the United States Bankruptcy Code or any other
federal or state law, and Lender is required to repay or restore any voidable
transfers or the amount or any portion thereof, or upon the advice of Lender’s
counsel is advised to do so, then, as to any such amount or property repaid or
restored, including all reasonable costs, expenses, and attorneys fees of Lender
related thereto, the liability of Borrowers shall automatically be revived,
reinstated and restored and shall exist as though the voidable transfers had
never been made.


    
      
         


      

      
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    8.18        Dispute Resolution, Jury
Trial Waiver, Class Action Waiver and Arbitration

     

    This
section contains a jury waiver, arbitration clause, and a class action
waiver.  READ IT CAREFULLY.

     

    a.           Jury Trial Waiver and Class
Action Waiver.  As permitted by applicable law, each party waives their respective
rights to a trial before a jury in connection with any Dispute (as
“Dispute” is hereinafter defined), and Disputes shall be resolved by a judge
sitting without a jury.  If a court determines that this
provision is not enforceable for any reason and at any time prior to trial of the
Dispute, but not later than 30 days after entry of the order determining this
provision is unenforceable, any party shall be entitled to move the court
for an order compelling arbitration and staying or dismissing such litigation
pending arbitration (“Arbitration Order”).  If permitted by applicable
law, each party also waives the
right to litigate in court or an arbitration proceeding any Dispute as a class
action, either as a member of a class or as a representative, or to act as a
private attorney general.

     

    b.           Arbitration.  If
a claim, dispute, or controversy arises between us with respect to this
Agreement, related agreements, or any other agreement or business
relationship between any of us whether or not related to the subject matter of
this Agreement (all of the foregoing, a “Dispute”), and only if a jury trial waiver is
not permitted by applicable law or ruling by a court, any of us may require
that the Dispute be resolved by binding arbitration before a single arbitrator
at the request of any party.  By agreeing to arbitrate a Dispute,
each party gives up any right that party may have to a jury trial, as well as
other rights that party would have in court that are not available or are more
limited in arbitration, such as the rights to discovery and to
appeal.

     

    Arbitration
shall be commenced by filing a petition with, and in accordance with the
applicable arbitration rules of, JAMS or National Arbitration Forum
(“Administrator”) as selected by the initiating party.  If the parties
agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an
Administrator.  Disputes include matters (i) relating to a deposit
account, application for or denial of credit, enforcement of any of the
obligations we have to each other, compliance with applicable laws and/or
regulations, performance or services provided under any agreement by any party,
(ii) based on or arising from an alleged tort, or (iii) involving either of our
employees, agents, affiliates, or assigns of a party.  However,
Disputes do not include the validity, enforceability, meaning, or scope of this
arbitration provision and such matters may be determined only by a
court.  If a third party is a party to a Dispute, we each will consent
to including the third party in the arbitration proceeding for resolving the
Dispute with the third party.  Venue for the arbitration proceeding
shall be at a location determined by mutual agreement of the parties or, if no
agreement, in the city and state where lender or bank is
headquartered.


    
      
         


      

      
        30

        
          

        

      

      
         


      

    


    After
entry of an Arbitration Order, the non-moving party shall commence
arbitration.  The moving party shall, at its discretion, also be
entitled to commence arbitration but is under no obligation to do so, and the
moving party shall not in any way be adversely prejudiced by electing not to
commence arbitration.  The arbitrator: (i) will hear and rule on
appropriate dispositive motions for judgment on the pleadings, for failure to
state a claim, or for full or partial summary judgment; (ii) will render a
decision and any award applying applicable law; (iii) will give effect to any
limitations period in determining any Dispute or defense; (iv) shall enforce the
doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if
applicable; (v) with regard to motions and the arbitration hearing, shall apply
rules of evidence governing civil cases; and (vi) will apply the law of the
state specified in the agreement giving rise to the Dispute.  Filing
of a petition for arbitration shall not prevent any party from (i) seeking and
obtaining from a court of competent jurisdiction (notwithstanding ongoing
arbitration) provisional or ancillary remedies including but not limited to
injunctive relief, property preservation orders, foreclosure, eviction,
attachment, replevin, garnishment, and/or the appointment of a receiver, (ii)
pursuing non-judicial foreclosure, or (iii) availing itself of any self-help
remedies such as setoff and repossession.  The exercise of such rights
shall not constitute a waiver of the right to submit any Dispute to
arbitration.

     

    Judgment
upon an arbitration award may be entered in any court having jurisdiction except
that, if the arbitration award exceeds four million dollars ($4,000,000.00), any
party shall be entitled to a de novo appeal of the award before a panel of three
arbitrators.  To allow for such appeal, if the award (including
Administrator, arbitrator, and attorney’s fees and costs) exceeds four million
dollars ($4,000,000.00), the arbitrator will issue a written, reasoned decision
supporting the award, including a statement of authority and its application to
the Dispute.  A request for de novo appeal must be filed with the
arbitrator within 30 days following the date of the arbitration award; if such a
request is not made within that time period, the arbitration decision shall
become final and binding.  On appeal, the arbitrators shall review the
award de novo, meaning that they shall reach their own findings of fact and
conclusions of law rather than deferring in any manner to the original
arbitrator.  Appeal of an arbitration award shall be pursuant to the
rules of the Administrator or, if the Administrator has no such rules, then the
JAMS arbitration appellate rules shall apply.

     

    Arbitration
under this provision concerns a transaction involving interstate commerce and
shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq.  This arbitration provision shall survive any termination,
amendment, or expiration of this Agreement.  If the terms of this
provision vary from the Administrator’s rules, this arbitration provision shall
control.

     

    c.           Reliance.  Each
party (i) certifies that no one has represented to such party that the other
party would not seek to enforce jury and class action waivers in the event of
suit, and (ii) acknowledges that it and the other party have been induced to
enter into this Agreement by, among other things, the mutual waivers,
agreements, and certifications in this section.


    
      
         


      

      
        31

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              8.19

            	
              Consent to Utah
      Jurisdiction and Exclusive Jurisdiction of Utah
    Courts

            


    

     

    Borrowers
acknowledge that by execution and delivery of the Loan Documents Borrowers have
transacted business in the State of Utah and Borrowers voluntarily submit to,
consent to, and waive any defense to the jurisdiction of courts located in the
State of Utah as to all matters relating to or arising from the Loan Documents
and/or the transactions contemplated thereby.  EXCEPT AS EXPRESSLY
AGREED IN WRITING BY LENDER AND EXCEPT AS PROVIDED IN THE ARBITRATION PROVISIONS
ABOVE, THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF UTAH SHALL HAVE SOLE
AND EXCLUSIVE JURISDICTION OF ANY AND ALL CLAIMS, DISPUTES, AND CONTROVERSIES,
ARISING UNDER OR RELATING TO THE LOAN DOCUMENTS AND/OR THE TRANSACTIONS
CONTEMPLATED THEREBY. NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION RELATING TO OR
ARISING UNDER THE LOAN DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY
MAY BE COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN
WRITING BY LENDER.

     

    8.20        Joint and Several
Liability

     

    Borrowers
shall each be jointly and severally liable for all obligations and liabilities
arising under the Loan Documents.

     

    8.21        Notices

     

    All
notices or demands by any party to this Loan Agreement (excluding notices
concerning any Interest Rate Management Transaction) shall, except as otherwise
provided herein, be in writing and may be sent by certified mail, return receipt
requested.  Notices so mailed shall be deemed received when deposited
in a United States post office box, postage prepaid, properly addressed to
Borrowers or Lender at the mailing addresses stated herein or to such other
addresses as Borrowers or Lender may from time to time specify in
writing.  Any notice so addressed and otherwise delivered shall be
deemed to be given when actually received by the addressee.

     

    Mailing
addresses:

    


    Lender:

    


    Zions
First National Bank

    Corporate
Banking Group

    One South
Main, Suite 200

    Salt Lake
City, Utah  84111

    Attention:  Michael
R. Brough

        Senior Vice
President

    


    With a
copy to:

    


    John A.
Beckstead

    Holland
& Hart LLP

    222 South
Main Street, Suite 2200

    Salt Lake
City, Utah 84101


    
      
         


      

      
        32

        
          

        

      

      
         


      

    

    


    With
respect to all Borrowers:

    


    c/o
Clarus Corporation

    2084 East
3900 South

    Salt Lake
City, Utah 84124

    Attention:  Executive
Chairman and Chief Executive Officer

    


    With a
copy to:

    


    Kane
Kessler, P.C.

    1350
Avenue of the Americas, 26th Floor

    New York,
New York 10019

    Attention:
Robert L. Lawrence, Esq.

    


    8.22        Duplicate Originals;
Counterpart Execution

     

    Two or
more duplicate originals of the Loan Documents may be signed by the parties,
each duplicate of which shall be an original but all of which together shall
constitute one and the same instrument.  Any Loan Document may be
executed in several counterparts, without the requirement that all parties sign
each counterpart.  Each of such counterparts shall be an original, but
all counterparts together shall constitute one and the same
instrument.

     

    8.23        Disclosure of Financial and
Other Information

     

    Borrowers
hereby consent to Lender disclosing to any other lender who may participate in
the Loan any and all information, knowledge, reports, and records, including,
without limitation, financial statements, relating in any manner whatsoever to
the Loan and Borrowers.

     

    8.24        Integrated Agreement and
Subsequent Amendment

     

    The Loan
Documents constitute the entire agreement between Lender and Borrowers and may
not be altered or amended except by written agreement signed by Lender and
Borrowers.  PURSUANT TO UTAH CODE SECTION 25-5-4, BORROWERS ARE
NOTIFIED THAT THESE AGREEMENTS ARE A FINAL EXPRESSION OF THE AGREEMENT BETWEEN
LENDER AND BORROWERS AND THESE AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF
ANY ALLEGED ORAL AGREEMENT.

     

    All prior
and contemporaneous agreements, arrangements  and understandings
between the parties hereto as to the subject matter hereof are, except as
otherwise expressly provided herein, rescinded.

     

    [Signatures
appear on following page.]


    
      
         


      

      
        33

        
          

        

      

      
         


      

    


    Effective
Date: May 28, 2010

    


    
      
        	 
      	
                Lender:

              
	 
      	 
      
	 
      	
                Zions
      First National Bank

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Michael R. Brough

              
	 
      	 
      	
                 Michael
      R. Brough

              
	 
      	 
      	
                 Senior
      Vice President

              
	 
      	 
      
	 
      	
                Borrowers:

              
	 
      	 
      
	 
      	
                Black
      Diamond Equipment, Ltd.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Peter Metcalf

              
	 
      	
                Name:

              	
                 Peter Metcalf

              
	 
      	
                Title:

              	
                 Chief Executive Officer and
      President

              
	 
      	 
      
	 
      	
                Black
      Diamond Retail, Inc.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Peter Metcalf

              
	 
      	
                Name:

              	
                 Peter Metcalf

              
	 
      	
                Title:

              	
                 Chief Executive Officer and
      President

              
	 
      	 
      
	 
      	
                Clarus
      Corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Peter Metcalf

              
	 
      	
                Name: 

              	
                 Peter Metcalf

              
	 
      	
                Title:

              	
                 Chief Executive Officer and
      President

              
	 
      	 
      
	 
      	
                Everest/Sapphire
      Acquisition, LLC

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Peter Metcalf

              
	 
      	
                Name:

              	
                 Peter Metcalf

              
	 
      	
                Title:

              	
                 President

              


      

    


    
      
         


      

      
        34

        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    Promissory
Note


    
      
         


      

      
        35

        
          

        

      

      
         


      

    


    EXHIBIT
B

    


    Existing
Debt

    


    BD
Existing Debt

     

    The
aggregate principal amount of Debt outstanding under the following agreements
with BDEL at April 30, 2010 is approximately $1,292,286.

     

    Agreement
for Sale and Purchase of Trademark and Related Actions dated June 30, 2009, by
and between BDEL as purchaser and GPG Enterprises as seller for nine hundred
thousand dollars ($900,000.00), as amended July 8, 2009.

     

    Master
Finance Lease No. 0008878 between BDEL as lessee and Zions Credit Corporation as
lessor dated December 18, 2003, Schedule No. 0008878005 dated October 1,
2007.

     

    Master
Finance Lease No. 0008878 between BDEL as lessee and Zions Credit Corporation as
lessor dated December 18, 2003, Schedule No. 0008878006 dated October 1,
2007.

     

    Master
Finance Lease No. 0008878 between BDEL as lessee and Zions Credit Corporation as
lessor dated December 18, 2003, Schedule No. 0008878007 dated October 1,
2007.

     

    Master
Finance Lease No. 0008878 between BDEL as lessee and Zions Credit Corporation as
lessor dated December 18, 2003, Schedule No. 0008878008 dated December 27,
2007.

     

    Master
Finance Lease No. 0008878 between BDEL as lessee and Zions Credit Corporation as
lessor dated December 18, 2003, Schedule No. 0008878009 dated December 27,
2007.

     

    Master
Lease Agreement between BDEL as lessee and US Bancorp as lessor dated March 9,
2009, Schedule No. 992592-001-0018585-001 dated March 9, 2009.

     

    Master
Lease Agreement No. 252193 between BDEL as lessee and Wells Fargo as lessor
dated January 30, 2009, Supplement No. 0252193-400 dated April 3,
2009.

     

    Guaranty
by BDEL in favor of Polartec, LLC, dated January 23, 2009.


    
      
         


      

      
        36

        
          

        

      

      
         


      

    


    GMP
Existing Debt

     

    The
aggregate principal amount of Debt outstanding under the following agreements
with GMP at April 30, 2010 is approximately $40,000.

     

    Lease
Agreement between Gregory Mountain Products and US Bancorp Business Equipment
Finance for Xerox copiers, dated March 20, 2008.

     

    Lease
Agreement between Gregory Mountain Products and Pitney Bowes, dated April 16,
2008.

     

    Lease
Agreement between Gregory Mountain Products and US Bancorp Business Equipment
Finance for Xerox copiers, dated September 25, 2008.


    
      
         


      

      
        37

        
          

        

      

      
         


      

    


    EXHIBIT
C

    


    Form of
Intercompany Loans


    
      
         


      

      
        38

        
          

        

      

      
         


      

    


    EXHIBIT
D

    


    BD Merger
Agreement


    
      
         


      

      
        39

        
          

        

      

      
         


      

    


    EXHIBIT
E

    


    GMP
Merger Agreement


    
      
         


      

      
        40

        
          

        

      

      
         


      

    


    EXHIBIT
F

    


    Assumption
Agreement


    
      
         


      

      
        41

        
          

        

      

      
         


      

    


    EXHIBIT
G

    


    Financial
Projections


    
      
         


      

      
        42

        
          

        

      

      
         


      

    


    EXHIBIT
H

    


    Subordination
Agreement



    
      
         


      

      
        43

        
          

        

      

      
         


      

    


    COMPANY
SCHEDULES TO CREDIT AGREEMENT


     

    The following Schedules constitute an
integral part of the representations and warranties of Borrowers, which take
into effect the consummation of the GMP Closing and the execution by GMP of the
Substitute Promissory Note.


     

    Other
than with respect to the Lender, and its successors, participants and/or
assigns, no reference in these Schedules to any agreement or document shall be
construed as an admission or indication to a third party other than the Lender,
its successors, participants and/or assigns that such agreement or document is
enforceable or currently in effect or that there are any obligations remaining
to be performed or any rights that may be exercised under such agreement or
document.  Other than with respect to the Lender, and its successors,
participants and/or assigns, no disclosure in these Schedules relating to any
possible breach or violation of any agreement, law or regulation shall be
construed as an admission or indication to a third party other than the Lender,
its successors, participants and/or assigns that any such breach or violation
exists or has actually occurred


    
      
         


      

      
        44

        
          

        

      

      
         


      

    


    SCHEDULE
4.5

     

    ACCURACY
OF FINANCIAL STATEMENTS


     

    BDEL
entered into an interest rate swap agreement in 2005 that is not reflected in
the financial statements for fiscal year ended June 30, 2008


    
      
         


      

      
        45

        
          

        

      

      
         


      

    


    SCHEDULE
4.6

     

    NO
PENDING OR THREATENED LITIGATION

     

    BD

     

    Diamond
Baseball Company, Inc. d/b/a Diamond Sports Co., Inc. filed an opposition
concerning BDEL’s United States Trademark Application No. 78/609,001, based on
intent to use, for the mark BLACK DIAMOND. Depending on the resolution, this
could affect the Company’s rights with respect to the use of the BLACK DIAMOND
mark in connection with apparel.

     

    GMP

     

    In 2002,
Sanriya Crafts Manufactory Co., Ltd., a/k/a Heshan Sanriya (“Sanriya”), a third
party unrelated to GMP or its predecessor, began seeking registration of the
GREGORY & design mark in multiple classes of goods and services in
China.  Sanriya filed a total of at least 36 such trademark
applications before GMP’s predecessor could file its own trademark
applications.  Some of the Sanriya applications have matured to
registration. GMP has filed trademark opposition proceedings in China seeking to
prevent registration of all of Sanriya’s still-pending trademark applications as
well as several potentially-related applications owned by other third parties
that may or may not be related to Sanriya, and may also oppose registration of
all other GREGORY-formative trademark applications regardless of
ownership.  It is possible that GMP would have to petition to cancel
those Sanriya trademark registrations which have issued.  GMP’s
predecessor brought a trademark opposition proceeding in China seeking to
prevent registration of Sanriya’s application for the mark GREGORY & design
in International Class 18, the class that includes backpacks, GMP’s primary
product.  This opposition was denied at the initial level by the
Chinese Trademark Office.  GMP appealed this decision to the Chinese
Trademark Appeal Board (“TRAB”).  In September, 2009, the TRAB denied
GMP’s appeal.  GMP is currently further appealing the TRAB decision to
a Chinese court.  If GMP is ultimately unsuccessful in the dispute, it
is possible Sanriya could seek injunctive relief to prevent GMP from
manufacturing its products in China.


    
      
         


      

      
        46

        
          

        

      

      
         


      

    


    SCHEDULE
4.10

     

    COMPLIANCE
WITH ALL OTHER APPLICABLE LAW

     

    BD

    


    See
Schedule 4.6.

    


    GMP

     

    See
Schedule 4.6.


    
      
         


      

      
        47

        
          

        

      

      
         


      

    


    SCHEDULE
4.11

     

    ENVIRONMENTAL
REPRESENTATIONS AND WARRANTIES

    


    BD

     

    Asbestos
existed in the underlayment of certain shake roofing on the Black Diamond campus
and may still exist in certain other underlayments.  This roofing
predated BDEL’s purchase of the real estate.  Roofs on two of the
outbuildings at the front of the campus have been replaced since BDEL purchased
the property, and the asbestos underlayment was removed using standard abatement
procedures during those roof replacements.


    
      
         


      

      
        48

        
          

        

      

      
         


      

    


    SCHEDULE
4.12

     

    OPERATION
OF BUSINESS

    


    BD

    


    See
Schedule 4.6.

    


    GMP

     

    See
Schedule 4.6.



    
      
         


      

      
        49

        
          

        

      

      
         


      

    


    SCHEDULE
5.5

     

    PRIOR CONSENTS FOR AMENDMENT OR
CHANGE


     

    Clarus
intends to amend its Organizational Documents to change the name of the
corporation to Black Diamond or any other similar name and to increase the
number of directors on its Board of Directors.


    
      
         


      

      
        50

        
          

        

      

      
         


      

    


    SCHEDULE
5.15

    


    PERMITTED
LIENS

    


    Delaware:


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    	 	
                                                                            Debtor

                                                                          	 
      	 	
                                                                            Secured Party

                                                                          	 
      	 	
                                                                            Date Filed

                                                                          	 
      	 	
                                                                            Filing No.

                                                                          	 
      	 	
                                                                            Collateral Description

                                                                          
	 	
                                                                            Black
      Diamond Equipment, Ltd

                                                                          	 
      	 	
                                                                            Henriksen/Butler
      Design Group

                                                                          	 
      	 	
                                                                            9/16/05

                                                                            Amended
      10/14/05

                                                                          	 
      	 	
                                                                            52868462

                                                                             

                                                                            53179851

                                                                          	 
      	 	
                                                                            All
      furniture and fixtures manufactured by Herman Miller, Inc, together with
      all proceeds and support obligations thereof up to the amount of
      $46,506.

                                                                          
	 	
                                                                            Black
      Diamond Equipment Ltd, Inc. and Black Diamond Retail, Inc.

                                                                          	 
      	 	
                                                                            Zions
      Credit Corporation

                                                                          	 
      	 	
                                                                            9/11/08

                                                                          	 
      	 	
                                                                            2008

                                                                            3075619

                                                                          	 
      	 	
                                                                            Specific
      equipment lease

                                                                          
	 	
                                                                            Black
      Diamond Equipment Ltd, Inc. and Black Diamond Retail

                                                                          	 
      	 	
                                                                            Zions
      Credit Corporation

                                                                          	 
      	 	
                                                                            9/11/08

                                                                          	 
      	 	
                                                                            2008

                                                                            3075627

                                                                          	 
      	 	
                                                                            Specific
      equipment lease

                                                                          
	 	
                                                                            Black
      Diamond Equipment Ltd, Inc. and Black Diamond Retail

                                                                          	 
      	 	
                                                                            Zions
      Credit Corporation

                                                                          	 
      	 	
                                                                            9/11/08

                                                                          	 
      	 	
                                                                            2008

                                                                            3075643

                                                                          	 
      	 	
                                                                            Specific
      equipment lease

                                                                          
	 	
                                                                            Black
      Diamond Equipment Ltd, Inc. and Black Diamond Retail

                                                                          	 
      	 	
                                                                            Zions
      Credit Corporation

                                                                          	 
      	 	
                                                                            9/11/08

                                                                          	 
      	 	
                                                                            2008
3075650

                                                                          	 
      	 	
                                                                            Specific
      equipment lease

                                                                          
	 	
                                                                            Black
      Diamond Equipment Ltd

                                                                          	 
      	 	
                                                                            Wells
      Fargo Equipment Finance, Inc.

                                                                          	 
      	 	
                                                                            2/4/2009

                                                                          	 
      	 	
                                                                            2009
0580743

                                                                          	 
      	 	
                                                                            Office
      Furniture and fixtures described on Henrickson Butler Invoices 107074.
      107143.107075

                                                                          
	 	
                                                                            Black
      Diamond Equipment Ltd

                                                                          	 
      	 	
                                                                            US
      Bancorp Equipment Finance, Inc.

                                                                          	 
      	 	
                                                                            4/29/2009

                                                                          	 
      	 	
                                                                            2009
1350773

                                                                          	 
      	 	
                                                                            Specific
      Equipment

                                                                          
	 	
                                                                            Gregory
      Mountain Products LLC

                                                                          	
                                                                              

                                                                          	 	
                                                                            US
      Bancorp

                                                                          	
                                                                              

                                                                          	 	
                                                                            11/19/2008

                                                                          	
                                                                              

                                                                          	 	
                                                                            2008
3875265

                                                                          	
                                                                              

                                                                          	 	
                                                                            Specific
      Equipment

                                                                          


                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         


      

      
        51

        
          

        

      

      
         


      

    


    Utah:

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      	 	
                                                              Debtor

                                                            	 
      	 	
                                                              Secured Party

                                                            	 
      	 	
                                                              Date Filed

                                                            	 
      	 	
                                                              Filing No.

                                                            	 
      	 	
                                                              Collateral Description

                                                            
	 	
                                                              Black
      Diamond Equipment Company, Ltd. Inc.

                                                            	 
      	 	
                                                              Revco
      Leasing Company

                                                            	 
      	 	
                                                              11/27/2007

                                                            	 
      	 	
                                                              332999200704

                                                            	 
      	 	
                                                              Specific
      Equipment

                                                            
	 	
                                                              Black
      Diamond Equipment Ltd, Inc.

                                                            	 
      	 	
                                                              Zions
      Credit Corporation

                                                            	 
      	 	
                                                              1/7/08

                                                            	 
      	 	
                                                              335497200801

                                                            	 
      	 	
                                                              Specific
      equipment lease

                                                            
	 	
                                                              Black
      Diamond Equipment Ltd, Inc. and Black Diamond Retail, Inc.

                                                            	 
      	 	
                                                              Zions
      Credit Corporation

                                                            	 
      	 	
                                                              9/11/06

                                                            	 
      	 	
                                                              303111200669

                                                            	 
      	 	
                                                              Specific
      equipment lease

                                                            
	 	
                                                              Black
      Diamond Equipment Ltd, Inc. and Black Diamond Retail, Inc.

                                                            	
                                                                

                                                            	 	
                                                              Zions
      Credit Corporation

                                                            	
                                                                

                                                            	 	
                                                              8/9/07

                                                            	
                                                                

                                                            	 	
                                                              325888200705

                                                            	
                                                                

                                                            	 	
                                                              Specific
      equipment
lease

                                                            


                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    Security
Interest granted pursuant to the terms of the Agreement for Sale and Purchase of
Trademark and Related Actions dated June 30, 2009, by and between BDEL as
purchaser and GPG Enterprises as seller, as amended July 8, 2009.

    


    
      Security
Interest granted pursuant to the terms of the Settlement Agreement between BDEL
and G3 Genuine Guide Gear, dated July 7, 2003.

    


    
      
         


      

      
        52

        
          

        

      

      
         


      

    

     

    TABLE
OF CONTENTS

    


    
      
        
          
            
              
                
                  	
                          1.

                        	
                          Definitions

                        	
                          1

                        
	 
      	 
      	 
      
	 
      	
                          1.1

                        	
                          Definitions

                        	
                          1

                        
	 
      	 
      	 
      	 
      
	
                          2.

                        	
                          Loan
      Description

                        	
                          7

                        
	 
      	 
      	 
      
	 
      	
                          2.1

                        	
                          Amount of
      Loan

                        	
                          7

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.2

                        	
                          Nature and Duration of
      Loan

                        	
                          7

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.3

                        	
                          Consideration Among
      Co-Borrowers

                        	
                          8

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.4

                        	
                          Promissory
      Note

                        	
                          8

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.5

                        	
                          Notice and Manner of
      Borrowing

                        	
                          8

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.6

                        	
                          Loan Hold
      Back

                        	
                          8

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.7

                        	
                          Funding
      Fee

                        	
                          9

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.8

                        	
                          Unused Commitment
      Fee

                        	
                          9

                        
	 
      	 
      	 
      	 
      
	 
      	
                          2.9

                        	
                          Payment of Prior Loans
      and Release of Liens and Security Interests

                        	
                          9

                        
	 
      	 
      	 
      	 
      
	
                          3.

                        	
                          Conditions to Loan
      Disbursements

                        	
                          9

                        
	 
      	 
      	 
      
	 
      	
                          3.1

                        	
                          Conditions to Loan
      Disbursements

                        	
                          9

                        
	 
      	 
      	 
      	 
      
	 
      	
                          3.2

                        	
                          No Default, Adverse
      Change, False or Misleading Statement

                        	
                          10

                        
	 
      	 
      	 
      	 
      
	
                          4.

                        	
                          Representations and
      Warranties

                        	
                          10

                        
	 
      	 
      	 
      
	 
      	
                          4.1

                        	
                          Organization and
      Qualification

                        	
                          10

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.2

                        	
                          Authorization

                        	
                          11

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.3

                        	
                          Corporate
      Relationships

                        	
                          11

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.4

                        	
                          No Governmental
      Approval Necessary

                        	
                          11

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.5

                        	
                          Accuracy of Financial
      Statements

                        	
                          12

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.6

                        	
                          No Pending or
      Threatened Litigation

                        	
                          12

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.7

                        	
                          Full and Accurate
      Disclosure

                        	
                          12

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.8

                        	
                          Compliance with
      ERISA

                        	
                          13

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.9

                        	
                          Compliance with USA
      Patriot Act

                        	
                          13

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.10

                        	
                          Compliance with All
      Other Applicable Law

                        	
                          13

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.11

                        	
                          Environmental
      Representations and Warranties

                        	
                          14

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.12

                        	
                          Operation of
      Business

                        	
                          14

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.13

                        	
                          Payment of
      Taxes

                        	
                          14

                        
	 
      	 
      	 
      	 
      
	 
      	
                          4.14

                        	
                          Solvency

                        	
                          14

                        
	 
      	 
      	 
      	 
      
	
                          5.

                        	
                          Borrowers’
      Covenants

                        	
                          14

                        


                

              

            

          

        

      

    

     

    
      
         


      

      
        -i-

        
          

        

      

      
         


      

    


    TABLE
OF CONTENTS

    (continued)

    


    
      
        
          
            
              
                
                  
                    	 
      	
                            5.1

                          	
                            Use of
      Proceeds

                          	
                            14

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.2

                          	
                            Continued Compliance
      with ERISA

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.3

                          	
                            Continued Compliance
      with USA Patriot Act

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.4

                          	
                            Continued Compliance
      with Applicable Law

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.5

                          	
                            Prior Consent for
      Amendment or Change

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.6

                          	
                            Payment of Taxes and
      Obligations

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.7

                          	
                            Financial Statements
      and Reports

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.8

                          	
                            Insurance

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.9

                          	
                            Inspection

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.10

                          	
                            Operation of
      Business

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.11

                          	
                            Maintenance of Records
      and Properties

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.12

                          	
                            Notice of
      Claims

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.13

                          	
                            Environmental
      Covenants

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.14

                          	
                            Financial
      Covenants

                          	
                            18

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.15

                          	
                            Negative
      Pledge

                          	
                            20

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.16

                          	
                            Restriction on
      Debt

                          	
                            20

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.17

                          	
                            Mergers,
      Consolidations, Acquisitions, Sale of Assets

                          	
                            21

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.18

                          	
                            Change in
      Control

                          	
                            22

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.19

                          	
                            Loans and
      Distributions

                          	
                            22

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.20

                          	
                            GMP
      Merger

                          	
                            23

                          
	 
      	 
      	 
      	 
      
	 
      	
                            5.21

                          	
                            Subordinated
      Debt

                          	
                            23

                          
	 
      	 
      	 
      	 
      
	
                            6.

                          	
                            Default

                          	
                            23

                          
	 
      	 
      	 
      
	 
      	
                            6.1

                          	
                            Events of
      Default

                          	
                            23

                          
	 
      	 
      	 
      	 
      
	 
      	
                            6.2

                          	
                            Cure
      Periods

                          	
                            24

                          
	 
      	 
      	 
      	 
      
	 
      	
                            6.3

                          	
                            No Waiver of Event of
      Default

                          	
                            24

                          
	 
      	 
      	 
      	 
      
	
                            7.

                          	
                            Remedies

                          	
                            25

                          
	 
      	 
      	 
      
	 
      	
                            7.1

                          	
                            Remedies upon Event of
      Default

                          	
                            25

                          
	 
      	 
      	 
      	 
      
	 
      	
                            7.2

                          	
                            Rights and Remedies
      Cumulative

                          	
                            25

                          
	 
      	 
      	 
      	 
      
	 
      	
                            7.3

                          	
                            No Waiver of
      Rights

                          	
                            25

                          
	 
      	 
      	 
      	 
      
	
                            8.

                          	
                            General
      Provisions

                          	
                            25

                          
	 
      	 
      	 
      
	 
      	
                            8.1

                          	
                            Governing
      Agreement

                          	
                            25

                          


                  

                

              

            

          

        

      

    

     

    
      
         


      

      
        -ii-

        
          

        

      

      
         


      

    


    TABLE
OF CONTENTS

    (continued)

    


    
      
        
          
            
              
                
                  	 
      	
                          8.2

                        	
                          Borrowers’ Obligations
      Cumulative

                        	
                          25

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.3

                        	
                          Co-Borrowers

                        	
                          26

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.4

                        	
                          Payment of Expenses
      and Attorney’s Fees

                        	
                          26

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.5

                        	
                          Right to Perform for
      Borrowers

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.6

                        	
                          Assignability

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.7

                        	
                          Third Party
      Beneficiaries

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.8

                        	
                          Governing
      Law

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.9

                        	
                          Severability of
      Invalid Provisions

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.10

                        	
                          Interpretation of Loan
      Agreement

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.11

                        	
                          Survival and Binding
      Effect of Representations, Warranties, and
Covenants

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.12

                        	
                          Indemnification

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.13

                        	
                          Environmental
      Indemnification

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.14

                        	
                          Interest on Expenses
      and Indemnification, Order of Application

                        	
                          29

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.15

                        	
                          Limitation of
      Consequential Damages

                        	
                          29

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.16

                        	
                          Waiver and Release of
      Claims

                        	
                          29

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.17

                        	
                          Revival
      Clause

                        	
                          29

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.18

                        	
                          Dispute Resolution,
      Jury Trial Waiver, Class Action Waiver and
    Arbitration

                        	
                          30

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.19

                        	
                          Consent to Utah
      Jurisdiction and Exclusive Jurisdiction of Utah
    Courts

                        	
                          32

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.20

                        	
                          Joint and Several
      Liability

                        	
                          32

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.21

                        	
                          Notices

                        	
                          32

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.22

                        	
                          Duplicate Originals;
      Counterpart Execution

                        	
                          33

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.23

                        	
                          Disclosure of
      Financial and Other Information

                        	
                          33

                        
	 
      	 
      	 
      	 
      
	 
      	
                          8.24

                        	
                          Integrated
      Agreement and Subsequent Amendment

                        	
                          33

                        


                

              

            

          

        

      

    

    


    EXHIBITS

    


    Exhibit A
– Promissory Note

    Exhibit B
- Existing Debt

    Exhibit C
– Form of Intercompany Loans

    Exhibit D
– BD Merger Agreement

    Exhibit E
– GMP Merger Agreement

    Exhibit F
– Assumption Agreement

    Exhibit G
– Financial Projections


    
      
         


      

      
        -iii-

        
          

        

      

      
         


      

    
 

    TABLE
OF CONTENTS

    (continued)

    
 

    Exhibit H
– Subordination Agreement

    


    Schedule
4.5 – Accuracy of Financial Statements

    Schedule
4.6 – No Pending or Threatened Litigation

    Schedule
4.10 – Compliance with All Other Applicable Law

    Schedule
4.11 – Environmental Representations and Warranties

    Schedule
4.12 – Operation of Business

    Schedule
5.5 – Prior Consents for Amendments or Change


    Schedule
5.15 – Permitted Liens


    
      
         


      

      
        -iv-