EXHIBIT 10.38


 


PROMISSORY NOTE


(Acquisition Loan)


 


March 8, 2013


 


	Borrowers:	Black Diamond, Inc., formerly known as Clarus Corporation
	 	Black Diamond Equipment, Ltd.
	 	Black Diamond Retail, Inc.
	 	Everest/Sapphire Acquisition, LLC
	 	Gregory Mountain Products, LLC
	 	POC USA, LLC
	 	Pieps Corporation
	 	PIEPS Service, LLC
	 	BD European Holdings, LLC
	 	 
	Lender:	Zions First National Bank
	 	 
	Amount:	$10,000,000
	 	 
	Maturity Date:	Six years from the date of each Advance hereunder, but not later than March 8, 2021.


 


For value received,
Borrowers promise to pay to the order of Lender at Zions First National Bank, Corporate Banking Group, One South Main Street, Suite
200, Salt Lake City, Utah 84133, the sum of $10,000,000 or such other principal balance as may be outstanding hereunder in lawful
money of the United States with interest thereon calculated and payable as provided herein.


 


Definitions


 


Terms used in the singular
shall have the same meaning when used in the plural and vice versa. Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Loan Agreement. As used in this Promissory Note (the “Note”), the term:


 


“Advance”
means one or more disbursements under this Note of not less than $1,000,000 for the purpose of funding Permitted Acquisitions.


 


“Dollars”
and the sign “$” mean lawful money of the United States.


 


“Draw Period”
means the Effective Date through March 8, 2016.


 


“Loan Agreement”
means the Amended and Restated Loan Agreement of even date herewith between Lender and Borrowers, together with any exhibits, amendments,
addenda, and modifications.


 




    	 



    	 



    

 


“Thirty Day FHLB
Rate” means the rate per annum quoted by Lender as Lender’s Thirty Day Federal Home Loan Bank rate based upon the FHLB
Seattle rate as quoted in Bloomberg, or on the FHLB Seattle internet web site at www.FHLBsea.com, or other comparable service selected
by Lender. The definition of “Thirty Day FHLB Rate” is to be strictly interpreted and is not intended to serve any
purpose other than providing an index to determine the interest rate used herein. It is not necessarily the lowest rate charged
by Lender on its loans. If the Thirty Day FHLB Rate becomes unavailable during the term of this Note, Lender may designate a substitute
index after notifying Borrowers.


 


“Thirty Day LIBOR
Rate” means the rate per annum quoted by Lender as its Thirty Day LIBOR Rate based upon quotes from the London Interbank
Offered Rate from the British Bankers Association Interest Settlement Rates as quoted for United States Dollars by Bloomberg or
other comparable services selected by Lender. This definition of “Thirty Day LIBOR Rate” is to be strictly interpreted
and is not intended to serve any purpose other than providing an index to determine the interest rate used herein. It is not the
lowest rate at which Lender may make loans to any of its customers, either now or in the future.


 


Interest


 


Interest shall accrue
on the outstanding principal balance hereunder from the date of disbursement until paid, both before and after judgment, at a variable
rate computed on the basis of a 360 day year and actual days elapsed equal to the Thirty
Day LIBOR Rate plus the Applicable Margin from time to time in effect, adjusted as of the date of any change in the Thirty Day
LIBOR Rate. 


 


Notwithstanding
the foregoing, if Lender reasonably determines (which determination shall be conclusive) that (i) quotations of interest rates
referred to in the definition of Lender’s Thirty Day LIBOR Rate are not being provided in the relevant amounts or for the
relevant maturities for purposes of Lender determining the Thirty Day LIBOR Rate, (ii) the adoption of any applicable law, rule,
or regulation or any change therein, or any change in the interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such authority, central bank, or comparable agency shall make
it unlawful or impossible for Lender to offer loans based on the Thirty Day LIBOR Rate, or (iii) the Thirty Day LIBOR Rate does
not adequately cover the cost of Lender making or maintaining advances based on the Thirty Day LIBOR Rate, then Lender shall give
notice thereof to Borrowers, whereupon until Lender notifies Borrowers that the circumstances giving rise to such suspension no
longer exist, the interest rate hereunder shall be converted to a variable rate computed on the basis of
a 360 day year and actual days elapsed equal to the Thirty Day FHLB Rate plus the Applicable
Margin from time to time in effect, adjusted as of the date of any change in the Thirty Day FHLB Rate.


 


The Applicable Margin
above the Thirty Day LIBOR Rate or Thirty Day FHLB Rate shall adjust on the first day of each month following the later of the
due date or date of receipt of the quarterly or annual financial statements to be provided by Borrowers pursuant to the Loan Agreement.


 




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Notwithstanding the
foregoing, in no case shall the interest rate hereunder be less than 3.25% per annum, regardless of Borrowers’ Senior Net
Debt to Trailing Twelve Month EBITDA ratio and regardless of the Thirty Day LIBOR Rate or Thirty Day FHLB Rate.


 


Advances


 


This Note shall be
an amortizing term loan. Amounts borrowed and repaid may not be re-advanced or re-borrowed by Borrowers. The right of Borrowers
to draw funds and the obligation of Lender to make any Advance of the proceeds of this Note to Borrowers shall not accrue, in the
case of each requested Advance, until all of the conditions set forth in Section 4 of the Loan Agreement have been fully satisfied
and Borrowers have provided evidence that the requested Advance will be used to fund a Permitted Acquisition, and shall terminate
on the earlier to occur of: (i) the end of the Draw Period, or (ii) upon occurrence of an Event of Default or event which,
with the passage of time or giving of notice or both, would constitute an Event of Default. Any principal amounts for which disbursement
has not been requested during the Draw Period shall not be disbursed hereunder and Borrowers shall not be liable to repay such
non-disbursed amounts. All amounts owing under this Note shall be due and payable in full by Borrower upon maturity, whether at
the stated maturity date, upon acceleration thereof, or upon renewal or extension thereof.


 


Requests for Advances
shall be given in writing or orally no later than 12:00 p.m. Mountain Time of the Banking Business Day on which the Advance is
to be made. Advances hereunder shall be made to Borrowers’ account with Lender.


 


Payment
Terms


 


Principal and interest
on each Advance shall be payable as follows: Interest accrued is to be paid monthly in arrears commencing the first month after
each Advance and on the same day of each month for the following 11 months. Thereafter, principal and interest shall be payable
in equal monthly installments on the same day of each month based on a 60 month mortgage-style amortization of the principal amount
of such Advance. All outstanding principal, unpaid interest and all other amounts due under this Note or any of the other Loan
Documents shall be paid in full on the Maturity Date of such Advance.


 


All payments shall
be applied (a) first, to reimbursable fees, late charges, costs and expenses payable by Borrowers under the Loan Agreement or any
of the other Loan Documents, (b) second, to accrued interest and (c) the remainder, if any, to principal.


 


Prepayment


 


Borrowers may prepay
all or any portion of this Note at any time. Any prepayments shall first be applied to any Advance for
which principal payments are not yet due and with the longest remaining amortization and then to the Advances with the largest
number of monthly principal installment payments owing. 


 


In the event of prepayment,
Borrowers shall make Lender whole and Borrowers shall pay to Lender all reasonable and documented out-of-pocket costs incurred
by Lender in connection with such prepayment and compensate Lender for any loss and any breakage costs arising from the re-employment
of funds at rates lower than the rate provided by this Note, cost to Lender of such funds, any interest or fees payable by Lender
to lenders of funds obtained by them in order to make or maintain the loan evidenced by this Note and any related costs.



 




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General


 


This Note is made in
accordance with, governed by, and deemed to be a promissory note under, and subject to all terms and conditions of, the Loan Agreement
and, upon a Collateral Triggering Event, is secured by Collateral identified in and contemplated by the Loan Agreement.


 


If, at any time prior
to the end of the Draw Period, this Note shall have a zero balance owing, this Note shall not be deemed satisfied or terminated
by and shall remain in full force and effect for future draws unless terminated upon other grounds.


 


Upon an Event of Default
in payment of any principal or interest when due, whether due at stated maturity, by acceleration, or otherwise, all outstanding
principal shall bear interest at the Default Rate from the date when due until paid, both before and after judgment.


 


If an Event of Default
occurs, time being the essence hereof, then the entire unpaid balance, with interest as aforesaid, shall, at the election of the
holder hereof and without notice of such election, become immediately due and payable in full.


 


If an Event of Default
occurs, Borrowers agree to pay to the holder hereof all collection costs, including reasonable attorney fees and legal expenses,
in addition to all other sums due hereunder.


 


This Note shall be
governed by and construed in accordance with the laws of the State of Utah.


 


Borrowers acknowledge
that by execution and delivery of this Note 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 this Note. EXCEPT AS EXPRESSLY AGREED IN WRITING BY LENDER AND EXCEPT AS PROVIDED IN THE ARBITRATION PROVISIONS
IN THE LOAN AGREEMENT, 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 THIS NOTE. NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION
RELATING TO OR ARISING UNDER THIS NOTE MAY BE COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING
BY LENDER.


 


All obligations of
Borrowers under this Note shall be joint and several.


 


Borrowers and all
endorsers, sureties and guarantors hereof hereby jointly and severally waive presentment for payment, demand, protest, notice
of protest, notice of protest and of non-payment and of dishonor, and consent to extensions of time, renewal, waivers or modifications
without notice and further consent to the release of any collateral or any part thereof with or without substitution.


 


[Signature Pages Follow]


 




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IN WITNESS WHEREOF,
the parties hereto have executed this Promissory Note (Term Loan) and it becomes effective as of the day and year first set forth
above.


 


	 	Borrowers:
	 	 
	 	Black Diamond Equipment, Ltd.
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Chief Financial Officer and Secretary
	 	 	 
	 	Black Diamond Retail, Inc.
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Chief Financial Officer and Secretary
	 	 	 
	 	Black Diamond, Inc.
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Chief Financial Officer, Secretary
	 	 	and Treasurer
	 	 	 
	 	Everest/Sapphire Acquisition, LLC
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Secretary and Treasurer
	 	 	 
	 	Gregory Mountain Products, LLC
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Treasurer


 


PROMISSORY NOTE (ACQUISITION LOAN)


Signature Pages


 




    	 



    	 



    

 


	 	POC USA, LLC
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Secretary and Treasurer
	 	 	 
	 	BD European Holdings, LLC
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Secretary and Treasurer
	 	 	 
	 	Pieps Corporation
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Secretary and Treasurer
	 	 	 
	 	PIEPS Service, LLC
	 	 	 
	 	By:	/s/ Robert Peay
	 	Name:	Robert Peay
	 	Title:	Secretary and Treasurer


 


PROMISSORY NOTE (ACQUISITION LOAN)


Signature Pages


 




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