Document:

AMENDMENT NO. 6

TRANSITION AND PHASE OUT AGREEMENT
RELATED TO

DISTRIBUTION AND LICENSING AGREEMENT

 

THIS Agreement, dated
as of the 28th day of September 2012 (the “Effective Date”), shall supersede the Distribution and
Licensing Agreement and all related Amendments by and between Gregory Mountain Products, LLC, a Delaware limited liability company
doing business as Gregory Mountain Products (hereinafter referred to as "Gregory"), and Kabushiki Kaisha A&F, a Japanese
corporation (hereinafter referred to as the "Licensee"). Gregory and Licensee hereinafter sometimes are referred to individually
as a "Party" and collectively as the "Parties."

 

WHEREAS, Gregory and
Licensee entered into a Distribution and Licensing Agreement dated as of January 1, 2007 as well as certain Amended and Restated
Distribution and Licensing Agreements, dated as of May 30, 2008, which was amended as of March 31, 2009, and further amended as
of September 3, 2009, as of October 4, 2009 and as of June 18, 2010 (as amended through June 18, 2010), and as of November 16,
2011, the “Distribution and Licensing Agreement”)

 

WHEREAS, Gregory and
Licensee desire to phase out the obligations in all of the aforementioned agreements in order to coordinate a smooth and fully
endorsed transition of the sales and distribution of Gregory products in Japan to a new Gregory controlled entity, the joint announcement
of which shall occur on October 1, 2012.

 

WHEREAS, coincident
with the transition, Licensee and Gregory have agreed to various terms regarding an ongoing business relationship

 

WHEREAS, during the
phase out period, Licensee agrees to use its best efforts to promote and grow the Gregory wholesale and retail business

 

NOW, THEREFORE, in
consideration of the promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

 

DEFINITIONS

 

“Current Inventories” shall
mean all inventories of Products in the market other than “Discontinued Product Inventories”. Notwithstanding anything
to the contrary, “Current Inventories” shall exclude all inventories of Products in Licensee’s direct retail
stores and the Gregory brand Store in Harajuku, Japan.

 

“Discontinued Products Inventories”
shall mean all Products that Gregory has determined not to produce after January 1, 2013.

 

“Go Forward Inventories”
is defined as products that will be current models in the Spring/Summer 2013 product list”

 

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“Transition Period”
shall mean that period of time in which the sales and distribution of Gregory products shall inure to the new Gregory controlled
entity beginning at the execution of this agreement until as set forth hereinbelow.

 

1. GOOD FAITH AND BEST EFFORTS

 

Licensee hereby agrees
to act in good faith to fully and completely endorse and facilitate the smooth transition of sales and distribution to the new
Gregory controlled entity in all actions, statements, commentary and representations involving media, retailers, and customers,
including collaboration on the preparation and dissemination of any and all related announcements regarding said change. In addition,
Licensee hereby agrees to fulfill all obligations set forth in the Distribution and Licensing Agreement as well as act in good
faith and use its best efforts throughout 2012 to promote and grow the Gregory wholesale and retail business.

 

2. TRANSITION OBLIGATIONS; PAYMENT

 

2.1 Customer
Data.  Both parties recognize that it is in the mutual interests to effect a smooth transition to the post-distributor
relationship, so as to maintain sales levels and in order to minimize disruption to the many retail partners, who in most cases
will remain customers of both Licensee and Gregory businesses. To facilitate such smooth transition, Licensee agrees to share with
Gregory its essential customer data including, but not limited to:

 

		(a)	Full customer lists, addresses, key contacts

		(b)	Full customer sales history for the years 2008-2012, including as available sales by model, month,
year and customer location/store

		(c)	Customer credit terms and conditions, payment history

 

Limit as required by individual
information protection law in Japan

 

2.2 Transition
Timeline. The parties will develop a mutually agreed upon timeline and plan for the transition period, including, but not
limited, to the mutually agreed upon planning and execution of any and all trade shows occurring within the transition period

 

2.3 Transition
Announcement. The parties will develop and distribute a mutually agreed upon Letter to Retail Partners, explaining the
transition of distribution to the new Gregory entity and encouraging all Retail Partners to support and cooperate with both licensee
and Gregory in the future. The joint announcement of the transition shall occur on October 1, 2012.

 

2.4 Exclusive
Distribution Forbearance. In light of the discounts extended to Licensee for its A & F Country Stores, the extension
of the licensed operation of the Gregory Harajuku Brand store with similar discounts, and for other such consideration, Licensee
agrees not to begin any exclusive distribution with another pack or bag brand during the period of Spring/Summer of 2013 (the first
six months of 2013). Licensee further agrees that it will not publicly announce, present, nor offer for sale to its customers any
pack or bag brand until February 1, 2013 and that it will not ship or deliver any such products to any customers until July 1,
2013.

 

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2.5 Transition
Consideration.  For the full and complete fulfillment of the obligations set forth herein, Gregory agrees to make a payment
to A&F of Seven Hundred and Fifth Thousand United States Dollars ($750,000). Payment will be made in two installments: Five
Hundred Thousand Dollars ($500,000) due no later than January 31, 2013 and Two Hundred and Fifty Thousand Dollars $250,000 due
no later than December 31, 2013.

 

3. BUY BACK INVENTORY

 

Gregory
hereby agrees that it will buy back from Licensee all Go Forward Inventories and Cancel for Spring/Summer 2013 Lifestyle Inventories.
The Go Forward Inventories and Cancel for Spring/Summer 2013 Lifestyle Inventories will be valued
at Licensee’s Book Value, which will be set forth herein at Exhibit A and mutually agreed upon between the parties. Gregory
hereby agrees to buy back the Go Forward Inventories and Cancel for Spring/Summer 2013 Lifestyle Inventories; however, the maximum
value it shall agree to pay for said products is 250,000,000 Yen. Gregory and Licensee shall conduct a joint inventory audit at
Licensee’s warehouses between November 15 and December 31, 2012 to determine Going Forward Inventories and Cancel for Spring/Summer
2013 Lifestyle Inventories which Gregory shall buy back from Licensee, the risk and title of which shall be transferred to Gregory
from Licensee on December 31, 2012. Gregory shall pay to Licensee the amount in yen of the Buy Back Inventory valuation within
ten business days of physical receipt of the inventory, not to be later than December 31, 2012 at a location determined by Gregory.
Inventory is to be shipped freight collect by carrier and means determined by Gregory. Any inventories remaining following the
maximum amount agreed upon to be paid by Gregory shall be considered for purchase upon mutually agreed terms between the parties.

 

4. GREGORY HARAJUKU STORE

 

4.1        Gregory
agrees to offer special discounts of thirty percent (30%) below standard wholesale, defined herein as Fifty-five percent (55%)
of Manufacturers Suggested Retail Price (“MSRP”) to Licensee for all purchases for products to be sold in the Gregory
Harajuku store throughout 2013 and through the end of February 2014. Gregory hereby extends the special license agreement for
the Gregory Harajuku Store to March 1, 2014, at which time said license shall terminate. No royalty payments shall be required
for the extension period for the Gregory Harajuku Store license. Licensee, however, shall remain obligated pursuant to the Distribution
and Licensing agreement for regular monthly reports regarding sales from the Gregory Harajuku Store.

 

4.2        The discounts set forth
hereinabove at 4.1 shall apply only if the year to date sales at the end of the third quarter of 2013 at the Gregory Harajuku Store
fulfill or exceed a threshold amount of eighty percent of a mutually agreed upon goal between the parties of a four (4) percent
increase over the 2012 annual sales and the sales for January and February 2014 at least equal or exceed the sales for the same
two month period in 2013. If said threshold is not met, the discounts as set forth hereinabove at 4.1 shall discontinue for the
periods beginning in the fourth quarter of 2013 through February 28, 2014. If, at any time up to February 28, 2014, it is determined
that discounts were withheld unreasonably according to the terms set forth herein, Gregory shall remit payments to Licensee in
accordance with the discounts specified in section 4.1.

 

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5. A & F COUNTRY AND ONLINE STORES

 

5.1        Gregory
hereby agrees to provide discounts to Licensee’s A&F Country Stores and its e-commerce website (A&F Country Online
Store) on merchandise at thirty percent (30%) below standard wholesale, defined herein as Fifty-five percent (55%) of MSRP for
the calendar year 2013. Gregory will further extend discounts of twenty-five percent (25%) below standard wholesale, defined herein
as Fifty-five percent (55%) of MSRP for all purchases by Licensee’s A&F Country Stores and its e-commerce website (A&F
Country Online Store) for the period of January 1 through June 30, 2014.

 

5.2        The discounts described
hereinabove at paragraph 5.1 shall apply if, and only if, Licensee shall not offer for sale by Licensee’s A&F Country
Stores and its e-commerce website (A&F Country Online Store) any pack or bag brand considered competing with Gregory from January
1, 2013 through June 30, 2014. Additionally, the discounts described hereinabove at paragraph 5.1 shall apply only if the year
to date sales at Licensee’s A&F Country Stores and its e-commerce website (A&F Country Online Store) shall fulfill
or exceed a threshold amount at the end of the third quarter of 2013 of eighty percent (80%) of the mutually agreed upon annual
goal regarding said sales. If, at any time up to December 31, 2013, it is determined that discounts were withheld unreasonably
according to the terms set forth herein, Gregory shall remit payments to Licensee in accordance with the discounts specified in
section 5.1.

 

5.3        Beginning January 1,
2014, the discounts described hereinabove shall be reduced to twenty-five (25%) below standard wholesale, defined herein as Fifty-five
percent (55%) of MSRP; however, said discounts shall only apply if the sales at Licensee’s A&F Country Stores and its
e-commerce website (A&F Country Online Store) equal or exceed the sales made in the first quarter of 2012. If, at any time
it is determined that discounts were withheld unreasonably according to the terms set forth herein, Gregory shall remit payments
to Licensee in accordance with the discounts specified hereinabove.

 

6. GREGORYPACKS.JP WEBSITE

 

The parties herein
hereby agree that Gregory shall include all purchases of products by Licensee for resale through the gregorypacks.jp website from
January 1, 2013 through December 31, 2013 based on the discount rate of thirty percent (30%) below standard wholesale, defined
herein as Fifty-five percent (55%) of MSRP. The parties further agree that said sales will create no royalty payment obligations
for Licensee. However, Licensee shall remain obligated pursuant to the Distribution and Licensing agreement to provide to Gregory
all monthly reports of sales from the gregorypacks.jp website.

 

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7. DISCONTINUED PRODUCTS

 

The parties hereby
agree that any special discounts previously required in the Distribution and Licensing Agreement for Discontinued Products shall
be foregone and no such obligations for discounts shall apply hereafter. The parties further agree that the new Gregory controlled
entity may offer to Licensee, for sale through its Outlet stores, discounted products, the price of which shall be determined on
a case by case basis in good faith. Licensee shall be under no obligation to buy Discontinued Products. Licensee shall have ten
(10) business days to review any such offers and respond, after which the new Gregory entity may offer the Discontinued Products
to other customers. The aforementioned “right of first refusal” on Discontinued Products shall be effective from January
1, 2013 through June 30, 2014.

 

8. NON-DISCLOSURE AGREEMENT

 

The parties hereby
agree that the Non-Disclosure Agreement, dated April 1, 2010, shall be extended in effect and obligation until September 30, 2012
and shall be attached hereto as an exhibit.

 

9. TERMINATION PAYMENT EXCLUSION

 

Licensee hereby agrees
that no further payments are due, and thus agrees to forego any such further payments, which may be related to or in connection
with or by reason of the termination of the Distribution and Licensing Agreement except those payments that are provided for hereinabove.

 

10. FORCE MAJEURE

 

Notwithstanding anything to the contrary
in this Agreement, neither party hereto shall be deemed to be in default of any provision of this Agreement or be liable to the
other party or to any third party for any delay, error, failure in performance or interruption of performance due to any act of
God, war, insurrection, riot, boycott, strikes, interruption of power service, interruption of communications service, labor or
civil disturbance, acts of any other person not under the control of either party or other similar causes, the occurrence of which
are (i) not reasonably foreseeable by a party, and (ii) beyond the reasonable control of that party; provided, that no such
actions shall delay the payment of any orders of Products where title to such Products has passed to the Distributor or its agents
or where such Products are in the possession of Distributor or its Agents. Each party shall use its best efforts to remedy its
delay, error, failure to perform, or incomplete performance in a manner which is fair and equitable to both parties. The delayed
party shall give the other party reasonable written notification of any material or indefinite delay due to such causes. This Agreement
shall be deemed to have been amended to extend the time of performance of such obligation hereunder by the period of time attributable
to the excusable delay.

 

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11. LAW GOVERNING

 

10.1        Interpretation. This Agreement shall be governed
by and interpreted under the laws of the State of New York without regard to that state’s conflicts of laws provisions, except
that the United Nations Convention for the International Sale of Goods does not apply. The Parties agree that any and all disputes
arising out of or relating in any way to this Agreement shall be litigated at the trial level only in state court or federal court
in New York, New York. Licensee hereby submits to personal and subject matter jurisdiction in such courts and agrees that Licensee
will not contest venue.

 

		12.	CONSTRUCTION

 

12.1 The headings appearing at the
beginning of each Section of this Agreement are for convenience only and shall not be deemed to define, limit or construe the contents
of any such article, section or schedule. Time is of the essence of this Agreement. Wherever required by the context hereof, each
pronoun used herein shall be deemed to include both the singular and the plural and encompass each gender. This Agreement: (a)
shall be deemed to reflect the mutual intent of the Parties, and no rule of strict construction shall be applied against either
Party; (b) may be executed in separate counterparts, each of which is deemed to be an original, and all of which taken together
constitute one and the same agreement; and (c) is written in American English, and no translation(s) of this Agreement in any other
language(s) shall control.

 

12.2 Enforceability.

 

(a)        Reformation. In the event that any provision(s) or
part(s) thereof in this Agreement shall be finally determined by any court or administrative agency to not be effective or enforceable
as written, and, if such determination is upheld on appeal or no appeal from such determination is taken, then the Parties agree
that such court or agency shall (or if such court or agency is unwilling or fails to do so, then the Parties shall) modify such
provision(s) or part(s) thereof to the minimum extent required to make such provision(s) or part(s) thereof effective and enforceable,
and the Parties further hereby consent to the entry by a court or administrative agency of an order to so modify such provision(s)
or part(s) thereof.

(b)        Substitution.
If applicable law contains or appears to contain any requirement that is contrary to, conflicts with or is missing from any provision(s)
or part(s) thereof in this Agreement, Gregory at any time and in its sole discretion, may elect by written notice to Licensee
(effective upon receipt thereof or as otherwise designated by Gregory therein) that: (i) such requirement be substituted for or
added to such provision(s) or part(s) thereof to the minimum extent necessary to validate such provision(s) or part(s) thereof
or (ii) this Agreement.

(c)        Severability. If any provision(s) or part(s) thereof
in this Agreement shall be held invalid, the remainder of this Agreement shall continue in full force and effect and each such
provision or part thereof shall be deemed not to be part of this Agreement. It is the intention of the Parties that this Agreement
shall be interpreted to give effect to its provisions, notwithstanding any potential adjudicative interpretation to the contrary.

 

		12.3	Relief.

 

In the event that Gregory files any action
against Licensee to enforce any provision(s) of this Agreement or Gregory defends itself in any action brought by Licensee, Gregory
shall be entitled: (a) to equitable relief without the necessity of posting bond or other security (including without limitation
entry of temporary and permanent injunctions and orders of specific performance) and (b) to recover in any judgment wholly or partially
in favor of Gregory entered in any such action the attorneys’ fees and litigation expenses of Gregory, such costs and damages
as permitted by law, the costs of collection thereof and such other relief as a court may award or order.

 

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13. ENTIRE AGREEMENT

 

13.1        Integration. This Agreement shall constitute
the entire understanding of the Parties; (b) is intended to govern the relationship between the Parties, including without limitation
each sale of any or all of the Products by Gregory to Licensee (c) supersede all agreements, representations or statements, either
oral or written; and (d) except as otherwise provided herein, may be amended or modified only by a written supplement, duly executed
by both of the Parties.

 

IN WITNESS WHEREOF, the parties hereto
have read and fully understand and agree to the terms described hereinabove and have duly executed this Agreement as of the date
first above written.

 

GREGORY MOUNTAIN PRODUCTS, LLC.

 

	By:	/s/ William Kulczycki	 
	 	Name: William Kulczycki
	 	Title: Gregory Mountain Products Brand President
	 	Vice President Black Diamond Inc.

 

KABUSHIKI KAISHA A&F

 

	By:	 /s/ Takao Akatsu	 
	 	Name: Takao Akatsu	 
	 	Title: President	 

 

		Page 7Assumption Agreement

 

This Assumption Agreement
(the “Agreement”) is made as of September 28, 2012 by POC USA, LLC, a limited liability company organized and existing
under the laws of the State of Delaware (the “Additional Borrower”), and Zions First National Bank (“Lender”).

 

Recitals

 

1.          Black
Diamond, Inc., formerly known as Clarus Corporation, Black Diamond Equipment, Ltd., Black Diamond Retail, Inc., Everest/Sapphire
Acquisition, LLC, and Gregory Mountain Products, LLC (individually and collectively, the “Borrower”) and Lender have
entered into a Loan Agreement dated May 28, 2010 (as amended from time to time, the “Loan Agreement”), pursuant to
which Lender has loaned Borrower the sum of thirty-five million dollars ($35,000,000.00), evidenced by a First Substitute Promissory
Note (Revolving Line of Credit) dated May 28, 2010, in the original principal amount of thirty-five million dollars ($35,000,000.00)
(collectively, the “Loan”).

 

2.          Additional
Borrower has been acquired, directly or indirectly, by the Borrower.

 

3.          Pursuant
to the terms of the Loan Agreement, Additional Borrower is required to become a Borrower under the Loan Agreement.

 

4.          Additional
Borrower desires to agree and consent to become bound by the Loan Agreement.

 

Agreement

 

For good and valuable
consideration, receipt of which is hereby acknowledged, Additional Borrower agrees as follows:

 

1.          Additional
Borrower Agreement. Additional Borrower hereby agrees and becomes bound by each of the Loan Documents (as defined in the Loan
Agreement) as if Additional Borrower has executed and delivered the Loan Documents as Borrower at the time the Loan Documents were
executed by the other parties thereto. Additional Borrower will execute and deliver a Substitute Promissory Note as provided in
the Loan Documents.

 

2.          Consideration
Among Co-Borrowers. Additional Borrower acknowledges and agrees that it has become a part of the financial enterprise described
in Section 2.3 Consideration Among Co-Borrowers of the Loan Agreement and the considerations recited therein are applicable
to Additional Borrower.

 

3.          Representations
and Warranties of Additional Borrower. Additional Borrower 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.

 

    	 

    	 

    
 

4.          Loan
Documents Remain in Full Force and Effect. The Loan Documents continue in full force and
effect and remain unchanged, except as specifically modified by this Agreement. 

 

5.          Counterparts.
Borrower agrees that this Agreement may be executed in one or more counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same document. Signature and acknowledgment pages may be detached from the counterparts
and attached to a single copy of this Agreement to physically form one document. Receipt by Lender of an executed copy of
this Agreement by facsimile or electronic mail shall constitute conclusive evidence of execution and delivery of this Agreement
by the signatory thereto.

 

6.          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah, without giving effect
to conflicts of law principles.

 

[Signature Page Follows]

 

    	2

    	 

    

 

IN WITNESS WHEREOF,
the parties have executed this Assumption Agreement and it becomes effective as of the day and year first set forth above.

 

	 	Additional Borrower:
	 	 
	 	POC USA, LLC
	 	 
	 	By:	 /s/ Robert Peay
	 	Name:	 Robert Peay
	 	Title: Secretary and Treasurer
	 	 
	 	Lender:
	 	 
	 	Zions First National Bank
	 	 
	 	By:	/s/ Michael R. Brough
	 	Name: Michael R. Brough
	 	Title: Senior Vice President

 

ASSUMPTION AGREEMENT (POC USA, LLC)

Signature Page

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