Document:

Second Substitute Promissory Note

 Revolving Line of Credit

 

September 28, 2012

 

		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

 

		Lender:	Zions First National Bank

 

		Amount:	$35,000,000.00

 

Maturity Date: July 2, 2013

 

For value received,
Black Diamond, Inc., a Delaware corporation, formerly known as Clarus Corporation, Black Diamond Equipment, Ltd., a Delaware corporation,
Black Diamond Retail, Inc., a Delaware corporation, Everest/Sapphire Acquisition, LLC, a Delaware limited liability company, Gregory
Mountain Products, LLC, a Delaware limited liability company, and POC USA, LLC, a Delaware limited liability company (individually
and collectively herein, “Borrowers”), promise to pay to the order of Zions First National Bank (“Lender”)
at its Corporate Banking Group, One South Main, Suite 200, Salt Lake City, Utah 84133, the sum of thirty-five million dollars ($35,000,000.00)
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. As used in this Promissory Note, the term:

 

“Banking Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of Utah are authorized
or required to close.

 

“Default Rate”
means Ninety Day LIBOR Rate plus seven and five-tenths percent (7.5%) per annum.

 

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

 

“EBITDA”
shall have the meaning set forth in the Loan Agreement.

 

“Loan Agreement”
means the Loan Agreement dated May 28, 2010 between Lender and Borrowers, together with any exhibits, amendments, addenda, and
modifications.

 

    	 

    	 

    

 

“Ninety Day FHLB
Rate” means the rate per annum quoted by Lender as Lender’s Ninety 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 “Ninety 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 Ninety Day FHLB Rate becomes unavailable during the term of this Promissory Note, Lender may designate
a substitute index after notifying Borrowers.

 

“Ninety Day LIBOR
Rate” means the rate per annum quoted by Lender as its Ninety 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 “Ninety 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.

 

“Promissory Note”
means this Second Substitute Promissory Note (Revolving Line of Credit).

 

“Senior Net Debt”
shall have the meaning set forth in the Loan Agreement.

 

“Trailing Twelve
Month” shall have the meaning set forth in the Loan Agreement.

 

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 the Ninety Day LIBOR Rate from time to time in effect, adjusted as of
the date of any change in the Ninety Day LIBOR Rate, and on a three hundred sixty (360) day year as follows: (A)
Ninety Day LIBOR Rate plus three and five-tenths 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); (B) Ninety Day LIBOR Rate plus 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). 

 

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 Ninety Day LIBOR Rate are not being provided in the relevant amounts or for the relevant
maturities for purposes of Lender determining the Ninety 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 Ninety Day LIBOR Rate, or (iii) the Ninety Day LIBOR Rate does not adequately cover the
cost of Lender making or maintaining advances based on the Ninety 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 the Ninety Day FHLB Rate, adjusted as of the date of any
change in the Ninety Day FHLB Rate, and a three hundred sixty (360) day year as follows: (A) Ninety Day FHLB Rate plus three and
five-tenths 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 2.5; (B) Ninety Day FHLB Rate plus 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 2.5.

 

    	2

    	 

    

 

The foregoing margins
above the Ninety Day LIBOR Rate or Ninety 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.

 

Notwithstanding the
foregoing, in no case shall interest be less than three and twenty-five hundredths percent (3.25%) per annum, regardless of Borrowers’
Senior Net Debt to Trailing Twelve Month EBITDA ratio and regardless of the Ninety Day LIBOR Rate or Ninety Day FHLB Rate.

 

Revolving
Line of Credit

 

This Promissory Note
shall be a revolving line of credit under which Borrowers may repeatedly draw and repay funds, so long as no Event of Default has
occurred hereunder or under the Loan Agreement which has not been timely cured or waived. All disbursements under this Promissory
Note shall be made in accordance with the Loan Agreement.

 

Principal and interest
shall be payable as follows: Interest accrued is to be paid monthly in arrears commencing June 1, 2010, and on the same day of
each month thereafter. All principal and unpaid interest shall be paid in full on July 2, 2013.

 

All payments shall
be applied first to accrued interest and the remainder, if any, to principal.

 

Prepayment

 

Borrowers may prepay
all or any portion of this Promissory Note at any time without penalty. Any prepayment received by Lender after 2:00 p.m. Mountain
Time shall be deemed received on the following Banking Business Day. Any prepayment may be subject to
fees or charges relating to the breakage of or constitute a termination event under an Interest Rate Management Transaction (as
defined in the Loan Agreement).

 

General

 

This Promissory 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.

 

    	3

    	 

    

 

If, at any time prior
to the maturity of this Promissory Note, this Promissory Note shall have a zero balance owing, this Promissory 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 Promissory 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 Promissory 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 Promissory 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 PROMISSORY NOTE. NO LAWSUIT, PROCEEDING,
OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THIS PROMISSORY NOTE MAY BE COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT
AS EXPRESSLY AGREED IN WRITING BY LENDER.

 

All obligations of
Borrowers under this Promissory 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.

 

This Promissory Note
restates, replaces and supersedes in its entirety, but does not extinguish or novate, that certain First Substitute Promissory
Note dated May 28, 2010, executed by Borrower, and any previous renewals, modifications or amendments thereof (the “Prior
Note”). All interest evidenced by the Prior Note shall continue to be due and payable until paid.

 

[Signature Pages Follow]

 

    	4

    	 

    

 

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

 

	 	Borrowers:
	 	 
	 	Black Diamond, Inc.
	 	 
	 	By:	/s/ Robert Peay	
	 	Name:	Robert Peay 	
	 	Title: Chief Financial Officer, Secretary and Treasurer
	 	 
	 	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
	 	 
	 	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

    

	
        SECOND SUBSTITUTE PROMISSORY 

NOTE

        Signature Pages
	 	 

 

    	

    	 

    
   

	 	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	 

 

	
        SECOND SUBSTITUTE PROMISSORY 

NOTE

        Signature PagesAssumption Agreement

 

This Assumption Agreement
(the “Agreement”) is made as of October 4, 2012, by Pieps Corporation, a California corporation (“Pieps”),
and BD European Holdings, LLC, a Delaware limited liability company (“BDEH” and together with Pieps, individually and
collectively, as the context requires, 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, Gregory Mountain Products, LLC, and POC USA, 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 Second Substitute Promissory Note (Revolving Line of Credit) dated September 28, 2012, 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. Pieps represents and warrants that it is a corporation duly organized and existing
in good standing under the laws of the State of California. BDEH 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]

 

    	 

    	 	

    
 

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

 

Additional Borrower:

 

Pieps Corporation

 

 

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

 

 

Zions First National Bank:

 

 

By:/s/ Michael R. Brough

Name: Michael R. Brough

Title: Senior Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]