**Exhibit10.19**

 

**TERM LOAN****AGREEMENT**

 

ThisTerm Loan Agreement (the **“Agreement”**) ismade and entered into by and between the undersigned borrower (the **“Borrower”**and the undersigned bank (the **“Bank”**) as of the date set forth on the last page ofthis Agreement.

 

**ARTICLE I. LOANS**

 

1.1   **Terms for Advance(s). [Choose One:]**

 

**ý****   ****Single Advance Term Loan.  **As of the date hereof, the Borrower has obtained a term loan from theBank in the amount of $ -1,950,000.00 (the **“Loan****Amount”**).  The Term loan is evidenced by a singlepromissory note of the Borrower to the order of the Bank in the principalamount of the Loan Amount and dated as of the date hereof (the **“Note”**).

 

**o****   ****Multiple Advance Term Loan. **Prior to n/a or theearlier termination hereof, the Borrower may obtain advances from the Bank inan aggregate amount not exceeding $ n/a (the **“LoanAmount”**).****The term loans will be evidenced bya single promissory note of the Borrower to the Bank in the principal amount ofthe Loan Amount and dated as of the date hereof (the “Note”). Although the Notewill be expressed a; payable in the full Loan Amount, the Borrower will beobligated to pay only the amounts actually disbursed hereunder together withaccrued interest on the outstanding balance at the rates and on the dates specifiedtherein and such other charges provided for herein.

 

1.2  **Advancesand Paying Procedure.  **TheBank is authorized and directed to credit any of the Borrower’s accounts withthe Bank (or to the account the Borrower designates in writing) for all loans madehereunder, and the Bank is authorized to debit such account any other accountof the Borrower with the Bank for the amount of any principal, interest orexpenses due under the Note or other amount due hereunder on the due date withrespect thereto. If, upon any request by the Borrower to the Bank to issue awire transfer, there is an inconsistency between the name of the recipient ofthe wire and its identification number as specified by the Borrower, the Bankmay without liability, transmit the payment via wire based solely upon theidentification number.

 

1.3  **ClosingFee.  **The Borrower will paythe Bank a one-time closing fee of $ n/a contemporaneously with execution ofthis Agreement. This fee is in addition to all other fees, expenses and otheramounts due hereunder.

 

1.4  **CompensatingBalances. **The Borrower willmaintain on deposit with the Bank in non-interest bearing accounts averagedaily collected balances, in excess of that required to support accountactivity and other credit facilities extended to the Borrower by the Bank anamount at least equal to the sum of (i) $ n/a and (ii) n/a % of the LoanAmount as computed on monthly basis. If the Borrower fails to keep and maintainsuch balances, it will pay a deficiency fee, payable within five days afterreceipt of a statement therefor calculated on the amount by which the Borrower’saverage daily balances are less than the requirements set forth above, computedat a rate equal to the rate set forth in the Note,

 

1.5  **Expensesand Attorneys’ Fees. **Upondemand, the Borrower will immediately reimburse the Bank and any participant inthe Obligations (defined below) (**“Participant”**)for all attorneys’ fees and all other costs, fees and out-of-pocketdisbursements incurred by the Bank or any Participant in connection with thepreparation, execution, delivery, administration, defense and enforcement ofthis Agreement or any of the other Loan Documents (defined below), includingattorneys’ fees and all other costs and fees (a) incurred before or aftercommencement of litigation or at trial, on appeal or in any other proceeding, (b) incurredin any bankruptcy proceeding and (c) related to any waivers or amendments withrespect thereto (examples of costs and fees include but are not limited to feesand costs for filing, perfecting or confirming the priority of the Bank’s lien,title searches or insurance, appraisals, environmental audits and other reviewsrelated to the Borrower, any collateral or the loans, if requested by theBank). The Borrower will also reimburse the Bank and any Participant for allcosts of collection, including all attorneys’ fees, before and after judgment,and the costs of preservation and/or liquidation of any collateral.

 

1.6**Conditions to Borrowing.  **The Bank will not be obligated tomake (or continue to make) advances hereunder unless (i) the Bank hasreceived executed originals of the Note and all other documents or agreementsapplicable to the loans described herein, including but not limited to thedocuments specified in Article III (collectively with this Agreement the **“Loan Documents”**), in form and content satisfactory to the Bank; (ii) if theloan is secured, the Bank has received confirmation satisfactory to it that theBank has a properly perfected security interest, mortgage or lien, with theproper priority; (iii) the Bank has received certified copies of the Borrower’sgovernance documents and certification of entity status satisfactory to theBank and all other relevant documents; (iv) the Bank has received acertified copy of a resolution or authorization in form and contentsatisfactory to the Bank authorizing the loan and all acts contemplated by thisAgreement and all related documents, and confirmation of proper authorizationof all guaranties and other acts of third parties contemplated hereunder; (v) ifrequired by the Bank, the Bank has been provided with Opinion of the Borrower’scounsel in form and content satisfactory to the Bank confirming the mattersoutlined in Section 2.2 and such other matters as the Bank requests; (vi) nodefault exists under this Agreement or under any other Loan Documents, or underany other agreements by and between the Borrower and the Bank; and (vii) allproceedings taken in connection with the transactions contemplated by this Agreement(including any required environmental assessments), and all instruments,authorizations and other documents applicable thereto, are satisfactory to theBank and its counsel.

 

1

----

 

**ARTICLE II. WARRANTIES AND COVENANTS**

 

Whileany part of the credit granted to the Borrower under this Agreement or theother Loan Documents is available or any obligation under any of the LoanDocuments are unpaid or outstanding, the Borrower continuously warrants andagrees as follows:

 

 2.1  **Accuracy of Information**. All information, certificates orstatements given to the Bank pursuant to this Agreement and the other LoanDocuments will be true and complete when given.

 

 2.2* ***Organizationand Authority; Litigation**.  ThisAgreement and the other Loan Documents are the legal, valid and bindingobligation of the Borrower, enforceable against the Borrower in accordance withtheir terms.  The execution, delivery andperformance of the Agreement and all other Loan Documents to which the Borroweris a party (i) are within the borrower’s power; (ii) have been duly authorizedby all appropriate entity action; (iii) do not require the approval of anygovernmental agency; and (iv) will not violate any lay agreement orrestriction by which the Borrower is bound. If the Borrower is not anindividual, the Borrower is validly existing and in good standing under thelaws of its state of organization, has all requisite power and authority andpossesses all licenses necessary to conduct its business and own itsproperties. There is no litigation or administrative proceeding threatened orpending against the Borrower which would, if adversely determined, have amaterial adverse effect on the Borrower’s financial condition or its property.

 

 2.3  **Existence; BusinessActivities; Assets; Change of Control**.  The Borrower will (i) preserve itsexistence, rights and franchises; (ii) not make any material change in thenature or manner of its business activities; (iii) not liquidate, dissolve,acquire another entity or merge or consolidate with or into another entity orchange its form of organization; (iv) not amend its organizationaldocuments in any manner that may conflict with any term or condition of theLoan Documents; and (v) not sell, lease, transfer or otherwise dispose ofall substantially all of its assets. Other than the transfer to a trust beneficially controlled by thetransferor, no event shall occur which cause or results in a transfer ofmajority ownership of the Borrower while any Obligations are outstanding orwhile the Bank has any obligation to provide funding to the Borrower.

 

 2.4  **Use of Proceeds; MarginStock; Speculation**.  Advancesby the Bank hereunder will be used exclusively by the Borrower for the purposes.represented to the Bank, The Borrower will not, without the prior writtenconsent of the Bank, redeem, purchase, or retire any of the capital stock ordeclare or pay any dividends, or make any other payments or distributions of asimilar type or nature including withdrawal distributions. The Borrower willnot use any of the loan proceeds to purchase or carry “margin” stock (asdefined in Regulation U of the Board of Governors of the Federal ReserveSystem). No part of any of the proceeds will be used for speculative investmentpurposes, including, without limitation, speculating or hedging in thecommodities and/or futures market.

 

 2.5  **Environmental Matters**. Except as disclosed in a written schedule attachedto this Agreement (if no schedule is attached, there are no exceptions),there exists no uncorrected violation by the Borrower of any federal, state orlocal laws (including statutes, regulations, ordinances or other governmentalrestrictions and requirements) relating to the discharge of air pollutants,water pollutants or process waste water or otherwise relating to theenvironment or Hazardous Substances as hereinafter defined, whether such lawscurrently exist are enacted in the future (collectively **“EnvironmentalLaws”**). The term **“Hazardous Substances”**will mean any hazardous or toxic wastes, chemicals or other substances, thegeneration, possession or existence of which is prohibited or governed by anyEnvironmental Laws.  The Borrower is notsubject to any judgment, decree, order or citation, or a party to (orthreatened with) any litigation administrative proceeding, which asserts thatthe Borrower (i) has violated any Environmental Laws; (ii) isrequired to clean up, remove take remedial or other action with respect to anyHazardous Substances (collectively **“Remedial Action”**);or (iii) is required to pay all or a portion of the cost of any RemedialAction, as a potentially responsible party. Except as disclosed on the Borrower’s environmental questionnaireprovided to the Bank, there are not now, nor to the Borrower’s knowledge afterreasonable investigation have there even been, any Hazardous Substances (ortanks or other facilities for the storage of Hazardous Substances) stored,deposited, recycled disposed of on, under or at any real estate owned oroccupied by the Borrower during the periods that the Borrower owned or occupiedsuch real estate, which if present on the real estate or in soils or groundwater, could require Remedial Action.  Tothe Borrower’s knowledge, there are no proposed or pending changes in EnvironmentalLaws which would adversely affect the Borrower or its business and there are noconditions existing currently or likely to exist while the Loan Documents arein effect which would subject the Borrower to Remedial Action or otherliability.  The Borrower currentlycomplies with and will continue to timely comply with all applicable EnvironmentalLaws; and will provide the Bank, immediately upon receipt, copies of anycorrespondence, notice, complaint, order or other document from any sourceasserting or alleging any circumstance or condition which requires or mayrequire a financial contribution by the Borrower or Remedial Action or otherresponse by or on the part of the Borrower under Environmental Laws, or which seeksdamages or civil, criminal or punitive penalties from the Borrower for analleged violation of Environmental Laws.

 

 2.6  **Compliance with Laws**. The Borrower has complied with all lawsapplicable to its business and its properties, and has all permits licenses andapprovals required by such laws, copies of which have been provided to theBank.

 

 2.7  **Restriction onIndebtedness.**  The Borrowerwill not create, incur, assume or have outstanding any indebtedness for borrowedmoney (including capitalized leases) except (i) any indebtedness, owing tothe Bank and its affiliates, and (ii) any other indebtedness outstandingon the date hereof, and shown on the Borrower’s financial statements deliveredto the Bank prior to the date hereof, provided that such other indebtednesswill not be increased.

 

 2.8  **Restriction on Liens**.  The Borrower will not create, incur, assumeor permit to exist any mortgage, pledge, encumbrance or other lien or levy uponor security interest in any of the Borrower’s property now owned or hereafteracquired, except (i) taxes and assessments which are either not delinquentor which are being contested in good faith with adequate reserves provided; (ii) easements,restrictions and minor title irregularities which do not, as a practicalmatter, have an adverse effect upon the ownership and use of the affected property;(iii) liens in favor of the Bank and its affiliates; and (iv) other liensdisclosed in writing to the Bank prior to the date hereof.

 

 2.9 **Restriction on ContingentLiabilities.**  The Borrowerwill not guarantee or became a surety or otherwise contingently liable for anyobligations of others, except pursuant to the deposit and collection of checksand similar matters in the ordinary course of business.

 

2

----

 

 2.10  **Insurance.**  TheBorrower will maintain insurance to such extent, covering such risks and withsuch insurers as is usual and customary for businesses operating similarproperties, and as is satisfactory to the Bank, including insurance for fireand other risks insured against by extended coverage, public liabilityinsurance and workers’ compensation insurance; and will designate the Bank as losspayee with a “Lender’s Loss Payable” endorsement on any casualty policies andtake such other action as the Bank may reasonably request to ensure that theBank will receive (subject to no other interests) the insurance proceeds on theBank’s collateral.

 

 2.11  **Taxes and OtherLiabilities.**  The Borrower will pay and discharge, whendue, all of its taxes, assessments and other liabilities except when thepayment thereof is being contested in good faith by appropriate procedureswhich will avoid foreclosure of liens securing such items, and with adequatereserves provided therefor.

 

 2.12  **Financial Statements andReporting.**  The financial statements and other informationpreviously provided to the Bank or provided to the Bank in the future are orwill be complete and accurate and prepared in accordance with generallyaccepted accounting principles. There has been no material adverse change inthe Borrower’s financial condition since such information was provided to the Bank.The Borrower will (i) maintain accounting records in accordance with generallyrecognized and accepted principles of accounting consistently applied throughoutthe accounting periods involved; (ii) provide the Bank with suchinformation concerning its business affairs and financial condition (includinginsurance coverage) as the Bank may request; and (iii) without request,provide the Bank with management-prepared financial statements:

 

o    quarterly within         **days of the end of each quarter;

o    monthly within          ****days of the end of each month;

 

andannual

within             daysof the end of each fiscal year.

 

 2.13  **Inspection of Propertiesand Records; Fiscal Year.**  TheBorrower will permit representatives of the Bank to visit and inspect any ofthe properties and examine any of the books and records of the Borrower at anyreasonable time and as often as the Bank may reasonably desire. The Borrowerwill not change its fiscal year.

 

 2.14  **Financial Status.** The Borrower will maintain at all times:

 

(i)  NetWorking Capital in the amount of at least

$XXXXXXXXXXXX.

 

(ii) Tangible Net Worth in the amount of at least $X.

 

(iii) Debt to Worth Ratio of not more than

XXXXXXXXXXXXXXXXXXXXXX.

 

(iv)  Current Ratio of at least XXXXXXXXXX.

 

(v)  Capital Expenditures not to exceed per $                 fiscalyear.

 

(vi) Cash Flow Coverage Ratio of at least                 $                  .

 

(vii) Officers, Directors, Partners, Members, and Management Salaries and OtherCompensation not to exceed                         per fiscal year.

 

Theterms used in this Section 2.14 will have the meanings set forth in asupplement entitled “Financial Definitions,” a copy of which the Borrowerhereby acknowledges having received with this Agreement and which isincorporated herein by reference.

 

**ARTICLE III. COLLATERAL AND GUARANTIES**

 

 3.1  **Collateral.**  This Agreement and the Note are secured by anyand all security interests, pledges, mortgages/deeds of trust (except anymortgage/deed of trust expressly limited by its terms to a specific obligationof Borrower to Bank) or liens now or hereafter in existence granted to the Bankto secure indebtedness of the Borrower to the Bank, including withoutlimitation as described in the following documents:

 

ý    Real Estate Mortgage(s)/Deed(s) of Trust dated10/18/05 covering real estatelocated at 43455 Business Park Drive, Temecula, CA 92590-3605

o    Security Agreement(s) dated

o    Possessory Collateral Pledge Agreement(s)dated

o    Other

 

 3.2  **Guaranties.**  This Agreement and the Note are guarantied byeach and every guaranty now or hereafter in existence guarantying theindebtedness of the Borrower to the Bank (except for any guaranty expresslylimited by its terms to a specific separate obligation of Borrower to the Bank)including, without limitation, the following: Outdoor Channel Holdings, Inc.

 

 3.3  **Credit Balances; Setoff.** As additional security for the paymentof the obligations described in the Loan Documents and any other obligations ofthe Borrower to the Bank of any nature whatsoever (collectively the **“Obligations”**), the Borrower hereby grants to the Bank asecurity interest in, a lien on and an express contractual right to set offagainst all depository account balances, cash and any other property of theBorrower now or hereafter in the possession of the Bank and the right to refuseto allow withdrawals from any account (collectively **“Setoff”**).The Bank may, at any time upon the occurrence of a default hereunder(notwithstanding any notice requirements

 

3

----

 

orgrace/cure periods under this or other agreements between the Borrower and theBank) Setoff against the Obligations **whether or not theObligations (including future installments) are then due or have beenaccelerated, all without any advance or contemporaneous notice or demand of anykind to the Borrower, such notice and demand being expressly waived.**

 

 Theomission of any reference to an agreement in Sections 3.1 and 3.2 above willnot affect the validity or enforceability thereof. The rights and remedies ofthe Bank outlined in this Agreement and the documents identified above areintended to be cumulative.

 

**ARTICLE IV. DEFAULTS**

 

 4.1**Defaults.  Notwithstanding any cure periods describedbelow, the Borrower will immediately notify the Bank in writing where theBorrower obtains knowledge of the occurrence of any default specified below.** Regardless of whether the Borrower hasgiven the required notice, the occurrence of one or more of the following willconstitute a default:

 

(a)   **Nonpayment.**  The Borrower shall fail to pay (i) anyinterest due on the Note or any fees, charges, costs or expenses under the LoanDocuments by 5 days after the same becomes due; or (ii) any principalamount of the Note when due.

 

(b)   **Nonperformance.**  The Borrower or any guarantor ofBorrower’s Obligations to the Bank **(“Guarantor”)**shall fail to perform or observe any agreement, term, provision, condition, orcovenant (other than a default occurring under (a), (c), (d), (e), (f) or (g) ofthis Section 4.1) required to be performed or observed by the Borrower orany Guarantor hereunder or under any other Loan Document or other agreementwith or in favor of the Bank.

 

(c)   **Misrepresentation.**  Any financial information,statement, certificate, representation or warranty given to the Bank by theBorrower or any Guarantor (or any of their representatives) in connection withentering into this Agreement or the other Loan Documents and/or any borrowingthereunder, or required to be furnished under the terms thereof, shall proveuntrue or misleading in any material respect (as determined by the Bank in theexercise of its judgment) as of the time when given.

 

(d)   **Default on Other Obligations.**  The Borrower or any Guarantorshall be in default under the terms of any loan agreement, promissory note,lease, conditional sale contract or other agreement, document or instrumentevidencing, governing or securing any indebtedness owing by the Borrower or anyGuarantor to the Bank or any indebtedness in excess of $10,000 owing by the Borrowerto any third party, and the period of grace, if any, to cure said default shallhave passed.

 

(e)   **Judgments.**  Any judgment shall be obtainedagainst the Borrower or any Guarantor which, together with all otheroutstanding unsatisfied judgments against the Borrower (or such Guarantor),shall exceed the sum of $10,000 and shall remain unvacated, unbonded orunstayed for a period of 30 days following the date of entry thereof.

 

(f)    **Inability to Perform;Bankruptcy/Insolvency.**  (i) TheBorrower or any Guarantor shall die or cease to exist; or (ii) anyGuarantor shall attempt to revoke any guaranty of the Obligations described herein,or any guaranty becomes unenforceable in whole or in part for any reason; or (iii) anybankruptcy, insolvency or receivership proceedings, or an assignment for thebenefit of creditors, shall be commenced under any Federal or state law by oragainst the Borrower or any Guarantor; or (iv) the Borrower or anyGuarantor shall became the subject of any out-of-court settlement with itscreditors; or (v) the Borrower or any Guarantor is unable or admits in writingits inability to pay its debts as they mature; or (vi) if the Borrower isa limited liability company, any member thereof shall withdraw or otherwisebecome disassociated from the Borrower.

 

(g)   **Adverse Change; Insecurity.**  (i) There is a materialadverse change in the business, properties, financial condition or affairs ofthe Borrower or any Guarantor, or in any collateral securing the Obligations;or (ii) the Bank in good faith deems itself insecure.

 

 4.2  **Termination of Loans;Additional Bank Rights.**  Upon the occurrence of any of theevents identified in Section 4.1, the Bank may at any time(notwithstanding any notice requirements or grace/cure periods under this orother agreements between the Borrower and the Bank) (i) immediatelyterminate its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;and/or (iii) take such other steps to protect or preserve the Bank’sinterest in any collateral, including without limitation, notifying accountdebtors to make payments directly to the Bank, advancing funds to protect anycollateral and insuring collateral at the Borrower’s expense; all withoutdemand or notice of any kind, all of which are hereby waived.

 

 4.3  **Acceleration ofObligations.**  Upon theoccurrence of any of the events identified in Sections 4.1(a) through 4.1(e) and4.1(g), and the passage of any applicable cure periods, the Bank may at anytime thereafter, by written notice to the Borrower, declare the unpaid principalbalance of any Obligations, together with the interest accrued thereon andother amounts accrued hereunder and under the other Loan Documents, to beimmediately due and payable; and the unpaid balance will thereupon be due andpayable, all without presentation, demand, protest or further notice of anykind, all of which are hereby waived, and notwithstanding anything to thecontrary contained herein or in any of the other Loan Documents.  Upon the occurrence of any event under Section 4.1(f),the unpaid principal balance of any Obligations, together with all interestaccrued thereon and other amounts accrued hereunder and under the other Loan Documents,will thereupon be immediately due and payable, all without presentation,demand, protest or notice of any kind, all of which are hereby waived, andnotwithstanding anything to the contrary contained herein or in any of theother Loan Documents.  **Nothing contained in Section 4.1, Section 4.2 or this section willlimit the Bank’s right to Setoff as provided in Section 3.3 or otherwisein this Agreement.**

 

 4.4  **Other Remedies.** Nothing in this Article IV is intendedto restrict the Bank’s rights under any of the Loan Documents or at law, and theBank may exercise all such rights and remedies as and when they are available.

 

4

----

 

**ARTICLE V. OTHER TERMS**

 

** 5.1  FinancialDefinitions Supplement.**  If covenants regarding financial statusapply to this loan, the **“FinancialDefinitions”** Supplementidentified in Section 2.14 of this Agreement is hereby incorporated intothis Agreement. The Borrower acknowledges receiving a copy of such Supplement.

 

 5.2  **Additional Terms;Addendum/Supplements.**  The warranties, covenants,conditions and other terms described in this Section and/or in the Addendumand/or other attached document(s) referenced in this Section areincorporated into this Agreement:

 

**See attached addendum**

 

**ARTICLE VI. MISCELLANEOUS**

 

 6.1 **Delay; Cumulative Remedies.**  Nodelay on the part of the Bank in exercising any right, power or privilegehereunder or under any of the other Loan Documents will operate as a waiverthereof, nor will any single or partial exercise of any right, power orprivilege hereunder preclude other or further exercise thereof or the exerciseof any other right, power or privilege. The rights and remedies hereinspecified are cumulative and are not exclusive of any rights or remedies whichthe Bank would otherwise have.

 

 6.2 **Relationship to OtherDocuments.** The warranties, covenants and other obligations of theBorrower (and the rights and remedies of the Bank) that are outlined in thisAgreement and the other Loan Documents are intended to supplement each other.In the event of any inconsistencies in any of the terms in the Loan Documents,all terms will be cumulative so as to give the Bank the most favorable rightsset forth in the conflicting documents, except that if there is a directconflict between any preprinted terms and specifically negotiated terms(whether included in an addendum or otherwise), the specifically negotiatedterms will control.

 

 6.3  **Successors.** Therights, options, powers and remedies granted in this Agreement and the otherLoan Documents shall be binding upon the Borrower and the Bank and theirrespective successors and assigns, and shall inure to the benefit of theBorrower and the Bank and the successors and assigns of the Bank, includingwithout limitation any purchaser of any or all of the rights and obligations ofthe Bank under the Note and the other Loan Documents. The Borrower may notassign its rights or obligations under this Agreement or any other Loan Documentswithout the prior written consent of the Bank,

 

 6.4  **Disclosure.**  The Bank may, in connection with any sale orpotential sale of all or any interest in the Note and other Loan Documents,disclose any financial information the Bank may have concerning the Borrower toany purchaser or potential purchaser. From time to time, the Bank may, in itsdiscretion and without obligation to the Borrower, any Guarantor or any otherthird party, disclose information about the Borrower and this loan to anyGuarantor, surety or other accommodation party. This provision does notobligate the Bank to supply any information or release the Borrower from itsobligation to provide such information, and the Borrower agrees to keep allGuarantors, sureties or other accommodation parties advised of its financialcondition and other matters which may be relevant to their obligations to theBank,

 

 6.5  **Indemnification.**  Except for harm arising from the Bank’swillful misconduct, the Borrower hereby indemnifies and agrees to defend andhold the Bank harmless from any and all losses, costs, damages, claims andexpenses of any kind suffered by or asserted against the Bank relating toclaims by third parties arising out of the financing provided under the LoanDocuments or related to any collateral (including, without limitation, theBorrower’s failure to perform its obligations relating to Environmental Mattersdescribed in Section 2.5 above). This indemnification and hold harmlessprovision will survive the termination of the Loan Documents and the satisfactionof the Obligations due the Bank,

 

 6.6  **Notice of Claims AgainstBank; Limitation of Certain Damages.** In order to allow the Bank to mitigate any damages to the Borrower fromthe Bank’s alleged breach of its duties under the Loan Documents or any otherduty, if any, to the Borrower, the Borrower agrees to give the Bank immediatewritten notice of any claim or defense it has against the Bank, whether in tortor contract, relating to any action or inaction by the Bank under the LoanDocuments, or the transactions related thereto, or of any defense to payment ofthe Obligations for any reason. The requirement of providing timely notice tothe Bank represents the parties’ agreed-to standard of performance regardingclaims against the Bank. Notwithstanding any claim that the Borrower may haveagainst the Bank, and regardless of any notice the Borrower may have given theBank, **the Bank will not be liable to the Borrower forconsequential and/or special damages arising therefrom, except those damagesarising from the Bank’s willful misconduct.**

 

 6.7  **Notices.**  Notice of any record shall be deemeddelivered when the record has been (a) deposited in the United StatesMail, postage pre-paid, (b) received by overnight delivery service, (c) receivedby telex, (d) received by telecopy, (e) received through the internet,or (f) when personally delivered.

 

5

----

 

 6.8  **Payments**. Payments due underthe Note and other Loan Documents will be made in lawful money of the UnitedStates. All payments may be applied by the Bank to principal, interest andother amounts due under the Loan Documents in any order which the Bank elects,

 

** 6.9  ApplicableLaw and Jurisdiction; Interpretation; Joint Liability; Severability.**This Agreement and all other Loan Documents will be governed by and Interpreted inaccordance with the internal laws of the State of California                     ,except to the extent superseded by Federal law. THE BORROWER HEREBY CONSENTS TOTHE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTYOR FEDERAL JURISDICTION OF THE BANK’S BRANCH WHERE THE LOAN WAS ORIGINATED, ANDWAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANYACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE,THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM,OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing hereinwill affect the Bank’s rights to serve process in any manner permitted by law,or limit the Bank’s right to bring proceedings against the Borrower in thecompetent courts of any other jurisdiction or jurisdictions.  This Agreement, the other Loan Documents andany amendments hereto (regardless of when executed) will be deemed effectiveand accepted only at the Bank’s offices, and only upon the Bank’s receipt ofthe executed originals thereof.  If there is more than one Borrower,the liability of the Borrowers will be joint and several, and the reference to “Borrower”will be deemed to refer to all Borrowers. Invalidity of any provision of this Agreement shall not affect the validityof any other provision.

 

** **6.10  **Copies;Entire Agreement; Modification.**The Borrower hereby acknowledges thereceipt of a copy of this Agreement and all other Loan Documents.  This Agreement is a “transferable record” asdefined in applicable law relating to electronic transactions. Therefore, theholder of this Agreement may, on behalf of Borrower, create a microfilm oroptical disk or other electronic image of this Agreement that is anauthoritative copy as defined in such law. The holder of this Agreement maystore the authoritative copy of such Agreement in its electronic form and thendestroy the paper original as part of the holder’s normal business practices.The holder, on its own behalf, may control and transfer such authoritative copyas permitted by such law.

 

**IMPORTANT: READ BEFORE SIGNING, THE TERMS OF THIS AGREEMENTSHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSINGCONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORALPROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.THE TERMS OF THIS AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTENAGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDITAGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANYOTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK, WHICHOCCURS AFTER RECEIPT BY BORROWER OF THIS NOTICE, MAY BE MADE ONLY BYANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO SUCH CREDITAGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.**

 

** **6.11  **Waiver of Jury Trial.  TO THEEXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLYWAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATINGTO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERALSECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO.THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER ISKNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.**

 

** **6.12 **Attachments.All documents attached hereto, including any appendices, schedules, riders, andexhibits to this Agreement, are hereby expressly incorporated by reference.**

 

INWITNESS WHEREOF, the undersigned have executed this TERM LOAN AGREEMENT as of OCTOBER  18,2005

 
| (Individual  Borrower)   | 43455  BPD, LLC.                                    |
|--------------------------|-----------------------------------------------------|
|                     | Borrower  Name (Organization)                       |
|                     |                                                |
|                     |                                                | a | California  Limited Liability company |
|                     |                                                |
|                     | By                                                  |   | SEE  ATTACHED SIGNATURE ADDENDUM |
| Borrower  Name           |                                                | N/A |   |   |
|                     | Name  and Title                                     |   |
|                     |                                                |
|                     | By                                                  |   | SEE  ATTACHED SIGNATURE ADDENDUM |
|                     |                                                |
| Borrower  Name           |                                                | N/A |   | Name  and Title |   |
|                     |                                                |
|                     | U.S.  BANK  N.A.                |
|                     |                                                |
|                     | By                                                  |   |
|                     |                                                |   |
|                     | Name  and Title                                     | Maureen  K. Sullivan, Vice President |
|                     |                                                |
| Borrower  Address:       | 43455  Business Park Drive. Temecula. CA 92590-3605 |
| Borrower  Telephone No.: |                                                |
|                          |                                                     |  |  |  |  |  |  |  |  |  |  |  |

 

6

----

 

**SIGNATURE ADDENDUM**

 

**Addendumto the Term Loan Agreement dated October 18, 2005, and any Riders or Addendaattached thereto,****as****applicable.**

 

**BORROWER: 43455 BPD, LLC, a California Limited Liability Company**

 
| **By:** | **Outdoor  Channel Holdings, Inc., a Delaware Corporation, Member** |
|---------|--------------------------------------------------------------------------|
|    |                                                                     |
|    | **By:**                                                                  | /s/  **Perry T. Massie** |   |
|    | **Perry T. Massie, Chief  Executive Officer**                            |

 

----

 
|   | **For Bank  Use Only**   |                                  | Reviewed by |
|--------|--------------------------|---------------------------------------|-------------|
|   |                     |
|   | Due                      | **SEPTEMBER 5,  2015** |
|   |                     |
|   | Customer #**6517399995** | Loan #                                |
|        |                          |                                       |             |  |  |

 

**TERM NOTE**

**(For TermLoan Agreement)**

 
| $1,950,000.00 |   | OCTOBER 18,   2005 |
|---------------|--------|-------------------------|

 

FORVALUE RECEIVED, the undersigned borrower (the **“Borrower”**),promises to pay to the order of  U.S*.*  BANKN.A, (the **“Bank”),**the principal sum of ONE MILLIONNINE HUNDRED FIFTY THOUSAND AND NO/100 Dollars (**$ 1,950,000.00**)

 

**Interest.**

 

Theunpaid principal balance will bear interest at an annual rate described in theInte: Rate Rider attached to this Note.

 

**Payment Schedule.**

 

Interestis payable beginning DECEMBER 5, 2005, and on the same date of eachconsecutive month thereafter (except that if a given month does not have such adate, the last day of such month), plus a final interest payment with the finalpayment of principal,

 

Principalis payable in 117 installments of $6,500,00 each, beginning DECEMBER 5, 2005,on the same data of each consecutive month thereafter (except that if a givenmonth does not have such a date, the last day of such month), plus a finalpayment equal to all unpaid principal on SEPTEMBER 5, 2015, the maturitydate.

 

Interestwill be computed for the actual number of days principal is unpaid, using adaily factor obtained by dividing the stated interest rate by 360.

 

Notwithstandingany provision of this Note to the contrary, upon any default or at any timeduring the continuation thereof (including failure to pay upon maturity), theBank may, at its option and subject to applicable law, increase the interestrate on this Note to a rate of 5% per annum plus the interest rate otherwisepayable hereunder. Notwithstanding the foregoing and subject to applicable law,upon the occurrence of a default by the Borrower or any guarantor involvingbankruptcy, insolvency, receivership proceedings or an assignment for thebenefit of creditors, the interest rate on this Note shall automaticallyincrease to a rate of 5% per annum plus the rate otherwise payable hereunder.

 

Inno event will the interest rate hereunder exceed that permitted by applicablelaw. If any interest or other charge is finally determined by a court ofcompetent jurisdiction to exceed the maximum amount permitted by law, theinterest or charge shall be reduced to the maximum permitted by law, and theBank may credit any excess amount previously collected against the balance due orrefund the amount to the Borrower.

 

Subjectto applicable law, if any payment is not made on or before its due date, theBank may collect a delinquency charge of 5.00% of the unpaid amount Collectionof the late payment fee shall not be deemed to be a waiver of the Bank’s rightto declare a default hereunder.

 

Withoutaffecting the liability of any Borrower, endorser, surety or guarantor, theBank may, without notice, renew or extend the time for payment, accept partialpayments, release or impair any collateral security for the payment of thisNote, or agree not to sue any party liable on it.

 

ThisTerm Note constitutes the Note issued under a Term Loan Agreement dated as ofthe date hereof between the Borrower and the Bank, to which Agreement referenceis hereby made for a statement of the terms and conditions under which the loanevidenced hereby was made and a description of the terms and conditions uponwhich the maturity of this Note may be accelerated, and for a description ofthe collateral securing this Note.

 

----

 

ThisNote is a “transferable record” as defined in applicable law relating toelectronic transactions. Therefore, the holder of this Note may, an behalf ofBorrower, create a microfilm or optical disk or other electronic image of thisNote that is an authoritative copy defined in such law. The holder of this Notemay store the authoritative copy of such Note in its electronic form and thendestroy the paper original as part of the holder’s normal business practices.The holder, on its own behalf, may control and transfer such authoritative copyas permitted by such law.

 

**All documents attached hereto, including anyappendices, schedules, riders, and exhibits to this Term Note, are herebyexpressly incorporated by reference.**

 
| The  Borrower hereby acknowledges the receipt of a copy of this Note. |
|-----------------------------------------------------------------------|
|                                                                  |
| (Individual Borrower)                                                 |   | 43455 BPD, LLC |
|                                                                  |   | Borrower Name (Organization) |
|                                                                  |   |   |
|                                                                  |   | a | California limited liability company |
|                                                                  |   |   |
| Borrower Name                                                         |   | N/A |   | By |   | SEE ATTACHED SIGNATURE  ADDENDUM |
|                                                                  |   |   |
|                                                                  |   | Name and Title |   |
|                                                                  |   |   |
|                                                                  |   | By |   | SEE ATTACHED SIGNATURE  ADDENDUM |
|                                                                  |   |   |
| Borrower Name                                                         |   | N/A |   | Name and Title |   |
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

 

**INTEREST RATE RIDER**

 

ThisRider is made part of the **Term** Note (the **“Note”**) in the original amount of $1,950*,*000.00by the undersigned borrower (the **“Borrower”)**in favor of **U.S.  BANK. NA**.(the **“Bank”**) as of the date identifiedbelow. The following interest rate description is hereby added to the Note:

 

Intereston each advance hereunder shall accrue at an annual rate equal to 1.350% plusone-month LIBOR rate quoted by the Bank from Telerate Page 3750 or anysuccessor thereto which shall be that one-month LIBOR rate in effect two NewYork Banking Days prior to the beginning of each calendar month adjusted forany reserve requirement and any subsequent costs arising from a change ingovernment regulation, such rate to be reset at the beginning of eachsucceeding month.  The term ‘New YorkBanking Day’ means any day (other than a Saturday or Sunday) on whichcommercial banks are open for business in New York, New York If the initialadvance under this Note occurs other than on the first day of the month, theinitial one-month LIBOR rate shall be that one-month LIBOR rate in effect twoNew York Banking Days prior to the date of the initial advance, which rate plusthe percentage described above shall be in effect for the remaining days of themonth of the initial advance; such one-month LIBOR rate to be reset at thebeginning of each succeeding month The Bank’s internal records of applicableinterest rates shall be determinative in the absence of manifest error.

 
| Dated as of:           |   | **OCTOBER 18, 2005**     |                                  |
|------------------------|--------|-------------------------------|---------------------------------------|
|                   |
| (Individual  Borrower) |   | ** **                    | **43455  BPD, LLC**                   |
|                   |   | Borrower  Name (Organization) |
|                   |   |                          |
|                   |   | a                             | California  limited liability company |
|                   |   |                          |
| Borrower  Name         |   | **N/A**                       |                                  | By |   | **SEE  ATTACHED SIGNATURE ADDENDUM** |
|                   |   |                          |
|                   |   | Name  and Title               |                                  |
|                   |   |                          |
|                   |   | By                            |                                  | **SEE  ATTACHED SIGNATURE ADDENDUM** |
|                   |   |                          |
| Borrower  Name         |   | **N/A**                       |                                  | Name  and Title |   |
|                        |        |                               |                                       |  |  |  |  |  |  |  |  |  |  |  |

 

----

 

**SIGNATURE ADDENDUM**

 

**Addendum to the Term Note dated October 18, 2005, and any Ridersor Addenda attached thereto, as applicable.**

 

**BORROWER: 43455 BPD. LLC, a California Limited Liability Company**

 
| **By:** | **Outdoor  Channel Holdings, Inc., a Delaware Corporation, Member** |
|---------|---------------------------------------------------------------------|
|    |
|    | **By:**                                                             | /s/ **Perry T. Massie** |   |
|    | **Perry T. Massie, Chief Executive Officer**                        |   |
|         |                                                                     |  |  |  |

 

----

 

**ADDENDUM TO TERM LOAN****AGREEMENT****AND NOTE**

 

ThisAddendum is made part of the Term Loan Agreement and Note (the “Agreement”)made and entered into by and between the undersigned borrower (the “Borrower”)and the undersigned bank (the “Bank”) as of the date identified below. Thewarranties, covenants and other terms described below are hereby added to theAgreement.

 

**FinancialCovenants.** Financialterms used herein which are not specifically defined herein shall have themeanings ascribed to them under generally accepted accounting principles. Forany Borrower who does not have a separate fiscal year end for tax,**reportingpurposes, the fiscal year will be deemed to be the calendar year. Borrower(herein referred to as the **“Subject Party”**)will maintain the following:

 

**Debt****ServiceCoverage Ratio** as of the endof each fiscal year for the four (4) fiscal quarters then ended of atleast 1.20 to 1,

 

**“DebtService Coverage Ratio”**shall mean the relationship, expressed as a numerical ratio, between (i) theNet Operating Income for a given fiscal period from real property andimprovements securing the Note (the **“Real Property Collateral”**)and (ii) the principal and interest due during such period on indebtednesssecured by the Real Property Collateral, For purposes of this definition, **“Net Operating Income”** means gross rental income for therelevant period produced from the Real Property Collateral, minus all expensesapplicable to the Real Property Collateral for such period, and less a capitalreplacement reserve of 0% of the gross revenue from the Real PropertyCollateral for such period.

 
| Dated  as of       | October 18,2005                                    |                                     |   |
|--------------------|---------------------------------------------------------|------------------------------------------|--------|
|               |                                                    |
| (Individual)       | (Non-Individual)                                        |
|               |                                                    |
|               |                                                    | 43455  BPD, LLC                          |
| Borrower  Name n/a | a/an  California Limited Liability Company              |
|               |                                                    |
|               |                                                    | By:  Outdoor Channel Holdings, Inc. |
| Borrower  Name n/a | a/an  California Corporation, MEMBER                    |
|               |                                                    |
|               | By:                                                     | /s/ Perry T.Massie                       |   |
|               | Name  and Title Perry T.Massie, Chief Executive Officer |
|               |                                                    |
|               |                                                    |
|               | Agreed  to:                                             |
|               | U.S.  BANKN.A.                                          |
|               |                                                    |
|               | By:                                                     | /s/  Maureen K. Sullivan                 |   |
|               | Name  and Title Maureen K, Sullivan, Vice President     |
|                    |                                                         |                                          |        |  |  |  |  |

 

----

 

 

MASTER AGREEMENT

 

dated as of October 18, 2005

 

U.S.Bank National Association and 43455 BPD LLC have entered and/or anticipateentering into one or more transactions (each a “Transaction”) that are or willbe governed by this Master Agreement, which includes the schedule (the “Schedule”),and the documents and other confirming evidence (each a “Confirmation”)exchanged between the parties confirming those Transactions.

 

Accordingly, the partiesagree as follows:

 

**1.****            ****Interpretation**

 

(a)   ***Definitions.*****Theterms defined in Section 12 and in the Schedule will have themeanings therein specified for the purpose of this Master Agreement.

 

(b)   ***Inconsistency.  ***In the event of any inconsistency between theprovision of the Schedule and the other provisions of this MasterAgreement, the Schedule will prevail. In the event of any inconsistency between the provision of anyConfirmation and this Master Agreement (including the Schedule), suchConfirmation will prevail for the purpose of the relevant Transaction.

 

(c)   ***Single Agreement.*****All Transactions are entered into in relianceon the fact that this Master Agreement and all Confirmations form a singleagreement between the parties (collectively referred to as this “Agreement”),and the parties would not otherwise enter into any Transactions,

 

**2.****            ****Obligations**

 

**(a)****   *GeneralConditions.***

 

(i)            Each party will make each payment or deliveryspecified in each Confirmation to be made by it, subject to the otherprovisions of this Agreement.

 

(ii)           Payments under this agreement will be made onthe due date for value on that date in the place of the account specified inthe relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the mannercustomary for payments in the required currency.

 

(iii)          Each obligation of each party under Section 2(a)(i) issubject to (1) the condition precedent that no Event of Default orPotential Event of Default with respect to the other party has occurred and iscontinuing; (2) the condition precedent that no Early Termination Date inrespect of the relevant Transaction has occurred or been effectively designatedand (3) each other applicable condition precedent specified in thisAgreement.

 

----

 

(b)   ***Change of Account.*****Either party may change its account forreceiving a payment or delivery by giving notice to the other party at leastfive Local Business Days prior to the scheduled date for the payment ordelivery to which such change applies unless such other party gives timelynotice of a reasonable objection to such change.

 

(c)   ***Netting.*****If on any date amounts would otherwise bepayable:

 

(i)            in the same currency; and

 

(ii)           in respect of the same Transaction,

 

by each party to theother, then, on such date, each party’s obligation to make payment of any suchamount will be automatically satisfied and discharged and, if the aggregateamount that would otherwise have been payable by one party exceeds theaggregate amount that would otherwise have been payable by the other party,replaced by an obligation upon the party by whom the larger aggregate amountwould have been payable to pay to the other party the excess of the largeraggregate amount over the smaller aggregate amount.

 

The parties may elect inrespect of two or more Transactions that a net amount will be determined inrespect of all amounts payable on the same date in the same currency in respectof such Transactions, regardless of whether such amounts are payable in respectof the same Transaction. The election may be made in the Schedule or aConfirmation by specifying that subparagraph (ii) above will not apply tothe Transactions identified as being subject to the election, together with thestarting date (in which case subparagraph (ii) above will not, or willcease to, apply to such Transactions from such date). This election may be madeseparately for different groups of Transactions and will apply separately toeach pairing of branches or offices through which the parties make and receivepayments or deliveries.

 

(d)   ***Default Interest;  Other Amounts.**** *Priorto the occurrence or effective designation of an Early Termination Date inrespect of the relevant Transaction, a party that defaults in the performanceof any payment obligation will, to the extent permitted by law and subject to Section 6(c),be required to pay interest (before as well, as after judgment) on the overdueamount to the other party on demand in the same currency as such overdueamount, for the period from (and including) the original due date for paymentto (but excluding) the date of actual payment, at the Default Rate. Suchinterest will be calculated on the basis of daily compounding and the actualnumber of days elapsed. If, prior to the occurrence or effective designation ofan Early Termination Date in respect of the relevant Transaction, a partydefaults in the performance of any obligation required to be settled bydelivery, it will compensate the other party on demand if and to the extentprovided for in the relevant Confirmation or elsewhere in this Agreement.

 

**3.****            ****Representations**

 

Eachparty represents to the other party (which representations will be deemed to berepeated by each party on each date on which a Transaction is entered into)that:

 

(a)   ***Basic Representations.***

 

(i)            ***Status.***   It is duly organizedand validly existing under the laws of the jurisdiction of its organization orincorporation and, if relevant under such laws, in good standing; 

 

(ii)           ***Powers.*****It has the power to execute thisAgreement and any other documentation relating to this Agreement to which it isa party, to deliver this Agreement and any other documentation relating to thisAgreement that it is required by this Agreement to deliver and to perform itsobligations under this Agreement and any obligations it has under any CreditSupport Document to which it is a party and has taken all necessary action toauthorize such execution, delivery and performance;

 

(iii)          ***No Violation or Conflict.*****Such execution, delivery and performancedo not violate or conflict with any law applicable to it, any provision of itsconstitutional documents, any order or judgment of any court or other agency ofgovernment applicable to it or any of its assets or any contractual restrictionbinding on or affecting it or any of its assets;

 

2

----

 

(iv)          ***Consents.***All governmental and other consents that arerequired to have been obtained by it with respect to this Agreement or anyCredit Support Document to which it is a party have been obtained and are infull force and effect and all conditions of any such consents have beencomplied with; and

 

(v)           ***ObligationsBinding.***Its obligationsunder this Agreement and any Credit Support Document to which it is a partyconstitute its legal, valid and binding obligations, enforceable in****accordancewith their respective terms (subject to applicable bankruptcy, reorganization,insolvency, moratorium or similar laws affecting creditors’ rights generallyand subject, as to enforceability, to equitable principles of general application(regardless of whether enforcement is sought in a proceeding in equity or atlaw)).

 

(b)   ***Absence of Certain Events.***  No Event ofDefault or Potential Event of Default or, to its knowledge, Termination Eventwith respect to it has occurred and is continuing and no such event orcircumstance would occur as a result of its entering into or performing itsobligations under this Agreement or any Credit Support document to which it isa party.

 

(c)   ***Absence of Litigation.***There is not pending or, to its knowledge,threatened against it or any of its Affiliates any action, suit or proceedingat law or in equity or before any court, tribunal, governmental body, agency orofficial or any arbitrator that is likely to affect the legality, validity orenforceability against it of this Agreement or any Credit Support Document towhich it is a party or its ability to perform its obligations under thisAgreement or such Credit Support Document

 

(d)   ***Accuracy of Specified Information.***All applicable information that is furnishedin writing by or on behalf of it to the other party and is identified for thepurpose of this Section 3(d) in the Schedule is, as of the date ofthe information, true, accurate and complete in every material respect

 

**4.****             Agreements**

 

Eachparty agrees with the other that, so long as either party has or may have anyobligation under this Agreement or under any Credit Support Document to whichit is a party;

 

**(a)****  *****FurnishSpecified Information.***  It will deliver to the other party any forms,documents or certificates specified in the Schedule or any Confirmation bythe date specified in the Schedule or such Confirmation or, if none isspecified, as soon as reasonably practicable.

 

(b)   ***Maintain Authorizations.  ***It will use all reasonable efforts to maintainin full force and effect all consents of any governmental or other authoritythat are required to be obtained by it with respect to this Agreement or any CreditSupport Document to which it is a party and will use all reasonable efforts toobtain any that may become necessary in the future.

 

(c)   ***Comply with Laws.  ***It will comply in allmaterial respects with all applicable laws and orders to which it may besubject if failure so to comply would materially impair its ability to performits obligations under this Agreement or any Credit Support Document to which itis a party.

 

**5.****             Events of Default and Termination Events**

 

(a)   ***Events ofDefault.***The occurrenceat any time with respect to a party or, if applicable, any Credit SupportProvider of such party or any Specified Entity of such party of any of thefollowing events constitutes an event of default (an “Event of Default”) withrespect to such party;

 

(i)**           *****Failure to Pay or Deliver.***  Failure bythe party to make, when due, any payment under this Agreement or delivery underSection 2(a)(i) or 2(d) required to be made by it if suchfailure is not remedied on or before the third Local Business Day after noticeof such failure is given to the party;

 

(ii)           ***Breach ofAgreement.  ***Failureby the party to comply with or perform any agreement or obligation (other thanan obligation to make any payment under this Agreement or delivery

 

3

----

 

underSection 2(a)(i) or 2(d) or to give notice of a TerminationEvent) to be complied with or performed by the party in accordance with thisAgreement if such failure is act remedied on or before the thirtieth day afternotice of such failure is given to the party;

 

(iii)          ***Credit Support Default.***

 

(1)           failure by the party or any Credit SupportProvider of such party to comply with or perform any agreement or obligation tobe complied with or performed by it in accordance with any Credit SupportDocument if such failure is continuing after any applicable grace period haselapsed;

 

(2)           the expiration or termination of such CreditSupport Document or the failing or ceasing of such Credit Support Document tobe in full force and effect for the purpose of this Agreement (in either caseother than in accordance with its terms)prior to the satisfaction of all obligations of such party under eachTransaction to which such Credit Support Document relates without the writtenconsent of the other party; or

 

(3)           the party or such Credit Support Provider disaffirms,disclaims, repudiates or rejects, in whole or in part, or challenges thevalidity of, such Credit Support Document;

 

(iv)          ***Misrepresentation.  ****A*representation made or repeated or deemed tohave been made or repeated by the party or any Credit Support Provider of suchparty in this Agreement or any Credit Support Document proves to have beenincorrect or misleading in any material respect when made or repeated or deemedto have been made or repeated;

 

(v)           ***Default underSpecified Transaction.**** *The party, any Credit Support Provider ofsuch party or any applicable Specified Entity of such party (1) defaultsunder a Specified Transaction and, after giving effect to any applicable noticerequirement or grace period, there occurs a liquidation of, an acceleration ofobligations under, or an early termination of, that Specified Transaction, (2) defaults,after giving effect to any applicable notice requirement or grace period, inmaking any payment or delivery due on the last payment, delivery or exchangedate of, or any payment on early termination of, a Specified Transaction (orsuch default continues for at least three Local Business Days if there is noapplicable notice requirement or grace period) or (3) disaffirms,disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (orsuch action, is taken by any person or entity appointed or empowered to operateit or act on its behalf);

 

(vi)          ***Cross Default.**** *If “Cross Default” is specified in the Schedule as applying to theparty, the occurrence or existence of (1) a default, event of default orother similar condition or event (however described) in respect of such party,any Credit Support Provider of such party or any applicable Specified Entity ofsuch party under one or more agreements or instruments relating to SpecifiedIndebtedness of any of them (individually or collectively) in an aggregateamount of not less than the applicable Threshold Amount (as specified in theSchedule) which has resulted in such Specified Indebtedness becoming, orbecoming capable at such time of being declared, due and payable under suchagreements or instruments, before it would otherwise have been due and payableor (2) a default by such party, such Credit Support Provider or suchSpecified Entity (individually or collectively) in making one or more paymentson the due date thereof in an aggregate amount of not less than the applicableThreshold Amount under such agreements or instruments (after giving effect toany applicable notice requirement or grace period);

 

(vii)         ***Bankruptcy.  *****The party, any Credit Support Provider ofsuch party or any applicable Specified Entity of such party:

 

(1)           is dissolved (other than pursuant to aconsolidation, amalgamation or merger); (2) becomes insolvent or is unableto pay its debts or fails or admits in writing its inability generally to payits debts as they become due; (3) makes a general assignment, arrangementor composition with or for the benefit of its creditors; (4) institutes orhas instituted against it a proceeding seeking a judgment of insolvency or bankruptcyor any other relief under any bankruptcy or insolvency law or other similar lawaffecting

 

4

----

 

creditors’ rights, or apetition is present for its winding-up or liquidation, and, in the case of anysuch proceeding or petition instituted or presented against it, such proceedingor petition (A) results in a judgment of insolvency or bankruptcy or theentry of an order for relief or the making of an order for its winding-up orliquidation, or (B) is not dismissed, discharged, stayed or restrained ineach case within30 days of the institution or presentation thereof; (5) has a resolutionpassed for its winding-up, official management or liquidation (other thanpursuant to a consolidation, amalgamation or merger); (6) seeks or becomessubject to the appointment of an administrator, provisional liquidator,conservator, receiver, trustee, custodian or other similar official for it orfor all or substantially all its assets; (7) has a secured party takepossession of all or substantially all its assets or has a distress, execution,attachment, sequestration or other legal process levied, enforced or sued on oragainst all or substantially all its assets and such secured party maintainspossession, or any such process is not dismissed, discharged, stayed orrestrained, in each case within 30 days thereafter; (8) causes or issubject to any event with respect to it which, under the applicable laws of anyjurisdiction, has an analogous effect to any of the events specified in clauses(1) to (7) (inclusive); or (9) takes any action in furtheranceof, indicating its consent to, approval of, or acquiescence in, any of theforegoing acts; or

 

(viii)        ***Merger Without Assumption.  ***Theparty or any Credit Support Provider of such party consolidates or amalgamateswith, or merges with or into, or transfers all or substantially all its assetsto, another entity and, at the time of such consolidation, amalgamation, mergeror transfer:

 

(1)           theresulting, surviving or transferee entity fails to assume all the obligationsof such party or such Credit Support Provider under this Agreement or anyCredit Support Document to which it or its predecessor was a party by operationof law or pursuant to an agreement reasonably satisfactory to the other partyto this Agreement; or

 

(2)           thebenefits of any Credit Support Document fail to extend (without the consent ofthe other party) to the performance by such resulting, surviving or transforceentity of its obligations under this Agreement,

 

(b) ***Termination Events,***Theoccurrence at any time with respect to a party or, if applicable, any CreditSupport Provider of such party or any Specified Entity of such party of anyevent specified below constitutes an Illegality if the event is specified in (i) below,and, if specified to be applicable, a Credit Event Upon Merger if the event isspecified pursuant to (ii) below or an Additional Termination Event if theevent is specified pursuant to (iii) below:

 

(i)**            *Illegality.  ***Due to theadoption of, or any change in, any applicable law after the date on which a Transactionis entered into, or due to the promulgation of, or any change in, theinterpretation by any court, tribunal or regulatory authority with competentjurisdiction of any applicable law after such date, it becomes unlawful (otherthan as a result of a breach by the party of Section 4(b)) for such party(which will be the Affected Party):

 

(1)           to performany absolute or contingent obligation to make a payment or delivery or to receivea payment or delivery in respect of such Transaction or to comply with any othermaterial provision of this Agreement relating to such Transaction; or

 

(2)           toperform, or for any Credit Support Provider of such party to perform, anycontingent or other obligation which the party (or such Credit SupportProvider) has under any Credit Support Document relating to such Transaction;

 

(ii)           ***Credit Event UponMerger.  ***If “Credit Event Upon Merger” is specified inthe Schedule as applying to the party, such party (“X”), any CreditSupport Provider of X or any applicable Specified Entity of X consolidates oramalgamates with, or merges with or into, or transfers all or substantially allits assets to, another entity and such action does not constitute an eventdescribed in Section 5(a)(viii) but the creditworthiness of theresulting, surviving or transferee entity is materially weaker than that of X,such Credit Support Provider or such Specified Entity,

 

5

----

 

 

as the case may be,immediately prior to such action (and, in such event, X or its successor ortransferee, as appropriate, will be the Affected Party); or

 

(iii)          ***Additional TerminationEvent.  ***If any “Additional Termination Event” isspecified in the Schedule or any Confirmation as applying, the occurrenceof such event (and, in such event, the Affected Party or Affected Parties shallbe as specified for such Additional Termination Event in the Schedule orsuch Confirmation).

 

(c)   ***Event of Default andIllegality.  ***If an event or circumstance which wouldotherwise constitute or give rise to an Event of Default also constitutes anillegality, it will be treated as an, illegality and will not constitute anEvent of Default

 

6.             **Early****Termination**

 

(a)   ***Right to Terminate Following Eventof Default. ***If at anytime an Event of Default with respect to a party (the “Defaulting Party”) hasoccurred and is then continuing, the other party (the “Non-defaulting Party”)may, by not more than 20 days notice to the Defaulting Party specifying therelevant Event of Default, designate a day not earlier than the day such noticeis effective as an Early Termination Date in respect of all outstanding Transactions.If, however, “Automatic Early Termination” is specified in the Schedule asapplying to a party, then an Early Termination Date in respect of alloutstanding Transactions will occur immediately upon the occurrence withrespect to such party of an Event of Default specified in Section 5(a)(vii)(l),(3), (5), (6) or, to the extent analogous thereof, (8), and as of the timeimmediately preceding the institution of the relevant proceeding or the presentationof the relevant petition upon the occurrence with respect to such party of anEvent of Default specified in Section 5(a)(vii)(4) or, to the extentanalogous thereto, (8).

 

(b)   ***Right to Terminate FollowingTermination Event***

 

(i)            ***Notice.  ***Ifa Termination Event occurs, an Affected Party will, promptly upon becomingaware of it, notify the other party, specifying the nature of that Termination Eventand each Affected Transaction and will also give such other information aboutthat Termination Event as the other party may reasonably require.

 

(ii)           ***Two Affected Parties.  ***Ifan illegality under Section 5(b)(i)(l) occurs and there are two Affected Parties,each party will use all reasonable efforts to reach agreement within 30 daysafter notice thereof is given under Section 6(b)(i) on action toavoid that Termination Event.

 

(iii)          ***Right to Terminate.****  *If:

 

(1)           anagreement under Section 6(b)(ii) has not been effected with respectto all Affected Transactions within 30 days after an Affected Party givesnotice under Section 6(b)(i); or

 

(2)           anIllegality other than that referred to in Section 6(b)(ii), a Credit EventUpon Merger or an Additional Termination Event occurs,

 

either party in the caseof an Illegality, any Affected Party in the case of an Additional TerminationEvent if there is more than, oneAffected Party, or the party which is not the Affected Party in the case of aCredit Event Upon Merger or an Additional Termination Event if there is onlyone Affected Party may, by not more than 20 days notice to the other party andprovided that the relevant Termination Event is then continuing, designate aday not earlier than the day such notice is effective as an Early TerminationDate in respect of all Affected Transactions.

 

(c)   ***Effect of Designation.***

 

(i)            Ifnotice designating an Early Termination Date is given under Section 6(a) or(b), the Early Termination Date will occur on the date so designated, whetheror not the relevant Event of Default or Termination is then continuing.

 

6

----

 

(ii)           Upon the occurrence or effective designationof an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or2(d) in respect of the Terminated Transactions will be required to bemade, but without prejudice to the other provisions of this Agreement. Theamount, if any, payable in respect of an Early Termination Date shall bedetermined pursuant to Section 6(e).

 

(d)   ***Calculations.***

 

(i)            ***Statement.  ***On or as soon as reasonably practicablefollowing the occurrence of an Early Termination Date, each party will make thecalculations on its part, if any, contemplated by Section 6(e) andwill provide to the other party a statement (1) showing, in reasonabledetail, such calculations (including all relevant quotations and specifying anyamount payable under Section 6(e)) and (2) giving details of therelevant account to which any amount payable to it is to be paid. In theabsence of written confirmation from the source of a quotation obtained indetermining a Market Quotation, the records of the party obtaining suchquotation will be conclusive evidence of the existence and accuracy of suchquotation.

 

(ii)           ***PaymentDate.  ***Anamount calculated as being due in respect of any Early Termination Date underSection 6(e) will, be payable on the day that notice of the amountpayable is effective (in the case of an Early Termination Date which isdesignated or occurs as a result of an Event of Default) and on the day whichis two Local Business Days after the day on which notice of the amount payableis effective (in the case of an Early Termination Date which is designated as aresult of a Termination Event). Such amount will be paid together with (to theextent permitted under applicable law) interest thereon (before as well asafter judgment), from (and including) the relevant Early Termination Date to(but excluding) the date such amount is paid, at the Applicable Rate. Suchinterest will be calculated on the basis of daily compounding and the actualnumber of days elapsed.

 

(e) ***Payments on Early Termination.***Ifan Early Termination Date occurs, the following provisions shall apply based onthe parties’ election in the Schedule of a payment measure, either “MarketQuotation” or “Loss”, and a payment method, either the “First Method” or the “SecondMethod”. If the parties fail to designate a payment measure or payment methodin the Schedule, it will be deemed that “Market Quotation” or the “SecondMethod”, as the case may be, shall apply. The amount, if any, payable inrespect of an Early Termination Date and determined pursuant to this Section willbe subject to any Set-off.

 

(i)            ***Events ofDefault.***If the Early TerminationDate results from an Event of Default:

 

(1)           ***FirstMethod and Market Quotation.***  If the First Method and Market Quotation apply, theDefaulting Party will pay to the Non-defaulting Party the excess, if a positivenumber, of (A) the sum of the Settlement Amount (determined by theNon-defaulting Party) in respect of the Terminated Transactions and the UnpaidAmounts owing to the Non-defaulting Party over (B) the Unpaid Amounts owing tothe Defaulting Party.

 

(2)           ***FirstMethod and Loss,  ***If the First Method and Loss apply, the Defaulting Party will pay tothe Non-defaulting Party, if a positive number, the Non-defaulting Party’s Lossin respect of this Agreement,

 

(3)           ***SecondMethod and Market Quotation. ***If the Second Method and Market Quotation apply,an amount will be payable equal to (A) the sum of the Settlement Amount (determinedby the Non-defaulting Party) in respect of the Terminated Transactions and theUnpaid Amounts owing to the Non-defaulting Party less (B) the UnpaidAmounts owing to the Defaulting Party. If that amount is a positive number, theDefaulting Party will pay it to the Non-defaulting Party; if it is a negativenumber, the Non-defaulting Party will pay the absolute value of that amount tothe Defaulting Party.

 

(4)           ***SecondMethod and Loss. ***If the Second Method and Loss apply, anamount will be payable equal to the Non-defaulting Party’s Loss in respect ofthis Agreement.  If that amount is apositive number, the Defaulting Party will pay it to the Non-defaulting

 

7

----

 

Party;if it is a negative number, the Non-defaulting Party will pay the absolutevalue of that amount to the Defaulting Party.

 

(ii)           ***TerminationEvents.****  *If theEarly Termination Date results from a Termination Event:

 

(1)           ***One AffectedParty.****  *If there is one Affected Party, the amountpayable will be determined in accordance with Section 6(e)(i)(3), ifMarket Quotation applies, or Section 6(e)(i)(4), if Loss applies, exceptthat, in either case, references to the Defaulting Party and to the Non-defaulting Party willbe deemed to be references to the Affected Party and the party which is not theAffected Party, respectively, and, if Loss applies and fewer than all theTransactions are being terminated, Loss shall be calculated in respect of allTerminated Transactions.

 

(2)           ***Two AffectedParties.****  *If thereare two Affected Parties:

 

(A)          If Market Quotation applies, each party willdetermine a Settlement Amount in respect of the Terminated Transactions, and anamount will be payable equal to (I) the sum of (a) one-half of thedifference between the Settlement Amount of the party with the higherSettlement Amount (“X”) and the Settlement Amount of the party with the lowerSettlement Amount (“Y”) and (b) the Unpaid Amounts owing to X less (II)the Unpaid Amounts owing to Y; and

 

(B)           If Loss applies, each party will determineits Loss in respect of this Agreement (or, if fewer than all the Transactionsare being terminated, in respect of all Terminated Transactions) and an amountwill be payable equal to one-half of the difference between the Loss of theparty with the higher Loss (“X”) and the Loss of the party with the lower Loss(“Y”).

 

Ifthe amount payable is a positive number, Y will pay it to X; if it is anegative number, X will pay the absolute value of that amount to Y.

 

(iii)          ***Adjustment forBankruptcy.****  *Incircumstances where an Early Termination Date occurs because “Automatic EarlyTermination” applies in respect of a party, the amount determined under this Section 6(e) willbe subject to such adjustments as are appropriate and permitted by law toreflect any payments or deliveries made by one party to the other under thisAgreement (and retained by such other party) during the period from therelevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

 

(iv)          ***Pre-Estimate.****  *The parties agree that if Market Quotationapplies an amount recoverable under this Section 6(e) is a reasonablepre-estimate of loss and not a penalty. Such amount is payable for the loss ofbargain and the loss of protection against future risks and except as otherwiseprovided in this Agreement neither party will be entitled to recover anyadditional damages as a consequence of such losses.

 

7.             **Transfer**

 

Neitherthis Agreement nor any interest or obligation in or under this Agreement may betransferred (whether by way of security or otherwise) by either party withoutthe prior written consent of the other party, except that:

 

(a)   a party may make such a transfer of this Agreement pursuant to aconsolidation or amalgamation with, or merger with or into, or transfer of allor substantially all its assets to, another entity (but without prejudice toany other right or remedy under this Agreement); and

 

(b)   a party may make such a transfer of all or any part of its interest inany amount payable to it from a Defaulting Party under Section 6(e).

 

Any purported transfer that is not in compliance with this Section willbe void.

 

8

----

 

8.             **Miscellaneous**

 

(a)   ***Entire Agreement.  ***ThisAgreement constitutes the entire agreement and understanding of the partieswith respect to its subject matter and supersedes all oral communication andprior writings with respect thereto.

 

(b)   ***Amendments.  ***Noamendment modification or waiver in respect of this Agreement will be effectiveunless in writing (including a writing evidence by a facsimile transmission)and executed by each of the parties or confirmed by an exchange of telexes orelectronic messages on an electric messaging system.

 

(c)   ***Survival of Obligations.****  *Without prejudice to Sections2(a)(iii) and 6(c)(ii), the obligations of the parties under thisAgreement will survive the termination of any Transaction.

 

(d)   ***Remedies Cumulative.****  *Except as provided in thisAgreement, the rights, powers, remedies and privileges provided in thisAgreement are cumulative and not exclusive of any rights, powers, remedies andprivileges provided by law.

 

(e)   ***Counterparts and Confirmations.***

 

(i)            ThisAgreement (and each amendment, modification, and waiver in respect of it) maybe executed and delivered in counterparts (including by facsimiletransmission), each of which will be deemed an original.

 

(ii)           Theparties intend that they are legally bound by the terms of each Transactionfrom the moment they agree to those terms (whether orally or otherwise). AConfirmation shall be entered into as soon as practicable and may be executedand delivered in counterparts (including by facsimile transmission) or becreated by an exchange of telexes or by an exchange of electronic messages onan electronic messaging system, which in each case will be sufficient for allpurposes to evidence a binding supplement to this Agreement. The parties willspecify therein or through another effective means that any such counterpart,telex or electronic message constitutes a Confirmation.

 

(f)    ***No Waiver of Rights.  ***Afailure or delay in exercising any right, power or privilege in respect of thisAgreement will not be presumed to operate as a waiver, and a single or partialexercise of any right power or privilege will not be presumed to preclude anysubsequent or further exercise, of that right power or privilege or theexercise of any other right power or privilege.

 

(g)   ***Headings.****  *The headings used in thisAgreement are for convenience of reference only and are not to affect theconstruction of or to be taken into consideration in interpreting thisAgreement.

 

9.             **Expenses**

 

A Defaulting Party will,on demand, indemnify and hold harmless the other party for and against allreasonable out-of-pocket expenses, including legal fees, incurred by such otherparty by reason of the enforcement and protection of its rights under thisAgreement or any Credit Support Document to which the Defaulting Party is aparty or by reason of the early termination of any Transaction, including, butnot limited to, costs of collection.

 

10.           **Notices**

 

(a)   ***Effectiveness.****  *Any notice or othercommunication in respect of this Agreement may be given in any manner set forthbelow (except that a notice or other communication under Section 5 or 6 maynot be given by facsimile transmission or electronic messaging system) to theaddress or number or in accordance with the electronic messaging system detailsprovided (see the Schedule) and will be deemed effective as indicated:

 

(i)            ifin writing and delivered in person or by courier on the date it is delivered;

 

(ii)           ifsent by telex, on the day the recipient’s answerback is received;

 

9

----

 

(iii)          if sent by facsimile transmission, on thedate that transmission is received by a responsible employee of the recipientin legible form (it being agreed that the burden of proving receipt will be onthe sender and will not be metby a transmission report generated by the sender’s facsimile machine);

 

(iv)          if sent by certified or registered mail(airmail, if overseas) or the equivalent (return receipt requested), on thedate that mail is delivered or its delivery is**attempted; or

 

(v)           if sent by electronic messaging system, onthe date that electronic message is received, 

 

unlessthe date of that delivery (or attempted delivery) or that receipt, asapplicable, is not a Local Business Day or that communication is delivered (orattempted) or received, as applicable, after the close of business on a LocalBusiness Day, in which case that communication shall be deemed given andeffective on the first following day that is a Local Business Day.

 

(b)   ***Change of Addresses. ***Either party may by notice to the other change the address, telex orfacsimile number or electronic messaging system details at which notices orother communications are to be given to it.

 

**11.****          Governing Law and Jurisdiction**

 

(a)   ***Governing Law.  ***This Agreement will be governed by and construed in accordance with thelaw specified in the Schedule.

 

(b)   ***Jurisdiction.  ***With respect to any suit, action or proceedings relating to thisAgreement (“Proceedings”), each party irrevocably:

 

(i)            submits to the jurisdiction of the Englishcourts, if this Agreement is expressed to be governed by English law, or to thenon-exclusive jurisdiction of the courts of the State of New York and theUnited States District Court located in the Borough of Manhattan in New YorkCity, if this Agreement is expressed to be governed by the laws of the State ofNew York; and

 

(ii)           waives any objection which it may have at anytime to the laying of venue of any Proceedings brought in any such court,waives any claim that such Proceedings have been brought in an inconvenientforum and further waives theright to object, with respect to such Proceedings, that such court does nothave any jurisdiction over such party.

 

Nothingin this Agreement precludes either party from bringing Proceedings in any otherjurisdiction (outside, if this Agreement is expressed to be governed by Englishlaw, the Contracting States, as defined in Section 1(3) of the CivilJurisdiction and Judgments Act 1982 or any modification, extension or re-enactmentthereof for the time being in force) nor will the bringing of Proceedings inany one or more jurisdictions preclude the bringing of Proceedings in any otherjurisdiction.

 

(c)   ***Waiver of Immunities.  ***Each party irrevocably waives, to the fullest extent permitted byapplicable law, with respect to itself and its revenues and assets(irrespective of their use or intended use), all immunity on the grounds ofsovereignty or other similar grounds from (i) suit, (ii) jurisdictionof any court, (iii) relief by way of injunction, order for specificperformance or for recovery of property, (iv) attachment of its assets(whether before or after judgment) and (v) execution or enforcement of anyjudgment to which it or its revenues or assets might otherwise be entitled inany Proceedings in the courts of any jurisdiction and irrevocably agrees, tothe extent permitted by applicable law, that it will not claim any suchimmunity in any Proceedings,

 

12.           **Definitions**

 

Asused in this Agreement:

 

***“Additional Termination Event”****has*the meaning specified inSection 5(b).

 

***“Affected Party”***has the meaning specified in Section 5(b).

 

10

----

 

***“AffectedTransactions”*****means(a) with respect to any Termination Event consisting of an Illegality, allTransactions affected by the occurrence of such Termination Event and (b) withrespect to any other Termination Event, all Transactions.

 

***“Affiliate”*****means, subject to the Schedule, inrelation to any person, any entity controlled, directly or indirectly, by theperson, any entity that controls, directly or indirectly, the person or anyentity directly or indirectly under common control with the person. For thispurpose, “control” of any entity or person means ownership of a majority of thevoting power of the entity or person.

 

***“Applicable Rate”***means:

 

(a)   inrespect of obligations payable or deliverable (or which would have been but forSection 2(a)(iii)) by a Defaulting Party, the Default Rate;

 

(b)   inrespect of an obligation to pay an amount under Section 6(e) ofeither party from and after the date (determined in accordance with Section 6(d)(ii))on which that amount is payable, the Default Rate;

 

(c)   inrespect of all other obligations payable or deliverable (or which would havebeen but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-defaultRate; and

 

(d)   inall other cases, the Termination Rate.

 

***“consent”*****includes a consent, approval, action,authorization, exemption, notice, filing, registration or exchange controlconsent

 

***“Credit EventUpon Merger”****has*themeaning specified in Section 5(b).

 

***“Credit SupportDocument”*****meansany agreement or instrument that is specified as such in this Agreement.

 

***“Credit SupportProvider”****has*themeaning specified in the Schedule.

 

***“Default Rate”*****means a rate per annum equal to the cost(without proof or evidence of any actual cost) to the relevant payee (ascertified by it) if it were to fund or of funding the relevant amount plus 1%per annum

 

***“DefaultingParty”*****hasthe meaning specified in Section 6(a).

 

***“EarlyTermination Date”*** means the date determined in accordancewith Section 6(a) or 6(b)(iii).

 

***“Event of Default”*****has the meaning specified in Section 5(a) and,if applicable, in the Schedule.

 

***“Illegality”*****has the meaning specified in Section 5(b).

 

***“law”*****includes any treaty, law, rule orregulation and “lawful” and “unlawful” will be construed accordingly.

 

***“Local BusinessDay”*****means,subject to the Schedule, a day on which commercial banks are open for business(including dealings in foreign exchange and foreign currency deposits) (a) inrelation to any obligation under Section 2(a)(i), in the place(s)specified in the relevant Confirmation or, if not so specified, as otherwiseagreed by the parties in writing or determined pursuant to provisionscontained, or incorporated by reference, in this Agreement, (b) inrelation to any other payment, in the place where the relevant account islocated, (c) in relation to any notice or other communication, includingnotice contemplated under Section 5(a)(i), in the city specified in theaddress for notice provided by the recipient and, in the case of a noticecontemplated by Section 2(b), in the place where the relevant new accountis to be located and (d) in relation to Section 5(a)(v)(2), in therelevant locations for performance with respect to such Specified Transaction,

 

***“Loss”*****means, with respect to this Agreement orone or more Terminated Transactions, as the case may be, and a party, an amountthat party reasonably determines in good faith to be its total losses and costs(or gain, in which case expressed as a negative number) in connection with thisAgreement or that Terminated Transaction or group of Terminated Transactions,as the case may be, including any loss of bargain, cost of funding or, at theelection of such party but without duplication, loss or cost incurred as aresult of its terminating, liquidating, obtaining or reestablishing any bedgeor related trading position (or any gain resulting from any of them). Lossincludes losses and costs (or gains) in respect of any payment or

 

11

----

 

delivery required to havebeen made (assuming satisfaction of each applicable condition precedent) on orbefore the relevant Early Termination Date and not made, except, so as to avoidduplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.Loss does not include a party’s legal fees and out-of-pocket expenses referredto under Section 9. A party will determine its Loss as of the relevantEarly Termination Date, or, if that is not reasonably practicable, as of theearliest date thereafter as is reasonably practicable. A party may (but neednot) determine its Loss by reference to quotations of relevant rates or pricesfrom one or more leading dealers in the relevant markets.

 

***“MarketQuotation”*****means,with respect to one or more Terminated Transactions and a party making thedetermination, an amount determined on the basis of quotations from ReferenceMarket-makers. Each quotation will be for an amount, if any, that would, bepaid to such party (expressed as a negative number) or by such party (expressedas a positive number) in consideration of an agreement between such party(taking into account any existing Credit Support Document with respect to theobligations of such party) and the quoting Reference Market-maker to enter intoa transaction (the “Replacement Transaction”) that would have the effect ofpreserving for such party the economic equivalent of any payment or delivery(whether the underlying obligation was absolute or contingent and assuming thesatisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) inrespect of such Terminated Transaction or group of Terminated Transactions thatwould, but for the occurrence of the relevant Early Termination Date, have beenrequired after that date. For this purpose, Unpaid Amounts in respect of theTerminated Transaction or group of Terminated Transactions are to be excludedbut, without limitation, any payment or delivery that would, but for therelevant Early Termination Date, have been required (assuming satisfaction ofeach applicable condition precedent) after that Early Termination Date is to beincluded. The Replacement Transaction would be subject to such documentation assuch party and the Reference Market-maker may, in good faith, agree. The partymaking the determination (or its agent) will request each ReferenceMarket-maker to provide its quotation to the extent reasonably practicable asof the same day and time (without regard to different time zones) on or as soonas reasonably practicable after the relevant Early Termination Date. The dayand time as of which those quotations are to be obtained will be selected ingood faith by the party obliged to make a determination under Section 6(e),and, if each party is so obliged, after consultation with the other. If morethan three quotations are provided, the Market Quotation will be the arithmeticmean of the quotations, without regard to the quotations having the highest andlowest values. If exactly three such quotations are provided, the MarketQuotation will be the quotation remaining after disregarding the highest andlowest quotations. For this purpose, if more than one quotation has the samehighest value or lowest value, then one of such quotations shall bedisregarded. If fewer than three quotations are provided, it will be deemedthat the Market Quotation in respect of such Terminated Transaction or group ofTerminated Transactions cannot be determined.

 

***“Non-defaultRate”*****meansa rate per annum equal to the cost (without proof or evidence of any actualcost) to the Non-defaulting Party (as certified by it) if it were to fund therelevant amount.

 

***“Non-defaultingParty”*****hasthe meaning specified in Section 6(a).

 

***“PotentialEvent of Default”*****meansany event which, with the giving of notice or the lapse of time or both, wouldconstitute an Event of Default.

 

***“Reference Market-makers”*****means four leading dealers in therelevant market selected by the party determining a Market Quotation in goodfaith (a) from among dealers of the highest credit standing which satisfyall the criteria that such party applies generally at the time in decidingwhether to offer or to make an extension of credit and (b) to the extentpracticable, from among such dealers having an office in the same city.

 

***“ScheduledPayment Date”*****meansa date on which a payment or delivery is to be made under Section 2(a)(i) withrespect to a Transaction.

 

***“Set-off”*****means set-off, offset, combination ofaccounts, right of retention or withholding or similar right or requirement towhich the payer of an amount under Section 6 is entitled or subject(whether arising under this Agreement, another contract, applicable law orotherwise) that is exercised by, or imposed on, such payer.

 

***“SettlementAmount”***means with respect to a party and any EarlyTermination Date, the sum of:

 

(a)   TheMarket Quotations (whether positive or negative) for each TerminatedTransaction or group of Terminated Transactions for which a Market Quotation isdetermined; and

 

12

----

 

(b)   such party’s Loss (whether positive or negative and without referenceto any Unpaid Amounts) for each Terminated Transaction or group of TerminatedTransactions for which Market Quotation cannot be determined or would not (inthe reasonable belief of the party making the determination) produce acommercially reasonable result.

 

***“Specified Entity”***has the meaning specified in the Schedule.

 

***“Specified Indebtedness”***means, subject to the Schedule, any obligation(whether present or future, contingent or otherwise, as principal or surety orotherwise) in respect of borrowed money.

 

***“Specified Transaction”***means, subject to the Schedule, (a) anytransaction (including an agreement with respect thereto) now existing orhereafter entered into between one party to this Agreement (or any CreditSupport Provider of such party or any applicable Specified Entity of suchparty) and the other party to this Agreement (or any Credit Support Provider ofsuch other party or any applicable Specified Entity of such other party) which,is a rate swap transaction, basis swap, forward rate transaction, commodityswap, commodity option, equity or equity index swap, equity or equity indexoption, bond option, interest rate option, foreign exchange transaction, captransaction, floor transaction, collar transaction, currency swap transaction,cross-currency rate swap transaction, currency option or any other similartransaction (including any option with respect to any of these transactions), (b) anycombination of these transactions and (c) any other transaction identifiedas a Specified Transaction in this Agreement or the relevant confirmation.

 

***“Terminated Transactions”***means with respect to any Early TerminationDate (a) if resulting from a Termination Event, all Affected Transactionsand (b) if resulting from an Event of Default, all Transactions (in eithercase) in effect immediately before the effectiveness of the notice designatingthat Early Termination Date (or, if “Automatic Early Termination” applies,immediately before that Early Termination Date).

 

***“Termination Event”***means an Illegality or, if specified to beapplicable, a Credit Event UponMerger or an Additional Termination Event.

 

***“Termination Rate”***means a rate per annum equal to thearithmetic mean of the cost (without proof or evidence of any actual cost) toeach party (as certified by such party) if it were to fund or of funding suchamounts.

 

***“Unpaid Amounts”***owing to any parry means, with respect to anEarly Termination Date, the aggregate of (a) in respect of all TerminatedTransactions, the amounts that became payable (or that would have becomepayable but for Section 2(a)(iii)) to such party under Section 2(a)(i) onor prior to such Early Termination Date and which remain unpaid as at suchEarly Termination Date and (b) in respect of each Terminated Transaction,for each obligation under Section 2(a)(i) which was (or would havebeen but for Section 2(a)(iii)) required to be settled by delivery to suchparty on or prior to such Early Termination Date and which has not been sosettled as at such Early Termination Date, an amount equal to the fair marketvalue of that which was (or would have been) required to be delivered as of theoriginally scheduled date for delivery, in each case together with (to theextent permitted under applicable law) interest, in the currency of suchamounts, from (and including) the date such amounts or obligations were orwould have been required to have been paid or performed to (but excluding) suchEarly Termination Date, at the Applicable Rate. Such amounts of interest willbe calculated on the basis of daily compounding and the actual number of dayselapsed. The fair market value of any obligation referred to in clause (b) aboveshall be reasonably determined by the party obliged to make the determinationunder Section 6(e) or, if each party is so obliged, it shall be theaverage of the fair market values reasonably determined by both parties.

 

[SIGNATURE PAGE TO FOLLOW]

 

13

----

 

IN WITNESS WHEREOF the parties have executedthis document on the respective dates specified below with effect from the datespecified on the first page of this document.

 
| **U.U.S. BANK**           | ** **              | **43455****BPD LLC** |
|---------------------------|-------------------------|----------------------|
| **NATIONAL  ASSOCIATION** |                    | By:                  | Outdoor Channel Holdings, Inc., Member |
|                      |                    |                 |
|                      |                    |                 |
| By:                       | /s/ Maureen K. Sullivan |                 | By: | /s/ Perry T. Massie |
| Name:                     | Maureen K. Sullivan     |                 | Name: | Perry T. Massie |
| Title:                    | Vice  President         |                 | Title: | CEO |
| Date:                     | 11/2/05                 |                 | Date: | 11/2/05 |
|                           |                         |                      |  |  |  |  |  |  |  |  |

 

14

----

 

(Local Currency-Single Jurisdiction)

 

**SCHEDULE to the MASTER AGREEMENT**

**dated as of October 18, 2005**

**between**

**U.S. BANK NATIONAL ASSOCIATION (“Party A”)**

**and**

**43455 BPD LLC (“Party B”)**

 

Part 1:**Termination Provisions and Certain OtherMatters**

 

(a)*          ****“SpecifiedEntity”***means, inrelation to Party A, for the purpose of: 

 

**Section 5(a)(v),**none;

 

**Section 5(a)(vi),**none; 

 

**Section 5(a)(vii),**none; and 

** **

**Section 5(b)(ii),**none;

 

and, in relation to Party B,for the purpose of: 

 

**Section 5(a)(v),**All Affiliates; 

** **

**Section 5(a)(vi),**All Affiliates; 

** **

**Section 5(a)(vii),**All Affiliates; and 

** **

**Section 5(b)(ii),**All Affiliates.

 

(b)           ***“Specified Transaction”***will have the meaning specified inSection 12 of this Agreement.

 

(c)           The ***“Cross-Default”***provisions of Section 5(a)(vi) will apply to Party Aand Party B. In connection therewith,

 

***“Specified Indebtedness”***will have the meaning specified inSection 12, except that such term shall not include obligations in respectof deposits received in the ordinary course of a party’s banking business, and

 

***“Threshold Amount”***means, in relation to Party A an amount equalto Ten Million

 

1

----

 

Dollars ($10,000,000.00), and in relation to PartyB an amount equal to ($0.00).

 

(d)           The ***“CreditEvent Upon Merger”***provisions of Section 5(b)(ii) willapply to Party A and Party B; provided, however, that the phrase “materiallyweaker” means that the actual or implied Credit Rating of (A) the seniorlong-term debt of the resulting, surviving or transferee entity is rated lessthan BBB- by Standard & Poor’s Corporation or Baa3 by Moody’sInvestors Service Inc., or (B) in the event that there are no suchStandard & Poor’s Corporation or Moody’s Investors Service, Inc.ratings, the Policies (as defined below) in effect at the time, of the partywhich is not the Affected Party, would lead such non-Affected Party, solely asa result of a change in the nature, character, identity or condition of theAffected Party from its state (as aparty to this Agreement) prior to such consolidation, amalgamation, merger ortransfer, to decline to make an extension of credit to, or enter into aTransaction with, the resulting, surviving or transferee entity. “Policies”,for the purposes of this definition means: (x)(i) internal credit limitsapplicable to individual entities or (ii) other limits on doing business withentities domiciled or doing business in certain jurisdictions or engaging incertain activities, or (y) internal restrictions on doing business withentities with whom the party which is not the Affected Party has had prioradverse business relations.

 

In addition,Section 5(b)(ii) is hereby amended by:

 

(i)             deleting in the fourth line thereof the words“another entity” and replacing them with the words “or receives all orsubstantially all of the assets of another entity or reorganizes, incorporates,reincorporates, or reconstitutes into or as, another entity or X, such CreditSupport Provider, or such Specified Entity, as the case may be, effects arecapitalization, liquidating dividend, leveraged buy-out, other similarhighly-leveraged transaction, redemption of indebtedness, or stock buy-back orsimilar call on equity or enters into any agreement providing for theforegoing.”

 

(ii)            deleting in the fifth line thereof the words“the resulting, surviving or transferee” and replacing them with the words “Xor any resulting, surviving, transferee, reorganized, or recapitalized”, and

 

(iii)           deleting in the seventh line thereof the words “its successor ortransferee” and replacing them with the words “any resulting, surviving,transferee, reorganized, or recapitalized entity.”

 

(e)           The ***“AutomaticEarly Termination”*****provisionof Section 6(a) will not apply to Party A. As to Party B, AutomaticEarly Termination shall apply.

 

2

----

 

(f)            ***Paymentson Early Termination.***Forthe purpose of Section 6(e) of this Agreement: 

 

(i)             Market Quotation will apply.

 

(ii)            The Second Method will apply.

 

(g)           ***AdditionalTermination Event***willnot apply to Party A.   As to Party B, an Additional Termination Event shall occur upon(i) payment in full of all loans, advances, indebtedness and other obligations of PartyB (or any Specified Entity of or Credit Support Provider for Party B) to PartyA (or any Affiliate of Party A), and the termination of all commitments(including revolving loan commitments and letters of credit) by Party A (or anyAffiliate of Party A) to extend credit to Party B (or any Specified Entity ofor Credit Support Provider of Party B) other than under this Agreement, or(ii) if Party B or any Credit Support Provider of Party B is a naturalperson, the death, permanent disability, legal incapacity or incompetence ofParty B or any Credit Support Provider of Party B. For the purpose of theforegoing Termination Event, the Affected Party shall be Party B and thenon-Affected Party shall be Party A.

 

Part 2: **Agreement to Deliver Documents**

 
| **Party Required To****Deliver Document** | ** ** | **Form/Document/****Certificate**                                                                                                                                                  | ** ** | **Date By Which To****Be Delivered**                                                           | ** ** | **Covered By Section  3(d) Representation** |
|-------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------|------------|--------------------------------------------------|
|                                      |       |                                                                                                                                                                               |       |                                                                                           |       |                                             |
| Party B                                   |       | Certified copies of all resolutions  and authorizations and any other documents with respect to the execution, delivery and performance of this Agreement  satisfactory to Party A |       | Upon execution and delivery  of this Agreement

                                          |       | Yes                                              |
|                                      |       |                                                                                                                                                                               |       |                                                                                           |       |                                             |
| Party B                                   |       | Certificate of authority and  specimen signatures of individuals executing this Agreement an Confirmations                                                                         |       | Upon execution and delivery  of this Agreement and thereafter, upon request of the other Party |       | Yes                                              |
|                                      |       |                                                                                                                                                                               |       |                                                                                           |       |                                             |
| Party B                                   |       | Consolidated and consolidating  balance sheet and income statements – quarterly (unaudited) and annually  (audited)                                                           |       | Upon request of Party A                                                                        |       | Yes                                              |

 

3

----

 
| Party B |   | A cross-collateralization agreement  satisfactory to Party A from Party B and any Credit Support Providers for  Party B, plus all other agreements deemed necessary by Party A to evidence  such cross-collateralization satisfactory to Party A |   | Upon execution and delivery  of this Agreement |   | Yes |
|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|-----|

 

Part 3. **Miscellaneous**

 

(a)           ***Addressfor Notices.***For thePurpose of Section 10(a) of this Agreement:

 

Any notice shall be delivered to the addressor facsimile or telex number specified in the relevant Confirmation of aTransaction. For Purposes of Sections 5 and 6 of this Agreement, any noticeshall also be delivered to the following address:

 

Address for notice or communications to PartyA:

 

U.S.Bank National AssociationATTN: Randy Bailey / Derivative Operations800 Nicollet MallMail Location: BC-MN-H18SMinneapolis, Minnesota 55402(612) 303-4128 Phone(612) 303-1353 Fax

 

Address for notice or communications to PartyB:

 

43455BPD LLCATTN: William “Bill” Owen 43455 Business Park Drive Temecula, California 92590 (951) 699-4749 Ext. 109 Phone (951) 699-1849 Fax

 

(b)           ***Calculation******Agent.***The Calculation Agent is Party A.

 

(c)           ***CreditSupport Document.***CreditSupport Document is not applicable in relation to Party A. Credit SupportDocument is applicable in relation to Party B and shall mean each agreement andinstrument, now or hereafter existing, of any kind or nature which secures,guarantees or otherwise provides direct or indirect assurance of

 

4

----

 

paymentor performance of any existing or future obligation of Party B under thisAgreement, made by or on behalf of any person or entity (including,without limiting the generality of the foregoing, any credit or loan agreement,note, reimbursement agreement, security agreement, mortgage, pledge agreement,assignment of rents or any other agreement or instrument granting any lien,security interest, assignment, charge or encumbrance to secure any suchobligation, any guaranty, suretyship, letter of credit or subordinationagreement relating to any such obligation and any “keep well” or otherfinancial support agreement relating to Party B or any Credit Support Provider)in favor of Party A or any of its Affiliates. Each Credit Support Document isincorporated by reference in, constitutes part of, and is made in connectionwith, this Agreement and each Confirmation as if set forth in full in thisAgreement or such Confirmation, and each representation, warranty, covenant andagreement of Party B contained therein is incorporated by reference herein andis repeated and restated in favor of Party A. Party B grants to Party A asecurity interest in all assets and collateral that are subject to a securityinterest pursuant to each Credit Support Document of Party B.

 

(d)           ***Credit Support Provider****. *Credit Support Provider is not applicable in relation to Party A.Credit Support Provider is applicable in relation to Party B and means anyperson or entity (other than Party B), that now or hereafter secures,guarantees or otherwise provides direct or indirect assurance of payment orperformance of any existing or future obligation of Party B under thisAgreement or any Credit Support Document, including but not limited to thefollowing persons and/or entities: Outdoor Channel Holdings, Inc.

 

(e)           ***Governing******Law****.*This Agreement will be governed by andconstrued in accordance with the laws of the state of New York (withoutreference to choice of law doctrine).

 

(f)            ***“Affiliate”*****willhave the meaning specified in Section 12 of this Agreement. 

 

Part 4. **Other****Provisions**

 

(a)           ***Set-off****.*Any amount (the “Early Termination Amount”)payable to one party (the “Payee”) by the other party (the “Payer”) underSection 6(e), in circumstances where there is a Defaulting Party or oneAffected Party in the case where a Termination Event underSection 5(b)(ii) has occurred, will, at the option of the party (“X”)other than the Defaulting Party or the Affected Party (and without prior noticeto the Defaulting Party or the Affected Party), be reduced by its set-offagainst any amount(s) (the “Other Agreement Amount”) payable (whether at suchtime or in the future or upon the occurrence of a contingency) by the Payee tothe Payer (irrespective of the currency, place of payment or booking office ofthe obligation) under any other agreement(s) between the Payee and the Payer orinstrument(s) or undertaking(s) issued or executed by one party to, or in favorof, the other party (and the Other Agreement Amount will be discharged promptlyand in all respects to the extent it is so set-off). X will give notice to theother party of any set-off effected under this section.

 

5

----

 

For this purpose, either the EarlyTermination Amount or the Other Agreement Amount (or the relevant portion of suchamounts) may be converted by X into the currency in which the other isdenominated at the rate of exchange at which such party would be able, actingin a reasonable manner and in good faith, to purchase the relevant amount ofsuch currency.

 

If an obligation is unascertained, X may ingood faith estimate that obligation and set-off in respect of the estimate,subject to the relevant party accounting to the other when the obligation isascertained.

 

Nothing in this section shall beeffective to create a charge or other security interest. Thissection shall be without prejudice and in addition to any right ofset-off, combination of accounts, lien or other right to which a party is atany time otherwise entitled (whether by operation of law, contract or otherwise).

 

(b)           ***Exchangeof Confirmations.***Foreach Transaction entered into hereunder, Party A shall promptly send to Party Ba Confirmation, via telex or facsimile transmission. Party B agrees to respondto such Confirmation within 5 Business Days, either confirming agreementthereto or requesting a correction of any error(s) contained therein. Failureby Party B to respond within such period shall not affect the validity orenforceability of such Transaction and shall be deemed to be an affirmation ofthe terms contained in such Confirmation, absent manifest error. The partiesagree that any such exchange of telexes or facsimile transmissions shallconstitute a Confirmation for all purposes hereunder.

 

(c)           ***Waiver ofRight to Trial by Jury.*****EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TOTRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATINGTO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.**

 

(d)           ***TelephonicRecording. ***Each party (i) consents to the recordingof the telephone conversations of trading and marketing personnel of theparties and their Affiliates in connection with this Agreement or any potentialTransaction and (ii) agrees to obtain any necessary consent of, and givenotice of such recording to, such personnel of it and its Affiliates.

 

(e)           ***Relationship******BetweenParties.***Section 3of the Agreement is amended by adding the following as subsection (e):

 

“(e)         **Relationship BetweenParties.******Absent a writtenagreement to the contrary:

 

(i)            It is not relying on any advice (whetherwritten or oral) of the other party regarding any Transaction, other than therepresentations expressly made by that other party in this Agreement and in theConfirmation in respect of that Transaction;

 

(ii)           In respect of each Transaction under thisAgreement,

 

6

----

 

(1)           it has the capacity to evaluate (internallyor through independent professional advice) that Transaction and has made itsown decision to enter into that Transaction;

 

(2)           it understands the terms, conditions andrisks of that Transaction and is willing to accept those terms and conditionsand to assume (financially and otherwise) those risks; and

 

(3)           the other party (a) is not acting as ainvestment or commodity trading advisor for it; (b) has not given to it(directly or indirectly through any other person) any assurance, guaranty orrepresentation whatsoever as to the merits (either legal, regulatory, tax,financial, accounting or otherwise) of that Transaction or any documentationrelated thereto; and (c) has not committed to unwind that Transaction.”

 

(f)            ***FDIC******Requirements.***

 

(i)            Corporate Authority. Each party (“X”) hereby represents andwarrants at all times until termination of this Agreement that X, byappropriate corporate action, is authorized under applicable law to enter intothis Agreement, as evidenced by the execution hereof by an officer of X of thelevel of vice president or higher.

 

(ii)           FIRREA Qualified Financial Contract. Each party recognizes and intends that eachTransaction entered into under this Agreement is, and shall constitute, a“qualified financial contract” as that term is defined in Section 212 ofthe Financial Institutions Reform, Recovery and Enforcement Act of 1989, as thesame may be amended, modified, or supplemented from time to time.

 

(g)           ***AdditionalRepresentations.***Inaddition to the representations made in Section 3 of the Agreement, eachparty hereby represents and warrants to the other party (which representationwill be deemed to be repeated by each party on each date on which a Transactionis entered into) as follows:

 

(1)           *No Agency**.*It is entering into this Agreement and eachTransaction as principal (and not as agent or in any other capacity, fiduciaryor otherwise).

 

(2)           *Eligible ContractParticipant**. It*is an “eligiblecontract participant” as defined in Section 1 a(12) of the U.S. CommodityExchange Act and/or an “eligible swap participant” as defined in Part 35of the regulations of the Commodity Futures Trading Commission.

 

(3)           *Line of**Business**.** *It hasentered into this Agreement (including each

 

7

----

 

Transaction evidenced hereby) in conjunction with itsline of business or the financing of its business. It represents and warrantsthat all transactions effected under this Agreement (i) will beappropriate in the conduct and management of its business, (ii) will beentered into for non-speculative purposes, and (iii) constitutetransactions entered into for purposes of hedging or managing risks related toits assets or liabilities as currently owned or incurred, or likely to be ownedor incurred in the conduct of its business.

 
| **Accepted and agreed:** | ** **                            |
|--------------------------|---------------------------------------|
|                     |                                  |
| **U.S. BANK**            | **43455 BPD LLC**                     |
| **NATIONAL ASSOCIATION** | Outdoor Channel Holdings Inc., Member |
| ** **               | ** **                            |
| By:                      | /s/ Maureen K. Sullivan               |   | By: |  /s/ Perry T.  Massie |   |
| Name:                    | Maureen  K. Sullivan                  |   | Name: | Perry T. Massie |   |
| Title:                   | Vice President                        |   | Title: | PRES, CEO |   |
|                          |                                       |  |  |  |  |  |  |  |  |

 

8

----