Document:

exv4w20

 

Exhibit 4.20

EXECUTION COPY

 

FIRST SUPPLEMENTAL INDENTURE TO FIRST MORTGAGE AND DEED OF TRUST

ITC MIDWEST LLC

TO

THE BANK OF NEW YORK TRUST COMPANY, N.A.

Trustee

 

Dated as of January 14, 2008

 

Supplementing the First Mortgage and Deed of Trust

Dated as of January 14, 2008

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS

Establishing a series of Securities designated 6.150% First Mortgage Bonds, Series A due 2038

 

This is a mortgage amendment, as defined in Minnesota Statutes, section 287.01, subdivision 2, and
as such it does not secure a new or an increased amount of debt.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	1	 
	 
	 	 	 	 
	Section 101. Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE TWO TITLE, FORM AND TERMS OF THE SERIES A BONDS
	 	 	4	 
	 
	 	 	 	 
	Section 201. Title of the Series A Bonds
	 	 	4	 
	 
	 	 	 	 
	Section 202. Form and Terms of the Series A Bonds
	 	 	4	 
	 
	 	 	 	 
	Section 203. Execution and Authentication
	 	 	6	 
	 
	 	 	 	 
	Section 204. Depositary for Global Securities
	 	 	6	 
	 
	 	 	 	 
	Section 205. Place of Payment
	 	 	6	 
	 
	 	 	 	 
	Section 206. Legends
	 	 	6	 
	 
	 	 	 	 
	Section 207. Restrictions on Transfer and Exchange of Series A Bonds
	 	 	9	 
	 
	 	 	 	 
	Section 208. Book-Entry Provisions for Restricted Global Securities and Regulation S Global
Securities
	 	 	9	 
	 
	 	 	 	 
	Section 209. Special Transfer Provisions
	 	 	12	 
	 
	 	 	 	 
	ARTICLE THREE REDEMPTION
	 	 	15	 
	 
	 	 	 	 
	ARTICLE FOUR MAINTENANCE AND RENEWAL
	 	 	15	 
	 
	 	 	 	 
	ARTICLE FIVE LIEN
	 	 	17	 
	 
	 	 	 	 
	ARTICLE SIX MISCELLANEOUS PROVISIONS
	 	 	17	 

i

 

          FIRST SUPPLEMENTAL INDENTURE, dated as of January 14, 2008, between ITC MIDWEST LLC, a limited
liability company organized and existing under the laws of the State of Michigan (herein called the
“Company”), having its principal office at 39500 Orchard Hill Place, Suite 200, Novi, Michigan
48375, and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association, as Trustee
(herein called the “Trustee”), the office of the Trustee at which on the date hereof its corporate
trust business is principally administered being 2 N. LaSalle, Suite 1020, Chicago, Illinois
60602.

RECITALS OF THE COMPANY

          WHEREAS, the Company has heretofore executed and delivered to the Trustee a First Mortgage and
Deed of Trust dated as of January 14, 2008 (the “Original Indenture”) providing for the issuance by
the Company from time to time of its bonds, notes and other evidence of indebtedness to be issued
in one or more series (in the Original Indenture and herein called the “Securities”) and to provide
security for the payment of the principal of and premium, if any, and interest, if any, on the
Securities; and

          WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved
to it under the provisions of the Original Indenture and pursuant to appropriate resolutions of the
Board of Directors, has duly determined to make, execute and deliver to the Trustee this First
Supplemental Indenture (the “First Supplemental Indenture”) to the Original Indenture as permitted
by Sections 2.01, 3.01, 4.01, 4.02 and 14.01 of the Original Indenture in order to establish the
form or terms of, and to provide for the creation and issuance of, a series of Securities to be
designated and in such initial aggregate principal amount as further set out in Section 202 hereof;
and

          WHEREAS, all things necessary to make the Securities of this first series, when executed by
the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued
upon the terms and subject to the conditions hereinafter and in the Original Indenture set forth
against payment therefor the valid, binding and legal obligations of the Company and to make this
First Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

          NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish the
terms of a series of Securities, and for and in consideration of the premises and of the covenants
contained in the Original Indenture and in this First Supplemental Indenture and for other good and
valuable consideration the receipt and sufficiency of which are hereby acknowledged, it is mutually
covenanted and agreed as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

     Section 101. Definitions. Each capitalized term that is used herein and is defined in the
Original Indenture shall have the meaning specified in the Original Indenture unless such term is
otherwise defined herein.

 

 

     “Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such Redemption Date, plus 0.30%.

     “Agent Member” has the meaning given to such term in Section 208(a) hereof.

     “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the Series A
Bonds to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities having a maturity
comparable to the remaining term of such Series A Bonds.

     “Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third business day preceding such Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal Reserve Bank of New
York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities,” or (ii) if
such release (or any successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations for such Redemption Date
(provided that, if there are at least four Reference Treasury Dealers, the average of the Reference
Treasury Dealer Quotations shall be calculated after excluding the highest and lowest such
Reference Treasury Dealer Quotations), or (B) if the Company obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.

     “Definitive Securities” has the meaning given to such term in Section 202(e) hereof.

     “Depositary” means DTC, together with any Person succeeding thereto by merger, consolidation
or acquisition of all or substantially all of its assets, including substantially all of its
securities payment and transfer operations.

     “Distribution Compliance Period” has the meaning given to such term in Section 202(c) hereof.

     “DTC” means The Depository Trust Company, a New York corporation, having a principal office at
55 Water Street, New York, New York 10041-0099.

     “Global Securities” has the meaning given to such term in Section 202(c) hereof.

     “Indenture” means the Original Indenture, as supplemented by this First Supplemental
Indenture.

     “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the
Company.

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     “Initial Purchasers” means Lehman Brothers Inc., Credit Suisse Securities (USA) LLC, Banc of
America Securities LLC, Comerica Securities, Inc. and J.P. Morgan Securities Inc.

     “Issue Date” means January 24, 2008, the date on which the Series A Bonds are originally
issued under this First Supplemental Indenture.

     “Non-U.S. Person” means any person not a “U.S. person” as defined in Regulation S.

     “Permanent Regulation S Global Security” has the meaning given to such term in Section 202(c)
hereof.

     “QIB” means “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

     “Reference Treasury Dealer” means each of Lehman Brothers Inc. and Credit Suisse Securities
(USA) LLC and their respective successors; provided, however, that if any of the foregoing is not a
primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the
Company will appoint another Primary Treasury Dealer as a substitute.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third
business day next preceding such Redemption Date.

     “Regulation S” means Regulation S promulgated under the Securities Act.

     “Regulation S Definitive Security” has the meaning given to such term in Section 208(c)
hereof.

     “Regulation S Global Security” has the meaning given to such term in Section 202(c) hereof.

     “Regulation S Securities” means Series A Bonds offered and sold as part of their initial
distribution to persons outside the United States in accordance with Regulation S under the
Securities Act.

     “Restricted Definitive Securities” means each of the Definitive Securities that are required
to bear the Restricted Legend.

     “Restricted Global Security” has the meaning given to such term in Section 202(b) hereof.

     “Restricted Legend” has the meaning given to such term in Section 206(a) hereof.

     “Restricted Securities” has the meaning given to such term in Section 206(a) hereof.

     “Rule 144A” means Rule 144A under the Securities Act.

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     “Rule 144A Definitive Securities” has the meaning given to such term in Section 208(c) hereof.

     “Series A Bonds” has the meaning given to such term in Section 201 hereof.

     “Temporary Regulation S Global Security” has the meaning given to such term in Section 202(c)
hereof.

ARTICLE TWO

TITLE, FORM AND TERMS OF THE SERIES A BONDS

     Section 201. Title of the Series A Bonds. This First Supplemental Indenture hereby creates
a series of Securities designated as the “6.150% First Mortgage Bonds, Series A, due January 31,
2038” of the Company (the “Series A Bonds”).

     Section 202. Form and Terms of the Series A Bonds. For purposes of the Original Indenture,
the Series A Bonds shall constitute a single series of Securities and may be issued in an unlimited
principal aggregate amount, although the initial issuance of the Series A Bonds shall be in the
principal amount of $175,000,000. In accordance with Sections 2.01 and 3.01 of the Original
Indenture, this First Supplemental Indenture hereby provides that the Series A Bonds (x) shall be
payable in such amounts and in the manner as set forth therein (the form of which is substantially
as set forth in Exhibit B attached hereto) and in the Original Indenture at the rates
specified in the Series A Bonds, (y) and shall have the form and such other terms as set forth in
this First Supplemental Indenture, the Series A Bonds and the Original Indenture (except to the
extent specifically provided for in this First Supplemental Indenture or in the Series A Bonds).

     (a) The Series A Bonds issued in transactions exempt from registration under the Securities
Act shall be substantially in the form of Exhibit B attached hereto. The Series A Bonds
may have such notations, legends or endorsements approved as to form by the Company and required,
as applicable, by law, stock exchange or depository rule, agreements to which the Company is
subject and/or usage. The terms of the Series A Bonds set forth in Exhibit B are herein
incorporated by reference and are part of the terms of this First Supplemental Indenture.

     (b) The Series A Bonds will be offered and sold by the Company pursuant to the terms of a
purchase agreement and will be resold initially only to (i) QIBs in reliance on Rule 144A and (ii)
Non-U.S. Persons in reliance on Regulation S. Each such purchaser of the Series A Bonds so
initially resold will be deemed by their acceptance of the Series A Bonds to have represented and
agreed as follows: it (A) (i) is a QIB, (ii) is aware that the sale to it is being made in
reliance on Rule 144A and (iii) is acquiring the Series A Bonds for its own account or for the
account of a QIB or (B) is not a U.S. person and is purchasing the Series A Bonds in an offshore
transaction pursuant to Regulation S.

     (c) The Series A Bonds initially resold in reliance on Rule 144A shall be issued, and will
only be available, in the form of one or more Global Securities substantially in the form of
Exhibit B attached hereto with such applicable legends as are provided for in Sections 206
and 208 (each, a “Restricted Global Security”) duly executed by the Company and duly

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authenticated by the Trustee as herein provided. The Restricted Global Security shall be in definitive, fully
registered form without coupons and be registered in the name of the Depositary or a nominee of the
Depositary and deposited with the Trustee, at its corporate trust office, as custodian for the
Depositary. The aggregate principal amount of any Restricted Global Security may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as provided in Section
209 hereof, which adjustments shall be conclusive as to the aggregate principal amount of any such
Global Security.

     (d) The Series A Bonds initially resold outside the United States in reliance on Regulation S
shall be issued, and will only be available, initially in the form of one or more temporary global
Securities substantially in the form of Exhibit B hereto with such applicable legends as
are provided for in Sections 206 and 208 (the “Temporary Regulation S Global Security”) duly
executed by the Company and duly authenticated by the Trustee as herein provided. Except as herein
provided, beneficial ownership interests in the Temporary Regulation S Global Security shall not be
exchangeable for interests in the Restricted Global Security, the permanent Regulation S Global
Securities substantially in the form of Exhibit B hereto (each, a “Permanent Regulation S
Global Security”) duly executed by the Company and duly authenticated by the Trustee as herein
provided or a Definitive Security prior to the expiration of the Distribution Compliance period and
then only upon certification in accordance with Regulation S under the Securities Act, in form
reasonably satisfactory to the Trustee, to the effect that beneficial ownership interests in such
Temporary Regulation S Global Security are owned either by Non-U.S. Persons or U.S. Persons who
purchased such interests in a transaction that did not require registration under the Securities
Act. The Temporary Regulation S Global Security and the Permanent Regulation S Global Security are
collectively referred to herein as the “Regulation S Global Security.” The Regulation S Global
Securities shall be in definitive, fully registered form without coupons and be registered in the
name of the Depositary or a nominee of the Depositary and deposited with the Trustee, at its
corporate trust office, as custodian for the Depositary, for credit initially and during the
Distribution Compliance Period to the respective accounts of beneficial owners of such Series A
Bonds (or to such other accounts as they may direct) at Euroclear Bank S.A./N.V. or Clearstream
Banking, Société Anonyme. As used herein, the term “Distribution Compliance Period,” with respect
to the Regulation S Global Securities offered and sold in reliance on Regulation S, means the
period of 40 consecutive days beginning on and including the later of (i) the day on which the
Series A Bonds are first offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the Issue Date. The aggregate principal amount of any
Regulation S Global Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as provided in Section 209 hereof, which adjustments shall be
conclusive as to the aggregate principal amount of any such Global Security. The Restricted Global
Security and Regulation S Global Security are sometimes collectively referred to herein as the
“Global Securities.”

     (e) Series A Bonds issued pursuant to Section 208(c) in exchange for interests in a Global
Security shall be issued substantially in the form of Exhibit B hereto in definitive, fully
registered form without interest coupons, but shall not bear the legend for Global Securities
in Section 208(b) (the “Definitive Securities”). Except as provided herein, owners of beneficial
interests in Global Securities shall not be entitled to physical delivery of Definitive Securities.

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     Section 203. Execution and Authentication. The Trustee, upon a Company Order and pursuant
to the terms of the Original Indenture and this First Supplemental Indenture, shall authenticate
and deliver Series A Bonds for original issue in an initial aggregate principal amount of
$175,000,000. Such Company Order shall specify the amount of the Series A Bonds to be
authenticated, the date on which the original issue of Series A Bonds is to be authenticated and
the aggregate principal amount of Series A Bonds outstanding on the date of authentication. All of
the Series A Bonds issued under the Indenture shall be treated as a single series for all purposes
under the Indenture, including, without limitation, waivers, amendments, and offers to purchase.

     Section 204. Depositary for Global Securities. The Depositary for the Series A Bonds shall
be DTC.

     Section 205. Place of Payment. The Place of Payment in respect of the Series A Bonds will
be at the principal office or agency of the Company in The City of New York, State of New York or
at the office or agency of the Trustee in The City of New York, State of New York which, at the
date hereof, is located at c/o The Bank of New York, Trust Services Window, 101 Barclay Street, New
York, New York 10286.

     Section 206. Legends.

     (a) All Series A Bonds issued pursuant to this First Supplemental Indenture shall be
“Restricted Securities” and shall bear a legend to the following effect (the “Restricted Legend”)
except as permitted by the following paragraph (b) or (c), as appropriate:

“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS
HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED

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UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, IF THE COMPANY SO REQUESTS) OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

Each Restricted Definitive Security shall bear the following legend on the face thereof:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER
AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE
TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

Each Temporary Regulation S Global Security shall bear the following legend on the face thereof:

“EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL
SECURITY OR ANY OTHER SECURITY REPRESENTING AN INTEREST IN THE BONDS REPRESENTED HEREBY
WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(B)(2) OF
REGULATION  S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY
SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S.
PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD,
PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM BANKING, SOCIÉTÉ
ANONYME AND ONLY (1) TO THE COMPANY, (2) WITHIN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES IN A
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (1) THROUGH (4)
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND
OTHER JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY

7

 

REGULATIONS S GLOBAL SECURITY WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF
THEN APPLICABLE.

BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION  S GLOBAL SECURITY MAY BE EXCHANGED FOR
INTERESTS IN A RESTRICTED GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION
WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE 144A, AND (2) THE TRANSFEROR OF
THE TEMPORARY REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN
CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION  S
GLOBAL SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES
TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO
IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A AND (C) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO
TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER
BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE
TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE  903
OR 904 OF REGULATION  S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR
TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST TRANSFERRED
WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM BANKING,
SOCIÉTÉ ANONYME.”

     (b) Upon any sale or transfer of a Restricted Security pursuant to Rule 144 under the
Securities Act, the Depositary shall, subject to approval by the Company and the provisions of
Section 3.05 of the Original Indenture, permit the Holder thereof to request the issuance of a
Series A Bond that does not bear one or more of the legends set forth above and rescind any
restrictions on the transfer of such Restricted Security, if the sale or exchange was made in
reliance on Rule 144 and the Holder certifies to that effect in writing to the Depositary.

     (c) Upon a sale or transfer after the expiration of the Distribution Compliance Period of any
Series A Bonds acquired pursuant to Regulation S, all requirements that such Series A Bonds bear
the Restricted Legend shall cease to apply (but requirements requiring such Series A Bonds to be in
global form and bear the global legend in Section 208 shall continue to apply).

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     Section 207. Restrictions on Transfer and Exchange of Series A Bonds.

     All Series A Bonds issued upon any registration of transfer or exchange of Series A Bonds
shall be valid obligations of the Company, evidencing the same interest therein, and entitled to
the same benefits under the Original Indenture and this First Supplemental Indenture, as the
Series A Bonds surrendered upon such registration of transfer or exchange.

     A Holder may transfer a Series A Bond, or request that a Series A Bond be exchanged for
Series A Bonds in authorized denominations and in an aggregate principal amount equal to the
principal amount of such Series A Bond surrendered for exchange of other authorized denominations,
by surrender of such Series A Bonds to the Trustee with the form of transfer notice thereon duly
completed and executed, and otherwise complying with the terms of the Original Indenture and this
First Supplemental Indenture, including providing evidence of compliance with any restrictions on
transfer, in form satisfactory to the Company, the Trustee and the Security Registrar. No such
transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only
upon, final acceptance and registration of the transfer by the Security Registrar in the Security
Register. Prior to the registration of any transfer of a Series A Bond by a Holder as provided
herein, the Company, the Security Registrar, the Paying Agent and the Trustee shall deem and treat
the person in whose name the Series A Bond is registered on the Security Register as the absolute
owner and holder thereof for the purpose of receiving payment of all amounts payable with respect
to such Series A Bond and for all other purposes, and none of the Company, the Security Registrar,
the Paying Agent or the Trustee shall be affected by any notice to the contrary. Furthermore, the
Depositary shall, by acceptance of a Global Security, agree that transfers of beneficial interests
in such Global Security may be effected only through a book-entry system maintained by the
Depositary (or its agent) and that ownership of a beneficial interest in the Global Security shall
be required to be reflected in a book-entry. When Series A Bonds are presented to the Security
Registrar with a request to register the transfer thereof or to exchange them for other authorized
denominations of a Series A Bond in a principal amount equal to the aggregate principal amount of
Series A Bonds surrendered for exchange, the Security Registrar shall register the transfer or make
the exchange as requested if its requirements for such transactions are met.

     To permit registrations of transfers and exchanges in accordance with the terms, conditions
and restrictions hereof, the Company shall execute, and the Trustee shall authenticate, Series A
Bonds at the Security Registrar’s request. No service charge shall be made to a Holder for any
registration of transfer or exchange of Series A Bonds, but the Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Series A Bonds. All Series A Bonds surrendered for registration of
transfer or exchange shall be cancelled by the Trustee in accordance with its then customary
procedures.

     Section 208. Book-Entry Provisions for Restricted Global Securities and Regulation S
Global Securities.

     (a) Members of, or participants in, DTC (“Agent Members”) shall have no rights under the
Original Indenture, this First Supplemental Indenture and the Series A Bonds with respect to any
Global Security held on their behalf by DTC, or its nominee, and DTC or its

9

 

nominee may be treated
by the Company, the Trustee and any agent of the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Trustee from giving effect to any written
certification, proxy or other authorization furnished by DTC or shall impair, as between DTC and
its Agent Members, the operation of customary practices governing the exercise of the rights of a
holder of any Global Security. Upon the issuance of any Global Security, the Security Registrar or
its duly appointed agent shall record DTC or its nominee as the registered holder of such Global
Security.

     (b) Transfers of any Global Security shall be limited to transfers of such Restricted Global
Security or Regulation S Global Security in whole, but not in part, to the Depositary. Each Global
Security shall bear the following legend:

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON MADE TO
CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

Beneficial interests in the Restricted Global Security and any Regulation S Global Security may be
transferred in accordance with the rules and procedures of DTC and the provisions of Section 209.

     (c) Beneficial interests in a Restricted Global Security or a Regulation S Global Security
shall be delivered to all beneficial owners thereof in the form of Rule 144A Definitive Securities
(“Rule 144A Definitive Securities”) or Regulation S Definitive Securities (“Regulation S Definitive
Securities”), as the case may be, if (i) DTC notifies the Trustee that it is unwilling or unable to
continue as Depositary for such Restricted Global Security or Regulation S Global Security, as the
case may be, and a successor depositary is not appointed by the Trustee within 90 days of such
notice, and (ii) after the occurrence and during the
continuance of an Event of Default, owners of beneficial interests in a Global Security with a
principal amount aggregating not less than a majority of the outstanding principal amount of the
Global Security advise the Trustee, the Company and DTC through Agent Members in writing that the
continuation of a book-entry system through DTC or its successor is no longer in their best
interests.

10

 

     (d) Any beneficial interest in one of the Global Securities that is transferred to a Person
who takes delivery in the form of an interest in another Global Security will, upon such transfer,
cease to be an interest in such Global Security and become an interest in the other Global Security
and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Security for as long as it
remains such an interest.

     (e) In connection with the transfer of an entire Restricted Global Security or an entire
Regulation S Global Security to the beneficial owners thereof pursuant to paragraph (c) of this
Section 208, such Restricted Global Security or Regulation S Global Security, as the case may be,
shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such Restricted Global Security or Regulation S Global Security, as the case
may be, an equal aggregate principal amount of Rule 144A Definitive Securities or Regulation S
Definitive Securities, as the case may be, of authorized denominations. None of the Company, the
Security Registrar, the Paying Agent or the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in relying on, such
registration instructions. Upon the issuance of Rule 144A Definitive Securities or Regulation S
Definitive Securities, as the case may be, the Company and the Trustee shall recognize the Person
in whose name the Rule 144A Definitive Securities or Regulation S Definitive Securities, as the
case may be, are registered in the Security Register as Holders hereunder.

     (f) Any Rule 144A Definitive Securities or Regulation S Definitive Securities, as the case may
be, delivered in exchange for an interest in the Restricted Global Security pursuant to paragraph
(c) of this Section 208 shall, except as otherwise provided by paragraph (d) of Section 209, bear
the Restricted Legend.

     (g) Prior to the expiration of the Distribution Compliance Period, any Regulation S Definitive
Security delivered in exchange for an interest in a Regulation S Global Security pursuant to
paragraph (c) of this Section 208 shall bear the Restricted Legend.

     (h) The registered holder of any Restricted Global Security or Regulation S Global Security
may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is entitled to take under
the Original Indenture or this First Supplemental Indenture or the Series A Bonds.

     (i) Neither the Company nor the Trustee shall be liable if the Trustee or the Company is
unable to locate a qualified successor clearing agency.

11

 

     Section 209. Special Transfer Provisions.

     The following provisions shall also apply to the Series A Bonds:

     (a) Transfers to QIBs. The following provisions shall apply with respect to the
registration of any proposed transfer of a Series A Bond required to bear the Restricted Legend to
a QIB (excluding Non-U.S. Persons):

     (i) The Security Registrar shall register the transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the form of Series A Bond
stating, or has otherwise advised the Company, the Trustee and the Security Registrar in
writing, that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Series A Bond
stating, or has otherwise advised the Company, the Trustee and the Security Registrar in
writing, that it is purchasing the Series A Bond for its own account or an account with
respect to which it exercises sole investment discretion and that it, or the Person on whose
behalf it is acting with respect to any such account, is a QIB within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

     (ii) Upon receipt by the Security Registrar of the documents required by clause (i)
above and instructions given in accordance with DTC’s and the Security Registrar’s
procedures therefor, the Security Registrar shall reflect on its books and records the date
of such transfer and an increase in the principal amount of a Restricted Global Security in
an amount equal to the principal amount of the interests in such Regulation S Global
Security being transferred, and the Trustee shall decrease the amount of such Regulation S
Global Security so transferred.

     (b) Transfers of Interests in the Temporary Regulation S Global Security, the Permanent
Regulation S Global Security or the Regulation S Definitive Securities.

     (i) After the expiration of the Distribution Compliance Period, the Security Registrar
shall register any transfer of interests in any Regulation S Global Security or Regulation S
Definitive Security without requiring any additional certification.

     (ii) Until the expiration of the Distribution Compliance Period, interests in the
Temporary Regulation S Global Security may only be sold, pledged or transferred through
Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, Société Anonyme
(“Clearstream”) (as indirect participants in the Depositary) or Agent Members acting for and
on behalf of Euroclear and Clearstream only (x) for interests in a Permanent Regulation S
Global Security and then only upon certification in form reasonably satisfactory to the
Trustee that interests in such Temporary Regulation S Global Security are owned by either
Non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not
require registration under the Securities Act or

12

 

(y) for interests in the Restricted Global Security if the transferor first delivers to
the Trustee a written transfer notice to the effect that the Series A Bonds are being
transferred to a person (A) who the transferor reasonably believes to be a QIB;
(B) purchasing for its own account or the account of a QIB in a transaction meeting the
requirements of Rule 144A; and (C) in accordance with all applicable securities laws of the
states of the United States and other jurisdictions.

     (c) Transfers to Non-U.S. Persons at Any Time. The following provisions shall apply
with respect to any registration of any transfer of a Series A Bond to a Non-U.S. Person:

     (i) Prior to the expiration of the Distribution Compliance Period, the Security
Registrar shall register any proposed transfer of a Series A Bond to a Non-U.S. Person upon
receipt of a certificate substantially in the form set forth as Exhibit C hereto
from the proposed transferor.

     (ii) After the expiration of the Distribution Compliance Period, the Security Registrar
shall register any proposed transfer to any Non-U.S. Person upon receipt of a certificate
substantially in the form of Exhibit C from the proposed transferor. The Security
Registrar shall promptly send a copy of such certificate to the Company.

     (iii) Upon receipt by the Security Registrar of (x) the documents, if any, required by
clause (ii) and (y) instructions in accordance with DTC’s and the Security Registrar’s
procedures, the Security Registrar shall reflect on its books and records the date of such
transfer and a decrease in the principal amount of such Restricted Global Security in an
amount equal to the principal amount of the beneficial interest in such Restricted Global
Security to be transferred, and, upon receipt by the Security Registrar of instructions
given in accordance with DTC’s and the Security Registrar’s procedures, the Security
Registrar shall reflect on its books and records the date and an increase in the principal
amount of the Regulation S Global Security in an amount equal to the principal amount of the
Restricted Global Security to be transferred, and the Trustee shall decrease the amount of
such Restricted Global Security.

     (d) Restricted Legend. Upon the transfer, exchange or replacement of Series A Bonds
not bearing the Restricted Legend, the Security Registrar shall deliver Series A Bonds that do not
bear the Restricted Legend. Upon the transfer, exchange or replacement of Series A Bonds bearing
the Restricted Legend, the Security Registrar shall deliver only Series A Bonds that bear the
Restricted Legend unless there is delivered to the Security Registrar an opinion of counsel to the
effect that neither such legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.

     (e) General. By acceptance of any Series A Bond bearing the Restricted Legend, each
Holder of such Series A Bond acknowledges the restrictions on transfer of such Series A Bond set
forth in such Restricted Legend and otherwise in this First Supplemental Indenture and agrees that
it will transfer such Series A Bond only as provided in such Restricted Legend and otherwise in
this First Supplemental Indenture. In connection with any transfer of Series A Bonds, each Holder
agrees by its acceptance of the Series A Bonds to furnish the Security Registrar or the Trustee
such certifications, legal opinions or other information as either of them

13

 

may reasonably require to confirm that such transfer is being made pursuant to an exemption
from, or a transaction not subject to, the registration requirements of the Securities Act and in
accordance with the terms and provisions of this Article Two; provided that the Security Registrar
shall not be required to determine the sufficiency of any such certifications, legal opinions or
other information.

     Until such time as no Series A Bonds remain Outstanding, the Security Registrar shall retain
copies of all letters, notices and other written communications received pursuant to Section 208 or
this Section 209. The Trustee, if not the Security Registrar at such time, shall have the right to
inspect and make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Security Registrar.

     The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this First Supplemental Indenture or under
applicable law with respect to any transfer of any interest in any Series A Bonds (including any
transfers between or among Agent Members or beneficial owners of interests in any Global Security)
other than to require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when required by the terms of, this First Supplemental
Indenture, and to examine the same to determine substantial compliance as to form with the
requirements hereof.

     In the event that any Global Security or any portion thereof is exchanged for Definitive
Securities, such other Definitive Securities may be exchanged (by transfer or otherwise) for
Definitive Securities or for beneficial interests in a Global Security (if any is then outstanding)
only in accordance with procedures substantially consistent with this Article Two (including any
certification requirements) and applicable procedures adopted by the Company and the Trustee.

     Until definitive Series A Bonds are ready for delivery, the Company may use temporary Series A
Bonds. Temporary Series A Bonds shall be substantially in the form of definitive Series A Bonds
but may have variations that the Company considers appropriate for temporary Series A Bonds.
Without unreasonable delay, the Company shall deliver definitive Series A Bonds in exchange for
temporary Series A Bonds.

     The Company may issue some or all of the Securities in temporary or permanent global form.
The Company may issue a Global Security only to the Depositary. The Depositary may transfer a
Global Security only to its nominee or to a successor Depositary. A Global Security shall
represent the amount of Series A Bonds specified in the Global Security. A Global Security may
have variations that the Depositary requires or that the Company considers appropriate for such a
security.

     Beneficial owners of part or all of a Global Security are subject to the rules of the
Depository as in effect from time to time.

     The Company, the Trustee and their agents shall not be responsible for any acts or omissions
of a Depositary, for any Depositary records of beneficial ownership interests or for any
transactions between or among the Depositary, Agent Members and beneficial owners.

14

 

     The Company at any time may deliver Series A Bonds to the Trustee for cancellation. The
Paying Agent, if not the Trustee, shall forward to the Trustee any Series A Bonds surrendered to
them for payment or conversion. The Trustee shall cancel all Series A Bonds surrendered for
registration of transfer, exchange, payment or cancellation and shall dispose of cancelled Series A
Bonds according to its then customary practices. The Company may not issue new Series A Bonds to
replace Series A Bonds that it has paid or which have been delivered to the Trustee for
cancellation.

ARTICLE THREE

REDEMPTION

     The Series A Bonds may be redeemed, in accordance with the procedures set forth in the
Original Indenture, on not less than 30 nor more than 60 days’ notice prior to the Redemption Date
to the Holders, given as provided in the Original Indenture, as a whole or in part, at any time at
the option of the Company, at a Redemption Price equal to the greater of (i) 100% of the principal
amount of the Series A Bonds being redeemed and (ii) as determined by an Independent Investment
Banker, the sum of the present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued and unpaid
interest thereon to, but excluding, the Redemption Date; provided, however, that installments of
interest on the Series A Bonds that are due and payable on an interest payment date falling on or
prior to the relevant Redemption Date will be payable to the Holders of such Series A Bonds
registered as such at the close of business on the relevant record date according to the terms and
provisions of the Original Indenture.

     In the event of a partial redemption of the Series A Bonds, the Company will issue new
Series A Bonds for the unredeemed portion in the name of each Holder of the partially redeemed
Series A Bonds.

     If less than all of the Series A Bonds are to be redeemed, the Series A Bonds will be redeemed
by lot, pro rata by the Trustee or by such method of selection as the Trustee shall deem fair and
appropriate and which may, in any case, provide for the selection for redemption of Series A Bonds
and portions of Series A Bonds in amounts of $2,000 or any integral multiples of $1,000 in excess
thereof.

     Unless the Company defaults in payment of the Redemption Price, the portion of Series A Bonds
called for redemption will no longer accrue interest on and after the Redemption Date.

ARTICLE FOUR

MAINTENANCE AND RENEWAL

     (a) The Company covenants and agrees that, so long as any of the Series A Bonds are
Outstanding, the Company will expend during each calendar year, and certify to the Trustee in

15

 

an Officer’s Certificate, an amount not less than 2.00% of the average amount of depreciable
property of the Company at the beginning and at the end of such calendar year for one or more of
the following purposes:

	 	(i)	 	capital expenditures for the maintenance and repair of the utility properties
of the Company subject to the Lien of the Original Indenture;
	 
	 	(ii)	 	the construction or acquisition of Property Additions on which the Original
Indenture is a first Lien, subject only to Permitted Liens and Prepaid Liens; or
	 
	 	(iii)	 	the retirement, through purchase, payment or redemption, of Securities issued
under and secured by the Indenture (including any future supplemental indenture
pursuant to the Original Indenture).

     (b) The term “amount of depreciable property” shall mean as of any date the amount of Property
Additions included at such date on the books of the Company which is depreciable, as determined in
accordance with generally accepted accounting principles in the United States. The average of the
amount of depreciable property shall mean the arithmetical average of the amount of depreciable
property at the beginning, and the amount thereof at the end, of such calendar year. Partial years
shall be prorated.

     If, in any calendar year, the required expenditures for the foregoing purposes are not made,
the Company shall deposit with the Trustee on or before the first day of February next succeeding
the close of such calendar year a sum in cash to the extent of any deficiency, after deducting
(subject to the terms of the Indenture) any eligible credit for unused excess expenditures
previously made for such purposes. Such cash may be applied to the redemption at the applicable
Redemption Price, or to the repurchase, of Securities, or may be withdrawn to the extent of 100% of
Property Additions.

     (c) Excess expenditures in any calendar year may be used to comply with the requirements of
any subsequent year or years and Property Additions may be certified to comply with the provisions
of clause (a)(ii) above; provided, that Property Additions so used, and Securities retired through
expenditures so used, cannot be used for other purposes under this First Supplemental Indenture;
provided, further that, (i) no Retired Securities or expenditures for Funded Property which shall
have been made the basis for authentication of Securities or the release of Mortgaged Property or
the withdrawal of deposited cash or Securities or any other amounts under any other provision of
the Indenture, or which shall have been made out of any insurance moneys or moneys received from
the condemnation, sale or other disposition of any of the Company’s property subject to the Lien of
the Indenture, or which shall have previously been used or applied or certified to the Trustee to
comply with this Article Four or any other provision of the Indenture and (ii) no retirement of
Securities which shall have been made with moneys applied to such purpose pursuant to any provision
of this Article Four or of Section 4.04 or 8.06 of the Original Indenture, shall be certified or
used or applied for the purpose of complying with this Article or withdrawing any moneys paid to
the Trustee pursuant to this Article Four. This Article Four shall not require the annual
retirement by the Company of any specific amount of Outstanding Securities.

16

 

     (d) So long as any of the Series A Bonds are Outstanding, on or before the first day of
February of each year beginning February 1, 2009, the Company shall deliver to the Trustee an
Officer’s Certificate showing in reasonable detail: (1) the Company’s expenditures pursuant to
each of subclauses (a)(i), (a)(ii) and (a)(iii) above, or otherwise deposited with the Trustee
pursuant to this Article Four, (2) any eligible credit for excess expenditures from prior periods
and the extent to which the Company elects to have such excess applied to the period next preceding
delivery of such Officer’s Certificate, and (3) the amount of cash the Company is depositing with
the Trustee concurrently with the delivery of such Officer’s Certificate to comply with the
requirements of this Article Four. Such Officer’s Certificate shall also state that it complies
with the requirements of this Article Four.

     (e) At the option of the Company, any moneys paid to and held by the Trustee under the
provisions of subclause (b) of this Section shall, upon the written request of the Company pursuant
to an Officer’s Certificate, (1) be applied by the Trustee to the purchase in the open market of
Securities of any series, at not exceeding the then applicable Redemption Price, if any, at which
Securities of said series may then be redeemed or (2) be paid to or upon the order of the Company
to the extent of (i) the principal amount of Securities of said series purchased or paid by the
Company and delivered to the Trustee, cancelled or for cancellation and (ii) the accrued interest
and the premium, if any, theretofore paid to the Trustee, as hereinabove provided, on such
principal amount of Securities. The Company hereby covenants and agrees that it will pay to the
Trustee from time to time in cash such additional sums, if any, as shall be paid or required to be
paid by the Trustee as or for accrued interest and premium, if any, in respect of any Securities
purchased or redeemed pursuant to the provisions of this Section.

     (f) Any and all Securities, the retirement (through payment or purchase) of which shall be
certified to the Trustee in compliance with the provisions of this Article Four, shall be delivered
to the Trustee at or before the time the same shall be so certified and shall thereupon be
cancelled and destroyed by the Trustee, unless theretofore cancelled and destroyed. All other
Securities received by the Trustee pursuant to any provision of this Article Four shall thereupon
be cancelled and destroyed by the Trustee.

ARTICLE FIVE

LIEN

     The Series A Bonds are entitled to the benefit of the Lien under the Indenture, including,
without limitation, the Lien on the property referred to in Exhibit A to the Original Indenture
(which is attached hereto as Exhibit A).

ARTICLE SIX

MISCELLANEOUS PROVISIONS

     The Trustee makes no undertaking or representations in respect of, and shall not be
responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this
First Supplemental Indenture, the Series A Bonds or the proper authorization or the due execution
hereof by the Company or for or in respect of the recitals and statements contained

17

 

herein, all of which recitals and statements are made solely by the Company. The Trustee
shall not be accountable for the use or the application by the Company of the Series A Bonds or of
the proceeds thereof.

     Except as expressly amended and supplemented hereby, the Original Indenture shall continue in
full force and effect in accordance with the provisions thereof and the Original Indenture is in
all respects hereby ratified and confirmed. This First Supplemental Indenture and all of its
provisions shall be deemed a part of the Original Indenture in the manner and to the extent herein
and therein provided.

     This First Supplemental Indenture and the Series A Bonds shall be governed by and construed in
accordance with the law of the State of New York, except that (i) if this First Supplemental
Indenture shall become qualified and shall become subject to the Trust Indenture Act, this First
Supplemental Indenture and the Series A Bonds shall be governed by the Trust Indenture Act to the
extent that the Trust Indenture Act shall be applicable and (ii) if the law of any jurisdiction
wherein any portion of the Mortgaged Property is located shall govern the creation of a mortgage
lien on and security interest in, or perfection, priority or enforcement of the Lien of the
Indenture or exercise of remedies with respect to, such portion of the Mortgaged Property, this
First Supplemental Indenture and the Series A Bonds shall be governed by the law of such
jurisdiction to the extent mandatory.

     This First Supplemental Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

18

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be
duly executed as of the day and year first above written.

	 	 	 	 	 
	 	ITC MIDWEST LLC

 	 
	 	By:  	ITC Holdings Corp.,
 	 
	 	 	as Sole Member 	 
	 	 	 
	 	By:  	     /s/ Daniel J. Oginsky
 	 
	 	 	Name:  	Daniel J. Oginsky 	 
	 	 	Title:  	Vice President and General Counsel 	 
	 
	 	THE BANK OF NEW YORK TRUST

COMPANY, N.A., as Trustee

 	 
	 	By:  	/s/ Roxanne Ellwanger
 	 
	 	 	Name:  	Roxane Ellwanger 	 
	 	 	Title:  	Assistant Vice President 	 

 

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF MICHIGAN

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	ss.:
	 	 
	COUNTY OF OAKLAND

	 	 	)	 	 	 	 	 

     On this 14th  day of January 2008, before me personally appeared
Daniel J. Oginsky, to me known to be Vice President and General Counsel of ITC
Holdings Corp., the sole member of ITC MIDWEST LLC, one of the entities that executed the within
and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and
deed of said company, for the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of
said company.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
first above written.

/s/ Janet E. Reed___

                    , Notary Public

Livingston        County, Michigan

Acting in Oakland County, Michigan

My Commission expires: August 26, 2008

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	STATE OF ILLINOIS
	 	 	)	 	 	 	 	 	 	 	 	 
	 
	 	 	)	 	 	ss.:
	 	 	 	 
	COUNTY OF COOK
	 	 	)	 	 	 	 	 	 	 	 	 

     On the 14th  day of January in the year 2008 before me, the undersigned,
personally appeared Roxane Ellwanger, Assistant Vice President of The Bank of New York Trust
Company, N.A., personally known to me or proved to me on the basis of satisfactory evidence to be
the individual whose name is subscribed to the within instrument and acknowledged to me that she
executed the same in her capacity, and that by her signature on the instrument, the individual or
the person upon behalf of which the individual acted, executed the instrument.

	 	 	 
	/s/ A. Hernandez
 

Print Name: A. Hernandez

	 	 

Notary Public in and for the State of Illinois

Commission expires: 7/8/2010

Drafted by:

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, New York 10005

When recorded return to:

The Bank of New York Trust Company, N.A.

2 N. LaSalle, Suite 1020

Chicago, Illinois 60602

Attention: Global Corporate Trust

 

EXHIBIT A

REAL PROPERTY

State of Illinois

State of Iowa

State of Minnesota

State of Missouri

A-1

 

EXHIBIT B

[FORM OF FACE OF SERIES A BONDS]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON MADE TO
CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]*

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY,
IF THE COMPANY SO REQUESTS) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT

 

			
	*	 	To be included on the face of each Global Security.

B-1

 

UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.]**

[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR AND TRANSFER
AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]***

[EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR
ANY OTHER SECURITY REPRESENTING AN INTEREST IN THE BONDS REPRESENTED HEREBY WHICH DO NOT CONTAIN A
LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION
COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(B)(2) OF REGULATION  S UNDER THE SECURITIES ACT)
AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH
INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH
40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.V. OR CLEARSTREAM
BANKING, SOCIÉTÉ ANONYME AND ONLY (1) TO THE COMPANY, (2) WITHIN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (1) THROUGH (4) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER
JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATIONS S GLOBAL SECURITY WILL NOTIFY
ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION  S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS
IN A RESTRICTED GLOBAL SECURITY

 

			
	**	 	To be included on the face of each Restricted Global
Security and Restricted Definitive Security.
	 
	***	 	To be included on the face of each Restricted
Definitive Security.

B-2

 

ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH
RULE 144A, AND (2) THE TRANSFEROR OF THE TEMPORARY REGULATION S GLOBAL SECURITY FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE
REGULATION  S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO
IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A AND (C) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES
DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER
THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS
TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT
IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE  903 OR 904 OF REGULATION  S OR RULE 144 (IF
AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION
COMPLIANCE PERIOD, THE INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR
BANK S.A./N.V. OR CLEARSTREAM BANKING, SOCIÉTÉ ANONYME.]****

 

			
	****	 	To be included on the face of each Temporary
Regulation S Global Security.

B-3

 

ITC MIDWEST LLC

6.150% FIRST MORTGAGE BONDS, SERIES A DUE JANUARY 31, 2038

	 	 	 
	 

	 	$                                        
	No.                     

	 	CUSIP                                         
	 

	 	ISIN                                         

     ITC MIDWEST LLC, a limited liability company duly organized and existing under the laws of the
State of Michigan (herein called the “Company,” which term includes any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., the
principal sum of $                     on January 31, 2038, and to pay interest thereon from January
24, 2008, or from the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually in arrears on January 31 and July 31 in each year, commencing July 31,
2008, at the rate per annum provided in the title hereof, until the principal hereof is paid or
made available for payment, and, subject to the terms of the Indenture hereinafter referenced, at
the rate of 6.150% per annum on any overdue principal and premium and (to the extent that the
payment of such interest shall be legally enforceable) on any overdue installment of interest, from
the dates such amounts are due until they are paid or made available for payment, and such interest
shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name
this Series A Bond is registered at the close of business on the Regular Record Date for such
interest, which shall be the January 15 or July 15 (whether or not a Business Day), as the case may
be, immediately preceding such Interest Payment Date. Any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and
may be paid to the Person in whose name this Series A Bond is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given as provided in the Indenture. Interest will be computed on the basis
of a 360-day year of 30-day months.

     Payment of the principal of (and premium, if any) and interest on the Series A Bonds will be
made at the office or agency of the Company maintained for that purpose in the City of New York,
State of New York or at the office or place of business of the Trustee or its successor in trust
under the Original Indenture hereinafter referenced, in such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public and private debts;
[if this Security is not a Global Security, insert — provided, however, that at the option of the
Company payments of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register] [if this Security is a Global
Security, insert—provided, however, that except with respect to payments of principal, payments
shall be made by wire transfer of immediately available funds with respect to payments in respect
of Global Securities if the Holders thereof have provided wire instructions in respect of such
payments to the Company or the Paying Agent]. Holders must surrender Series A Bonds to a Paying
Agent to collect principal payments.

B-4

 

     Reference is hereby made to the further provisions of the Series A Bonds set forth on the
reverse hereof, which further provisions shall for all purposes have the same effect as if set
forth at this place.

     Unless the certificate of authentication hereon has been manually executed by or on behalf of
the Trustee under the Indenture (hereinafter referenced), this Series A Bond shall not be entitled
to any benefits under the Indenture (hereinafter referenced), or be valid or obligatory for any
purpose.

     IN WITNESS WHEREOF, ITC MIDWEST LLC has caused this Series A Bond to be duly executed.

	 	 	 	 	 
	Dated: 	ITC MIDWEST LLC

 	 
	 	BY  	ITC HOLDINGS CORP.,
 	 
	 	 	AS SOLE MEMBER 	 
	 	 	 	 
	 
	 	 	 
	 	BY  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-5

 

	 	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This is one of the Series A Bonds of the series designated therein referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	Date: 	THE BANK OF NEW YORK TRUST 

              COMPANY, N.A., as Trustee,

 	 
	 	BY:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

B-6

 

[FORM OF REVERSE OF SERIES A BOND]

     This 6.150% First Mortgage Bond, Series A is one of the duly authorized issue of bonds, notes
or other evidences of indebtedness of the Company (herein sometimes referred to as the “Series A
Bonds”), of the series hereinafter specified, all issued or to be issued under and pursuant to the
Original Indenture dated as of January 14, 2008, as supplemented by the First Supplemental
Indenture, dated as of January 14, 2008 (as so supplemented, the “Indenture”), duly executed and
delivered by the Company and The Bank of New York Trust Company, N.A., as Trustee (herein called
the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture
and any other indentures supplemental thereto reference is hereby made for a statement of the
respective rights, obligations, duties and immunities thereunder of the Trustee and any agent of
the Trustee, any Paying Agent, the Company and the Holders of the Series A Bonds and of the terms
upon which the Series A Bonds are issued and are to be authenticated and delivered. This Security
is one of the series designated on the face hereof, which series is initially limited in aggregate
principal amount to $175,000,000; provided that the Company may from time to time or at any time,
without the consent of the Holders of the Series A Bonds, issue additional Securities, including
additional Series A Bonds, which additional Series A Bonds shall, if issued, increase the aggregate
principal amount of, and shall be consolidated and form a single series with, the Series A Bonds
issued on the Issue Date. By the terms of the Indenture, additional Securities of other separate
series, which may vary as to date, aggregate principal amount, Stated Maturity, interest rate or
method of calculating the interest rate, redemption provisions and in other respects as therein
provided, may be issued in an unlimited amount.

     Series A Bonds may be redeemed in accordance with the procedures set forth in the Original
Indenture on not less than 30 nor more than 60 days’ notice prior to the Redemption Date thereof to
the Holder thereof, given as provided in the Indenture, as a whole or in part, at any time at the
option of the Company, at a Redemption Price equal to the greater of (i) 100% of the principal
amount of the Series A Bonds being redeemed and (ii) as determined by an Independent Investment
Banker, the sum of the present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued and unpaid
interest thereon to, but excluding, the Redemption Date; provided, however, that installments of
interest on the Series A Bonds that are due and payable on an interest payment date falling on or
prior to the relevant Redemption Date will be payable to the Holder of the Series A Bond registered
as such at the close of business on the relevant Record Date according to the terms and provisions
of the Indenture.

     The Series A Bonds are subject to the further redemption provisions and procedures set forth
in the Indenture.

     The Indenture contains provisions for defeasance of (a) the entire indebtedness of the
Series A Bonds and (b) certain restrictive covenants upon compliance by the Company with certain
conditions set forth in the Indenture.

B-7

 

     If an Event of Default with respect to the Series A Bonds shall occur and be continuing, the
unpaid principal of the Series A Bonds may be declared due and payable in the manner and with the
effect provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a class). The Indenture
also contains provisions permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such consent or waiver by the
Holder of the Securities of this series shall be conclusive and binding upon such Holder and upon
all future Holders of the Securities of this series and of any Securities of this series issued
upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon the Securities of this series.

     No reference herein to the Indenture and no provision of the Series A Bonds or of the
Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of (and premium, if any) and interest, if any, on the Series A Bonds at the
times, place and rate, and in the coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of the Series A Bonds is registrable in the Security Register, upon surrender of the
Series A Bonds for registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest, if any, on the Series A Bonds are
payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Series A Bonds of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

     The Series A Bonds are issuable only in registered form without coupons in denominations of
$2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, the Series A Bonds are exchangeable for a like
aggregate principal amount of Series A Bonds of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentment of the Series A Bonds for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name the Series A
Bonds are registered as the owner hereof for all purposes, whether or not the Series A

B-8

 

Bonds be overdue, and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.

     The Series A Bonds are not subject to any sinking fund.

     The Series A Bonds are entitled to the benefit of the Lien under the Indenture.

     Each Holder, by accepting a Series A Bond, agrees to be bound by all the terms and provisions
of the Indenture, as the same may be amended from time to time in accordance with its terms.

     This Series A Bond shall be governed by and construed in accordance with the law of the State
of New York, except that (i) if the First Supplemental Indenture governing this Series A Bond shall
become qualified and shall become subject to the Trust Indenture Act, this Series A Bond shall be
governed by the Trust Indenture Act to the extent that the Trust Indenture Act shall be applicable
and (ii) if the law of any jurisdiction wherein any portion of the Mortgaged Property is located
shall govern the creation of a mortgage lien on and security interest in, or perfection, priority
or enforcement of the Lien of the Indenture or exercise of remedies with respect to, such portion
of the Mortgaged Property, the Series A Bond shall be governed by the law of such jurisdiction to
the extent mandatory.

     All capitalized terms used but not defined in this Series A Bond shall have the meanings
assigned to them in the Indenture.

B-9

 

FORM OF TRANSFER NOTICE

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s)
unto

Insert Taxpayer Identification No.

                                                            

                                                            

please print or typewrite name and address including zip code of assignee

                                                            

the within Series A Bond and all rights thereunder, hereby irrevocably constituting and appointing

                                                            

attorney to transfer said Series A Bond on the books of the Security Registrar with full power of
substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL SERIES A BONDS,

EXCEPT REGULATION S GLOBAL SECURITIES AND

REGULATION S DEFINITIVE SECURITIES]

     In connection with any transfer of this Certificate occurring prior to the date that is the
earlier of the date of an effective Registration Statement or the date two years (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original issuance of this Series A Bond or the last date on
which this Series A Bond was held by ITC Midwest LLC or any affiliate of ITC Midwest LLC, the
undersigned confirms that without utilizing any general solicitation or general advertising that:

[Check One]

[___] (a) the Series A Bonds are being transferred to a person whom we reasonably believe is a
“qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) (a
“QIB”) that purchases for its own account or for the account of one or more QIBs to whom notice has
been given that the resale, pledge or transfer is being made in reliance on Rule 144A under the
Securities Act;

or

[___] (b) the Series A Bonds are being transferred other than in accordance with (a) above and
documents are being furnished that comply with the conditions of transfer set forth in this
Series A Bond and the Indenture.

B-10

 

If neither of the foregoing boxes is checked, the Security Registrar shall not be obligated to
register this Series A Bond in the name of any Person other than the Holder hereof unless and until
the conditions to any such transfer of registration set forth herein and in Section 209 of the
First Supplemental Indenture shall have been satisfied.

	 	 	 	 	 	 
	Date: [                    , ___]

	 	By:	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	             	 	[Name of Transferor] 	 
	 
	 	 	 	 	 
	 	 	NOTE: The signature must correspond with the name as written
upon the face of the within-mentioned instrument in every
particular, without alteration or any change whatsoever.

Signature Guarantee:                                                             

SIGNATURE GUARANTEE

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

B-11

 

EXHIBIT C

[Form of Regulation S Transfer Certificate]

[Date]

ITC Midwest LLC (the “Company”)

39500 Orchard Hill Place, Suite 200

Novi, Michigan 48375

Attention: General Counsel

The Bank of New York Trust Company, N.A. (the “Trustee”)

2 N. LaSalle, Suite 1020

Chicago, Illinois 60602

Attention: Global Corporate Trust

Dear Ladies and Gentlemen:

     In connection with our proposed transfer of $                     aggregate principal amount of
6.150% First Mortgage Bonds, Series A, due January 31, 2038 (the “Series A Bonds”) of the Company,
we confirm that:

	 	(i)	 	the offer of the Series A Bonds was not made to a person in the United States;
	 
	 	(ii)	 	either (i) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed that
the transferee was outside the United States or (ii) the transaction was executed in,
on or through the facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been pre-arranged
with a buyer in the United States;
	 
	 	(iii)	 	no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as
applicable; and
	 
	 	(iv)	 	the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

     In addition, if the sale is made during the Distribution Compliance Period and the provisions
of Rule 903(b)(2) or Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such
sale has been made in accordance with the applicable provisions of Rule 903(b)(2) or Rule
904(b)(1), as the case may be.

C-1 

 

     The Company and the Trustee are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.

Very truly yours,

[Name of Transferor]

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Signature
	 	 

C-2exv10w29

 

Exhibit 10.29

REVOLVING CREDIT AGREEMENT

This Revolving Credit Agreement (the “Agreement”) is made 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 of this Agreement.

ARTICLE I. LOANS

     1.1 Revolving Credit Loans. From time to time prior to SEPTEMBER 5, 2009 (the “Maturity Date”)
or the earlier termination hereof, the Borrower may borrow from the Bank for working capital
purposes up to the aggregate principal amount outstanding at any one time of the lesser of (i)
$10,000,000.00 (the “Loan Amount”), less letters of credit issued by the Bank, or (ii) if
applicable, the Borrowing Base (defined below). All revolving loans hereunder will be evidenced by
a single promissory note of the Borrower payable to the order of the Bank in the principal amount
of the Loan Amount (the “Note”). Although the Note will be expressed to be payable in the full Loan
Amount, the Borrower will be obligated to pay only the amounts actually disbursed hereunder,
together with accrued interest on the outstanding balance at the rates and on the dates specified
therein and such other charges provided for herein. In the event that the principal amount
outstanding under the Note exceeds the Borrowing Base at any time, the Borrower will immediately,
without request, prepay an amount sufficient to eliminate such excess.

     1.2 Borrowing Base. The Borrowing Base, if any, will be as set forth in an addendum to this
Agreement.

     1.3 Advances After Maturity or In Excess of Maximum Loan Amount. The Bank shall have no
obligation whatsoever, and the Bank has no present intention, to make any advance after the
Maturity Date or which would cause the principal amount outstanding under this Agreement to exceed
the maximum loan amount or any other limitations on advances stated in this Agreement.
Notwithstanding the foregoing, the Bank may from time to time, in its sole and absolute discretion,
agree to make an advance after the Maturity Date or which would cause the principal amount of
advances outstanding under this Agreement to exceed the maximum loan amount or any of the other
limitations on advances. The Borrower is and shall be and remain unconditionally liable to the Bank
for the amount of all advances, including, without limitation, advances in excess of the maximum
loan amount or any other limitation on advances and advances made after the Maturity Date.
Immediately upon the Bank’s demand, the Borrower shall pay to the Bank the amount of any advances
made after the Maturity Date or in excess of the maximum loan amount or any other limitation on
advances contained in this Agreement, together with interest on the principal amount of such excess
advances, for so long as such advances are outstanding, at the highest interest rate from time to
time in effect for such advances. Any such advances shall not be deemed an extension of this
Agreement nor an increase in the maximum loan amount available for borrowing under this Agreement.

     1.4 Advances and Paying Procedure. The Bank is authorized and directed to credit any of the
Borrower’s accounts with the Bank (or to the account the Borrower designates in writing) for all
loans made hereunder, and the Bank is authorized to debit such account or any other account of the
Borrower with the Bank for the amount of any principal, interest or expenses due under the Note or
other amount due hereunder on the due date with respect thereto. If, upon any request by the
Borrower to the Bank to issue a wire transfer, there is an inconsistency between the name of the
recipient of the wire and its identification number as specified by the Borrower, the Bank may,
without liability, transmit the payment via wire based solely upon the identification number.

     1.5 Closing Fee. The Borrower will pay the Bank a one-time closing fee of $5,000.00
contemporaneously with execution of this Agreement. This fee is in addition to all other fees,
expenses and other amounts due hereunder.

     1.6 Loan Facility Fee. The Borrower will pay a loan facility fee equal
to:

	 	 	 	 	 
	 

	 	o
	 	$ n/a per annum, payable annually in advance; (or)
	 
	 	 	 	 
	 

	 	o
	 	n/a% per annum of the Loan Amount, payable annually in advance; (or)
	 
	 	 	 	 
	 

	 	o
	 	n/a% per annum of the difference between the Loan Amount and the actual
daily unpaid principal amount of the Note outstanding from time to time, payable quarterly,
in arrears, on the last business day of each third calendar month, and at maturity; (or)
	 
	 	 	 	 
	 

	 	o
	 	n/a% per annum of the actual daily unpaid principal amount of the Note
outstanding from time to time, payable quarterly, in arrears, on the last business day of
each third calendar month, and at maturity.

The loan facility fee is payable for the entire period that this Agreement is in effect, regardless
of whether any amounts are outstanding hereunder at any given time.

     1.7 Expenses and Attorneys’ Fees. Upon demand, the Borrower will immediately reimburse the
Bank and any participant in the Obligations (defined below) (“Participant”) for all attorneys’ fees
and all other costs, fees and out-of-pocket disbursements incurred by the Bank or any Participant
in connection with the preparation, execution, delivery, administration, defense and enforcement of
this Agreement or any of the other Loan Documents (defined below), including attorneys’ fees and
all other costs and fees (a) incurred before or after commencement of litigation or at trial, on
appeal or in any other proceeding, (b) incurred in any bankruptcy proceeding and (c) related to any
waivers or amendments with respect thereto (examples of costs and fees include but are not limited
to fees and costs for: filing, perfecting or confirming the priority of the Bank’s lien, title
searches or insurance, appraisals, environmental audits and other reviews related to the Borrower,
any collateral or the loans, if requested by the Bank). The Borrower will also reimburse the Bank
and any Participant for all costs of collection, including all attorneys’ fees, before and after
judgment, and the costs of preservation and/or liquidation of any collateral.

     1.8 Compensating Balances. The Borrower will maintain on deposit with the Bank in non-interest
bearing accounts average daily collected balances, in excess of that required to support account
activity and other credit facilities extended to the Borrower by the Bank, an amount at least equal
to the sum of (i) $ n/a and (ii) n/a% of the Loan Amount as computed

1

 

on a monthly basis. If the Borrower fails to keep and maintain such balances, it will pay a deficiency fee, payable within
five days after receipt of a statement therefor calculated on the amount by which the Borrower’s
average daily balances are less than the requirements set forth above, computed at a rate equal to
the rate set forth in the Note.

     1.9 Conditions to Borrowing. The Bank will not be obligated to make (or continue to make)
advances hereunder unless (i) the Bank has received executed originals of the Note and all other
documents or agreements applicable to the loans described herein, including but not limited to the
documents specified in Article III (collectively with this Agreement the “Loan Documents”), in form
and content satisfactory to the Bank; (ii) if the loan is secured, the Bank has received
confirmation satisfactory to it that the Bank has a properly perfected security interest, mortgage
or lien, with the proper priority; (iii) the Bank has received certified copies of the Borrower’s
governance documents and certification of entity status satisfactory to the Bank and all other
relevant documents; (iv) the Bank has received a certified copy of a resolution or authorization in
form and content satisfactory to the Bank authorizing the loan and all acts contemplated by this
Agreement and all related documents, and confirmation of proper authorization of all guaranties and
other acts of third parties contemplated hereunder; (v) if required by the Bank, the Bank has been
provided with an Opinion of the Borrower’s counsel in form and content satisfactory to the Bank
confirming the matters outlined in Section 2.2 and such other matters as the Bank requests; (vi) no
default exists under this Agreement or under any other Loan Documents, or under any other
agreements by and between the Borrower and the Bank; and (vii) all proceedings 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 the Bank and its counsel.

ARTICLE II. WARRANTIES AND COVENANTS

While any part of the credit granted to the Borrower under this Agreement or the other Loan
Documents is available or any obligations under any of the Loan Documents are unpaid or
outstanding, the Borrower continuously warrants and agrees as follows:

     2.1 Accuracy of Information. All information, certificates or statements given to the Bank pursuant to this Agreement and the
other Loan Documents will be true and complete when given.

     2.2 Organization and Authority; Litigation. This Agreement and the other Loan Documents are
the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their terms. The execution, delivery and performance of this Agreement and all
other Loan Documents to which the Borrower is a party (i) are within the borrower’s power; (ii)
have been duly authorized by all appropriate entity action; (iii) do not require the approval of
any governmental agency; and (iv) will not violate any law, agreement or restriction by which the
Borrower is bound. If the Borrower is not an individual, the Borrower is validly existing and in
good standing under the laws of its state of organization, has all requisite power and authority
and possesses all licenses necessary to conduct its business and own its properties. There is no
litigation or administrative proceeding threatened or pending against the Borrower which would, if
adversely determined, have a material adverse effect on the Borrower’s financial condition or its
property.

     2.3 Existence; Business Activities; Assets; Change of Control. The Borrower will (i) preserve
its existence, rights and franchises; (ii) not make any material change in the nature or manner of
its business activities; (iii) not liquidate, dissolve, acquire another entity or merge or
consolidate with or into another entity or change its form of organization; (iv) not amend its
organizational documents in any manner that may conflict with any term or condition of the Loan
Documents; and (v) not sell, lease, transfer or otherwise dispose of all or substantially all of
its assets. Other than the transfer to a trust beneficially controlled by the transferor, no event
shall occur which causes or results in a transfer of majority ownership of the Borrower while any
Obligations are outstanding or while the Bank has any obligation to provide funding to the
Borrower.

     2.4 Use of Proceeds; Margin Stock; Speculation. Advances by the Bank hereunder will be used
exclusively by the Borrower for working capital and other regular and valid purposes. The Borrower
will not, without the prior written consent of the Bank, use any of the loan proceeds to redeem,
purchase, or retire any of the capital stock or declare or pay any dividends, or make any other
payments or distributions of a similar type or nature including withdrawal distributions. The
Borrower will not use any of the loan proceeds to purchase or carry “margin” stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve System). No part of any of the
proceeds will be used for speculative investment purposes, including, without limitation,
speculating or hedging in the commodities and/or futures market.

     2.5 Environmental Matters. Except as disclosed in a written schedule attached to this
Agreement (if no schedule is attached, there are no exceptions), there exists no uncorrected
violation by the Borrower of any federal, state or local laws (including statutes, regulations,
ordinances or other governmental restrictions and requirements) relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to the environment or
Hazardous Substances as hereinafter defined, whether such laws currently exist or are enacted in
the future (collectively “Environmental Laws”). The term “Hazardous Substances” will mean any
hazardous or toxic wastes, chemicals or other substances, the generation, possession or existence
of which is prohibited or governed by any Environmental Laws. The Borrower is not subject to any
judgment, decree, order or citation, or a party to (or threatened with) any litigation or
administrative proceeding, which asserts that the Borrower (i) has violated any Environmental Laws;
(ii) is required to clean up, remove or take remedial or other action with respect to any Hazardous
Substances (collectively “Remedial Action”); or (iii) is required to pay all or a portion of the
cost of any Remedial Action, as a potentially responsible party. Except as disclosed on the
Borrower’s environmental questionnaire provided to the Bank, there are not now, nor to the
Borrower’s knowledge after reasonable investigation have there ever been, any Hazardous Substances
(or tanks or other facilities for the storage of Hazardous Substances) stored, deposited, recycled
or disposed of on, under or at any real estate owned or occupied by the Borrower during the periods
that the Borrower owned or occupied such real estate, which if present on the real estate or in
soils or ground water, could require Remedial Action. To the Borrower’s
knowledge, there are no proposed or pending changes in Environmental Laws which would
adversely affect the Borrower or its business, and there are no conditions existing currently or
likely to exist while the Loan Documents are in effect which would subject the Borrower to Remedial
Action or other liability. The Borrower currently complies with and will continue to timely comply
with all applicable Environmental Laws; and will provide the Bank, immediately upon receipt, copies
of any correspondence, notice, complaint, order or other document from any source asserting or
alleging any circumstance or condition which requires or may require a financial contribution by
the Borrower or Remedial Action or other response by or on the part of the Borrower under
Environmental Laws, or which seeks damages or civil, criminal or punitive penalties from the
Borrower for an alleged violation of Environmental Laws.

2

 

     2.6 Compliance with Laws. The Borrower has complied with all laws applicable to its business
and its properties, and has all permits, licenses and approvals required by such laws, copies of
which have been provided to the Bank.

     2.7 Restriction on Indebtedness. The Borrower will not create, incur, assume or have
outstanding any indebtedness for borrowed money (including capitalized leases) except (i) any
indebtedness owing to the Bank and its affiliates, and (ii) any other indebtedness outstanding on
the date hereof, and shown on the Borrower’s financial statements delivered to the Bank prior to
the date hereof, provided that such other indebtedness will not be increased.

     2.8 Restriction on Liens. The Borrower will not create, incur, assume or permit to exist any
mortgage, pledge, encumbrance or other lien or levy upon or security interest in any of the
Borrower’s property now owned or hereafter acquired, except (i) taxes and assessments which are
either not delinquent or which are being contested in good faith with adequate reserves provided;
(ii) easements, restrictions and minor title irregularities which do not, as a practical matter,
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 liens disclosed in writing to the Bank prior to the
date hereof.

     2.9 Restriction on Contingent Liabilities. The Borrower will not guarantee or become a surety
or otherwise contingently liable for any obligations of others, except pursuant to the deposit and
collection of checks and similar matters in the ordinary course of business.

     2.10 Insurance. The Borrower will maintain insurance to such extent, covering such risks and
with such insurers as is usual and customary for businesses operating similar properties, and as is
satisfactory to the Bank, including insurance for fire and other risks insured against by extended
coverage, public liability insurance and workers’ compensation insurance; and will designate the
Bank as loss payee with a “Lender’s Loss Payable” endorsement on any casualty policies and take
such other action as the Bank may reasonably request to ensure that the Bank will receive (subject
to no other interests) the insurance proceeds on the Bank’s collateral.

     2.11 Taxes and Other Liabilities. The Borrower will pay and discharge, when due, all of its
taxes, assessments and other liabilities, except when the payment thereof is being contested in
good faith by appropriate procedures which will avoid foreclosure of liens securing such items, and
with adequate reserves provided therefor.

     2.12 Financial Statements and Reporting. The financial statements and other information
previously provided to the Bank or provided to the Bank in the future are or will be complete and
accurate and prepared in accordance with generally accepted accounting principles. There has been
no material adverse change in the Borrower’s financial condition since such information was
provided to the Bank. The Borrower will (i) maintain accounting records in accordance with
generally recognized and accepted principles of accounting consistently applied throughout the
accounting periods involved; (ii) provide the Bank with such information concerning its business
affairs and financial condition (including insurance coverage) as the Bank may request; and (iii)
without request, provide the Bank with such specific financial statements, certifications and/or
information as may be set forth in an addendum to this Agreement.

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

     2.14 Financial Status. Financial Covenants, if any, will be as set forth in an addendum to this
Agreement.

     2.15
Paid-in-Full Period. þ If checked here, all revolving loans under this Agreement
and the Note must be paid in full for a period of at least 30 consecutive days during each fiscal
year.

ARTICLE III. COLLATERAL AND GUARANTIES

     3.1 Collateral. This Agreement and the Note are secured by any and all security interests,
pledges, mortgages/deeds of trust (except any mortgage/deed of trust expressly limited by its terms
to a specific obligation of Borrower to Bank) or liens now or hereafter in existence granted to the Bank to
secure indebtedness of the Borrower to the Bank, including without limitation as described in the
following documents:

	 	 	 
	o

	 	Real Estate Mortgage(s)/Deed(s) of
Trust dated covering real estate located at
	 
	 	 
	o

	 	Security Agreement(s) dated
	 
	 	 
	o

	 	Possessory Collateral Pledge Agreement(s) dated
	 
	 	 
	o

	 	Other

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

3

 

     3.3 Credit Balances; Setoff. As additional security for the payment of the obligations
described in the Loan Documents and any other obligations of the Borrower to the Bank of any nature
whatsoever (collectively the “Obligations”), the Borrower hereby grants to the Bank a security
interest in, a lien on and an express contractual right to set off against all depository account
balances, cash and any other property of the Borrower now or hereafter in the possession of the
Bank and the right to refuse to allow withdrawals from any account (collectively “Setoff”). The
Bank may, at any time upon the occurrence of a default hereunder (notwithstanding any notice
requirements or grace/cure periods under this or other agreements between the Borrower and the
Bank) Setoff against the Obligations whether or not the Obligations (including future installments)
are then due or have been accelerated, all without any advance or contemporaneous notice or demand
of any kind to the Borrower, such notice and demand being expressly waived.

The omission of any reference to an agreement in Sections 3.1 and 3.2 above will not affect the
validity or enforceability thereof. The rights and remedies of the Bank outlined in this Agreement
and the documents identified above are intended to be cumulative.

ARTICLE IV. DEFAULTS

     4.1 Defaults. Notwithstanding any cure periods described below, the Borrower will immediately
notify the Bank in writing when the Borrower obtains knowledge of the occurrence of any default
specified below. Regardless of whether the Borrower has given the required notice, the occurrence
of one or more of the following will constitute a default:

	 	 	 
	(a)

	 	Nonpayment. The Borrower shall fail to pay (i) any interest due on the Note or any fees,
charges, costs or expenses under the Loan Documents by 5 days after the same becomes due; or (ii)
any principal amount of the Note when due.
	 
	 	 
	(b)

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

	 	Misrepresentation. Any financial information, statement, certificate, representation or
warranty given to the Bank by the Borrower or any Guarantor (or any of their representatives) in
connection with entering into this Agreement or the other Loan Documents and/or any borrowing
thereunder, or required to be furnished under the terms thereof, shall prove untrue or misleading
in any material respect (as determined by the Bank in the exercise of its judgment) as of the time
when given.
	 
	 	 
	(d)

	 	Default on Other Obligations. The Borrower or any Guarantor shall be in default under the terms
of any loan agreement, promissory note, lease, conditional sale contract or other agreement,
document or instrument evidencing, governing or securing any indebtedness owing by the Borrower or
any Guarantor to
the Bank or any indebtedness in excess of $100,000 owing by the Borrower, to any third party, and
the period of grace, if any, to cure said default shall have passed.
	 
	 	 
	(e)

	 	Judgments. Any judgment shall be obtained against the Borrower or any Guarantor which, together
with all other outstanding unsatisfied judgments against the Borrower (or such Guarantor), shall
exceed the sum of $100,000 and shall remain unvacated, unbonded or unstayed for a period of 30 days
following the date of entry thereof.
	 
	 	 
	(f)

	 	Inability to Perform; Bankruptcy/Insolvency. (i) The Borrower or any Guarantor shall die or
cease to exist; or (ii) an Guarantor 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) any bankruptcy, insolvency or receivership proceedings, or an assignment for the benefit of
creditors, shall be commenced under any Federal or state law by or against the Borrower or any
Guarantor; or (iv) the Borrower or any Guarantor shall become the subject of any out-of-court
settlement with its creditors; or (v) the Borrower or any Guarantor is unable or admits in writing
its inability to pay its debts as they mature; or (vi) if the Borrower is a limited liability
company, any member thereof shall withdraw or otherwise become disassociated from the Borrower.
	 
	 	 
	(g)

	 	Adverse Change; Insecurity. (i) There is a material adverse change in the business, properties,
financial condition or affairs of the 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 Maturity Date or the occurrence of
any of the events identified in Section 4.1, the Bank may at any time (notwithstanding any notice
requirements or grace/cure periods under this or other agreements between the Borrower and the
Bank) (i) immediately terminate 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’s interest in any
collateral, including without limitation, notifying account debtors to make payments directly to
the Bank, advancing funds to protect any collateral and insuring collateral at the Borrower’s
expense; all without demand or notice of any kind, all of which are hereby waived.

     4.3 Acceleration of Obligations. Upon the Maturity Date or the occurrence of any of the events
identified in Sections 4.1(a) through 4.1(e) and 4.1(g), and the passage of any applicable cure
periods, the Bank may at any time thereafter, by written notice to the Borrower, declare the unpaid
principal balance of any Obligations, together with the interest accrued thereon and other amounts
accrued hereunder and under the other Loan Documents, to be immediately due and payable; and the
unpaid balance will thereupon be due and payable, all without presentation, demand, protest or
further notice of any kind, all of which are hereby waived, and notwithstanding anything to the
contrary 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 interest
accrued 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, and notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents. Nothing contained in Section 4.1, Section 4.2 or this
section will limit the Bank’s right to Setoff as provided in Section 3.3 or otherwise in this
Agreement.

4

 

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

ARTICLE V. OTHER TERMS

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

ARTICLE VI. MISCELLANEOUS

     6.1 Delay; Cumulative Remedies. No delay on the part of the Bank in exercising any right,
power or privilege hereunder or under any of the other Loan Documents will operate as a waiver
thereof, nor will any single or partial exercise of any right, power or privilege hereunder
preclude other or further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein specified are cumulative and are not exclusive of any rights or
remedies which the Bank would otherwise have.

     6.2 Relationship to Other Documents. The warranties, covenants and other obligations of the
Borrower (and the rights and remedies of the Bank) that are outlined in this Agreement 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 rights set forth in the conflicting documents, except that if there is a direct
conflict between any preprinted terms and specifically negotiated terms (whether included in an
addendum or otherwise), the specifically negotiated terms will control.

     6.3 Successors. The rights, options, powers and remedies granted in this Agreement and the
other Loan Documents shall be binding upon the Borrower and the Bank and their respective
successors and assigns, and shall inure to the benefit of the Borrower and the Bank and the
successors and assigns of the Bank, including without limitation any purchaser of any or all of the
rights and obligations of the Bank under the Note and the other Loan Documents. The Borrower may
not assign its rights or obligations under this Agreement or any other Loan Documents without the
prior written consent of the Bank.

     6.4 Disclosure. The Bank may, in connection with any sale or potential sale of all or any
interest in the Note and other Loan Documents, disclose any financial information the Bank may have
concerning the Borrower to any purchaser or potential purchaser. From time to time, the Bank may,
in its discretion and without obligation to the Borrower, any Guarantor or any other third party,
disclose information about the Borrower and this loan to any Guarantor, surety or other
accommodation party. This provision does not obligate the Bank to supply any information or release
the Borrower from its obligation to provide such information, and the Borrower agrees to keep all
Guarantors, sureties or other accommodation parties advised of its financial condition and other
matters which may be relevant to their obligations to the Bank.

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

     6.6 Notice of Claims Against Bank; Limitation of Certain Damages. In order to allow the Bank
to mitigate any damages to the Borrower from the Bank’s alleged breach of its duties under the Loan
Documents or any other duty, if any, to the Borrower, the Borrower agrees to give the Bank
immediate written notice of any claim or defense it has against the Bank, whether in tort or
contract, relating to any action or inaction by the Bank under the Loan Documents, or the
transactions related thereto, or of any defense to payment of the Obligations for any reason. The
requirement of providing timely notice to the Bank represents the parties’ agreed-to standard of
performance regarding claims against the Bank. Notwithstanding any claim that the Borrower may have
against the Bank, and regardless of any notice the Borrower may have given the Bank, the Bank will
not be liable to the Borrower for consequential and/or special damages arising therefrom, except
those damages arising from the Bank’s willful misconduct.

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

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

5

 

     6.9 Applicable Law and Jurisdiction; lnterpretation; Joint Liability; Severability. This
Agreement and all other Loan Documents will be governed by and interpreted in accordance with the
internal laws of the State of California, except to the extent superseded by Federal law. THE
BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN
THE COUNTY OR FEDERAL JURISDICTION OF THE BANK’S BRANCH WHERE THE LOAN WAS ORIGINATED, AND WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS, 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 herein will 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 the competent courts of any other jurisdiction or
jurisdictions. This Agreement, the other Loan Documents and any amendments hereto (regardless of
when executed) will be deemed effective and accepted only upon the Bank’s receipt of the 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 validity of any other provision.

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

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

     6.11 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY
JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL
SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THERE FROM OR CONNECTED THERE TO. THE BORROWER
AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
GIVEN.

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

IN WITNESS WHEREOF, the undersigned have executed this REVOLVING CREDIT AGREEMENT as of SEPTEMBER
21, 2007.

	 	 	 	 	 	 	 	 	 
	(Individual Borrower)	 	Outdoor Channel Holdings, Inc.
	 	 	Borrower Name (Organization)
	 
	 	 	 	 	 	 	 	 
	 	 	a	Delaware Corporation
	 
	 	 	 	 	 	 	 	 
	Borrower Name	        N/A	 	By	 	/s/ William A. Owen
	 

	 	 	 	 	 	Name and Title
	 	William A. Owen, CFO/Treasurer
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 
	 
	 	 	 	 	 	 	 	 
	Borrower Name

	        N/A	 	 	 	Name and Title	 	 
	 
	 	 	
U.S. BANK N.A.                            	(Bank) 
	 	 	 
	 
	 		 	By	 	/s/ Maureen K. Sullivan
	 
	 

	 	 	 	 	 	Name and Title
	 	Maureen K. Sullivan, Vice President

Borrower Address: 43445 Business Park Drive, Suite 103, Temecula, CA 92590

Borrower Telephone No.:

6

 

	 	 	 	 	 
	 

	 	For Bank Use Only
	 	Reviewed by
	 
	 	 	 	 
	 

	 	Due SEPTEMBER 5, 2009	 	 
	 

	 	Customer # 6517384088
	 	Loan # 18

REVOLVING CREDIT NOTE

			
	$10,000,000.00
	 	SEPTEMBER 21, 2007

     FOR VALUE RECEIVED, the undersigned
borrower (the “Borrower”), promises to pay to the order of U.S. BANK N.A. (the “Bank”), the
principal sum of TEN MILLION AND NO/100 Dollars ($10,000,000.00), payable SEPTEMBER 5, 2009 (the
“Maturity Date”).

          Interest.

     The unpaid principal balance will bear interest at an annual rate described in the Interest
Rate Rider attached to this Note.

          Payment Schedule.

Interest is payable beginning NOVEMBER 5, 2007, and on the same date of each consecutive month
thereafter (except that if a given month does not have such a date, the last day of such
month), plus a final interest payment with the final payment of principal.

     Interest will be computed for the actual number of days principal is unpaid, using a daily
factor obtained by dividing the stated interest rate by 360.

     Notwithstanding any provision of this Note to the contrary, upon any default or at any time
during the continuation thereof (including failure to pay upon maturity), the Bank may, at its
option and subject to applicable law, increase the interest rate on this Note to a rate of 5% per
annum plus the interest rate otherwise payable hereunder. Notwithstanding the foregoing and subject
to applicable law, upon the occurrence of a default by the Borrower or any guarantor involving
bankruptcy, insolvency, receivership proceedings or an assignment for the benefit of creditors, the
interest rate on this Note shall automatically increase to a rate of 5% per annum plus the rate
otherwise payable hereunder.

     In no event will the interest rate hereunder exceed that permitted by applicable law. If any
interest or other charge is finally determined by a court of competent jurisdiction to exceed the
maximum amount permitted by law, the interest or charge shall be reduced to the maximum permitted
by law, and the Bank may credit any excess amount previously collected against the balance due or
refund the amount to the Borrower.

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

     Without affecting the liability of any Borrower, endorser, surety or guarantor, the Bank may,
without notice, renew or extend the time for payment, accept partial payments, release or impair
any collateral security for the payment of this Note, or agree not to sue any party liable on it.

     This Revolving Credit Note constitutes the Note issued under a Revolving Credit Agreement
dated as of the date hereof between the Borrower and the Bank, to which Agreement reference is
hereby made for a statement of the terms and conditions under which loans evidenced hereby were or
may be made and a description of the terms and conditions upon which the maturity of this Note may
be accelerated, and for a description of the collateral securing this Note.

 

 

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

     All documents attached hereto, including any appendices, schedules, riders, and exhibits to
this Revolving Credit Note, are hereby expressly incorporated by reference.

The Borrower hereby acknowledges the receipt of a copy of this Note.

	 	 	 	 	 	 	 	 	 
	(Individual Borrower)	 	Outdoor Channel Holdings, Inc.
	 	 	Borrower Name (Organization)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	a	Delaware Corporation
	 
	 	 	 	 	 	 	 	 
	Borrower Name	        N/A	 	By	 	/s/ William A. Owen
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name and Title
	 	William A. Owen, CFO/Treasurer
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 
	 
	 	 	 	 	 	 	 	 
	Borrower Name

	        N/A	 	 	 	Name and Title	 	 

 

 

INTEREST RATE RIDER

     This Rider is made part of the Revolving Credit Note (the “Note”) in the original amount of
$10,000,000.00 by the undersigned borrower (the “Borrower”) in favor of U.S. BANK N.A. (the “Bank”)
as of the date identified below. The following interest rate description is hereby added to the
Note:

Interest Rate Options. Interest on each advance hereunder shall accrue at one of the
following per annum rates selected by the Borrower (“n/a” indicates rate option is not available,
but Prime Rate Loan option must always be selected) (i) upon notice to the Bank, 0.000% plus the
prime rate announced by the Bank from time to time, as and when such rate changes (a “Prime Rate
Loan”); (ii) upon a minimum of two New York Banking Days prior notice, 1.250% plus the 1, 2, 3, 6
or 12 month LIBOR rate quoted by the Bank from Telerate Page 3750 or any successor thereto (which
shall be the LIBOR rate in effect two New York Banking Days prior to commencement of the advance),
adjusted for any reserve requirement and any subsequent costs arising from a change in government
regulation (a “LIBOR Rate Loan”); or (iii) upon notice to the Bank, n/a% plus the rate, determined
solely by the Bank, at which the Bank would be able to borrow funds of comparable amounts in the
Money Markets for a 1, 2, 3, 6 or 12 month period, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation (a “Money Market Rate Loan”). The
term “New York Banking Day” means any day (other than a Saturday or Sunday) on which commercial
banks are open for business in New York, New York. The term “Money Markets” refers to one or more
wholesale funding markets available to the Bank, including negotiable certificates of deposit,
commercial paper, eurodollar deposits, bank notes, federal funds, interest rate swaps or others. No
LIBOR Rate Loan or Money Market Rate Loan may extend beyond the maturity of this Note. In any
event, if the Loan Period for a LIBOR Rate Loan or Money Market Rate Loan should happen to extend
beyond the maturity of this Note, such loan must be prepaid at the time this Note matures. If a
LIBOR Rate Loan or Money Market Rate Loan is prepaid prior to the end of the Loan Period for such
loan, whether voluntarily or because prepayment is required due to the Note maturing or due to
acceleration of this Note upon default or otherwise, the Borrower agrees to pay all of the Bank’s
costs, expenses and Interest Differential (as determined by the Bank) incurred as a result of such
prepayment. The term “Loan Period” means the period commencing on the advance date of the
applicable LIBOR Rate Loan or Money Market Rate Loan and ending on the numerically corresponding
day 1, 2, 3, 6 or 12 months thereafter matching the interest rate term selected by the Borrower;
provided, however, (a) if any Loan Period would otherwise end on a day which is not a New York
Banking Day, then the Loan Period shall end on the next succeeding New York Banking Day unless the
next succeeding New York Banking Day falls in another calendar month, in which case the Loan Period
shall end on the immediately preceding New York Banking Day; or (b) if any Loan Period begins on
the last New York Banking Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of the Loan Period),
then the Loan Period shall end on the last New York Banking Day of the calendar month at the
end of such Loan Period. The term “Interest Differential” shall mean that sum equal to the greater
of zero or the financial loss incurred by the Bank resulting from prepayment, calculated as the
difference between the amount of interest the Bank would have earned (from like investments in the
Money Markets as of the first day of the LIBOR Rate Loan or Money Market Rate Loan) had prepayment
not occurred and the interest the Bank will actually earn (from like investments in the Money
Markets as of the date of prepayment) as a result of the redeployment of funds from the prepayment.
Because of the short-term nature of this facility, the Borrower agrees that the Interest
Differential shall not be
 discounted to its present value. Any prepayment of a LIBOR Rate Loan or
Money Market Rate Loan shall be in an amount equal to the remaining entire principal balance of
such loan.

In the event the Borrower does not timely select another interest rate option at least two New York
Banking Days before the end of the Loan Period for a LIBOR Rate Loan or Money Market Rate Loan, the
Bank may at any time after the end of the Loan Period convert the LIBOR Rate Loan or Money Market
Rate Loan to a Prime Rate Loan, but until such conversion, the funds advanced under the LIBOR Rate
Loan or Money Market Rate Loan shall continue to accrue interest at the same rate as the interest
rate in effect for such LIBOR Rate Loan or Money Market Rate Loan prior to the end of the Loan
Period.

The Bank’s internal records of applicable interest rates shall be determinative in the absence of
manifest error. Each LIBOR Rate Loan and each Money Market Rate Loan shall be in a minimum
principal amount of $100,000.

	 	 	 	 	 	 	 	 	 
	Dated as of:

	     SEPTEMBER 21, 2007.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(Individual Borrower)	 	     Outdoor Channel Holdings, Inc.
	 	 	Borrower Name (Organization)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	a Delaware Corporation
	 
	 	 	 	 	 	 	 	 
	Borrower Name	        N/A	 	By	 	/s/ William A. Owen
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name and Title
	 	William A. Owen, CFO/Treasurer
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 
	 
	 	 	 	 	 	 	 	 
	Borrower Name

	        N/A	 	 	 	Name and Title	 	 

 

 

REAFFIRMATION OF GUARANTY

To: U.S. BANK N.A. (the “Bank”)

     The undersigned (the “Guarantor,” whether one or more) has executed Continuing Guaranty(ies)
(Unlimited), Continuing Guaranty(ies) (Limited), Continuing Guaranty(ies) (Pro Rata), or
Guaranty(ies) of Specific Transaction date SEPTEMBER 5, 2004 (collectively the “Guaranty”)
guaranteeing all of the obligations of Outdoor Channel Holdings, Inc. (the “Borrower”) to the Bank,
whether currently existing or arising in the future.

     The Bank will be extending a new loan to the Borrower, or renewing, restructuring or otherwise
amending an existing loan to the Borrower, as evidenced by the following documents, among others:

          Revolving Loan Agreement and Note dated September 21, 2007

     The Guarantor hereby confirms that the guaranty remains in full force and effect, and the
definition of “Obligations” in the Guaranty specifically includes the obligations identified above,
as well as any renewals, amendments or refinancings thereto (including an increase in the principal
amount of the loan).

     The Guarantor reaffirms that consent by the Guarantor to any additional loans, refinancings,
amendments and other changes in any agreements between the Bank and the Borrower is not necessary,
as described in the Guaranty. All collateral securing the Guaranty also continues as security, and
all other terms of the Guaranty are hereby reaffirmed.

     The Guarantor represents that the Guarantor has reviewed the Borrower’s financial condition
prior to executing this Reaffirmation; and the Guarantor specifically relieves the Bank of any
obligation to advise the Guarantor of the Borrower’s current financial condition, or any changes in
the Borrower’s financial condition in the future.

     The Guarantor hereby acknowledges the receipt of a copy of this Reaffirmation and all other
Loan Documents. This Reaffirmation is a “transferable record” as defined in applicable law relating
to electronic transactions. Therefore, the holder of this Reaffirmation may, on behalf of
Guarantor, create a microfilm or optical disk or other electronic image of this Reaffirmation that
is an authoritative copy as defined in such law. The holder of this Reaffirmation may store the
authoritative copy of such Reaffirmation in its electronic form and then destroy the paper original
as part of the holder’s normal business practices. The holder, on its own behalf, may control and
transfer such authoritative copy as permitted by such law.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY
THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO
OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE
TERMS OF THIS AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL ALSO BE
EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN GUARANTOR AND THE BANK.
A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN GUARANTOR AND THE BANK, WHICH
OCCURS AFTER RECEIPT BY GUARANTOR OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT.
ORAL OR IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE
RELIED UPON.

	 	 	 	 	 	 	 	 	 
	Dated:

	SEPTEMBER 21, 2007	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	(Individual Guarantor)	 	The
Outdoor Channel, Inc.
	 	 	Guarantor Name (Organization)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	a	 Nevada Corporation
	 
	 	 	 	 	 	 	 	 
	Guarantor Name	        N/A	 	By	 	/s/ William A. Owen
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name and Title
	 	William A. Owen, CFO
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 
	 
	 	 	 	 	 	 	 	 
	Guarantor Name

	        N/A	 	 	 	Name and Title	 	 

 

 

CORPORATE RESOLUTION FOR BORROWING AND/OR PLEDGING ASSETS

Outdoor Channel Holdings, Inc.

NAME OF CORPORATION

     WHEREAS, this corporation may enter into financial transactions or accommodations with U.S.
BANK N.A. (the “Bank”) from time to time;

     NOW, THEREFORE, RESOLVED, that any 1 of the officers of
this corporation denoted below: [mark authorized officers]

	 	 	 	 	 
	o     Chairman of the Board

	 	þ     Treasurer
	 	þ     Other: Chief Financial officer
	o     President

	 	þ     Secretary
	 	þ     Other: Chief Executive Officer
	o     Any Vice President

	 	o     Any Assistant Treasurer
	 	o     Other:
	 

	 	o     Any Assistant Secretary
	 	o     Other:

is (are) authorized, on behalf of and in the name of this corporation, (a) to borrow money from the
Bank from time to time in such amounts as such officer(s) shall deem advisable; (b) to make,
execute, seal with the corporate seal, and deliver to the Bank, from time to time, loan agreements,
disbursing agreements, notes, applications for letters of credit, and other evidence of or
agreements concerning such indebtedness, in such amounts with such maturities, at such rates of
interest, and upon such terms and conditions as said officer(s) shall approve; (c) to pledge,
assign, mortgage or otherwise grant a security interest in any or all real property, fixtures,
tangible or intangible personal property, or any other assets of this corporation, to execute, seal
with the corporate seal, and deliver to the Bank such security agreements, chattel mortgages,
assignments, financing statements, real estate mortgages, deeds of trust, lease or rental
assignments, assignments of life insurance, agreements not to encumber, or other agreements
respecting any or all interests in real or personal property now owned or hereafter acquired by
this corporation as may be requested by the Bank to secure any obligations of this corporation to
the Bank or to secure the obligations of a third party to the Bank, now existing or hereafter
arising, all upon such terms and conditions as said officer(s) shall approve, and to perform such
acts required of this corporation in such agreements or otherwise to perfect such security
interests; (d) to sell to the Bank, with or without recourse, accounts, contract rights, general
intangibles, instruments, documents, chattel paper, equipment, inventory, insurance policies,
deposit accounts, rights in action or other personal property of this corporation; (e) to endorse
or assign and deliver such property to the Bank, and from time to time to withdraw and make
substitutions of such property, or to sell such property to third persons and cause the proceeds of
such sales to be applied against the obligations of this corporation to the Bank; (f) to give
subordinations, guaranties or other financial accommodations to the Bank (it being the judgment of
the governing body of this corporation that any such guaranties may reasonably be expected to
benefit the corporation); and (g) to endorse and deliver for discount with the Bank, notes,
certificates of deposit, bills of exchange, orders for the payment of money, chattel paper,
commercial, or other business paper, howsoever drawn, either belonging to or coming into the
possession of this corporation. The signature(s) of said officer(s) appearing on any of the
foregoing instruments shall be conclusive evidence of (his/her) (their) approval thereof.

     FURTHER RESOLVED, that the authority granted to the officers of this corporation shall
continue in full force and effect, and said Bank may rely thereon in dealing with such officers,
unless and until written notice of any change in or revocation of such authority shall be delivered
to said Bank to the attention of Commercial Loan Servicing by an officer or director of this
corporation, and any action taken by said officers and relied on by said Bank pursuant to the
authority granted herein prior to its receipt of such
written notice shall be fully and conclusively binding on this corporation.

     FURTHER RESOLVED, that the actions of any officer of this corporation heretofore taken in
borrowing money from the Bank for and on behalf of this corporation, and in securing such
indebtedness in any manner authorized herein, and in selling or assigning property of this
corporation to the Bank with or without recourse, and in discounting with the Bank commercial and
other business paper, be and the same hereby are in all respects ratified, confirmed and approved.

     FURTHER RESOLVED, that in consideration of any loans or other financial accommodation made by
the Bank to this corporation, this corporation shall be authorized to and shall assume full
responsibility for and hold the Bank harmless from any and all payments made or any other actions
taken by the Bank in reliance upon the signatures, including facsimiles thereof, of any person or
persons holding the offices of this corporation designated above regardless of whether or not the
use of the facsimile signature was unlawful or unauthorized and regardless of by whom or by what
means the purported signature or facsimile signature may have been affixed to any instrument if
such signatures reasonably resemble the specimen or facsimile signatures as provided to the Bank,
or for refusing to honor any signatures not provided to the Bank; and that this corporation agrees
to indemnify the Bank against any and all claims, demands, losses, costs, damages or expenses
suffered or incurred by the Bank resulting from or arising out of any such payment or other action.
The foregoing indemnification shall be effective and may be enforced by the Bank upon delivery to
the Bank of a copy of this resolution certified by the Secretary, Assistant Secretary or any other
officer of this corporation.

     FURTHER RESOLVED, that the Secretary, Assistant Secretary or any other officer of this
corporation is authorized and directed to certify to the Bank the foregoing resolutions and that
the provisions thereof are in conformity with the Articles of Incorporation and By-Laws of this
corporation and to certify to the Bank the names of the persons now holding the offices referred to
above and any changes hereafter in the persons holding said offices together with specimens of the
signatures of such present and future officers.

     FURTHER RESOLVED, that all prior resolutions of this corporation authorizing the borrowing of
money from the Bank and the securing thereof, be and they hereby are rescinded and superseded as to
all borrowings from the Bank and security transactions with respect thereto effected after the date
of adoption of these resolutions.

 

 

     I HEREBY CERTIFY that I am the duly elected, qualified and acting Secretary (or as otherwise
designated below) and the custodian of the records of the above-named corporation, a corporation
organized and existing and in good standing under the laws of the State of Delaware. The foregoing
resolutions (i) are true and correct copies of the resolutions duly adopted in accordance with law
and the Charter or Articles or Certificate of Incorporation and By-Laws or Code of Regulations, as
applicable, of the corporation and that such resolutions are now in full force and effect without
modifications and are duly recorded in the minute book of the corporation or (ii) are otherwise in
conformity with existing resolutions, the Charter or Articles or Certificate of Incorporation and
By-Laws or Code of Regulations, as applicable, of the corporation, and permit the officers
designated herein to undertake all the activities set forth above.

     I FURTHER CERTIFY that set forth below are the true titles, names and genuine signatures of
the duly elected or appointed, qualified and acting officers of said corporation presently holding
such offices who are authorized under the foregoing resolutions:

	 	 	 	 	 
	Title	 	Name*	 	Signature*
	 
	 	 	 	 
	Chairman of the Board
	 	 	 	 
	 
	 	 	 	 
	President
	 	 	 	 
	 
	 	 	 	 
	Vice President
	 	 	 	 
	 
	 	 	 	 
	Treasurer

	 	William A. Owen
	 	/s/ William A. Owen
	 
	 	 	 	 
	Secretary

	 	Tom Hornish
	 	/s/ Tom Hornish
	 
	 	 	 	 
	Assistant Treasurer
	 	 	 	 
	 
	 	 	 	 
	Assistant Secretary
	 	 	 	 
	 
	 	 	 	 
	Other

	 	William A. Owen	 	 
	 

	 	Chief Financial Officer
	 	/s/ William A. Owen
	 

	 	Name & Title	 	 
	 
	 	 	 	 
	Other

	 	Roger L. Werner	 	 
	 

	 	Chief Executive Officer
	 	/s/ Roger L. Werner
	 

	 	Name & Title	 	 
	 
	 	 	 	 
	Other
	 	 	 	 
	 

	 	Name & Title	 	 
	 
	 	 	 	 
	Other
	 	 	 	 
	 

	 	Name & Title	 	 

     I FURTHER CERTIFY that copies of the Charter or Articles or Certificate of Incorporation and
By-Laws or Code of Regulations, as applicable, of the corporation which have heretofore been
delivered to the Bank or which are delivered herewith are true and correct copies and that such
Charter or Articles or Certificate and By-Laws or Code of Regulations, as applicable, are presently
in full force and effect.

     IN WITNESS WHEREOF, I have affixed my name in my official capacity and have caused the
corporate seal of the corporation to be hereunto affixed on .

          (CORPORATE SEAL)

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Secretary 	 
	 	 	 
	 

 

			
	*	 	Only the names and signatures of officers who will act in transactions with the Bank need be
inserted.

 

 

CALIFORNIA JUDICIAL REFERENCE AGREEMENT

This California Judicial Reference Agreement (“Agreement”) is entered into in connection with any
existing financing (other than consumer purpose financing) (“Financing”) provided by U.S. BANK N.A.
(“Bank”) to Outdoor Channel Holdings, Inc.

(“Borrower”) evidenced, secured and/or supported by one or more promissory notes, loan agreements,
security agreements, mortgages/deeds of trust, guaranties and/or other documents signed by the
undersigned parties (said promissory note and such other agreements, together with amendments,
modifications, substitutions and replacements thereto, are hereinafter referred to as the “Loan
Documents”).

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto (collectively, the “Parties”) agree as follows:

	1.	 	Any and all disputes, claims and controversies arising out of the Loan Documents or the
transactions contemplated thereby (including, but not limited to, actions arising in contract
or tort and any claims by a Party against Bank related in any way to the Financing)
(individually, a “Dispute”) that are brought before a forum in which pre-dispute waivers of
the right to trial by jury are invalid under applicable law shall be subject to the terms of
this Agreement in lieu of the jury trial waivers otherwise provided in the Loan Documents.

	2.	 	Any and all Disputes shall be heard by a referee and resolved by judicial reference pursuant
to California Code of Civil Procedure Sections 638 et seq.

	3.	 	The referee shall be a retired California state court judge or an attorney licensed to
practice law in the State of California with at least ten (10) years’ experience practicing
commercial law. The Parties shall not seek to appoint a referee that may be disqualified
pursuant to California Code of Civil Procedure Section 641 or 641.2 without the prior written
consent of all Parties.

	4.	 	If the Parties are unable to agree upon a referee within ten (10) calendar days after one
Party serves a written notice of intent for judicial reference upon the other Party or
Parties, then the referee will be selected by the court in accordance with California Code of
Civil Procedure Section 640(b).

	5.	 	The referee shall render a written statement of decision and shall conduct the proceedings in
accordance with the California Code of Civil Procedure, the Rules of Court, and California
Evidence Code, except as otherwise specifically agreed by the parties and approved by the
referee. The referee’s statement of decision shall set forth findings of fact and conclusions
of law. The decision of the referee shall be entered as a judgment in the court in accordance
with the provisions of California Code of Civil Procedure Sections 644 and 645. The decision
of the referee shall be appealable to the same extent and in the same manner that such
decision would be appealable if rendered by a judge of the superior court.

	6.	 	Nothing in this Agreement shall be deemed to apply to or limit the right of Bank (a) to
exercise self help remedies such as (but not limited to) setoff, or (b) to foreclose
judicially or nonjudicially against any real or personal property collateral, or to exercise
judicial or nonjudicial power of sale rights, (c) to
obtain from a court provisional or ancillary remedies (including, but not limited to,
injunctive relief, a writ of possession, prejudgment attachment, a protective order or the
appointment of a receiver), or (d) to pursue rights against a Party in a third-party proceeding
in any action brought against Bank (including actions in bankruptcy court). Bank may exercise
the rights set forth in the foregoing clauses (a) through (d), inclusive, before, during or
after the pendency of any judicial reference proceeding. Neither the exercise of self help
remedies nor the institution or maintenance of an action for foreclosure or provisional or
ancillary remedies or the opposition to any such provisional remedies shall constitute a waiver
of the right of any Party, including, but not limited to, the claimant in any such action, to
require submission to judicial reference the merits of the Dispute occasioning resort to such
remedies. No provision in the Loan Documents regarding submission to jurisdiction and/or venue
in any court is intended or shall be construed to be in derogation of the provisions in any
Loan Document for judicial reference of any of Dispute.

	7.	 	If a Dispute includes multiple claims, some of which are found not subject to this Agreement,
the Parties shall stay the proceedings of the Disputes or part or parts thereof not subject to
this Agreement until all other Disputes or parts thereof are resolved in accordance with this
Agreement. If there are Disputes by or against multiple parties, some of which are not subject
to this Agreement, the Parties shall sever the Disputes subject to this Agreement and resolve
them in accordance with this Agreement.

1

 

	8.	 	During the pendency of any Dispute which is submitted to judicial reference in accordance
with this Agreement, each of the Parties to such Dispute shall bear equal shares of the fees
charged and costs incurred by the referee in performing the services described in this
Agreement. The compensation of the referee shall not exceed the prevailing rate for like
services. The prevailing party shall be entitled to reasonable court costs and legal fees,
including customary attorney fees, expert witness fees, paralegal fees, the fees of the
referee and other reasonable costs and disbursements charged to the party by its counsel, in
such amount as is determined by the Referee.

	9.	 	In the event of any challenge to the legality or enforceability of this Agreement, the
prevailing Party shall be entitled to recover the costs and expenses from the non-prevailing
Party, including reasonable attorneys’ fees, incurred by it in connection therewith.

	10.	 	THIS AGREEMENT CONSTITUTESA “REFERENCE AGREEMENT “BETWEEN OR AMONG THE PARTIES WITHIN
THE MEANING OF AND FOR PURPOSES OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638.

	 	 	 	 	 
	Dated as of: SEPTEMBER 21, 2007      	 	 
	 
	
Agreed to:
 	 	 
	
U.S. BANK N.A.
 	 	 
	
(Bank)
 	 	 
	 
	By:  	/s/Maureen K. Sullivan
 	 	 
	 	 	Maureen K. Sullivan  	 	 
	 	Name and Title:  	Vice President 	 	 
	 

	 	 	 	 	 	 	 
	 	 	Outdoor Channel Holdings, Inc.
	(Individual)	 	Name (Organization)
	 
	 	 	a Delaware Corporation
	 
	Printed Name:
	 	 	 	 	 	 
	 	 	By:	 	/s/William A. Owen
	(Individual)

	 	 	 	Name and Title:
	 	William A. Owen, CFO
	 
	Printed Name:
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	(Individual)

	 	 	 	Name and Title:	 	 
	 
	Printed Name:
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	(Individual)

	 	 	 	Name and Title:	 	 
	 
	Printed Name:
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	(Individual)

	 	 	 	Name and Title:	 	 
	 
	Printed Name:
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	(Individual)

	 	 	 	Name and Title:	 	 
	Printed Name:
	 	 	 	 	 	 

2

 

California Judicial Reference Agreement — Additional Signature Page

	 	 	 	 	 	 	 	 	 	 	 	 	 
	(Individual)

	 	 	 	 	 	The Outdoor Channel, Inc.
	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name (Organization)	 
	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	a
	 	Nevada Corporation	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	(Individual)

	 	 	 	 	 	By:
	 	/s/William A. Owen	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name and Title:	 	William A. Owen, CFO	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	(Individual)	 	 	 	 	 	Name and Title:	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name and Title:	 	 	 	 
	(Individual)
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Printed Name:	 	 	 	 	 	Name and Title:	 	 	 	 
	 
	(Individual)

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name and Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	(Individual)

	 	 	 	 	 	Name and Title:
	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	(Individual)
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name (Organization)	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	a	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	By:	 	 	 	 
	(Individual)

	 	 	 	 	 	Name and Title:	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name and Title:	 	 	 	 
	(Individual)
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	Name and Title:
	 	 	 	 
	 
	(Individual)

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name and Title:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name and Title:
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name and Title:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

 

 

ADDENDUM TO REVOLVING CREDIT AGREEMENT AND NOTE

This Addendum is made part of the Revolving Credit 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. The warranties, covenants and other terms described below
are hereby added to the Agreement.

Amended and Restated Note. This Amended and Restated Note (this “Note”) is issued (i) as an
amendment and restatement of, but not in payment of, Borrower’s promissory note dated September 30,
2004, payable to the order of the Bank in the original principal amount of $5,000,000.00, as
amended, supplemented, extended or otherwise modified (the “Original Note”), and (ii) to evidence
an increase of $5,000,000.00, in the aggregate amount that may be advanced under this Note, subject
to the terms of this Note and any loan agreement related to this Note. All interest accrued but
unpaid on the Original Note shall be due and payable in full on the first interest payment date
under this Note. All agreements and documents evidencing, securing, guarantying and otherwise
related to the Original Note or the indebtedness evidenced thereby, whether or not identified in
this Note, continue in full force and effect, except to the extent that any such agreement or
document may have been wholly or partially released in a writing signed by the Bank. Any and all
references to the Replaced Note in any agreement or document are hereby amended to refer to this
Note.

Amended and Restated Agreement. This Amended and Restated Agreement (this “Restated Agreement”) is
issued as an amendment and restatement of the loan agreement or credit agreement between Borrower
and Bank dated September 30, 2004 pertaining to a loan facility in the original principal amount of
$5,000,000.00, as amended, supplemented, extended or otherwise modified (the “Original Agreement”).
This Restated Agreement also evidences an increase of $5,000,000.00 in the aggregate amount that
may be advanced under the Original Agreement, subject to the terms of this Restated Agreement. All
agreements and documents evidencing, securing, guarantying and otherwise related to the Original
Agreement or the indebtedness evidenced thereby, whether or not identified in this Restated
Agreement, continue in full force and effect, except to the extent that any such agreement or
document may have been wholly or partially released in a writing signed by Bank. Any and all
references to the Original Agreement in any agreement or document are hereby amended to refer to
this Restated Agreement.

Financial Covenants. Financial terms used herein which are not specifically defined herein shall
have the meanings ascribed to them under generally accepted accounting principles. For any Borrower
who does not have a separate fiscal year end for tax reporting purposes, the fiscal year will be
deemed to be the calendar year. Borrower (herein referred to as the “Subject Party”) will maintain
the following:

Senior Funded Debt to EBITDA Ratio as of the end of each fiscal quarter for the four (4) fiscal
quarters then ended of not more than 1.50 to 1.00.

“Senior Funded Debt to EBITDA Ratio” shall mean the ratio of Senior Funded Debt to EBITDA.

“Senior Funded Debt” shall mean indebtedness for borrowed money, for the deferred purchase price of
property not purchased on ordinary trade terms, for capitalized leases and for other liabilities
evidenced by promissory notes or other instruments, but not including any indebtedness that has
been subordinated to the indebtedness evidenced by the Note pursuant to a writing that has been
accepted by Bank.

“EBITDA” shall mean net income, plus interest expense, plus income tax expense, plus depreciation
expense plus amortization expense.

Financial Information and Reporting. This provision replaces in its entirety the provision of the
Agreement titled “Financial Information and Reporting”. Financial terms used herein which are not
specifically defined herein shall have the meanings ascribed to them under generally accepted
accounting principles. For any Borrower who does not have a separate fiscal year end for tax
reporting purposes, the fiscal year will be deemed to be the calendar year. The financial
statements and other information previously provided to Bank or provided to Bank in the future are
or will be complete and accurate and prepared in accordance with generally accepted accounting
principles. There has been no material adverse change in Borrower’s financial condition since such
information was provided to Bank. Borrower will (i) maintain accounting records in accordance with
generally recognized and accepted principles of accounting consistently applied throughout the accounting periods involved; (ii) provide Bank with such
information concerning its business affairs and financial condition (including insurance coverage)
as Bank may request; and (iii) without request, provide to Bank the following financial
information, in form and content acceptable to Bank, pertaining to Borrower:

 

 

Annual Financial Statements: Not later than 90 days after the end of each fiscal year, annual
combined financial statements, audited by a certified public accounting firm acceptable to Bank.

Interim Financial Statements: Not later than 60 days after the end of each fiscal quarter, interim
combined financial statements, certified by Borrower to be true, correct and complete.

Certificate of Compliance (this requirement pertains to Borrower only, regardless of whether
financial reports are otherwise required for Borrower together with others hereunder): Not later
than 60 days after the end of each fiscal quarter, a certificate, executed by Borrower (or, if
Borrower is an entity, by Borrower’s chief financial officer or other officer or person acceptable
to Bank) certifying that the representations and warranties set forth in the Agreement are true and
correct as of the date of the certificate and further certifying that, as of the date of the
certificate, no default exists under the Agreement.

Dated as of September 21,
2007

(Non-Individual)

Outdoor Channel Holdings, Inc.

a/an Delaware Corporation

	 	 	 	 	 
	By:  	/s/ William A. Owen
 	 	 
	 	Name and Title William A. Owen, CFO/Treasurer 	 	 
	 	 	 	 

Agreed to: U.S.
BANK N.A.

	 	 	 	 	 
	By:  	/s/ Maureen K. Sullivan
 	 	 
	 	Name and Title Maureen K. Sullivan, Vice President 	 	 
	 	 	 	 
	 

 

SECOND ADDENDUM TO REVOLVING CREDIT AGREEMENT AND NOTE

This Second Addendum to Revolving Credit Agreement and Note (this “Addendum”) is made part of the
Revolving Credit Agreement (the “Agreement”) made and entered into by and between the undersigned
borrower (the “Borrower”) and U.S. Bank N.A. (the “Bank”), the Addendum to Revolving Credit
Agreement and Note (the “First Addendum”) by and between Borrower and Bank, and the Note (as
defined in the Agreement), all of which documents are dated as of the date hereof. The First
Addendum and this Addendum are addendums to the Agreement and the Note. The warranties, covenants
and other terms of this Addendum hereby (i) supplement, amend or modify the Agreement, and to the
extent inconsistent herewith, all Loan Documents (as defined in the Agreement) and any and all
other documents by and between Bank and Borrower that have not expired or terminated, including,
without limitation, that certain Term Loan Agreement dated October 18, 2005 by and between Bank and
Borrower, as such agreement may have been amended, modified, supplemented, extended, replaced or
restated (collectively, the “Term Loan Agreement”), and (ii) constitute warranties, covenants and
terms of all the extensions of credit made by Bank to Borrower, including, without limitation, the
extensions of credit made pursuant to Term Loan Agreement. Capitalized terms and financial terms
not defined herein shall have the meanings ascribed to them in the Agreement or, if not defined in
the Agreement, the meanings ascribed to them by generally accepted accounting principles. In the
event of any conflict between the provisions of the Agreement, the Note, any Loan Document, the
Term Loan Agreement or any other document by and between Bank and Borrower, on the one hand, and
the provisions of this Addendum on the other, the provisions of this Addendum shall prevail and
control.

1. Fixed Charge Coverage Ratio. The following covenant is hereby added to the Agreement:

	 	 	“Borrower shall maintain a Fixed Charge Coverage Ratio as of the end of each fiscal quarter
for the four (4) fiscal quarters then ended (i.e., on a “rolling four (4) quarter basis”)
of at least 1.25:1.
	 
	 	 	“Fixed Charge Coverage Ratio” shall mean (a) net income, plus interest expense, plus rent
expense, plus income tax expense, plus depreciation, plus amortization, plus charges
related to non-cash stock-based compensation per the SFAS 123R requirement, minus cash
taxes, cash dividends and Maintenance Capital Expenditures divided by (b) the sum of all
required principal payments (on short and long term debt and capital leases), interest
expense and rental or lease expense.
	 
	 	 	“Maintenance Capital Expenditures” shall mean the dollar amount of Capital Expenditures
that are necessary to maintain the current level of revenues. For the purposes of this
covenant calculation, at no time shall the amount of the Capital Expenditures used for
purposes of the calculation made for determining Borrower’s satisfaction of the Fixed
Charge Coverage Ratio covenant be less than $1,500,000.00 per fiscal year, prorated evenly
for each applicable measurement period, but Borrower shall not be required to actually
incur expenses of such amount or any amount whatsoever.
	 
	 	 	“Capital Expenditures” shall mean the aggregate amount of all purchases or acquisitions of
fixed assets, including real estate, motor vehicles, equipment, fixtures, leases and any
other items that would be capitalized on the books of the Borrower under generally accepted
accounting principles. The term “Capital Expenditures” will not include expenditures or
charges for the usual and customary maintenance, repair and retooling of any fixed asset or
the acquisition of new tooling in the ordinary course of business.”

	2.	 	Profitability. The following covenant is hereby added to the Agreement:

	 	 	“Quarterly Profits. The Borrower shall have and shall report Net Profit After Taxes of an
amount greater than $250,000.00 excluding any charges related to non-cash

1

 

	 	 	stock based compensation per the SFAS 123R requirement for each of its fiscal quarters.”

3. Continuing Validity. Except as expressly modified above or in other written agreements by and
between Borrower and Bank, the terms of the Agreement, the First Addendum, the Note, the Term Loan Agreement, the other
Loan Documents, and any other documents by and between Bank and Borrower in connection with
extensions of credit by Bank to Borrower, shall remain unchanged and in full force and effect.

	 	 	 	 	 
	Dated as of September 21, 2007 

Borrower: 

Outdoor Channel Holdings, Inc.,

 a Delaware corporation

 	 	 
	By:  	/s/ William A. Owen
 	 	 
	 	William A. Owen,                    	 	 
	 	CFO/Treasurer 	 	 
	 
	Bank: 

U.S. Bank N.A.

 	 	 
	By:  	/s/ Maureen K. Sullivan
 	 	 
	 	Maureen K. Sullivan,       	 	 
	 	Vice President 	 	 
	 

2

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