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	 






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          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.



5









 





     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



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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.




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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.




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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.



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     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-2