Exhibit 4.4


 


EXECUTION COPY


 




 


 





ITC HOLDINGS CORP.


 


to


 


BNY MIDWEST TRUST COMPANY,


as Trustee


 


 










 


 


First Supplemental Indenture


Dated as of July 16, 2003


 


 


Supplemental to the Indenture


dated as of July 16, 2003


 


 


Establishing a series of Securities


designated 5.25% Senior Notes Due July 15, 2013




 


 





 





















 


FIRST
SUPPLEMENTAL INDENTURE, dated as of July 16, 2003 (herein called the “First Supplemental Indenture”), between ITC
Holdings Corp., a corporation duly organized and existing under the laws of the
State of Michigan (hereinafter called the “Company”),
and BNY Midwest Trust Company, as Trustee under the Original Indenture referred
to below (hereinafter called the “Trustee”).


 


WITNESSETH:


 


WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture
dated as of July 16, 2003 (hereinafter called the “Original Indenture”), to provide for the
issuance from time to time in one or more series of its debentures, notes,
bonds or other evidences of indebtedness (herein called the “Securities”), the form and terms of which
are to be established as set forth in Sections 2.1 and 3.1 of the Original
Indenture;


 


WHEREAS,
Section 9.1 of the Original Indenture provides, among other things, that
the Company and the Trustee may enter into indentures supplemental to the
Original Indenture to, among other things, establish the form and terms of the
Securities of any series as permitted in Sections 2.1 and 3.1 of the Original
Indenture;


 


WHEREAS,
the Company desires to create a series of the Securities in an aggregate
principal amount of $267,000,000 to be designated the “5.25% Senior Notes due July 15,
2013”, and all action on the part of the Company necessary to authorize the
issuance of the Senior Notes (as hereinafter defined) under the Original
Indenture and this First Supplemental Indenture has been duly taken; and


 


WHEREAS,
all acts and things necessary to make the Senior Notes, when executed by the
Company and completed, authenticated and delivered by the Trustee as provided
in the Original Indenture and this First Supplemental Indenture, the valid and
binding obligations of the Company and to constitute these presents a valid and
binding supplemental indenture and agreement according to its terms, have been
done and performed.


 


NOW,
THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:


 


That
in consideration of the premises and of the acceptance and purchase of the
Senior Notes by the holders thereof and of the acceptance of this trust by the
Trustee, the Company covenants and agrees with the Trustee, for the equal
benefit of holders of the Senior Notes (as hereinafter defined), as follows:


 


ARTICLE ONE


 


DEFINITIONS


 


Except
to the extent such terms are otherwise defined in this First Supplemental
Indenture or the context clearly requires otherwise, all terms used in this
First Supplemental Indenture which are defined in the Original Indenture or the
form of Senior Note (as hereinafter defined) attached hereto as Exhibit A,
have the meanings assigned to them therein.


 





















 


In
addition, as used in this First Supplemental Indenture, the following terms
have the following meanings:


 


“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 0.35%.


 


“Agent Member” has the meaning given to such
term in Section 2.8(a) hereof.


 


“Clearstream” has the meaning given to such
term in Section 2.2(c) 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 Senior Notes 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 Senior Notes.


 


“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,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee 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 2.2(d) 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 2.2(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.


 


“Euroclear” has the meaning given to such
term in Section 2.2(c) hereof.


 


“Global Securities” has the meaning given to
such term in Section 2.2(c) hereof.


 


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


 


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“Initial Purchasers” means Credit Suisse
First Boston LLC.


 


“Issue Date” means the date on which the
Senior Notes are originally issued.


 


“Make-Whole Price” has the meaning given to
such term in Article Three hereof.


 


“Non-U.S. Person” has the meaning assigned
to such term in Regulation S.


 


“Permanent Regulation S Global Security” has
the meaning given to such term in Section 2.2(C) hereof.


 


“QIB” has the meaning given to such term in Section 2.2(d) hereof.


 


“Reference
Treasury Dealer” means each of Credit Suisse First Boston LLC and
Morgan Stanley & Co. Incorporated, 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 Trustee, 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 Trustee 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, as amended.


 


“Regulation S Definitive Security” has the
meaning given to such term in Section 2.2(d) hereof.


 


“Regulation S Global Security” has the
meaning given to such term in Section 2.2(c) hereof.


 


“Regulation S Securities” means Securities
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” has the
meaning given to such term in Section 2.2(d) hereof.


 


“Restricted Global Security” has the meaning
given to such term in Section 2.2(b) hereof.


 


“Restricted Legend” has the meaning given to
such term in Section 2.6(a) hereof.


 


“Restricted Securities” has the meaning
given to such term in Section 2.6(a) hereof.


 


“Rule 144A” means Rule 144A under
the Securities Act, as may be amended.


 


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“Rule 144A Definitive Securities” has
the meaning given to such term in Section 2.8(b) hereof.


 


“Senior Notes” means the 5.25% Senior Notes
due July 15, 2013 issued in accordance with clause (iii) of Section 2.3
hereof treated as a single series of securities for all purposes, as amended or
supplemented from time to time in accordance with the terms of this First
Supplemental Indenture and the Original Indenture, that are issued pursuant to
this First Supplemental Indenture.


 


“Temporary Regulation S Global Security” has
the meaning given to such term in Section 2.2(c) hereof.


 


ARTICLE TWO


 


TERMS AND ISSUANCE OF THE 5.25% SENIOR NOTES DUE JULY 15, 2013


 


Section 2.1.  Issue of Senior Notes.  A series of Securities which shall be
designated the “5.25% Senior Notes due July 15, 2013” shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in
all respects be subject to, the terms, conditions and covenants of, the
Original Indenture and this First Supplemental Indenture (including the form of
Senior Notes set forth hereto as Exhibits A). The aggregate
principal amount of the Senior Notes which may be authenticated and delivered
under this First Supplemental Indenture shall not, except as permitted by the
provisions of the Original Indenture, initially exceed $267,000,000; provided
that the Company may from time to time or at any time, without the consent of
the Holders of the Senior Notes, issue additional Senior Notes, which
additional Senior Notes shall increase the aggregate principal amount of, and
shall be consolidated and form a single series with, the Senior Notes.


 


Section 2.2.  Form of Senior Notes;
Incorporation of Terms.  (a) The
Senior Notes issued in transactions exempt from registration under the
Securities Act shall be substantially in the form of Exhibit A
attached hereto.  The Senior Notes 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 Senior Notes set forth in Exhibit A
are herein incorporated by reference and are part of the terms of this First
Supplemental Indenture.


 


(b) 
The Senior Notes offered and sold 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 A attached hereto
with such applicable legends as are provided for in Section 2.6  (each, a “Restricted
Global Security”) duly executed by the Company and duly
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 DTC and deposited with BNY Midwest Trust Company, at its corporate trust
office, as custodian for DTC.  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 2.9 hereof, which adjustments shall be
conclusive as to the aggregate principal amount of any such Global Security.


 


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(c) 
The Senior Notes offered and sold 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 A
hereto with such applicable legends as are provided for in Section 2.6
(the “Temporary Regulation S Global Security”)
duly executed by the Company and duly authenticated by the Trustee 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 A 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 Rule 903(b)(3)(ii)(B) 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 DTC and deposited with
BNY Midwest Trust Company, at its corporate trust office, as custodian for DTC,
for credit initially and during the Distribution Compliance Period to the
respective accounts of beneficial owners of such Securities (or to such other
accounts as they may direct) at Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear System (“Euroclear”)
or Clearstream Luxembourg, a société anonyme (“Clearstream”).  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 Securities are first offered to persons other than distributors (as
defined in Regulation S) in reliance on Regulation S and (ii) the
Closing 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 2.9 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”.


 


(d) 
Senior Notes offered and sold to any Institutional Accredited Investor that is
not a qualified institutional buyer as defined in Rule 144A under the
Securities Act (“QIB”) in a
transaction exempt from registration under the Securities Act (and other than
as described in Section 2.2(c)) shall be issued substantially in the form
of Exhibit A hereto in definitive, fully registered form without
coupons with such applicable legends as are provided for in Section 2.6
(the “Restricted Definitive Securities”)
duly executed by the Company and duly authenticated by the Trustee as herein
provided.  Securities issued pursuant to Section 2.8(b) in
exchange for interests in a Regulation S Global Security shall be issued
in definitive, fully registered form without interest coupons (the “Regulation S Definitive Securities”).  Securities issued pursuant to Section 2.8(b) in
exchange for interests in a Restricted Global Security or a Regulation S Global
Security shall be issued in the form of definitive Global Securities (the “Rule 144A Definitive Securities”).  The Restricted Definitive Securities, the Rule 144A
Definitive Securities and the Regulation S Definitive Securities are
sometimes collectively referred to herein as the “Definitive Securities”.


 


5





















 


Section 2.3.  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
Senior Notes for original issue in an initial aggregate principal amount of
$267,000,000.  Such Company Order shall
specify the amount of the Senior Notes to be authenticated, the date on which
the original issue of Senior Notes is to be authenticated and the aggregate
principal amount of Senior Notes outstanding on the date of
authentication.  All of the Senior Notes
issued under this First Supplemental Indenture shall be treated as a single
series for all purposes under the Original Indenture and this First
Supplemental Indenture, including, without limitation, waivers, amendments, and
offers to purchase.


 


Section 2.4.  Depositary for Global
Securities.  The Depositary
for the Securities of the series of which this Security is a part shall be The
Depository Trust Company in the City of New York.


 


Section 2.5.  Place of Payment.  The Place of Payment in respect of the Senior
Notes 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
101 Barclay Street, New York, New York 10286.


 


Section 2.6.  Legends.


 


(a)                                  All
Senior Notes 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 paragraphs (b) and
(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) OR
(IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE


 


6





















 


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 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.”


 


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 SECURITIES 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 SYSTEM OR CLEARSTREAM LUXEMBOURG,
A SOCIETE 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.


 


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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 SYSTEM OR CLEARSTREAM LUXEMBOURG, A
SOCIETE 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 3.5 of the Original Indenture, permit the
Holder thereof to request the issuance of a global Senior Note 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.


 


Section 2.7.  Restrictions
on Transfer and Exchange of Senior Notes.


 


All
Senior Notes issued upon any registration of transfer or exchange of Senior
Notes 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 Senior Notes surrendered upon such
registration of transfer or exchange.


 


A
Holder may transfer a Senior Note, or request that a Senior Note be exchanged
for Senior Notes in authorized denominations and in an aggregate principal
amount equal to the principal amount of such Senior Note surrendered for
exchange of other authorized


 


8





















 


denominations, by
surrender of such Senior Notes 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
Register.  Prior to the registration of
any transfer of a Senior Note 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 Security is registered on the Register as the absolute
owner and holder thereof for the purpose of receiving payment of all amounts
payable with respect to such Security 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, DTC 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 DTC (or its agent) and that ownership
of a beneficial interest in the Senior Note shall be required to be reflected
in a book-entry.  When Senior Notes are
presented to the Security Registrar with a request to register the transfer
thereof or to exchange them for other authorized denominations of a Senior Note
in a principal amount equal to the aggregate principal amount of Senior Notes
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, Senior Notes at the Security Registrar’s request.  No service charge shall be made to a Holder
for any registration of transfer or exchange of Senior Notes, 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 Senior
Notes.  All Senior Notes surrendered for
registration of transfer or exchange shall be cancelled by the Trustee in
accordance with its then customary procedures.


 


Section 2.8                                      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 Senior Notes with respect to any Global Security held on
their behalf by DTC, or BNY Midwest Trust Company as its custodian, and DTC 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
Security.  Upon the issuance of any
Global Security, the Security Registrar or its duly appointed agent shall
record DTC as the registered holder of such Global Security.


 


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(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
DTC.  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 2.9. 
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 or
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.


 


(c)                                  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.


 


(d)                                 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 (b) of
this Section 2.8, 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 Register as Holders
hereunder.


 


(e)                                  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 (b) of this Section 2.8 shall, except as
otherwise provided by paragraph (e) of Section 2.9, bear the
Restricted Legend.


 


(f)                                    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 (b) of this Section 2.8
shall bear the Restricted Legend.


 


10





















 


(g)                                 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 Securities.


 


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


 


Section 2.9                                      Special
Transfer Provisions.


 


The following provisions shall also apply to
the Senior Notes:


 


(a)                                  Transfers to
Non-QIB Institutional Accredited Investors. 
The following provisions shall apply with respect to the registration of
any proposed transfer of a Senior Note to any Institutional Accredited Investor
that is neither a QIB nor a Non-U.S. Person:


 


(i)                                     The Security
Registrar shall register the transfer of any Senior Note, whether or not
bearing the Restricted Legend, only if (x) the requested transfer is at least
two years after the later of the (A) Closing Date and (B) the last
date on which such Senior Note was held by the Company or any affiliate of the
Company or (y) the proposed transferor is an Initial Purchaser who is
transferring Senior Notes purchased under the Purchase Agreement and the
proposed transferee has delivered to the Security Registrar a letter
substantially in the form of Exhibit C hereto and the aggregate
principal amount of the Senior Notes being transferred is at least
$100,000.  Except as provided in the
foregoing sentence, the Security Registrar shall not register the transfer of
any Senior Note to any Institutional Accredited Investor that is neither a QIB
nor a Non-U.S. Person.


 


(ii)                                  If the proposed
transferor is an Agent Member holding a beneficial interest in a Restricted
Global Security, upon receipt by the Security Registrar of (x) the documents,
if any, required by paragraph (i) and (y) 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 of the 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 the Company shall execute and the Trustee shall
authenticate and deliver to the transferor or at its direction, one or more
Restricted Definitive Securities of like tenor and amount.


 


(b)                                 Transfers to QIBs.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Senior Note to a QIB
(excluding Non-U.S. Persons):


 


(i)                                     If the Senior Note
to be transferred consists of a Restricted Definitive Security, or of an
interest in any Regulation S Global Security during the Distribution
Compliance Period, 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 Senior Note 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


 


11





















 


the form of
Senior Note stating, or has otherwise advised the Company, the Trustee and the
Security Registrar in writing, that it is purchasing the Senior Note 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
Restricted Definitive Securities or interests in such Regulation S Global
Security, as the case may be, being transferred, and the Trustee shall cancel
such Definitive Securities or decrease the amount of such Regulation S
Global Security so transferred.


 


(c)                                  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 Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear
or 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 (y) for interests in the Restricted
Global Security on if the transferor first delivers to the Trustee a written
transfer notice to the effect that the Securities 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.


 


(d)                                 Transfers to
Non-U.S. Persons at Any Time.  The
following provisions shall apply with respect to any registration of any
transfer of a Senior Note 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 Senior Note to a Non-U.S. Person upon


 


12





















 


receipt of a
certificate substantially in the form set forth as Exhibit B 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 if the Senior Note to be
transferred is a Restricted Definitive Security or an interest in a Restricted
Global Security, upon receipt of a certificate substantially in the form of Exhibit B
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 Definitive Security or the Restricted Global Security,
as the case may be, to be transferred, and the Trustee shall cancel the
Definitive Security, if any, so transferred or decrease the amount of such
Restricted Global Security.


 


(e)                                  Restricted Legend.  Upon the transfer, exchange or replacement of
Senior Notes not bearing the Restricted Legend, the Security Registrar shall
deliver Senior Notes that do not bear the Restricted Legend.  Upon the transfer, exchange or replacement of
Senior Notes bearing the Restricted Legend, the Security Registrar shall deliver
only Senior Notes that bear the Restricted Legend unless either (i) the
circumstances contemplated by paragraph (d)(ii) of this Section 2.9
exist or (ii) 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.


 


(f)                                    General.  By acceptance of any Senior Note bearing the
Restricted Legend, each Holder of such Senior Note acknowledges the
restrictions on transfer of such Senior Note set forth in such Restricted
Legend and otherwise in this First Supplemental Indenture and agrees that it
will transfer such Senior Note only as provided in such Restricted Legend and
otherwise in this First Supplemental Indenture. 
In connection with any transfer of Senior Notes, each Holder agrees by
its acceptance of the Senior Notes to furnish the Security Registrar or the
Trustee such certifications, legal opinions or other information as either of them
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 2; 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 Senior Notes remain Outstanding, the Security Registrar shall
retain copies of all letters, notices and other written communications received
pursuant to Section 2.8 or this Section 2.9.  The Trustee, if not the Security Registrar at
such time, shall have the right to


 


13





















 


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.


 


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


 


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. 
A Depositary may transfer a Global Security only to its nominee or to a
successor Depository.  A Global Security
shall represent the amount of Senior Notes 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.


 


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


 


Section 2.10.  Restrictions on Liens.  The covenant provided by Section 10.11
of the Original Indenture shall be applicable to the Senior Notes.


 


Section 2.11.  Restrictions on Sale and
Leaseback Transactions.  The
covenant provided by Section 10.12 of the Original Indenture shall be
applicable to the Senior Notes.


 


ARTICLE THREE


 


REDEMPTION


 


The Senior Notes 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 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 Senior Notes 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


 


14





















 


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 (the
“Make-Whole Price”); provided,
however, that installments of interest on the Senior Notes 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 Senior Notes, registered
as such at the close of business on the relevant record date according to the
terms and provisions of the Indenture.


 


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


 


If less
than all of the Senior Notes are to be redeemed, the Senior Notes 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 Senior Notes and portions of Senior Notes in
amounts of $1,000 or any integral multiples of $1,000 in excess thereof from
the outstanding Senior Notes, in accordance with Section 11.3 of the
Original Indenture.


 


Unless the Company
defaults in payment of the redemption price, the portion of Senior Notes called
for redemption will no longer accrue interest on and after the redemption date.


 


ARTICLE FOUR


 


MISCELLANEOUS


 


Section 4.1.  Execution as Supplemental
Indenture.  This First
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this First Supplemental Indenture forms a part thereof.


 


Section 4.2.  Conflict with Trust
Indenture Act.  This First
Supplemental Indenture may, but is not, as of the date first written above,
required to be, qualified under and subject to the Trust Indenture Act.  If this First Supplemental Indenture shall
become qualified under and subject to the Trust Indenture Act, then if any
provision hereof limits, qualifies or conflicts with another provision hereof,
or with a provision of the Original Indenture, which is required to be included
in this First Supplemental Indenture, or in the Original Indenture, respectively,
by any of the provisions of the Trust Indenture Act, such required provision
shall control to the extent it is applicable. 
Except as expressly provided otherwise herein, any reference herein to a
requirement under the Trust Indenture Act shall apply only upon and so long as
this First Supplemental Indenture shall become qualified under and subject to
the Trust Indenture Act..


 


Section 4.3.  Effect of Headings.  The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.


 


Section 4.4.  Successors and Assigns.  All covenants and agreements by the Company
and the Trustee in this First Supplemental Indenture shall bind its successors
and assigns, whether so expressed or not.


 


15





















 


Section 4.5.  Separability Clause.  In case any provision in this First
Supplemental Indenture or in the Senior Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


Section 4.6.  Benefits
of First Supplemental Indenture.  Nothing in this First
Supplemental Indenture or in the Senior Notes, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
the Holders, any benefit or any legal or equitable right, remedy or claim under
this First Supplemental Indenture.


 


Section 4.7.  Execution and
Counterparts.  This First
Supplemental Indenture may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.


 


Section 4.8.  Governing
Law.  This First Supplemental
Indenture and the Senior Notes shall be governed by and construed in accordance
with the laws of the State of New York except, if this First Supplemental
Indenture shall become qualified under and subject to the Trust Indenture Act,
to the extent that the Trust Indenture Act shall be applicable.


 


16





















 


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 HOLDINGS
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST
  TRUST COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Roxane
  Ellwanger

  
	
   

  	
   

  	
  Title: Assistant
  Vice President

  



 





















 


	
  STATE OF
  MICHIGAN

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF

  	
  )

  



 


On
this                 
day of                 
2003, before me personally appeared                                     ,
to me known to be                                               
of ITC Holdings Corp., one of the corporations that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said Corporation, 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 Corporation.


 


On the
         day of                 
in the year          before me
personally came                                     
to me known, who, being by me duly sworn, did depose and say that he resides at
                                                              ;
that he is                                                           
of ITC Holdings Corp., the corporation described in and which executed the
above instrument; and that he signed his name thereto by authority of the board
of directors of said corporation.


 


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


 


 


	
   

  	
   

  
	
                                  ,
  Notary Public

  
	
   

  
	
                                  
  County, Michigan

  
	
   

  
	
  My Commission
  expires:

  	
   

  	
   

  
				



 


 


2





















 


	
  STATE OF
  ILLINOIS

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF COOK

  	
  )

  



 


On the
11th day of July in the year 2003 before me, the undersigned, personally
appeared Roxane Ellwanger, Assistant Vice President of BNY Midwest Trust
Company, 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.


 


 


	
   

  	
   

  
	
  Print Name: A.
  Hernandez

  



 


 


Notary Public, State of
Illinois

Commission expires:  July 8, 2006


 





















 


EXHIBIT A


 


[FORM OF FACE OF SENIOR NOTES]


 


[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) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN


 










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


 


A-1





















 


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 SECURITIES 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 SYSTEM OR CLEARSTREAM LUXEMBOURG, A SOCIETE
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.


 










** To be included on the
face of each Restricted Security and Rule 144A Definitive Security.


 


*** To be included on the
face of each Restricted Definitive Security and Rule 144A Definitive
Security.


 


 


A-2





















 


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 SYSTEM OR CLEARSTREAM LUXEMBOURG, A SOCIETE ANONYME]****


 


ITC HOLDINGS CORP.


 


5.25% SENIOR NOTES DUE JULY, 2013


 


	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  No.

  	
  CUSIP

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ISIN

  	
   

  	
   

  



 


ITC
HOLDINGS CORP., a corporation 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


 










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


 


A-3





















 


                                        
or registered assigns, the principal sum of $                                
on July 15, 2013, and to pay interest thereon from July 16, 2003, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on January 15 and July 15
in each year, commencing January 15, 2004, 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 5.25% 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 Security is registered at the close of business on
the Regular Record Date for such interest, which shall be the January 1 or
July 1 (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 either be paid to the Person in whose name this
Security 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 said Indenture.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.


 


Payment
of the principal of (and premium, if any) and interest on the Securities of
this series 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 payment 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
Securities to a Paying Agent to collect principal payments..


 


Reference
is hereby made to the further provisions of the Securities of this series 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
Security shall not be entitled to any benefits under the Indenture (hereinafter
referenced), or be valid or obligatory for any purpose.


 


A-4





















 


IN
WITNESS WHEREOF, ITC HOLDINGS CORP. has caused this Security to be
duly executed.


 


	
  Dated:

  	
  ITC HOLDINGS
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-5





















 


TRUSTEE’S CERTIFICATE OF AUTHENTICATION


 


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


 


	
  Date:

  	
   

  	
  ,

  
	
   

  	
  as Trustee,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
					



 


A-6





















 


[FORM OF REVERSE OF SENIOR NOTE]


 


This
Security is one of the duly authorized issue of debentures, notes, bonds or
other evidences of indebtedness of the Company (herein sometimes referred to as
the “Securities”), of the series
hereinafter specified, all issued or to be issued under and pursuant to the
Original Indenture dated as of July 15, 2003, as supplemented by the First
Supplemental Indenture, dated as of July 15, 2003 (as so supplemented, the
“Indenture”), duly executed and
delivered by the Company and BNY Midwest Trust Company, 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 Securities of this series and of the terms upon which the
Securities of this series 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 $267,000,000; provided
that the Company may from time to time or at any time, without the consent of
the Holders of the Securities of this series, issue additional Senior Notes,
which additional Senior Notes shall increase the aggregate principal amount of,
and shall be consolidated and form a single series with, the Senior Notes.  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.


 


This
Senior Note may be redeemed in accordance with the procedures set forth in the
Indenture on not less than 30 nor more than 60 days’ notice 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 Senior Notes 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 (the “Make-Whole Price”);
provided, however, that installments of interest on the Senior Notes 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 Senior Notes, registered
as such at the close of business on the relevant record date according to the
terms and provisions of the Indenture.


 


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


 


Unless
the Company defaults in payment of the redemption price, the portion of Senior
Notes called for redemption will no longer accrue interest on and after the
redemption date.


 


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If
less than all of the Securities of this series are to be redeemed, the
Securities of this series will be redeemed on a pro rata basis by the Trustee
from the Outstanding Securities of this series.


 


The
Securities 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 Securities of this series and (b) certain restrictive
covenants upon compliance by the Company with certain conditions set forth in
the Indenture.


 


If an
Event of Default with respect to the Securities of this series shall occur and
be continuing, the unpaid principal of the Securities of this series 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 Securities of this series
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 Securities of this series 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 Securities of this series is registrable in the Security
Register, upon surrender of the Securities of this series 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 Securities of
this series 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 Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.


 


The
Securities of this series are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and


 


A-8





















 


subject to certain
limitations therein set forth, the Securities of this series are exchangeable
for a like aggregate principal amount of the Securities of this series and 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 Securities of this series 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 Securities of this series are registered
as the owner hereof for all purposes, whether or not the Securities of this
series be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.


 


The
Securities of this series are not subject to any sinking fund.


 


Each
Holder, by accepting a Security, 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.


 


The
Securities of this series shall be governed by and construed in accordance with
the laws of the State of New York, except, if the Indenture shall become
qualified under and subject to the Trust Indenture Act, to the extent that the
Trust Indenture Act shall be applicable.


 


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


 


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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 Security and
all rights thereunder, hereby irrevocably constituting and appointing


 


 


 


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


 


[THE FOLLOWING PROVISION TO BE INCLUDED


ON ALL SECURITIES,


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 after the later of the original issuance of this Security or the
last date on which this Security was held by ITC Holdings Corp. or any
affiliate of ITC Holdings Corp., the undersigned confirms that without
utilizing any general solicitation or general advertising that:


 


[Check One]


 


o (a) the Securities 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


 


A-10





















 


o (b) this Security is 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 Security and the
Indenture.


 


If neither of the
foregoing boxes is checked, the Security Registrar shall not be obligated to
register this Security 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 2.9 of the Indenture shall have been satisfied.


 


	
  Date: [                      ,
      ]

  	
  [Name of
  Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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.


 


A-11





















 


EXHIBIT B


 


[Form of Regulation S Transfer Certificate]


 


[Date]


 


ITC Holdings Corp. (the “Company”)


1901 South Wagner


Ann Arbor, Michigan, 48103-9715


Attention:  General Counsel


 


BNY Midwest Trust Company
(the “Trustee”)


2 N. LaSalle
Street


Suite 1020


Chicago, Illinois
60630


Attention:  Corporate Trust Administration


 


 


Dear Ladies and
Gentlemen:


 


In connection with our
proposed transfer of $                    
aggregate principal amount of 5.25% Senior Notes Due July 15, 2013
(the “Notes”) of the Company, we
confirm that:


 


(a)                                  the
offer of the Notes was not made to a person in the United States;


 


(b)                                 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;


 


(c)                                  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


 


(d)                                 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.


 


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


 


B-1





















 


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

  	
   

  



 


B-2





















 


EXHIBIT C


 


[Form of Certificate to be Delivered in Connection with Transfers
to


Non-QIB Institutional Accredited Investors]


 


[Date]


 


ITC Holdings Corp.


1901 South Wagner

Ann Arbor, Michigan 48103-9715


 


Credit Suisse First
Boston LLC


Eleven Madison Avenue


New York, NY 10010


 


Dear Sirs:


 


We are delivering this
letter in connection with an offering of $267,000,000 of 5.25% Senior Notes due
July 15, 2013 (the “Securities”)
of ITC Holdings Corp., a Michigan corporation (the “Company”), all as described
in the Confidential Offering Circular (the “Offering Circular”) relating to the
offering.


 


We hereby confirm that:


 


(i)                  we are an
institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”), or an entity in which all of the equity owners
are accredited investors within the meaning of Rule 501(a)(1), (2), (3) or
(7) under the Securities Act (an “Institutional Accredited Investor”);


 


(ii)               (A) any
purchase of the Securities by us will be for our own account or for the account
of one or more other Institutional Accredited Investors or as fiduciary for the
account of one or more trusts, each of which is an “accredited investor” within
the meaning of Rule 501(a)(7) under the Securities Act and for each
of which we exercise sole investment discretion or (B) we are a “bank”,
within the meaning of Section 3(a)(2) of the Securities Act, or a “savings
and loan association” or other institution described in Section 3(a)(5)(A) of
the Securities Act that is acquiring the Securities as fiduciary for the
account of one or more institutions for which we exercise sole investment
discretion,


 


(iii)            we will acquire
Securities having a minimum purchase price of not less than $100,000 for our
own account or for any separate account for which we are acting;


 


(iv)           we have such knowledge
and experience in financial and business matters that we are capable of
evaluating the merits and risks of purchasing the Securities;


 


(v)              we are not acquiring
the Securities with a view to distribution thereof or with any present
intention of offering or selling any of the Securities, except inside the
United States in accordance with Rule 144A under the Securities Act or
outside the United States under Regulation S under the Securities Act, as
provided below; provided that the disposition of
our property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control;


 


C-1





















 


(vi)           we have received a copy
of the Offering Circular relating to the offering of the Securities and
acknowledge that we have had access to financial and other information, and
have been afforded the opportunity to ask questions of representatives of the
Company and receive answers thereto, as we deem necessary in connection with
our decision to purchase the Securities; and


 


(vii) 
we understand that any subsequent transfer of the Securities is subject to
certain restrictions and conditions set forth in the Indenture, dated as of July 15,
2003, among the Company, BNY Midwest Trust Company (the “Trustee”) as supplemented by the First Supplemental
Indenture, dated as of July 15, 2003 among the Company and the Trustee
(together, the “Indenture”),
relating to the Securities, and we agree to be bound by, and not to resell,
pledge or otherwise transfer the Purchased Securities except in compliance
with, such restrictions and conditions and the Securities Act.


 


We understand that the Securities are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Securities have not been and
will not be registered under the Securities Act, and we agree, on our own
behalf and on behalf of each account for which we acquire
any Securities, that if in the future we decide to resell, pledge or otherwise
transfer the Securities within two years after the later of the original
issuance of such Securities and the last date on which such Securities are
owned by the Company or any affiliate of the Company, the Securities may be
offered, resold, pledged or otherwise transferred only (i) in the United
States to a person who we reasonably believe 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 a transaction in accordance with Rule 904 under the Securities Act, (iii) under
an exemption from registration under the Securities Act provided by Rule 144
thereunder (if available) or (iv) under an effective registration
statement under the Securities Act, in each of cases (i) through (iv),
subject to any applicable securities laws of any State of the United States or
any other applicable jurisdiction.  We
understand that the Security Registrar and transfer agent for the Securities,
will not be required to accept for registration of transfer any Securities
acquired by us, except upon presentation of evidence satisfactory to the
Company and the transfer agent that the
foregoing restrictions on transfer have been complied with.  We further understand that any Securities
acquired by us will be in the form of definitive physical certificates and that
the certificates will bear a legend reflecting the substance of this paragraph.


 


We
acknowledge that you, the Company and others
will rely upon our confirmations, acknowledgements and agreements set forth
herein, and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and complete.


 


THIS
LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.


 


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name of
  Purchaser)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 


C-2





















 


	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Address:

  	
   

  



 


C-3