##### 



ITC Holdings Corp.
 
 Note Purchase Agreement




---



##### 



TABLE OF CONTENTS
  Section
    
    Heading
    
    PageSection 1. Authorization of Notes
    
    
    1Section 2. Sale and Purchase of Notes
    
    
    1Section 3. Closing
    
    
    2Section 4. Conditions to Closing
    
    
    2Section 4.1
    
    Representations and Warranties
    
    
    2Section 4.2
    
    Performance; No Default
    
    
    2Section 4.3
    
    Compliance Certificates
    
    
    2Section 4.4
    
    Opinions of Counsel
    
    
    3Section 4.5
    
    Purchase Permitted by Applicable Law, Etc.
    
    
    3Section 4.6
    
    Sale of Other Notes
    
    
    3Section 4.7
    
    Payment of Special Counsel Fees
    
    
    3Section 4.8
    
    Private Placement Number
    
    
    3Section 4.9
    
    Changes in Corporate Structure
    
    
    3Section 4.10
    
    Funding Instructions
    
    
    3Section 4.11
    
    Proceedings and Documents
    
    
    4Section 5. Representations and Warranties of the Company
    
    
    4Section 5.1
    
    Organization; Power and Authority
    
    
    4Section 5.2
    
    Authorization, Etc.
    
    
    4Section 5.3
    
    Disclosure
    
    
    4Section 5.4
    
    Organization and Ownership of Shares of Subsidiaries; Affiliates
    
    
    5Section 5.5
    
    Financial Statements
    
    
    5Section 5.6
    
    Compliance with Laws, Other Instruments, Etc.
    
    
    6Section 5.7
    
    Governmental Authorizations, Etc.
    
    
    6Section 5.8
    
    Litigation; Observance of Agreements, Statutes and Orders
    
    
    6Section 5.9
    
    Taxes
    
    
    6Section 5.10
    
    Title to Property; Leases
    
    
    7Section 5.11
    
    Licenses, Permits, Etc.
    
    
    7
 -i-




---



##### 



Section
    
    Heading
    
    PageSection 5.12
    
    Compliance with ERISA
    
    
    7Section 5.13
    
    Private Offering by the Company
    
    
    8Section 5.14
    
    Use of Proceeds; Margin Regulations
    
    
    8Section 5.15
    
    Existing Indebtedness; Future Liens
    
    
    9Section 5.16
    
    Foreign Assets Control Regulations, Etc.
    
    
    9Section 5.17
    
    Status under Certain Statutes
    
    
    10Section 5.18
    
    Environmental Matters
    
    
    10Section 5.19
    
    Notes Rank Pari Passu
    
    
    11Section 6. Representations of the Purchasers
    
    
    11Section 6.1
    
    Purchase for Investment
    
    
    11Section 6.2
    
    Source of Funds
    
    
    11Section 7. Information as to Company
    
    
    13Section 7.1
    
    Financial and Business Information
    
    
    13Section 7.2
    
    Officers Certificate
    
    
    15Section 7.3
    
    Visitation
    
    
    16Section 8. Payment and Prepayment of the Notes
    
    
    16Section 8.1
    
    Maturity
    
    
    16Section 8.2
    
    Optional Prepayments with Make-Whole Amount
    
    
    16Section 8.3
    
    Allocation of Partial Prepayments
    
    
    17Section 8.4
    
    Maturity; Surrender, Etc.
    
    
    17Section 8.5
    
    Purchase of Notes
    
    
    17Section 8.6
    
    Make-Whole Amount
    
    
    17Section 9. Affirmative Covenants
    
    
    19Section 9.1
    
    Compliance with Law
    
    
    19Section 9.2
    
    Insurance
    
    
    19Section 9.3
    
    Maintenance of Properties
    
    
    19Section 9.4
    
    Payment of Taxes and Claims
    
    
    19Section 9.5
    
    Corporate Existence, Etc.
    
    
    20Section 9.6
    
    Books and Records
    
    
    20Section 9.7
    
    Notes to Rank Pari Passu
    
    
    20Section 10. Negative Covenants
    
    
    20Section 10.1
    
    Debt to Capitalization Ratio
    
    
    20Section 10.2
    
    Limitation on Liens
    
    
    20
 -ii-




---



##### 



Section
    
    Heading
    
    PageSection 10.3
    
    Limitation on Dividends
    
    
    22Section 10.4
    
    Limitation on Sale and Leaseback Transactions
    
    
    22Section 10.5
    
    Merger, Consolidation, Etc.
    
    
    23Section 10.6
    
    Transactions with Affiliates
    
    
    23Section 10.7
    
    Line of Business
    
    
    23Section 10.8
    
    Terrorism Sanctions Regulations
    
    
    23Section 10.9
    
    Material Subsidiaries
    
    
    24Section 11. Events of Default
    
    
    24Section 12. Remedies on Default, Etc.
    
    
    26Section 12.1
    
    Acceleration
    
    
    26Section 12.2
    
    Other Remedies
    
    
    27Section 12.3
    
    Rescission
    
    
    27Section 12.4
    
    No Waivers or Election of Remedies, Expenses, Etc.
    
    
    27Section 13. Registration; Exchange; Substitution of Notes
    
    
    27Section 13.1
    
    Registration of Notes
    
    
    27Section 13.2
    
    Transfer and Exchange of Notes
    
    
    28Section 13.3
    
    Replacement of Notes
    
    
    28Section 14. Payments on Notes
    
    
    28Section 14.1
    
    Place of Payment
    
    
    28Section 14.2
    
    Home Office Payment
    
    
    29Section 15. Expenses, Etc.
    
    
    29Section 15.1
    
    Transaction Expenses
    
    
    29Section 15.2
    
    Survival
    
    
    29Section 16. Survival of Representations and Warranties; Entire Agreement
    
    
    30Section 17. Amendment and Waiver
    
    
    30Section 17.1
    
    Requirements
    
    
    30Section 17.2
    
    Solicitation of Holders of Notes
    
    
    30Section 17.3
    
    Binding Effect, Etc.
    
    
    31Section 17.4
    
    Notes Held by Company, Etc.
    
    
    31Section 18. Notices
    
    
    31Section 19. Reproduction of Documents
    
    
    32Section 20. Confidential Information
    
    
    32Section 21. Substitution of Purchaser
    
    
    33
 -iii-




---



##### 



Section
    
    Heading
    
    PageSection 22. Miscellaneous
    
    
    33Section 22.1
    
    Successors and Assigns
    
    
    33Section 22.2
    
    Payments Due on Non-Business Days
    
    
    33Section 22.3
    
    Accounting Terms
    
    
    34Section 22.4
    
    Severability
    
    
    34Section 22.5
    
    Construction, Etc.
    
    
    34Section 22.6
    
    Counterparts
    
    
    34Section 22.7
    
    Governing Law
    
    
    34Section 22.8
    
    Jurisdiction and Process; Waiver of Jury Trial
    
    
    35
 -iv-




---



##### 



Attachments to Note Purchase Agreement:
 Schedule A
    
    
    
    Information Relating to PurchasersSchedule B
    
    
    
    Defined TermsSchedule 5.3
    
    
    
    Disclosure MaterialsSchedule 5.4
    
    
    
    Subsidiaries of the Company and Ownership of Subsidiary StockSchedule 5.5
    
    
    
    Financial StatementsSchedule 5.15
    
    
    
    Existing IndebtednessSchedule 10.2
    
    
    
    Existing LiensExhibit1(a)
    
    
    
    Form of 6.04% Senior Note, Series A, due September 20, 2014Exhibit1(b)
    
    
    
    Form of 6.23% Senior Note, Series B, due September 20, 2017Exhibit 4.4(a)
    
    
    
    Form of Opinion of Special Counsel for the CompanyExhibit 4.4(b)
    
    
    
    Form of Opinion of Special Counsel for the Purchasers
 -v-




---



##### 



ITC Holdings Corp.
 
  To the Purchasers listed in  the attached Schedule A
  ITC Holdings Corp Company Purchaser Purchasers
 Authorization of Notes.
 Series A Notes Series B
Notes Notes.
 Sale and Purchase of Notes.




---



##### 



Closing.
 Closing
 Conditions to Closing
  Section 4.1 Representations and Warranties.
 Section 4.2 Performance; No Default.
 Section 4.3 Compliance Certificates.
 Officers Certificate.
 Secretarys Certificate.
 -2-




---



##### 



Section 4.4 Opinions of Counsel.
 Section 4.5 Purchase Permitted by Applicable Law, Etc.
 Section 4.6 Sale of Other Notes.
 Section 4.7 Payment of Special Counsel Fees.
 Section 4.8 Private Placement Number.
 Section 4.9 Changes in Corporate Structure.
 Section 4.10 Funding Instructions.
 -3-




---



##### 



Section 4.11 Proceedings and Documents.
 Representations and Warranties of the Company.
  Section 5.1 Organization; Power and Authority.
 Section 5.2 Authorization, Etc.
 Section 5.3 Disclosure. Memorandum Disclosure Documents
 -4-




---



##### 



Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates.
     Section 5.5 Financial Statements.
 -5-




---



##### 



Section 5.6 Compliance with Laws, Other Instruments, Etc.
 Section 5.7 Governmental Authorizations, Etc.
 Section 5.8 Litigation; Observance of Agreements, Statutes and Orders.
   Section 5.9 Taxes.
 -6-




---



##### 



Section 5.10 Title to Property; Leases.
 Section 5.11 Licenses, Permits, Etc.
    Section 5.12 Compliance with ERISA.
  -7-




---



##### 



Section 5.13 Private Offering by the Company.
 Section 5.14 Use of Proceeds; Margin Regulations.
 -8-




---



##### 



Section 5.15 Existing Indebtedness; Future Liens.
    Section 5.16 Foreign Assets Control Regulations, Etc.
   -9-




---



##### 



Section 5.17 Status under Certain Statutes. PUHCA 2005
 Section 5.18 Environmental Matters.
     -10-




---



##### 



Section 5.19 Notes Rank Pari Passu. pari passu
 Representations of the Purchasers.
 Section 6.1 Purchase for Investment. provided
 Section 6.2 Source of Funds. Source
 PTE NAIC Annual Statement
   -11-




---



##### 



QPAM Exemption
 INHAM Exemption
     -12-




---



##### 



Information as to Company.
 Section 7.1 Financial and Business Information
 Quarterly Statements
   provided Form 10-Q provided, further, Electronic
Delivery
 Annual Statements
    -13-




---



##### 



provided Form
10-K provided, further,
 SEC and Other Reports provided,
 Notice of Default or Event of Default
 ERISA Matters
   -14-




---



##### 



Notices from Governmental Authority
 Requested Information
 Section 7.2 Officers Certificate.
 Covenant Compliance
 Event of Default
 -15-




---



##### 



Section 7.3 Visitation.
 No Default
 Default
 Payment and Prepayment of the Notes.
 Section 8.1 Maturity.
 Section 8.2 Optional Prepayments with Make-Whole Amount. plus plus
 -16-




---



##### 



Section 8.3 Allocation of Partial Prepayments.
 Section 8.4 Maturity; Surrender, Etc.
 Section 8.5 Purchase of Notes.
 Section 8.6 Make-Whole Amount. Make-Whole Amount provided
 Called Principal
 Discounted Value
 -17-




---



##### 



Reinvestment Yield
  Remaining Average Life
 Remaining Scheduled Payments
 Settlement Date
 -18-




---



##### 



Affirmative Covenants.
  Section 9.1 Compliance with Law.
 Section 9.2 Insurance.
 Section 9.3 Maintenance of Properties. provided
 Section 9.4 Payment of Taxes and Claims. provided
 -19-




---



##### 



Section 9.5 Corporate Existence, Etc.
 Section 9.6 Books and Records.
 Section 9.7 Notes to Rank Pari Passu. pari passu
 Negative Covenants.
  Section 10.1 Debt to Capitalization Ratio. provided
 Section 10.2 Limitation on Liens.
   -20-




---



##### 



provided
   provided
     -21-




---



##### 



provided provided,
further,
 Section 10.3 Limitation on Dividends. provided
 Section 10.4 Limitation on Sale and Leaseback Transactions. Sale and Leaseback Transaction
 -22-




---



##### 



Section 10.5 Merger, Consolidation, Etc.
    Section 10.6 Transactions with Affiliates.
 Section 10.7 Line of Business.
 Section 10.8 Terrorism Sanctions Regulations.
 -23-




---



##### 



Section 10.9 Material Subsidiaries
 Events of Default.
        -24-




---



##### 



-25-




---



##### 



Remedies on Default, Etc.
 Section 12.1 Acceleration
     -26-




---



##### 



Section 12.2 Other Remedies.
 Section 12.3 Rescission.
 Section 12.4 No Waivers or Election of Remedies, Expenses, Etc.
 Registration; Exchange; Substitution of Notes.
 Section 13.1 Registration of Notes.
 -27-




---



##### 



Section 13.2 Transfer and Exchange of Notes. provided
 Section 13.3 Replacement of Notes.
 provided
   Payments on Notes.
 Section 14.1 Place of Payment.
 -28-




---



##### 



Section 14.2 Home Office Payment.
 Expenses, Etc.
 Section 15.1 Transaction Expenses.
 Section 15.2 Survival.
 -29-




---



##### 



Survival of Representations and Warranties; Entire Agreement.
  Amendment and Waiver.
 Section 17.1 Requirements.
 Section 17.2 Solicitation of Holders of Notes.
 Solicitation
 Payment
 -30-




---



##### 



Consent in Contemplation of Transfer.
 Section 17.3 Binding Effect, Etc.
 Section 17.4 Notes Held by Company, Etc.
 Notices.
    -31-




---



##### 



Reproduction of Documents.
  Confidential Information.
 Confidential Information provided provided
 -32-




---



##### 



Substitution of Purchaser.
  Miscellaneous.
 Section 22.1 Successors and Assigns.
 Section 22.2 Payments Due on Non-Business Days.
 -33-




---



##### 



provided
 Section 22.3 Accounting Terms. provided
 Section 22.4 Severability.
 Section 22.5 Construction, Etc.
  Section 22.6 Counterparts.
 Section 22.7 Governing Law.
 -34-




---



##### 



Section 22.8 Jurisdiction and Process; Waiver of Jury Trial.
    The parties hereto hereby waive trial by jury in any action brought on
or with respect to this Agreement, the Notes or any other document executed in connection
herewith or therewith.
  -35-




---



##### 



Very truly yours,ITC Holdings Corp.By
    /s/ Edward M. RahillTitle: Senior Vice President & CFO




---



##### 



This Agreement is hereby accepted and agreed to as of the date thereof.Metropolitan Life Insurance CompanyBy:
    /s/ Judith A. GulottaTitle: DirectorThe Northwestern Mutual Life Insurance CompanyBy:
    /s/ Howard SternTitle: Authorized RepresentativeThe Prudential Insurance Company of AmericaBy:
    /s/ Ric E. AbelTitle: Vice PresidentPrudential Retirement Insurance and Annuity CompanyBy:
    Prudential Investment Management, Inc., as investment managerBy:
    /s/ Ric E. AbelTitle: Vice PresidentUniversal Prudential Arizona Reinsurance CompanyBy:
    Prudential Investment Management, Inc., as investment managerBy:
    /s/ Ric E. AbelTitle: Vice President




---



##### 



This Agreement is hereby accepted and agreed  to as of the date thereof.Jackson National Life Insurance CompanyBy:
    PPM America, Inc., as attorney in fact, on behalf of Jackson National Life Insurance CompanyBy:
    /s/ Craig RadisTitle: Vice PresidentThe Guardian Life Insurance Company of AmericaBy:
    /s/ Brian KeatingTitle: Managing DirectorConnecticut General Life Insurance CompanyBy:
    CIGNA Investments, Inc. (authorized agent)By:
    /s/ Deborah B. WiacekTitle: Managing DirectorLife Insurance Company of North AmericaBy:
    CIGNA Investments, Inc. (authorized agent)By:
    /s/ Deborah B. WiacekTitle: Managing Director




---



##### 



This Agreement is hereby accepted and agreed to as of the date thereof.The United of Omaha Life Insurance CompanyBy:
    /s/ Curtis R. CaldwellTitle: Vice PresidentFort Dearborn Life Insurance CompanyBy:
    Advantus Capital Management, Inc.By:
    /s/ E.A. BergslandTitle: Vice PresidentColorado Bankers Life Insurance CompanyBy:
    Advantus Capital Management, Inc.By:
    /s/ James F. GeigerTitle: Vice PresidentGreat Western Insurance CompanyBy:
    Advantus Capital Management, Inc.By:
    /s/ James W. TobinTitle: Vice PresidentThe Catholic Aid AssociationBy:
    Advantus Capital Management, Inc.By:
    /s/ Robert W. ThompsonTitle: Vice President




---



##### 



This Agreement is hereby accepted and agreed to as of the date thereof.American Republic Insurance CompanyBy:
    Advantus Capital Management, Inc.By:
    /s/ Joseph GogolaTitle: Vice PresidentBlue Cross and Blue Shield of Florida, Inc.By:
    Advantus Capital Management, Inc.By:
    /s/ Theodore R. HoxmeierTitle: Vice PresidentAmerican Public Life Insurance Company.By:
    Advantus Capital Management, Inc.By:
    /s/ Kathleen H. ParkerTitle: Vice President




---



##### 



Information Relating To Purchasers
 Principal Amount of NotesName and Address of Purchaser
    
    Series
    
    to be Purchased[Name of Purchaser]
    
    
    
    $(1) All payments by wire transfer of
immediately available funds to:With sufficient
information to identify
the source and
application of such
funds.(2) All notices of payments and
written confirmations of such wire
transfers:(3) All other communications:
 Schedule A






---



##### 



Defined Terms
  Acquisition provided
 Affiliate Control Affiliate
 Anti-Terrorism Order
 Attributable Value
 Business Day
 Schedule B




---



##### 



Capital Lease
 Capital Stock
 Capitalized Lease Obligations
 Closing
 Code
 Company
 Confidential Information
 Consolidated Capitalization
 Debt to Capitalization Ratio
 Default
 Default Rate
 Electronic Delivery
 Environmental Laws
 B-2




---



##### 



ERISA
 ERISA Affiliate
 Event of Default
 Form 10-K
 Form 10-Q
 GAAP
 Governmental Authority
     Guarantee Obligations primary obligor" provided
 B-3




---



##### 



Hazardous Material
 holder
 Indebtedness provided
 INHAM Exemption
 Institutional Investor
 Investment Grade
 ITC
 ITC First Mortgage Indenture
 Lien
 B-4




---



##### 



Make-Whole Amount
 Material
 Material Adverse Effect
 Material Subsidiary Subject Subsidiary"
     Memorandum
 METC
 METC First Mortgage Indenture
 Moodys
 Multi-employer Plan
 NAIC
 B-5




---



##### 



NAIC Annual Statement
 Net Tangible Assets
 Notes
 Notice of Election to Increase Debt to Capitalization Ratio
 Officers Certificate
 PBGC
 Person
 Permitted Liens
 B-6




---



##### 



Plan
 property properties
 PTE
 Purchaser
 QPAM Exemption
 Qualified Institutional Buyer
 Related Fund
 Required Holders
 Responsible Officer
 B-7




---



##### 



S&P
 Sale and Leaseback Transaction
 SEC
 Securities Security
 Securities Act
 Senior Financial Officer
 Series A Notes
 Series B Notes
 Source
 Subsidiary
 SVO
 Threshold Amount
 Total Capitalization provided
 B-8




---



##### 



Total Debt
 USA Patriot Act
 Wholly-Owned Subsidiary
 B-9




---



##### 



Form of Series A Note
 ITC Holdings Corp.
  No. RA-
    

, 20$
    
    PPN 45031# AB0
 For value received ITC Holdings Corp. Company   Dollars
  Notes Note Purchase Agreement
  Exhibit




---



##### 



ITC Holdings Corp.ByIts




---



##### 



Form of Series B Note
 ITC Holdings Corp.
  No. RB-
    
    ,20$
    
    PPN 45031# AC8
 For value received ITC Holdings Corp. Company    Dollars
  Notes Note Purchase Agreement
  Exhibit




---



##### 



ITC Holdings Corp.ByIts




---



##### 



Form of Opinion of Special Counsel  to the Company
          Exhibit




---



##### 








---



##### 



Form of Opinion of Special Counsel  to the Purchasers
        Exhibit