Exhibit 4.2

 

EXECUTION VERSION

 

FIRST SUPPLEMENTAL INDENTURE  TO FIRST MORTGAGE AND DEED OF TRUST

 

ITC GREAT PLAINS, LLC

 

TO

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

Trustee

 

Dated as of November 12, 2014

 

Supplementing the First Mortgage and Deed of Trust dated as of November 12, 2014,

 

From ITC GREAT PLAINS, LLC to WELLS FARGO BANK, NATIONAL ASSOCIATION, Trustee

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS

 

Establishing a series of Securities designated 4.16% First Mortgage Bonds, Series A, due 2044

 

	
 
    	
 
    


 

A POWER OF SALE HAS BEEN GRANTED IN THIS FIRST SUPPLEMENTAL INDENTURE.  A POWER OF SALE MAY ALLOW LENDER TO TAKE THE PROPERTY, OR ANY PART THEREOF, AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY BORROWER UNDER THIS FIRST SUPPLEMENTAL INDENTURE.

 

This First Supplemental Indenture serves as a Fixture Filing under the Oklahoma Uniform Commercial Code

 

	
 
    	
 
    


 











 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE ONE   DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
    	
4
    
	
 
    	
 
    
	
ARTICLE TWO TITLE,   FORM AND TERMS AND CONDITIONS OF THE BONDS
    	
8
    
	
 
    	
 
    
	
Section 2.01. The Bonds
    	
8
    
	
Section 2.02. Payment on the   Bonds
    	
9
    
	
Section 2.03. Mandatory   Redemption of the Bonds
    	
10
    
	
Section 2.04. Optional   Redemption
    	
10
    
	
Section 2.05. Purchase of   Bonds
    	
11
    
	
Section 2.06. Payment upon   Event of Default
    	
11
    
	
Section 2.07. Transfers
    	
11
    
	
 
    	
 
    
	
ARTICLE THREE   ADDITIONAL COVENANTS
    	
11
    
	
 
    	
 
    
	
Section 3.01. Affirmative   Covenants of the Company
    	
11
    
	
Section 3.02. Negative   Covenants of the Company
    	
12
    
	
 
    	
 
    
	
ARTICLE FOUR   ADDITIONAL EVENTS OF DEFAULT; REMEDIES
    	
13
    
	
 
    	
 
    
	
Section 4.01. Events of   Default
    	
13
    
	
Section 4.02. Acceleration   of Maturity; Rescission and Annulment
    	
14
    
	
 
    	
 
    
	
ARTICLE FIVE   MISCELLANEOUS PROVISIONS
    	
14
    
	
 
    	
 
    
	
Section 5.01. Reports to   Bondholders of Financial and Business Information
    	
14
    
	
Section 5.02. Execution of   First Supplemental Indenture
    	
14
    
	
Section 5.03. Effect of   Headings
    	
17
    
	
Section 5.04. Successors and   Assigns
    	
17
    
	
Section 5.05. Severability   Clause
    	
17
    
	
Section 5.06. Benefit of   First Supplemental Indenture
    	
17
    
	
Section 5.07. Execution and   Counterparts
    	
18
    
	
Section 5.08. Conflict with   Mortgage Indenture
    	
18
    
	
Section 5.09. Recitals
    	
18
    
	
Section 5.10. Governing Law
    	
18
    
	
Section 5.11. Kansas   Provisions
    	
18
    
	
Section 5.12. Oklahoma   Provisions
    	
18
    


 

	
Schedule 1
    	
Recording Information
    
	
Exhibit A
    	
Description   of Properties
    
	
Exhibit B
    	
Subordination   Terms
    
	
Exhibit C
    	
Form of   Series A Bonds
    


 

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FIRST SUPPLEMENTAL INDENTURE (this “FIRST SUPPLEMENTAL INDENTURE”), dated as of November 12, 2014, between ITC GREAT PLAINS, LLC, a limited liability company organized and existing under the laws of the State of Michigan (herein called the “Company”), having its principal office at 27175 Energy Way, Novi, Michigan  48377, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee (herein called the “Trustee”), the office of the Trustee at which on the date hereof its corporate trust business is principally administered being at Corporate Trust Services, 150 East 42nd Street, 40th Floor, New York, New York 10017.

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee a First Mortgage and Deed of Trust dated as of November 12, 2014 (the “Mortgage Indenture”), encumbering the real property interests as more particularly described on Exhibit A attached to the Mortgage Indenture and Exhibit A attached hereto providing for the issuance by the Company from time to time of its bonds, notes or other evidences of indebtedness (in the Mortgage Indenture and herein called the “Securities”) to be issued in one or more series and to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Securities; and

 

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Mortgage Indenture and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this First Supplemental Indenture to the Mortgage Indenture as permitted by Sections 2.01, 3.01, 4.01, 4.02 and 14.01 of the Mortgage Indenture in order to establish the form and terms of, and to provide for the creation and issuance of, a series of Securities under the Mortgage Indenture in an aggregate principal amount of $150,000,000 and to amend and supplement the Mortgage Indenture as herein provided; and

 

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

 

GRANTING CLAUSES

 

NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish the terms of a series of Securities, and for and in consideration of the premises and of the covenants contained in the Mortgage Indenture and in this First Supplemental Indenture and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and in order to secure the payment of the principal of and premium, if any, and interest, if any, on, and all other amounts (including, without limitation, fees, expenses and indemnities) in connection with, all Securities from time to time Outstanding and the performance of the covenants therein and herein contained and to declare the terms and conditions on which such Securities are secured, the Company has granted, bargained, sold, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed and hereby grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges, sets over and confirms to the Trustee, and has granted and hereby grants to the Trustee, for itself and for the benefit of the Holders, with power of sale, a lien upon and a security interest in, the following (subject, however, to the terms and conditions set forth in the Mortgage Indenture and herein):

 











 

GRANTING CLAUSE FIRST

 

All right, title and interest of the Company, as of the date of the execution and delivery of this First Supplemental Indenture, as originally executed and delivered, in and to all property, real, personal and mixed, located in the States of Kansas and Oklahoma, or wherever else situated (other than Excepted Property) from time to time, including without limitation, all right, title and interest of the Company in and to the following property and interests so located (other than Excepted Property):

 

(a)                                 all real property owned in fee, easements, easement estates and other interests in real property which are specifically described or referred to in Exhibit A attached to the Mortgage Indenture and Exhibit A attached hereto;

 

(b)                                 all licenses, permits to use the real property of others, franchises to use public roads, streets and other public properties, rights of way and other rights or interests relating to the occupancy or use of real property;

 

(c)                                  all facilities, machinery, equipment and fixtures for the transmission and distribution of electric energy including, but not limited to, all plants, air and water pollution control and sewage and solid waste disposal facilities, switchyards, towers, substations, transformers, poles, lines, cables, conduits, ducts, conductors, meters, regulators and all other property used or to be used for any or all of such purposes;

 

(d)                                 all buildings, offices, warehouses, structures or improvements in addition to those referred to or otherwise included in clauses (a) and (c) above;

 

(e)                                  all computers, data processing, data storage, data transmission and/or telecommunications facilities, equipment and apparatus necessary for the operation or maintenance of any facilities, machinery, equipment or fixtures described or referred to in clause (c) above;

 

(f)                                   all of the foregoing property in the process of construction; and

 

(g)                                  (except as hereinbefore or hereinafter expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore described;

 

GRANTING CLAUSE SECOND

 

Subject to the applicable exceptions permitted by Sections 8.10(d), 13.03 and 13.05 of the Mortgage Indenture, all right, title and interest of the Company in all property of every kind and description and wheresoever situated, real, personal and mixed (other than Excepted Property) which may be hereafter acquired by the Company, it being the intention of the Company that all such property acquired by the Company after the date of the execution and delivery of this First Supplemental Indenture, as originally executed and delivered, shall be as fully embraced within and subjected to the Lien of the Indenture as if such property were owned by the Company as of the date of the execution and delivery of this First Supplemental Indenture, as originally executed and delivered;

 

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GRANTING CLAUSE THIRD

 

Any Excepted Property, which may, from time to time after the date of the execution and delivery of this First Supplemental Indenture, as originally executed and delivered, by delivery or by an instrument supplemental to the Indenture, be subjected to the Lien of the Indenture by the Company, the Trustee being hereby authorized to receive the same at any time as additional security hereunder; it being understood that any such subjection to the Lien of the Indenture of any Excepted Property as additional security may be made subject to such reservations, limitations or conditions respecting the use and disposition of such property or the proceeds thereof as shall be set forth in such instrument; and

 

GRANTING CLAUSE FOURTH

 

All tenements, hereditaments, servitudes and appurtenances belonging or in any way appertaining to the aforesaid property, with the reversions and remainders thereof;

 

EXCEPTED PROPERTY

 

Expressly excepting and excluding, however, from the Lien of the Indenture all right, title and interest of the Company in and to all Excepted Property, whether now owned or hereafter acquired;

 

TO HAVE AND TO HOLD all such property, unto the Trustee, its successors in trust and their assigns forever;

 

SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution and delivery of the Mortgage Indenture, as originally executed and delivered, which Liens do not in the aggregate materially and adversely impair the use of the Mortgaged Property in the operation of the business of the Company, or materially and adversely affect the security afforded by the Indenture, (b) as to property acquired by the Company after the date of the execution and delivery of the Mortgage Indenture, as originally executed and delivered, Liens existing or placed thereon at the time of the acquisition thereof (including, but not limited to, Purchase Money Liens), and (c) Permitted Liens;

 

IN TRUST, for the equal and ratable benefit and security of the Holders from time to time of all Outstanding Securities without any priority of any such Security over any other such Security;

 

PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article IX of the Mortgage Indenture, and if, thereafter, the principal of and premium, if any, and interest, if any, on, and any other amounts (including, without limitation, fees, expenses and indemnities) in connection with, the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 6.03 of the Mortgage Indenture, then and in that case the Indenture shall terminate, and the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise the Indenture, and the estate and rights hereby granted, shall be and remain in full force and effect;

 

IT IS HEREBY COVENANTED AND AGREED by and between the Company and the Trustee that all the Securities are to be authenticated and delivered, and that the Mortgaged Property is to be held, subject to the further covenants, conditions and trusts set forth in the Indenture; and

 

THE PARTIES HEREBY COVENANT AND AGREE as follows:

 

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ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS
 OF GENERAL APPLICATION

 

(a)                                 Mortgage Indenture Definitions.  Each capitalized term that is used herein and is defined in the Mortgage Indenture shall have the meaning specified in the Mortgage Indenture unless such term is otherwise defined herein;  provided, however, that any reference to a “Section” or “Article” refers to a Section or Article, as the case may be, of this First Supplemental Indenture, unless otherwise expressly stated.

 

(b)                                 Additional Definitions.  For purposes of this First Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires, the following capitalized terms shall have the meanings set forth below:

 

“Bond” has the meaning assigned to that term in Section 2.01(a).

 

“Bondholders” means (a) the Initial Bondholders and (b) each subsequent holder of a Bond as shown on the register maintained by the Company pursuant to Section 3.05 of the Indenture.

 

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) in the equity of such Person, including, without limitation, all partnership interests, limited liability company membership or other interests, common stock and preferred stock and any and all warrants, rights or options to purchase any of the foregoing.

 

“Closing Date” has the meaning assigned to that term in Schedule B to the Purchase Agreement.

 

“Change in Ownership” means and shall be deemed to have occurred if Holdco ceases to own, directly or indirectly, 85% of the Capital Stock of the Company.

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Controlled Group” means, when used with respect to the Company, all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with such Person, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

 

“Default” means the occurrence and continuance of an event, which, with the giving of notice or lapse of time, or both, would constitute an Event of Default.

 

“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses or legally enforceable governmental restrictions relating to pollution and the protection of the environment or the release of any Hazardous Materials into the environment.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and the regulations promulgated thereunder.

 

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“Event of Default” has the meaning assigned to that term in Article Four of this First Supplemental Indenture.

 

“Financing Agreements” means the Indenture, including this First Supplemental Indenture, the Purchase Agreement and the Bonds.

 

“First Supplemental Indenture” has the meaning assigned to that term in the introductory paragraph hereof.

 

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that could reasonably be expected to pose a hazard to health and safety, the removal of which could reasonably be expected to be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

 

“Holdco” means ITC Holdings Corp., a Michigan corporation.

 

“Indenture” means the Mortgage Indenture, as supplemented and modified by any and all indentures supplemental thereto, including this First Supplemental Indenture.

 

“Initial Bondholder” means each Bondholder listed on Schedule A to the Purchase Agreement purchasing any Bonds on the Closing Date.

 

“Institutional Investor” means (a) any Initial Bondholder, (b) any holder of more than $5,000,000 of the aggregate principal amount of the Bonds and (c) any bank, trust company, other financial institution, pension plan, investment company, insurance company, or similar financial institution.

 

“Law” means any federal, state, local (including municipal) or other statute, law, rule, regulation, ordinance, order, code, policy or rule of common law, now or hereafter in effect, and any judicial or administrative interpretation thereof by a Governmental Authority or otherwise (including any judicial or administrative order, consent decree or judgment to which the Company is a party).

 

“Make-Whole Amount” means, with respect to any Bond, an amount, as determined by the Company, equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Bond over the amount of such Called Principal; provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining any Make-Whole Amount, the following terms have the following meanings:

 

“Called Principal” means, with respect to any Bond, the principal of such Bond that is to be redeemed pursuant to Section 2.04(a) or has become or is declared to be immediately due and payable pursuant to Section 10.02 of the Indenture, as the context requires.

 

“Discounted Value” means, with respect to the Called Principal of any Bond, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with

 

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accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Bonds is payable) equal to the Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” means, with respect to the Called Principal of any Bond, 0.50% over the yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” on the Bloomberg Financial Markets Services Screen (or such other display as may replace Page PX1 on the Bloomberg Financial Markets Services Screen) for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for actively traded on the run U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding sentence, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable actively traded on the run U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable actively traded on the run U.S. Treasury security with the maturity closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Bond.

 

“Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

 

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Bond, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date; provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Bonds, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 2.04(a) or Section 10.02 of the Indenture.

 

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“Settlement Date” means, with respect to the Called Principal of any Bond, the date on which such Called Principal is to be redeemed pursuant to Section 2.04(a) or has become or is declared to be immediately due and payable pursuant to Section 10.02 of the Indenture, as the context requires.

 

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company, (b) the ability of the Company to perform its obligations under any Financing Agreement (including, the timely payments of principal of, or Make-Whole Amount, if any, and interest on, the Bonds), (c) the legality, validity or enforceability of the Financing Agreements or (d) the perfection or priority of the Liens purported to be created pursuant to the Indenture or the rights and remedies of the Bondholders with respect thereto.

 

“Mortgage Indenture” has the meaning assigned to that term in the first Recital.

 

“Permitted Additional Senior Secured Debt” means indebtedness secured by a Permitted Lien; provided that, for debt secured by a lien described in clauses (v) and (w) of the definition of Permitted Liens to be Permitted Additional Senior Secured Debt, the Securities must be secured on anequal and ratable basis.

 

“Pension Plan” means shall mean a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the Company or any corporation, trade or business that is, along with the Company, a member of a Controlled Group, is a contributing employer or a sponsor.

 

“Property” means any right or interest in or to assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

 

“Purchase Agreement” means that certain Bond Purchase Agreement, to be dated as of November 26, 2014 between the Company and the Initial Bondholders.

 

“Responsible Officer”, when used with respect to the Company, means any Senior Financial Officer or any vice president of the Company or Holdco and any other officer of the Company or Holdco with responsibility for the administration of the relevant Financing Agreement, or portion thereof.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer, comptroller or any vice president of Holdco.

 

“Senior Secured Debt” means (i) the Bonds, (ii) other Securities Outstanding issued pursuant to the Indenture and (iii) Permitted Additional Senior Secured Debt.

 

“Subordinated Debt” means unsecured indebtedness of the Company fully subordinated in right of payment to the Bonds and other Senior Secured Debt substantially on the terms set forth in Exhibit B attached hereto.

 

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ARTICLE TWO

 

TITLE, FORM AND TERMS AND CONDITIONS OF THE BONDS

 

Section 2.01.  The Bonds.

 

(a)                                 The Securities of this series to be issued under the Mortgage Indenture pursuant to this First Supplemental Indenture shall be designated as “4.16% First Mortgage Bonds, Series A, due 2044” (the “Bonds”) and shall be Securities issued under the Mortgage Indenture.

 

(b)                                 The Trustee shall authenticate and deliver the Bonds for original issue on the Closing Date in the aggregate principal amount of $150,000,000, upon a Company Order for the authentication and delivery thereof pursuant to Section 4.01 of the Mortgage Indenture.

 

(c)                                  Interest on the Bonds shall be payable to the Persons in whose names such Bonds are registered at the close of business on the Regular Record Date for such interest (as specified in subsection (e) below), except as otherwise expressly provided in the form of such Bonds attached hereto as Exhibit C.

 

(d)                                 The Bonds shall mature and the principal thereof shall be due and payable together with all accrued and unpaid interest thereon on November 26, 2044.

 

(e)                                  The Bonds shall bear interest at the rate of 4.16% per annum; provided that, to the extent permitted by law, any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount shall bear interest at a rate per annum from time to time equal to the greater of (x) 6.16% and (y) 2.0% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate.  Interest shall accrue on the Bonds from the Closing Date, or the most recent date to which interest has been paid or duly provided for.  The Interest Payment Dates for the Bonds shall be May 26 and November 26 in each year, commencing May 26, 2015, and the Regular Record Dates with respect to the Interest Payment Dates for the Bonds shall be the 15th calendar day preceding each Interest Payment Date (whether or not a Business Day); provided, however, that interest payable at Maturity will be payable to the Bondholder to whom principal is payable.

 

(f)                                   Subject to Section 2.02, the office or agency of the Trustee in New York, New York, which as of the date hereof is located at 150 East 42nd Street, 40th Floor, New York, New York 10017, shall be the place at which the principal of and Make-Whole Amount, if any, and interest on the Bonds shall be payable.  The office or agency of the Trustee in Minneapolis, Minnesota, which as of the date hereof is located at 6th & Marquette Avenue, 12 Floor, Minneapolis, Minnesota 55479, shall be the place at which registration of transfer of the Bonds may be effected; and Wells Fargo Bank, National Association shall be the Security Registrar and the Paying Agent for the Bonds; provided, however, that the Company reserves the right to designate, by one or more Officer’s Certificates, its principal office in Novi, Michigan as any such place or itself as the Security Registrar; provided, however, that there shall be only a single Security Registrar for the  Bonds.

 

(g)                                  The Bonds shall be issuable in registered form in denominations of at least $250,000 or any integral multiple thereof.

 

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(h)                                 All payments of the principal of and Make-Whole Amount, if any, and interest on the Bonds shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

 

(i)                                     The Bonds shall not be defeasible pursuant to Sections 9.04(b) or (c) of the Indenture and such Sections of the Indenture shall not apply to the Bonds.

 

(j)                                    The  Bonds shall have such other terms and provisions as are provided in the form thereof attached hereto as Exhibit C, and shall be issued in substantially such form.

 

Section 2.02.  Payment on the Bonds.

 

(a)                                 Subject to Section 2.02(b), payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Bonds shall be made at the Place of Payment designated in Section 2.01(f) or such place as the Company may at any time, by notice, specify to each Bondholder, so long as such Place of Payment shall be either the principal office of the Company or the principal office of a bank or trust company in New York, New York.

 

(b)                                 So long as any Initial Bondholder or its nominee shall be a Bondholder, and notwithstanding anything contained in the Indenture, Section 2.02(a) or in such Bond to the contrary, the Company will pay all sums becoming due on such Bond for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below such Initial Bondholder’s name in Schedule A to the Purchase Agreement, or by such other method or at such other address as such Initial Bondholder shall have from time to time specified to the Company and the Trustee in writing for such purpose in accordance with the Purchase Agreement, without the presentation or surrender of such Bond or the making of any notation thereon, except that concurrently with or reasonably promptly after payment or redemption in full of any Bond, such Initial Bondholder shall surrender such Bond for cancellation to the Company at its principal office or at the Place of Payment most recently designated by the Company pursuant to Section 2.02(a).  Prior to any sale or other disposition of any Bond held by such Initial Bondholder or its nominee such Initial Bondholder will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Bond to the Company in exchange for a new Bond or Bonds pursuant to Section 3.05 of the Indenture; provided, that a transfer by endorsement shall not constitute a registration of transfer for purposes of the Indenture and the Trustee and any agent of the Trustee shall be entitled to the protections of Section 3.08 of the Indenture with respect to any Bond, the transfer of which has not been so registered.  The Company will afford the benefits of this Section 2.02(b) to any Institutional Investor that is the direct or indirect transferee of any Bond purchased by such Initial Bondholder under the Indenture. The Company agrees and acknowledges that the Trustee shall not be liable for any Bondholder’s failure to perform its obligations under this Section 2.02(b).  Each Initial Bondholder and any such Institutional Investor by its purchase of its Bond agrees to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with such Bondholder’s or Institutional Investor’s failure to comply with the provisions of this Section 2.02(b), including the costs and expenses of defending itself against any claim or liability in connection therewith, such indemnity to survive the payment of such Bonds and the resignation or removal of the Trustee.

 

(c)                                  Notwithstanding anything to the contrary in Section 1.18 of the Mortgage Indenture, if the Stated Maturity or any Redemption Date of the Bonds shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of the Mortgage Indenture or this First Supplemental Indenture) payment of interest on or principal (and premium, if any) of the Bonds due at the Stated Maturity or on any Redemption Date thereof need not be made at such Place of Payment on such

 

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date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Stated Maturity or on any Redemption Date thereof, provided that interest shall accrue on the outstanding principal amount of the Bonds due at the Stated Maturity or on any Redemption Date thereof at the rate set forth in the Bonds until the date of actual payment.

 

Section 2.03.  Mandatory Redemption of the Bonds.

 

The mandatory redemption provision of Section 5.01(b) of the Mortgage Indenture shall apply to the Bonds.

 

Section 2.04.  Optional Redemption.

 

(a)                                 Pursuant to Section 5.01 of the Mortgage Indenture, the Bonds may be redeemed at the option of Company, in whole or in part, at any time or from time to time at a Redemption Price equal to the principal amount of such Bonds plus the Make-Whole Amount plus accrued and unpaid interest thereon to the redemption date; provided, however, that if the Bonds are redeemed in part, the Bonds shall not be redeemed in an amount less than $5,000,000 of the aggregate principal amount of the Bonds then Outstanding.

 

(b)                                 Pursuant to Section 5.01 of the Mortgage Indenture, the Bonds may be redeemed at the option of the Company, in whole, on or after May 26, 2044 at a redemption price equal to the principal amount of such Bonds plus accrued and unpaid interest thereon to the redemption date.

 

(c)                                  Notwithstanding anything to the contrary in Article V of the Mortgage Indenture, the redemption of the Bonds shall take place in accordance with the procedures and requirements set forth in this Section 2.04(c), without prejudice to the requirements of Section 5.02 (which shall for purposes of this First Supplemental Indenture also be applicable to a redemption under Section 2.03) and Sections 5.06 and 5.07 of the Mortgage Indenture.  The Company (or the Security Registrar, if so requested pursuant to Section 5.04 of the Mortgage Indenture) shall give each Bondholder written notice of each optional redemption under this Section 2.04, or a mandatory redemption under Section 2.03, as the case may be, not less than thirty (30) days and not more than sixty (60) days prior to the date fixed for such redemption.  Each such notice shall specify such date, the aggregate principal amount of the Bonds to be redeemed on such date, the principal amount of each Bond held by such Bondholder to be redeemed (determined in accordance with Section 2.04(d)) and the interest to be paid on the redemption date with respect to such principal amount being redeemed, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount, if applicable, due in connection with such redemption (calculated as if the date of such notice were the date of the redemption), setting forth the details of such computation.  Two (2) Business Days prior to such redemption, the Company shall deliver to each Bondholder and the Trustee a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount, if applicable, as of the specified redemption date.  The Trustee shall have no responsibility for such calculation.  Each notice of redemption shall be irrevocable and unconditional and the principal amount of each Bond to be redeemed shall mature and become due and payable on the date fixed for such redemption (which shall be a Business Day), together with interest on such principal amount accrued to such date and the Make-Whole Amount (if applicable).  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Bond redeemed in full shall be surrendered (as contemplated by Section 2.02(b)) to the Company and cancelled and shall not be reissued, and no Bond shall be issued in lieu of any redeemed principal amount of any Bond.

 

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(d)                                 Notwithstanding anything to the contrary in Article V of the Mortgage Indenture, in the case of each partial redemption of the Bonds pursuant to Section 2.04(c), the Company shall redeem the same percentage of the unpaid principal amount of the Bonds, and the principal amount of the Bonds so to be redeemed shall be allocated by the Trustee among all of the Bonds at the time Outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofor called for redemption.

 

Section 2.05.  Purchase of Bonds.

 

Except as may be agreed to by a Bondholder or Bondholders in connection with an offer made to all Bondholders on the same terms and conditions, the Company shall not and shall not permit any Affiliate to purchase, redeem or otherwise acquire, directly or indirectly, any of the Outstanding Bonds except upon the payment or redemption of the Bonds in accordance with the terms of the Indenture.  The Company will promptly cause the Trustee to cancel all Bonds acquired by it or any Affiliate pursuant to any payment, redemption or purchase of Bonds pursuant to any provision of the Indenture and no Bonds may be issued in substitution or exchange for any such Bonds.

 

Section 2.06.  Payment upon Event of Default.

 

Upon any Bonds becoming due and payable under Section 10.02 of the Indenture, whether automatically or by declaration, such Bonds will forthwith mature and the entire unpaid principal amount of such Bonds, plus (x) all accrued and unpaid interest thereon (including, without limitation, interest accrued thereon at the applicable rate for overdue payments) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable Law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges that each holder of a Bond has the right to maintain its investment in the Bonds free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Bonds have become due and payable under Section 10.02 of the Indenture, whether automatically or by declaration, as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

 

Section 2.07.  Transfers.

 

In registering the transfer of any Bond in accordance with Section 3.05 of the Mortgage Indenture, the Security Registrar and the Trustee shall have no responsibility to monitor securities law compliance in connection with any such transfer.

 

ARTICLE THREE

 

ADDITIONAL COVENANTS

 

Section 3.01.  Affirmative Covenants of the Company.

 

For purposes of the Bonds, pursuant to Section 3.01(u) of the Mortgage Indenture, Article VI of the Mortgage Indenture is hereby supplemented by incorporating therein the following additional affirmative covenants which the Company shall observe solely for the benefit of the Bondholders for so long as any Bond is Outstanding:

 

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(a)                                 Use of Proceeds.  The Company shall apply the net proceeds from the issuance and sale of the Bonds to (i) refinance existing indebtedness or for general corporate purposes, and (ii) pay reasonable fees and expenses associated with the sale of the Bonds.

 

(b)                                 Compliance with Laws and Regulations.  The Company shall comply with all Laws (including Environmental Laws) to which its Property or assets may be subject, except where failure to comply would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  In addition, the Company shall immediately pay or cause to be paid when due all costs and expenses incurred in such compliance, except to the extent that the same is being contested in good faith by the Company through appropriate means under circumstances where none of the Mortgaged Property or the Liens thereon will be endangered.

 

(c)                                  Real Estate Filings.  To the extent that any filing required to perfect any security interest in real property or fixtures constituting Mortgaged Property is not made on or prior to the Closing Date, the Company shall undertake to present all such documents for filing with the appropriate registers of deeds as soon as practicable after the Closing Date, but in no event shall any such presentation for filing take place more than five (5) Business Days after the Closing Date; provided that the Company shall confirm by an Officer’s Certificate delivered to the Trustee (if not made prior to the Closing Date) within six (6) weeks after the Closing Date that each such document has been recorded with the applicable registers of deeds and the security interests created or purported to be created in real property or fixtures by such documents have been fully perfected by recording in the land records.  The recording jurisdictions as of the date hereof for this First Supplemental Indenture are listed on Schedule I attached hereto.

 

(d)                                 Delivery of Opinions of Counsel.  The Company shall deliver, or cause to be delivered, to the Trustee the opinions of counsel required pursuant to Section 4.4(a) of the Purchase Agreement.

 

Section 3.02.  Negative Covenants of the Company.

 

For purposes of the Bonds, pursuant to Section 3.01(u) of the Mortgage Indenture, Article VI of the Mortgage Indenture is hereby supplemented by incorporating therein the following negative covenants which the Company shall observe solely for the benefit of the Bondholders for so long as any Bond is Outstanding:

 

(a)                                 Limitation on Lines of Business.  As of the Closing Date, the Company is in the business of owning electric transmission facilities and providing electric transmission service over such facilities.  From the Closing Date onward, the Company shall not engage in any business, if as a result, the general nature of the business engaged in by the Company taken as a whole would be substantially changed from the general nature of the business the Company is engaged in on the Closing Date.

 

(b)                                 Amendments to Exhibit B Hereto. The Company shall not make any amendments or changes to the subordination terms and conditions set forth in Exhibit B hereto that adversely affect the Bondholders without the prior consent of the Bondholders of all the Outstanding Bonds.

 

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ARTICLE FOUR

 

ADDITIONAL EVENTS OF DEFAULT; REMEDIES

 

Section 4.01.  Events of Default.

 

For purposes of the Bonds, pursuant to Section 3.01(v) of the Mortgage Indenture, Section 10.01 of the Mortgage Indenture shall be supplemented to include as “Events of Default” thereunder the occurrence of any of the following events (each such event, together with those “Events of Default” in Section 10.01 of the Mortgage Indenture, an “Event of Default”):

 

(a)                                 Material Covenants.  The Company shall fail to perform or observe any covenant set forth in Section 3.02 or its obligation to provide notice to the Bondholders under Section 7.1(b) of the Purchase Agreement and such failure is not cured within thirty (30) days after earlier to occur of (i) a Responsible Officer of the Company obtaining actual knowledge of such failure and (ii) the Company receiving written notice of such failure from the Trustee or any Bondholder in accordance with the terms of the Indenture or the Purchase Agreement;

 

(b)                                 Other Covenants.  The Company shall fail to perform or observe any of its obligations or covenants (other than the covenants described in Section 4.01(a) or in Section 10.01(b) of the Mortgage Indenture) contained in any of the Financing Agreements, including Section 7 of the Purchase Agreement (or in any modification or supplement thereto), and such failure is not cured within sixty (60) days after the earlier to occur of (i) a Responsible Officer of the Company obtaining actual knowledge of such failure and (ii) the Company receiving written notice of such failure from the Trustee or any Bondholder in accordance with the terms of the Mortgage Indenture or the Purchase Agreement;

 

(c)                                  Representations.  Any representation, warranty or certification by the Company in any of the Financing Agreements or in any certificate furnished to the Trustee or any Bondholder pursuant to the provisions of this First Supplemental Indenture or any other Financing Agreement shall prove to have been false in any Material respect as of the time made or furnished, as the case may be;

 

(d)                                 Indebtedness.

 

(i)                                     The Company shall be in default in the payment of any principal, premium, including any make-whole amount, if any, or interest on any indebtedness (other than Subordinated Debt) in the aggregate principal amount of $30,000,000 or more beyond the expiration of any applicable grace or cure period relating thereto;

 

(ii)                                  The Company shall be in default in the performance or compliance with any term (other than those referred to in Section 4.01(d)(i)) of any agreement or instrument evidencing any indebtedness (other than Subordinated Debt) in the aggregate principal amount of $30,000,000 or more or any other document relating thereto or any condition exists and, as a consequence, such indebtedness has become or has been declared (or the holder or beneficiary of such indebtedness or a trustee or agent on behalf of such holder or beneficiary is entitled to declare such indebtedness to be) due and payable before its stated maturity or before its regularly scheduled dates of payment; or

 

(iii)                               As a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of indebtedness to convert such indebtedness into equity interests), other than as provided in Section 2.03 or Section 2.04 or Section 5.01 of the Mortgage Indenture, (x) the Company shall have become obligated to

 

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purchase or repay any indebtedness before its regularly scheduled maturity date in the aggregate principal amount of $30,000,000 or more or (y) one or more Persons have the right to require such indebtedness to be purchased or repaid;

 

(e)                                  Pension Plans.  Any of the following events shall occur with respect to any Pension Plan: (a) the institution of any steps by the Company or any other Person to terminate a Pension Plan if, as a result of such termination, the Company or any of its Subsidiaries could be required to make a contribution to such Pension Plan, or would reasonably expect to incur a liability or obligation to such Pension Plan in respect of such termination; or (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under section 303(k) of ERISA, where in each case under clauses (a) or (b) such contribution, liability, obligation or Lien would reasonably be expected to result in a Material Adverse Effect;

 

(f)                                   Judgments.  Any judgment or judgments for the payment of money in excess of $30,000,000 (or its equivalent in any other currency) in the aggregate by the Company, which is, or are, not covered by insurance, shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction over the Company and the same shall not be discharged (or provision shall not be made for such discharge), bonded or a stay of execution thereof shall not be procured, within 60 days from the date of entry thereof and the Company shall not, within said period of 60 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or

 

(g)                                  Change in Ownership.  A Change in Ownership shall occur.

 

Section 4.02.  Acceleration of Maturity; Rescission and Annulment.

 

For purposes of the Bonds, pursuant to Section 3.01(v) of the Mortgage Indenture, Section 10.02 of the Mortgage Indenture shall be supplemented as follows:

 

(a)  Acceleration of Maturity.  In addition to the provisions set forth in Section 10.02 of the Mortgage Indenture, if an Event of Default arising from the failure to pay principal of, or interest on, or any Make-Whole Amount relating to the Bonds shall have occurred and be continuing, then in every such case each Holder of Bonds may declare the principal amount of the Bonds held by it to be due and payable immediately, by a notice in writing to the Company and to the Trustee, and upon receipt by the Company or the Trustee of such notice of such declaration, such principal amount, together with Make-Whole Amount and accrued interest, if any, thereon (including, without limitation, interest accrued thereon at the applicable rate for overdue payments), shall become immediately due and payable.

 

ARTICLE FIVE

 

MISCELLANEOUS PROVISIONS

 

Section 5.01.  Reports to Bondholders of Financial and Business Information.

 

Pursuant to Section 12.04 of the Mortgage Indenture, for so long as any Bond is outstanding the Company shall deliver to each Bondholder that is an Institutional Investor:

 

(a)                                 Financial Statements.

 

(1)                                 Quarterly Statements — As soon as available, but in any event within 60 days after the end of its first three quarterly fiscal periods, the unaudited balance sheet of the

 

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Company as at the end of each such quarter and the period then ended, the related unaudited statements of income for such quarter and the portion of the fiscal year through the end of each such quarter and cash flows for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter, prepared in accordance with GAAP and setting forth in comparative form with the figures for the comparable period of the previous year, which shall be accompanied by a certificate from the Senior Financial Officer certifying that such financial statements fairly present in all material respects (subject to normal, recurring audit adjustments and the absence of all the footnotes that would be required by GAAP for complete financial statements) the financial position and the results of operations of the Company; provided that the Company filing on  “EDGAR” (or other similar system adopted by the SEC) within the specified time period a Form 10-Q prepared in compliance with the requirements therefor shall be deemed to satisfy the requirements of this Section 5.01(a)(1).

 

(2)                                 Annual Statements — As soon as available, but in any event within 105 days after the end of each fiscal year, the balance sheet of the Company as at the end of such year and the related statements of income and cash flows for such year, prepared in accordance with GAAP and setting forth in comparative form with the figures for the preceding fiscal year and audited by independent certified public accountants of recognized standing in the United States of America, which shall be accompanied by a report thereon of independent certified public accountants of recognized national standing;  provided that the Company filing on “EDGAR” (or other similar system adopted by the SEC) within the specified time period a Form 10-K prepared in compliance with the requirements therefor shall be deemed to satisfy the requirements of this Section 5.01(a)(2).

 

(b)                                 Notice of Default or Event of Default.

 

Promptly, and in any event within 10 days after a Responsible Officer of the Company becoming aware of the existence of any Default or Event of Default or that any Person has given any notice to the Company or taken any action against the Company with respect to a Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto.

 

(c)                                  Pension Plans.

 

Promptly after a Responsible Officer of the Company obtains knowledge thereof where the liability, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect, notice of and copies of all documentation relating to (i) the institution of any steps by any Person to terminate any Pension Plan, (ii) the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under Section 303(k) of ERISA, (iii) the taking of any action with respect to a Pension Plan which could result in the requirement that the Company furnish a bond or other security to such Pension Plan, or (iv) the occurrence of any event with respect to any Pension Plan which could result in the incurrence by the Company of any material liability, fine or penalty.

 

(d)                                 Notices from Governmental Authority.

 

Promptly, and in any event within 30 days after receipt by the Company thereof, copies of any notice relating to any order, ruling, statute or other Law from any Governmental Authority that would reasonably be expected to have a Material Adverse Effect.

 

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(e)                                  Material Adverse Effect.

 

Promptly, and in any event within 10 days of a Responsible Officer of the Company becoming aware thereof, a notice of any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

 

(f)                                   Notice of Litigation.

 

Promptly after a Responsible Officer of the Company obtains knowledge thereof, notice of any litigation or proceeding pending or threatened against the Company that would reasonably be expected to result in a Material Adverse Effect.

 

(g)                                  Trustee Opinion of Counsel.

 

Concurrently with the delivery of an opinion of counsel to the Trustee pursuant to Article XIII of the Mortgage Indenture, a copy of such opinion addressed to the Trustee.

 

(h)                                 Other Reports.

 

Within five days of the occurrence thereof, a certificate of a Responsible Officer of the Company providing notice of any of the following events, including in reasonable detail a summary of such event or events and the Company’s plans in respect thereof, if any (provided that the Company or Holdco filing on “EDGAR” (or other similar system adopted by the SEC) within the time period required by the SEC a Form 8-K including the details of such event or events and prepared in compliance with the requirements therefor shall be deemed to satisfy the requirements of this Section 5.01(h)):

 

(1)                                 any change of control of the Company, including the name of the Person(s) acquiring control, the amount and source of the consideration used, the basis of the control, the date and description of the transaction resulting in the change of control, the percentage of beneficial ownership of voting securities of the Company owned by the Person gaining control, the identity of the Person from whom control was assumed and the effect of such change of control, if any, on any material agreements or arrangements of the Company;

 

(2)                                 any acquisition or disposition of any significant assets of the Company, whether in one transaction or a series of related transactions;

 

(3)                                 any bankruptcy or receivership of the Company or any direct or indirect parent of the Company;

 

(4)                                 any change in the Company’s auditors;

 

(5)                                 any change in the fiscal year of the Company; and

 

(6)                                 information with respect to the Company’s results of operations, financial condition or prospects which, in the reasonable judgment of the Company, would be material to a Bondholder.

 

(i)                                     Requested Information.

 

With reasonable promptness such other data and information relating to the business, operations, affairs, financial condition, assets or Properties of the Company or relating to the ability of the

 

16











 

Company to perform its obligations hereunder, under the Bonds or under the other Financing Agreements as from time to time may be reasonably requested by any such Bondholder.

 

At the request of the Company, the Trustee shall assist the Company in the mailing to Bondholders of any of the aforesaid information, reports and certificates pursuant to clauses (a) to (i) above, as applicable.  If the Trustee delivers the foregoing information to the Bondholders on behalf of the Company, the Company shall not be required to deliver such information.  Should the Company deliver to the Trustee any such information, reports or certificates or any annual reports, information, documents and other reports pursuant to Section 314(a) of the Trust Indenture Act (if this First Supplemental Indenture shall become qualified and subject to the Trust Indenture Act), delivery of such information, reports and certificates, or such annual reports, information, documents and other reports to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute notice or constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

Section 5.02.  Execution of First Supplemental Indenture.

 

Except as expressly amended and supplemented hereby, the Mortgage Indenture shall continue in full force and effect in accordance with the provisions thereof and the Mortgage Indenture is in all respects hereby ratified and confirmed.  This First Supplemental Indenture and all of its provisions shall be deemed a part of the Mortgage Indenture in the manner and to the extent herein and therein provided.  The  Bonds executed, authenticated and delivered under this First Supplemental Indenture constitute a series of Securities and shall not be considered to be a part of a series of Securities executed, authenticated and delivered under any other supplemental indenture entered into pursuant to the Mortgage Indenture.

 

Section 5.03.  Effect of Headings.

 

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

 

Section 5.04.  Successors and Assigns.

 

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

 

Section 5.05.  Severability Clause.

 

In case any provision in this First Supplemental Indenture or in the Bonds 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 5.06.  Benefit of First Supplemental Indenture.

 

Except as otherwise provided in the Mortgage Indenture, nothing in this First Supplemental Indenture or in the Bonds, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Bondholders, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture.

 

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Section 5.07.  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.  The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile or electronic format (i.e., “pdf” or “tif”) transmission shall constitute effective execution and delivery of this First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or electronic format (i.e., “pdf” or “tif”) shall be deemed to be their original signatures for all purposes.

 

Section 5.08.  Conflict with Mortgage Indenture.

 

If any provision hereof limits, qualifies or conflicts with another provision of the Mortgage Indenture, such provision of this First Supplemental Indenture shall control, insofar as the rights between the Company and the Bondholders are concerned.

 

Section 5.09.  Recitals.

 

The recitals contained herein shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness and makes no representations as to the validity or sufficiency of this First Supplemental Indenture.

 

Section 5.10.  Governing Law.

 

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

 

Section 5.11.  Kansas Provisions.

 

The debt or obligation secured under this First Supplemental Indenture is $150,000,000, which is the same indebtedness secured by the Mortgage Indenture.

 

Section 5.12.  Oklahoma Provisions

 

(a)                                 Oklahoma Provisions.

 

The provisions of this Section 5.12 apply solely with respect to Mortgaged Property located in the State of Oklahoma.  Notwithstanding anything contained to the contrary in this First Supplemental Indenture, if any conflict or inconsistency exists between this Section 5.12 and the remainder of this First Supplemental Indenture with respect to Mortgaged Property located in the State of Oklahoma, this Section 5.12 shall govern.

 

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(b)                                 Additional Oklahoma Rights and Remedies.

 

The Trustee shall have the following rights and remedies, which shall be in addition to and not in limitation of any other rights and remedies set forth in the Indenture:

 

(i)                                     Power of Sale.  The Trustee may elect to use the non-judicial power of sale which is hereby granted and conferred.  Such power of sale shall be exercised in compliance with the Oklahoma Power of Sale Mortgage Foreclosure Act, 46 Okla. Stat. Section 40 et seq., as the same may be amended from time to time or other applicable statutory authority.

 

(ii)                                  Waiver of Appraisement.  Notwithstanding anything to the contrary contained in the Indenture or any other agreements of the Company, if the Trustee elects to foreclose upon the Indenture by judicial proceedings, appraisement of the Property is waived or not waived at the option of the Trustee.  Such option can be exercised at or prior to the time judgment is rendered in any judicial foreclosure thereof.

 

(c)                                  Oklahoma Mortgage Tax.

 

Company shall pay the Oklahoma Real Estate Mortgage Tax to be paid upon the recording of this First Supplemental Indenture as prescribed and levied pursuant to 68 Okla. Stat. Section 1901 et seq.

 

(d)                                 Maturity Date.

 

The maturity date of the Bonds is November 26, 2044.

 




 

Drafted by:

 

Elizabeth B. Hardin

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, NY 10005

 

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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   GREAT PLAINS, LLC,
    
	
 
    	
a   Michigan limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
ITC   Grid Development, LLC,
    
	
 
    	
 
    	
a   Michigan limited liability company
    
	
 
    	
 
    	
as   Sole Member
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
ITC   Holdings Corp.,
    
	
 
    	
 
    	
a   Michigan corporation
    
	
 
    	
 
    	
its   sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Daniel J. Oginsky
    
	
 
    	
 
    	
Name:   Daniel J. Oginsky
    
	
 
    	
 
    	
Title:   Executive Vice President and General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stefan Victory
    
	
 
    	
 
    	
Name:   Stefan Victory
    
	
 
    	
 
    	
Title:   Vice President
    


 

Signature Page to

First Supplemental Indenture

 












 

	
STATE   OF TEXAS
    	
)
    
	
 
    	
)   ss.
    
	
COUNTY   OF DALLAS
    	
)
    


 

The foregoing instrument was acknowledged before me this 12th day of November 2014 by Daniel J. Oginsky, Executive Vice President and General Counsel of ITC Holdings Corp., a Michigan corporation, the sole member of ITC Grid Development LLC, a Michigan limited liability company, as the sole member of ITC Great Plains, LLC, a Michigan limited liability company, on behalf of such company.

 

 

	
 
    	
/s/   Denise M. Juras
    
	
 
    	
Notary   Public
    
	
 
    	
My Commission Expires October 29, 2020
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(SEAL)
    


 











 

	
STATE   OF GEORGIA
    	
)
    
	
 
    	
)   ss.:
    
	
COUNTY   OF FULTON
    	
)
    


 

The foregoing instrument was acknowledged before me this 12th day of November 2014 by Stefan Victory, Vice President of Wells Fargo Bank, National Association, on behalf of the association.

 

 

	
 
    	
/s/   Lee Weissman
    
	
 
    	
Notary   Public
    
	
 
    	
My Commission Expires July 26, 2017
    
	
 
    	
Commission No. W - 00178907
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(SEAL)
    


 











 

Schedule I

 

RECORDING INFORMATION

 

List of recording jurisdictions are:

 

Kansas

 

Barber

Clark

Cloud

Edwards

Ellis

Ford

Hodgeman

Kiowa

Osborne

Ottawa

Pawnee

Rush

Rooks

Smith

 

Oklahoma

 

Choctaw

McCurtain

 

I-1











 

Exhibit A

 

DESCRIPTION OF PROPERTIES

 

State of Kansas

 

State of Oklahoma

 

A-1











 

Exhibit B

 

SUBORDINATION TERMS

 

The unsecured permitted indebtedness evidenced by this instrument is subordinated and subject in right of payment to the prior payment in full of all Senior Debt Obligations (as hereinafter defined) of ITC Great Plains, LLC, a limited liability company formed under the laws of the State of Michigan (the “Company”).  Each holder of this instrument, by its acceptance hereof, agrees to and shall be bound by all the provisions hereof.

 

All capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the First Supplemental Indenture, dated as of November 12, 2014 (as in effect on the date hereof, the “Supplemental Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

 

The term “Senior Debt Obligations”, as used herein, shall include all, loans, advances, debts, liabilities and obligations, howsoever arising (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising (collectively, as used herein, “Obligations”) of the Company now or hereafter existing in respect of Senior Debt (as defined herein) and any amendments, modifications, deferrals, renewals or extensions of any such Senior Debt, or of any notes or evidences of indebtedness heretofore or hereafter issued in evidence of or in exchange for any such Obligation, whether for principal, interest (including interest payable in respect of any such Obligations subsequent to the commencement of any proceeding against or with respect to the Company under any chapter of the Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), or any provision of corresponding bankruptcy, insolvency or commercial reorganization legislation of any other jurisdiction, whether or not such interest is an allowed claim enforceable against the debtor, and whether or not the holder of such obligation would be otherwise entitled to receive dividends or payments with respect to any such interest or any such proceeding), premium (including Make-Whole Amount), if any, fees, expenses or otherwise.

 

The term “Senior Debt”, as used herein, shall mean (i) all Senior Secured Debt and (ii) all unsecured debt of the Company permitted to be incurred by the Company pursuant to the Mortgage Indenture or the Supplemental Indenture which is not subject to any subordination terms whether or not similar to those set forth in this instrument.

 

The term “Subordinated Debt”, as used herein, shall mean all Obligations of the Company evidenced by this instrument owing to any Person now or hereafter existing hereunder (whether created directly or acquired by assignment or otherwise), whether for principal, interest (including, without limitation, interest accruing after the filing of a petition initiating any bankruptcy proceeding described in the definition of Senior Debt Obligations, whether or not such interest accrues after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding), fees, expenses or otherwise.

 

On and after the Closing Date, no payment on account of principal, interest, fees, premium, expenses or otherwise on this Subordinated Debt shall be made by the Company in cash or otherwise unless (a) full payment of all amounts then due and payable on all Senior Debt Obligations has been made, (b) such payment would be permitted by the Indenture and any Senior Debt Document (as defined below) and (c) immediately after giving effect to such payment, there shall not exist any Default or Event of Default.  Any such payment permitted pursuant to this paragraph is hereinafter referred to as a “Permitted Payment”.  For the purposes of these provisions, no Senior Debt Obligations shall be deemed to have

 

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been paid in full until the obligee of such Senior Debt Obligations shall have received payment in full in cash and 91 days shall have elapsed since the date of receipt of such payment.

 

Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, then and in any such event all principal, premium and interest and all other amounts due or to become due upon all Senior Debt Obligations shall first be paid in full before the holders of the Subordinated Debt shall be entitled to retain any assets so paid or distributed in respect of the Subordinated Debt (whether for principal, premium, interest or otherwise), and upon any such dissolution or winding up or liquidation or reorganization, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the holders of the Subordinated Debt would be entitled, except as otherwise provided herein, shall be paid pro rata among the holders of Senior Debt Obligations by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the holders of the Subordinated Debt if received by them.  So long as any Senior Debt Obligations are outstanding, the holder of this instrument shall not commence, or join with any creditor other than the Trustee or the Senior Debt Parties (as hereinafter defined) in commencing, or directly or indirectly causing the Company to commence, or assist the Company in commencing, any proceeding referred to in the preceding sentence.

 

The holder of this instrument hereby irrevocably authorizes and empowers (without imposing any obligation on) each Person (each such Person a “Senior Debt Party” and collectively, the “Senior Debt Parties”) that has entered into an agreement, instrument, or other document evidencing or relating to any Senior Debt Obligation (each such agreement, instrument or other document, a “Senior Debt Document”) as a lender or creditor and such Senior Debt Party’s representatives, under the circumstances set forth in the immediately preceding paragraph, to demand, sue for, collect and receive every such payment or distribution described therein and give acquittance therefor, to file claims and proofs of claims in any statutory or nonstatutory proceeding, to vote such Senior Debt Party’s ratable share of the full amount of the Subordinated Debt evidenced by this instrument in its sole discretion in connection with any resolution, arrangement, plan of reorganization, compromise, settlement or extension and to take all such other action (including, without limitation, the right to participate in any composition of creditors and the right to vote such Senior Debt Party’s ratable share of the full amount of the Subordinated Debt at creditors’ meetings for the election of trustees, acceptances of plans and otherwise), in the name of the holder of the Subordinated Debt evidenced by this instrument or otherwise, as such Senior Debt Party’s representatives may deem necessary or desirable for the enforcement of the subordination provisions of this instrument.  The holder of this instrument shall execute and deliver to each Senior Debt Party and such holder’s representatives all such further instruments confirming the foregoing authorization, and all such powers of attorney, proofs of claim, assignments of claim and other instruments, and shall take all such other action as may be reasonably requested by such holder or such holder’s representatives in order to enable such holder to enforce all claims upon or in respect of such holder’s ratable share of the Subordinated Debt evidenced by this instrument.

 

The holder of this instrument shall not, without the prior written consent of the Senior Debt Parties, have any right to accelerate payment of, or institute any proceeding to enforce, the Subordinated Debt so long as any Senior Debt Obligations are outstanding, unless and until all Senior Debt Parties have accelerated payment thereof and commenced proceedings to enforce such Senior Debt Obligations.

 

After the payment in full of all amounts due in respect of Senior Debt Obligations, the holder or holders of the Subordinated Debt shall be subrogated to the rights of the Senior Debt Parties to receive payments or distributions of cash, property or securities of the Company applicable to Senior Debt Obligations until

 

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the principal of, premium on, interest on and all other amounts due or to become due with respect to the Subordinated Debt shall be paid in full subject to the terms and conditions of the Subordinated Debt or of any agreement among the holders of the Subordinated Debt and other Subordinated Debt of the Company.

 

If any payment (other than a Permitted Payment) or distribution of assets of the Company of any kind or character, whether in cash, property or securities, shall be received by the holder of the Subordinated Debt in such capacity before all Senior Debt Obligations are paid in full, such payment or distribution will be held in trust for the benefit of, and shall be immediately paid over pro rata among the Senior Debt Parties, for application to the payment in full of Senior Debt Obligations, until all Senior Debt Obligations shall have been paid in full.

 

Nothing contained in this instrument is intended to or shall impair as between the Company, its creditors (other than the Senior Debt Parties) and the holders of the Subordinated Debt, the obligations of the Company to pay to the holders of the Subordinated Debt, as and when the same shall become due and payable in accordance with their terms, or to affect the relative rights of the holders of the Subordinated Debt and creditors of the Company (other than the Senior Debt Parties).

 

The Senior Debt Parties shall not be prejudiced in their rights to enforce the subordination contained herein in accordance with the terms hereof by any act or failure to act on the part of the Company.

 

The holder of this instrument agrees to execute and deliver such further documents and to do such other acts and things as the Senior Debt Parties may reasonably request in order fully to effect the purposes of these subordination provisions.  Each holder of this instrument by its acceptance hereof authorizes and directs the trustee or other representative, if any, of the Subordinated Debt represented by this instrument on its behalf to take such further action as may be necessary to effectuate the subordination as provided herein and appoints such trustee or other representative, if any, as its attorney-in-fact for any and all such purposes.

 

The subordination effected by these provisions, and the rights of the Senior Debt Parties, shall not be affected by (i) any amendment of, or addition or supplement to, the Financing Agreements, any other Senior Debt Document, or any other document evidencing or securing Senior Debt Obligations, (ii) any exercise or non-exercise of any right, power or remedy under or in respect to the Financing Agreements, any other Senior Debt Document, or any other document evidencing or securing Senior Debt Obligations or (iii) any waiver, consent, release, indulgence, extension, renewal, modification, delay, or other action, inaction or omission, in respect of the Financing Agreements, any other Senior Debt Document, or any other document evidencing or securing Senior Debt Obligations; whether or not any holder of any Subordinated Debt shall have had notice or knowledge of any of the foregoing.

 

No failure on the part of any Senior Debt Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor all any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by Law.

 

The holder of this instrument and the Company each hereby waive promptness, diligence, notice of acceptance and any other notice with respect to any of the Senior Debt Obligations and these terms of subordination and any requirement that the Trustee or any Senior Debt Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right to take any action against the Company or any other Person or any Mortgaged Property.

 

These terms of subordination shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Senior Debt Obligations is rescinded or must otherwise be returned by the

 

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Trustee or any Senior Debt Party upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made.

 

The provisions of these terms of subordination constitute a continuing agreement and shall (i) remain in full force and effect until the indefeasible payment in full of the Senior Debt Obligations and the termination or expiration of all obligations to extend credit under the Senior Debt Documents, (ii) be binding upon the holder of this instrument, the Company and its successors, transferees and assignees and (iii) inure to the benefit of, and be enforceable by, the Trustee and each Senior Debt Party.  Without limiting the generality of the foregoing clause (iii), each Senior Debt Party may assign or otherwise transfer all or any portion of its rights and obligations under all or any of the Senior Debt Documents to any other Person (to the extent permitted by the Senior Debt Documents), and such other Person shall thereupon become vested with all the rights in respect thereof granted to such Senior Debt Party herein or otherwise.

 

This instrument shall be governed by and construed in accordance with, the laws of the State of New York.

 

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Exhibit C

 

THIS BOND HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE.  ACCORDINGLY, THIS BOND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED (1) EXCEPT IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) UNLESS THIS BOND IS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

ITC GREAT PLAINS, LLC

 

4.16% First Mortgage Bonds, Series A, due 2044

 

Original Interest Accrual Date:  November 26, 2014

Stated Maturity:  November 26, 2044

Interest Rate:  4.16% per annum

Interest Payment Dates:  May 26 and November 26

Regular Record Dates:  May 11 and November 11

 

This Bond is a Security within the 
 meaning of the within-mentioned Indenture.

 




 

	
Registered   No. [RB - ]
    	
[DATE]
    
	
$[                     ](1)
    	
PPN   45032@ AA3
    


 

ITC GREAT PLAINS, LLC, a limited liability company duly organized and existing under the laws of the State of Michigan (herein called the “Company”, which term includes any successor corporation under the Indenture referred to below), for value received, hereby promises to pay to [                     ], or its registered assigns, the principal sum of [                                     ] DOLLARS ($            ) on the Stated Maturity specified above, and to pay interest (a) thereon from the Original Interest Accrual Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on the Interest Payment Dates specified above in each year, commencing on May 26, 2015 and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid or duly provided for and (b) to the extent permitted by law, on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 6.16% and (ii) 2.0% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Bond (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date.  Notwithstanding the foregoing, interest payable at Maturity shall be paid to the Person to whom principal shall be paid.  Except as otherwise provided in said Indenture, any such interest not so timely paid or duly provided for shall forthwith cease to be payable to the Bondholder on such Regular Record Date and may either be paid to the Person in whose name this Bond (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such

 




(1)                                 Reference is made to Schedule A attached hereto with respect to the amount of principal paid hereon and the last date to which interest has been paid hereon.

 

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Defaulted Interest to be fixed by the Trustee, notice of which shall be given to the Bondholders not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Securities of this series may be listed, and upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in said Indenture.

 

CERTIFICATE OF AUTHENTICATION

 

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

 

	
Date   of Authentication:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION
    
	
 
    	
as Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    
						


 

Capitalized terms used in this Bond and not otherwise defined herein shall have the meaning assigned to such term in the Indenture.

 

Subject to the home office payment obligation set forth in Section 2.02(b) of the Supplemental Indenture (referred to below), payment of the principal of and Make-Whole Amount, if any, on this Bond and interest hereon at Maturity shall be made upon presentation of this Bond at the office or agency of the Trustee in Minneapolis, Minnesota at 6th & Marquette Avenue, 12 Floor, Minneapolis, Minnesota 55479 or at such other office or agency as may be designated for such purpose by the Company from time to time in accordance with the Indenture.  Subject to the home office payment obligation set forth in Section 2.02(b) of the Supplemental Indenture, payment of interest on this Bond (other than interest at Maturity) shall be made as set forth in Section 3.07 of the Original Indenture (as defined below).  Payment of the principal of and Make-Whole Amount, if any, and interest on this Bond, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

 

This Bond is one of a duly authorized issue of securities of the Company (all such series of securities herein called the “Securities”) issued and issuable in one or more series under and equally secured by a First Mortgage and Deed of Trust dated as of November 12, 2014 (such indenture as originally executed and delivered herein called the “Original Indenture” and as supplemented and modified by any and all indentures supplemental thereto, including the Supplemental Indenture referred to below, being herein called the “Indenture”), and has been issued pursuant to that certain First Supplemental Indenture, dated as of November 12, 2014 (the “Supplemental Indenture”), each of the Original Indenture and the Supplemental Indenture being between the Company and Wells Fargo Bank, National Association, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a description of the property mortgaged, pledged and held in trust as security for payment of all amounts due under this Bond, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of the Securities thereunder and of the terms and conditions upon which the Securities (including the Securities of this series) are, and are to be, authenticated and delivered and secured.  The acceptance of this Bond shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture.  This Bond is one of the series of Securities designated above.

 

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Notwithstanding anything to the contrary in Section 1.18 of the Original Indenture, in the Supplemental Indenture or in this Bond, if the Stated Maturity or any Redemption Date of this Bond shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of the Original Indenture or the Supplemental Indenture or this Bond) payment of interest on or principal (and premium, if any) of this Bond due at the Stated Maturity or on any Redemption Date thereof need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Stated Maturity or on any Redemption Date thereof, provided that interest shall accrue on the Outstanding principal amount of this Bond due at the Stated Maturity or on any Redemption Date thereof until the date of actual payment.  Interest hereon will be computed on the basis of a 360-day year of twelve 30-day months.

 

This Bond is subject to mandatory redemption under the circumstances set forth in Section 5.01 of the Original Indenture and as set forth in Section 2.03 of the Supplemental Indenture.  This Bond is subject to redemption at the option of the Company, in whole or in part, as set forth in Section 2.04 of the Supplemental Indenture.

 

If an Event of Default, as defined in the Indenture, occurs and is continuing, the principal of this Bond may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Indenture.

 

The Original Indenture permits, with certain exceptions as therein provided, the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of each series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Original Indenture permits the Trustee to enter into one or more supplemental indentures for limited purposes without the consent of any Holders of Securities and for certain other purposes with the consent of all Holders of affected Securities.  The Original Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities then Outstanding, 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 this Bond shall be conclusive and binding upon such Holder and upon all future Holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Bond.

 

No reference herein to the Indenture and no provision of this Bond or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and interest and any Make-Whole Amount on this Bond 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 this Bond is registrable in the Security Register, upon surrender of this Bond for registration of transfer at the office or agency of the Trustee in Minneapolis, Minnesota, which as of the date hereof is located at 6th &

 

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Marquette Avenue, 12 Floor, Minneapolis, Minnesota 55479 or such other office or agency as may be designated by the Company from time to time in accordance with the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in the form attached hereto as Annex A duly executed by the Holder hereof, or his attorney duly authorized in writing, and thereupon one or more new Securities of this series of authorized denominations and of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only as registered Securities, without coupons, and in denominations of $250,000 or any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of the same series and Tranche, of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Bond or Bonds to be exchanged at the office or agency of the Trustee in Minneapolis, Minnesota at 6th & Marquette Avenue, 12 Floor, Minneapolis, Minnesota 55479, or such other office or agency as may be designated by the Company from time to time in accordance with the Indenture.

 

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 in accordance with the Indenture.

 

The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Bond is registered as the absolute owner hereof for all purposes, whether or not this Bond 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 entitled to the benefit of any sinking fund.

 

As provided in Section 2.05 of the Supplemental Indenture, except as may be agreed to by the Holder hereof in connection with an offer made to all Holders of the Securities of this series on the same terms and conditions, the Company shall not and shall not permit any Affiliate of the Company to purchase, redeem or otherwise acquire, directly or indirectly, this Bond, except upon the payment or redemption of this Bond in accordance with the terms of the Indenture.  The Company will promptly cause the Trustee to cancel this Bond once acquired by it or any Affiliate of the Company pursuant to any payment, redemption or purchase of this Bond pursuant to any provision of the Indenture and no Bonds may be issued in substitution or exchange for this Bond.

 

As provided in Section 16.01 of the Original Indenture, no recourse shall be had for the payment of the principal of or Make-Whole Amount, if any, or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, organizer, member, manager, stockholder, officer, director or employee, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities (including the Bonds) are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities (including the Bonds).

 

Demand, presentment, protest and notice of non-payment and protest are hereby waived by the Company.

 

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

 

Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Bond shall not be entitled to any benefit as a Security under the Indenture or be valid or obligatory for any purpose.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

 

	
 
    	
ITC   GREAT PLAINS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
ITC   Grid Development, LLC,
    
	
 
    	
 
    	
as   sole member
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
ITC   Holdings Corp.,
    
	
 
    	
 
    	
its   sole member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
					


 

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SCHEDULE A

 

SCHEDULE OF NOTATIONS

 

The notations on the following table have been made by the holder of the within Bond in connection with the transfer thereof in accordance with Section 2.02(b) of the Supplemental Indenture.

 

	
Date of Notation
    	
 
    	
Amount of principal paid
   on the within Bond
    	
 
    	
Last date to which interest has
   been paid on the within Bond
    	
 
    	
Notation by Holder
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    


 

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ANNEX A

 

FORM OF ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

 

 

 

Please print or typewrite name and address, including postal zip code of assignee

 

 

 

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

 

attorney to transfer said Bond on the Security Register, upon surrender of said Bond at the office or agency of the Trustee in New York, New York, or such other office or agency as may be designated by the Company from time to time in accordance with the Indenture, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME   OF TRANSFEROR]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
NOTICE:   The signature to this assignment must correspond with the name as written   upon the face of the within Bond in every particular, without alteration or   enlargement or any change whatever.
    
	
 
    	
 
    	
 
    
	
 
    	
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.

 

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