Document:

Exhibit 10.12

 

[EXECUTION COPY]

 

PUT
AGREEMENT

 

THIS PUT AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time referred to as this “Agreement”),
dated as of February 28, 2003, is made by ITC HOLDINGS CORP., a Michigan
corporation (“Holdco”), in favor of CIBC, INC., a Delaware corporation
(together with its successors, transferees or assigns, the “Lender”).  Unless otherwise defined, all capitalized
terms used herein shall have the meanings ascribed thereto in the relevant Note
or Pledge Agreement, each as defined below.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to a Credit Agreement, dated as of February 28,
2003 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Holdco Credit Agreement”), among Holdco, the various
financial institutions and other Persons from time to time parties thereto, as
the lenders, Canadian Imperial Bank of Commerce, as administrative agent and
Union Bank of California and Société Générale, as co-syndication agents, such
lenders have extended commitments to make credit extensions to Holdco;

 

WHEREAS, the Lender may make the loans described on Schedule B
hereto in aggregate amounts up to the amounts set forth thereon and such other
loans as Holdco and the Lender may agree in writing are to be subject to this
Agreement from time to time (collectively referred to as the “Loans”) to
certain management and employees of Holdco and its subsidiaries (such persons
being collectively referred to as “Management”) such Loans to be made
pursuant to and evidenced by notes made by Management (as amended,
supplemented, amended and restated or otherwise modified from time to time,
collectively referred to as the “Notes”);

 

WHEREAS, in connection with and as a condition to
making the Loans, Management will be required to pledge in favor of the Lender,
among other things, their capital securities in Holdco pursuant to pledge
agreements to be executed from time to time by Management (as amended,
supplemented, amended and restated or otherwise modified from time to time,
collectively referred to as the “Pledge Agreements”); and

 

WHEREAS, as a condition precedent to the making of the
Loans, Holdco is required to execute and deliver this Agreement;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in order to
induce the Lender to make Loans to Management pursuant to the Notes, Holdco
agrees, for the benefit of the Lender, as follows.

 

ARTICLE I

ASSIGNMENT OF LOANS

 

SECTION 1.1.  Assignment Obligation.  Holdco hereby agrees that, upon notice to it
by the Lender that one or more of the circumstances giving rise to enforcement
hereof under Section 1.2 has occurred and is continuing, (i) Holdco
and the Lender will promptly (and in any event

 

 

within one
business day following receipt of such notice) execute and deliver an
assignment agreement in the form of Exhibit A hereto (an “Assignment
Agreement”) with respect to the Loans and the applicable Pledge Agreement
of one or more Management being assigned from the Lender to Holdco as further
described in such Assignment Agreement and (ii) Holdco will pay in
immediately available funds, in U.S. Dollars, the aggregate amount of
outstanding principal, accrued interest and other amounts set forth by the
Lender in such Assignment Agreement to be owing to the Lender from applicable
Management in connection with the Loans, which amount shall be conclusive and
binding on Holdco, absent manifest error (referred to as the “Aggregate
Amount”).  In lieu of paying U.S.
Dollars in the Aggregate Amount to the Lender, Holdco may execute and (together
with its delivery of such Assignment Agreement) deliver to the Lender a demand
promissory note in a principal amount equal to the Aggregate Amount, in the
form of Exhibit B hereto (the “Demand Note”).  Subject to Section 1.5, Holdco’s
obligations hereunder with respect to any particular Loan shall terminate upon
the earlier to occur of the repayment in cash in full of the amounts owing
under such Loan or satisfaction of Holdco’s obligations hereunder with respect
thereto.

 

SECTION 1.2.  When Delivery of Assignment Agreement,
Demand Note, etc. is Required.  The
parties agree that the obligations of Holdco under Section 1.1 with
respect to one or more particular Loans shall be enforceable by the Lender from
time to time upon the occurrence of any of the following events:

 

(a)                                  as
to any particular individual of Management, upon his or her termination of
employment with Holdco for whatever reason (whether for good cause or no cause
at all), or the demotion of such individual (either in title or job
responsibilities);

 

(b)                                 the
resignation or other voluntary cessation of employment with Holdco by an
individual Management;

 

(c)                                  the
death or (in the reasonable judgment of the Lender), incompetency or disability
of any individual Management, if such individual can no longer fully act in the
employment capacity that such individual did prior to the occurrence of
incompetency or disability and his or her salary is materially reduced;

 

(d)                                 the
occurrence and continuation of any Event of Default under (and as defined from
time to time in) either Credit Agreement, and for purposes of this Agreement, “Credit
Agreement” has the meaning set forth in Schedule A attached hereto
and made a part hereof;

 

(e)                                  at
any time within five business days prior to the date on which Holdco (or any of
its successors or transferees, by way of business combination, merger or
otherwise) becomes an “issuer” as that term is defined in Section 2(a)(7) of
the Sarbanes-Oxley Act of 2002; or

 

(f)                                    as
to any individual Management, the occurrence of an “Event of Default” under
(and as defined in) the Note or Pledge Agreement delivered by such individual,
which such Event of Default is continuing.

 

2

 

SECTION 1.3.  Obligation Absolute.  Holdco hereby appoints the Lender, its true
and lawful attorney, irrevocably, with full power (in such attorney’s name or
otherwise) and coupled with an interest, to enforce the obligation of Holdco
contained herein or to take any action or institute any proceedings that the
Lender may deem necessary or advisable with respect thereto.  The Lender agrees that it will only be
entitled to exercise such rights from and after the time an event set forth in Section 1.1
has occurred and is then continuing. 
Each and every right and remedy of the Lender shall be cumulative and
shall be in addition to, and not in limitation of, each other right and remedy
given hereunder now or hereafter existing or at law or in equity.

 

SECTION 1.4.  Continuing Obligations.  This Agreement and the obligations of Holdco
hereunder shall in all respects be a continuing, absolute, unconditional and
irrevocable agreement, and shall remain in full force and effect until the
earliest to occur of (i) the date on which all obligations of Holdco
hereunder have been satisfied in accordance with the terms hereof and (ii) the
date on which all amounts outstanding under or in connection with all Notes and
all Pledge Agreements have been paid in cash in full, subject in the case of
any individual Loans to the provisions of Sections 1.1 and 1.5 in
respect thereof.

 

SECTION 1.5.  Reinstatement, etc.  Holdco hereby agrees that (notwithstanding
any other terms of this Agreement), this Agreement and the obligations of
Holdco hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time any payment made to the Lender in respect of a Loan or
other amount owing to the Lender from any Management (in whole or in part) is
invalidated, declared to be fraudulent or preferential, set aside, rescinded or
must otherwise be restored by the Lender, including, without limitation, upon
the occurrence of any bankruptcy, insolvency or similar event of a particular
Management or otherwise, all as though such payment had not been made.

 

SECTION 1.6.  Nature of Holdco Obligation.  The obligation of Holdco under this Agreement
shall be absolute, unconditional and irrevocable irrespective of:

 

(a)  any lack of
validity, legality or enforceability of any Loan, Note or Pledge Agreement;

 

(b)  the failure of
the Lender (i) to assert any claim or demand or
to enforce any right or remedy against any Management, or any Note or Pledge
Agreement, or (ii) to exercise any right or
remedy against any collateral securing any obligations of any Management;

 

(c)  any change in
the time, manner or place of payment of, or in any other term of, all or any
part of the obligations of Management (provided, that the Lender will
not forgive or reduce (other than as a result of a Dollar for Dollar payment)
any amounts owing to it by any Management); or

 

(d)  any other
circumstance which might otherwise constitute a defense available to, or a
legal or equitable discharge of Holdco hereunder (other than as a result of the
Lender forgiving or reducing the principal amount of, or interest or other
amount owing with respect to, any Loan).

 

3

 

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

SECTION 2.1.  Representations, Warranties.  In order to induce the Lender to enter into
this Agreement and the Pledge Agreements and to make Loans to Management from
time to time, Holdco represents and warrants to the Lender that the
representations and warranties contained in Sections 7.1 through 7.5
(inclusive) and Section 7.16 of Article 7 of the Holdco Credit
Agreement are true and correct in all material respects, each such
representation and warranty set forth in such Article and all other terms
of the Holdco Credit Agreement to which reference is made therein, together
with all related definitions and ancillary provisions, are hereby incorporated
into this Agreement by this reference as though specifically set forth in this
Section; provided, that references in such Article to (i) ”the
Borrower” shall be deemed to be a reference to Holdco and (ii) ”Finance
Document” and “Finance Documents”, and “Credit Document” and “Credit Documents”,
shall (in each case) be deemed to be a reference to this Agreement.

 

SECTION 2.2.  Delivery of Notices.  Holdco agrees that it will promptly (and any
event within three business days following) its knowledge of the occurrence of
any event set forth in Section 1.2 deliver a notice of the occurrence of
such event to the Lender.

 

ARTICLE III

MISCELLANEOUS PROVISIONS

 

SECTION 3.1.  Assignment of Agreement.  Neither Holdco nor the Lender may assign or
delegate any of its rights or obligations hereunder without the prior written
consent of the other party hereto and any attempted assignment shall be null
and void.

 

SECTION 3.2.  Amendments, etc.  No amendment to or waiver of any provision of
this Agreement, nor consent to any departure by Holdco of its obligations under
this Agreement, shall in any event be effective unless the same shall be in
writing and signed by Holdco and the Lender and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

SECTION 3.3.  Notices.  All notices and other communications provided
for hereunder shall be in writing (including facsimile communication) and
mailed, telecopied or delivered to Holdco to the address or facsimile number
set forth in the Holdco Credit Agreement, or at such other address or facsimile
number as may be designated by Holdco in a notice to the Lender or, if such
notice or communication is to the Lender, to the address or facsimile number
set forth in the signature page hereof or at such other address or
facsimile number as may be designated by the Lender in a notice to Holdco.  All such notices and other communications,
when mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when received;
any such notice or communication, if transmitted by facsimile, shall be deemed
given when the confirmation of transmission thereof is received by the
transmitter.

 

SECTION 3.4.  No Waiver; Remedies.  No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any

 

4

 

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.

 

SECTION 3.5.  Captions.  Section captions used in this Agreement
are for convenience of reference only, and shall not affect the construction of
this Agreement.

 

SECTION 3.6.  Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

 

SECTION 3.7.  Governing Law, Entire Agreement, etc.  THIS
AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401
AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).  This Agreement constitutes the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersedes any prior agreements, written or oral, with respect
thereto.

 

SECTION
3.8.  Forum Selection and Consent to
Jurisdiction.  ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF ANY OF THE PARTIES HERETO IN CONNECTION HEREWITH
MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.  HOLDCO IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK AT HOLDCO’S ADDRESS FOR NOTICES SPECIFIED IN
SECTION 12.2 OF THE HOLDCO CREDIT AGREEMENT. 
HOLDCO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT
HOLDCO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, HOLDCO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT.

 

 

5

 

SECTION 3.9.  Counterparts.  This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

SECTION
3.10.  Waiver of Jury Trial.  THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED
BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF ANY OF THE PARTIES HERETO IN CONNECTION THEREWITH.  HOLDCO ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT
AND MAKING LOANS FROM TIME TO TIME TO MANAGEMENT.

 

6

 

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

 

	
   

  	
  ITC HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and
  Accepted as of

  	
   

  
	
  the day and year first
  above written:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CIBC, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

7

 

SCHEDULE A

 

CREDIT
AGREEMENTS

 

Opco Credit Agreement

 

Credit Agreement, dated as of February 28, 2003,
among International Transmission Company, a Michigan corporation, as the
borrower, the various financial institutions and other persons from time to
time parties thereto, as the lenders, Canadian Imperial Bank of Commerce, as
the administrative agent and the swingline lender and Union Bank of California
and Société Générale, as co-syndication agents (without giving effect to any
amendments, supplements or other modifications, if any, from time to time
subsequent to February 28, 2003, unless agreed to by the Lender).

 

Holdco Credit Agreement

 

Credit Agreement, dated as of February 28, 2003, among
ITC Holdings Corp., a Michigan corporation, as the borrower, the various
financial institutions and other persons from time to time parties thereto, as
the lenders, Canadian Imperial Bank of Commerce, as administrative agent and
Union Bank of California and Société Générale, as co-syndication agents
(without giving effect to any amendments, supplements or other modifications,
if any, from time to time subsequent to February 28, 2003, unless agreed to by
the Lender).

 

8

 

SCHEDULE B

 

SUMMARY
OF LOANS

 

	
  NAME

  	
   

  	
  MAXIMUM PRINCIPAL AMOUNT

  	
   

  
	
  Joseph Welch

  	
   

  	
  $

  	
   500,000

  	
   

  
	
  Linda Blair

  	
   

  	
  $

  	
   200,000

  	
   

  
	
  Richard Schultz

  	
   

  	
  $

  	
   200,000

  	
   

  
	
  Jim Cyrulewski

  	
   

  	
  $

  	
   200,000

  	
   

  
	
  Denis DesRosiers

  	
   

  	
  $

  	
   100,000

  	
   

  
	
  Peter Scussel

  	
   

  	
  $

  	
   100,000

  	
   

  
	
  Michael Moltane

  	
   

  	
  $

  	
   100,000

  	
   

  
	
  Joseph Fennell

  	
   

  	
  $

  	
   100,000

  	
   

  
	
  Christine Kujawa

  	
   

  	
  $

  	
   100,000

  	
   

  
	
  James Wachlarz

  	
   

  	
  $

  	
   100,000

  	
   

  
	
  John Flynn

  	
   

  	
  $

  	
   75,000

  	
   

  
	
  Raymond Smith

  	
   

  	
  $

  	
   45,000

  	
   

  
	
  David Doubley

  	
   

  	
  $

  	
   40,000

  	
   

  

 

 

EXHIBIT A

 

[ASSIGNMENT
AGREEMENT]

 

 

EXHIBIT B

 

[DEMAND NOTE]

 

 

EXECUTION COPY

 

CIBC, Inc.

300 Madison Avenue

New York, NY  10017

 

 

March 4,
2005

 

 

ITC Holdings Corp.

39500 Orchard Hill Place

Novi, Michigan  48375

 

Re: Amendment of Put Agreement; Waiver under
Notes

 

Ladies and Gentlemen:

 

Reference is
made (i) to that Put Agreement (the “Put Agreement”) dated February 28,
2003 between ITC Holdings Corp. (“Holdco”) and CIBC, Inc. (“CIBC”)
and (ii) to those Notes (as defined in the Put Agreement) to which the Put
Agreement refers and which are outstanding on the date hereof.  Capitalized terms used but not defined in
this letter (including Annex A hereto) shall have the respective meanings
assigned thereto in the Put Agreement.

 

Holdco has
requested that the terms of the Put Agreement be amended in light of the
potential for Holdco to become an “issuer”, as that term is defined in Section 2(a)(7) of
the Sarbanes-Oxley Act of 2002.  CIBC is
willing to make such amendment.  Subject
to the satisfaction of the condition precedent set forth in the second
succeeding paragraph hereto, Holdco and CIBC hereby agree that the Put
Agreement shall be amended to delete Section 1.2(e) thereof in its
entirety and substitute in lieu thereof the following:

 

“(e)  as to the outstanding Loans of any particular individual of
Management, at any time after the fifth business day prior to the date on which
Holdco causes such individual to become an “executive officer” for purposes of Section 13(k)
of the Securities Exchange Act (as enacted by Section 402 of the
Sarbanes-Oxley Act of 2002);”

 

In light of
the same issue, Holdco has also requested that CIBC waive the repayment by each
member of Management of principal of and accrued interest on the outstanding
Loans required by paragraph (D) on page 2 of such member’s Note.  CIBC is willing to grant such waiver.  Subject to (i) the satisfaction of the
condition precedent set forth in the next succeeding paragraph hereto and (ii) as
to the outstanding Loans of any particular member of Management, Holdco’s not
causing such member of Management to become an “executive officer” for purposes
of Section 13(k) of the Securities Exchange Act (as enacted by Section 402
of the Sarbanes-Oxley Act of 2002), CIBC hereby waives the repayment by each
member of

 

 

Management of principal of and accrued
interest on the outstanding Loans required by paragraph (D) on page 2
of such member’s Note.

 

As a condition
precedent to CIBC’s consent to the amendment and waiver in the above
paragraphs, Holdco shall deliver to CIBC an officer’s certificate in the form
attached hereto as Annex A.

 

Holdco further
agrees that, during the period commencing on the date hereof and ending on the
date upon which that particular registration statement (in draft form as of the
date hereof) pursuant to which it is contemplated that Holdco may become an “issuer”,
as that term is defined in Section 2(a)(7) of the Sarbanes-Oxley Act
of 2002, becomes effective, it shall not cause any member of Management with an
outstanding Loan under the Notes to become an “executive officer” for purposes
of Section 13(k) of the Securities Exchange Act (as enacted by Section 402
of the Sarbanes-Oxley Act of 2002).

 

All other terms and conditions of the Put Agreement and the Notes shall
remain in full force and effect, without modification.

 

THIS
AMENDMENT AND WAIVER WILL BE DEEMED TO BE MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK.  This amendment and waiver constitutes the
entire understanding among the parties hereto with respect to the subject
matter hereof and supersedes any prior agreements, written or oral, with
respect thereto.

 

This amendment
and waiver may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same amendment and waiver.  Delivery of an executed counterpart of a
signature page to this amendment and waiver by facsimile shall be
effective as delivery of a manually executed counterpart of this amendment and
waiver.

 

 

If the
foregoing sets forth the understanding between us, please so indicate on the
enclosed signed copy of this amendment and waiver in the space provided
therefor and return it to us, whereupon this amendment and waiver shall
constitute a binding agreement among us.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CIBC, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  ITC Holdings Corp.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

 

ANNEX A

 

OFFICER’S
CERTIFICATE OF

ITC HOLDINGS CORP.

 

The
undersigned, [                                ],
does hereby certify that he is the duly elected, acting and qualified [                                ]
of ITC Holdings Corp. (“Holdco”).

 

This
certificate is provided in connection with that certain letter agreement dated
the date hereof (the “Letter Agreement”) between Holdco and CIBC, Inc.
(“CIBC”).  Capitalized terms used
but not defined in this certificate shall have the respective meanings assigned
thereto in the Letter Agreement.

 

In my capacity
as [                                ]
of Holdco, I hereby certify as of the date hereof that none of the members of
Management with outstanding Loans under the Notes are “executive officers” for
purposes of Section 13(k) of the Securities Exchange Act (as enacted by Section 402
of the Sarbanes-Oxley Act of 2002).

 

IN WITNESS
WHEREOF, I have hereunto set my hand as of this       
day of March, 2005.

 

	
   

  	
  ITC HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:Exhibit
10.18

 

CONFORMED COPY

[28302-32600]

 

 

REVOLVING
CREDIT AGREEMENT,

 

 

dated as
of  March 19, 2004,

 

 

among

 

 

ITC HOLDINGS CORP.,

as the Borrower,

 

 

VARIOUS
FINANCIAL INSTITUTIONS AND OTHER

PERSONS FROM TIME TO TIME PARTIES HERETO,

as the
Lenders,

 

 

CANADIAN
IMPERIAL BANK OF COMMERCE,

as the Administrative Agent,

 

 

CREDIT
SUISSE FIRST BOSTON,

CAYMAN ISLANDS BRANCH,

as the Documentation Agent and Joint Lead Arranger

 

 

and

 

 

CIBC
WORLD MARKETS CORP.,

as Joint Lead Arranger

 

 

	
  ARTICLE 1 DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined Terms.

  	
   

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Accounting and Financial Determinations.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 AMOUNT AND TERMS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitments.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Minimum Amount of Each Borrowing; Maximum
  Number of Borrowings.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Notice of Borrowing.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Disbursement of Funds.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Repayment of Loans; Evidence of Debt.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Changes in Type of Revolving Credit Loan.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Pro Rata Borrowings.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Interest and Fees.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Interest Periods.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Increased Costs, Illegality, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Compensation.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.12

  	
  Change of Lending Office.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.13

  	
  Notice of Certain Costs.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Letters of Credit.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Letter of Credit Requests and Information to Administrative Agent.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Letter of Credit Participations.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Agreement to Repay Letter of Credit Drawings.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Increased Costs.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Successor Letter of Credit Issuer.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 FEES; COMMITMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Fees.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Voluntary Reduction of Revolving Credit
  Commitments.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Commitment Increases.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Mandatory Termination of Commitments.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Prepayments.

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Method and Place of Payment.

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Net Payments.

  	
   

  

 

i

 

	
  5.4

  	
  Computations of Interest and Fees.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Conditions Precedent to Initial Credit
  Event.

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Conditions Precedent to All Credit Events.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Organizational Status.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Capacity, Power and Authority.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  No Violation.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Litigation.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Governmental Approvals.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  True and Complete Disclosure.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Financial Condition; Financial Statements.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  Tax Returns and Payments.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.9

  	
  Environmental Matters.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.10

  	
  Properties.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  Pension and Welfare Plans.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12

  	
  Regulations U and X.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.13

  	
  Investment Company Act.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.14

  	
  No Material Adverse Change.

  	
   

  
	
   

  	
   

  	
   

  
	
  7.15

  	
  Deemed Repetition of Representations and Warranties.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Information Covenants.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Books, Record and Inspections.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Maintenance of Insurance.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Payment of Taxes.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Organizational Existence.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  Compliance with Statutes, Obligations, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  Good Repair.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.8

  	
  Transactions with Affiliates.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.9

  	
  End of Fiscal Years; Fiscal Quarters.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.10

  	
  Use of Proceeds.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.11

  	
  Changes in Business.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 NEGATIVE COVENANTS

  	
   

  
				

 

ii

 

	
  9.1

  	
  Limitation on Liens.

  	
   

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Limitation on Fundamental Changes.

  	
   

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Limitation on Dividends.

  	
   

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Debt to Capitalization Ratio.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Payments.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Representations, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Covenants.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Default Under Other Agreements.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Bankruptcy, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Security Documents.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  Judgments.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  Change of Ownership.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  Pension Plans.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  Remedies.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.11

  	
  Remedies Cumulative.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Appointment.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Delegation of Duties.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Exculpatory Provisions.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  Reliance by Administrative Agent.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  Notice of Default.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.6

  	
  Non-Reliance on Administrative Agent and
  Other Lenders.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.7

  	
  Indemnification.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.8

  	
  Administrative Agent in Its Individual Capacity.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.9

  	
  Successor Agent.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.10

  	
  Borrower as a Lender.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Amendments and Waivers.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Notices.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.3

  	
  No Waiver; Cumulative Remedies.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.4

  	
  Survival of Representations and Warranties.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.5

  	
  Payment of Expenses and Taxes.

  	
   

  

 

iii

 

	
  12.6

  	
  Successors and Assigns; Participations and Assignments.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.7

  	
  Replacements of Lenders under Certain
  Circumstances.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.8

  	
  Adjustments; Set-off.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.9

  	
  Marshalling; Payments Set Aside.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.10

  	
  Counterparts.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.11

  	
  Severability.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.12

  	
  Integration.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.13

  	
  Governing Law.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.14

  	
  Submission to Jurisdiction; Waivers.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.15

  	
  Acknowledgements.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.16

  	
  Waivers of Jury Trial.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.17

  	
  Confidentiality.

  	
   

  
	
   

  	
   

  	
   

  
	
  12.18

  	
  Treatment of Revolving Credit Loans.

  	
   

  

 

iv

 

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  Commitments

  	
   

  
	
  Schedule II

  	
  Environmental Matters

  	
   

  
	
  Schedule III

  	
  Pension and Welfare Matters

  	
   

  
	
  Schedule IV

  	
  Outstanding Liens on Closing Date

  	
   

  
	
  Schedule V

  	
  Senior Management

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form
  of Notice of Borrowing

  	
   

  
	
  Exhibit B

  	
  Form
  of Pledge Agreement

  	
   

  
	
  Exhibit C

  	
  Form
  of Notice of Continuation

  	
   

  
	
  Exhibit D

  	
  Form
  of Letter of Credit Request

  	
   

  
	
  Exhibit E

  	
  Form
  of New Lender Supplement

  	
   

  
	
  Exhibit F

  	
  Form
  of Commitment Increase Supplement

  	
   

  
	
  Exhibit G

  	
  Form
  of Closing Certificate

  	
   

  
	
  Exhibit H

  	
  Form
  of Compliance Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEXES:

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex 1

  	
  Indenture

  	
   

  

 

v

 

REVOLVING CREDIT AGREEMENT,
dated as of March 19, 2004, among ITC HOLDINGS CORP., a Michigan corporation
(the “Borrower”), various
financial institutions and other Persons from time to time parties hereto as
lenders (each a “Lender” and, collectively, the “Lenders”) and CANADIAN IMPERIAL BANK OF COMMERCE (“CIBC”), as administrative agent (in such
capacity, the “Administrative Agent”).

 

The Borrower has requested
that the Lenders make senior loans to it in an aggregate principal amount not
exceeding $20,000,000 (subject to increase to $45,000,000 as provided herein)
at any one time outstanding.  The Lenders
are prepared to make such loans upon the terms and conditions hereof, and,
accordingly, the parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

As used herein, the following terms shall have the
meanings specified in this Article 1 unless the context otherwise requires
(it being understood that defined terms in this Agreement shall include in the
singular number the plural and in the plural the singular):

 

1.1          Defined Terms.

 

“ABR” shall
mean, for any day, a rate per annum equal to the greater of (a) the rate of
interest (however designated) established by the Administrative Agent as its
base rate in effect at its principal office in New York, New York and (b) the
Federal Funds Effective Rate in effect on such day plus 0.5%.  Any change in the ABR due to a change in any
of the foregoing rates shall be effective as of the opening of business on the
effective date of such change in such rate.

 

“ABR Loan” shall
mean each Loan bearing interest at the rate provided in Section 2.8(a).

 

“Administrative Agent”
shall have the meaning provided in the preamble to this Agreement and shall
include such other financial institution as may be appointed as the successor
administrative agent in the manner and to the extent described in Section 11.9.

 

“Administrative Agent’s
Office” shall mean the office of the Administrative Agent located at
425 Lexington Avenue, New York, New York 
10017 or such other office as the Administrative Agent may hereafter
designate in writing as such to the Borrower and the Lenders.

 

“Affiliate”
shall mean, with respect to any Person, (a) any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person, and (b) any other Person in which such Person
directly or indirectly through Subsidiaries has a 10% or greater equity
interest.  A Person shall be deemed to
control a Person if such Person possesses, directly or indirectly, the power
(i) to vote 10% or more of the Voting Stock having ordinary voting power
for the election of directors (or the equivalent) of such other Person or
(ii) to direct or cause the direction of the management and policies of
such other Person, whether through the ownership of Capital Stock, by contract
or otherwise.

 

“Agreement” shall
mean this Revolving Credit Agreement, as the same may be amended, modified,
supplemented, restated or replaced from time to time.

 

 

“Applicable Margin”
shall mean, for any day,
with respect to any ABR Loan or LIBOR Loan, as the case may be, the applicable
rate per annum set forth below under the caption “ABR Spread” or “LIBOR
Spread”, respectively, based upon the ratings by Moody’s and S&P,
respectively, applicable on such date to the Borrower Bonds:

 

	
  Borrower Bonds Rating:

  	
   

  	
  ABR Spread

  	
   

  	
  LIBOR Spread

  	
   

  
	
  Category 1

  A+/A1 or higher

  	
   

  	
  Nil

  	
   

  	
  0.85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 2

  A/A2

  	
   

  	
  Nil

  	
   

  	
  0.95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 3

  A-/A3

  	
   

  	
  0.05

  	
  %

  	
  1.05

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 4

  BBB+/Baa1

  	
   

  	
  0.25

  	
  %

  	
  1.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 5

  BBB/Baa2

  	
   

  	
  0.35

  	
  %

  	
  1.35

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 6

  BBB-/Baa3

  	
   

  	
  0.50

  	
  %

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 7

  BB+/Ba1 or lower

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 8

  BB/Ba2 or lower

  	
   

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  

 

For purposes of this definition, (i) if
either Moody’s or S&P shall not have in effect a rating for the Borrower
Bonds (other than by reason of the circumstances referred to in the last
sentence of this definition), then such rating agency shall be deemed to have
established a rating in Category 7; (iv) if the ratings established
or deemed to have been established by Moody’s and S&P for the Borrower
Bonds shall fall within different Categories, the Applicable Margin shall be
based on the higher of the two ratings unless one of the two ratings is two or
more Categories lower than the other, in which case the Applicable Margin shall
be determined by reference to the median Category or the higher of the two
Categories between which the median would fall and (v) if the ratings
established or deemed to have been established by Moody’s and S&P for the
Borrower Bonds shall be changed (other than as a result of a change in the
rating system of Moody’s or S&P), such change shall be effective as of the
date on which it is first announced by the applicable rating agency.  Each change in the Applicable Margin shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change.  If the rating system of Moody’s
or S&P shall change, or if either such rating agency shall cease to be in
the business of rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating

 

2

 

agency and, pending the effectiveness of any such amendment, the
Applicable Margin shall be determined by reference to the rating most recently
in effect prior to such change or cessation.

 

“Approved Fund”
shall mean any Person (other than a natural person) that is or will be engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business and that is
administered or managed by a Lender, an Affiliate of a Lender or an entity or
an Affiliate of an entity that administers or manages a Lender.

 

“Arranger” shall mean the joint lead arrangers,
Credit Suisse First Boston, Cayman Islands Branch, and CIBC World Markets Corp.

 

“Assignee” shall
have the meaning provided in Section 12.6(a)(ii).

 

“Assignment and Acceptance”
shall mean the assignment and acceptance agreement delivered by each Assignee
pursuant to Section 12.6(a)(ii).

 

“Assignment
Effective Date” shall have the meaning provided in Section
12.6(a)(ii).

 

“Authorized Officer”
shall mean the Chief Executive Officer, the President, any Executive
Vice-President, any Senior Executive Vice President, any Senior Vice-President,
the Chief Financial Officer, the Treasurer or General Counsel of the Borrower
or any other senior officer of the Borrower designated as such in writing to
the Administrative Agent by the Borrower.

 

“Available Revolving Credit
Commitment” shall mean, with respect to any Lender, an amount equal
to the excess, if any, of (a) the amount of such Lender’s Revolving Credit
Commitment over (b) the sum of (i) the aggregate principal amount of
all Revolving Credit Loans of such Lender then outstanding and (ii) that
portion of such Lender’s Letter of Credit Exposure.

 

“Bankruptcy Code”
shall have the meaning provided in Section 10.5.

 

“Borrower” shall
have the meaning provided in the recitals to this Agreement.

 

“Borrower Bonds”
shall mean the 5.25% Senior Notes due 2013 issued under the Indenture.

 

“Borrowing”
shall mean the incurrence of one Type of Revolving Credit Loan on a given date
(or resulting from conversions or continuations on a given date) having, in the
case of LIBOR Loans, the same Interest Period (provided that ABR Loans incurred
pursuant to Section 2.10(b) shall be considered part of any related
Borrowing of LIBOR Loans).

 

“Business” shall have the meaning provided in
Section 8.11.

 

“Business Day”
shall mean (a) for all purposes other than as covered by clause (b)
below, any day excluding Saturday, Sunday and any day that shall be in the City
of New York a legal holiday or a day on which banking institutions are
authorized or required by law or other

 

3

 

governmental actions to close, and (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, LIBOR Loans, any day that is a Business Day
described in clause (a) excluding any day that shall be in the City of
London a legal holiday or a day on which banking institutions are authorized or
required by law or other governmental actions to close.

 

“Capital Lease”,
as applied to any Person, shall mean any lease of any property (whether real,
personal or mixed) by that Person as lessee that, in conformity with GAAP, is,
or is required to be, accounted for as a finance lease obligation on the
balance sheet of that Person.

 

“Capital
Stock” shall mean
common shares, preferred shares or other equivalent equity interests (howsoever
designated) of capital stock of a corporation, equity preferred or common
interests or membership interests in a limited liability company, limited or
general partnership interests in a partnership or any other equivalent of such
ownership interest.

 

“Capitalized Lease
Obligations” shall mean, as applied to any Person, all obligations
under Capital Leases of such Person and its Subsidiaries, in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.

 

“Change of Ownership”
shall mean and be deemed to have occurred if (a) the Sponsors shall at any time
not own, in the aggregate, directly or indirectly, beneficially and of record,
at least 35% of the issued and outstanding Voting Stock of the Borrower (other
than as a result of one or more widely distributed offerings of the Borrower’s
Voting Stock by the Borrower or one or more widely distributed offerings of the
Voting Stock of a direct or indirect parent of the Borrower by such parent, as
the case may be); and/or (b) the Borrower shall at any time not own, in the
aggregate, directly or indirectly, beneficially and of record, all of the issued
and outstanding Voting Stock of ITC; and/or (c) any person, entity or
group of Persons “acting in concert” (as contemplated by the Securities Act and as interpreted by
applicable law) shall at any time have acquired direct or indirect beneficial
ownership of a percentage of the issued and outstanding Voting Stock of the
Borrower that exceeds the percentage of such Voting Stock then directly or
indirectly beneficially owned, in the aggregate, by the Permitted Holders.

 

“Closing Date”
shall mean March 19, 2004.

 

“Code”
shall mean the Internal Revenue Code of 1986, and the regulations thereunder,
in each case as amended, reformed or otherwise modified from time to time.

 

“Collateral”
shall have the meaning set forth in the Pledge Agreement.

 

“Commitment Increase Supplement”
shall have the meaning provided for in Section 4.3(d).

 

“Compliance Certificate”
shall have the meaning provided in Section 8.1(c).

 

“Confidential Information”
shall have the meaning provided in Section 12.17.

 

4

 

“Control”, “Controls”
and “Controlled”, when used with respect to any Person, shall mean the power to
direct the management and policies of such Person, directly or indirectly,
whether through ownership of Voting Stock, by contract or otherwise.

 

“Controlled Group”
shall mean 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 the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

 

“Credit Documents”
shall mean this Agreement and the Pledge Agreement.

 

“Credit Event”
shall mean and include the making (but not the conversion or continuation) of a
Revolving Credit Loan and the issuance, extension or increase of a Letter of
Credit.

 

“Debt to Capitalization
Ratio” shall mean, as of any date of determination, the ratio of (a)
Total Debt for the relevant Test Period to (b) Total Capitalization for such
Test Period.

 

“Default”
shall mean any event, act or condition that with notice or lapse of time, or
both, would constitute an Event of Default.

 

“Defaulting Lender”
shall mean any Lender with respect to which a Lender Default is in effect.

 

“Dollars” and “$” shall mean lawful currency of the United States.

 

“Environmental Claims”
shall mean any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-compliance,
investigations (other than internal reports prepared by the Borrower or any of
its Subsidiaries (a) in the ordinary course of such Person’s business or
(b) as required in connection with a financing transaction or an
acquisition or disposition of real estate) or proceedings relating in any way
to any Environmental Law or any permit issued, or any approval given, under any
such Environmental Law (hereinafter, “Claims”),
including (i) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law and (ii) any and all
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to health, safety (with
respect to Hazardous Materials or conditions in the environment) or the
environment.

 

“Environmental Law”
shall mean any applicable federal, provincial, state, foreign or local statute,
law, rule, regulation, ordinance, code and rule of common law now or hereafter
in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment,
human health or safety (with respect to Hazardous Materials or conditions in
the environment) or Hazardous Materials.

 

5

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute thereto of similar import, together with the regulations
thereunder, in each case as in effect from time to time.  References to Sections of ERISA also refer to
any successor Sections thereto.

 

“Event of Default”
shall have the meaning provided in Article 10.

 

“Federal Funds Effective
Rate” shall mean, for any day, the weighted average of the per annum
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

 

“Fees” shall
mean all amounts payable pursuant to, or referred to in, Section 4.1.

 

“Final Date”
shall mean the date on which the Revolving Credit Commitments shall have
terminated, no Revolving Credit Loans shall be outstanding and the Letters of
Credit Outstanding shall have been reduced to zero, but in any event shall not
be later than the Revolving Credit Maturity Date.

 

“Finance Parties” shall mean the Administrative Agent
and the Lenders.

 

“First Mortgage
Indenture” shall mean the First Mortgage and Deed of Trust, dated as
of July 15, 2003, between ITC and BNY Midwest Trust Company, as trustee
thereunder, as the same may be amended, supplemented or otherwise modified and
in effect from time to time.

 

“Fiscal Quarter”
shall mean, with respect to each fiscal year of the Borrower and each of its
Subsidiaries, (a) the first to third, inclusive, calendar months of such
fiscal year, (b) the fourth to sixth, inclusive, calendar months of such
fiscal year, (c) the seventh to ninth, inclusive, calendar months of such
fiscal year and (d) the tenth to twelfth, inclusive, calendar months of
such fiscal year.

 

“Fronting Fee”
shall have the meaning provided in Section 4.1(c).

 

“F.R.S. Board”
shall mean the Board of Governors of the Federal Reserve System or any
successor thereto.

 

“Funding Office”
shall mean the office of the Administrative Agent located 425 Lexington Avenue,
New York, New York 10017, or such other office as the Administrative Agent may
hereafter designate in writing as such to the Borrower and the Lenders.

 

“GAAP” shall
mean generally accepted accounting principles in the United States as in effect
from time to time; provided, that if there occurs after the date hereof any
change in GAAP that affects in any respect the calculation of any covenant
contained in Article 9, the Lenders and the Borrower shall negotiate in
good faith amendments to the provisions of this Agreement that relate to the
calculation of such covenant with the intent of having the respective positions
of the Lenders and the Borrower after such change in GAAP conform as nearly as
possible to their

 

6

 

respective positions as of the date of this Agreement
and, until any such amendments have been agreed upon, the covenants in
Article 9 shall be calculated as if no such change in GAAP has occurred.

 

“Governmental Authority”
shall mean any nation or government, any state or other political subdivision
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.

 

“Guarantee Obligations”
shall mean, as to any Person, any obligation of such Person guaranteeing or
intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including any obligation of such Person, whether or not contingent,
(a) to purchase any such Indebtedness or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for
the purchase or payment of any such Indebtedness or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such Indebtedness of the ability of the primary obligor to make
payment of such Indebtedness or (d) otherwise to assure or hold harmless
the owner of such Indebtedness against loss in respect thereof; provided that,
the term “Guarantee Obligations” shall not include endorsements of instruments
for deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
Indebtedness in respect of which such Guarantee Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith or, if the Guarantee Obligation is expressly
limited to a specified amount, such specified amount.

 

“Hazardous Material”
shall mean (a) any petroleum or petroleum products, radioactive materials,
friable asbestos, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing regulated levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of “hazardous substances”, “hazardous
waste”, “hazardous materials”, “extremely hazardous waste”, “restricted
hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”,
or words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any Governmental Authority.

 

“Hostile Take-Over Bid” shall
mean an offer to purchase a controlling interest in any Person by the Borrower
or any of its Subsidiaries or in which the Borrower or any of its Subsidiaries
is involved, in respect of which the board of directors (or equivalent
governing body for such entity) of the target entity has recommended against
acceptance of such offer to the target entity’s shareholders or equity holders
or which is similarly opposed or contested.

 

“including”
and “include” shall mean including
without limiting the generality of any description preceding such term, and,
for purposes of each Credit Document, the parties hereto agree that the rule of
ejusdem generis shall not be applicable to limit a general statement, which

 

7

 

is followed by or referable to an enumeration of
specific matters, to matters similar to the matters specifically mentioned.

 

“Indebtedness”
of any Person shall mean (a) all indebtedness of such Person for borrowed
money, (b) the deferred purchase price of assets or services that in
accordance with GAAP would be classified as a liability on the balance sheet of
such Person, (c) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder,
(d) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (e) all Capitalized Lease Obligations of such Person,
(f) all existing payment obligations of such Person under interest rate
swap, cap or collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts and other similar
agreements, (g) all existing payment obligations of such Person under commodity
future contracts and other similar agreements and (h) without duplication,
all Guarantee Obligations of such Person; provided that, Indebtedness shall not
include current payables and accrued expenses, in each case arising in the
ordinary course of business.

 

“Indenture”
shall mean the Indenture attached hereto as Annex 1, dated as of July 16, 2003,
between the Borrower and BNY Midwest Trust Company, as trustee, as amended and
supplemented by the First Supplemental Indenture dated as of July 16, 2003,
between the Borrower and BNY Midwest Trust Company, as trustee.

 

“Interest Period”
shall mean, with respect to any Revolving Credit Loan, the interest period
applicable thereto, as determined pursuant to Section 2.9.

 

“ITC”
shall mean International Transmission Company, a Michigan corporation and
Subsidiary of the Borrower.

 

“ITC
Revolving Credit Agreement”
shall mean the Revolving Credit Agreement,
dated as of July 16, 2003, among ITC, various financial institutions and other
Persons from time to time parties hereto as lenders and CIBC, as administrative
agent.

 

“L/C Maturity Date”
shall mean the date that is five Business Days prior to the Revolving Credit
Maturity Date.

 

“L/C Participant”
shall have the meaning provided in Section 3.3(a).

 

“L/C Participation”
shall have the meaning provided in Section 3.3(a).

 

“Lender” and “Lenders” shall have the respective meanings provided in the
preamble to this Agreement.

 

“Lender Default”
shall mean a Lender having notified the Administrative Agent and/or the Borrower
that it does not intend to comply with the obligations under
Section 2.1(a) as a result of the control of such Lender being
assumed by any regulatory authority or the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.

 

8

 

“Letter of Credit”
shall mean each standby letter of credit issued pursuant to Section 3.1.

 

“Letter of Credit
Commitment” shall mean $10,000,000, as such amount may be reduced
from time to time pursuant to Section 3.1.

 

“Letter of Credit Exposure”
shall mean, with respect to any Lender, the sum of (a) the amount of any
Unpaid Drawings on Letters of Credit in respect of which such Lender has made
(or is required to have made) payments to the Letter of Credit Issuer pursuant
to Section 3.4(a) and (b) such Lender’s Revolving Credit Commitment
Percentage of the Letter of Credit Outstanding (excluding the portion thereof
consisting of Unpaid Drawings in respect of which the Lenders have made (or are
required to have made) payments to the Letter of Credit Issuer pursuant to
Section 3.4(a)).

 

“Letter of Credit Fee”
shall have the meaning provided in Section 4.1(b).

 

“Letter of Credit Issuer”
shall mean CIBC, any of its Affiliates or any successor thereto pursuant to
Section 3.6.

 

“Letter of Credit
Outstanding” shall mean, at any time, the sum, without duplication,
of (a) the aggregate Stated Amount of all outstanding Letters of Credit
and (b) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.

 

“Letter of Credit Request”
shall have the meaning provided in Section 3.2.

 

“LIBOR” shall
mean, with respect to each LIBOR Period for each LIBOR Loan, a rate per annum,
expressed on the basis of a 360 day year, equal to the annual interest rate for
deposits of Dollars for a maturity most nearly comparable to such LIBOR Period
which appears on page 3750 of the Dow Jones Telerate Screen as of 11:00 a.m.
(London time) on the second Business Day prior to the commencement of such
LIBOR Period; provided that, if such Dow Jones Telerate Screen rate is not
available on such day, then the annual interest rate for deposits of Dollars
for a maturity most nearly comparable to such LIBOR Period which appears on the
LIBOR page of the Reuters Screen as of 11:00 a.m. (London time) on the second
Business Day prior to the commencement of such LIBOR Period; and provided
further that if such Reuters Screen rate is not available on such day, then the
interest rate at which the Administrative Agent is offered deposits of Dollars
by leading banks in the London interbank market as of 11:00 a.m. (London time)
on the second Business Day prior to the commencement of such LIBOR Period, for
delivery on the first day of such LIBOR Period for the number of days comprised
in such LIBOR Period and in an amount comparable to the amount of such LIBOR
Loan.

 

“LIBOR Loan”
shall mean each Loan bearing interest at the rate provided in
Section 2.8(b).

 

“LIBOR Period”
shall mean, with respect to a LIBOR Loan, the interest period selected by the
Borrower for such LIBOR Loan in accordance with Section 2.9.

 

“Lien” shall
mean any mortgage, pledge, security interest, hypothecation, assignment by way
of security, lien (statutory or other) or similar encumbrance (including any
agreement to

 

9

 

give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof).

 

“Material Adverse Effect”
shall mean a circumstance or condition affecting the business, assets,
operations, properties or financial condition of the Borrower and its
Subsidiaries taken as a whole that would materially adversely affect
(a) the ability of the Borrower to perform its obligations under this
Agreement and the other Credit Documents or (b) the rights and remedies of
the Lenders under the Credit Documents.

 

“Minimum Borrowing Amount”
shall mean $500,000.

 

“Moody’s” shall
mean Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.

 

“Net Income”
shall mean, for any period, the consolidated profit (or loss) after taxation of
the Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.

 

“New Lender”
shall have the meaning provided in Section 4.3.

 

“New Lender
Supplement” shall have the meaning provided in Section 4.3.

 

“Non-U.S. Lender”
shall mean any Lender that is not a “United States person”, as defined under
Section 7701(a)(30) of the Code.

 

“Notice of Borrowing”
shall mean a Notice of Borrowing provided pursuant Section 2.3(a),
substantially in the form of Exhibit A.

 

“Notice of Continuation”
shall have the meaning provided in Section 2.6(a).

 

“Organic
Document” shall mean,
relative to any Person, its certificate of incorporation, by-laws, certificate
of partnership, partnership agreement, certificate of formation, limited
liability agreement, operating agreement and all shareholder agreements, voting
trusts and similar arrangements applicable to any of such Person’s Capital
Stock.

 

“Participant”
shall have the meaning provided in Section 12.6(a)(i).

 

“Pension Plan”
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 Borrower or any corporation,
trade or business that is, along with the Borrower, a member of a Controlled
Group, is a contributing employer or a sponsor.

 

“Permitted
Holders” shall mean,
collectively, the Sponsors and Senior Management.

 

“Permitted Liens”
shall mean (a) Liens for taxes, assessments, customs duties or
governmental charges or claims not yet due or which are being contested in good
faith and by appropriate proceedings for which appropriate provisions have been
established in accordance

 

10

 

with GAAP; (b) Liens in respect of property or
assets of the Borrower or any of its Subsidiaries imposed by law, such as
carriers’, warehousemen’s and or mechanics’ Liens, and other similar Liens
arising in the ordinary course of business and Liens arising under zoning laws
and ordinances and municipal bylaws and regulations, in each case so long as
such Liens arise in the ordinary course of business and do not individually or
in the aggregate have a Material Adverse Effect; (c) Liens arising out of
pledges or deposits under workmen’s compensation laws or similar legislation
and Liens of judgments thereunder which are not currently dischargeable, or
good faith deposits in connection with bids, tenders, contracts (other than for
the payment of money) or leases to which the Borrower or any Subsidiary is a
party, or deposits to secure public or statutory obligations of the Borrower or
any Subsidiary, or deposits in connection with obtaining or maintaining
self-insurance or to obtain the benefits of any law, regulation or arrangement
pertaining to unemployment insurance, old age pensions, social security or
similar matters, or deposits of cash or obligations of the United States of
America to secure surety, appeal or customs bonds to which the Borrower or any
Subsidiary is a party, or deposits in litigation or other proceedings such as,
but not limited to, interpleader proceedings, and, to the extent not securing Indebtedness,
other similar obligations incurred in the ordinary course of business;
(d) easements, rights-of-way, restrictive covenants or agreements, minor
defects or irregularities in title and other similar charges or encumbrances
not interfering in any material respect with the business of the Borrower and
its Subsidiaries taken as a whole; and (e) to the extent not securing
Indebtedness, (i) liens arising from judgments or decrees in circumstances
not constituting an Event of Default under Section 10.7; (ii) ground
leases in respect of real property on which facilities owned or leased by the
Borrower or any of its Subsidiaries are located; (iii) any interest or
title of a lessor or secured by a lessor’s interest under any lease not
prohibited by this Agreement; (iv) liens incurred by the licensing of
trademarks by the Borrower or any of its Subsidiaries to others in the ordinary
course of business; and (v) leases or subleases granted to others, not
interfering in any material respect with the business of the Borrower and its
Subsidiaries taken as a whole.

 

“Person” shall
mean any individual, partnership, joint venture, firm, corporation, limited
liability company, association, trust or other enterprise or any Governmental
Authority.

 

“Pledge Agreement”
shall mean the pledge agreement made by the Borrower in favor of the
Administrative Agent for the benefit of the Finance Parties, substantially in
the form of Exhibit B, as the same may be amended, modified, supplemented,
restated or replaced from time to time.

 

“Real Estate”
shall have the meaning provided in Section 8.1(e).

 

“Register” shall
have the meaning provided in Section 12.6(c).

 

“Required Lenders”
shall mean, at any date, Lenders having or holding more than 50% of the Total
Revolving Credit Commitment at such date (provided that in the case of a
Defaulting Lender, for this purpose only, its Revolving Credit Commitment shall
be deemed to be equal to the outstanding principal amount of all Revolving
Credit Loans of such Defaulting Lender at such date) or, if the Revolving
Credit Commitments have terminated, more than 50% of the outstanding principal
amount of all Revolving Credit Loans and Letter of Credit Exposure on such
date.

 

11

 

“Requirement of Law”
shall mean, as to any Person, the Certificate of Incorporation and By-Laws or
other organizational or governing documents of such Person, and any law,
treaty, rule, regulation, guideline, policy or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or assets or to which such
Person or any of its property or assets is subject and whether or not having
the force of law.

 

“Revolving Credit
Commitment” shall mean, (a) with respect to each Lender that is
a Lender on the date hereof, the amount set forth on Schedule I as such Lender’s
“Revolving Credit Commitment”, (b) in the case of any Lender that becomes
a Lender after the date hereof by assignment, the amount specified as such
Lender’s “Revolving Credit Commitment” in the Assignment and Acceptance
contemplated in Section 12.6 pursuant to which such Lender assumed a
portion of the Total Revolving Credit Commitment, and (c) in the case of any
Lender that becomes a Lender after the date hereof pursuant to Section 4.3, the
amount specified as such Lender’s “Revolving Credit Commitment” in the New
Lender Supplement in Section 4.3 pursuant to which such Lender assumed a
Revolving Credit Commitment, in each case as the same may be changed from time
to time pursuant to the terms hereof (including pursuant to Sections 4.2
and 12.6).

 

“Revolving Credit
Commitment Percentage” shall mean, at any time, for each Lender, the
percentage obtained by dividing (a) such Lender’s Revolving Credit
Commitment by (b) the Total Revolving Credit Commitment; provided that at
any time when the Total Revolving Credit Commitment shall have been terminated,
each Lender’s Revolving Credit Commitment Percentage shall be the percentage
obtained by dividing (c) such Lender’s Revolving Credit Exposure by
(d) the aggregate amount of the Revolving Credit Exposures of all the
Lenders.

 

“Revolving Credit Exposure”
shall mean, with respect to any Lender at any time, the sum of (a) the
aggregate principal amount of the Revolving Credit Loans of such Lender then
outstanding and (b) such Lender’s Letter of Credit Exposure at such time.

 

“Revolving Credit Loan”
shall have the meaning provided in Section 2.1(a).

 

“Revolving Credit Maturity
Date” shall mean March 19, 2007, or, if earlier, the date on which
the Revolving Credit Commitments shall have terminated and no Revolving Credit
Loans shall be outstanding.

 

“S&P” shall
mean Standard & Poor’s Ratings Service or any successor by merger or
consolidation to its business.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“Senior
Management” shall
mean those Persons listed in Schedule V.

 

“Sponsors”
shall mean Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners,
along with their respective Affiliates.

 

12

 

 

“Stated Amount”
of any Letter of Credit shall mean the maximum amount from time to time
available to be drawn thereunder, determined without regard to whether any
conditions to drawing could then be met.

 

“Subsidiary” of
any Person shall mean and include (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock or issued share capital of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any, contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (b) any partnership, association,
joint venture or other entity in which such Person directly or indirectly
through Subsidiaries has more than a 50% equity interest and more than a 50%
voting interest at the time and (c) any other corporation, partnership,
joint venture or other entity (i) the accounts of which would be
consolidated with those of such Person in such Person’s consolidated financial
statements if such statements were prepared in accordance with GAAP and
(ii) that is controlled (as defined in clause (b) of the definition
of such term in the definition of the term “Affiliate”) by such Person.  Unless otherwise expressly provided, all
references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.

 

“Successor Borrower”
shall have the meaning provided in Section 9.1(a).

 

“Taxes” shall have the meaning
provided in Section 5.3(a)(i).

 

“Test Period”
shall mean, for any determination under this Agreement, the four consecutive
Fiscal Quarters of the Borrower then last ended.

 

“Total
Capitalization” shall mean, as of any date of determination, the
sum, without duplication, of (a) Total Debt and (b) the consolidated net
shareholders equity of the Borrower as determined in accordance with GAAP.

 

“Total Debt”
shall mean, as of any date of determination, (a) the sum, without
duplication, of (i) all Indebtedness of the Borrower and its Subsidiaries
for borrowed money outstanding on such date, (ii) all Capitalized Lease
Obligations of the Borrower and its Subsidiaries outstanding on such date and
(iii) all Indebtedness of the Borrower and its Subsidiaries of the types
described in clauses (b) and (d) of the definition of Indebtedness (but in the
case of clause (d), only to the extent such Indebtedness is assumed by the Borrower
or any Subsidiary), all calculated on a consolidated basis in accordance with
GAAP and to the extent reflected as Indebtedness on the consolidated balance
sheet of the Borrower in accordance with GAAP minus
(b) the aggregate amount of cash held by the Borrower and its Subsidiaries as
at such date and included in the cash accounts listed on the consolidated
balance sheet of the Borrower and its Subsidiaries and deposited with the
Administrative Agent to the extent the use thereof for application to payment of
Indebtedness of the Borrower and its Subsidiaries is not prohibited by law or
any contract to which the Borrower or any of its Subsidiaries is a party.

 

“Total Revolving Credit
Commitment” shall mean the sum of the Revolving Credit Commitments
of all the Lenders, which as of the Closing Date was $20,000,000.

 

13

 

“Transactions” shall mean the execution, delivery
and performance by the Borrower of this Agreement and the other Credit
Documents, including the borrowing of the Revolving Credit Loans and the use of
the proceeds thereof.

 

“Transferee”
shall have the meaning provided in Section 12.6(e).

 

“Type” shall
mean as to any Revolving Credit Loan, its nature as an ABR Loan or a LIBOR
Loan.

 

“United States”
and “US” shall mean the United States of
America.

 

“Unpaid Drawing”
shall have the meaning provided in Section 3.4(a).

 

“Voting Stock”
shall mean Capital Stock of a Person which carries voting rights or the right
to Control such Person under any circumstances; provided that Capital Stock
which carries the right to vote or Control conditionally upon the happening of
an event shall not be considered Voting Stock until the occurrence of such
event and then only during the continuance of such event.

 

“Welfare Plan”
shall mean a “welfare plan”, as such term is defined in Section 3(1) of ERISA.

 

1.2          Accounting and
Financial Determinations.

 

(a)           Unless otherwise specified, all
accounting terms used herein shall be interpreted, and all accounting
determinations and computations hereunder shall be made, in accordance with
GAAP.  Unless otherwise expressly
provided herein, all financial covenants and defined financial terms shall be
computed on a consolidated basis for the Borrower and the Restricted
Subsidiaries, in each case without duplication. 
Such computations shall not give effect to adjustments in component
amounts required or permitted by the Financial Accounting Standards Board
Statements of Financial Accounting Standards Nos. 141 and 142, and related
authoritative pronouncements, as a result of the Transactions or the
amortization or write off of any amounts in connection therewith and related
financing thereof.

 

(b)           For purposes of computing the ratio
referred to in Section 9.3, such ratio (and any financial calculations or
components required to be made or included therein) shall be determined, with
respect to the relevant Test Period, after giving pro forma
effect to each acquisition and disposition of a Person, business or asset
consummated after the Closing Date and during such period, together with all
transactions relating thereto consummated during such period (including any
incurrence, assumption, refinancing or repayment of Indebtedness), as if such
acquisition, disposition and related transactions had been consummated on the
first day of such Test Period, in each case (i) based on historical results
accounted for in accordance with GAAP and (ii) prepared in accordance with
Regulation S-X under the Securities Act, as in effect on the Closing Date, to the
extent applicable.

 

14

 

ARTICLE 2

AMOUNT AND TERMS OF CREDIT

 

2.1          Commitments.

 

(a)           Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a “Revolving Credit Loan” and,
collectively, the “Revolving Credit Loans”)
to the Borrower, which Revolving Credit Loans (i) shall be made at any
time and from time to time on and after the Closing Date and prior to the
Revolving Credit Maturity Date, (ii) may, at the option of the Borrower,
be incurred and maintained as, and/or converted into, ABR Loans or LIBOR Loans
(provided that all Revolving Credit Loans made by each of the Lenders pursuant
to the same Borrowing shall, unless otherwise specifically provided herein,
consist entirely of Revolving Credit Loans of the same Type), (iii) may be
repaid and reborrowed in accordance with the provisions hereof and shall be
repaid in full on the Revolving Credit Maturity Date, (iv) for any such
Lender at any time, shall not result in such Lender’s Revolving Credit Exposure
at such time exceeding such Lender’s Revolving Credit Commitment at such time
and (v) after giving effect thereto and to the application of the proceeds
thereof, shall not result at any time in the aggregate amount of the Lenders’
Revolving Credit Exposures at such time exceeding the Total Revolving Credit
Commitment then in effect.  As of the
Closing Date, the Total Revolving Credit Commitment will be $20,000,000.

 

(b)           The Borrower shall use the Letters of
Credit and the proceeds from the Revolving Credit Loans (i) for general
corporate purposes of the Borrower and its Subsidiaries and (ii) to
finance capital expenditures by ITC; provided that, notwithstanding any of the
foregoing, none of the proceeds from Revolving Credit Loans may be used to
finance any Hostile Take-Over Bid.

 

2.2          Minimum Amount
of Each Borrowing; Maximum Number of Borrowings.

 

The aggregate principal amount of each Borrowing of
Revolving Credit Loans shall be in a multiple of $100,000 and shall not be less
than the Minimum Borrowing Amount.  More
than one Borrowing may be incurred on any date; provided that at no time shall
there be outstanding more than 15 Borrowings of LIBOR Loans under this
Agreement.

 

2.3          Notice of
Borrowing.

 

(a)           Whenever the Borrower desires to
incur Revolving Credit Loans hereunder (other than Borrowings to repay Unpaid
Drawings), it shall give the Administrative Agent at the locations set forth in
Section 12.2, (i) a written Notice of Borrowing (or telephonic notice
promptly confirmed in writing) prior to 12:00 noon (New York time) at least
three Business Days prior to the proposed day of each Borrowing of LIBOR Loans
and (ii) a written Notice of Borrowing (or telephonic notice promptly confirmed
in writing) prior to 10:00 a.m. (New York time) on the proposed day of each
Borrowing of ABR Loans.  Each such Notice
of Borrowing, except as otherwise expressly provided in Section 2.10,
shall be irrevocable and shall specify (i) the aggregate principal amount
of the Revolving Credit Loans to be made pursuant to such Borrowing,
(ii) the date of Borrowing (which shall be a Business Day), (iii) whether
the Borrowing shall consist of ABR Loans or LIBOR Loans, (iv) if such Borrowing
shall consist of LIBOR Loans, the Interest Period to be initially applicable
thereto and (v) the number and

 

15

 

location of the account
to which funds are to be disbursed.  The
Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing of
Revolving Credit Loans, of such Lender’s proportionate share thereof and of the
other matters covered by the related Notice of Borrowing.

 

(b)           Borrowings to reimburse Unpaid
Drawings shall be made upon the notice specified in Section 3.4(c).

 

(c)           Without in any way limiting the
obligation of the Borrower to confirm in writing any notice it may give
hereunder by telephone, the Administrative Agent may act prior to receipt of
written confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized
Officer of the Borrower.  In each such
case the Borrower hereby waives the right to dispute the Administrative Agent’s
record of the terms of any such telephonic notice.

 

2.4          Disbursement of
Funds.

 

(a)           No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing, each Lender will make
available its pro rata portion, if any, of each
Borrowing requested to be made on such date in the manner provided below.

 

(b)           Each Lender shall make available all
amounts it is to fund under any Borrowing in immediately available funds to the
Administrative Agent at the Funding Office and the Administrative Agent will
(except in the case of Borrowings to repay Unpaid Drawings) make available to
the Borrower by depositing such funds as specified in the applicable Notice of
Borrowing, the aggregate of the amounts so made available.  Unless the Administrative Agent shall have
been notified by any Lender prior to the date of any such Borrowing that such
Lender does not intend to make available to the Administrative Agent its
portion of the Borrowing or Borrowings to be made on such date, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such date of Borrowing, and the Administrative Agent,
in reliance upon such assumption, may (in its sole discretion and without any
obligation to do so) make available to the Borrower a corresponding
amount.  If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender.  If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent.  The Administrative
Agent shall also be entitled to recover from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if
paid by such Lender, at the Federal Funds Effective Rate or (ii) if paid
by the Borrower, the then-applicable rate of interest, calculated in accordance
with Section 2.8, for the respective Revolving Credit Loans.

 

16

 

(c)           Nothing in this Section 2.4
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights that the Borrower may have
against any Lender as a result of any default by such Lender hereunder (it
being understood, however, that no Lender shall be responsible for the failure
of any other Lender to fulfill its commitments hereunder).

 

2.5          Repayment of
Loans; Evidence of Debt.

 

(a)           The Borrower shall, for the benefit
of the Lenders, on the Revolving Credit Maturity Date, (i) repay to the
Administrative Agent the then-unpaid Revolving Credit Loans and (ii) retire all
other then-outstanding Revolving Credit Exposure.

 

(b)           Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the Indebtedness
of the Borrower to the appropriate lending office of such Lender resulting from
each Revolving Credit Loan made by such lending office of such Lender from time
to time, including the amounts and currency of principal and interest payable
and paid to such lending office of such Lender from time to time under this
Agreement.

 

(c)           The Administrative Agent shall
maintain the Register pursuant to Section 12.6, and a sub-account for each
Lender, in which Register and sub-accounts (taken together) shall be recorded
(i) the amount of each Revolving Credit Loan made hereunder, the Type of
each Revolving Credit Loan made and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.

 

(d)           The entries made in the Register and
accounts and subaccounts maintained pursuant to paragraphs (b) and (c) of
this Section shall, to the extent permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of the Borrower therein recorded; provided that the failure of any Lender or the Administrative Agent
to maintain such account, such Register or such subaccount, as applicable, or
any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Revolving Credit Loans made to
the Borrower by such Lender in accordance with the terms of this
Agreement.  In the event that there is an
inconsistency between the accounts maintained by a Lender pursuant to
Section 2.5(b) and the Register maintained by the Administrative Agent
pursuant to Section 12.6, the said Register shall prevail.

 

(e)           All payments to be made by the
Administrative Agent to any Lender hereunder shall be made in accordance with
the payment instructions of such Lender set forth on the signature page of such
Lender hereunder or, if such Lender is an Assignee, set forth in the Assignment
and Acceptance of such Lender.

 

2.6          Changes in Type
of Revolving Credit Loan.

 

(a)           The Borrower shall have the option on
any Business Day to convert all or a portion equal to at least the Minimum
Borrowing Amount of the outstanding principal amount of Revolving Credit Loans
of one Type into a Borrowing or Borrowings of another permitted Type or to
continue the outstanding principal amount of any LIBOR Loans as LIBOR Loans for
an

 

17

 

additional Interest
Period; provided that (i) no partial continuation of LIBOR Loans shall
reduce the outstanding principal amount of LIBOR Loans made pursuant to a
single Borrowing to less than the Minimum Borrowing Amount, (ii) ABR Loans
may not be converted into LIBOR Loans, if a Default or Event of Default is in
existence on the date of the proposed conversion and the Administrative Agent
has or the Required Lenders have determined in its or their sole discretion not
to permit such conversion, (iii) LIBOR Loans may not be continued as LIBOR
Loans for an additional Interest Period if a Default or Event of Default is in
existence on the date of the proposed continuation and the Administrative Agent
has or the Required Lenders have determined in its or their sole discretion not
to permit such continuation, (iv) no Interest Period in excess of one
month may be selected for any LIBOR Loan if a Default or Event of Default is in
existence on the date of the proposed continuation and the Administrative Agent
has or the Required Lenders have determined in its or their sole discretion not
to permit such longer Interest Period, (v) Borrowings resulting from
continuations or conversions pursuant to this Section 2.6 shall be limited
in number as provided in Section 2.2 and (vi) the outstanding principal
amount of a Revolving Credit Loan of one Type may not be converted into a
Borrowing of another permitted Type until the end of the current Interest
Period for such Revolving Credit Loan. 
Each such continuation or conversion shall be effected by the Borrower
by giving the Administrative Agent at the location set forth in Section 12.2
prior to 12:00 Noon (New York time) at least three Business Days’ prior written
notice substantially in the form of Exhibit C (or telephonic notice promptly
confirmed in writing) (each a “Notice of Continuation”)
specifying the Revolving Credit Loans to be so continued or converted, the Type
of Revolving Credit Loans to be continued or converted into and, if such Revolving
Credit Loans are to be converted or continued as LIBOR Loans, the Interest
Period to be initially applicable thereto. 
The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed continuation or conversion affecting any of
its Revolving Credit Loans.  This Section
shall not be construed to permit the Borrower to change the currency of any
Borrowing.

 

(b)           If any Default or Event of Default is
in existence at the time of any proposed continuation of any LIBOR Loans and
the Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such continuation, such LIBOR Loans shall
be automatically converted on the last day of the current Interest Period into
ABR Loans.

 

(c)           If upon the expiration of any
Interest Period in respect of LIBOR Loans, the Borrower has failed to elect a
new Interest Period to be applicable thereto as provided in paragraph (a)
above, the Borrower shall be deemed to have elected to convert such Borrowing
of LIBOR Loans, as the case may be, into a Borrowing of ABR Loans, as the case
may be, effective as of the expiration date of such current Interest Period.

 

2.7          Pro Rata Borrowings.

 

Each Borrowing
of Revolving Credit Loans under this Agreement shall be made by the Lenders pro rata on the basis of their then-applicable Revolving
Credit Commitment Percentage; provided that the Administrative Agent may adjust
the proportions of the Lenders with respect to any Borrowing to be made by such
Lenders to ensure that no Lender’s Revolving Credit Exposure (after granting
its portion of such Borrowing) exceeds its Revolving Credit

 

18

 

 

Commitment.  It is understood
that no Lender shall be responsible for any default by any other Lender in its
obligation to make Revolving Credit Loans hereunder and that each Lender shall
be obligated to make the Revolving Credit Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder.

 

2.8          Interest and Fees.

 

(a)           The unpaid principal amount of each
ABR Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise and both before and after
default and judgment) at a rate per annum that shall at all times be equal to
the Applicable Margin for ABR Loans plus the ABR in effect from time to time.

 

(b)           The unpaid principal amount of each
LIBOR Loan shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise and both before and after default and
judgment) at a rate per annum that shall at all times be equal to the
Applicable Margin for LIBOR Loans plus the relevant LIBOR.

 

(c)           If all or a portion of (i) the
principal amount of any Revolving Credit Loan or (ii) any interest thereon
or fees payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum that is (x) in the case of overdue principal,
equal to the rate that would otherwise be applicable thereto plus, to the
extent permitted by applicable law, 2.00% (after as well as before maturity and
judgment), (y) in the case of any overdue interest with respect to any
Revolving Credit Loan, equal to the rate of interest applicable to such
Revolving Credit Loan plus, to the extent permitted by applicable law, 2.00%,
or (z) in the case of any overdue fees or other amounts owing hereunder, equal
to the rate of interest then applicable to Revolving Credit Loans maintained as
ABR Loans plus 2.00%, in each case from and including the date of such
non-payment to but excluding the date on which such amount is paid in full
(after as well as before maturity and judgment).  All interest payable pursuant to this
Section 2.8(c) shall be payable upon demand.

 

(d)           Interest on each Revolving Credit
Loan shall accrue from and including the date of any Borrowing to but excluding
the date of any repayment thereof and shall, except as otherwise provided
pursuant to Section 2.8(c), be payable (i) in respect of each ABR
Loan, quarterly in arrears on the last Business Day of each of March, June,
September and December, (ii) in respect of each LIBOR Loan, on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three-month
intervals after the first day of such Interest Period, (iii) in respect of each
Revolving Credit Loan on any prepayment (on the amount prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.

 

(e)           All computations of interest
hereunder shall be made in accordance with Section 5.4.

 

(f)            The Administrative Agent, upon
determining the interest rate for any Borrowing of LIBOR Loans, shall promptly
notify the Borrower and the relevant Lenders thereof.  Each

 

19

 

such determination shall,
absent clearly demonstrable error, be final and conclusive and binding on all
parties hereto.

 

2.9          Interest Periods.

 

At the time
the Borrower gives a Notice of Borrowing or Notice of Continuation in respect
of the making of, or conversion into or continuation as, a Borrowing of LIBOR
Loans prior to 10:00 a.m. (New York time) on the third Business Day prior to
the applicable date of making or conversion or continuation of such LIBOR
Loans, the Borrower shall have the right to elect by giving the Administrative
Agent written notice of (or telephonic notice promptly confirmed in writing)
the LIBOR Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower, be one, two, three or six months.  Notwithstanding anything to the contrary
contained above:

 

(a)           the initial LIBOR Period for any Borrowing
of LIBOR Loans shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing of ABR Loans) and each LIBOR Period
occurring thereafter in respect of such Borrowing shall commence on the day on
which the next preceding LIBOR Period expires;

 

(b)           if any LIBOR Period relating to a
Borrowing of LIBOR Loans begins on the last Business Day of a calendar month or
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such LIBOR Period, such LIBOR Period shall end on
the last Business Day of the calendar month at the end of such LIBOR Period;

 

(c)           if any LIBOR Period would otherwise
expire on a day that is not a Business Day, such LIBOR Period shall expire on
the next succeeding Business Day; provided that if any LIBOR Period in respect
of a LIBOR Loan would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such LIBOR Period shall expire on the next preceding Business Day; and

 

(d)           the Borrower shall not be entitled to
elect any LIBOR Period in respect of any LIBOR Loan if such LIBOR Period would
extend beyond the applicable Revolving Credit Maturity Date of such LIBOR Loan.

 

2.10        Increased Costs, Illegality, etc.

 

(a)           In the event that any Lender shall
have reasonably determined (which determination shall, absent clearly
demonstrable error, be final and conclusive and binding upon all parties
hereto):

 

(i)            on any date for determining LIBOR for
a Borrowing of LIBOR Loans for any Interest Period that by reason of any
changes arising on or after the date hereof affecting the London interbank
market (x) deposits in Dollars in the principal amounts of the Revolving Credit
Loans comprising such Borrowing are not readily available to such Lender in the
London interbank market or (y) adequate and fair means do not exist for

 

20

 

ascertaining the applicable interest rate on the basis provided for in
the definition of LIBOR; or

 

(ii)           at any time, that such Lender shall
incur increased costs or reductions in the amounts received or receivable
hereunder with respect to any LIBOR Loans (other than any such increase or
reduction attributable to taxes) because of (x) any change since the date
hereof in any applicable law, governmental rule, regulation, guideline or order
(or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline or
order), such as, for example, but not limited to, a change in official reserve
requirements (including any reserve requirements specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including “Eurocurrency Liabilities” as therein
defined), and/or (y) other circumstances affecting the London interbank
market; or

 

(iii)          at any time, that the making or
continuance of any LIBOR Loan has become unlawful by compliance by such Lender
in good faith with any law, governmental rule, regulation, guideline or order
(or would conflict with any such governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful), or has become impracticable as a result of a
contingency occurring after the date hereof that materially and adversely
affects the London interbank market;

 

then, and in any such event, such Lender shall within
a reasonable time thereafter give notice (if by telephone confirmed in writing)
to the Borrower and to the Administrative Agent of such determination (which
notice the Administrative Agent shall promptly transmit to each of the other
Lenders).  Thereafter (x) in the
case of clause (i) above, LIBOR Loans shall no longer be available from
such Lender (and such Lender’s obligation to make such Revolving Credit Loans
shall be suspended) until such time as such Lender notifies the Administrative
Agent, the Borrower and the Lenders that the circumstances giving rise to such
notice by the Administrative Agent no longer exist (which notice such Lender
agrees to give at such time when such circumstances no longer exist), and any
Notice of Borrowing or Notice of Continuation given by the Borrower with respect
to LIBOR Loans that have not yet been incurred shall be deemed, with respect to
such Lender only, to be a Notice of Borrowing or Notice of Continuation for ABR
Loans, (y) in the case of clause (ii) above, the Borrower shall pay
to such Lender, promptly after receipt of written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its reasonable
discretion shall determine) as shall be required to compensate such Lender for
such increased costs or reductions in amounts receivable hereunder (it being
agreed that a written notice as to the additional amounts owed to such Lender,
showing in reasonable detail the basis for the calculation thereof, submitted
to the Borrower by such Lender shall, absent clearly demonstrable error, be
final and conclusive and binding upon all parties hereto) other than any such
increase or reduction attributable to taxes and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in
Section 2.10(b) as promptly as possible and, in any event, within the time
period required by law.

 

21

 

(b)           At any time that any LIBOR Loan is
affected by the circumstances described in Section 2.10(a)(ii) or
2.10(a)(iii), the Borrower may (and in the case of a LIBOR Loan affected
pursuant to Section 2.10(a)(iii) shall) either (i) if the affected
LIBOR Loan is then being made pursuant to a Credit Event or Borrowing by way of
conversion into a LIBOR Loan, cancel said Credit Event or Borrowing by giving
the Administrative Agent telephonic notice (confirmed promptly in writing)
thereof on the same date that the Borrower was notified by a Lender pursuant to
Section 2.10(a)(ii) or 2.10(a)(iii), or (ii) if the affected LIBOR
Loan is then outstanding, upon at least three Business Days notice to the
Administrative Agent, require the affected Lender to convert each such LIBOR
Loan into an ABR Loan; provided that if more than one Lender is affected at any
time, then all affected Lenders must be treated in the same manner pursuant to
this Section 2.10(b).

 

(c)           If, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, or compliance by a Lender or its parent
with any request or directive made or adopted after the date hereof regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate of
return on such Lender’s or its parent’s capital or assets as a consequence of
such Lender’s commitments or obligations hereunder to a level below that which
such Lender or its parent could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s or
its parent’s policies with respect to capital adequacy), then from time to
time, promptly after demand by such Lender (with a copy to the Administrative
Agent), the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or its parent for such reduction, it being
understood and agreed, however, that a Lender shall not be entitled to such
compensation as a result of such Lender’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as in
effect on the date hereof.  Each Lender,
upon determining in good faith that any additional amounts will be payable
pursuant to this Section 2.10(c), will give prompt written notice thereof
to the Borrower, which notice shall set forth in reasonable detail the basis of
the calculation of such additional amounts, although the failure to give any
such notice shall not, subject to Section 2.13, release or diminish any of
the Borrower’s obligations to pay additional amounts pursuant to this
Section 2.10(c) upon receipt of such notice.

 

2.11        Compensation.

 

If
(a) any payment of principal of any LIBOR Loan, or any continuation of any
LIBOR Loan, is made by the Borrower (or a replacement Lender in the case of
Section 12.7) to or for the account of a Lender other than on the last day
of the Interest Period for such LIBOR Loan pursuant to Section 2.5, 2.6,
2.10, 5.1 or 12.7, as a result of acceleration of the maturity of the Revolving
Credit Loans pursuant to Article 10 or for any other reason, (b) any
Borrowing of LIBOR Loans is not made as a result of a withdrawn Notice of
Borrowing, (c) any ABR Loan is not converted into a LIBOR Loan as a result
of a withdrawn Notice of Continuation, (d) any LIBOR Loan is not continued
as a LIBOR Loan as a result of a withdrawn Notice of Continuation or
(e) any prepayment of principal of any LIBOR Loan is not made as a result
of a withdrawn notice of prepayment pursuant to Section 5.1, the Borrower
shall, after receipt of a written request by such Lender (which request shall
set forth in reasonable detail the basis for requesting such amount), pay to
the Administrative Agent for the account of such Lender any

 

22

 

amounts required to compensate such Lender for any additional losses,
costs or expenses that such Lender may reasonably incur as a result of such payment,
failure to convert, failure to continue or failure to prepay, including any
loss, cost or expense (excluding loss of anticipated profits) actually incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such LIBOR Loan.

 

2.12        Change of Lending
Office.

 

Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
Section 2.10(a)(ii), 2.10(a)(iii), 2.10(b) or 5.3 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another lending
office for any Revolving Credit Loans affected by such event; provided that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section.  Nothing in this Section 2.12
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Section 2.10 or 5.3.

 

2.13        Notice of Certain
Costs.

 

Notwithstanding
anything in this Agreement to the contrary, to the extent any notice required
by Section 2.10, 2.11 or 5.3 is given by any Lender more than 180 days
after such Lender has knowledge (or should have had knowledge) of the
occurrence of the event giving rise to the additional cost, reduction in
amounts, loss, tax or other additional amounts described in such Sections, such
Lender shall not be entitled to compensation under Section 2.10, 2.11 or
5.3, as the case may be, for any such amounts incurred or accruing prior to the
giving of such notice to the Borrower.

 

ARTICLE 3

LETTERS OF CREDIT

 

3.1          Letters of Credit.

 

(a)           Subject to and upon the terms and
conditions herein set forth, the Borrower, at any time and from time to time on
or after the Closing Date and prior to the L/C Maturity Date, may request that
the Letter of Credit Issuer issue, for the account of the Borrower, a standby
letter of credit or letters of credit (in such form as may be approved by the
Letter of Credit Issuer in its reasonable discretion) which is participated by
the Letter of Credit Issuer pursuant to Section 3.3 (each such letter of
credit, a “Letter of Credit”).

 

(b)           Notwithstanding the foregoing,
(i) no Letter of Credit shall be issued the Stated Amount of which, when
added to the Letter of Credit Outstanding at such time, would exceed the Letter
of Credit Commitment then in effect; (ii) no Letter of Credit shall be
issued the Stated Amount of which, when added to the sum of (x) the Letter
of Credit Outstanding at such time and (y) the aggregate principal of all
Revolving Credit Loans then outstanding would exceed the Total Revolving Credit
Commitment then in effect; (iii) each Letter of Credit shall have an
expiry date occurring no later than one year after the date of issuance
thereof, unless otherwise agreed upon by the Administrative Agent and the
Letter of Credit Issuer; provided that in no

 

23

 

event shall such expiry
date occur later than the L/C Maturity Date; (iv) each Letter of Credit
shall be denominated in Dollars and shall provide for drawings thereunder to be
made in Dollars; and (v) no Letter of Credit shall be issued by the Letter
of Credit Issuer after it has received a written notice from the Borrower or
any Lender stating that a Default or Event of Default has occurred and is
continuing until such time as the Letter of Credit Issuer shall have received a
written notice of (x) rescission of such notice from the party or parties
originally delivering such notice (provided that in the case of any such notice
delivered by the Borrower, the Administrative Agent has not objected to or contested
such rescission) or (y) the waiver of such Default or Event of Default in
accordance with the provisions of Section 12.1.

 

(c)           Upon at least three Business Day’s
prior written notice (or telephonic notice promptly confirmed in writing) to
the Administrative Agent and the Letter of Credit Issuer, the Borrower shall
have the right, on any day, to permanently terminate or reduce the Letter of
Credit Commitment, in whole or in part; provided that, after giving effect to
such termination or reduction, the Letter of Credit Outstanding shall not
exceed the Letter of Credit Commitment.

 

3.2          Letter of Credit
Requests and Information to Administrative Agent.

 

(a)           Whenever the Borrower desires that a
Letter of Credit be issued for its account, it shall give the Administrative
Agent and the Letter of Credit Issuer at least three (or such lesser number as
may be agreed upon by the Administrative Agent and the Letter of Credit Issuer)
Business Days’ written notice thereof. 
Each notice shall be executed by the Borrower and shall be in the form
of Exhibit D (each a “Letter of Credit Request”).  The Administrative Agent shall promptly
transmit copies of each Letter of Credit Request to each Lender.

 

(b)           The making of each Letter of Credit
Request shall be deemed to be a representation and warranty by the Borrower
that the Letter of Credit may be issued in accordance with, and will not
violate the requirements of, Section 3.1(b).

 

(c)           The Letter of Credit Issuer shall, as
soon as practicable following the issuance, cancellation or termination of any
Letter of Credit, provide a copy of such Letter of Credit, cancellation or
termination to the Administrative Agent.

 

3.3          Letter of Credit Participations.

 

(a)           Immediately upon the issuance by the
Letter of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer
shall be deemed to have sold and transferred to each other Lender that has a
Revolving Credit Commitment (each such other Lender, in its capacity under this
Section 3.3, an “L/C Participant”), and each such L/C Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
Letter of Credit Issuer, without recourse or warranty, an undivided interest
and participation (each an “L/C Participation”), to the extent of such L/C Participant’s
Revolving Credit Commitment Percentage from time to time, in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto (although the Letter of Credit
Fee will be paid directly to the Administrative Agent for the ratable account
of the L/C

 

24

 

Participants as provided
in Section 4.1(b) and the L/C Participants shall have no right to receive
any portion of any Fronting Fees).

 

(b)           In determining whether to pay under
any Letter of Credit, the Letter of Credit Issuer shall have no obligation
relative to the L/C Participants other than to confirm that any documents
required to be delivered under such Letter of Credit have been delivered and
that they appear to comply on their face with the requirements of such Letter
of Credit.  Any action taken or omitted
to be taken by the Letter of Credit Issuer under or in connection with any
Letter of Credit issued by it, unless taken or omitted through its gross
negligence or willful misconduct as determined by a final judgment of a court
of competent jurisdiction, shall not create for the Letter of Credit Issuer any
resulting liability.

 

(c)           In the event that the Letter of
Credit Issuer makes any payment under any Letter of Credit issued by it and the
Borrower shall not have repaid the amount in full to the Letter of Credit
Issuer pursuant to Section 3.4(a), the Letter of Credit Issuer shall
promptly notify the Administrative Agent (who shall in turn promptly notify
each L/C Participant) of the failure, and each L/C Participant shall promptly
and unconditionally pay to the Administrative Agent, for the account of the
Letter of Credit Issuer, the amount of the L/C Participant’s Revolving Credit
Commitment Percentage (determined as of the date of the notice referred to
above) of the unreimbursed payment in Dollars and in same day funds.  If the Letter of Credit Issuer so notifies,
prior to 11:00 a.m. (New York time) on any Business Day, any L/C
Participant required to fund a payment under a Letter of Credit, the L/C
Participant shall make available to the Administrative Agent for the account of
the Letter of Credit Issuer the L/C Participant’s Revolving Credit Commitment
Percentage of the amount of the payment on the Business Day in same day
funds.  If and to the extent the L/C
Participant shall not have so made its Revolving Credit Commitment Percentage
of the amount of the payment available to the Administrative Agent for the
account of the Letter of Credit Issuer, the L/C Participant agrees to pay to
the Administrative Agent for the account of the Letter of Credit Issuer,
forthwith on demand, the amount, together with interest thereon for each day
from the date until the date the amount is paid to the Administrative Agent for
the account of the Letter of Credit Issuer at the Federal Funds Effective
Rate.  The failure of any L/C Participant
to make available to the Administrative Agent for the account of a Letter of
Credit Issuer the L/C Participant’s Revolving Credit Commitment Percentage of
any payment under any Letter of Credit shall not relieve any other L/C
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of the Letter of Credit Issuer the other L/C Participant’s
Revolving Credit Commitment Percentage of any payment under the Letter of
Credit on the date required, as specified above, but no L/C Participant shall be
responsible for the failure of any other L/C Participant to make available to
the Administrative Agent the other L/C Participant’s Revolving Credit
Commitment Percentage of the payment. 
Notwithstanding the foregoing, the Administrative Agent shall be entitled
to adjust the proportions of any of the foregoing amounts required to be paid
by the L/C Participants to ensure that no L/C Participant’s Revolving Credit
Exposure exceeds its Revolving Credit Commitment.

 

(d)           Whenever the Letter of Credit Issuer
receives a payment in respect of an unpaid reimbursement obligation as to which
the Administrative Agent has received for the account of the Letter of Credit
Issuer any payments from the L/C Participants pursuant to paragraph (c)
above, the Letter of Credit Issuer shall pay to the Administrative Agent and
the Administrative

 

25

 

 

Agent shall promptly pay
to each L/C Participant that has paid its applicable portion of such
reimbursement obligation, in Dollars and in same day funds, an amount equal to
such L/C Participant’s share (based upon the proportionate aggregate amount
originally funded by such L/C Participant to the aggregate amount funded by all
L/C Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective L/C
Participations.

 

(e)           The obligations of the L/C
Participants to make payments to the Administrative Agent for the account of
the Letter of Credit Issuer with respect to Letters of Credit issued by it
shall be irrevocable and not subject to counterclaim, set-off or other defense
or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all circumstances,
including any of the following circumstances:

 

(i)            any lack of validity or
enforceability of this Agreement or any of the other Credit Documents;

 

(ii)           the existence of any claim, set-off,
defense or other right that the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Administrative
Agent, the Letter of Credit Issuer, any Lender or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such Letter
of Credit);

 

(iii)          any draft, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

 

(iv)          the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Credit Documents; or

 

(v)           the occurrence of any Default or
Event of Default;

 

provided that no L/C Participant shall be obligated to pay to the
Administrative Agent for the account of the Letter of Credit Issuer such L/C
Participant’s Revolving Credit Commitment Percentage of any unreimbursed amount
arising from any wrongful payment made by the Letter of Credit Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer as
determined by a final judgment of a court of competent jurisdiction.

 

3.4          Agreement to Repay Letter of Credit
Drawings.

 

(a)           The Borrower hereby agrees to
reimburse the Letter of Credit Issuer, by making payment to the Administrative
Agent in Dollars in immediately available funds at the Funding Office, for any
payment or disbursement made by the Letter of Credit Issuer under any Letter of
Credit (each such amount so paid until reimbursed, an “Unpaid
Drawing”) immediately after, and in any event on the date of, such
payment, with interest on the amount so paid or disbursed

 

26

 

by the Letter of Credit
Issuer, to the extent not reimbursed prior to 5:00 p.m. (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Letter of Credit Issuer is reimbursed
therefor, at a rate per annum that shall at all times be 2% above the
Applicable Margin for Revolving Credit Loans plus the ABR as in effect from
time to time.

 

(b)           The Borrower’s obligations under this
Section 3.4 to reimburse the Letter of Credit Issuer with respect to
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment that the Borrower or any other
Person may have or have had against the Letter of Credit Issuer, the Administrative
Agent or any Lender (including in its capacity as an L/C Participant),
including any defense based upon the failure of any drawing under a Letter of
Credit (each a “Drawing”) to conform to the terms
of the Letter of Credit, any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing or any of the circumstances
described in Sections 3.3(e)(i) to 3.3(e)(v), inclusive; provided that the
Borrower shall not be obligated to reimburse the Letter of Credit Issuer for
any wrongful payment made by the Letter of Credit Issuer under the Letter of
Credit issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer as
determined by a final judgment of a court of competent jurisdiction.

 

(c)           Each payment by the Letter of Credit
Issuer under any Letter of Credit shall constitute a request by the Borrower
for a Revolving Credit Loan, subject to Section 6.2, in the amount of the
Unpaid Drawing in respect of such Letter of Credit.  The Letter of Credit Issuer shall notify the
Borrower and the Administrative Agent, by 10:00 a.m. (New York time) on any
Business Day on which the Letter of Credit Issuer intends to honor a drawing
under a Letter of Credit, of (i) the Letter of Credit Issuer’s intention
to honor such drawing and (ii) the amount of such drawing.  Unless instructed by the Borrower by 10:30
a.m. (New York time) on such Business Day that it intends to reimburse the
Letter of Credit Issuer for the amount of such drawing with funds other than
the proceeds of Loans, the Administrative Agent shall promptly notify each
Lender of such drawing and the amount of its Revolving Credit Loan to be made
in respect thereof, and each Lender shall be irrevocably obligated to make ABR
Loans to the Borrower in the amount of such Lender’s Revolving Credit
Commitment Percentage of the applicable Unpaid Drawing by 12:00 noon (New York
time) on such Business Day by making the amount of such Revolving Credit Loan
available to the Administrative Agent at the Funding Office.  Such Revolving Credit Loans shall be made
without regard to the Minimum Borrowing Amount. 
The Administrative Agent shall use the proceeds of such Revolving Credit
Loans solely for the purpose of reimbursing the Letter of Credit Issuer for the
related Unpaid Drawing.

 

3.5          Increased Costs.

 

If after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof, or actual compliance by the
Letter of Credit Issuer or any L/C Participant with any request or directive
made or adopted after the date hereof (whether or not having the force of law),
by any such authority, central bank or comparable agency shall either (a)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against

 

27

 

letters of credit issued by the Letter of Credit Issuer, or any L/C
Participant’s L/C Participation therein, or (b) impose on the Letter of Credit
Issuer or any L/C Participant any other conditions affecting its obligations
under this Agreement in respect of Letters of Credit or L/C Participations
therein or any Letter of Credit or such L/C Participant’s L/C Participation
therein; and the result of any of the foregoing is to increase the cost to the
Letter of Credit Issuer or such L/C Participant of issuing, maintaining or
participating in such Letter of Credit, or to reduce the amount of any sum
received or receivable by the Letter of Credit Issuer or such L/C Participant
hereunder (other than any such increase or reduction attributable to taxes) in
respect of Letters of Credit or any L/C Participations therein, then, promptly
after receipt of written demand to the Borrower by the Letter of Credit Issuer
or such L/C Participant, as the case may be (a copy of which notice shall be
sent by the Letter of Credit Issuer or such L/C Participant to the
Administrative Agent), the Borrower shall pay to the Letter of Credit Issuer or
such L/C Participant such additional amount or amounts as will compensate the
Letter of Credit Issuer or such L/C Participant for such increased cost or
reduction, it being understood and agreed, however, that neither the Letter of
Credit Issuer nor any L/C Participant shall be entitled to such compensation as
a result of such Person’s compliance with, or pursuant to any request or
directive to comply with, any such law, rule or regulation as in effect on the
date hereof.  A certificate submitted to
the Borrower by the Letter of Credit Issuer or any L/C Participant, as the case
may be (a copy of which certificate shall be sent by the Letter of Credit
Issuer or such L/C Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the determination of such additional amount or
amounts necessary to compensate the Letter of Credit Issuer or such L/C
Participant as aforesaid shall be conclusive and binding on the Borrower absent
clearly demonstrable error.

 

3.6          Successor Letter of Credit Issuer.

 

The Letter of
Credit Issuer may resign as the Letter of Credit Issuer upon 60 days’
prior written notice to the Administrative Agent, the Lenders and the
Borrower.  If the Letter of Credit Issuer
shall resign as the Letter of Credit Issuer under this Agreement, then the
Borrower shall appoint from among the Lenders with Revolving Credit Commitments
a successor issuer of Letters of Credit, whereupon such successor issuer shall
succeed to the rights, powers and duties of the Letter of Credit Issuer, and
the term “Letter of Credit Issuer” shall mean such successor issuer effective
upon such appointment.  At the time such
resignation shall become effective, the Borrower shall pay to the resigning
Letter of Credit Issuer all accrued and unpaid fees pursuant to Sections 4.1(c)
and 4.1(d).  The acceptance of any
appointment as the Letter of Credit Issuer hereunder by a successor Lender
shall be evidenced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Administrative Agent and, from and after
the effective date of such agreement, such successor Lender shall have all the rights
and obligations of the previous Letter of Credit Issuer under this Agreement
and the other Credit Documents.  After
the resignation of the Letter of Credit Issuer hereunder, the resigning Letter
of Credit Issuer shall remain a party hereto and shall continue to have all the
rights and obligations of the Letter of Credit Issuer under this Agreement and
the other Credit Documents with respect to Letters of Credit issued by it prior
to such resignation, but shall not be required to issue additional Letters of
Credit.  After any retiring Letter of
Credit Issuer’s resignation as Letter of Credit Issuer, the provisions of this
Agreement relating to the Letter of Credit Issuer shall inure to its benefit as
to any actions taken or omitted to be taken by it (a) while it was the
Letter of

 

28

 

Credit Issuer under this Agreement or (b) at any time with respect
to Letters of Credit issued by the Letter of Credit Issuer.

 

ARTICLE 4

FEES; COMMITMENTS

 

4.1          Fees.

 

(a)           The Borrower agrees to pay to the
Administrative Agent, for the account of each Lender (in each case pro rata according to the respective Available Revolving
Credit Commitments of all such Lenders), a commitment fee for each day from and
including the Closing Date to but excluding the Final Date on the average daily
closing balances of the unused amount of the Total Revolving Credit
Commitment.  Such commitment fee shall be
payable in arrears (i) on the last Business Day of each of March, June,
September and December (for the three-month period (or portion thereof) ended
on such day) and (ii) on the Final Date (for the period ended on such date for
which no payment has been received pursuant to clause (i) above), and
shall be computed during such period at the rate of 0.375% per annum on the
average daily closing balances of the unused amount of the Total Revolving
Credit Commitment.  Notwithstanding the
foregoing, the Borrower shall not be obligated to pay any amounts to any
Defaulting Lender pursuant to this Section 4.1.

 

(b)           The Borrower agrees to pay to the
Administrative Agent, for the account of the Lenders pro rata
on the basis of their respective Letter of Credit Exposure, a fee in respect of
each Letter of Credit (the “Letter of Credit Fee”),
for the period from and including the date of issuance of such Letter of Credit
to, but not including, the termination date of such Letter of Credit computed
during such period at a per annum rate equal to the Applicable Margin then in
effect for Revolving Credit Loans that are LIBOR Loans on the average daily
Stated Amount of such Letter of Credit. 
Such Letter of Credit Fees shall be due and payable quarterly in arrears
on the last Business Day of each of March, June, September and December and on
the date upon which the Total Revolving Credit Commitment terminates and the
Letters of Credit Outstanding shall have been reduced to zero.

 

(c)           The Borrower agrees to pay directly
to the Letter of Credit Issuer a fee in respect of each Letter of Credit issued
by it (the “Fronting Fee”), for the period
from and including the date of issuance of such Letter of Credit to but not
including the termination date of such Letter of Credit, computed during such
period at a per annum rate equal to 0.125% on the average daily Stated Amount
of such Letter of Credit.  Such Fronting
Fees shall be due and payable quarterly in arrears on the last Business Day of
each of March, June, September and December and on the date upon which the
Total Revolving Credit Commitment terminates and the Letters of Credit
Outstanding shall have been reduced to zero.

 

(d)           The Borrower agrees to pay directly
to the Letter of Credit Issuer upon each renewal of, drawing under and/or
amendment of a Letter of Credit issued by it such amount as the Letter of Credit
Issuer and the Borrower may agree upon for issuances or renewal or drawings
under or amendments of letters of credit issued by it.

 

29

 

(e)           The Borrower agrees to pay to the
Administrative Agent, for the benefit of the Administrative Agent, the fees for
acting as administrative agent in the amounts and on the dates previously
agreed to in writing by the Borrower and the Administrative Agent, as amended
from time to time by agreement between the Administrative Agent and the
Borrower.

 

(f)            The Borrower agrees to pay on the
Closing Date to the Arranger, for the benefit of the Lenders, the fees in the
amounts previously agreed to in writing by the Borrower and the Arranger.

 

4.2          Voluntary
Reduction of Revolving Credit Commitments.

 

Upon at least two
Business Days’ prior written notice (or telephonic notice promptly confirmed in
writing) to the Administrative Agent at the Administrative Agent’s Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right, without premium or penalty, on any
day, to permanently terminate or reduce the Total Revolving Credit Commitment
in whole or in part; provided that (i) any such reduction shall apply
proportionately and permanently to reduce the Revolving Credit Commitment of
each of the Lenders, (ii) any partial reduction pursuant to this
Section 4.2 shall be in the amount of at least $1,000,000, (iii) after
giving effect to any such partial reduction of the Total Revolving Credit
Commitment, the Total Revolving Credit Commitment shall be at least $5,000,000
and (iv) after giving effect to such termination or reduction and to any
prepayments of the Revolving Credit Loans made on the date thereof in
accordance with this Agreement, the sum of (A) the aggregate outstanding
principal amount of the Revolving Credit Loans and (B) the Letters of
Credit Outstanding shall not exceed the Total Revolving Credit Commitment.  For greater certainty, (i) if the Total
Revolving Credit Commitment is permanently terminated, the Letter of Credit
Commitment shall each be automatically and concurrently terminated and
(ii)  if the Total Revolving Credit Commitment is permanently reduced to
an amount less than the then current Letter of Credit Commitment without the
Borrower also permanently reducing the Letter of Credit Commitment to at least
the same amount, the Letter of Credit Commitment shall be automatically and
concurrently permanently reduced to the same amount as the Total Revolving
Credit Commitment.

 

4.3          Commitment Increases.

 

(a)           In the event that the Borrower wishes
to increase the Total Revolving Credit Commitment, it shall notify the
Administrative Agent in writing of the amount (the “Offered Increase Amount”) of such proposed increase (such
notice, a “Commitment Increase Notice”).

 

(b)           The Borrower may, at its election,
(i) offer one or more of the Lenders the opportunity to participate in all or a
portion of the Offered Increase Amount pursuant to paragraph (d) below and/or
(ii) with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld), offer one or more additional banks, financial
institutions or other entities the opportunity to participate in all or a
portion of the Offered Increase Amount pursuant to paragraph (c) below.  Each Commitment Increase Notice shall specify
which Lenders and/or banks, financial institutions or other entities the
Borrower desires to participate in such

 

30

 

Commitment Increase.  The Borrower or, if requested by the
Borrower, the Administrative Agent, will notify such Lenders and/or banks,
financial institutions or other entities of such offer.

 

(c)           Any additional bank, financial
institution or other entity which the Borrower selects to offer participation
in the increased Commitments and which elects to become a party to the
Agreement and provide a Commitment in an amount so offered and accepted by it
pursuant to Section 4.3(b)(ii) shall execute a New Lender Supplement (each a “New Lender Supplement”) with the Borrower
and the Administrative Agent, substantially in the form of Exhibit E, whereupon
such bank, financial institution or other entity (herein called a “New Lender”) shall become a Lender for all
purposes and to the same extent as if originally a party hereto and shall be
bound by and entitled to the benefits of this Agreement, and Schedule I shall
be deemed to be amended to add the name and Commitment of such New Lender.

 

(d)           Any Lender which accepts an offer to
it by the Borrower to increase its Commitment pursuant to Section 4.3(b)(i)
shall, in each case, execute a Commitment Increase Supplement (each a “Commitment Increase Supplement”) with the
Borrower and the Administrative Agent, substantially in the form of Exhibit F,
whereupon such Lender shall be bound by and entitled to the benefits of this
Agreement with respect to the full amount of its Commitment as so increased,
and Schedule I shall be deemed to be amended to increase the Commitment of such
Lender.

 

(e)           If on the date upon which a bank,
financial institution or other entity becomes a New Lender pursuant to Section
4.3(c) or a Lender increases its Commitment pursuant to Section 4.3(d), there
is an unpaid principal amount of Revolving Credit Loans, the Borrower shall
borrow Revolving Credit Loans from the Lenders and/or (subject to compliance by
the Borrower with Section 2.11) prepay Revolving Credit Loans of the Lenders
such that, after giving effect thereto, the Revolving Credit Loans (including, without
limitation, the Types thereof and Interest Periods with respect thereto) shall
be held by the Lenders (including for such purposes the New Lenders) pro rata
according to their respective Revolving Credit Commitment Percentages.

 

(f)            If on the date upon which a bank,
financial institution or other entity becomes a New Lender pursuant to Section
4.3(c) or a Lender increases its Commitment pursuant to Section 4.3(d), there
are Letters of Credit Outstanding, each Lender that has a Revolving Credit
Commitment shall be deemed to have sold and transferred to each other Lender
that has a Revolving Credit Commitment, and each such Lender that has a
Revolving Credit Commitment shall be deemed irrevocably and unconditionally to
have purchased and received from such other Lender that has a Revolving Credit
Commitment, without recourse or warranty, an L/C Participation, to the extent
of such Lender’s Revolving Credit Commitment Percentage, in such Letters of
Credit Outstanding, provided that no LC Participations shall be sold,
transferred, purchased and received in respect of any Unpaid Drawing existing
at the time an entity becomes a New Lender pursuant to Section 4.3(c) or a
Lender increases its Commitment pursuant to Section 4.3(d).

 

(g)           Notwithstanding anything to the
contrary in this Section 4.3, prior to each New Lender Supplement and
Commitment Increase Supplement becoming effective, and as a condition precedent
to such effectiveness, the Borrower shall (i) furnish to the Administrative

 

31

 

Agent such evidence of
legal and corporate authority (including legal opinions of counsel to the
Borrower) as the Administrative Agent may request in connection with such New
Lender Supplement or Commitment Increase Supplement, as the case may be, and
(ii) will cause additional shares of common stock of ITC to be deposited in
pledge with the Administrative Agent under the Pledge Agreement, such
additional shares of common stock of ITC as will cause the total number of
shares of common stock of ITC pledged thereunder to be equal to (A) the number
of shares of common stock pledged immediately prior to such additional pledge
multiplied by (B) a ratio (I) the numerator of which is the amount of the Total
Revolving Credit Commitment following such New Lender Supplement or Commitment
Increase Supplement, as the case may be, and (II) the denominator of which is
the Total Revolving Credit Commitment prior to such New Lender Supplement or
Commitment Increase Supplement, as the case may be, and will deliver or cause
to be delivered such officer’s certificates and legal opinions in connection
therewith as may reasonably be requested by the Administrative Agent.  Notwithstanding anything to the contrary in
this Section 4.3, in no event shall any transaction effected pursuant to this
subsection cause the Total Revolving Credit Commitment to exceed $45,000,000 or
to increase in an amount of less than $1,000,000.

 

(h)           Both on the date that the Borrower
delivers a Commitment Increase Notice and the date that the Total Revolving
Credit Commitment is increased as a result thereof, the Borrower shall be
deemed to represent and warrant that (both before and immediately after giving
effect to such increase) all representations and warranties made by the Borrower
herein are true and correct and no Default or Event of Default exists.

 

4.4          Mandatory Termination of Commitments.

 

(a)           The Total Revolving Credit Commitment
shall terminate at 5:00 p.m. (New York time) on the Revolving Credit
Maturity Date.

 

(b)           The Letter of Credit Commitment shall
terminate at 5:00 p.m. (New York time) on the L/C Maturity Date.

 

ARTICLE 5

PAYMENTS

 

5.1          Prepayments.

 

The Borrower shall
have the right to prepay any Borrowing, without premium or penalty, in whole or
in part at any time and from time to time. 
Such prepayment of Revolving Credit Loans shall be subject to the
following conditions: (a) the Borrower shall give the Administrative Agent
at the Administrative Agent’s Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to make such prepayment, the
amount of such prepayment and (in the case of LIBOR Loans) the specific
Borrowing(s) to be prepaid, which notice shall be given by the Borrower no
later than 10:00 a.m. (New York time) three Business Days prior to the
date of such prepayment and shall promptly be transmitted by the Administrative
Agent to each of the Lenders; (b) each partial prepayment shall be in an
amount that is a multiple of $100,000 and in an aggregate principal amount of
at least $5,000,000; provided that no partial prepayment of LIBOR Loans made
pursuant to a single Borrowing shall reduce the outstanding LIBOR

 

32

 

Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount for LIBOR
Loans; and (c) any prepayment of LIBOR Loans pursuant to this
Section 5.1 on any day other than the last day of an Interest Period
applicable thereto shall be subject to compliance by the Borrower with the applicable
provisions of Section 2.11; provided further that at the Borrower’s
election in connection with any prepayment pursuant to this Section 5.1,
such prepayment shall not be applied to any Revolving Credit Loan of a
Defaulting Lender.  Each prepayment of a Borrowing shall be
applied ratably to the Revolving Credit Loans included in the prepaid Borrowing.

 

5.2          Method and Place
of Payment.

 

(a)           Except as otherwise specifically
provided herein, all payments to be made by the Borrower under this Agreement
shall be made, without set-off, counterclaim or deduction of any kind, to the
Administrative Agent for, as the case may be, the (i) ratable account of all
the Lenders of Revolving Credit Loans or (ii) account of each Letter of Credit
Issuer, not later than 12:00 Noon (New York time) on the date when due.  Such payments shall be made in immediately
available funds at the Funding Office, it being understood that written or
facsimile notice by the Borrower to the Administrative Agent to make a payment
from the funds in the Borrower’s account at the Funding Office shall constitute
the making of such payment to the extent of such funds held in such
account.  The Administrative Agent will
thereafter cause to be distributed on the same day (if payment was actually
received by the Administrative Agent prior to 2:00 p.m. (New York time) on such
day, otherwise the next Business Day) like funds relating to the payment of
principal or interest or Fees ratably to the Lenders entitled thereto.  A payment shall be deemed to have been made
by the Administrative Agent on the date on which it is required to be made
under this Agreement if the Administrative Agent has, on or before such date,
taken steps to make such payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by the
Administrative Agent in order to make such payment.

 

(b)           Any payments under this Agreement
that are made later than 2:00 p.m. (New York time) shall be deemed to have been
made on the next succeeding Business Day. 
Whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in
effect immediately prior to such extension.

 

5.3          Net Payments.

 

(a)           (i)            All
payments made by the Borrower under each Credit Document shall be made free and
clear of, and without deduction or withholding for or on account of, any
current or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding (i)
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent or any Lender and (ii) any taxes imposed on
the Administrative Agent or any Lender as a result of a current or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein

 

33

 

 

(other than any such connection arising solely from
the Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement) (“Taxes”) except to the extent that such deduction or
withholding is required by any applicable law, as modified by the
administrative practice of any relevant Governmental Authority then in
effect.  If any such Taxes are required
to be withheld from any amounts payable to the Administrative Agent or any
Lender hereunder, the Borrower shall:

 

(A)          promptly notify the Administrative
Agent of such requirement;

 

(B)           promptly pay to the relevant
Governmental Authority when due the full amount required to be deducted or
withheld (including the full amount of Taxes required to be deducted or
withheld from any additional amount paid by such Borrower to the Administrative
Agent or such Lender under this Section 5.3(a);

 

(C)           as promptly as possible thereafter,
forward to the Administrative Agent and such Lender an official receipt (or a
certified copy), or other documentation reasonably acceptable to the
Administrative Agent and such Lender, evidencing such payment to such
Governmental Authority; and

 

(D)          pay to the Administrative Agent or
such Lender, in addition to the payment to which the Administrative Agent or
such Lender is otherwise entitled under this Agreement, such additional amount
as is necessary to ensure that the net amount actually received by the
Administrative Agent or such Lender (free and clear of any such Taxes, whether
assessed against the Borrower, the Administrative Agent or such Lender) will
equal the full amount the Administrative Agent or such Lender would have
received had no such deduction or withholding been required.

 

(ii)           If the Borrower fails to pay to the
relevant Governmental Authority when due any Taxes that it was required to
deduct or withhold under this Section 5.3(a) in respect of any payment to or
for the benefit of the Administrative Agent or any Lender under this Agreement
or fails to furnish the Administrative Agent or such Lender, as applicable,
with the documentation referred to in Section 5.3(a) when required to do so,
the Borrower shall forthwith on demand fully indemnify the Administrative Agent
or such Lender for any incremental taxes, interest, costs or penalties that may
become payable by the Administrative Agent or such Lender as a result of such
failure.

 

(iii)          The Borrower’s obligations under this
Section 5.3(a) shall survive the termination of this Agreement and the payment
of the Revolving Credit Loans and all other amounts payable hereunder.

 

(b)           Notwithstanding Section 5.3(a),
the Borrower shall not be required to indemnify or pay any additional amounts
in respect of withholding tax applicable to any amount payable under this
Agreement pursuant to Section 5.3(a) above to any Non-U.S. Lender, except
if any such Revolving Credit Loans were assigned, participated or transferred
to such Non-U.S.

 

34

 

Lender at the request of
the Borrower or were assigned, participated or transferred to such Non-U.S.
Lender following the occurrence of and during the continuance of an Event of
Default pursuant to Section 10.1 or 10.5.

 

(c)           Each Non-U.S. Lender shall:

 

(i)            deliver to the Borrower and the
Administrative Agent two copies of either (x) in the case of a Non-U.S. Lender
claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”, United
States Internal Revenue Service Form W-8BEN, (together with a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code)), or (y) Internal Revenue Service Form W-8BEN or
W-8ECI, in each case properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or reduced rate of, U.S. Federal
withholding tax on payments by the Borrower under this Agreement;

 

(ii)           deliver to the Borrower and the
Administrative Agent two further copies of any such form or certification (or
any applicable successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower; and

 

(iii)          obtain such extensions of time for
filing and complete such forms or certifications as may reasonably be requested
in writing by the Borrower or the Administrative Agent;

 

unless, in any such case, any change in treaty, law or
regulation, has occurred prior to the date on which any such delivery would
otherwise be required that renders any such form inapplicable or would prevent
such Lender from duly completing and delivering any such form with respect to
it and such Lender so advises the Borrower and the Administrative Agent.  Each Person that shall become a Participant
pursuant to Section 12.6 or a Lender pursuant to Section 12.6 shall, upon the
effectiveness of the related transfer, be required to provide all the forms and
statements required pursuant to this Section 5.3(c), provided that in the case
of a Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.

 

(d)           If the Borrower determines in good
faith that a reasonable basis exists for contesting any taxes for which
indemnification has been demanded hereunder, the relevant Lender or the
Administrative Agent, as applicable, shall cooperate with the Borrower in
challenging such taxes at the Borrower’s expense if so requested by the
Borrower.  If any Lender or the
Administrative Agent, as applicable, receives a refund of, or credit for, a Tax
for which a payment has been made by the Borrower pursuant to this Agreement,
which refund or credit in the good faith judgment of such Lender or the
Administrative Agent, as the case may be, is attributable to such payment made
by the Borrower, then the Lender or the Administrative Agent, as the case may
be, shall reimburse the Borrower for such amount as the Lender or the

 

35

 

Administrative Agent, as
the case may be, determines to be the proportion of the refund or credit as
will leave it, after such reimbursement, in no better or worse position than it
would have been in if the payment had not been required.  A Lender or Administrative Agent shall claim
any refund or credit that it determines is available to it, unless it concludes
in its reasonable discretion that it would be adversely affected by making such
a claim.  Neither such Lender nor the
Administrative Agent shall be obliged to disclose any information regarding its
tax affairs or computations to the Borrower in connection with this
paragraph (d) or any other provision of this Section 5.3.

 

5.4          Computations of Interest and Fees.

 

(a)           Interest on LIBOR Loans, ABR Loans
accruing interest at the Federal Funds Effective Rate and Fees accruing
pursuant to Section 4.1(a) shall be calculated on the basis of a 360 day
year for the actual days elapsed. 
Interest on all other ABR Loans, interest on overdue interest and fees
accruing pursuant to Sections 4.1(b) and (c) shall be calculated on the basis
of a 365-day year for the actual days elapsed.

 

(b)           All interest payments to be made
under this Agreement shall be paid without allowance or deduction for deemed
re-investment or otherwise, both before and after maturity and before and after
default and/or judgment, if any, until payment of the amount on which such
interest is accruing, and interest will accrue on overdue interest, if any.

 

(c)           The amount of costs and expenses required
to be paid or reimbursed by the Borrower pursuant to Section 12.5 or any
other provision of this Agreement or any other Credit Document shall bear
interest until paid, as well after as before demand, default, maturity and
judgment, at the highest rate provided for in Section 2.8(c).

 

(d)           If interest is
not paid on the indebtedness of the Borrower to the Lenders hereunder, or any
part thereof, as and when interest is due and payable hereunder, unpaid
interest shall bear interest until paid, as well after as before demand,
default, maturity and judgment, at the rates provided for in
Section 2.8(c).

 

ARTICLE 6

CONDITIONS PRECEDENT

 

6.1          Conditions
Precedent to Initial Credit Event.

 

The initial
Credit Event under this Agreement is subject to the satisfaction of the
following conditions precedent:

 

(a)           Credit Documents.  The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
each of the parties hereto and (ii) the Pledge Agreement, perfected and
executed and delivered by a duly authorized officer of each of the parties
thereto.

 

(b)           Closing Certificate.  The Administrative Agent shall have received
a certificate of the Borrower, dated the Closing Date, substantially in the
form of Exhibit

 

36

 

G, with appropriate
insertions, executed by the President or any Vice President and the Secretary
or any Assistant Secretary of the Borrower.

 

(c)           Proceedings of the
Borrower.  The Administrative
Agent shall have received a copy of the resolutions, in form and substance
satisfactory to the Administrative Agent, of the Board of Directors of each of
the Borrower (or a duly authorized committee thereof) authorizing (a) the
execution, delivery and performance of the Credit Documents (and any agreements
relating thereto) to which it is a party and (b) the extensions of credit
contemplated hereunder.

 

(d)           Organic Documents.  The Administrative Agent shall have received
true and complete copies of the articles of incorporation and by-laws of the
Borrower and a certificate of good standing with respect to the Borrower issued
by its jurisdiction of incorporation or organization.

 

(e)           Fees.  The Administrative Agent shall have received
the fees referred to in Section 4.1(e) to be received on the Closing Date.

 

(f)            Liens.  After giving effect to the Transactions and
the other transactions contemplated hereby, there shall not be outstanding any
Liens on the Collateral other than as set forth in the Pledge Agreement.

 

(g)           Legal Opinions.  The Administrative Agent shall have received
in form and substance reasonably satisfactory to it the executed legal opinions
of (i) counsel to the Borrower with respect to the status and capacity of the
Borrower, the due authorization, execution and delivery of the Credit Documents
by the Borrower, the validity, binding effect, legality and enforceability of
the Credit Documents, compliance with the Organic Documents of the Borrower and
with applicable law and such other matters as the Arranger may reasonably
request in form and substance satisfactory to the Arranger and (ii) special
Michigan counsel to the Borrower with respect to the status and capacity of the
Borrower, the due authorization, execution and delivery of the Credit Documents
by the Borrower, the validity, binding effect, legality and enforceability of
the Credit Documents, compliance with the Organic Documents of the Borrower and
with applicable law and such other matters as the Arranger may reasonably
request in form and substance satisfactory to the Arranger.

 

(h)           Opinion
of Special New York Counsel to the Arranger.  An opinion, in form and substance reasonable
satisfactory to the Arranger of Milbank, Tweed, Hadley & McCloy LLP,
special New York counsel to the Arranger (and the Arranger hereby instructs
such counsel to deliver
such opinion to the Lenders).

 

The obligation of any Lender to make its initial extension of credit
hereunder is also subject to the payment by the Borrower of such fees as the
Borrower shall have agreed to pay to any Lender or the Administrative Agent in
connection herewith.

 

37

 

6.2          Conditions Precedent
to All Credit Events.

 

The agreement
of each Lender to make any Revolving Credit Loan requested to be made by it on
any date (including its initial Revolving Credit Loans) and the obligation of
each Letter of Credit Issuer to issue, extend or increase Letters of Credit on
any date is subject to the satisfaction of the following conditions precedent:

 

(a)           No Default;
Representations and Warranties True and Correct.  At the time of each Credit Event and also
after giving effect thereto (i) there shall exist no Default or Event of
Default and (ii) all representations and warranties made by the Borrower
contained herein or in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Credit Event (except
where such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date).

 

(b)           Notice of Borrowing; Letter of Credit
Request.  Prior to the making of each
Revolving Credit Loan, the Administrative Agent shall have received a Notice of
Borrowing (whether in writing or by telephone) meeting the requirements of
Section 2.3.  Prior to the issuance
of each Letter of Credit, the Administrative Agent and the Letter of Credit
Issuer shall have received a Letter of Credit Request meeting the requirements
of Section 3.2(a).

 

The acceptance
of the benefits of each Credit Event shall constitute a representation and
warranty by the Borrower to each of the Lenders that all the applicable
conditions specified above exist as of that time.

 

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

 

In order to
induce the Lenders to enter into this Agreement and to make the Revolving
Credit Loans and issue or participate in Letters of Credit as provided for
herein, the Borrower (as to itself and each of its Subsidiaries) makes the
following representations and warranties to, and agreements with, the Lenders,
all of which shall survive the execution and delivery of this Agreement and the
making of the Revolving Credit Loans and the issuance of Letters of Credit.

 

7.1          Organizational
Status.

 

The Borrower
is validly organized and existing and in good standing under the laws of the
state or jurisdiction of its incorporation or organization, is duly qualified
to do business and is in good standing as a foreign entity in each jurisdiction
where the nature of its business requires such qualification (except where the
failure to be so qualified could not reasonably be expected to result in a
Material Adverse Effect), and has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its obligations under each Credit Document to which it is a party, to
own and hold under lease its property and to conduct its business substantially
as currently conducted by it.

 

38

 

7.2          Capacity, Power
and Authority.

 

The Borrower
has the capacity, power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken all
necessary action, partnership, corporate or otherwise, to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party.  The Borrower has duly executed
and delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of the Borrower
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors’
rights generally and subject to general principles of equity.

 

7.3          No Violation.

 

Neither the
execution, delivery nor performance by the Borrower of the Credit Documents to
which it is a party nor compliance with the terms and provisions thereof and
the other transactions contemplated therein will (a) contravene any
applicable provision of any material law, statute, rule, regulation, order,
writ, injunction or decree of any court or Governmental Authority,
(b) result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to, the
terms of any material indenture, loan agreement, lease agreement, mortgage,
deed of trust, agreement or other material instrument to which the Borrower or
any of its Subsidiaries is a party or by which it or any of its property or
assets is bound or (c) violate any provision of the Borrower’s Organic
Documents.

 

7.4          Litigation.

 

There are no
actions, suits or proceedings pending or, to the knowledge of the Borrower or
any Subsidiary (after due internal inquiry), threatened with respect to the
Business, the Borrower or any of its Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect.

 

7.5          Governmental
Approvals.

 

No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or notice to, any Governmental
Authority (other than those that have been, or on the Closing Date will be,
obtained and in full force and effect) is required to authorize or is required
in connection with (a) the execution, delivery and performance of any
Credit Document or (b) the legality, validity, binding effect or
enforceability of any Credit Document.

 

7.6          True and
Complete Disclosure.

 

To the
knowledge of the Borrower, after due inquiry:

 

(a)           All factual information and data
(taken as a whole) heretofore or contemporaneously furnished (other than any
projections and pro forma financial information), by or on behalf of the
Borrower or any of its Subsidiaries or
any of their

 

39

 

respective authorized
consultants, agents or representatives in writing to the Administrative Agent
and/or any Lender on or before the Closing Date (including all information
contained in the Credit Documents) for purposes of or in connection with this
Agreement or any transaction contemplated herein was true and complete in all
material respects on the date as of which such information or data is dated or
certified and did not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
therein, taken as a whole, not materially misleading at such time in light of
the circumstances under which such statements were made.

 

(b)           The projections and pro forma
financial information contained in the information and data referred to in
paragraph (a) above were prepared in good faith based upon assumptions
believed by such Persons to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered by any
such projections may differ from the projected results.

 

7.7          Financial
Condition; Financial Statements.

 

The Borrower
has heretofore furnished to the Lenders the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of the Fiscal Quarter ended
June 30, 2003 and September 30, 2002 and the related consolidated
statement of operations for such Fiscal Quarters, and the related consolidated
statement of cash flows for such Fiscal Quarters.  Such financial statements present fairly in
all material respects the consolidated financial position and results of
operations and cash flows of the Borrower and its Subsidiaries as of such dates
and for such periods in accordance with GAAP consistently applied, subject to
year-end audit adjustments and the absence of footnotes.

 

7.8          Tax Returns and
Payments.

 

Each of the
Borrower and its Subsidiaries has filed all material tax returns, domestic and
foreign, required to be filed by it and has paid all material taxes and
assessments payable by it that have become due, other than those not yet
delinquent or contested in good faith. 
The Borrower and each of its respective Subsidiaries have paid, or have
provided adequate reserves (in the good faith judgment of the management of the
Borrower) in accordance with GAAP for the payment of, all material income taxes
applicable for all prior fiscal years and for the current fiscal year to the
Closing Date.

 

7.9          Environmental Matters.

 

Except as set forth in Schedule II:

 

(a)           Other than instances of noncompliance
that could not reasonably be expected to have a Material Adverse Effect: (i)
the Borrower and each of its Subsidiaries are in compliance with all
Environmental Laws in all jurisdictions in which the Borrower and each of its
Subsidiaries are currently doing business (including having obtained all
material permits required under Environmental Laws) and (ii) the Borrower will
comply

 

40

 

and cause each of its
Subsidiaries to comply with all such Environmental Laws (including all permits
required under Environmental Laws); and

 

(b)           Neither the Borrower nor any of its Subsidiaries
has treated, stored, transported or disposed of Hazardous Materials at or from
any currently or formerly owned Real Estate or facility relating to its
business in a manner that could reasonably be expected to have a Material
Adverse Effect.

 

7.10        Properties.

 

The Borrower
and each of its Subsidiaries has good title to or a leasehold or easement
interest in all of its properties that are necessary for the operation of its
respective business as currently conducted and as proposed to be conducted,
free and clear in each case of all Liens (other than any Liens permitted by
this Agreement) except where the failure to have such good title could not
reasonably be expected to have a Material Adverse Effect.

 

7.11        Pension and Welfare Plans.

 

During the twelve-consecutive-month
period prior to the Closing Date and prior to the date of any Credit Event
hereunder, except as could not reasonably be expected have a Material Adverse
Effect, (a) no steps have been taken to terminate any Pension Plan, (b) no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f) of ERISA, (c) no condition exists or event or
transaction has occurred with respect to any Pension Plan which might result in
the incurrence by the Borrower or any member of the Controlled Group of any
liability, fine or penalty and (d) except as disclosed in Schedule III,
neither the Borrower nor any member of the Controlled Group has any contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Title I
of ERISA.

 

7.12        Regulations U and
X.

 

Neither the making of any Revolving Credit Loan
hereunder nor the use of the proceeds thereof will violate the provisions of
F.R.S. Board Regulation U or Regulation X.

 

7.13        Investment Company
Act.

 

Neither the Borrower nor any of its Subsidiaries is an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

 

7.14        No Material Adverse Change.

 

There has been
no material adverse change in the business, assets, operations, property or
financial condition of the Borrower and its Subsidiaries taken as a whole since
December 31, 2003.

 

41

 

7.15        Deemed Repetition
of Representations and Warranties.

 

The
representations and warranties set out in Section 7.1 to 7.14 inclusive
will be deemed to be repeated by the Borrower as of the date of each request
for a new Borrowing by the Borrower (including conversions and continuations of
Borrowings) and as of the date on which a Successor Borrower assumes all of the
obligations of the Borrower under the Credit Documents pursuant to Section
9.1(a) (but after giving effect to such assumption), except to the extent that
on or prior to such date (a) the Borrower has advised the Administrative
Agent in writing of a variation in any such representation or warranty, and
(b) the Required Lenders have approved such variation, and except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct in
all material respects as of such earlier date.

 

ARTICLE 8

AFFIRMATIVE COVENANTS

 

The Borrower
(on its own behalf and on behalf of each of its Subsidiaries) hereby covenants
and agrees that on the Closing Date and thereafter, for so long as this
Agreement is in effect and until the Revolving Commitment Maturity Date:

 

8.1          Information
Covenants.

 

The Borrower
will furnish to each Lender and the Administrative Agent:

 

(a)           Annual Financial
Statements.  As soon as
available and in any event on or before the date that is 90 days after the
end of each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statement of operations and cash flows for such fiscal year
prepared in accordance with GAAP, setting forth comparative consolidated
figures for the preceding fiscal year, and certified by independent chartered
accountants of recognized national standing whose opinion shall not be
qualified as to the scope of audit or as to the status of the Borrower or any
of its Subsidiaries as a going concern, together in any event with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of the Borrower and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any Default or Event of Default
relating to Section 9.3 that has occurred and is continuing or, if in the
opinion of such accounting firm such a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof.

 

(b)           Quarterly Financial
Statements.  As soon as
available and in any event on or before the date that is 45 days after the end
of each of the first three Fiscal Quarters in each fiscal year of the Borrower,
the consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such Fiscal Quarter and the related consolidated statement of operations
for such Fiscal Quarter and for the elapsed portion of the fiscal year ended
with the

 

42

 

 

last day of such Fiscal
Quarter, and the related consolidated statement of cash flows for such Fiscal
Quarter and for the elapsed portion of the fiscal year ended with the last day
of such Fiscal Quarter, and setting forth comparative consolidated figures for
the related periods in the prior fiscal year or, in the case of such
consolidated balance sheet, for the last day of the prior fiscal year, and
prepared in accordance with GAAP, all of which shall be certified by an
Authorized Officer of the Borrower, subject to changes resulting from audit and
normal year-end audit adjustments.

 

(c)           Officer’s Certificates.  At the time of the delivery of the financial
statements provided for in Sections 8.1(a) and (b), a certificate of an
Authorized Officer of the Borrower in substantially the form of Exhibit H (a “Compliance Certificate”) to the effect that
no Default or Event of Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof, which certificate shall
be in form and detail satisfactory to the Administrative Agent, acting
reasonably, and setting forth the calculations required to establish whether
the Borrower was in compliance with the provisions of Section 9.3 as at
the end of such fiscal year or period, as the case may be.

 

(d)           Notice of Default or
Litigation.  Promptly after an
Authorized Officer of the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of (i) the occurrence of any event that constitutes a
Default or Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to take with
respect thereto and (ii) any litigation or governmental proceeding pending
or threatened against the Borrower or any of its Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect, together with a
certificate of the Chief Financial Officer of the Borrower (in detail
reasonably satisfactory to the Administrative Agent) setting forth the
calculations required to establish whether the Borrower and its Subsidiaries
are in pro forma compliance with Section 9.3 of this Agreement.

 

(e)           Environmental Matters.  Promptly after an Authorized Officer of the
Borrower or any of its Subsidiaries obtains knowledge or notice of any one or
more of the following environmental matters, unless such environmental matters
would not, individually or when aggregated with all other such matters, be
reasonably expected to result in a Material Adverse Effect:

 

(i)            Any pending or threatened
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Estate (as defined below);

 

(ii)           Any condition or occurrence that
(x) results in non-compliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (y) could reasonably be
anticipated to form the basis of an Environmental Claim against the Borrower or
any of its Subsidiaries or any Real Estate;

 

(iii)          Any condition or occurrence on any
Real Estate that could reasonably be anticipated to cause such Real Estate to
be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Estate under any Environmental Law; and

 

43

 

(iv)          The taking of any removal or remedial action
in response to the actual or alleged presence of any Hazardous Material on any
Real Estate.

 

All such
notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Borrower’s
response thereto.  The term “Real Estate” shall mean land, buildings and improvements
owned or leased by the Borrower or any of its Subsidiaries, but excluding all
operating fixtures and equipment, whether or not incorporated into
improvements.

 

(f)            Pension
Plans.  Promptly after an
Authorized Officer of the Borrower or any of its Subsidiaries obtains knowledge
thereof where the liability, individually or in the aggregate, could 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 302(f) of ERISA, (iii) the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower or any of
its Subsidiaries 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 Borrower or any of its Subsidiaries of any material
liability, fine or penalty.

 

(g)           Other Information.  Promptly upon filing thereof, copies of any
filings or registration statements with, and reports to, any Governmental
Authority in any relevant jurisdiction by the Borrower or any of its
Subsidiaries pursuant to applicable securities laws (other than amendments to
any registration statement (to the extent such registration statement, in the
form it becomes effective, is delivered to the Lenders), exhibits to any
registration statement) and copies of all financial statements, proxy
statements, notices and reports that the Borrower or any of its Subsidiaries
shall send to the holders of any publicly issued securities of the Borrower
and/or any of its Subsidiaries in their capacity as such holders (in each case
to the extent not theretofore delivered to the Lenders pursuant to this
Agreement) and, with reasonable promptness, such other information (financial
or otherwise) as the Administrative Agent on its own behalf or on behalf of any
Lender may reasonably request in writing from time to time.

 

8.2          Books, Record and Inspections.

 

The Borrower
will, and will cause each of its Subsidiaries to, (i) permit officers and
designated representatives of the Administrative Agent or the Required Lenders
to visit and inspect any of the properties or assets of the Borrower and its
Subsidiaries in whomever’s possession to the extent that it is within the
Borrower’s or such Subsidiary’s control to permit such inspection, and to
examine the books of account of the Borrower and any such Subsidiary and
discuss the affairs, finances and accounts of the Borrower and of any such
Subsidiary with, and be advised as to the same by, its and their officers and
independent accountants, and (ii) permit officers and designated
representatives of Lenders to view copies of contracts of the Borrower and its
Subsidiaries (subject to reasonable confidentiality arrangements established by
the Borrower), all at such reasonable times during normal business hours and
intervals and to

 

44

 

such reasonable extent as the Administrative Agent, the Required
Lenders or the Lenders, as the case may be, may desire.

 

8.3          Maintenance of Insurance.

 

The Borrower
will, and will cause each of its Subsidiaries to, at all times maintain in full
force and effect, with insurance companies that the Borrower believes (in the
good faith judgment of the management of the Borrower) are financially sound
and responsible at the time the relevant coverage is placed or renewed,
insurance in at least such amounts and against at least such risks (and with
such risk retentions) as are usually insured against in the same general area
by companies engaged in the same or a similar business.

 

8.4          Payment of Taxes.

 

The Borrower
will pay and discharge, and will cause each of its Subsidiaries to pay and
discharge, all material taxes, assessments and governmental charges or levies
imposed upon it or upon its capital, income or profits, or upon any properties
belonging to it, prior to the date on which material penalties attach thereto,
and all lawful material claims that, if unpaid, could reasonably be expected to
become a material Lien upon any properties of the Borrower or any of its
Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim that
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves (in the good faith judgment of the management of the
Borrower) with respect thereto in accordance with GAAP.

 

8.5          Organizational
Existence.

 

The Borrower
will do, and will cause each of its Subsidiaries to do, or cause to be done,
all things necessary to preserve and keep in full force and effect its
existence and its corporate or other organizational rights and authority,
except to the extent that the failure to do so could not reasonably be expected
to have a Material Adverse Effect; provided that Borrower and its Subsidiaries
may consummate any transaction permitted under Section 9.1.

 

8.6          Compliance with
Statutes, Obligations, etc.

 

The Borrower
will, and will cause each of its Subsidiaries to, comply with all applicable
laws, rules, regulations and orders (including Environmental Laws), except to
the extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

8.7          Good Repair.

 

The Borrower
will, and will cause each of its Subsidiaries to, ensure that its properties
and equipment used or useful in its business in whomever’s possession they may
be to the extent that it is within the Borrower’s or its Subsidiary’s control
to cause the same, are kept in good repair, working order and condition, normal
wear and tear excepted, and that from time to time there are made in such
properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner customary for companies in similar businesses and
consistent with third party leases,

 

45

 

except in each case to the extent the failure to do so could not be
reasonably expected to have a Material Adverse Effect.

 

8.8          Transactions with Affiliates.

 

The Borrower
will conduct, and will cause each of its Subsidiaries to conduct, all
transactions with any of its Affiliates on terms that are substantially as
favorable to the Borrower or such Subsidiary as it would obtain in a comparable
arm’s-length transaction with a Person that is not an Affiliate; provided that
the foregoing restrictions shall not apply to (a) the payment of customary
annual fees to the Permitted Holders for management, consulting and financial
services rendered to the Borrower and its Subsidiaries and customary investment
banking fees paid to the Sponsors for services rendered to the Borrower and its
Subsidiaries in connection with divestitures, acquisitions, financings and
other transactions, (b) customary fees paid to members of the Board of
Directors of the Borrower and of the Subsidiaries of the Borrower, (c)
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s length basis from unrelated third parties, (d)
transactions between and among the Borrower and its wholly owned Subsidiaries
that do not involve any other Affiliate and (e) transactions permitted by
Section 9.2.

 

8.9          End of Fiscal Years; Fiscal Quarters.

 

The Borrower
will, for financial reporting purposes, cause (a) each of its, and each of
its Subsidiaries’, fiscal years to be comprised of twelve calendar months
ending on December 31 of each year and (b) each of its, and each of
its Subsidiaries’, Fiscal Quarters to end on dates consistent with such fiscal
year-end; provided that the Borrower may, upon written notice to the
Administrative Agent, change the financial reporting convention specified above
to any other financial reporting convention reasonably acceptable to the
Administrative Agent, in which case the Borrower and the Administrative Agent
will, and are hereby authorized by the Lenders to, make any adjustments to this
Agreement that are necessary in order to reflect such change in financial
reporting.

 

8.10        Use of Proceeds.

 

The Borrower
will use the Letters of Credit and the proceeds of all the Revolving Credit
Loans only for the purposes set forth in Section 2.1(b).

 

8.11        Changes in
Business.

 

From the
Closing Date, the Borrower and its Subsidiaries taken as a whole will not
fundamentally and substantively alter the character of their business taken as
a whole from the business conducted by the Borrower and its Subsidiaries taken
as a whole on the Closing Date following the consummation of the Transactions
and other business activities incidental or related to any of the foregoing
(the “Business”).

 

46

 

ARTICLE 9

NEGATIVE COVENANTS

 

The Borrower
(on its own behalf and on behalf of each of its Subsidiaries) hereby covenants
and agrees that on the Closing Date and thereafter until the Revolving
Commitment Maturity Date:

 

9.1          Limitation on
Liens.

 

The Borrower
will not, and will not permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any property or assets of any kind (real or
personal, tangible or intangible) of the Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired, except:

 

(a)           Permitted Liens;

 

(b)           Liens (i) arising under the Credit
Documents or (ii) to secure Indebtedness under the ITC Revolving Credit
Agreement, up to $25,000,000, or the First Mortgage Indenture;

 

(c)           Liens existing on the Closing Date
and as set out on Schedule IV;

 

(d)           Liens existing on the assets or
Capital Stock of any Person that becomes a Subsidiary, or existing on assets
acquired; provided that such Liens attach at all times only to the same assets
that such Liens attached to and secure only the same Indebtedness that such
Liens secured, immediately prior to such acquisition;

 

(e)           Liens in favor of the Borrower or any
Subsidiary;

 

(f)            Liens in favor of the United States
of America or any State thereof, or any department, agency or instrumentality
or political subdivision of the United States of America or any State thereof
or political entity affiliated therewith, to secure partial, progress, advance
or other payments, or other obligations, pursuant to any contract or statute to
secure any Indebtedness incurred for the purpose of financing all or any part
of the cost of acquiring, constructing or improving property subject to such
Liens (including Liens incurred in connection with pollution control,
industrial revenue or similar financings);

 

(g)           Liens on any property created,
assumed or otherwise brought into existence in contemplation of the sale or
other disposition of the underlying property, whether directly or indirectly,
by way of share disposition or otherwise; provided that 180 days from the
creation of such Liens the Borrower or the relevant Subsidiary shall have
disposed of such property and any Indebtedness secured by such Liens shall be
without recourse to the Borrower or any Subsidiary;

 

(h)           Rights of other Persons to take
minerals, timber, gas, water or other products produced by the Borrower or by
other Persons on the property of the Borrower;

 

47

 

(i)            Liens pursuant to “Sale and
Leaseback Transactions” as permitted by Section 10.10 of the Indenture (as in
effect on the date hereof);

 

(k)           Liens created by or resulting from
any litigation or other proceeding which is being contested in good faith by
appropriate proceedings, including Liens arising out of judgments or awards
against the Borrower or any Subsidiary with respect to which the Borrower or
such Subsidiary is in good faith prosecuting an appeal or proceedings for
review; or Liens that the Borrower or any Subsidiary incurs for the purpose of
obtaining a stay or discharge in the course of any litigation or other
proceeding to which the Borrower or such Subsidiary is a party;

 

(l)            Liens which have been bonded for the
full amount in dispute;

 

(m)          additional Liens so long as the
aggregate principal amount of the obligations so secured plus the “Attributable
Value” (as defined in the Indenture as in effect on the date hereof) of Sale
and Leaseback Transactions entered into pursuant to the penultimate paragraph
of Section 10.10 of the Indenture (as in effect on the date hereof) during the
term of this Agreement does not exceed the greater of 10% of Net Tangible
Assets (as defined in the Indenture as in effect on the date hereof) and 10% of
Consolidated Capitalization (as defined in the Indenture as in effect on the
date hereof) at any time;

 

(n)           Liens on any property acquired,
constructed or improved by the Borrower or any Subsidiary after the date hereof
which are created or assumed contemporaneously with such acquisition,
construction or improvement, or within 270 days after the completion thereof,
to secure or provide for the payment of all or any part of the cost of such
acquisition, construction or improvement (including related expenditures
capitalized for Federal income tax purposes in connection therewith) incurred
after the date hereof; and

 

(o)           the replacement, extension or renewal
of any Lien permitted by clauses (a) through (n) above upon or in the same
assets theretofore subject to such Lien or the replacement, extension or
renewal (without increase in the amount or change in any direct or contingent
obligor except to the extent otherwise permitted hereunder) of the Indebtedness
secured thereby.

 

9.2          Limitation on
Fundamental Changes.

 

The Borrower
will not enter into any merger or consolidation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all its
business units, assets or other properties, except that:

 

(a)           any Subsidiary of the Borrower or any
other Person may be merged or consolidated (including by way of liquidation or
winding up) with or into the Borrower; provided that (i) the Borrower shall be
the continuing or surviving entity or the Person formed by or surviving any
such merger or consolidation (if other than the Borrower) shall be an entity
organized or existing under the laws of the United States or any State

 

48

 

thereof (the Borrower or
such Person, as the case may be, being herein referred to as the “Successor Borrower”), (ii) the Successor
Borrower shall expressly assume all the obligations of the Borrower under this
Agreement and the other Credit Documents pursuant to a supplement hereto or
thereto in form and substance reasonably satisfactory to the Administrative
Agent, (iii) no Default or Event of Default is then existing and no Default or
Event of Default would result from the consummation of such merger or
consolidation, (iv) the Successor Borrower shall be in compliance, on a pro
forma basis after giving effect to such merger or consolidation, with the
covenant set forth in Section 9.4 as such covenant is recomputed as at the
last day of the most recently ended Test Period under each such Section as if
such merger or consolidation had occurred on the first day of such Test Period
and (v) the Borrower shall have delivered to the Administrative Agent an
officer’s certificate, in form and substance reasonably satisfactory to the
Administrative Agent, certifying the compliance referred to in clause (iv)
above and stating that such merger or consolidation and such supplement to this
Agreement comply with this Agreement and a legal opinion (in form and substance
reasonably satisfactory to the Administrative Agent) with respect to the Credit
Documents to be delivered, if any, pursuant to clause (ii) above; provided
further that if the foregoing are satisfied, the Successor Borrower (if other
than the Borrower) will succeed to, and be substituted for, the Borrower under
this Agreement; and

 

(b)           the Borrower may enter into any
merger or consolidation for the purpose of changing its organizational form
from a corporation to a limited liability company or from a limited liability
company to a corporation; provided that such change has no adverse affect on
the rights of the Finance Parties.

 

9.3          Limitation on Dividends.

 

If any Default
or Event of Default then exists or would result therefrom, the Borrower will
not declare or pay any distributions (other than dividends payable solely in
its capital stock) or return any capital to its shareholders or make any other
distribution, payment or delivery of property or cash to its shareholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for consideration, any of its Capital Stock or the Capital Stock of any direct
or indirect shareholder of the Borrower now or hereafter outstanding (or any
warrants for or options or stock appreciation rights in respect of any of its
Capital Stock), or set aside any funds for any of the foregoing purposes, or
permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any Capital Stock of the Borrower, now or hereafter outstanding
(or any options or warrants or stock appreciation rights issued by such Person
with respect to its Capital Stock), provided that the Borrower may take any of
the actions in this Section 9.3 so long as the (a) ratings of the Borrower
Bonds are BBB- or Baa3 or better or (b) the Revolving Credit Commitment is
unused and there are no Letters of Credit Outstanding.

 

9.4          Debt to
Capitalization Ratio.

 

The Borrower
will not permit the Debt to Capitalization Ratio to be greater than 85% at any
time on or after the Closing Date.

 

49

 

ARTICLE 10

EVENTS OF DEFAULT

 

Each of the
following specified events or occurrences described in Sections 10.1 through
10.9 below shall constitute an “Event of Default”:

 

10.1        Payments.

 

The Borrower
shall (a) default in the payment when due of any principal of the
Revolving Credit Loans or (b) default, and such default shall continue for
five or more days, in the payment when due of any interest on the Revolving
Credit Loans or any Fees or any Unpaid Drawings or of any other amounts owing
hereunder or under any other Credit Document.

 

10.2        Representations,
etc.

 

Any
representation, warranty or statement made or deemed made by the Borrower
herein or in the Pledge Agreement or any certificate delivered or required to
be delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made (it being
understood that, for purposes of the foregoing, the truth of the
representations and warranties set forth in Section 7.6 shall be
determined without reference to the knowledge of the Borrower).

 

10.3        Covenants.

 

The Borrower
shall (a) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 8.1(d), Section 8.11 or
Article 9, or (b) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in
Section 10.1 or 10.2 or clause (a) of this Section 10.3)
contained in this Agreement or the Pledge Agreement and such default shall
continue unremedied for a period of at least 30 days after the receipt of
written notice by the Borrower from the Administrative Agent or the Required
Lenders.

 

10.4        Default Under Other Agreements.

 

(a)           The Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any
Indebtedness, in excess of $15,000,000 in the aggregate, beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, any such Indebtedness to become due
prior to its stated maturity; or

 

(b)           without limiting the provisions of
clause (a) above, any such Indebtedness shall be declared to be due and
payable, or required to be prepaid other than by a regularly scheduled required
prepayment or as a mandatory prepayment, prior to the stated maturity thereof.

 

50

 

10.5        Bankruptcy, etc.

 

The Borrower
or any Subsidiary shall commence a voluntary case concerning itself under the Bankruptcy Code as now or hereafter
in effect, or any successor thereto or any similar legislation in any other
applicable jurisdiction (collectively, the “Bankruptcy
Code”); or an involuntary case is commenced against the Borrower or
any Subsidiary and the petition or application is not contested within 10 days
after commencement of the case; or an involuntary case is commenced against the
Borrower or any Subsidiary and the petition or application is not dismissed
within 45 days after commencement of the case; or a receiver, trustee,
liquidator, custodian or similar official is appointed for, or takes charge of,
all or substantially all of the property of the Borrower or any Subsidiary or
the Borrower or any Subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any Subsidiary
itself; or there is commenced against the Borrower or any Subsidiary any such
proceeding that remains undismissed for a period of 45 days; or the
Borrower or any Subsidiary is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
the Borrower or any Subsidiary makes a general assignment for the benefit of
creditors, files under the Bankruptcy Act or takes a
similar action under the Bankruptcy Act; or any
corporate or similar action is taken by the Borrower or any Subsidiary for the
purpose of effecting any of the foregoing; or the Borrower or any Subsidiary is
unable to pay its debts as they fall due, or makes a general assignment for the
benefit of or a composition with its creditors generally; or the Borrower or
any Subsidiary takes any corporate or similar action or other steps are taken
or legal proceedings are started for its winding-up, dissolution,
administration or insolvent re-organization or for the appointment of a
liquidator, administrator or administrative receiver of it.

 

10.6        Security Documents.

 

The Pledge Agreement
or any material provision thereof shall cease to be in full force or effect
(other than pursuant to the terms hereof or thereof or as a result of acts or
omissions of the Administrative Agent or any Lender) or the Borrower shall deny
or disaffirm in writing its obligations under the Pledge Agreement.

 

10.7        Judgments.

 

One or more
judgments or decrees shall be entered against the Borrower or any of its
Subsidiaries involving a liability of $15,000,000 or more in the aggregate for
all such judgments and decrees for the Borrower and its Subsidiaries (to the
extent not paid or fully covered by insurance provided by a carrier not
disputing coverage) and any such judgments or decrees shall not have been
satisfied, vacated, discharged or stayed or bonded pending appeal within
60 days from the entry thereof.

 

10.8        Change of Ownership.

 

A Change of
Ownership shall occur.

 

51

 

10.9        Pension Plans.

 

Any of the
following events shall occur with respect to any Pension Plan: (a) the
institution of any steps by the Borrower or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower or any such
member could be required to make a contribution to such Pension Plan, or could
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 302(f) of
ERISA, where in each case under clauses (a) or (b) such contribution,
liability, obligation or Lien would reasonably be expected to have a Material
Adverse Effect.

 

10.10      Remedies.

 

Upon the
occurrence of any Event of Default described above, and in any such event, and
at any time thereafter, if any Event of Default shall then be continuing, the
Administrative Agent shall, upon the written request of the Required Lenders,
by written notice to the Borrower, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent to enforce its
claims against the Borrower, except as otherwise specifically provided for in
this Agreement (provided that, if an Event of Default specified in
Section 10.5 shall occur with respect to the Borrower, the result that
would occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i), and (ii) below shall occur automatically without
the giving of any such notice): 
(i) declare the Total Revolving Credit Commitment terminated,
whereupon the Revolving Credit Commitments of each Lender shall forthwith
terminate immediately and any Fees theretofore accrued shall forthwith become
due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Revolving Credit Loans
and all obligations owing hereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; (iii) terminate
any Letter of Credit that may be terminated in accordance with its terms;
(iv) direct the Borrower to pay (and the Borrower agrees that upon receipt
of such notice, or upon the occurrence of an Event of Default specified in
Section 10.5 with respect to the Borrower, it will pay) to the
Administrative Agent at the Funding Office such additional amounts of cash, to
be held as security for the Borrower’s reimbursement obligations for Drawings
that may subsequently occur thereunder, equal to the aggregate Stated Amount of
all Letters of Credit issued and then outstanding; and/or (v) exercise any
other remedies that may be available under the Credit Documents or applicable
law.

 

10.11      Remedies Cumulative.

 

The rights and
remedies of the Administrative Agent and the Lenders under this Agreement and
the other Credit Documents are cumulative and are in addition to and not in
substitution for any rights or remedies provided by law or by equity, and any
single or partial exercise by the Lenders of any right or remedy for a default
or breach of any term, covenant, condition or agreement herein contained shall
not be deemed to be a waiver of or to alter, affect, or prejudice any other
right or remedy or other rights or remedies to which the Lenders may be lawfully
entitled for the same default or breach, and any waiver by the Administrative
Agent or the Lenders of the strict observance, performance or compliance with
any term, covenant, condition or agreement herein contained, and any indulgence
granted by the Administrative Agent or the Lenders shall be deemed not to be a
waiver of any subsequent default.  In the
event that the Administrative Agent or the Lenders shall have proceeded to
enforce any such right,

 

52

 

remedy or power contained herein or in the other Credit Documents and
such proceedings shall have been discontinued or abandoned for any reason, by
written agreement between the Lenders and the Borrower, then in each such event
the Borrower and the Lenders shall be restored to their former positions and
the rights, remedies and powers of the Lenders shall continue as if no such
proceedings had been taken.

 

ARTICLE 11

THE ADMINISTRATIVE AGENT

 

11.1        Appointment.

 

Each Lender
hereby irrevocably designates and appoints the Administrative Agent as the
agent of such Lender under this Agreement and the other Credit Documents, and
each such Lender irrevocably authorizes the Administrative Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto (including the power to
execute documents on behalf of the Lenders). 
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent.  The Documentation
Agent and Arranger, in its capacities as such, shall not have any obligations,
duties or responsibilities under any Credit Document.

 

11.2        Delegation of Duties.

 

The
Administrative Agent may execute any of its duties under this Agreement and the
other Credit Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

 

11.3        Exculpatory
Provisions.

 

Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Credit Document (except for its or
such Person’s own gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction) or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any officer, employee, agent or consultant
thereof contained in this Agreement or any other Credit Document or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document or for any failure

 

53

 

of the Borrower to perform its obligations hereunder or thereunder.  The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of the Borrower.  The
Administrative Agent shall not be under any obligation to any Lender to obtain
the consent of any Person which is required in connection with an assignment by
such Lender pursuant to Section 12.6(a)(ii) or to ascertain whether a
particular assignment by a Lender pursuant to Section 12.6(a)(ii) requires the
consent of any particular Person.

 

11.4        Reliance by
Administrative Agent.

 

The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent.  The Administrative Agent may deem and treat the
Lender specified in the Register with respect to any amount owing hereunder as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent.  The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Credit Document unless it shall first receive such advice or
concurrence of the Required Lenders (or each of the Lenders if required
pursuant to Section 12.1) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with
a request of the Required Lenders (or each of the Lenders if required pursuant
to Section 12.1), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of the Revolving Credit Loans.

 

11.5        Notice of Default.

 

The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the other Finance Parties.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or
each of the Lenders if required pursuant to Section 12.1); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders (except
to the extent that this Agreement requires that such action be taken only with
the approval of the Required Lenders or each of the Lenders, as applicable).

 

54

 

11.6        Non-Reliance on
Administrative Agent and Other Lenders.

 

Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Revolving Credit Loans hereunder
and enter into this Agreement.  Each
Lender also represents that it will, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the
Borrower.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, assets, operations, properties, financial
condition, prospects or creditworthiness of the Borrower that may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.

 

11.7        Indemnification.

 

(a)           The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower forthwith on demand, without any obligation to seek recovery from
the Borrower first, and without limiting the obligation of the Borrower to do
so), ratably according to their respective portions of the Revolving Credit
Exposure in effect on the date on which indemnification is sought (or, if
indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the Revolving Credit Loans shall have
been paid in full, ratably in accordance with their respective portions of the
Revolving Credit Exposure in effect immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including at any time following the payment of
the Revolving Credit Loans) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of, the Revolving
Credit Commitments, this Agreement, any of the other Credit Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing, provide
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative Agent’s
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.  The

 

55

 

agreements in this
Section 11.7 shall survive the payment of the Revolving Credit Loans and
all other amounts payable hereunder.

 

11.8        Administrative Agent
in Its Individual Capacity.

 

The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Credit Documents.  With respect to
the Revolving Credit Loans made by it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Credit Documents as
any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.

 

11.9        Successor Agent.

 

The
Administrative Agent may resign as Administrative Agent upon 20 days prior
written notice to the Lenders and the Borrower. 
If the Administrative Agent is in default of its obligations under this
Agreement and the Required Lenders deem it advisable, the Lenders may terminate
the Administrative Agent’s authority to act on behalf of the Lenders pursuant
to this Article 11 upon 20 days prior written notice.  If the Administrative Agent shall resign or
be terminated as Administrative Agent under this Agreement and the other Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by the
Borrower (which approval shall not be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Revolving Credit Loans. 
After any retiring Administrative Agent’s resignation or termination as
Administrative Agent, the provisions of this Article 11 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Credit Documents.

 

11.10      Borrower as a Lender.

 

Notwithstanding
any other provision hereof, any Lender that is the Borrower or an Affiliate of
the Borrower shall not be entitled to attend or be represented at any meeting
of Lenders.

 

ARTICLE 12

MISCELLANEOUS

 

12.1        Amendments and Waivers.

 

Neither this
Agreement nor any other Credit Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 12.1.  The Administrative
Agent may, without the consent of the Lenders, enter into technical, minor or
administrative amendments.  The Required
Lenders may from time to time

 

56

 

(a) enter into with the Borrower and Administrative Agent, as
applicable, written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding or amending any provisions to
this Agreement or the other Credit Documents or changing in any manner the
rights of the Lenders or of the Borrower hereunder or thereunder,
(b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Credit Documents or any
Default or Event of Default and its consequences; provided that no such waiver
and no such amendment, supplement or modification shall directly
(i) forgive any portion of, or extend or waive the final scheduled
maturity date of, any Revolving Credit Loan, or reduce the stated rate of,
forgive any portion of or extend the date for the payment of any interest or
fee payable hereunder (other than as a result of waiving the applicability of
any post-default increase in interest rates) or extend the final expiration
date of any Lender’s Revolving Credit Commitment or extend the final expiration
date of any Letter of Credit beyond the L/C Maturity Date or increase the
amount of any of the Revolving Credit Commitments of any Lender or amend
Section 3.2, in each case without the written consent of each Lender whose
Revolving Credit Loan, interest, fee or Revolving Credit Commitment is changed
as set forth above thereby, or (ii) amend, modify or waive any provision
of this Section 12.1 or reduce the percentages specified in the
definitions of the terms “Required Lenders” or consent to the assignment or
transfer by the Borrower of its rights and obligations under any Credit
Document to which it is a party (except as permitted pursuant to Section 9.1),
in each case without the written consent of each Lender, or (iii) amend,
modify or waive any provision of Article 11 without the written consent of
the then-current Administrative Agent, or (iv) amend, modify or waive any
provision of Article 3 or Section 12.6(a)(ii) (to the extent it
relates to the Letter of Credit Issuer) without the written consent of the
Letter of Credit Issuer, or (v) amend Section 5.2(a) to the extent that it
relates to payments for the ratable account of Lenders without the written
consent of each Lender directly and adversely affected thereby or
(vi) release all or substantially all of the Collateral, in each case
without the written consent of all the Lenders except as otherwise specifically
provided in this Section 12.1 and provided further that at any time that
no Default or Event of Default has occurred and is continuing, the Revolving
Credit Commitment of any Lender may be increased for any purpose permitted
hereunder, with the consent of such Lender, the Borrower and the Administrative
Agent (which consent, in the case of the Administrative Agent, shall not be
unreasonably withheld) and without the consent of the Required Lenders, as
provided for in this Section 12.1.

 

Any such
waiver and any such amendment, supplement or modification shall apply equally
to each of the affected Lenders and shall be binding upon the Borrower, such
Lenders, the Administrative Agent and all future holders of the affected
Revolving Credit Loans.  In the case of
any waiver, the Borrower, the Lenders and the Administrative Agent shall be
restored to their former positions and rights hereunder and under the other
Credit Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing, it being understood that no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.

 

12.2        Notices.

 

All notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by facsimile transmission) and, unless otherwise
expressly

 

57

 

provided herein, if mailed and properly addressed with postage prepaid
or if properly addressed and sent by pre-paid courier service, shall be deemed
given when received and, if transmitted by facsimile, shall be deemed given
when the confirmation of transmission thereof is received by the transmitter,
in each case addressed as follows in the case of the Borrower, the
Administrative Agent and as set forth on Schedule I in the case of each Lender
(or as set forth in the Assignment and Acceptance or New Lender Supplement of
any Lender which is an Assignee) or to such other address as may be hereafter
notified by the respective parties hereto:

 

(a)                                  The
Borrower:

 

ITC Holdings Corp.

1901 South Wagner

Ann Arbor, MI 48103-9715

 

Attention: John Flynn, Esq.

Facsimile No.:

 

with a copy to:

 

Simpson Thacher & Bartlett

425 Lexington Avenue

New York, NY 10017-3954

 

Attention: James Cross

Facsimile No.: (212) 455-2502

 

(b)                                 The
Administrative Agent:

 

Canadian Imperial Bank of Commerce

425 Lexington Avenue, 8th Floor

New York, NY 10017

 

Attention: April Varner

Facsimile No.:  (212) 856-3763

 

provided that any notice, request or demand to or upon
the Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6,
2.10, 4.2 and 5.1 shall not be effective until received.

 

12.3        No Waiver;
Cumulative Remedies.

 

No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under the other
Credit Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

 

58

 

 

12.4                        Survival
of Representations and Warranties.

 

All
representations and warranties made hereunder, in the other Credit Documents
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Revolving Credit Loans hereunder.

 

12.5                        Payment
of Expenses and Taxes.

 

The Borrower
agrees (a) to pay or reimburse the Arranger and the Administrative Agent
for all their reasonable and documented out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby (including the syndication of the Revolving
Credit Commitments), including the reasonable fees, disbursements and other
charges of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its reasonable and documented
costs and expenses incurred in connection with the enforcement or preservation
of any rights under, or “workout” or restructuring of, this Agreement, the
other Credit Documents and any such other documents, including the reasonable
fees, disbursements and other charges of counsel to each Lender and of counsel
to the Administrative Agent, (c) to pay, indemnify, defend and hold
harmless each Lender and the Administrative Agent from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar taxes, if any, that may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Credit Documents
and any such other documents, and (d) to pay, indemnify, defend and hold
harmless each Lender, the Arranger and the Administrative Agent and their
respective directors, officers, employees, trustee, agents and Affiliates
(collectively, the “Indemnitees”) from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including reasonable and documented fees, disbursements and other charges of
counsel incurred in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or potential party thereto, and
any fees or expenses incurred by any Indemnitee in enforcing this indemnity),
whether direct, indirect or consequential, whether based on strict liability or
negligence, and whether based on any federal, provincial or foreign laws, statutes,
rules, regulations or guidelines (including Environmental Laws), common law,
equity, contract or otherwise that may be imposed on, incurred by or asserted
against any Indemnitee, in any manner arising out of or relating to
(i) this Agreement, the other Credit Documents and any other agreements or
documents contemplated hereby or thereby, the other transactions contemplated
hereby (including the execution, delivery, enforcement, performance and
administration of any of the Credit Documents and the breach by the Borrower
of, or default by the Borrower under, any of the provisions of any of the
Credit Documents, (ii) the violation of, non-compliance with or liability
under, any Environmental Law applicable to the operations of the Borrower or
any of its Subsidiaries or applicable to any of the Real Estate, or
(iii) any Environmental Claim or any Hazardous Materials relating to or
arising

 

59

 

from, directly or indirectly, any past or present activity, operation,
land ownership, possession or control, or practice of, the Borrower or any of
its Subsidiaries from time to time (all the foregoing in this clause (d),
collectively, the “indemnified  liabilities”); provided that the Borrower shall have no
obligation hereunder to any Indemnitee with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of such Indemnitee as
determined by a final judgment of a court of competent jurisdiction and
provided further that the Borrower shall have no obligation hereunder to any
Indemnitee with respect to claims to the extent relating to disputes among the
Lenders, any of the Arranger and/or the Administrative Agent.  The agreements in this Section 12.5
shall survive repayment of the Revolving Credit Loans and all other amounts
payable hereunder.

 

Each of the
Lenders, the Arranger and the Administrative Agent agree that any and all of
their respective rights under this Agreement, the other Credit Documents and
any other agreements contemplated hereby and thereby, including recourse for
any obligation or claim for any indemnification thereunder, is limited to
recourse to the Borrower and its assets as contemplated hereby, and none of the
direct or indirect limited partners, partners, shareholders, members of the
Borrower or any of their respective employees, directors or officers shall have
any obligations or liability, or be subject to any recourse, in respect of any
such obligations or claims hereunder or thereunder.

 

12.6                        Successors
and Assigns; Participations and Assignments.

 

(a)                                  This
Agreement shall be binding upon and inure to the benefit of, the Borrower, the
Lenders, the Administrative Agent and their respective successors and assigns,
except that, subject to Section 9.1(a), the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.

 

(i)                                     Any
Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other entities (“Participants”) participating interests in any Revolving
Credit Loan owing to such Lender, any Revolving Credit Commitment of such
Lender or any other interest of such Lender hereunder and under the other
Credit Documents.  In the event of any
such sale by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Revolving
Credit Loan for all purposes under this Agreement and the other Credit
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement and the other Credit Documents.  In no event shall any Participant under any
such participation have any right to approve any amendment or waiver of any
provision of any Credit Document, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or consent
would directly forgive any principal of any Revolving Credit Loan or reduce the
stated rate, or forgive any portion, or postpone the date for the payment, of
any principal, interest or fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates),
increase the aggregate amount of the Revolving Credit Commitments of any Lender,
postpone the date of the final

 

60

 

scheduled maturity of any Revolving Credit Loan, or release all or
substantially all the Collateral, in each case to the extent subject to such
participation.  The Borrower agrees that
if amounts outstanding under this Agreement are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement; provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 12.8 as fully as if it
were a Lender hereunder.  The Borrower
also agrees that each Participant shall be entitled to the benefits of
Sections 2.10, 2.11 and 5.3 with respect to its participation in the
Revolving Credit Commitments and the Revolving Credit Loans outstanding from
time to time as if it were a Lender; provided that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.

 

(ii)                                  Any
Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time and from time to time assign to (A) any Lender
or any Affiliate thereof or Approved Fund with respect thereto (with the consent
of the Borrower if any increased costs would result therefrom) or,
(B) with the consent of the Borrower, the Letter of Credit Issuer and the
Administrative Agent (which in each case shall not be unreasonably withheld or
delayed, it being understood that, without limitation, the Borrower shall have
the right to withhold its consent to any assignment if, in order for such
assignment to comply with applicable law, the Borrower would be required to
obtain the consent of, or make any filing or registration with, any
Governmental Authority), to an additional bank or fund that is regularly
engaged in making, purchasing or investing in loans or securities or a
financial institution (an “Assignee”) all
or any part of its rights and obligations under this Agreement and the other
Credit Documents pursuant to an Assignment and Acceptance, substantially in the
form prescribed from time to time by the Loan Syndications and Trading
Association, with such modifications as the Administrative Agent shall require
from time to time, executed by such Assignee and such assigning Lender (and, in
the case of an Assignee that is not then a Lender, an Affiliate thereof or an
Approved Fund with respect thereto, by the Borrower and the Administrative
Agent) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that, except in the case of an assignment
of all of a Lender’s interests under this Agreement, unless otherwise agreed to
by the Administrative Agent, no such assignment to an Assignee (other than any
Lender, any Affiliate thereof or any Approved Fund with respect thereto) and
its Affiliates shall be in an aggregate principal amount less than $2,500,000
in respect of Revolving Credit Loans. 
Upon such execution, delivery, acceptance and recording (referred to as
the “Assignment Effective Date”),
(x) the Assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of
a Lender hereunder with a Revolving Credit Commitment as set forth therein and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and,

 

61

 

in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).  Notwithstanding any provision of this
Agreement to the contrary, (x) the consent of the Borrower shall not be
required for any assignment that occurs at any time when any Event of Default
shall have occurred and be continuing and (y) the consent of the Letter of
Credit Issuer shall be required for any assignment that includes an assignment
of all or any part of a Lender’s Revolving Credit Commitment.

 

(b)                                 Nothing
herein shall prohibit any Lender from pledging or assigning all or any portion
of its Revolving Credit Loans to any Federal Reserve Bank in accordance with
applicable law, and any Lender that is an investment fund that invests in bank
loans may, without the consent of the Borrower or the Administrative Agent,
pledge or assign all or any portion of its Revolving Credit Loans and
promissory notes evidencing such Revolving Credit Loans to any trustee or any
other representative of holders of obligations owed or securities issued by
such investment fund as security for such obligations or securities; provided
that no such pledge or assignment shall release a Lender from any of its
obligations hereunder, substitute any such pledgee or assignee for such Lender
as party hereto or increase the obligations of the Borrower hereunder.  In order to facilitate such pledge or
assignment, the Borrower hereby agrees that, upon request of any Lender at any
time and from time to time after the Borrower has made its initial borrowing
hereunder, the Borrower shall provide to such Lender, at the Borrower’s own
expense, a promissory note in form satisfactory to such Lender, acting
reasonably, evidencing the Revolving Credit Loans owing to such Lender.

 

(c)                                  The
Administrative Agent, on behalf of the Borrower, shall maintain at the address
of the Administrative Agent referred to in Section 12.2 a copy of each
Assignment and Acceptance and New Lender Supplement delivered to it and a
register (the “Register”) for the recordation of
the names and addresses of the Lenders and the Revolving Credit Commitment of,
and principal amount of the Revolving Credit Loans (whether or not evidenced by
a promissory note) owing to, each Lender from time to time.  Notwithstanding Section 2.5, the entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of a Revolving Credit Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Credit Documents, notwithstanding any notice to the
contrary.  Any assignment of any
Revolving Credit Loan or other obligation hereunder (whether or not evidenced
by a promissory note) shall be effective only upon appropriate entries with
respect thereto being made in the Register. 
Any assignment of all or part of a Revolving Credit Loan evidenced by a
promissory note shall be registered on the Register only upon surrender for
registration of assignment or transfer of such promissory note evidencing such
Revolving Credit Loan, accompanied by a duly executed Assignment and
Acceptance, and thereupon one or more new promissory notes in the same
aggregate principal amount shall be issued to the designated Assignee and the
old promissory notes shall be returned by the Administrative Agent to the
Borrower marked “cancelled”.  The
Register shall be available for inspection by the Borrower at any reasonable
time and from time to time upon reasonable prior notice.

 

(d)                                 The
Administrative Agent shall (i) upon its receipt of an Assignment and
Acceptance executed by an assigning Lender, the Letter of Credit Issuer and an
Assignee (and, in

 

62

 

the case of an Assignee
that is not then a Lender, an Affiliate thereof or an Approved Fund with
respect thereto, by the Borrower, together with payment to the Administrative
Agent of a registration and processing fee of $3,500, promptly accept such
Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register.

 

(e)                                  Subject
to Section 12.17, the Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a “Transferee”)
and any prospective Transferee any and all information in such Lender’s
possession concerning the Borrower and its Affiliates that has been delivered
to such Lender by or on behalf of the Borrower pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender’s credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement; provided that neither
the Administrative Agent nor any Lender shall provide to any Transferee or
prospective Transferee any of the Confidential Information unless such person
shall have previously executed a Confidentiality Agreement substantially in the
form prescribed from time to time by the Loan Sales and Trading Association.

 

12.7                        Replacements
of Lenders under Certain Circumstances.

 

(a)                                  The
Borrower shall be permitted to replace any Lender that (a) requests reimbursement
for amounts owing pursuant to Section 2.10 or 5.3, (b) is affected in
the manner described in Section 2.10(a)(iii) and as a result thereof any
of the actions described in such Section is required to be taken or
(c) becomes a Defaulting Lender, with a replacement bank or other
financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) the
replacement bank or institution shall purchase, at par, all Revolving Credit
Loans and other amounts (other than any disputed amount) pursuant to
Section 2.10, 2.11 or 5.3, as the case may be, owing to such replaced
Lender prior to the date of replacement or as a result of such replacement,
(iv) the replacement bank or institution, if not already a Lender, and the
terms and conditions of such replacement, shall be reasonably satisfactory to
the Administrative Agent, (v) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 12.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein) and (vi) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against the replaced
Lender.

 

(b)                                 In
the event that S&P or Moody’s shall, after the date that any Lender with a
Revolving Credit Commitment becomes a Lender, downgrade the long-term
certificate of deposit rating or long-term senior unsecured debt rating of such
Lender, and the resulting rating shall be below BBB- or Baa3 respectively, then
the Borrower shall have the right, but not the obligation, upon notice to such
Lender and the Administrative Agent, to replace such Lender with an Assignee in
accordance with and subject to the restrictions contained in Section 12.6,
and such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in Section 12.6)
all its interests, rights and obligations in respect of its Revolving Credit
Commitment under this Agreement to such Assignee; provided that (i) no
such assignment shall conflict with any law, regulation or order of any governmental
authority and (ii) such Assignee shall pay to such Lender in immediately
available funds on the

 

63

 

date of such assignment
the principal of and interest and fees (if any) accrued to the date of payment
on the Revolving Credit Loans made by such Lender hereunder and all other
amounts accrued for such Lender’s account or owed to it hereunder.

 

12.8                        Adjustments;
Set-off.

 

(a)                                  Upon
termination of the Total Revolving Credit Commitment and each Lender’s Revolving
Credit Commitment, the Administrative Agent shall calculate each Lender’s
Revolving Credit Commitment Percentage based on such Lender’s Revolving Credit
Exposure at such time.  If any Lender’s
Revolving Credit Commitment Percentage calculated on such basis is greater than
the ratio of such Lender’s Revolving Credit Commitment to the Total Revolving
Credit Commitment (such Lender, a “Selling Lender”),
then each of the other Lenders’ whose Revolving Credit Commitment Percentage
calculated on the basis of Revolving Credit Exposure is less than such other
Lender’s Revolving Credit Commitment Percentage calculated on the basis of its
Revolving Credit Commitment (each such other Lender, a “Purchasing
Lender”) shall purchase for cash from the Selling Lender, without
recourse or representation or warranty (other than as to ownership and no Liens
or claims by any Person), an interest in the Revolving Credit Exposure of the
Selling Lender at par in such amount as would result in a pro rata
participation (based on Revolving Credit Commitments) by each Lender, in the
aggregate Revolving Credit Exposure of all the Lenders.  The Administrative Agent, upon consultation
with the applicable Lenders, shall have the power to settle any documentation
required to evidence any such purchase and, if deemed advisable by the
Administrative Agent, to execute any document as attorney for any Lender in
order to complete any such purchase.  The
Borrower acknowledges that the foregoing arrangements are to be settled by the
Lenders among themselves, and the Borrower expressly consents to the foregoing
arrangements among the Lenders.  The
Administrative Agent shall recalculate each Lender’s Revolving Credit
Commitment Percentage from time to time after termination of the Total Revolving
Credit Commitment and each Lender’s Revolving Credit Commitment on the basis
hereinbefore provided and the Lenders shall adjust their respective Revolving
Credit Commitment Percentages from time to time in accordance with this
Section 12.8(a) as may be required.

 

(b)                                 After
the occurrence and during the continuance of an Event of Default, in addition
to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by applicable law,
upon any amount becoming due and payable by the Borrower hereunder (whether at
the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of the Borrower.  Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.

 

(c)                                  If
any Finance Party shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of setoff or otherwise) on account of
any Credit Event

 

64

 

(other than pursuant to
the terms of Section 2.10, 2.11 or 5.3) in excess of its pro rata share of
payments obtained by all Finance Parties, such Finance Party shall purchase
from the other Finance Parties such participations in Credit Events made by
them as shall be necessary to cause such purchasing Finance Party to share the excess payment or other
recovery ratably (to the extent such other Finance Parties were entitled to
receive a portion of such payment or recovery) with each of them; provided that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Finance Party, the purchase shall be rescinded
and each Finance Party which has sold a participation to the purchasing Finance
Party shall repay to the purchasing Finance Party the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Finance Party’s ratable share (according to the proportion of (a) the amount of
such selling Finance Party’s required repayment to the purchasing Finance Party
to (b) total amount so recovered from the purchasing Finance Party) of any
interest or other amount paid or payable by the purchasing Finance Party in
respect of the total amount so recovered. 
The Borrower agrees that any Finance Party purchasing a participation
from another Finance Party pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including pursuant to
clause (b) above) with respect to such participation as fully as if such
Finance Party were the direct creditor of the Borrower in the amount of such
participation.  If under any applicable bankruptcy,
insolvency or other similar law any Finance Party receives a secured claim in
lieu of a setoff to which this Section applies, such Finance Party shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders entitled under this Section
to share in the benefits of any recovery on such secured claim.

 

12.9                        Marshalling;
Payments Set Aside.

 

Neither the
Administrative Agent nor any Lender shall be under any obligation to marshal
any assets in favor of the Borrower or any other party or against or in payment
of any or all of the Borrower’s obligations hereunder.  To the extent that the Borrower makes a
payment or payments to the Administrative Agent, any Letter of Credit Issuer or
Lenders (or to the Administrative Agent for the benefit of Lenders), or the
Administrative Agent, any Letter of Credit Issuer or Lenders enforce any
security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, any other provincial, state or federal law, common law or
any equitable cause, then, to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.

 

12.10                 Counterparts.

 

This Agreement
may be executed by one or more of the parties to this Agreement on any number
of separate counterparts (including by facsimile transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.  A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

 

65

 

12.11                 Severability.

 

Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

12.12                 Integration.

 

This Agreement
and the other Credit Documents represent the agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.

 

12.13                 Governing Law.

 

THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK AND THE LAWS OF THE UNITED STATES APPLICABLE THEREIN (EXCLUDING ANY
CONFLICT OF LAWS RULE OR PRINCIPLE WHICH MIGHT REFER SUCH CONSTRUCTION TO THE
LAWS OF ANOTHER JURISDICTION).

 

12.14                 Submission
to Jurisdiction; Waivers.

 

The Borrower
hereby irrevocably and unconditionally:

 

(a)                                  submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Credit Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York;

 

(b)                                 consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees
that service of process in any such action or proceeding may be effected in
accordance with the local rules of civil procedure or by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in Section 12.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

(d)                                 agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

 

66

 

(e)                                  waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this
Section 12.14 any special, exemplary, punitive or consequential damages.

 

12.15                 Acknowledgements.

 

The Borrower
hereby acknowledges that:

 

(a)                                  it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Credit Documents to which it is a party;

 

(b)                                 neither
the Administrative Agent nor any Lender (in any capacity) has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Credit Documents to which it is a party, and
the relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

 

(c)                                  no
joint venture is created hereby or by the other Credit Documents to which the
Borrower is a party or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the Lenders.

 

12.16                 Waivers
of Jury Trial.

 

THE BORROWER,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY
COUNTERCLAIM THEREIN.

 

12.17                 Confidentiality.

 

The
Administrative Agent and each Lender shall hold all non-public information
furnished by or on behalf of the Borrower in connection with such Lender’s
evaluation of whether to become a Lender hereunder or obtained by such Lender
or the Administrative Agent pursuant to the requirements of this Agreement (“Confidential Information”), in accordance with its customary
procedure for handling confidential information of this nature and (in the case
of a Lender that is a bank) in accordance with safe and sound banking practices
and in any event may make disclosure as required or requested by any
Governmental Authority, representatives thereof or any nationally recognized
rating agency that requires access to information about such Lender’s
investment portfolio in connection with ratings issued with respect to such
Lender or pursuant to legal process or to such Lender’s or the Administrative
Agent’s lawyers, professional advisors or independent auditors or Affiliates;
provided that, unless specifically prohibited by applicable law or court order,
each Lender and the Administrative Agent shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition or
regulatory compliance of such Lender by such Governmental Authority or in
connection with ratings by such rating agency with respect to such Lender) for
disclosure of any such non-public

 

67

 

information prior to disclosure of such information, and provided further that in no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
by the Borrower or any Subsidiary of the Borrower.  Each Lender and the Administrative Agent
agrees that it will not provide to prospective Transferees or to prospective
direct or indirect contractual counterparties in swap agreements to be entered
into in connection with Revolving Credit Loans made hereunder any of the
Confidential Information unless such Person shall have previously executed a
Confidentiality Agreement substantially in the form prescribed from time to
time by the Loan Sales and Trading Association. 
Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to
this Agreement) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transactions contemplated by
this Agreement, and all materials of any kind (including opinions or other tax
analyses) related to such tax treatment and tax structure.  Further, each party hereto acknowledges that
it has no proprietary rights to any tax matter or tax idea related to the
transactions contemplated by this Agreement. 
For this purpose the tax treatment of the transactions contemplated by
this Agreement is the purported or claimed U.S. federal income tax treatment of
such transactions and the tax structure of such transactions is any fact that
may be relevant to understanding the purported or claimed U.S. federal income
tax treatment of such transaction.

 

12.18                 Treatment
of Revolving Credit Loans.

 

(a)  The Borrower does not intend to treat the
Revolving Credit Loans and related transactions as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4).  In the event the Borrower determines to take
any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof.

 

(b)  The Borrower acknowledges that the Administrative
Agent and one or more of the Lenders may treat its Revolving Credit Loans as
part of a transaction that is subject to Treasury Regulation Section 1.6011-4
or Section 301.6112-1, and the Administrative Agent and such Lender or Lenders,
as applicable, may file such IRS forms or maintain such lists and other records
as they may determine is required by such Treasury Regulations.

 

68

 

IN WITNESS
WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.

 

 

	
   

  	
  ITC
  HOLDINGS CORP.,

  as the Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward
  Rahill

  	
   

  
	
   

  	
   

  	
  Title: Vice
  President and C.F.O.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE FIRST BOSTON,

  CAYMAN ISLANDS BRANCH,

  as a Lender and as the Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sarah Wu

  	
   

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karl M.
  Studer

  	
   

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CANADIAN
  IMPERIAL BANK OF

  COMMERCE,

  as the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John P.
  Burke

  	
   

  
	
   

  	
   

  	
  Title:
  Executive Director

  
	
   

  	
   

  	
  CIBC World
  Markets Corp., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CIBC
  INC.,

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John P.
  Burke

  	
   

  
	
   

  	
   

  	
  Title:
  Executive Director

  
	
   

  	
   

  	
  CIBC World
  Markets Corp., as Agent

  
					

 

 

SCHEDULE
I

COMMITMENTS

 

	
  LENDER

  	
   

  	
  REVOLVING

  CREDIT

  COMMITMENT

  	
   

  	
  REVOLVING CREDIT

  COMMITMENT

  PERCENTAGE

  	
   

  
	
  Credit Suisse First Boston,

  Cayman Islands Branch

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CIBC Inc.

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total amount

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  100

  	
  %

  

 

69

 

SCHEDULE II

ENVIRONMENTAL MATTERS

 

 

SCHEDULE III

PENSION AND WELFARE MATTERS

 

 

SCHEDULE IV

OUTSTANDING LIENS ON CLOSING DATE

 

	
  Secured Party

  	
   

  	
  Description
  of Indebtedness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

SCHEDULE
V

SENIOR MANAGEMENT

 

 

EXHIBIT A

 

[Form of Notice of Borrowing]

 

NOTICE OF BORROWING

 

TO:                            [        ]

Attention:  [        ]

Facsimile No.: [        ]

 

Pursuant to
the Revolving Credit Agreement, dated as of March 19, 2004 (as the same may be
amended, modified, supplemented, restated or replaced from time to time, the “Revolving Credit Agreement”; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), among ITC Holdings Corp., a Michigan corporation (the “Borrower”), the Lenders, and Canadian
Imperial Bank of Commerce, as the Administrative Agent, this represents the
Borrower’s request to borrow as follows:

 

Revolving Credit Loan:

 

1.               Date of borrowing:

 

2.               Amount of borrowing:

 

3.               Lender(s):                                       Lenders,
in accordance with their Revolving Credit 
Commitments under the Revolving Credit Agreement

 

4.               Interest rate option:

 

Please wire
transfer the proceeds of the Borrowing in accordance with the funds flow
memorandum delivered under separate cover.

 

The
undersigned officer, to the best of his or her knowledge, in his or her
capacity as an officer of the Borrower certifies that:

 

(i)                                     All
representations and warranties made by the Borrower contained in the Revolving
Credit Agreement and in the other Credit Documents are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties are true and correct in all material
respects as of such earlier date); and

 

(ii)                                  No
event has occurred and is continuing or would result from the consummation of
the Borrowing contemplated hereby that would constitute a Default or an Event
of Default.

 

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  ITC HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT B

 

[Form of Pledge Agreement]

 

See attached.

 

 

EXHIBIT C

 

[Form of Notice of Continuation]

 

TO:                                                                          Canadian
Imperial Bank of Commerce, as Administrative Agent under the Credit Agreement
(as defined below)

425 Lexington Avenue

New York, NY  10017

Attention:  April Varner

Facsimile No.:  (212) 856-3763

 

Pursuant to the Revolving Credit Agreement, dated as of March 19, 2004
(as the same may be amended, modified, supplemented, restated or replaced from
time to time, the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), among ITC Holdings Corp., a Michigan corporation (the “Borrower”), the various financial
institutions and other persons from time to time referred to as “Lenders” in
the Credit Agreement (the “Lenders”),
Canadian Imperial Bank of Commerce, as the Administrative Agent and Credit Suisse First Boston, Cayman Islands
Branch, as Documentation Agent, this represents the Borrower’s request
to continue Revolving Credit Loans as follows:

 

1.                                       Date of continuation or conversion:

 

                                              ,             

 

2.                                       Amount of Revolving Credit Loans being continued or
converted:

 

$                                                    

 

3.                                       Nature of continuation or conversion:

 

	
                              

  	
  a.

  	
   

  	
  Conversion of a LIBOR Loan as an ABR Loan

  
	
                              

  	
  b.

  	
   

  	
  Conversion of an ABR Loan as a LIBOR Loan

  
	
                              

  	
  c.

  	
   

  	
  Continuation (rollover) of LIBOR Loans as LIBOR Loans

  

 

4.                                       If
Revolving Credit Loans are being continued as or converted into LIBOR Loans,
the duration of the new Interest Period that commences on the continuation or
conversion date:

 

                       month(s)

 

The undersigned officer, to the best of his or her knowledge, in his or
her capacity as an officer of the Borrower, certifies that:

 

 

(i)                                     All
representations and warranties made by the Borrower contained in the Credit
Agreement and in the other Credit Documents are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties are true and correct in all material
respects as of such earlier date); and

 

(ii)                                  No
event has occurred and is continuing or would result from the consummation of
the Borrowing contemplated hereby that would constitute a Default or an Event
of Default.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ITC HOLDINGS
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT D

 

[Form of Letter of Credit Request]

 

TO:                            Canadian
Imperial Bank of Commerce

425 Lexington Avenue, 8th Floor

New York, NY  10017

Attention:  Agency Services

Facsimile No.: 212.856.3763

 

Pursuant to
the Revolving Credit Agreement, dated as of March 19, 2004 (as the same may be
amended, modified, supplemented, restated or replaced from time to time, the “Revolving Credit Agreement”; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), among ITC Holdings Corp., a Michigan corporation (the “Borrower”), the Lenders, and Canadian
Imperial Bank of Commerce, as the Administrative Agent, this represents the
Borrower’s request to issue letter(s) of credit as follows:

 

Letter of Credit Request:

 

	
  1.

  	
   

  	
  Date of
  issuance:

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Stated
  Amount of Letter of Credit:

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Beneficiary
  Name:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
  Email:

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Expiration
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Proposed
  Terms or Verbatim Text attached:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
											

 

 

The undersigned officer, to the best of his or her knowledge, in his or
her capacity as an officer of the Borrower certifies that:

 

(i.)                                  All
representations and warranties made by the Borrower contained in the Revolving
Credit Agreement and in the other Credit Documents are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties are true and correct in all material
respects as of such earlier date); and

 

(ii.)                               No
event has occurred and is continuing or would result from the consummation of
the Borrowing contemplated hereby that would constitute a Default or an Event
of Default.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ITC
  HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT E

 

[Form
of New Lender Supplement]

 

Reference is made
to the REVOLVING CREDIT AGREEMENT, dated as of
March 19, 2004, among ITC HOLDINGS CORP., a Michigan corporation (the “Borrower”), various financial institutions
and other Persons from time to time parties referred to as lenders (the “Lenders”) and CANADIAN IMPERIAL BANK OF COMMERCE, as
administrative agent (in such capacity, the “Administrative
Agent”). Capitalized terms used and not defined herein have the
respective meanings assigned thereto in the Credit Agreement.

 

Upon execution
and delivery of this New Lender Supplement by the parties hereto as provided in
Section 4.3 of the Credit Agreement and subject to the conditions precedent set
forth in said section, the undersigned hereby becomes a Lender thereunder
having the Revolving Credit Commitments set forth opposite it signature below,
effective as of the date hereof.

 

This New
Lender Supplement shall be construed in accordance with and governed by the law
of the State of New York.  This New
Lender Supplement may be executed by one or more of the parties hereto on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page hereof
by facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.

 

All notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing to such address listed below or as may be hereafter
notified by the respective parties hereto:

 

(a)                                  The
Borrower:

 

ITC Holdings Corp.

1901 South Wagner

Ann Arbor, MI 48103-9715

 

Attention: John Flynn, Esq.

Facsimile No.:

 

with a copy to:

 

Simpson Thacher & Bartlett

425 Lexington Avenue

New York, NY 10017-3954

 

Attention: James Cross

Facsimile No.: (212) 455-2502

 

 

(b)                                 The
Administrative Agent:

 

Canadian Imperial Bank of Commerce

425 Lexington Avenue, 8th Floor

New York, NY 10017

 

Attention: April Varner

Facsimile No.:  (212) 856-3763

 

IN WITNESS WHEREOF, the parties hereto have
caused this New Lender Supplement to be duly executed and delivered by their
proper and duly authorized officers as of this               day
of                  ,
200    .

 

 

	
  Revolving Credit Commitments:

  	
   

  	
   

  
	
   

  	
  Name of Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Accepted and agreed:

  	
   

  
	
  ITC HOLDINGS CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  CANADIAN IMPERIAL BANK OF COMMERCE

  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
							

 

 

EXHIBIT F

 

[Form
of Commitment Increase Supplement]

 

SUPPLEMENT,
dated                                ,
to Revolving Credit Agreement, dated as of March 19, 2004 (as the same may be
amended, modified, supplemented, restated or replaced from time to time, the “Credit
Agreement”; the terms defined therein and not otherwise defined herein being
used herein as therein defined), among ITC Holdings Corp., a Michigan
corporation (the “Borrower”), the Lenders, and Canadian Imperial Bank of
Commerce, as the Administrative Agent.

 

W I T N E S S
E T H :

 

WHEREAS, the
Credit Agreement provides in Section 4.3(d) thereof that any Lender with (when
applicable) the consent of the Borrower may increase the amount of its
Commitment by executing and delivering to the Borrower and the Administrative
Agent a supplement to the Credit Agreement in substantially the form of this
Supplement; and

 

WHEREAS, the
undersigned now desires to increase the amount of its Commitment under the
Credit Agreement;

 

NOW THEREFORE,
the undersigned hereby agrees as follows:

 

1.                                                 The
undersigned agrees, subject to the terms and conditions of the Credit
Agreement, that on the effective date of this Supplement, it shall have its
Commitment increased by $                              ,
thereby making the amount of its Commitment $                                     .

 

2.                                                 Terms
defined in the Credit Agreement shall have their defined meanings when used
herein.

 

 

IN WITNESS WHEREOF, the
undersigned has caused this Supplement to be executed and delivered by a duly
authorized officer on the date first above written.

 

	
   

  	
  [NAME OF
  LENDER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  Accepted this             day
  of

  	
   

  
	
                         ,           .

  	
   

  
	
  ITC HOLDINGS
  CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted this             day
  of

  	
   

  
	
                         ,           .

  	
   

  
	
   

  	
   

  
	
  CANADIAN
  IMPERIAL BANK OF COMMERCE,

  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

70

 

EXHIBIT G

 

[Form of Closing Certificate]

 

See attached.

 

 

EXHIBIT H

 

[Form
of Compliance Certificate]

 

TO:                          The
Lenders and the Administrative Agent

 

The undersigned, an Authorized Officer of ITC Holdings Corp. (the “Borrower”),
in such capacity and not personally, hereby certifies to the best of my
knowledge, information and belief that:

 

1.                                       I
am the duly appointed                                                                                     of
the Borrower named in the Revolving Credit Agreement, dated as of March 19,
2004 (as the same may be amended, modified, supplemented, restated or replaced
from time to time, the “Credit Agreement”),
among ITC Holdings Corp., a Michigan corporation (the “Borrower”), the Lenders, Canadian Imperial
Bank of Commerce, as the Administrative Agent and Credit Suisse First Boston,
Cayman Islands Branch as Documentation Agent and as such I am providing this certificate
for and on behalf of the Borrower pursuant to Section 8.1(c) of the Credit
Agreement. Unless the context otherwise requires, capitalized terms in the
Credit Agreement which appear herein without definitions shall have the
meanings ascribed thereto in the Credit Agreement.

 

2.                                       I
am familiar with and have examined the provisions of the Credit Agreement
including those of Articles 7, 8, 9 and 10 therein and have reviewed and am
familiar with the contents of this certificate.

 

3.                                       Delivered
herewith are the financial statements required to be delivered pursuant to
Section 8.1(a) and (b) of the Credit Agreement.

 

4.                                       No
Default or Event of Default has occurred and is continuing as of the date
hereof [or if any Default or Event of Default does exist, specify the nature
and extent thereof].

 

5.                                       As
of the last day of the Fiscal Quarter ending                          ,
the financial ratio referred to in Section 9.4 of the Credit Agreement is    :
     and was calculated as set forth in Schedule I.

 

Dated this day of                        ,                        .

 

	
   

  	
   

  
	
  [Name and
  Title]

  

 

 

Schedule I

 

Debt to Capitalization Ratio

 

	
  1. Total Debt for the relevant Test Period.

  	
   

  	
  $

  	
   

  	
   

  
	
  2. Total Capitalization for such Test
  Period.

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Total Debt

  	
   

  	
  $

  	
   

  	
   

  
	
  (b)

  	
  Consolidated net shareholders equity of the
  Borrower

  	
   

  	
  $

  	
   

  	
   

  
	
  (c)

  	
  Total Capitalization: The sum of Items 2(a)
  and 2(b)

  	
   

  	
  $

  	
   

  	
   

  
	
  3.

  	
  DEBT TO CAPITALIZATION RATIO: the ratio of
  Item 1 to Item 2

  	
   

  	
        %

  	
   

  
	
  4. Maximum Debt to Capitalization Ratio
  allowed

  	
   

  	
  85%

  	
   

  
	
  5. In compliance

  	
   

  	
  Yes / No

  	
   

  

 

 

Annex 1

 

Indenture

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}]]