Document:

INVESTMENT MANAGEMENT TRUST AGREEMENT 

This Agreement is made as of           , 2008 by and between International Brands Management Group Ltd. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”). 

WHEREAS, the Company’s Registration Statement on Form S-1, as amended, No. 333-147586 (together with any registration statement filed pursuant to Rule 462(b), the “Registration Statement”), for its initial public offering of securities (the “IPO”) has been declared effective as of the date hereof by the Securities and Exchange Commission (the “Effective Date”); and 

WHEREAS, Pali Capital, Inc. is acting as the representative (the “Representative”) to the underwriters in the IPO (collectively, with the Representative, the “Underwriters”); and 

WHEREAS, the Company has completed a private placement of 6,000,000 warrants for an aggregate purchase price of $6,000,000 (the “Private Placement”); and 

WHEREAS, as described in the Registration Statement, and in accordance with the Company’s Certificate of Incorporation, $200,000,000 (inclusive of all discounts and commissions including the Deferred Discount as defined below) of the proceeds of the IPO and the sale of warrants in a private placement simultaneously with the IPO ($229,205,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a trust account for the benefit of the Company and the holders of the Company’s common stock, par value $0.0001 per share, issued in the IPO (the amount to be delivered to the Trustee will be referred to herein as the “Property”; the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public
Stockholders,” and the Public Stockholders and the Company will be referred to together as the “Beneficiaries”); and 

WHEREAS, a portion of the Property consists of $8,700,000 (or $10,005,000 if the Underwriter’s over-allotment option is exercised in full) attributable to the Underwriters’ discount (“Deferred Discount”) which the Underwriters have agreed to deposit in the Trust Account (defined below); and 

WHEREAS, the Company and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property. 

IT IS AGREED: 

1. Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to: 

 

 

(a) Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement, in a segregated trust account(s) (“Trust Account”) established by the Trustee at a branch of JP Morgan Chase Bank, N.A. and at a brokerage institution selected by the Trustee; 

(b) Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein; 

(c) In a timely manner, upon the written instruction of the Company, to invest and reinvest the Property in any “Government Security” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 180 days or less, or in money market funds selected by the Company meeting the conditions specified in paragraphs c(2), c(3) and c(4) under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, as determined by the Company; 

(d) Collect and receive, when due, all principal and income arising from the Property, which income, net of taxes, shall become part of the “Property,” as such term is used herein; 

(e) Notify the Company of all communications received by it with respect to any Property which communications require that notice be given by the Company or action be taken by the Company; 

(f) Supply any necessary information or documents as may be requested by the Company in connection with the Company’s preparation of the tax returns relating to income from the Property in the Trust Account or otherwise; 

(g) Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the Company in writing to do so; 

(h) Render to the Company and to the Representative, and to such other person as the Company may instruct, monthly written statements of the activities of and amounts in the Trust Account reflecting all receipts and disbursements of the Trust Account; 

(i) Until such time as the Trustee shall have disbursed an aggregate amount equal to $2,400,000 to the Company (net of any expenses of the Trustee payable pursuant to Section 3(c) and any income or other tax obligations relating to the income from the Property in the Trust, the amount of such tax obligations as determined by the Company), the Trustee shall, upon the written request of the Company, disburse to the Company, in cash, the amount of any income earned and collected on the Trust Account. Following such time as the Trustee shall have disbursed an amount equal to $2,400,000 to the Company (net of any expenses of the Trustee payable pursuant Section 3(c) and any income or other tax obligations relating to the income from the Property in the Trust, the amount of such tax obligations as determined by the Company), if there is any income or other tax obligation relating to
the income from the Property in the Trust Account as determined by the Company, then, from time to time, at the written instruction of the Company, the Trustee shall promptly to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, liquidate such assets held

 

 

3

 

in the Trust Account as shall be designated by the Company in writing, and disburse to the Company by wire transfer, out of the Property in the Trust Account, the amount indicated by the Company as owing in respect of such income tax obligation; and 

(j) Commence liquidation of the Trust Account promptly only upon receipt of and only in accordance with the terms of a letter (the “Termination Letter”), in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B as the case by be, signed on behalf of the Company by (i) either the Chief Executive Officer or the President and (ii) the Chief Financial Officer, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account only as directed in the Termination Letter and the other documents referred to therein, provided, however, that in the event a Termination Letter has not been received by the 24-month anniversary of the effective date of the Registration Statement (the “Last Date”), the Trust Account shall be liquidated in accordance with the procedures set forth in the
Termination Letter attached hereto as Exhibit B to the stockholders of record on the Last Date. 

The provisions of this Section 1(j) may not be modified, amended or deleted under any circumstances. The Trustee understands and agrees that, except as provided in paragraphs 1(j), and 7(a) hereof, disbursements from the Trust Account shall be made only pursuant to a duly executed Termination Letter, together with the other documents referenced herein. 

2. Limited Distributions Of Income From Trust Account. 

Each of the parties hereto hereby acknowledge and agree that no distributions from the Trust Account shall be permitted except in accordance with Sections 1(i) and 1(j) hereof. 

3. Agreements and Covenants of the Company. The Company hereby agrees and covenants to: 

(a) Give all instructions to the Trustee hereunder in writing, signed by either the Chief Executive Officer, President or Chief Financial Officer of the Company. In addition, except with respect to its duties under Sections 1(i) and 1(j) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction which it in good faith believes to be given by any one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in writing; 

(b) Subject to the provisions of Section 6 hereof, hold the Trustee harmless and indemnify the Trustee from and against, any and all expenses, including reasonable counsel fees and disbursements, or loss suffered by the Trustee in connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any income earned from investment of the Property, except for expenses and losses resulting from the Trustee’s gross negligence or willful misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the

 

 

4

 

commencement of any action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this paragraph, it shall notify the Company in writing of such claim and the nature, basis and amount of such claim to the extent then known (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim, provided, that the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which consent shall not be unreasonably withheld. The Company shall be entitled to participate in such action with its own counsel; 

(c) Pay the Trustee an initial acceptance fee, an annual fee and a transaction processing fee for each disbursement made pursuant to Section 1(i) as set forth on Schedule A hereto, which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property shall not be used to pay such fees and further agreed that said transaction processing fees shall be deducted by the Trustee from the disbursements made to the Company pursuant to Section 1(i). The Company shall pay the Trustee the initial acceptance fee and first year’s annual fee at the consummation of the IPO and shall thereafter pay the annual fee on the anniversary of the Effective Date. The Trustee shall refund to the Company the annual fee (on a pro rata basis) with respect to any period after the liquidation of the Trust Fund. The Company shall not be
responsible for any other fees or charges of the Trustee except as set forth in this Section 3(c) and as may be provided in Section 3(b) hereof (it being expressly understood that the Property shall not be used to make any payments to the Trustee under such Sections); 

(d) Provide the Representative with a copy of any Termination Letter and/or any other correspondence that it issues to the Trustee with respect to any proposed withdrawal from the Trust Account promptly after it receives same; 

(e) Provide to the Trustee any letter of intent, agreement in principle or definitive agreement that is executed prior to ____________, 2010 (the “Business Combination Deadline Date”) in connection with a business combination as described in and contemplated by the Registration Statement (a “Business Combination”) together with a certified copy of a unanimous resolution of the Board of Directors of the Company affirming that such letter of intent, agreement in principle or definitive agreement is in effect; 

(f) In connection with any vote of the Company’s stockholders regarding a Business Combination, provide to the Trustee an affidavit or certificate of a firm regularly engaged in the business of soliciting proxies and tabulating stockholder votes (which firm may be the Trustee) verifying the vote of the Company’s stockholders regarding such Business Combination; and

(g) In connection with any liquidation of the Trust Account, not to direct the Trustee, as paying agent, to make any payment not specifically permitted under this Agreement.

4. Limitations of Liability. The Trustee shall have no responsibility or liability: 

(a) to take any action with respect to the Property, other than as

 

 

5

 

directed in Section 1 hereof and the Trustee shall have no liability to any party except for liability arising out of its own gross negligence or willful misconduct; 

(b) to institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with respect to, any of the Property unless and until it shall have received written instructions from the Company given as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto; 

(c) to change the investment of any Property, other than in compliance with Section 1(c); 

(d) to refund any depreciation in principal of any Property; 

(e) to assume that the authority of any person designated by the Company or the Representative to give instructions hereunder shall not be continuing unless provided otherwise in such designation, or unless the Company or the Representative shall have delivered a written revocation of such authority to the Trustee; 

(f) to the other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, except for its gross negligence or willful misconduct. The Trustee may rely conclusively and shall be protected in acting upon any order, judgment, instruction, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Trustee, in good faith, to be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee signed by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent thereto; 

(g) in respect of the correctness of the information set forth in the Registration Statement or to confirm or assure that any acquisition made by the Company or any other action taken by it is as contemplated by the Registration Statement unless an officer of the Trustee has actual knowledge thereof, written notice of such event is sent to the Trustee or as otherwise required under Section 1(j) hereof; 

(h) Pay any taxes on behalf of the Trust Account (it being expressly understood that, as set forth in Section 1(i), if there is any income tax obligation relating to the income of the Property in the Trust Account, then, at the written instruction of the Company, the Trustee shall disburse to the Company the amount indicated by the Company as owing in respect of such income tax obligation); and 

(i) Verify calculations, qualify or otherwise approve Company requests for distributions pursuant to Section 1(i) or 1(k). 

 

 

6

 

5. Certain Rights of Trustee. 

(a) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or opinion of counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or opinion of counsel. The Trustee may consult with counsel and the advice of such counsel or any opinion of counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 

(b) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 

(c) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Agreement. 

(d) The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Agreement, and it shall not be accountable for the Company’s use of the proceeds from the Trust Account. Notwithstanding the effective date of this Agreement or anything to the contrary contained in this Agreement, the Trustee shall have no liability or responsibility for any act or event relating to this Agreement or the transactions related thereto which occurs prior to the date of this Agreement, and shall have no contractual obligations to the Beneficiaries until the date of this Agreement. 

6. Termination. This Agreement shall terminate as follows: 

(a) If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor trustee. At such time that the Company notifies the Trustee that a successor trustee has been appointed by the Company and has agreed to become subject to the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however, that, in the event that the Company does not locate a successor trustee within ninety days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with the United States District Court for the Southern
District of New York and upon such deposit, the Trustee shall be immune from any liability whatsoever that arises due to any actions or omissions to act by any party after such deposit; or 

(b) At such time that the Trustee has completed the liquidation of the Trust Account in accordance with the provisions of Section 1(j) hereof and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 3(b). 

7. Waiver. 

Notwithstanding anything herein to the contrary, the Trustee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of the Trust

 

 

7

 

Account, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. In the event that the Trustee has a claim against the Company under this Agreement, including, without limitation, under Section 4(b), the Trustee will pursue such claim solely against the Company and not against the Property held in the Trust Account. 

8. Miscellaneous. 

(a) The Company and the Trustee each acknowledge and agree that the Trustee will follow the security procedures set forth below with respect to funds transferred from the Trust Account. Upon receipt of written instructions, the Trustee will confirm such instructions with an Authorized Individual at an Authorized Telephone Number listed on the attached Exhibit C. The Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained access to such information, or of any change in its authorized personnel. In executing funds transfers, the Trustee will rely upon account numbers or other identifying numbers of a beneficiary, beneficiary’s bank or intermediary bank, rather than names. The
Trustee shall not be liable for any loss, liability or expense resulting from any error in an account number or other identifying number, provided it has accurately transmitted the numbers so provided to it. 

(b) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof. It may be executed in one or more counterparts, each of which shall constitute an original, and together shall constitute one and the same instrument. 

(c) This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. The parties hereto may change, waive, amend or modify any provision contained herein that may be defective or inconsistent with any other provision contained herein only upon the written consent of each of the parties hereto; provided, however, that no such change, amendment or modification (other than to correct a typographical or similar technical error) may be made to Sections 1(i), and 1(j) hereof without the consent of 95% of the Public Stockholders, it being the specific intention of the parties hereto that each Public Stockholder is and shall be a third-party beneficiary of this
Section 7(c) with the same right and power to enforce this Section 7(c) as either of the parties hereto. For purposes of this Section 7(c), the “consent of 95% of the Public Stockholders” shall mean receipt by the Trustee of a certificate from an entity certifying that (i) such entity regularly engages in the business of serving as inspector of elections for companies whose securities are publicly traded, and (ii) either (a) 95% of the Public Stockholders of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law, as amended (the “DGCL”), have voted in favor of such amendment or modification or (b) 95% of the Public Stockholders of record as of a record date established in accordance with Section 213(b) of the DGCL has delivered to such entity a signed writing approving such amendment or modification. As to any claim, cross-claim or counterclaim in any way relating to this Agreement,
each party waives the right to trial by jury. 

(d) The parties hereto consent to the jurisdiction and venue of any

 

 

8

 

state or federal court located in the City of New York for purposes of resolving any disputes hereunder. 

(e) Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or by facsimile transmission: 

if to the Trustee, to: 

Continental Stock Transfer & Trust Company

17 Battery Place, 8th Floor 

New York, New York 10004

Attn: Steven G. Nelson

Tel: (212) 845-3270

Fax: (212) 509-5150

if to the Company, to: 

International Brands Management Group Ltd.

25 East 22nd Street

New York, NY 10010

Attn: David Chu, Chief Executive Officer

Tel: (212) 277-6401

Fax: (212) ___-____

with copies to: 

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Attn: Christopher S. Auguste, Esq.

Tel: (212) 715-9100

Fax: (212) 715-8000

in either case with a copy on behalf of the Underwriters to: 

Pali Capital, Inc.

650 Fifth Avenue

New York, NY 10019

Attn: R. Michael Powell

Tel: (212) 259-2071

Fax: (212) 259-2093

 

 

9

 

with a copy to: 
McDermott Will & Emery LLP

340 Madison Avenue

New York, New York 10173-1922

Attn: Joel L. Rubinstein, Esq.

Tel: (212) 547-5336

Fax: (212) 547-5444 

(f) This Agreement may not be assigned by the Trustee without the prior written consent of the Company. 

(g) Each of the Trustee and the Company hereby represents that it has the full right and power and has been duly authorized to enter into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any part of the Property under any circumstance. 

(h) The Trustee hereby consents to the inclusion of Continental Stock Transfer & Trust Company in the Registration Statement and other materials relating to the IPO. 

(i) The Underwriters shall be third party beneficiaries of this Agreement and this Agreement may not be modified or changed without the prior written consent of the Representative. 

[Signature page follows] 

 

 

10

 

IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above. 

 

	
                         
 	
                         
 	
                        CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
       
 	
                         
 	
       
 	
      Name: 
 	
       
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

 

	
                         
 	
                         
 	
                        INTERNATIONAL BRANDS
 MANAGEMENT GROUP LTD.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
       
 	
                         
 	
       
 	
      Name: 
 	
       
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

 

 

EXHIBIT A

[LETTERHEAD OF COMPANY] 

[INSERT DATE] 

Continental Stock Transfer & Trust Company

17 Battery Place

8th Floor

New York, New York 10004

	
                        Attn: [  
 	
                        ]
 

	
                         
 	
                        Re: Trust Account No. [        ] Termination Letter
 

Gentlemen: 

Pursuant to Section 1(j) of the Investment Management Trust Agreement between International Brands Management Group Ltd. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [                      ], 2008 (the “Trust Agreement”), this is to advise you that the Company has entered into an agreement (“Business Agreement”) with [                      ] (the “Target Business”) to consummate a business combination with Target Business (a “Business Combination”) on or about [INSERT DATE]. The Company shall notify you at least 48 hours in advance of the actual date of the consummation of the Business Combination (the “Consummation Date”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Trust Agreement. 

Pursuant to Section 3(e) of the Trust Agreement, we are providing you with [an affidavit] [a certificate] of [                      ], which verifies the vote of the Company’s stockholders in connection with the Business Combination. In accordance with the terms of the Trust Agreement, we hereby authorize you to commence liquidation of the Trust Account to the effect that, on the Consummation Date, all of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct in writing on the Consummation Date. 

On the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated and (ii) the Company and Pali Capital, Inc., as the representative of the underwriters of the Company’s IPO (the “Representative”) shall deliver to you joint written instructions with respect to the transfer of the funds held in the Trust Account including the Deferred Compensation (the “Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the counsel’s letter and the Instruction Letter, in accordance 

 

 

12

 

with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify the Company and the Representative of the same and the Company and the Representative shall jointly direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company or, with respect to the Deferred Discount, to the Underwriters. Upon the distribution of all the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall automatically terminated and cease to have any further force or effect. 

In the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation Date of a new Consummation Date, then, upon the written notice of the Company, the funds held in the Trust Account shall be reinvested as provided in the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice. 

 

	
                         
 	
                         
 	
                        Very truly yours,
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        International Brands Management Group Ltd.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
       
 	
                         
 	
       
 	
      Name: 
 	
       
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

 

 

13

 

EXHIBIT B

[Letterhead of Company]

[Insert date]

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven Nelson & Frank DiPaolo

Re: Trust Account No. ______________Termination Letter

Gentlemen:

Pursuant to Section 1(j) of the Investment Management Trust Agreement between International Brands Management Group Ltd. (“Company”) and Continental Stock Transfer & Trust Company (“Trustee”), dated as of ___________, 2008 (“Trust Agreement”), this is to advise you that the Company has been unable to effect a Business Combination with a Target Company prior to the Business Combination Deadline Date. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

In accordance with the terms of the Trust Agreement, we hereby authorize you, to commence liquidation of the Trust Account as promptly as practicable to stockholders of record on the Business Combination Deadline Date. You will notify the Company in writing as to when all of the funds in the Trust Account will be available for immediate transfer (“Transfer Date”) in accordance with the terms of the Trust Agreement and the Certificate of Incorporation. You shall commence distribution of such funds in accordance with the terms of the Trust Agreement and you shall oversee the distribution of the funds. Upon the distribution of all the funds in the Trust Account, your obligations under the Trust Agreement shall be terminated. 

 

	
                         
 	
                         
 	
                        Very truly yours,
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        International Brands Management Group Ltd.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
       
 	
                         
 	
       
 	
      Name: 
 	
       
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

cc: Pali Capital, Inc.

 

 

14

 

EXHIBIT C

AUTHORIZED INDIVIDUAL(S) AND TELEPHONE NUMBERS 

AUTHORIZED FOR TELEPHONE CALL BACK 

 

	
                        COMPANY:
 	
                        International Brands Management Group Ltd.
 
	
                         
 	
                        25 East 22nd Street
 
	
                         
 	
                        New York, NY 10010
 
	
                         
 	
                        Attn: David Chu, Chief Executive Officer
 
	
                         
 	
                        Tel: (212) 277-6401
 
	
                         
 	
                        Fax: (212) ___-____
 

 

	
                        TRUSTEE:
 	
                        Continental Stock Transfer & Trust Company
 
	
                         
 	
                        17 Battery Place
 
	
                         
 	
                        8th Floor
 
	
                         
 	
                        New York, New York 10004
 
	
                         
 	
                        Attn: Frank A. DiPaolo
 
	
                         
 	
                        Tel: (212) 845-3270
 
	
                         
 	
                        Fax: (212) 509-5150
 
	
                         
 	
                        Email: cstsgn@aol.com
 

 

 

15

 

SCHEDULE A

Schedule of fees pursuant to Section 3(c) of Investment Management Trust Agreement between International Brands Management Group Ltd. and Continental Stock Transfer & Trust Company 

 

	
                        FEE ITEM
 	
                         
 	
                        TIME AND METHOD OF PAYMENT
 	
                         
 	
                        AMOUNT
 
	
                        Initial acceptance fee
 	
                         
 	
                        Initial closing of IPO by wire transfer
 	
                         
 	
      $1,000
 
	
                         
 	
                         
 	
                        First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check
 	
                         
 	
      
 
 $3,000
 
	
                        Transaction processing fee for disbursements to Company under Section 1(i)
 	
                         
 	
                        Deduction by Trustee from disbursement made to Company under Section 1(i)
 	
                         
 	
      
 $250
 

 

	
                         
 	
                         
 	
                        Agreed:
 
	
                         
 	
                         
 	
                         
 
	
                        Dated:           , 2008  
 	
                         
 	
                        International Brands Management Group Ltd.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
       
 	
                         
 	
       
 	
      Name: 
 	
       
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

 

	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        Continental Stock Transfer & Trust Co.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
       
 	
                         
 	
       
 	
      Name: 
 	
       
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

 

 

16exv4w18

 

Exhibit 4.18

EXECUTION COPY

 

ITC HOLDINGS CORP.

to

THE BANK OF NEW YORK TRUST COMPANY, N.A.

(as successor to BNY Midwest Trust Company),

as Trustee

 

Third Supplemental Indenture

Dated as of January 24, 2008

Supplemental to the Indenture

dated as of July 16, 2003

Establishing a series of Securities designated

6.050% Senior Notes due January 31, 2018

 

 

 

     THIRD SUPPLEMENTAL INDENTURE, dated as of January 24, 2008 (herein called the “Third
Supplemental Indenture”), between ITC Holdings Corp., a corporation duly organized and existing
under the laws of the State of Michigan (hereinafter called the “Company”), and The Bank of New
York Trust Company, N.A. (as successor to BNY Midwest Trust Company), as Trustee under the Original
Indenture referred to below (hereinafter called the “Trustee”).

WITNESSETH:

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

     WHEREAS, the Company has heretofore executed and delivered the First Supplemental Indenture on
July 16, 2003 and has issued $267,000,000 aggregate principal amount of 5.25% Senior Notes due July
15, 2013 thereunder;

     WHEREAS, the Company has heretofore executed and delivered the Second Supplemental Indenture
on October 10, 2006 and has issued (i) $255,000,000 aggregate principal amount of 5.875% Senior
Notes due 2016 and (ii) $255,000,000 aggregate principal amount of 6.375% Senior Notes due 2036
thereunder.

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

     WHEREAS, the Company desires to create a series of the Securities in an aggregate principal
amount of $385,000,000 to be designated the “6.050% Senior Notes due 2018,” (herein called the
“Senior Notes”) and all action on the part of the Company necessary to authorize the issuance of
the Senior Notes under the Original Indenture and this Third Supplemental Indenture has been duly
taken; and

     WHEREAS, the Company desires to issue the Senior Notes in accordance with Section 2.3 of this
Third Supplemental Indenture and treat the Senior Notes as a single series of Securities for all
purposes, as amended or supplemented from time to time in accordance with the terms of this Third
Supplemental Indenture and the Original Indenture; and

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

 

 

     NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:

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

ARTICLE ONE

DEFINITIONS

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

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

     Senior Notes has the meaning given to such term in the preamble hereof.

     “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such redemption date, plus 0.35%.

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

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

     “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the Senior
Notes to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities having a maturity
comparable to the remaining term of such Senior Notes.

     “Comparable Treasury Price” means, with respect to any redemption date (i) the average of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal Reserve Bank of New
York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities,” or (ii) if
such release (or any successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer Quotations or (B) if the
Company obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.

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

2

 

     “Depositary” means DTC, together with any Person succeeding thereto by merger, consolidation
or acquisition of all or substantially all of its assets, including substantially all of its
securities payment and transfer operations.

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

     “DTC” means The Depository Trust Company, a New York corporation, having a principal office at
55 Water Street, New York, New York 10041-0099.

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

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

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

     “Initial Purchasers” means Lehman Brothers Inc. and Credit Suisse Securities (USA) LLC.

     “Issue Date” means January 24, 2008, the date on which the Senior Notes are originally issued
under this Third Supplemental Indenture.

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

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

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

     “Reference Treasury Dealer” means each of Lehman Brothers Inc. and Credit Suisse Securities
(USA) LLC, and their respective successors; provided, however, that if any of the foregoing is not
a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the
Company will appoint another Primary Treasury Dealer as a substitute.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Company of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third
business day next preceding such redemption date.

     “Regulation S” means Regulation S promulgated under the Securities Act, as amended.

     “Regulation S Definitive Security” has the meaning given to such term in Section 2.8(g)
hereof.

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

3

 

     “Regulation S Securities” means Securities offered and sold as part of their initial
distribution to persons outside the United States in accordance with Regulation S under the
Securities Act.

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

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

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

     “Revolving Credit Agreement” means the Revolving Credit Agreement, dated as of March 29, 2007,
among ITC Holdings Corp., as the borrower, various financial institutions and other persons from
time to time parties thereto, as the lenders, JPMorgan Chase Bank, N.A. as the administrative
agent, as the same may be further amended, supplemented, refinanced, refunded, replaced or
otherwise modified and in effect from time to time including any successor or replacement agreement
whether by the same or any other agent, lender or group of lenders.

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

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

ARTICLE TWO

TERMS AND ISSUANCE OF THE SENIOR NOTES DUE

     Section 2.1. Issue of Senior Notes. A series of Securities which shall be designated the
6.050% Senior Notes due 2018” shall be executed, authenticated and delivered in accordance with the
provisions of, and shall in all respects be subject to, the terms, conditions and covenants of, the
Original Indenture and this Third Supplemental Indenture (including the form of Senior Notes set
forth hereto as Exhibit A). The aggregate principal amount of Senior Notes which may be
authenticated and delivered under this Third Supplemental Indenture shall not, except as permitted
by the provisions of the Original Indenture, initially exceed $385,000,000; provided that the
Company may from time to time or at any time, without the consent of the Holders of the Senior
Notes, issue additional Senior Notes, which additional Senior Notes shall increase the aggregate
principal amount of, and shall be consolidated and form a single series with, the Senior Notes.

     Section 2.2. Form of Senior Notes; Incorporation of Terms. (a) The Senior Notes issued in
transactions exempt from registration under the Securities Act shall be substantially in the form
of Exhibit A attached hereto. The Senior Notes may have such notations, legends or
endorsements approved as to form by the Company and required, as applicable, by law, stock exchange
or depository rule, agreements to which the Company is subject and/or usage. The terms of the
Senior Notes set forth in Exhibit A are herein incorporated by reference and are part of
the terms of this Third Supplemental Indenture.

4

 

     (b) The Senior Notes will be offered and sold by the Company pursuant to the terms of a
purchase agreement and will be resold initially only to (i) qualified institutional buyers as
defined in Rule 144A under the Securities Act (“QIBs”) in reliance on Rule 144A and (ii) Non-U.S.
Persons in reliance on Regulation S. Each such purchaser of the Senior Notes so initially resold
will be deemed by their acceptance of the Senior Notes to have represented and agreed as follows:
it (A) (i) is a QIB, (ii) is aware that the sale to it is being made in reliance on Rule 144A and
(iii) is acquiring the Senior Notes for its own account or for the account of a QIB or (B) is not a
U.S. person and is purchasing the Senior Notes in an offshore transaction pursuant to Regulation S.

     (c) The Senior Notes offered and sold in reliance on Rule 144A shall be issued, and will only
be available, in the form of one or more Global Securities substantially in the form of
Exhibit A attached hereto, with such applicable legends as are provided for in Sections 2.6
and 2.8 (each, a “Restricted Global Security”) duly executed by the Company and duly authenticated
by the Trustee as herein provided. The Restricted Global Security shall be in definitive, fully
registered form without coupons and be registered in the name of the Depositary or a nominee of the
Depositary and deposited with the Trustee, at its corporate trust office, as custodian for the
Depositary. The aggregate principal amount of any Restricted Global Security may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as provided in Section
2.9 hereof, which adjustments shall be conclusive as to the aggregate principal amount of any such
Global Security.

     (d) The Senior Notes offered and sold outside the United States in reliance on Regulation S
shall be issued, and will only be available, initially in the form of one or more global Securities
substantially in the form of Exhibit A hereto, with such applicable legends as are provided
for in Section 2.6 (each, a “Regulation S Global Security”) duly executed by the Company and duly
authenticated by the Trustee as herein provided. The Regulation S Global Securities shall be in
definitive, fully registered form without coupons and be registered in the name of the Depositary
or a nominee of the Depositary and deposited with the Trustee, at its corporate trust office, as
custodian for the Depositary, for credit initially and during the Distribution Compliance Period to
the respective accounts of beneficial owners of such Securities (or to such other accounts as they
may direct) at Euroclear System S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme
(“Clearstream”). As used herein, the term “Distribution Compliance Period”, with respect to the
Regulation S Global Securities offered and sold in reliance on Regulation S, means the period of 40
consecutive days beginning on and including the later of (i) the day on which the Securities are
first offered to persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the Closing Date. The aggregate principal amount of any Regulation S Global
Security may from time to time be increased or decreased by adjustments made on the records of the
Trustee, as provided in Section 2.9 hereof, which adjustments shall be conclusive as to the
aggregate principal amount of any such Global Security. The Restricted Global Security and
Regulation S Global Security are sometimes collectively referred to herein as the “Global
Securities”.

     (e) Senior Notes issued pursuant to Section 2.8(d) in exchange for interests in a Global
Security shall be issued substantially in the form of Exhibit A attached hereto, in
definitive, fully registered form without interest coupons, but shall not bear the legend for
Global Securities in

5

 

Section 2.8(b) (the “Definitive Securities”). Except as provided herein, owners of beneficial
interests in Global Securities shall not be entitled to physical delivery of Definitive Securities.

     Section 2.3. Execution and Authentication. The Trustee, upon a Company Order and pursuant to
the terms of the Original Indenture and this Third Supplemental Indenture, shall authenticate and
deliver Senior Notes for original issue in an initial aggregate principal amount of $385,000,000.
Such Company Order shall specify the amount of the Senior Notes to be authenticated, the date on
which the original issue of Senior Notes is to be authenticated and the aggregate principal amount
of Senior Notes outstanding on the date of authentication. All of the Senior Notes issued under
this Third Supplemental Indenture shall be treated as a single series for all purposes under the
Original Indenture and this Third Supplemental Indenture, including, without limitation, waivers,
amendments and offers to purchase.

     Section 2.4. Depositary for Global Securities. The Depositary for the Senior Notes issued
under this Third Supplemental Indenture shall be DTC in the City of New York.

     Section 2.5. Place of Payment. The Place of Payment in respect of the Senior Notes will be
at the principal office or agency of the Company in The City of New York, State of New York or at
the office or agency of the Trustee in The City of New York, State of New York, which, at the date
hereof, is located at c/o The Bank of New York, Trust Services Window, 101 Barclay Street, New
York, NY 10286.

     Section 2.6. Legends.

     (a) All Senior Notes issued pursuant to this Third Supplemental Indenture shall be “Restricted
Securities” and shall bear a legend to the following effect (the “Restricted Legend”), except as
permitted by the following paragraphs (b) and (c), as appropriate:

“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS
HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE

6

 

SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS) OR (V) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

Each Definitive Security shall bear the following legend on the face thereof:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

     (b) Upon any sale or transfer of a Restricted Security pursuant to Rule 144 under the
Securities Act, the Depositary shall, subject to approval by the Company and the provisions of
Section 3.5 of the Original Indenture, permit the Holder thereof to request the issuance of a
global Senior Note that does not bear one or more of the legends set forth above and rescind any
restrictions on the transfer of such Restricted Security, if the sale or exchange was made in
reliance on Rule 144 and the Holder certifies to that effect in writing to the Depositary.

     (c) Upon a sale or transfer after the expiration of the Distribution Compliance Period of any
Senior Notes acquired pursuant to Regulation S, all requirements that such Senior Notes bear the
Restricted Legend shall cease to apply (but requirements requiring such Senior Notes to be in
global form and bear the global legend in Section 2.8 shall continue to apply).

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

     All Senior Notes issued upon any registration of transfer or exchange of Senior Notes shall be
valid obligations of the Company, evidencing the same interest therein, and entitled to the same
benefits under the Original Indenture and this Third Supplemental Indenture, as the Senior Notes
surrendered upon such registration of transfer or exchange.

     A Holder may transfer a Senior Note, or request that a Senior Note be exchanged for Senior
Notes in authorized denominations and in an aggregate principal amount equal to the principal
amount of such Senior Note surrendered for exchange of other authorized denominations, by surrender
of such Senior Note to the Trustee with the form of transfer notice thereon duly completed and
executed, and otherwise complying with the terms of the Original Indenture and this Third
Supplemental Indenture, including providing evidence of compliance with any restrictions on
transfer, in form satisfactory to the Company, the Trustee and the Security Registrar. No such
transfer shall be effected until, and such transferee shall succeed to

7

 

the rights of a Holder only upon, final acceptance and registration of the transfer by the
Security Registrar in the Register. Prior to the registration of any transfer of a Senior Note by
a Holder as provided herein, the Company, the Security Registrar, the Paying Agent and the Trustee
shall deem and treat the person in whose name the Security is registered on the Register as the
absolute owner and holder thereof for the purpose of receiving payment of all amounts payable with
respect to such Security and for all other purposes, and none of the Company, the Security
Registrar, the Paying Agent or the Trustee shall be affected by any notice to the contrary.
Furthermore, the Depositary shall, by acceptance of a Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a book-entry system
maintained by the Depositary (or its agent) and that ownership of a beneficial interest in the
Senior Notes shall be required to be reflected in a book-entry. When Senior Notes are presented to
the Security Registrar with a request to register the transfer thereof or to exchange them for
other authorized denominations of a Senior Note in a principal amount equal to the aggregate
principal amount of Senior Notes surrendered for exchange, the Security Registrar shall register
the transfer or make the exchange as requested if its requirements for such transactions are met.

     To permit registrations of transfers and exchanges in accordance with the terms, conditions
and restrictions hereof, the Company shall execute, and the Trustee shall authenticate, Senior
Notes at the Security Registrar’s request. No service charge shall be made to a Holder for any
registration of transfer or exchange of Senior Notes, but the Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Senior Notes. All Senior Notes surrendered for registration of transfer or
exchange shall be cancelled by the Trustee in accordance with its then customary procedures.

     Section 2.8 Book-Entry Provisions for Restricted Global Securities and Regulation S Global
Securities.

     (a) Members of, or participants in, DTC (“Agent Members”) shall have no rights under the
Original Indenture, this Third Supplemental Indenture and the Senior Notes with respect to any
Global Security held on their behalf by DTC, or the Trustee, as its custodian, and DTC may be
treated by the Company, the Trustee and any agent of the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Trustee from giving effect to any written
certification, proxy or other authorization furnished by DTC or shall impair, as between DTC and
its Agent Members, the operation of customary practices governing the exercise of the rights of a
holder of any Security. Upon the issuance of any Global Security, the Security Registrar or its
duly appointed agent shall record DTC as the registered holder of such Global Security.

     (b) Transfers of any Global Security shall be limited to transfers of such Restricted Global
Security or Regulation S Global Security in whole, but not in part, to DTC. Beneficial interests
in the Restricted Global Security and any Regulation S Global Security may be transferred in
accordance with the rules and procedures of DTC and the provisions of Section 2.9. Beneficial
interests in a Restricted Global Security or a Regulation S Global Security shall be delivered to
all beneficial owners thereof in the form of Rule 144A Definitive Securities (“Rule 144A Definitive
Securities”) or Regulation S Definitive Securities

8

 

(“Regulation S Definitive Securities”), as the case may be, if (i) DTC notifies the Trustee
that it is unwilling or unable to continue as depositary for such Restricted Global Security or
Regulation S Global Security, as the case may be, and a successor depositary is not appointed by
the Company within 90 days of such notice and (ii) after the occurrence and during the continuance
of an Event of Default, owners of beneficial interests in a Global Security with a principal amount
aggregating not less than a majority of the outstanding principal amount of the Global Security
advise the Trustee, the Company and DTC through Agent Members in writing that the continuation of a
book-entry system through DTC is no longer in their best interests.

     (d) Any beneficial interest in one of the Global Securities that is transferred to a Person
who takes delivery in the form of an interest in another Global Security will, upon such transfer,
cease to be an interest in such Global Security and become an interest in the other Global Security
and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Security for as long as it
remains such an interest.

     (e) In connection with the transfer of an entire Restricted Global Security or an entire
Regulation S Global Security to the beneficial owners thereof pursuant to paragraph (b) of this
Section 2.8, such Restricted Global Security or Regulation S Global Security, as the case may be,
shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such Restricted Global Security or Regulation S Global Security, as the case
may be, an equal aggregate principal amount of Rule 144A Definitive Securities or Regulation S
Definitive Securities, as the case may be, of authorized denominations. None of the Company, the
Security Registrar, the Paying Agent or the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in relying on, such
registration instructions. Upon the issuance of Rule 144A Definitive Securities or Regulation S
Definitive Securities, as the case may be, the Company and the Trustee shall recognize the Person
in whose name the Rule 144A Definitive Securities or Regulation S Definitive Securities, as the
case may be, are registered in the Register as Holders hereunder.

     (f) Any Rule 144A Definitive Securities or Regulation S Definitive Securities, as the case may
be, delivered in exchange for an interest in the Restricted Global Security pursuant to paragraph
(b) of this Section 2.8 shall, except as otherwise provided by paragraph (d) of Section 2.9, bear
the Restricted Legend.

     (g) Prior to the expiration of the Distribution Compliance Period, any interests in a
Regulation S Global Security issued in definitive, fully registered form without interest coupons
(“Regulation S Definitive Security”) delivered in exchange for an interest in a Regulation S Global
Security pursuant to paragraph (b) of this Section 2.8 shall bear the Restricted Legend.

     (h) The registered holder of any Restricted Global Security or Regulation S Global Security
may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is entitled to take under
the Original Indenture or this Third Supplemental Indenture or the Securities.

9

 

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

     Section 2.9 Special Transfer Provisions.

     The following provisions shall also apply to the Senior Notes:

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

     (i) If the Senior Note to be transferred consists of an interest in any Regulation S
Global Security during the Distribution Compliance Period, the Security Registrar shall
register the transfer if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Senior Note stating, or has otherwise advised
the Company, the Trustee and the Security Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Senior Note stating, or has otherwise advised the
Company, the Trustee and the Security Registrar in writing, that it is purchasing the Senior
Note for its own account or an account with respect to which it exercises sole investment
discretion and that it, or the Person on whose behalf it is acting with respect to any such
account, is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration provided by Rule
144A.

     (ii) Upon receipt by the Security Registrar of the documents required by clause (i)
above and instructions given in accordance with DTC’s and the Security Registrar’s
procedures therefor, the Security Registrar shall reflect on its books and records the date
of such transfer and an increase in the principal amount of a Restricted Global Security in
an amount equal to the principal amount of the interests in such Regulation S Global
Security and the Trustee shall decrease the amount of such Regulation S Global Security so
transferred.

     (b) Transfers of Interests in the Regulation S Global Security.

     (i) After the expiration of the Distribution Compliance Period, the Security Registrar
shall register any transfer of interests in any Regulation S Global Security without
requiring any additional certification.

     (ii) Until the expiration of the Distribution Compliance Period, interests in the
Regulation S Global Security may only be sold, pledged or transferred through Euroclear
S.A./N.V. or Clearstream Banking, société anonyme (as indirect participants in the
Depositary) or Agent Members acting for and on behalf of Euroclear and Clearstream only (x)
for interests in a Regulation S Global Security and then only upon certification in form
reasonably satisfactory to the Trustee that interests in such Regulation S Global

10

 

Security are owned by either Non-U.S. Persons or U.S. Persons who purchased such
interests in a transaction that did not require registration under the Securities Act or (y)
for interests in the Restricted Global Security or if the transferor first delivers to the
Trustee a written transfer notice to the effect that the Securities are being transferred to
a person (A) who the transferor reasonably believes to be a QIB; (B) purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of Rule 144A; and
(C) in accordance with all applicable securities laws of the states of the United States and
other jurisdictions.

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

     (i) Prior to the expiration of the Distribution Compliance Period, the Security
Registrar shall register any proposed transfer of a Senior Note to a Non-U.S. Person upon
receipt of a certificate substantially in the form set forth as Exhibit B, hereto
from the proposed transferor.

     (ii) After the expiration of the Distribution Compliance Period, the Security Registrar
shall register any proposed transfer to any Non-U.S. Person if the Senior Note to be
transferred is an interest in a Restricted Global Security, upon receipt of a certificate
substantially in the form of Exhibit B, as applicable, from the proposed transferor.
The Security Registrar shall promptly send a copy of such certificate to the Company.

     (iii) Upon receipt by the Security Registrar of (x) the documents, if any, required by
clause (ii) and (y) instructions in accordance with DTC’s and the Security Registrar’s
procedures, the Security Registrar shall reflect on its books and records the date of such
transfer and a decrease in the principal amount of such Restricted Global Security in an
amount equal to the principal amount of the beneficial interest in such Restricted Global
Security to be transferred, and, upon receipt by the Security Registrar of instructions
given in accordance with DTC’s and the Security Registrar’s procedures, the Security
Registrar shall reflect on its books and records the date and an increase in the principal
amount of the Regulation S Global Security in an amount equal to the principal amount of the
Restricted Global Security to be transferred, and the Trustee shall decrease the amount of
such Restricted Global Security.

     (d) Restricted Legend. Upon the transfer, exchange or replacement of Senior Notes not
bearing the Restricted Legend, the Security Registrar shall deliver Senior Notes that do not bear
the Restricted Legend. Upon the transfer, exchange or replacement of Senior Notes bearing the
Restricted Legend, the Security Registrar shall deliver only Senior Notes that bear the Restricted
Legend unless either (i) the circumstances contemplated by paragraph (c)(ii) of this Section 2.9
exist or (ii) there is delivered to the Security Registrar an opinion of counsel to the effect that
neither such legend nor the related restrictions on transfer are required in order to maintain
compliance with the provisions of the Securities Act.

     (e) General. By acceptance of any Senior Note bearing the Restricted Legend, each
Holder of such Senior Note acknowledges the restrictions on transfer of such Senior Note set forth
in such Restricted Legend and otherwise in this Third Supplemental Indenture and agrees

11

 

that it will transfer such Senior Note only as provided in such Restricted Legend and
otherwise in this Third Supplemental Indenture. In connection with any transfer of Senior Notes,
each Holder agrees by its acceptance of the Senior Notes to furnish the Security Registrar or the
Trustee such certifications, legal opinions or other information as either of them may reasonably
require to confirm that such transfer is being made pursuant to an exemption from, or a transaction
not subject to, the registration requirements of the Securities Act and in accordance with the
terms and provisions of this Article 2; provided that the Security Registrar shall not be
required to determine the sufficiency of any such certifications, legal opinions or other
information.

     Until such time as no Senior Notes remain Outstanding, the Security Registrar shall retain
copies of all letters, notices and other written communications received pursuant to Section 2.8 or
this Section 2.9. The Trustee, if not the Security Registrar at such time, shall have the right to
inspect and make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Security Registrar.

     In the event that any Global Security or any portion thereof is exchanged for Definitive
Securities, such other Definitive Securities may be exchanged (by transfer or otherwise) for
Definitive Securities or for beneficial interests in a Global Security (if any is then outstanding)
only in accordance with procedures substantially consistent with this Article Two (including any
certification requirements) and applicable procedures adopted by the Company and the Trustee.

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

     The Company may issue some or all of the Securities in temporary or permanent global form.
The Company may issue a Global Security only to the Depositary. A Depositary may transfer a Global
Security only to its nominee or to a successor Depositary. A Global Security shall represent the
amount of Senior Notes specified in the Global Security. A Global Security may have variations
that the Depositary requires or that the Company considers appropriate for such a security.

     Beneficial owners of part or all of a Global Security are subject to the rules of the
Depository as in effect from time to time.

     The Company, the Trustee and their agents shall not be responsible for any acts or omissions
of a Depositary, for any Depositary records of beneficial ownership interests or for any
transactions between or among the Depositary, Agent Members and beneficial owners.

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

12

 

to replace Senior Notes that it has paid or which have been delivered to the Trustee for
cancellation.

     Section 2.10. Events of Default. The provisions of Section 5.1 of the Original Indenture
shall be applicable to the Senior Notes; provided, however, that clause (d) of the Section 5.1
shall now read as follows: “(d) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default in whose performance
or whose breach is elsewhere in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of series of Securities other than that series),
and continuance of such default in the performance or breach for a period of 60 consecutive days
(or 90 days in the case of the covenant described under Section 10.11) after there has been given,
by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a “Notice of Default” hereunder.”

     Section 2.11. Consolidation, Merger, Conveyance, Transfer of Lease. The provisions of Section
8.1 of the Original Indenture shall be applicable to the Senior Notes; provided, however, that the
term “Corporation” as used in clause (a) of Section 8.1 will be replaced with the term “Person” and
such term will have the same meaning ascribed to it in the Original Indenture.

     Section 2.12. Restrictions on Liens. The covenant provided by Section 10.9 of the Original
Indenture shall be applicable to the Senior Notes; provided, however, that (i) the term of
“$100,000,000” set forth in paragraph (b) of Section 10.9 shall be replaced with “$125,000,000” and
(ii) the following Liens shall not be restricted by such covenant: “Liens to secure Indebtedness of
any Subsidiary under any mortgage bond indenture similar to the First Mortgage Indenture on the
assets of any Subsidiary of the same type that constitute collateral under the First Mortgage
Indenture.”

     Section 2.13. Restrictions on Sale and Leaseback Transactions. The covenant provided by
Section 10.10 of the Original Indenture shall be applicable to the Senior Notes.

     Section 2.14. Limitation on Incurrence of Debt. The covenant provided by Section 10.8 of the
Original Indenture shall not be applicable to the Senior Notes.

     Section 2.15. Reports. The covenant provided by Section 10.11 of the Original Indenture shall
be applicable to the Senior Notes; provided, however, that the phrase “provided, that at such time
as the Company is required to file reports on Form 8-K, the Company shall mail to the Trustee and
the Holders, within the time periods specified in the Commission’s rules and regulations” shall now
read “provided, that at such time as the Company is required to file reports on Form 8-K, the
Company shall mail to the Trustee and the Holders or post on the Company’s website, within the time
periods specified in the Commission’s rules and regulations”.

     Section 2.16. Defeasance and Covenant Defeasance. The provisions of Section 13.4 of the
Original Indenture shall be applicable to the Senior Notes; provided, however, that clause (c)
shall now read as follows: “In the event of an election to have Section 13.3 apply to any

13

 

Securities or any series of Securities, as the case may be, the Company shall have delivered
to the Trustee an Opinion of Counsel, subject to customary assumptions and exceptions, to the
effect that the Holders of such Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance were not to occur.”

ARTICLE THREE

REDEMPTION

     The Senior Notes may be redeemed, in accordance with the procedures set forth in the Original
Indenture, on not less than 30 nor more than 60 days’ notice given as provided in the Original
Indenture, as a whole or in part, at any time at the option of the Company, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Senior Notes being redeemed and
(ii) as determined by an Independent Investment Banker, the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not including any portion of such
payments of interest accrued as of the redemption date) discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, accrued and unpaid interest thereon to, but excluding, the
redemption date (the “Make-Whole Price”); provided, however, that installments of interest on the
Senior Notes that are due and payable on an interest payment date falling on or prior to the
relevant redemption date will be payable to the holders of such Senior Notes, registered as such at
the close of business on the relevant record date according to the terms and provisions of the
Indenture.

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

     If less than all of the Senior Notes are to be redeemed, the Senior Notes will be redeemed,
pro rata by the Trustee or by such method of selection as the Trustee shall deem fair and
appropriate and which may, in any case, provide for the selection for redemption of Senior Notes
and portions of Senior Notes in amounts of $2,000 or any integral multiples of $1,000 in excess
thereof from the outstanding Senior Notes, in accordance with Section 11.3 of the Original
Indenture.

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

ARTICLE FOUR

MISCELLANEOUS

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

14

 

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

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

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

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

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

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

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

15

 

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

	 	 	 	 	 
	 	ITC HOLDINGS CORP.

 	 
	 	By  	/s/ Daniel J. Oginsky
 	 
	 	 	Name:  	Daniel J. Oginsky 	 
	 	 	Title:  	Vice President and General Counsel 	 
	 
	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee

 	 
	 	By  	/s/ Roxanne Ellwanger
 	 
	 	 	Name:  	Roxanne Ellwanger 	 
	 	 	Title:  	Assistant Vice President 	 
	 

 

 

	 	 	 	 	 	 	 
	STATE OF MICHIGAN

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.:
	COUNTY OF OAKLAND

	 	 	)	 	 	 

     On this 24 day of January 2008, before me personally appeared Daniel J.
Oginsky, to me known to be Vice President and General Counsel of ITC Holdings Corp.,
one of the corporations that executed the within and foregoing instrument, and acknowledged said
instrument to be the free and voluntary act and deed of said Corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said instrument and that
the seal affixed, if any, is the corporate seal of said Corporation.

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

/s/ Janet Reed               

                                        , Notary Public

                                         County, Michigan

My Commission expires: August 26, 2008

Acting in the County of: Oakland

 

 

	 	 	 	 	 	 	 
	STATE OF ILLINOIS

	 	 	)

)	 	 	
 ss.:
	COUNTY OF COOK

	 	 	)	 	 	 

     On the 24th day of January in the year 2008 before me, the undersigned, personally
appeared Roxanne Ellwanger, Assistant Vice President of The Bank of New York Trust Company,
N.A., personally known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to me that she
executed the same in her capacity, and that by her signature on the instrument, the individual, or
the person upon behalf of which the individual acted, executed the instrument.

	 	 	 
	/s/ Danita George
 

Print Name: Danita George

	 	 

Notary Public, State of Illinois

Commission expires: May 12, 2009

 

 

EXHIBIT A

[FORM OF FACE OF 6.050% SENIOR NOTES DUE 2018]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON MADE TO
CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]*

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF
THE COMPANY SO REQUESTS) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN

 

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

A-1

 

ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]**

[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR AND TRANSFER
AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]***

ITC
HOLDINGS CORP.

6.050% SENIOR NOTES DUE 2018

$                                         

	 	 	 
	No.                     

	 	CUSIP                                         

ISIN                                         

     ITC HOLDINGS CORP., a corporation duly organized and existing under the laws of the State of
Michigan (herein called the “Company,” which term includes any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to                          or
registered assigns, the principal sum of $                                         on January 31, 2018 and to pay interest
thereon from January 24, 2008, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually in arrears on January 31 and July 31 in each year,
commencing July 31,2008, at the rate per annum provided in the title hereof, until the principal
hereof is paid or made available for payment, and, subject to the terms of the Indenture
hereinafter referenced, at the rate of 6.050% per annum on any overdue principal and premium and
(to the extent that the payment of such interest shall be legally enforceable) on any overdue
installment of interest, from the dates such amounts are due until they are paid or made available
for payment, and such interest shall be payable on demand. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security is registered at the close of business on the
Regular Record Date for such interest, which shall be the January 15 or July 15 (whether or not a
Business Day), as the case may be, immediately preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose name this Security
is registered at the close of business on a Special Record Date for the

 

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

A-2

 

payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given
as provided in said Indenture. Interest will be computed on the basis of a 360-day year of twelve
30-day months.

     Payment of the principal of (and premium, if any) and interest on the Securities of this
series will be made at the office or agency of the Company maintained for that purpose in the City
of New York, State of New York or at the office or place of business of the Trustee or its
successor in trust under the Original Indenture hereinafter referenced, in such coin or currency of
the United States of America as at the time of payment is legal tender for the payment of public
and private debts; [if this Security is not a Global Security, insert — provided, however, that at
the option of the Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register] [if this Security is
a Global Security, insert—provided, however, that except with respect to payments of principal,
payments shall be made by wire transfer of immediately available funds with respect to payments in
respect of Global Securities if the Holders thereof have provided wire instructions in respect of
such payments to the Company or the Paying Agent]. Holders must surrender Securities to a Paying
Agent to collect principal payments.

     Reference is hereby made to the further provisions of the Securities of this series set forth
on the reverse hereof, which further provisions shall for all purposes have the same effect as if
set forth at this place.

     Unless the certificate of authentication hereon has been manually executed by or on behalf of
the Trustee under the Indenture (hereinafter referenced), this Security shall not be entitled to
any benefits under the Indenture (hereinafter referenced), or be valid or obligatory for any
purpose.

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

	 	 	 	 	 	 	 
	Dated:	 	ITC HOLDINGS CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	BY	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

A-3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 	 	 
	Date:	 	The Bank of New York Trust Company, N.A.,
as Trustee,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Authorized Signatory
	 	 

A-4

 

[FORM OF REVERSE OF 6.050% SENIOR NOTES DUE 2018]

          This Security is one of the duly authorized issue of debentures, notes, bonds or other
evidences of indebtedness of the Company (herein sometimes referred to as the “Securities”), of the
series hereinafter specified, all issued or to be issued under and pursuant to the Original
Indenture dated as of July 16, 2003, as supplemented by the First Supplemental Indenture, dated as
of July 16, 2003, the Second Supplemental Indenture, dated as of October 10, 2006 and the Third
Supplemental Indenture, dated as of January 24, 2008 (as so supplemented, the “Indenture”), duly
executed and delivered by the Company and The Bank of New York Trust Company, N.A., as Trustee
(herein called the “Trustee”, which term includes any successor trustee under the Indenture), to
which Indenture and any other indentures supplemental thereto reference is hereby made for a
statement of the respective rights, obligations, duties and immunities thereunder of the Trustee
and any agent of the Trustee, any Paying Agent, the Company and the Holders of the Securities of
this series and of the terms upon which the Securities of this series are issued and are to be
authenticated and delivered. This Security is one of the series designated on the face hereof,
which series is initially limited in aggregate principal amount to $385,000,000; provided that the
Company may from time to time or at any time, without the consent of the Holders of the Securities
of this series, issue additional Senior Notes, which additional Senior Notes shall increase the
aggregate principal amount of, and shall be consolidated and form a single series with, the Senior
Notes. By the terms of the Indenture, additional Securities of other separate series, which may
vary as to date, aggregate principal amount, Stated Maturity, interest rate or method of
calculating the interest rate, redemption provisions and in other respects as therein provided, may
be issued in an unlimited amount.

          This Senior Note may be redeemed in accordance with the procedures set forth in the Indenture
on not less than 30 nor more than 60 days’ notice given as provided in the Indenture, as a whole or
in part, at any time at the option of the Company, at a redemption price equal to the greater of
(i) 100% of the principal amount of the Senior Notes being redeemed and (ii) as determined by an
Independent Investment Banker, the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of interest accrued as
of the redemption date) discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case,
accrued and unpaid interest thereon to, but excluding, the redemption date (the “Make-Whole
Price”); provided, however, that installments of interest on the Senior Notes that are due and
payable on an interest payment date falling on or prior to the relevant redemption date will be
payable to the holders of such Senior Notes, registered as such at the close of business on the
relevant record date according to the terms and provisions of the Indenture.

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

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

A-5

 

          If less than all of the Securities of this series are to be redeemed, the Securities of this
series will be redeemed on a pro rata basis by the Trustee from the Outstanding Securities of this
series or by such method of selection as the Trustee shall deem fair and appropriate and which may,
in any case, provide for selection for redemption of the Securities of this series and portions of
such Securities in amounts of $2,000 or any integral multiple of $1,000 in excess thereof from the
Outstanding Securities.

          The Securities are subject to the further redemption provisions and procedures set forth in
the Indenture.

          The Indenture contains provisions for defeasance of (a) the entire indebtedness of the
Securities of this series and (b) certain restrictive covenants upon compliance by the Company
with certain conditions set forth in the Indenture.

          If an Event of Default with respect to the Securities of this series shall occur and be
continuing, the unpaid principal of the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture.

          The Indenture permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the Company and the rights of the Holders
of the Securities of each series to be affected under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding of all series to be affected (voting as a class). The
Indenture also contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent
or waiver by the Holder of the Securities of this series shall be conclusive and binding upon
such Holder and upon all future Holders of the Securities of this series and of any Securities of
this series issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon the Securities of this
series.

          No reference herein to the Indenture and no provision of the Securities of this series or of
the Indenture shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of (and premium, if any) and interest, if any, on the
Securities of this series at the times, place and rate, and in the coin or currency, herein
prescribed.

          As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of the Securities of this series is registrable in the Security Register, upon surrender
of the Securities of this series for registration of transfer at the office or agency of the
Company in any place where the principal of (and premium, if any) and interest, if any, on the
Securities of this series are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or transferees.

A-6

 

          The Securities of this series are issuable only in registered form without coupons in
minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, the Securities of this
series are exchangeable for a like aggregate principal amount of the Securities of this series
and of like tenor of a different authorized denomination, as requested by the Holder surrendering
the same.

          No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

          Prior to due presentment of the Securities of this series for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose
name the Securities of this series are registered as the owner hereof for all purposes, whether
or not the Securities of this series be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.

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

          Each Holder, by accepting a Security, agrees to be bound by all the terms and provisions of
the Indenture, as the same may be amended from time to time in accordance with its terms.

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

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

A-7

 

FORM OF TRANSFER NOTICE

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

Insert Taxpayer Identification No.

                                        

                                        

please print or typewrite name and address including zip code of assignee

                                        

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

                                        

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

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL SECURITIES,

EXCEPT REGULATION S GLOBAL SECURITIES AND

REGULATION S DEFINITIVE SECURITIES]

          In connection with any transfer of this Certificate occurring prior to the date that is the
earlier of the date of an effective Registration Statement or the date on which the Security is no
longer considered a “restricted security” under Rule 144 of the Securities Act of 1933, the
undersigned confirms that without utilizing any general solicitation or general advertising that:

[Check One]

[___] (a) the Securities are being transferred to a person whom we reasonably believe is a
“qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) (a
“QIB”) that purchases for its own account or for the account of one or more QIBs to whom notice has
been given that the resale, pledge or transfer is being made in reliance on Rule 144A under the
Securities Act;

or

[    ] (b) this Security is being transferred other than in accordance with (a) above and
documents are being furnished that comply with the conditions of transfer set forth in this
Security and the Indenture.

A-8

 

If neither of the foregoing boxes is checked, the Security Registrar shall not be obligated to
register this Security in the name of any Person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Section 2.9 of the Third
Supplemental Indenture shall have been satisfied.

	 	 	 
	Date:[_____, ___]

	 	 [Name of
Transferor]              
	 
	 	 
	 

	 	By:                                         
	 
	 	 
	 

	 	NOTE: The signature must correspond with the name as written
upon the face of the within-mentioned instrument in every
particular, without alteration or any change whatsoever.

Signature Guarantee:                                         

SIGNATURE GUARANTEE

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

A-9

 

EXHIBIT B

[Form of Regulation S Transfer Certificate]

[Date]

ITC Holdings Corp. (the “Company”)

39500 Orchard Hill Place, Suite 200

Novi, Michigan, 48375

Attention: General Counsel

The Bank of New York Trust Company, N.A. (the “Trustee”)

2 N. LaSalle Street, Suite 1020

Chicago, Illinois 60602

Attention: Global Corporate Trust

Ladies and Gentlemen:

          In
connection with our proposed transfer of $______ aggregate principal amount of Senior
Notes (the “Notes”) of the Company, we confirm that:

	 	(a)	 	the offer of the Notes was not made to a person in the United States;
	 
	 	(b)	 	either (i) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed that
the transferee was outside the United States or (ii) the transaction was executed in,
on or through the facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been pre-arranged
with a buyer in the United States;
	 
	 	(c)	 	no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as
applicable; and
	 
	 	(d)	 	the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

          In addition, if the sale is made during the Distribution Compliance Period and the provisions
of Rule 903(b)(2) or Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such
sale has been made in accordance with the applicable provisions of Rule 903(b)(2) or Rule
904(b)(1), as the case may be.

B-1

 

          The Company and the Trustee are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.

Very truly yours,

[Name of Transferor]

By:                                         

      Authorized Signature

B-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]