Document:

Exhibit
4.7

 

EXECUTION
COPY

 

 

 

SECOND SUPPLEMENTAL
INDENTURE

 

INTERNATIONAL
TRANSMISSION COMPANY

 

TO

 

BNY MIDWEST TRUST COMPANY

Trustee

 

 

Dated as of July 15,
2003

 

 

Supplementing the First
Mortgage and Deed of Trust

 

Dated as of July 15,
2003

 

THIS INSTRUMENT CONTAINS
AFTER-ACQUIRED PROPERTY PROVISIONS

 

Establishing a series of
Securities designated First Mortgage Bonds, Series B

 

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE ONE  DEFINITIONS AND OTHER PROVISIONS OF GENERAL
  APPLICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 101.
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 102.
  Corporate Trust Office

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO  TITLE, FORM AND TERMS OF THE SERIES B BONDS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 201.
  Title of the Series B Bonds

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 202.
  Form and Terms of the Series B Bonds

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 203.
  Execution and Authentication

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 204.
  Place of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 205. Legends.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 206.
  Restrictions on Transfer and Exchange of Series B Bonds.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 207.
  Special Transfer Provisions.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR  NET EARNINGS CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE  LIEN

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX  MISCELLANEOUS PROVISIONS

  	
   

  

 

i

 

 

SECOND SUPPLEMENTAL INDENTURE, dated as of July 15,
2003, between International Transmission Company, a corporation organized and
existing under the laws of the State of Michigan (herein called the “Company”), having its principal office at
1901 South Wagner, Ann Arbor, MI 48103 and BNY MIDWEST TRUST COMPANY, a
corporation duly organized and existing under the laws of the State of
Illinois, as Trustee (herein called the “Trustee”),
the office of the Trustee at which on the date hereof its corporate trust
business is principally administered being 2 N. LaSalle Street, Suite 1020,
Chicago, Illinois 60630.

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company has heretofore executed and delivered
to the Trustee a First Mortgage and Deed of Trust dated as of July 15,
2003 (the “Original Indenture”)
providing for the issuance by the Company from time to time of its bonds, notes
and other evidence of indebtedness to be issued in one or more series (in the
Original Indenture and herein called the “Securities”)
and to provide security for the payment of the principal of and premium, if
any, and interest, if any, on the Securities; and

 

WHEREAS, the Company has heretofore executed and
delivered to the Trustee a First Supplemental Indenture dated as of July 15,
2003 to the Original Indenture providing for the issuance by the Company of
$185,000,000 4.45% First Mortgage Bonds, Series A due 2013; and

 

WHEREAS, the Company, in the exercise of the power and
authority conferred upon and reserved to it under the provisions of the
Original Indenture and pursuant to appropriate resolutions of the Board of
Directors, has duly determined to make, execute and deliver to the Trustee this
Second Supplemental Indenture (the “Second
Supplemental Indenture”) to the
Original Indenture as permitted by Sections 2.01, 3.01, 4.01, 4.02 and 14.01 of
the Original Indenture in order to establish the form or terms of, and to
provide for the creation and issuance of, a series of Securities to be
designated and in such initial aggregate principal amount as further set out in
Section 202 hereof; and

 

WHEREAS, all things necessary to make the Securities
of the second Series, when executed by the Company and authenticated and
delivered by the Trustee or any Authenticating Agent and issued upon the terms
and subject to the conditions hereinafter and in the Original Indenture set
forth against payment therefore the valid, binding and legal obligations of the
Company and to make this Second Supplemental Indenture a valid, binding and
legal agreement of the Company, have been done;

 

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE
WITNESSETH that, in order to establish the terms of a series of Securities, and
for and in consideration of the premises and of the covenants contained in the
Original Indenture and in this Second Supplemental Indenture and for other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:

 

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

 

Section 101.                                Definitions.  Each capitalized
term that is used herein and is defined in the Original Indenture shall have
the meaning specified in the Original Indenture unless such term is otherwise
defined herein.

 

“Credit Agreement”
means the credit agreement dated as of July 16, 2003 among the Company,
the lenders party thereto, the administrative agent referred to therein
(including and successor administrative agent, the “Adminstrative Agent”) and any other parties thereto from time
to time, as amended from time to time.

 

“Indenture”
means the Original Indenture, as supplemented by this Second Supplemental
Indenture.

 

“Issue Date”
means July 16, 2003, the date on which the Series B Bonds are
originally issued under this Second Supplemental Indenture.

 

“QIB”
means a qualified institutional buyer as defined in Rule 144A under the
Securities Act.

 

“Restricted Legend”
has the meaning given to such term in Section 205(a) hereof.

 

“Restricted
Securities” has the meaning given to such term in Section 205(a)
hereof.

 

“Rule 144A”
means Rule 144A under the Securities Act.

 

“Securities Act”
means the United States Securities Act of 1933, as amended.

 

“Series B Bonds”
has the meaning given to such term in Section 201 hereof.

 

Section 102.                                Corporate
Trust Office.  The definition of Corporate Trust Office in
the Original Indenture is hereby replaced in its entirety with the following:

 

“Corporate Trust
Office” means the office of the Trustee in Chicago, Illinois, at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution and delivery of this
Indenture, as originally executed and delivered, is located at 2 N. LaSalle
Street, Suite 1020, Chicago, Illinois 60630, Attention: Corporate Trust
Administration.

 

2

 

ARTICLE TWO

 

TITLE, FORM AND TERMS OF THE
SERIES B BONDS

 

Section 201.                                Title
of the Series B Bonds.  This Second Supplemental Indenture hereby
creates a series of Securities designated as the “First Mortgage Bonds, Series
B, due February 28, 2006” of the Company (the “Series B Bonds”).

 

Section 202.                                Form
and Terms of the Series B Bonds.  For purposes of the Original Indenture, the
Series B Bonds shall constitute a single series of Securities and may be issued
in an unlimited aggregate principal amount, although the initial issuance of
Series B Bonds shall be in the principal amount of $15,000,000 issued hereunder
on the Issue Date.  In accordance with Sections 2.01 and 3.01 of the
Original Indenture, this Second Supplemental Indenture hereby provides that the
Series B Bonds (x) shall be payable
in such amounts and in the manner as set forth therein (the form of which is
substantially as set forth in Exhibit A attached hereto) and in the
Original Indenture at the rates specified in the Series B Bonds, (y) and shall
have the form and such other terms as set forth in this Second Supplemental
Indenture, the Series B Bonds and the Original Indenture (except to the extent
specifically provided for in this Second Supplemental Indenture or in the
Series B Bonds).

 

(a)  The Series B Bonds shall be substantially in
the form of Exhibit A attached hereto.  The Series
B Bonds 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 Series B Bonds, substantially as set forth in Exhibit A
attached hereto, are herein incorporated by reference and are part of the terms
of this Second Supplemental Indenture.

 

(b)  Series B
Bonds will initially be issued to the Administrative Agent under the Credit
Agreement to secure payment when due of all obligations of the Company under
the Credit Agreement in a transaction exempt from registration under the
Securities Act.  Series B Bonds will not
be transferable except to a successor Administrative Agent under the Credit Agreement.  Series B Bonds shall be issued substantially
in the form of Exhibit A attached hereto in definitive, fully registered
form without coupons duly executed by the Company and duly authenticated by the
Trustee as herein provided.

 

(c) The Trustee may conclusively presume that the
obligations of the Company to pay the principal of and interest on the Series B
Bonds shall have been fully satisfied and discharged unless and until it shall
have received a written notice from the Administrative Agent, signed by an
authorized officer of the Administrative Agent, stating that the payment of
principal of or interest on the Series B Bonds has not been fully paid when due
and specifying the amount of the funds required to make such payment.

 

Section 203.                                Execution
and Authentication.  The Trustee, upon a Company Order and
pursuant to the terms of the Original Indenture and this Second Supplemental
Indenture, shall authenticate and deliver Series B Bonds for original issue in
an initial aggregate principal amount of $15,000,000.  Such Company Order shall specify the amount
of the Series B Bonds to be authenticated, the date on which the original issue
of Series B Bonds is to be authenticated and

 

3

 

the aggregate principal amount of
Series B Bonds outstanding on the date of authentication.  All of the Series B Bonds issued under the
Indenture shall be treated as a single series for all purposes under the
Indenture, including, without limitation, waivers, amendments, and offers to
purchase.

 

Section 204.                                Place of Payment.  The Place of Payment in respect of the Series
B Bonds will be at the principal office or agency of the Company in The City of
New York, State of New York or at the office or agency of the Trustee in The
City of New York, State of New York, which, at the date hereof, is located at
101 Barclay Street, New York, New York 10286.

 

Section 205.                                Legends.

 

(a)                                  All
Series B Bonds issued pursuant to this Second Supplemental Indenture shall be “Restricted Securities” and shall bear
legends to the following effect (the “Restricted
Legend”) except as permitted by the following paragraph (b), as
appropriate:

 

“THIS SECURITY IS
NOT TRANSFERABLE EXCEPT TO A SUCCESSOR ADMINISTRATIVE AGENT UNDER THE CREDIT
AGREEMENT DATED AS OF JULY 16, 2003 AMONG INTERNATIONAL TRANSMISSION
COMPANY, THE LENDERS PARTY THERETO, THE ADMINISTRATIVE AGENT REFERRED TO
THEREIN AND THE OTHER PARTIES THERETO FROM TIME TO TIME, AS AMENDED FROM TIME
TO TIME.

 

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) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES OR (II) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
AND (II) 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.

 

IN CONNECTION WITH
ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE

 

4

 

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, subject to approval by the Company and the provisions of Section 3.05
of the Original Indenture, a Holder may request the issuance of a Series B Bond
that does not bear one or more of the legends set forth in clause (a) 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 Company, the Trustee and the Security
Registrar; provided, however, that notwithstanding anything to the contrary
herein, the first legend set forth under clause (a) above shall not be removed
in any case.

 

Section 206.                                Restrictions
on Transfer and Exchange of Series B Bonds.

 

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

 

A Holder may transfer a Series B Bond, or request that
a Series B Bond be exchanged for Series B Bonds in authorized denominations and
in an aggregate principal amount equal to the principal amount of such Series B
Bond surrendered for exchange of other authorized denominations, by surrender
of such Series B Bonds 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 Second Supplemental Indenture, including providing
evidence of compliance with any restrictions on transfer, in form satisfactory
to the Company, the Trustee and the Security Registrar.  No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Security Registrar in the
Security Register.  Prior to the
registration of any transfer of a Series B Bond 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 Series B Bond is registered on the
Security Register as the absolute owner and holder thereof for the purpose of
receiving payment of all amounts payable with respect to such Series B Bond 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.  When Series B Bonds are
presented to the Security Registrar with a request to register the transfer
thereof or to exchange them for other authorized denominations of a Series B
Bond in a principal amount equal to the aggregate principal amount of Series B
Bonds 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, Series B Bonds at the
Security Registrar’s request.  No service
charge shall be made to a Holder for any registration of transfer or exchange
of Series B Bonds, 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 Series B Bonds. 
All Series B Bonds surrendered for

 

5

 

registration
of transfer or exchange shall be canceled by the Trustee in accordance with its
then customary procedures.

 

Section 207.                                Special
Transfer Provisions.

 

The following provisions shall also apply to the
Series B Bonds:

 

(a)                                  Restricted
Legend.  Upon the transfer, exchange
or replacement of Series B Bonds not bearing the Restricted Legend, the
Security Registrar shall deliver Series B Bonds that do not bear the Restricted
Legend.  Upon the transfer, exchange or
replacement of Series B Bonds bearing the Restricted Legend, the Security
Registrar shall deliver only Series B Bonds that bear the Restricted Legend
unless 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 and the Indenture.

 

(b)                                 General.  By acceptance of any Series B Bond bearing
the Restricted Legend, each Holder of such Series B Bond acknowledges the
restrictions on transfer of such Series B Bond set forth in such Restricted
Legend and otherwise in this Second Supplemental Indenture and agrees that it
will transfer such Series B Bond only as provided in such Restricted Legend and
otherwise in this Second Supplemental Indenture.  In connection with any transfer of Series B
Bonds, each Holder agrees by its acceptance of the Series B Bonds 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 Two; 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 Series B Bonds remain
Outstanding, the Security Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 206 or this Section 207.  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.

 

The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Second Supplemental Indenture or under applicable
law with respect to any transfer or any interest in any Series B Bonds other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if an when required by the
terms of, this Second Supplemental Indenture, and to examine the same to
determine substantial compliance as to form with the requirements thereof.

 

The Company at any time may deliver Series B Bonds to
the Trustee for cancellation.  The Paying
Agent, if not the Trustee, shall forward to the Trustee any Series B Bonds
surrendered to them for payment.  The
Trustee shall cancel all Series B Bonds surrendered for registration or
transfer, exchange, payment or cancellation and shall dispose of cancelled
Series

 

6

 

B Bonds according to its
then customary practices.  The Company
may not issue new Series B Bonds to replace Series B Bonds that it has paid or
which have been delivered to the Trustee for cancellation.

 

ARTICLE THREE

 

REDEMPTION

 

The Series B Bonds may not be redeemed in whole or in
part, provided, that nothing contained in the Series B Bonds or in the
Indenture shall limit the right of the Company to prepay loans under the Credit
Agreement having the effect on the principal amount of the Series B Bonds set
forth on the face thereof.

 

ARTICLE FOUR

 

NET EARNINGS CERTIFICATE

 

Notwithstanding Section 1.04 or any other
provision of the Original Indenture, the Net Earnings Certificate delivered in
connection with the initial issuance of Series B Bonds on the Issue Date
shall be made and signed by an Accountant if it is not signed by an independent
public accountant.

 

ARTICLE FIVE

 

LIEN

 

The Series B Bonds are entitled to the benefit of the
Lien under the Indenture, including, without limitation, the Lien on the
property referred to in Exhibit A to the Original Indenture (which is attached
hereto as Exhibit B).

 

ARTICLE SIX

 

MISCELLANEOUS PROVISIONS

 

The Trustee makes no undertaking or representations in
respect of, and shall not be responsible in any manner whatsoever for and in
respect of, the validity or sufficiency of this Second Supplemental Indenture,
the Series B Bonds or the proper authorization or the due execution hereof by
the company or for or in respect of the recitals and statements contained
herein, all of which recitals and statements are made solely by the
Company.  The Trustee shall not be
accountable for the use or the application by the Company of the Series B Bonds
or the proceeds thereof.

 

The word “termination” in the second paragraph of Section 1.04(b)(ii) of the Original Indenture is hereby replaced with the
word “determination” and the word “relation” in Section 11.01(e) of the
Original Indenture is hereby replaced with the word “relating”.

 

Except as expressly amended and supplemented hereby,
the Original Indenture shall continue in full force and effect in accordance
with the provisions thereof and the Original

 

7

 

Indenture is in all
respects hereby ratified and confirmed. 
This Second Supplemental Indenture and all of its provisions shall be
deemed a part of the Original Indenture in the manner and to the extent herein
and therein provided.

 

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

 

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

 

8

 

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

 

	
   

  	
  INTERNATIONAL TRANSMISSION

    COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Roxane Ellwanger

  
	
   

  	
   

  	
  Title: Assistant Vice President

  

 

 

	
  STATE OF MICHIGAN

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this
               day
of
               2003,
before me personally appeared
                                 ,
to me known to be                                            
of INTERNATIONAL TRANSMISSION COMPANY, one of the corporations that executed
the within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said Corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
Corporation.

 

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

 

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

 

 

	
   

  	
   

  
	
                                  ,
  Notary Public

  
	
                                  County,
  Michigan

  
	
   

  	
   

  
	
  My Commission expires:

  	
   

  	
   

  
					

 

 

	
  STATE OF ILLINOIS

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF COOK

  	
  )

  

 

On the
               day
of July in the year 2003 before me, the undersigned, personally appeared
Roxane Ellwanger, Assistant Vice President of BNY Midwest Trust Company,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that she executed the same in her capacity, and that by her
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
  Print Name: A.
  Hernandez

  
	
   

  
	
  Notary Public,
  State of Illinois

  
	
  Commission
  expires: July 8, 2006

  

 

Drafted by:

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, New York 10005

 

When recorded return to:

BNY Midwest Trust Company

2 N. LaSalle Street, Suite 1020

Chicago, Illinois 60630

Attention: Corporate Trust Administration/Roxane Ellwanger

 

 

EXHIBIT A

 

[FORM OF FACE OF
SERIES B BONDS]

 

THIS SECURITY IS NOT TRANSFERABLE EXCEPT TO A
SUCCESSOR ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT DATED AS OF JULY 16,
2003 AMONG INTERNATIONAL TRANSMISSION COMPANY, THE LENDERS PARTY THERETO, THE
ADMINISTRATIVE AGENT REFERRED TO THEREIN AND THE OTHER PARTIES THERETO FROM
TIME TO TIME, AS AMENDED FROM TIME TO TIME.

 

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT, AS AMENDED 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) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES OR (II) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) AND (II) 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.

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE 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.

 

A-1

 

INTERNATIONAL
TRANSMISSION COMPANY

FIRST MORTGAGE BONDS, SERIES B DUE FEBRUARY 28, 2006

 

$15,000,000

No. 1

 

INTERNATIONAL TRANSMISSION COMPANY, 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 the Administrative Agent under the Credit Agreement
referred to below, or registered assigns, the principal sum of FIFTEEN MILLION
DOLLARS ($15,000,000) on February 28, 2006, or such lesser principal amount
of loans as may be outstanding on said date under the Credit Agreement, and to
pay interest thereon from July 16, 2003, or such later date as the Credit
Agreement shall be executed and delivered, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, in arrears,
at such rate per annum on each Interest Payment Date and at maturity as shall,
except to the extent payment has been made in respect of the Company’s
obligations under the Credit Agreement as discussed below, cause the amount of
interest payable on this Series B Bonds to equal the amount of interest, fees
and other amounts (excluding principal) payable on such Interest Payment Date
under the Credit Agreement.  The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date (as defined below) will, as provided in such Indenture, be paid to the
Person in whose name the Series B Bonds are registered at the close of business
on the Regular Record Date for such interest, fees and other amounts (excluding
principal). 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
be paid to the Person in whose name this Series B Bond is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given as provided
in the Indenture.

 

Payment of the principal of and interest and any other
amounts due on the Series B Bonds 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; provided, however, that at
the option of the Company payments 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 Holders must surrender Series B Bonds to a Paying Agent
to collect principal payments.

 

The Series B Bonds have been issued in connection with
the Credit Agreement dated as of July 16, 2003 (as amended from time to
time, the “Credit Agreement”) among the Company, the lenders party
thereto (the “Lenders”), the administrative agent referred to therein
(including and successor administrative agent, the “Administrative Agent”)
and any other parties thereto from time to time, to secure payment when due of
all obligations of the Company under the Credit Agreement.  Nothing contained in the Series B Bonds shall
be deemed to prejudice the rights and remedies of the Lenders or the
Administrative Agent, or the obligations of the Company, under the Credit
Agreement.

 

A-2

 

For purposes of the term “Interest Payment Date” as
used in the Series B Bonds, interest shall be payable on the same dates as
interest, fees and other amounts are payable from time to time under the Credit
Agreement until the maturity of the Series B Bonds, or until the payment of all
the Company’s obligations and the termination of the Lenders’ commitments under
the Credit Agreement, or if the Company defaults in the payment of principal or
interest due on the Series B Bonds, until such principal and interest shall
have been paid in full and the Company’s obligations with respect thereto
discharged as provided in the Indenture. 
The amount of interest, fees and other amounts payable from time to time
under the Credit Agreement, the bases on which such interest, fees and other
amounts are calculated and the dates on which such interest, fees and amounts
are payable are set forth in the Credit Agreement.

 

A payment of the principal, interest, fees or other
amounts made in respect of the Company’s obligations under the Credit Agreement
shall be deemed a payment in respect of the respective obligations under the
Series B Bonds.  The obligation of the
Company to make payments with respect to principal of and interest on the
Series B Bonds shall be fully satisfied and discharged to the extent that, at
any time that such payment shall be due, the Company shall have paid fully the
then due principal, interest, fees and other amounts, as the case may be, due
under the Credit Agreement.  The Series B
Bonds shall be automatically deemed fully paid and cancelled upon payment in
full of all outstanding amounts owing under the Credit Agreement and
termination of the commitments thereunder.

 

The Trustee may conclusively presume that the
obligation of the Company to pay the principal of an interest on the Series B
Bonds shall have been fully satisfied and discharged unless and until it shall
have received a written notice from the Administrative Agent, signed by an
authorized officer of the Administrative Agent, stating that the payment of
principal and interest of the Series B Bonds has not been fully paid when due
and specifying the amount of the funds required to make such payment.

 

Before any transfer of this Series B Bond by the
registered holder or its legal representative will be recognized or given
effect by the Company or the Trustee, the registered holder shall note the
amounts of all reductions in the Lenders’ commitments under the Credit
Agreement, and shall notify the Company and the Trustee of the name and address
of the transferee and shall afford the Company and the Trustee the opportunity
to verify the notation of such reductions.

 

Reference is hereby made to the further provisions of
the Series B Bonds 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 Series B Bond shall not be entitled to any
benefits under the Indenture (hereinafter referenced), or be valid or obligatory
for any purpose.

 

A-3

 

IN WITNESS WHEREOF, INTERNATIONAL TRANSMISSION COMPANY
has caused this Series B Bond to be duly executed.

 

 

	
  Dated:

  	
  INTERNATIONAL TRANSMISSION

  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-4

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

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

 

	
  Date:

  	
  BNY MIDWEST TRUST COMPANY,

  
	
   

  	
  as Trustee,

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

A-5

 

[FORM OF REVERSE OF
SERIES B BOND]

 

This First Mortgage Bond, Series B is one of the
duly authorized issue of debentures, bonds, notes or other evidences of indebtedness
of the Company (herein sometimes referred to as the “Series B Bonds”), of the series hereinafter specified,
all issued or to be issued under and pursuant to the Original Indenture dated
as of July 15, 2003, as supplemented by the First Supplemental Indenture
and the Second Supplemental Indenture, each dated as of July 15, 2003 (as
so supplemented, the “Indenture”),
duly executed and delivered by the Company and BNY Midwest Trust Company, as
Trustee (herein called the “Trustee,”
which term includes any successor trustee under the Indenture), to which
Indenture and any other indentures supplemental thereto reference is hereby
made for a statement of the respective rights, obligations, duties and
immunities thereunder of the Trustee and any agent of the Trustee, any Paying
Agent, the Company and the Holders of the Series B Bonds and of the terms
upon which the Series B Bonds 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 $15,000,000 issued on the Issue Date; provided
that the Company may from time to time or at any time, without the consent of
the Holders of the Series B Bonds issue additional Securities, including additional
Series B Bonds up to the amount permitted under the Indenture, which additional
Series B Bonds shall, if issued, increase the aggregate principal amount of,
and shall be consolidated and form a single series with, the Series B Bonds
issued on the Issue Date such that the Company’s obligations to pay the
principal amount of all Series B Bonds outstanding at any time shall not exceed
the Company’s obligations to pay the aggregate principal amount of loans
outstanding under the Credit Agreement at such time, and the Company shall not
be obligated to pay interest on the Series B Bonds in excess of the interest,
fees and other amounts (excluding principal) payable by the Company under the
Credit Agreement.  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.

 

The Series B Bonds may not be redeemed in whole or in
part, provided, that nothing contained in this Series B Bond or in the
Indenture shall limit the right of the Company to prepay loans under the Credit
Agreement having the effect on the principal amount of the Series B Bonds set
forth on the face hereof.

 

The Indenture contains provisions for defeasance of
(a) the entire indebtedness of the Series B Bonds 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
Series B Bonds shall occur and be continuing, the unpaid principal of the
Series B Bonds may be declared due and payable in the manner and with the
effect provided in the Indenture. 
Further, notwithstanding whether there is otherwise a default or Event
of Default under the Series B Bonds, if the maturity of the loans under the
Credit Agreement is accelerated as provided in the Credit Agreement, there
shall immediately be an Event of Default with respect to the Series B Bonds and
the unpaid principal of the Series B Bonds shall thereupon become immediately
due and payable without any action by the Holders of any Series B Bonds or any
other Securities, and without presentment, demand, protest or any other notice
of any kind, all of which are hereby waived by the Company.

 

A-6

 

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 Series B Bonds 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 Series B
Bonds 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 Series B Bonds is registrable in
the Security Register, upon surrender of the Series B Bonds 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
Series B Bonds 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 Series B Bonds of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

The Series B Bonds are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.  As provided in the
Indenture and subject to certain limitations therein set forth, the
Series B Bonds are exchangeable for a like aggregate principal amount of
Series B Bonds 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 Series B Bonds
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 Series B
Bonds are registered as the owner hereof for all purposes, whether or not the
Series B Bonds be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.

 

The Series B Bonds are not subject to any sinking
fund.

 

A-7

 

The Series B Bonds are entitled to the benefit of
the Lien under the Indenture.

 

Each Holder, by accepting a Series B Bond, 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.

 

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

 

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

 

A-8

 

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 Series B Bond and
all rights thereunder, hereby irrevocably constituting and appointing

 

	
   

  	
   

  	
   

  

 

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

 

In connection with any transfer of this Certificate
occurring prior to the date that is the earlier of the date of an effective
Registration Statement or the date two years after the later of the original
issuance of this Security or the last date on which this Security was held by
International Transmission Company or any affiliate of International
Transmission Company, the undersigned confirms that without utilizing any
general solicitation or general advertising that pursuant to an exemption from
registration under the Securities Act of 1933, as amended:

 

[Check One]

 

o
(a) the Series B Bonds 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, as amended) (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

 

o
(b) the Series B Bonds are 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 Series B Bond and
the Indenture.

 

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 207 of the Second Supplemental Indenture shall have
been satisfied.

 

A-9

 

	
  Date:
  [                       ,
      ]

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
  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:

  	
   

  	
   

  
						

 

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 of, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 

A-10

 

EXHIBIT B

 

REAL
PROPERTY

 

State of Michigan

 

B-1Exhibit 10.5

 

EXECUTION COPY

 

February 25,
2003

 

KKR Millennium Fund L.P.

9 West 57th Street

New York,
NY  10019

 

Gentlemen:

 

Reference
is made to the Agreement of Limited Partnership of International Transmission
Holdings Limited Partnership (the “Partnership”), dated as of February 25,
2003 (the “LP Agreement”), among Ironhill Transmission, LLC, a Michigan
limited liability company, as general partner, and those persons listed as
limited partners on Schedule A attached thereto, who are
signatories to the LP Agreement (each such persons, a “Limited Partner”).  Capitalized terms used but not defined herein
have the meanings given to them in the LP Agreement.

 

The
undersigned, which include entities which are not parties to the LP Agreement,
each hereby acknowledges and agrees that, for so long as the LP Agreement
remains in full force and effect, KKR Millennium Fund L.P., a Delaware limited
partnership (the “Fund”) shall have, consistent with the terms of the LP
Agreement, the following rights:

 

(i) the right to inspect and copy the books and
records of Holding Company and Operating Company, at such times as the Fund
shall reasonably request;

 

(ii) the right
to meet with the appropriate officers and/or directors of Holding Company,
Operating Company and the Partnership, respectively, periodically and at such
times as reasonably requested by the Fund with respect to matters relating to
the business and affairs of Holding Company, Operating Company and the
Partnership; and

 

(iii) the
rights to (x) receive the same prior written notice of all meetings of the
board of directors of Holding Company and Operating Company as that afforded to
the directors thereof, (y) designate one non-voting observer who will be
entitled to meet periodically and at such times as reasonably requested by the
Fund with the General Partner, and to attend all meetings of the board of
directors of Holding Company and Operating Company, and (z) receive copies of
information provided to directors of Holding Company and Operating Company
(including, without limitation, books and records and financial statements), as
if the Fund were a director thereof; provided, however, that such
representative shall have no right to vote at any such board meeting and his or
her attendance at any such board meeting shall not in any way affect any quorum
requirements.

 

This letter
agreement and the rights and the duties of the parties hereto shall be governed
by, and construed in accordance with, the laws of the State of Michigan and may
be executed in counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.

 

 

	
   

  	
  INTERNATIONAL TRANSMISSION HOLDINGS

  LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   IRONHILL TRANSMISSION, LLC, 

   its General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Lewis Eisenberg

  Manager

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ITC HOLDINGS CORP., a Michigan corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL TRANSMISSION COMPANY,

  a Michigan corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
								

 

 

Acknowledged
and Agreed as of the date first above written:

 

 

KKR MILLENNIUM FUND L.P.

 

 

	
  By:

  	
  KKR ASSOCIATES MILLENNIUM L.P., its General Partner

  
	
   

  
	
  By: KKR MILLENNIUM GP LLC, its General Partner

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Member

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