Document:

Exhibit 4.1

 

CERTIFICATE OF AMENDMENT
 TO
 AMENDED AND RESTATED
 CERTIFICATE OF INCORPORATION
 OF
 ARRAY BIOPHARMA INC.

 

(Pursuant to Section 242)

 

Array BioPharma Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows for the purpose of amending its Amended and Restated Certificate of Incorporation:

 

	
FIRST:
    	
 
    	
The   name of the corporation is Array BioPharma Inc. (the “Corporation”). The Corporation was originally   incorporated on February 6, 1998 pursuant to the DGCL. An Amended and   Restated Certificate of Incorporation of the Corporation was filed with the   Secretary of State of the State of Delaware on or about November 21,   2000 (the “Certificate of Incorporation”).
    
	
 
    	
 
    	
 
    
	
SECOND:
    	
 
    	
That   the board of directors of the Corporation duly adopted resolutions approving   the following amendment to the Certificate of Incorporation (the “Amendment”) in accordance with the   provisions of Section 242 of the DGCL, declaring such Amendment to be   advisable and calling for the approval of the stockholders of the Corporation   to such Amendment.
    
	
 
    	
 
    	
 
    
	
THIRD:
    	
 
    	
The   Amendment was duly adopted and approved in accordance with the provisions of   Section 211 of the DGCL by the required vote of the stockholders of the   Corporation at the Annual Meeting of the stockholders of the Corporation.
    
	
 
    	
 
    	
 
    
	
FOURTH:
    	
 
    	
That   the Corporation’s Certificate of Incorporation is hereby amended as provided   herein. Section 4.1 shall be deleted in its entirety and replaced with   the following:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.1 Authorized Shares. The total   number of shares of all classes of stock that the Corporation shall have the   authority to issue is 230,000,000 of which 220,000,000 shall be common stock,   all of one class, having a par value of $.001 per share (the “Common Stock”), and 10,000,000 of such   shares shall be Preferred Stock, having a par value of $.001 per share (the “Preferred Stock”).
    
	
 
    	
 
    	
 
    
	
FIFTH:
    	
 
    	
Except   as expressly amended by this Amendment, the provisions of the Certificate of   Incorporation shall remain in full force and effect.
    

 

*    *    *    *    *    *    *

 

IN WITNESS WHEREOF, this Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Corporation has been executed this 24th day of October 2012.

 

	
 
    	
ARRAY   BIOPHARMA INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   R. Michael Carruthers
    
	
 
    	
 
    	
R.   Michael Carruthers, Chief Financial OfficerEXHIBIT 10.1

 

News Release

 

ITC Judge Rules in Favor of GSI Technology, Inc. in ITC Litigation with Cypress Semiconductor

 

SUNNYVALE, Calif.—(BUSINESS WIRE)—Oct. 25, 2012— GSI Technology, Inc. (Nasdaq: GSIT) today reported that Chief Administrative Law Judge Charles E. Bullock issued his initial determination in the patent litigation between GSI and Cypress Semiconductor Corp. pending before the International Trade Commission (the “ITC”).

 

The ITC investigation was instituted in July 2011 in response to a complaint filed by Cypress. Cypress’ complaint alleged that GSI products, including its SigmaDDR and SigmaQuad families of static random access memory (“SRAM”) products, infringe four Cypress patents and sought an order excluding the allegedly infringing SRAMs, and products containing them, from entry into the United States and permanent orders directing GSI and other respondents (a customer and a distributor) to cease and desist from selling these products in the United States. An evidentiary hearing before Judge Bullock took place in March 2012.

 

In his initial determination, issued on October 25, 2012, Judge Bullock held that the importation of GSI’s SRAM products, and products containing them, and the sale within the United States of such products, have not violated applicable federal law with respect to any of the four patents that Cypress had alleged were infringed. Detailed findings in support of Judge Bullock’s determination have not yet been released.

 

Either party may request a review of the initial determination by the full Commission. Requests for Commission review must be submitted in early November 2012. The target date for concluding the ITC investigation is February 25, 2013.

 

Lee-Lean Shu, GSI’s President and Chief Executive Officer, commented that “We are, of course, pleased with this complete victory. The judge confirmed what we have been saying for over a year — that GSI has not infringed any valid Cypress patents. The victory is particularly satisfying in light of the repeated misleading and defamatory statements made by Cypress management in an attempt to intimidate our customers and other prospective purchasers of GSI’s products. We look forward to resuming competition with Cypress on the basis of the technological superiority of our products.” On a related matter, Shu noted that “We continue to vigorously pursue our antitrust case against Cypress that is pending in the U.S. District Court for the Northern District of California.”

 

About GSI Technology

 

Founded in 1995, GSI Technology, lne. is a leading provider of high-performance SRAM products primarily incorporated in networking and telecommunications equipment. Headquartered in Sunnyvale, California, GSI Technology is ISO 9001 certified and has worldwide factory and sales locations. For more information, please visit www.gsitechnology.com.

 

1

 

Source: GSI Technology, Inc.

 

GSI Technology, Inc.

Douglas M. Schirle

Chief Financial Officer

408-331-9802 

or

Silverman Heller Associates 

Philip Bourdillon/Gene Heller 

310-208-2550

 

2Exhibit 4.31

 

Execution Version

 

SIXTH SUPPLEMENTAL INDENTURE

 

between

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC

 

and

 

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

 

Trustee

 

 

Dated as of October 5, 2012

 

 

Supplementing the First Mortgage Indenture dated as of December 10, 2003, as heretofore supplemented

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS

 

Establishing a series of Securities designated 3.98% Senior Secured Notes due 2042

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE ONE DEFINITIONS   AND OTHER PROVISIONS OF GENERAL APPLICATION
    	
6
    
	
 
    	
 
    
	
ARTICLE TWO TITLE,   FORM AND TERMS AND CONDITIONS OF THE NOTES
    	
13
    
	
 
    	
 
    
	
Section 2.01. The Notes
    	
13
    
	
Section 2.02. Payment on the Notes
    	
14
    
	
Section 2.03. Mandatory Redemption of the Notes
    	
15
    
	
Section 2.04. Optional Redemption
    	
15
    
	
Section 2.05. Purchase of Notes
    	
15
    
	
Section 2.06. Payment upon Event of Default
    	
16
    
	
Section 2.07. Transfers
    	
17
    
	
 
    	
 
    
	
ARTICLE THREE   ADDITIONAL COVENANTS
    	
17
    
	
 
    	
 
    
	
Section 3.01. Affirmative Covenants of the   Company
    	
17
    
	
Section 3.02. Negative Covenants of the Company
    	
18
    
	
 
    	
 
    
	
ARTICLE FOUR   ADDITIONAL EVENTS OF DEFAULT
    	
20
    
	
 
    	
 
    
	
Section 4.01. Events of Default
    	
20
    
	
Section 4.02. Acceleration of Maturity
    	
22
    
	
 
    	
 
    
	
ARTICLE FIVE   MISCELLANEOUS PROVISIONS
    	
22
    
	
 
    	
 
    
	
Section 5.01. Execution of Sixth Supplemental   Indenture
    	
22
    
	
Section 5.02. Effect of Headings
    	
22
    
	
Section 5.03. Successors and Assigns
    	
22
    
	
Section 5.04. Severability Clause
    	
22
    
	
Section 5.05. Benefit of Sixth Supplemental   Indenture
    	
22
    
	
Section 5.06. Execution and Counterparts
    	
23
    
	
Section 5.07. Conflict with Mortgage Indenture
    	
23
    
	
Section 5.08. Recitals
    	
23
    
	
Section 5.09. Governing Law
    	
23
    
	
 
    	
 
    
	
Schedule   1
    	
Recording   Information
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Description   of Properties
    	
 
    
	
Exhibit B
    	
Subordination   Terms
    	
 
    
	
Exhibit C
    	
Form of   Note
    	
 
    

 

 

SIXTH SUPPLEMENTAL INDENTURE (this “SIXTH SUPPLEMENTAL INDENTURE”), dated as of October 5, 2012, between MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC, a limited liability company organized and existing under the laws of the State of Michigan (herein called the “Company”), having its principal office at 27175 Energy Way, Novi, Michigan  48377, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (as successor to JPMorgan Chase Bank, N.A.), a national banking association organized under the laws of the United States, as trustee (herein called the “Trustee”), the office of the Trustee at which on the date hereof its corporate trust business is administered being 2 N. LaSalle, Suite 1020, Chicago, Illinois  60602.

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee a First Mortgage Indenture dated as of December 10, 2003 (the “Original Mortgage Indenture”), as amended and supplemented by the Third Supplemental Indenture thereto, dated as of November 25, 2008, (together with the Original Mortgage Indenture, the “Mortgage Indenture”) encumbering the real property interests as more particularly described on Exhibit A and Exhibit B attached to the Original Mortgage Indenture, on Exhibit A to the Fourth Supplemental Indenture thereto and Exhibit A to the Fifth Supplemental Indenture thereto, and providing for (i) the issuance by the Company from time to time of its bonds, notes or other evidences of indebtedness (in the Mortgage Indenture and herein called the “Debt Securities”) to be issued in one or more series and to provide security for the payment of the principal of and premium (including any Make-Whole Amount), if any, and interest, if any, on the Debt Securities and (ii) the issuance from time to time of Collateral Securities (as defined in the Mortgage Indenture) (together with the Debt Securities, in the Mortgage Indenture and herein called the “Securities”); and

 

WHEREAS, the Company has heretofore executed and delivered the following supplemental indentures, each dated as hereinafter set forth:

 

	
Instrument
    	
 
    	
Date
    
	
 
    	
 
    	
 
    
	
First   Supplemental Indenture
    	
 
    	
December 10,   2003
    
	
 
    	
 
    	
 
    
	
Second   Supplemental Indenture
    	
 
    	
December 10,   2003
    
	
 
    	
 
    	
 
    
	
Third   Supplemental Indenture
    	
 
    	
November 25,   2008
    
	
 
    	
 
    	
 
    
	
Fourth   Supplemental Indenture
    	
 
    	
December 11,   2008
    
	
 
    	
 
    	
 
    
	
Fifth   Supplemental Indenture
    	
 
    	
April 20,   2010
    

 

WHEREAS, the Original Mortgage Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture listed in the foregoing paragraph were recorded in the offices set forth in Schedule 1 attached hereto; and

 

WHEREAS, there have heretofore been issued under the Indenture the following Securities in the principal amounts as follows:

 

 

	
Title
    	
 
    	
Issued
    	
 
    	
Principal Amount
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.75%   Senior Secured Notes, due 2015
    	
 
    	
December 10,   2003
    	
 
    	
$
    	
175,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Senior   Secured Bonds, Collateral Series A
    	
 
    	
December 10,   2003 (Discharged on March 29, 2007)
    	
 
    	
$
    	
35,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.63%   Senior Secured Notes due 2014
    	
 
    	
December 11,   2008
    	
 
    	
$
    	
50,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.64%   Senior Secured Notes due 2040
    	
 
    	
May 6,   2010
    	
 
    	
$
    	
50,000,000
    	
 
    

 

WHEREAS, in addition to the property described in the Original Mortgage Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture, the Company has acquired certain other property, rights, and interests in property; and

 

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Mortgage Indenture and pursuant to a Company Resolution, has duly determined to make, execute and deliver to the Trustee this Sixth Supplemental Indenture to the Mortgage Indenture as permitted by Sections 201, 301 and 1201 of the Mortgage Indenture in order to establish the form and terms of, and to provide for the creation and issuance of, a series of Securities under the Mortgage Indenture in an aggregate principal amount of $75,000,000 and to amend and supplement the Mortgage Indenture as herein provided; and

 

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

 

GRANTING CLAUSES

 

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

 

GRANTING CLAUSE FIRST

 

All right, title and interest of the Company, as of the date of the execution and delivery of this Sixth Supplemental Indenture, as originally executed and delivered, in and to all of the following property:

 

(a)                                 all real property owned in fee and other interests in real property located in the State of Michigan or wherever else situated including, but not limited to, such property as described in Exhibit A and Exhibit B attached to the Original Mortgage Indenture, Exhibit A attached to the Fourth 

 

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Supplemental Indenture, Exhibit A attached to the Fifth Supplemental Indenture and Exhibit A attached hereto;

 

(b)                                 the entire easement estate created under and by virtue of the Easement Agreement (as defined in Section 101 of the Original Mortgage Indenture), including any interest in any fee, or greater or lesser title to such easement estate, including, without limitation, the Company’s interest in the parcels of real property described in Exhibit B attached to the Original Mortgage Indenture for purposes of local recording of the Indenture (collectively, the “Easement Land”) and the Improvements (as defined below) that the Company may own or hereafter acquire (whether acquired pursuant to a right or option contained in the Easement Agreement or otherwise) and all credits, deposits, options, privileges and rights of the Company under the Easement Agreement (including all rights of use, occupancy and enjoyment) and under any amendments, supplements, extensions, renewals, restatements, replacements and modifications thereof (including, without limitation, (i) the right to give consents, (ii) the right to receive moneys payable to the Company, (iii) the right to renew or extend the Easement Agreement for a succeeding term or terms, (iv) the right, if any, to purchase the Real Estate (as defined below) and (v) the right to terminate or modify the Easement Agreement); all of the Company’s claims and rights to the payment of damages arising under the Bankruptcy Code (as defined in Section 101 of the Original Mortgage Indenture) from any rejection of the Easement Agreement by the grantor thereunder or any other party (such parcel(s) of real property (including the real property owned in fee and the Easement Land and the Company’s easement estate), together with all of the buildings, improvements, structures and fixtures now or subsequently located thereon (the “Improvements”) are collectively referred to as the “Real Estate”);

 

(c)                                  the Improvements or any part thereof (whether owned in fee by the Company or held pursuant to the Easement Agreement or otherwise) and all the estate, right, title, claim or demand whatsoever of the Company, in possession or expectancy, in and to the Real Estate or any part thereof;

 

(d)                                 all rights of way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water and riparian rights, development rights, air rights, mineral rights and all estates, rights, titles, interests, privileges, licenses, tenements, hereditaments and appurtenances belonging, relating or appertaining to the Real Estate, and any reversions, remainders, rents, issues, profits and revenue thereof and all land lying in the bed of any street, road or avenue, in front of or adjoining the Real Estate to the center line thereof (the assets described in clauses (a), (b) and (c) above and this clause (d) are collectively referred to as the “Real Property”);

 

(e)                                  all fixtures, towers, pole structures, poles, crossarms, wires, cables, conduits, guys, anchors, transformers, insulators, substations, switching stations, chattels, business machines, machinery, apparatus, equipment, furnishings, fittings and articles of personal property of every kind and nature whatsoever, and all appurtenances and additions thereto and substitutions or replacements thereof (together with, in each case, attachments, components, parts and accessories) currently owned or subsequently acquired by the Company and now or subsequently attached to, or contained in or used or usable in any way in connection with any operation or letting of the Real Estate, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind 

 

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and description and all other assets that constitute “Equipment” as defined in the Uniform Commercial Code (all of the foregoing in this clause (e), collectively being referred to as the “Equipment”);

 

(f)                                   all substitutes and replacements of, and all additions and improvements to, the Real Estate and the Equipment, subsequently acquired by or released to the Company or constructed, assembled or placed by the Company on the Real Estate, immediately upon such acquisition, release, construction, assembling or placement, including, without limitation, any and all building materials whether stored at the Real Estate or offsite, and, in each such case, without any further mortgage, conveyance, assignment or other act by the Company;

 

(g)                                  all leases, subleases, underlettings, concession agreements, management agreements, licenses and other agreements relating to the use or occupancy of the Real Estate or the Equipment or any part thereof, now existing or subsequently entered into by the Company and whether written or oral and all guarantees of any of the foregoing (collectively, as any of the foregoing may be amended, restated, extended, renewed or modified from time to time, the “Leases”), and all rights of the Company in respect of cash and securities deposited thereunder and the right to receive and collect the revenues, income, rents, issues and profits thereof, together with all other rents, royalties, issues, profits, revenue, income and other benefits arising from the use and enjoyment of the Mortgaged Property (collectively, the “Rents”), including, but not limited to, all rights conferred by Act No. 210 of the Michigan Public Acts of 1953 as amended by Act No. 151 of the Michigan Public Acts of 1966 (MCLA 554.231 et  seq.), and Act No. 228 of the Michigan Public Acts of 1925 as amended by Act No. 55 of the Michigan Public Acts of 1933 (MCLA 554.211 et  seq.);

 

(h)                                 all trade names, trade marks, logos, copyrights, good will and books and records relating to or used in connection with the operation of the Real Estate or the Equipment or any part thereof, all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom; all general intangibles related to the operation of the Improvements now existing or hereafter arising and all other assets that constitute “Intellectual Property” as defined in the Uniform Commercial Code (all of the foregoing in this clause (h), collectively being referred to as “Intellectual Property”);

 

(i)                                     all unearned premiums under insurance policies now or subsequently obtained by the Company relating to the Real Estate or Equipment and the Company’s interest in and to all proceeds of any such insurance policies (including title insurance policies) including the right to collect and receive such proceeds, subject to the provisions relating to insurance generally set forth below; and all awards and other compensation, including the interest payable thereon and the right to collect and receive the same, made to the present or any subsequent owner of the Real Estate or Equipment for the taking by eminent domain, condemnation  or otherwise, of all or any part of the Real Estate or any easement or other right therein;

 

(j)                                    all contracts from time to time executed by the Company or any Manager or agent on its behalf relating to the ownership, construction, maintenance, repair, operation, occupancy, sale or financing of the Real Estate or Equipment or any part thereof and all agreements relating to the purchase or lease of any portion of the Real Estate or any property which is adjacent or peripheral to the Real Estate, together with the right to exercise such options and all leases of Equipment; all consents, licenses, building permits, certificates of occupancy and other Governmental Approvals (to the extent constituting property) relating to construction, completion, occupancy, use or operation of the Real Estate 

 

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or any part thereof; and all drawings, plans, specifications and similar or related items relating to the Real Estate (all of the foregoing in this clause (j) being referred to as “Real Estate Contracts”);

 

(k)                                 any and all moneys now or subsequently on deposit for the payment of real estate taxes or special assessments against the Real Estate or for the payment of premiums on insurance policies covering the foregoing property or otherwise on deposit with or held by the Company as provided in the Indenture;

 

(l)                                     any right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of the state;

 

(m)                             all Accounts;

 

(n)                                 all Chattel Paper;

 

(o)                                 all Contracts;

 

(p)                                 all Deposit Accounts;

 

(q)                                 all Documents;

 

(r)                                    all General Intangibles;

 

(s)                                   all Instruments;

 

(t)                                    all Inventory;

 

(u)                                 all Investment Property;

 

(v)                                 all Letter of Credit Rights;

 

(w)                               all other property not otherwise described above;

 

(x)                                 all books and records pertaining to the Mortgaged Property; and

 

(y)                                 to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing.

 

GRANTING CLAUSE SECOND

 

All right, title and interest of the Company in all property described in the foregoing Granting Clause First, which may be hereafter acquired by the Company, it being the intention of the Company that all such property and all such rights, title and interests acquired by the Company after the date of the execution and delivery of this Sixth Supplemental Indenture, as originally executed and delivered, shall be as fully embraced within and subjected to the Lien hereof as if such property were 

 

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owned by the Company as of the date of the execution and delivery of this Sixth Supplemental Indenture, as originally executed and delivered;

 

GRANTING CLAUSE THIRD

 

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

 

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

 

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

 

PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article Seven or Article Twelve of the Original Mortgage Indenture, and if, thereafter, the principal of and premium, if any, and interest, if any, on, and any other amounts (including, without limitation, fees, expenses and indemnities) in connection with, the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 603 of the Original Mortgage Indenture, then and in that case the Indenture shall terminate, and the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise the Indenture, and the estate and rights hereby granted, shall be and remain in full force and effect;

 

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

 

THE PARTIES HEREBY COVENANT AND AGREE as follows:

 

ARTICLE ONE

 

DEFINITIONS AND OTHER PROVISIONS
 OF GENERAL APPLICATION

 

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

 

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

 

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

 

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

 

6

 

“Dispose” or “Disposition” means a sale, lease, transfer or other disposition of any assets of the Company.

 

“Easement Agreement” means the Amended and Restated Easement Agreement, dated as of April 29, 2002, between the Company and Consumers, as amended and supplemented to date.

 

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

 

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

 

“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which is treated as a single employer with such Person under Section 414 of the Code.

 

“ERISA Event” means:

 

(a)                                 the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the notice requirement with respect to such event has been waived;

 

(b)                                 the application for a minimum funding waiver with respect to a Plan;

 

(c)                                  the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(c) of ERISA;

 

(d)                                 the withdrawal by the Company or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;

 

(e)                                  the conditions for the imposition of a lien under Section 303(k) of ERISA shall have been met with respect to any Plan;

 

(f)                                   the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 436 of the Code;

 

(g)                                  the institution by the PBGC of proceedings to terminate, or cause a trustee to be appointed to administer, a Plan pursuant to Section 4042 of ERISA; or

 

(h)                                 the incurrence of withdrawal liability under Title IV of ERISA by the Company or any of its ERISA Affiliates upon the withdrawal by the Company or any of its ERISA Affiliates from a Multiemployer Plan or the incurrence of liability by the Company or any of its ERISA Affiliates upon the termination of a Multiemployer Plan.

 

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

 

7

 

“Financing Agreements” means the Mortgage Indenture, this Sixth Supplemental Indenture, the Note Agreement and the Notes.

 

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

 

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

 

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

 

“Initial Noteholder” means each Noteholder listed on Schedule A to the Note Agreement purchasing any Notes on the Closing Date.

 

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

 

“Investment” or “Invest” means (a) a purchase or acquisition of, or an investment or reinvestment in, Rate Base Assets or (b) without duplication, the making of a firm, good faith contractual commitment, in the ordinary course of business and not subject to any conditions in the Company’s control, to purchase or acquire, or invest or reinvest in, Rate Base Assets.

 

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

 

“Called Principal” means, with respect to any Note, the principal of such Note that is to be redeemed pursuant to Section 2.03 or 2.04 or has become or is declared to be immediately due and payable pursuant to Section 802 of the Indenture, as the context requires.

 

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by (i) the yields reported, as of 10:00 

 

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

 

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

 

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date; provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 2.03 or 2.04 or Section 802 of the Indenture.

 

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be redeemed pursuant to Section 2.03 or 2.04 or has become or is declared to be immediately due and payable pursuant to Section 802 of the Indenture, as the context requires.

 

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

 

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

 

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

 

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Company or any of its ERISA Affiliates is making or accruing an obligation to make contributions, or has within any of the preceding six plan years made or accrued an obligation to make contributions, such plan being maintained pursuant to one or more collective bargaining agreements.

 

“Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (a) is maintained for employees of the Company or any of its ERISA Affiliates and at least one Person other than the Company and its ERISA Affiliates or (b) was so maintained and in respect of which the Company or any of its ERISA Affiliates could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

 

“Net Proceeds” means, with respect to any Disposition of assets, the gross proceeds thereof (including any such proceeds received by way of deferred payment, installment, price adjustment or otherwise), whether in cash or otherwise, net of any taxes paid or reasonably estimated to be paid as a result thereof (after taking into account any available tax credits or deductions applicable thereto).

 

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

 

“Note Agreement” means that certain Note Purchase Agreement, expected to be dated as of October 26, 2012, between the Company and the Initial Noteholders.

 

“Noteholders” means (a) the Initial Noteholders and (b) each subsequent holder of a Note as shown on the register maintained by the Company pursuant to Section 305 of the Mortgage Indenture.

 

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

 

“Payment Event of Default” means an Event of Default under subsections (a) or (b) of Section 801 of the Mortgage Indenture, or, with respect to failures to make payment only, Section 4.01(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, or any successor.

 

“Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title IV of ERISA or is subject to Section 412 of the Code, other than a Multiemployer Plan, which is maintained, sponsored or contributed to, by the Company or any of its ERISA Affiliates.

 

“Rate Base Assets” means assets of the Company which are included in FERC’s determination of the Company’s revenue requirement under the OATT.

 

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“Reputable Insurer”  means any financially sound and responsible insurance provider permitted to do business in the State of Michigan rated “A-” or better by A.M. Best Company (or if such ratings cease to be published generally for the insurance industry, meeting comparable financial standards then applicable to the insurance industry).

 

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

 

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

 

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

 

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

 

“Subsidiary” means, as to any Person, any Corporation or other business entity in which such Person beneficially owns, directly or indirectly, a majority of the outstanding voting securities thereof.

 

“Transmission Documents” shall have the meaning assigned to such term in the Note Agreement.

 

(c)                                  For purposes of the Notes, pursuant to Section 301(22) of the Mortgage Indenture, the Mortgage Indenture is hereby supplemented as follows:

 

(i) The following Section 116 shall be added immediately following Section 115:

 

Section 116. Jurisdiction; Waiver of Trial by Jury.

 

(a)                                 The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, the City of New York, over any suit, action or proceeding arising out of or relating to this Indenture.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

(b)                                 The Company consents to process being served by or on behalf of the Trustee or any Holder in any suit, action or proceeding of the nature referred to in Section 116(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 15 of the Note Agreement or at such other address of which the Trustee or any such Holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices 

 

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hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

 

(c)                                  Nothing in this Section 116 shall affect the right of the Trustee or any Holder to serve process in any manner permitted by law, or limit any right that the Trustee or any Holder may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)                                 THE PARTIES HERETO, AND EACH HOLDER OF A SECURITY BY ITS ACCEPTANCE HEREOF, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT.

 

(ii)                                  The following provisions shall be added immediately following Section 903(13):

 

(14)                          the Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its control, including, without limitation, any provision of any law or regulation or any act of any governmental authority; acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services (it being understood that the Trustee shall maintain a business continuity plan and otherwise use reasonable efforts which are consistent with accepted practices in the banking industry to avoid and mitigate the effects of such occurrences and to resume performance as soon as practicable under the circumstances); accidents; labor disputes; acts of civil or military authority and governmental action; and

 

(15)                          in no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

(iii)                           The following sentence shall be added immediately following the last sentence of Section 1004:

 

Delivery of such information, documents and other reports to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute actual or constructive knowledge or notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

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ARTICLE TWO

 

TITLE, FORM AND TERMS AND CONDITIONS OF THE NOTES

 

Section 2.01.  The Notes.

 

(a)                                 The Securities of this series to be issued under the Mortgage Indenture pursuant to this Sixth Supplemental Indenture shall be designated as “3.98% Senior Secured Notes due 2042” (the “Notes”) and shall be Debt Securities issued under the Indenture.

 

(b)                                 The Trustee shall authenticate and deliver the Notes for original issue on the Closing Date in the aggregate principal amount of $75,000,000, upon a Company Order for the authentication and delivery thereof pursuant to Section 401 of the Mortgage Indenture.

 

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

 

(d)                                 The Notes shall mature and the principal thereof shall be due and payable together with all accrued and unpaid interest thereon on October 26, 2042.

 

(e)                                  The Notes shall bear interest at the rate of 3.98% per annum; provided that, to the extent permitted by law, any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount shall bear interest at a rate per annum from time to time equal to the greater of (i) 5.98% and (ii) 2.0% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate.  Interest shall accrue on the Notes from the Closing Date, or the most recent date to which interest has been paid or duly provided for.  The Interest Payment Dates for the Notes shall be March 31 and September 30 in each year, commencing March 31, 2013, and the Regular Record Dates with respect to the Interest Payment Dates for the Notes shall be the 15th calendar day preceding each Interest Payment Date (whether or not a Business Day); provided, however that interest payable at Maturity will be payable to the Noteholder to whom principal is payable.

 

(f)                                   Subject to Section 2.02, the office or agency of the Trustee in New York, New York, which as of the date hereof is located at c/o The Bank of New York Mellon, Trust Services Window, 101 Barclay Street, New York, New York 10286, shall be the place at which the principal of and Make-Whole Amount, if any, and interest on the Notes shall be payable.  The office or agency of the Trustee in New York, New York, which as of the date hereof is located at c/o The Bank of New York Mellon, Trust Services Window, 101 Barclay Street, New York, New York  10286, shall be the place at which registration of transfer of the Notes may be effected; and The Bank of New York Mellon Trust Company, N.A. shall be the Security Registrar and the Paying Agent for the Notes; provided, however, that the Company reserves the right to designate, by one or more Officer’s Certificates, its principal office in Novi, Michigan as any such place or itself as the Security Registrar; provided, however, that there shall be only a single Security Registrar for the Notes.

 

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

 

(h)                                 The Notes shall not be defeasible pursuant to Sections 7.01 or 7.02 of the Indenture and such Sections of the Indenture shall not apply to the Notes.

 

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

 

Section 2.02.  Payment on the Notes.

 

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

 

(b)                                 So long as any Initial Noteholder or its nominee shall be a Noteholder, and notwithstanding anything contained in the Indenture, Section 2.02(a) or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below such Initial Noteholder’s name in Schedule A to the Note Agreement, or by such other method or at such other address as such Initial Noteholder shall have from time to time specified to the Company and the Trustee in writing for such purpose in accordance with the Note Agreement, without the presentation or surrender of such Note or the making of any notation thereon, except that concurrently with or reasonably promptly after payment or redemption in full of any Note, such Initial Noteholder shall surrender such Note for cancellation to the Company at its principal office or at the Place of Payment most recently designated by the Company pursuant to Section 2.02(a).  Prior to any sale or other disposition of any Note held by such Initial Noteholder or its nominee such Initial Noteholder will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 305 of the Indenture; provided, that a transfer by endorsement shall not constitute a registration of transfer for purposes of the Indenture and the Trustee and any agent of the Trustee shall be entitled to the protections of Section 308 of the Indenture with respect to any Note, the transfer of which has not been so registered.  The Company will afford the benefits of this Section 2.02(b) to any Institutional Investor that is the direct or indirect transferee of any Note purchased by such Initial Noteholder under the Indenture. The Company agrees and acknowledges that the Trustee shall not be liable for any Noteholder’s failure to perform its obligations under this Section 2.02(b).  Each Initial Noteholder and any such Institutional Investor by its purchase of its Note agrees to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with such Noteholder’s or Institutional Investor’s failure to comply with the provisions of this Section 2.02(b), including the costs and expenses of defending itself against any claim or liability in connection therewith, such indemnity to survive the payment of such Notes and the resignation or removal of the Trustee.

 

(c)                                  Notwithstanding anything to the contrary in Section 113 of the Mortgage Indenture, if the Stated Maturity or any Redemption Date of the Notes shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of the Mortgage Indenture or this Sixth Supplemental Indenture) payment of interest on or principal (and premium, if any) of the Notes due at the Stated Maturity or on any Redemption Date thereof need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Stated Maturity or on any Redemption Date thereof, provided that interest shall accrue on the outstanding principal amount of the Notes due at the Stated Maturity or on any Redemption Date thereof at the rate set forth in the Notes until the date of actual payment.

 

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Section 2.03.  Mandatory Redemption of the Notes.

 

In addition to the mandatory redemption required by Section 501(a) of the Mortgage Indenture, which Section 501(a) shall apply to the Notes, in the event that any one or more Dispositions during any consecutive 12 month period (except Dispositions permitted under Section 3.02(b)(i) or (ii)) yield Net Proceeds in excess of $10,000,000, in the aggregate, the Net Proceeds of such Disposition or Dispositions shall be used for the mandatory redemption of the Notes, and/or the redemption or prepayment of other Senior Secured Debt in accordance with its terms, on a date which is no more than nine months following a Disposition that, when aggregated with any other Dispositions, requires compliance with this Section 2.03 unless (x) during the nine month period immediately preceding the date of such Disposition, the Company Invested in any Rate Base Assets in which case an amount of such Net Proceeds equal to the excess, if any, of (A) the total aggregate amount of all such Investments made during such preceding nine month period (excluding, however, the amount of any Investments made pursuant to clause (b) of the definition of “Investment” that were not expended for Rate Base Assets during such nine month period) over (B) the aggregate amount of Debt incurred by the Company (which, with respect to any Debt incurred under any permitted credit facility of a revolving nature, shall be calculated on a net basis after taking into account any borrowings, prepayments, repayments, reborrowings or other extensions of credit made by or in favor of the Company thereunder), in each case, during such preceding nine month period, need not be applied to such redemption or prepayment, as the case may be, or (y) during the nine month period following the date of such Disposition, the Company shall Invest in Rate Base Assets, in which case an amount of such Net Proceeds so Invested during such following nine month period need not be applied to such redemption or prepayment, as the case may be; provided, however, that in the event that any such amounts referred to in this clause (y) Invested pursuant to clause (b) of the definition of “Investment” are not expended for Rate Base Assets within a period of six months from the end of such following nine month period, any such amounts not so expended shall be used for the mandatory redemption of the Notes, and/or the redemption or prepayment of other Senior Secured Debt in accordance with its terms, on a date not later than the last day of such six month period.  Any redemption of the Notes pursuant to this Section 2.03 shall be made (i) at a redemption price equal to the principal amount of the Notes being redeemed and shall be accompanied by payment of accrued and unpaid interest on the principal amount of the Notes so redeemed to the redemption date and a Make-Whole Amount and (ii) in accordance with the procedures for optional redemption set forth in Section 2.04(c) below.  Notwithstanding anything to the contrary in this Section 2.03, any amounts utilized pursuant to clauses (x) or (y) above to reduce the amount of Net Proceeds required to be applied to redemption of the Notes and/or redemption or prepayment of other Senior Secured Debt in accordance with its terms may be utilized no more than once with respect to the Net Proceeds of any one or more Dispositions occurring in any consecutive twelve month period.

 

Section 2.04.  Optional Redemption.

 

(a)                                 Pursuant to Section 501(b) of the Mortgage Indenture, the Notes may be redeemed at the option of Company, in whole or in part, at any time or from time to time at a redemption price equal to the principal amount of such Notes plus the Make-Whole Amount plus accrued and unpaid interest thereon to the redemption date; provided, however, that if the Notes are redeemed in part, the Notes shall not be redeemed in an amount less than $5,000,000 of the aggregate principal amount of the Notes then Outstanding.

 

(b)                                 Pursuant to Section 501(b) of the Mortgage Indenture, the Notes may be redeemed at the option of the Company, in whole, on or after March 31, 2042 at a redemption price equal to the principal amount of such Notes plus accrued and unpaid interest thereon to the redemption date.

 

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(c)                                  Notwithstanding anything to the contrary in Article Five of the Mortgage Indenture, the redemption of the Notes shall take place in accordance with the procedures and requirements set forth in this Section 2.04(c), without prejudice to the requirements of Section 502 (which shall for purposes of this Sixth Supplemental Indenture also be applicable to a redemption under Section 2.03) and Sections 505 through 507 of the Mortgage Indenture.  The Company (or the Trustee, if so requested pursuant to Section 504 of the Mortgage Indenture) shall give each Noteholder written notice of each optional redemption under this Section 2.04, or a mandatory redemption under Section 2.03, as the case may be, not less than 30 days and not more than 60 days prior to the date fixed for such redemption.  Each such notice shall specify such date, the aggregate principal amount of the Notes to be redeemed on such date, the principal amount of each Note held by such Noteholder to be redeemed (determined in accordance with Section 2.04(d)) and the interest to be paid on the redemption date with respect to such principal amount being redeemed, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount, if applicable, due in connection with such redemption (calculated as if the date of such notice were the date of the redemption), setting forth the details of such computation.  Two Business Days prior to such redemption, the Company shall deliver to each Noteholder and the Trustee a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount, if applicable, as of the specified redemption date.  The Trustee shall have no responsibility for such calculation.

 

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

 

Section 2.05.  Purchase of Notes.

 

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

 

Section 2.06.  Payment upon Event of Default.

 

Upon any Notes becoming due and payable under Section 802 of the Indenture, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, without limitation, interest accrued thereon at the applicable rate for overdue payments) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable Law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes have become due and payable under Section 802 of the Indenture, whether automatically or by declaration, as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

 

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Section 2.07.  Transfers.

 

In registering the transfer of any Note in accordance with Section 305 of the Mortgage Indenture, the Security Registrar and the Trustee shall have no responsibility to monitor securities law compliance in connection with any such transfer.

 

ARTICLE THREE

 

ADDITIONAL COVENANTS

 

Section 3.01.  Affirmative Covenants of the Company.

 

For purposes of the Notes, pursuant to Section 301(20) of the Mortgage Indenture, Article Six of the Mortgage Indenture is hereby supplemented by (i) deeming each reference to the phrase “Material Adverse Effect” in Article Six of the Mortgage Indenture to be a reference to the phrase “Material Adverse Effect” as defined in this Sixth Supplemental Indenture and (ii) incorporating therein the following additional affirmative covenants which the Company shall observe solely for the benefit of the Noteholders for so long as any Note is Outstanding:

 

(a)                                 Maintenance and Operation of Properties.  The Company shall maintain and preserve, develop, and operate in substantial conformity with all Transmission Documents, applicable Law, Good Utility Practices, and all material Governmental Approvals, all elements of the Transmission System which are used or necessary in the conduct of its businesses in good working order and condition, ordinary wear and tear excepted, except where the failure to so maintain and preserve, develop and operate the Transmission System would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Maintenance of Insurance.  At any time and from time to time, the Company shall provide or cause to be provided, for itself and its assets (including the Transmission System and related equipment), insurance with Reputable Insurers (or self-insurance, if adequate reserves are maintained with respect thereto) in amounts and within the limits and coverages (including deductibles and co-insurance) customarily obtained for comparable businesses under similar circumstances.

 

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

 

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

 

(e)                                  Permits; Approvals.  The Company shall obtain in a timely manner and maintain all Governmental Approvals which are necessary or desirable for the ownership or operation of its Property or the conduct of its business as so conducted, except where failure to obtain or maintain such Governmental Approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(f)                                   Real Estate Filings.  To the extent that any filing required to perfect any security interest in real property or fixtures constituting Mortgaged Property is not made on or prior to the Closing Date, the Company shall undertake to present all such documents for filing with the appropriate registers of deeds as soon as practicable after the Closing Date, but in no event shall any such presentation for filing take place more than five (5) Business Days after the Closing Date; provided that the Company shall confirm by an Officer’s Certificate delivered to the Trustee within six (6) weeks after the Closing Date that each such document has been recorded with the applicable registers of deeds and the security interests created or purported to be created in real property or fixtures by such documents have been fully perfected by recording in the land records, except for documents to be recorded in the registers of deeds in the Counties of Oakland, Kent and Genesee in the State of Michigan, in which case the Company shall confirm by an Officer’s Certificate delivered to the Trustee no more than three (3) months after the Closing Date with respect to the Counties of Kent and Genesee, and no more than five (5) months after the Closing Date with respect to the County of Oakland, that such documents have been so recorded.

 

(g)                                  Compliance with ERISA.  With respect to each Plan, the Company shall comply with ERISA and the Code, except where such failure would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

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

 

Section 3.02.  Negative Covenants of the Company.

 

For purposes of the Notes, pursuant to Section 301(20) of the Mortgage Indenture, Article Six of the Mortgage Indenture is hereby supplemented by incorporating therein the following negative covenants which the Company shall observe solely for the benefit of the Noteholders for so long as any Note is Outstanding:

 

(a)                                 Restrictions on the Establishment of Subsidiaries.  The Company shall not create, acquire or suffer to exist, directly or indirectly, any Subsidiaries or acquire or invest in any other Capital Stock in any Person.

 

(b)                                 Limitations on Asset Sales.  The Company shall not Dispose of all or any substantial part of its assets during any fiscal year, other than:

 

(i)                                     Subject to compliance with Section 610 of the Mortgage Indenture, Dispositions in the ordinary course of business of obsolete or worn out Property and real estate interests not needed for the Company for its Transmission System or for the conduct of its business;

 

(ii)                                  Dispositions of assets that would be permitted under Article Eleven of the Mortgage Indenture; or

 

(iii)                               Subject to compliance with Section 610 of the Mortgage Indenture, any other Disposition of assets; provided, that in the event the Net Proceeds of all such Dispositions during any consecutive 12-month period are in excess of $10,000,000, in the aggregate, such Net Proceeds shall be applied in accordance with the terms and conditions of Section 2.03.

 

(c)                                  [Reserved].

 

18

 

(d)                                 Limitation on Debt.  The Company shall not incur any additional Debt (other than Subordinated Debt) unless no Default or Event of Default has occurred and is continuing, or would exist immediately after giving effect to, the incurrence of such Debt; provided that (A) if a Default or an Event of Default shall have occurred and is continuing at the time of the incurrence of any Subordinated Debt, the net proceeds from the incurrence of such Subordinated Debt shall be applied to cure such Default or Event of Default to the extent such Default or Event of Default, after giving pro forma effect to the incurrence of such Subordinated Debt, can be so cured, and (B) if a Payment Event of Default shall have occurred and be continuing, no such Subordinated Debt shall be incurred.  Any such additional Debt permitted by the preceding sentence (other than (i) any bank or other credit facilities (whether of a revolving nature or not) between the Company and any lenders under which facilities the borrowings outstanding, the face amount of any letters of credit outstanding and any unfunded commitments to extend credit exceed, in the aggregate, $70,000,000 or (ii) any Subordinated Debt, each of which in case of clause (i) and (ii) shall be unsecured) may be secured on a pari passu basis with the Notes pursuant to the terms and conditions of the Mortgage Indenture (any such secured Debt, “Permitted Additional Senior Secured Debt”).  Further, the Company shall not, at any time, enter into (i) any Hedging Agreement for speculative purposes or (ii) any Hedging Agreement if the obligations of the Company relating thereto would not be reflected in the calculation of the Company’s revenue requirement to be collected under the OATT.

 

(e)                                  Limitations on Liens.  The Company shall not create, incur, assume or suffer to exist any Lien upon any of the Company’s Property, whether now owned or hereafter acquired, other than Permitted Liens.

 

(f)                                   Restrictions on Investments.  Unless permitted by Article Eleven of the Mortgage Indenture, the Company shall not make any advance, loan, extension of credit (by way of guarantee or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person, except:

 

(i)                                     extensions of trade credit in the ordinary course of business;

 

(ii)                                  investments in Cash Equivalents;

 

(iii)                               loans and advances to employees of the Company in the ordinary course of business (including for travel, entertainment and relocation expenses) in an aggregate amount not to exceed $300,000 at any one time outstanding;

 

(iv)                              loans to Holdco to pay corporate overhead and administrative expenses incurred by Holdco in the ordinary course of business not to exceed $2,000,000 at any one time outstanding; and

 

(v)                                 investments in Rate Base Assets.

 

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

 

(h)                                 Limitation on Transactions with Affiliates.  The Company shall not enter into any Material transaction with any Affiliate, except (i) in the ordinary course of business and (ii) on terms 

 

19

 

and conditions (A) no less favorable than would be obtainable in a comparable arms-length transaction negotiated in good faith with a Person that is not an Affiliate and (B) consistent with applicable FERC policy regarding Affiliate transactions.

 

(i)                                     Limitation on Sale-Lease and Lease-Lease Back Transactions.  The Company shall not enter into any sale-leaseback or lease-leaseback transaction involving any of its Properties whether now owned or hereafter acquired, whereby the Company sells, otherwise transfers or leases such Properties and thereafter leases or subleases such Properties or any part thereof.

 

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

 

ARTICLE FOUR

 

ADDITIONAL EVENTS OF DEFAULT

 

Section 4.01.  Events of Default.

 

For purposes of the Notes, pursuant to Section 301(21) of the Mortgage Indenture, Section 801 of the Mortgage Indenture shall be supplemented to include as “Events of Default” thereunder the occurrence of any of the following events (each such event, together with those “Events of Default” in Section 801 of the Mortgage Indenture, an “Event of Default”):

 

(a)                                 Material Covenants.  The Company shall fail to perform or observe any covenant set forth in Section 3.02 or its obligation to provide notice to the Noteholders under Section 7.1(c) of the Note Agreement and such failure is not cured within ten (10) days;

 

(b)                                 Other Covenants.  The Company shall fail to perform or observe any of its obligations or covenants (other than the covenants described in Section 4.01(a) or in Section 801(a), 801(b) or 801(e) of the Mortgage Indenture) contained in any of the Financing Agreements, including Section 7 of the Note Agreement (or in any modification or supplement thereto), and such failure is not cured within 30 days after the earlier to occur of (i) a Responsible Officer of the Company obtaining actual knowledge of such failure and (ii) the Company receiving notice of such failure from the Trustee or any Noteholder in accordance with the terms of the Mortgage Indenture or the Note Agreement;

 

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

 

(d)                                 Debt.

 

(i)                                     The Company shall be in default in the payment of any principal, premium, including any make-whole amount, if any, or interest on any Debt (other than Subordinated Debt) in the aggregate principal amount of $10,000,000 or more beyond the expiration of any applicable grace or cure period relating thereto;

 

(ii)                                  The Company shall be in default in the performance or compliance with any term (other than those referred to in Section 4.01(d)(i)) of any agreement or instrument evidencing any Debt (other than Subordinated Debt) in the aggregate principal amount of 

 

20

 

$10,000,000 or more or any other document relating thereto or any condition exists and, as a consequence, such Debt has become or has been declared (or the holder or beneficiary of such Debt or a trustee or agent on behalf of such holder or beneficiary is entitled to declare such Debt to be) due and payable before its stated maturity or before its regularly scheduled dates of payment; or

 

(iii)                               As a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), other than as provided in Section 2.03 or Section 2.04 or Section 501(a) or (b) of the Mortgage Indenture, (x) the Company shall have become obligated to purchase or repay any Debt before its regularly scheduled maturity date in the aggregate principal amount of $10,000,000 or more or (y) one or more Persons have the right to require such Debt to be purchased or repaid;

 

(e)                                  Judgments.  Any judgment or judgments for the payment of money in excess of $10,000,000 (or its equivalent in any other currency) in the aggregate by the Company, which is, or are, not covered by insurance, shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction over the Company and the same shall not be discharged (or provision shall not be made for such discharge), bonded or a stay of execution thereof shall not be procured, within 60 days from the date of entry thereof and the Company shall not, within said period of 60 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal;

 

(f)                                   Transmission System.  The Company shall directly or indirectly terminate transmission service over all or a significant portion of the Transmission System or cease to pursue the operation of the Transmission System for a period in excess of 30 days;

 

(g)                                  Transmission Documents.  Any Material Transmission Document shall have been terminated prior to its stated termination date and such termination has, or would reasonably be expected to have, a Material Adverse Effect;

 

(h)                                 Security Interests.  Subject to Section 611(2) of the Mortgage Indenture and Section 3.01(f), the Company shall fail to perfect and maintain a valid and perfected first priority Lien in any part of the Mortgaged Property, to the extent such perfection can be accomplished by filing;

 

(i)                                     Repudiation.  Any provision (i) of any Financing Agreement shall be repudiated by the Company or (ii) of any Financing Agreement or the Consumers Consent for any reason other than the express terms thereof cease to be enforceable and such repudiation or unenforceability shall not be remedied within 30 days;

 

(j)                                    Total Loss.  There shall occur a Total Loss;

 

(k)                                 ERISA.  Any ERISA Event shall have occurred and the liability of the Company and the ERISA Affiliates related to such ERISA Event, when aggregated with all other ERISA Events (determined as of the date of occurrence of such ERISA Event), has resulted in or would reasonably be expected to result in a Material Adverse Effect; or

 

(l)                                     Holdco Ownership.  Holdco either directly or indirectly shall cease to own 100% of the Capital Stock of the Company.

 

21

 

Section 4.02.  Acceleration of Maturity.

 

Pursuant to Section 802 of the Mortgage Indenture, in addition to the provisions set forth in Section 802 of the Mortgage Indenture, if an Event of Default arising from the failure to pay principal of, or interest on, or any Make-Whole Amount relating to the Notes shall have occurred and be continuing, then in every such case each Holder of Notes may declare the principal amount of the Notes held by it to be due and payable immediately, by a notice in writing to the Company and to the Trustee, and upon receipt by the Company or the Trustee of such notice of such declaration, such principal amount, together with Make-Whole Amount and accrued interest, if any, thereon (including, without limitation, interest accrued thereon at the applicable rate for overdue payments), shall become immediately due and payable (subject to Section 821 of the Indenture).

 

ARTICLE FIVE

 

MISCELLANEOUS PROVISIONS

 

Section 5.01.  Execution of Sixth Supplemental Indenture.

 

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

 

Section 5.02.  Effect of Headings.

 

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

 

Section 5.03.  Successors and Assigns.

 

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

 

Section 5.04.  Severability Clause.

 

In case any provision in this Sixth Supplemental Indenture or in the 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 5.05.  Benefit of Sixth Supplemental Indenture.

 

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

 

22

 

Section 5.06.  Execution and Counterparts.

 

This Sixth 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.  Any such counterpart, as recorded or filed in any jurisdiction, may omit such portions of Exhibit A hereto as shall not describe or refer to properties located in such jurisdiction.  The exchange of copies of this Sixth Supplemental Indenture and of signature pages by facsimile or electronic format (i.e., “pdf” or “tif”) transmission shall constitute effective execution and delivery of this Sixth Supplemental Indenture as to the parties hereto and may be used in lieu of the original Sixth Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or electronic format (i.e., “pdf” or “tif”) shall be deemed to be their original signatures for all purposes.

 

Section 5.07.  Conflict with Mortgage Indenture.

 

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

 

Section 5.08.  Recitals.

 

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

 

Section 5.09.  Governing Law.

 

This Sixth Supplemental Indenture shall be governed by and construed in accordance with the law of the State of New York (including, without limitation, Section 5-1401 of the New York General Obligations Law or any successor to such statute), except that (i) to the extent that the Trust Indenture Act shall be applicable, this Sixth Supplemental Indenture shall be governed by and construed in accordance with the Trust Indenture Act and (ii) if the law of any jurisdiction wherein any portion of the Mortgaged Property that is Real Property is located shall govern the creation of a mortgage lien on and security interest in, or perfection, priority or enforcement of the Lien of the Indenture or exercise of remedies with respect to, such portion of the Mortgaged Property, this Sixth Supplemental Indenture shall be governed by and construed in accordance with the law of such jurisdiction to the extent mandatory.

 

Section 5.10.  Interpretation of Financial Covenants.

 

For purposes of determining compliance with the financial covenants set out in the Indenture, any election by the Company to measure an item of Debt using fair value (as permitted by Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards No. 159) or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) shall be disregarded and such determination shall be made by valuing Debt at 100% of the outstanding principal amount thereof (except to the extent such Debt was issued at a discount or premium in which case the value of such Debt shall be valued at 100% of the outstanding principal amount thereof, less any unamortized discount or plus any unamortized premium, as the case may be).

 

23

 

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

 

	
 
    	
MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC, a Michigan   limited liability company
    
	
 
    	
 
    
	
 
    	
By:   ITC Holdings Corp., its sole manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
      /s/   Cameron M. Bready
    
	
 
    	
Cameron   M. Bready, Executive Vice President and Chief Financial Officer
    

 

Drafted by:

 

Elizabeth B. Hardin

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, NY 10005

 

After Recorded, Return to:

 

The Bank of New York Mellon Trust Company, N.A.

2 N. LaSalle, Suite 1020

Chicago, Illinois 60602

Attention: Global Corporate Trust

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
      /s/   Linda Garcia
    
	
 
    	
Name:   Linda Garcia
    	
 
    
	
 
    	
Title:   Vice President
    
				

 

 

	
ACKNOWLEDGMENT
    
	
 
    
	
STATE   OF MICHIGAN
    	
)
    
	
 
    	
)   ss.
    
	
COUNTY   OF OAKLAND
    	
)
    

 

On the 5th day of October, 2012, before me, the undersigned notary public, personally came Cameron M. Bready, to me known to be Executive Vice President and Chief Financial Officer of ITC Holdings Corp., a corporation organized under the laws of the State of Michigan, the sole manager of Michigan Electric Transmission Company, LLC, a limited liability company organized under the laws of the State of Michigan, and acknowledged that he executed the foregoing instrument in his authorized capacity, and that by his signature on the instrument he, or the entity upon behalf of which he acted, executed the instrument.

 

	
 
    	
 
    	
/s/   Denise M. Juras
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Denise   M. Juras, Notary Public
    
	
 
    	
 
    	
Oakland   County, Michigan
    
	
 
    	
 
    	
My   Commission Expires October 29, 2014
    
	
 
    	
 
    	
Acting   in the County of Oakland
    

 

 

	
ACKNOWLEDGMENT
    
	
 
    
	
STATE   OF ILLINOIS
    	
)
    
	
 
    	
)   ss.
    
	
COUNTY   OF COOK
    	
)
    
			

 

On the 5th day of October, 2012, before me, the undersigned notary public, personally came Linda Garcia, Vice President of The Bank of New York Mellon Trust Company, N.A., a national banking association organized under the laws of the United States, and acknowledged to me that she executed the foregoing instrument in her authorized capacity, and that by her signature on the instrument she, or the entity upon behalf of which she acted, executed the instrument.

 

 

	
 
    	
By:
    	
/s/   T. Mosterd
    
	
 
    	
 
    	
No.
    
	
 
    	
 
    	
Notary   Public State of Illinois
    
	
 
    	
 
    	
Qualified   in Cook County
    
	
 
    	
 
    	
My   Commission Expires 11/22/2013
    

 

 

Schedule 1

 

The recording information for the Original Mortgage Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture, each recorded in the Offices of the Register of Deeds in the Michigan counties as indicated, is as follows:

 

	
County
    	
 
    	
Original Mortgage
   Indenture
    	
 
    	
First Supplemental
   Indenture
    	
 
    	
Second Supplemental
   Indenture
    	
 
    	
Fourth Supplemental
   Indenture
    	
 
    	
Fifth Supplemental
   Indenture
    
	
Alcona
    	
 
    	
Instrument   No. 200300006636; L395, P141
    	
 
    	
Instrument   No. 200300006637; L395, P270
    	
 
    	
Instrument   No. 200300006638; L395, P336
    	
 
    	
Instrument   No. 200800003865; L457, P1036
    	
 
    	
L470,   P107
    
	
Allegan
    	
 
    	
L2609,   P654
    	
 
    	
L2610,   P1
    	
 
    	
L2610,   P194
    	
 
    	
Instrument   No. 2008023175 L3281, P602
    	
 
    	
L3414,   P1
    
	
Alpena
    	
 
    	
L431,   P340
    	
 
    	
L431,   P341
    	
 
    	
L431,   P342
    	
 
    	
Instrument   No. 03078018 L468, P684
    	
 
    	
L476,   P998
    
	
Antrim
    	
 
    	
L00697,   P0280
    	
 
    	
L00697,   P0404
    	
 
    	
L00697,   P0465
    	
 
    	
Instrument   No. 200800010254 L786, P2867
    	
 
    	
L803,   P942
    
	
Arenac
    	
 
    	
L423,   P301
    	
 
    	
L423,   P444
    	
 
    	
L423,   P524
    	
 
    	
L541,   P212
    	
 
    	
L561,   P725
    
	
Barry
    	
 
    	
Instrument   No. 1120018
    	
 
    	
Instrument   No. 1120019
    	
 
    	
Instrument   No. 1120020
    	
 
    	
Instrument   No. 20081215-0011782
    	
 
    	
Instrument   No. 201004230004212
    
	
Bay
    	
 
    	
L2156,   P585
    	
 
    	
L2157,   P249
    	
 
    	
L2157,   P004
    	
 
    	
L2647,   P508
    	
 
    	
L2734,   P912
    
	
Branch
    	
 
    	
L01000,   P0600
    	
 
    	
L01000,   P0737
    	
 
    	
L01000,   P0811
    	
 
    	
Instrument   No. 2008-08600
    	
 
    	
Instrument   No. 2010-02696
    
	
Calhoun
    	
 
    	
L2765,   P587
    	
 
    	
L2765,   P829
    	
 
    	
L2766,   P1
    	
 
    	
L3421,   P892
    	
 
    	
L3538,   P553
    
	
Charlevoix
    	
 
    	
L591,   P042
    	
 
    	
L591,   P156
    	
 
    	
L591,   P207
    	
 
    	
L0869,   P0414
    	
 
    	
L0919,   P0518
    

 

1

 

	
County
    	
 
    	
Original Mortgage
   Indenture
    	
 
    	
First Supplemental
   Indenture
    	
 
    	
Second Supplemental
   Indenture
    	
 
    	
Fourth Supplemental
   Indenture
    	
 
    	
Fifth Supplemental
   Indenture
    
	
Cheboygan
    	
 
    	
L925,   P483
    	
 
    	
L925,   P637
    	
 
    	
L925,   P727
    	
 
    	
L1112,   P918
    	
 
    	
L1149,   P529
    
	
Clare
    	
 
    	
L890,   P333
    	
 
    	
L890,   P443
    	
 
    	
L890,   P490
    	
 
    	
Instrument   No. 200800009719 L1098, P156
    	
 
    	
L1139,   P464
    
	
Clinton
    	
 
    	
Instrument   No. 5048529
    	
 
    	
Instrument   No. 5048530
    	
 
    	
Instrument   No. 5048531
    	
 
    	
Instrument   No. 5138207
    	
 
    	
Instrument   No. 5156341
    
	
Crawford
    	
 
    	
L663,   P4
    	
 
    	
L663,   P115
    	
 
    	
L663,   P163
    	
 
    	
L694,   P129
    	
 
    	
L700,   P257
    
	
Eaton
    	
 
    	
L1775,   P271
    	
 
    	
L1775,   P449
    	
 
    	
L1775,   P564
    	
 
    	
L2207,   P0903
    	
 
    	
L2278,   P834
    
	
Emmet
    	
 
    	
L1032,   P537
    	
 
    	
L1032,   P669
    	
 
    	
L1032,   P738
    	
 
    	
Instrument   No. 5060620 B1108, P168
    	
 
    	
L1122,   P870
    
	
Genesee
    	
 
    	
Instrument   No. 200312160161714
    	
 
    	
Instrument   No. 200312160161715
    	
 
    	
Instrument   No. 200312160161716
    	
 
    	
Instrument   No. 200812160082181
    	
 
    	
Instrument   No. 201004270037454
    
	
Gladwin
    	
 
    	
L709,   P27
    	
 
    	
L709,   P151
    	
 
    	
L709,   P212
    	
 
    	
L883,   P873
    	
 
    	
L917,   P533
    
	
Grand   Traverse
    	
 
    	
L2049,   P508
    	
 
    	
L2049,   P652
    	
 
    	
L2049,   P733
    	
 
    	
Instrument   No. 2008R-20555
    	
 
    	
Instrument   No. 2010R-07137
    
	
Gratiot
    	
 
    	
L740,   P595
    	
 
    	
L740,   P752
    	
 
    	
L740,   P846
    	
 
    	
L858,   P1452
    	
 
    	
L883,   P563
    
	
Hillsdale
    	
 
    	
L1125,   P517
    	
 
    	
L1125,   P643
    	
 
    	
L1125,   P706
    	
 
    	
L1373,   P218
    	
 
    	
L1422,   P469
    
	
Ingham
    	
 
    	
L3084,   P73
    	
 
    	
L3084,   P74
    	
 
    	
L3084,   P75
    	
 
    	
Instrument   No.

2008-047041   B3327, P1040
    	
 
    	
B3382,   P132
    
	
Ionia
    	
 
    	
L577,   P7152
    	
 
    	
L577,   P7299
    	
 
    	
L577,   P7383
    	
 
    	
L610,   P4348
    	
 
    	
L0616,   P1388
    

 

2

 

	
County
    	
 
    	
Original Mortgage
   Indenture
    	
 
    	
First Supplemental
   Indenture
    	
 
    	
Second Supplemental
   Indenture
    	
 
    	
Fourth Supplemental
   Indenture
    	
 
    	
Fifth Supplemental
   Indenture
    
	
Iosco
    	
 
    	
L781,   P793
    	
 
    	
L782,   P1
    	
 
    	
L782,   P79
    	
 
    	
L964,   P582
    	
 
    	
L997,   P895
    
	
Isabella
    	
 
    	
L1216,   P4
    	
 
    	
L1216,   P122
    	
 
    	
L1216,   P177
    	
 
    	
L1458,   P591
    	
 
    	
L1515,   P139
    
	
Jackson
    	
 
    	
L1767,   P119
    	
 
    	
L1767,   P117
    	
 
    	
L1767,   P118
    	
 
    	
Instrument   No. 2524184

L1911,   P696
    	
 
    	
L1941,   P1155
    
	
Kalamazoo
    	
 
    	
Instrument   No. 2003-087140
    	
 
    	
Instrument   No. 2003-087142
    	
 
    	
Instrument   No. 2003-087141
    	
 
    	
Instrument   No.

2008-039292
    	
 
    	
Instrument   No.

2010-013218
    
	
Kalkaska
    	
 
    	
Instrument   No. 3053445
    	
 
    	
Instrument   No. 3053446
    	
 
    	
Instrument   No. 3053447
    	
 
    	
Instrument   No. 3088499
    	
 
    	
Instrument   No. 3095622
    
	
Kent
    	
 
    	
Instrument   No. 20040105-0000653
    	
 
    	
Instrument   No. 20040105-0000654
    	
 
    	
Instrument   No. 20040105-0000655
    	
 
    	
Instrument   No. 20081216-0106138
    	
 
    	
Instrument   No. 20100426-0037103
    
	
Lake
    	
 
    	
L281,   P477
    	
 
    	
L281,   P598
    	
 
    	
L281,   P656
    	
 
    	
L330,   P319
    	
 
    	
L339,   P1857
    
	
Leelanau
    	
 
    	
L1045,   P258
    	
 
    	
L1045,   P258
    	
 
    	
L1045,   P258
    	
 
    	
L1045,   P258
    	
 
    	
L1046,   P153
    
	
Lenawee
    	
 
    	
L2258,   P769
    	
 
    	
L2258,   P770
    	
 
    	
L2258,   P771
    	
 
    	
L2375,   P632
    	
 
    	
L2403,   P35
    
	
Livingston
    	
 
    	
L4282,   P0464
    	
 
    	
L4282,   P0602
    	
 
    	
L4282,   P0677
    	
 
    	
Instrument   No. 2008R-033965
    	
 
    	
Instrument   No. 2010R-012370
    
	
Manistee
    	
 
    	
L890,   P415
    	
 
    	
L890,   P578
    	
 
    	
L890,   P678
    	
 
    	
Instrument   No. 2008R007239
    	
 
    	
Instrument   No. 2010R002229
    
	
Mason
    	
 
    	
L555,   P2265
    	
 
    	
L555,   P2419
    	
 
    	
L555,   P2510
    	
 
    	
Instrument   No. 2008R06641
    	
 
    	
Instrument   No. 2010R02375
    
	
Mecosta
    	
 
    	
L705,   P2593
    	
 
    	
L705,   P2707
    	
 
    	
L705,   P2758
    	
 
    	
Instrument   No. 200800009891 L0782, P2850
    	
 
    	
L799,   P795
    
	
Midland
    	
 
    	
L1206,   P4
    	
 
    	
L1206,   P160
    	
 
    	
L1206,   P253
    	
 
    	
L1451,   P208
    	
 
    	
L1507,   P721
    

 

3

 

	
County
    	
 
    	
Original Mortgage
   Indenture
    	
 
    	
First Supplemental
   Indenture
    	
 
    	
Second Supplemental
   Indenture
    	
 
    	
Fourth Supplemental
   Indenture
    	
 
    	
Fifth Supplemental
   Indenture
    
	
Missaukee
    	
 
    	
Instrument   No. 2003-06377
    	
 
    	
Instrument   No. 2003-06378
    	
 
    	
Instrument   No.  2003-06379
    	
 
    	
Instrument   No. 2008-04378
    	
 
    	
Instrument   No. 2010-01327
    
	
Monroe
    	
 
    	
L2647,   P657
    	
 
    	
L2647,   P833
    	
 
    	
L2647,   P935
    	
 
    	
Instrument   No. 2008R22325
    	
 
    	
Instrument   No.

2010   R08054
    
	
Montcalm
    	
 
    	
L1149,   P293
    	
 
    	
L1149,   P442
    	
 
    	
L1149,   P528
    	
 
    	
L1426,   P510
    	
 
    	
L1475,   P1019
    
	
Montmorency
    	
 
    	
L244,   P679
    	
 
    	
L244,   P804
    	
 
    	
L244,   P866
    	
 
    	
Instrument   No. 200800037674

L305,   P573
    	
 
    	
L314,   P926
    
	
Muskegon
    	
 
    	
L3581,   P921
    	
 
    	
L3581,   P922
    	
 
    	
L3581,   P923
    	
 
    	
L3797,   P757
    	
 
    	
L3845,   P318
    
	
Newaygo
    	
 
    	
L404,   P5495
    	
 
    	
L404,   P5687
    	
 
    	
L404,   P5816
    	
 
    	
L433,   P3422
    	
 
    	
L438,   P5704
    
	
Oakland
    	
 
    	
L31677,   P1
    	
 
    	
L31677,   P128
    	
 
    	
L31677,   P196
    	
 
    	
Instrument   No. 215217

L40774,   P814
    	
 
    	
B42014,   P518
    
	
Oceana
    	
 
    	
GR   2004/822
    	
 
    	
GR   2004/976
    	
 
    	
GR   2004/1067
    	
 
    	
GR2008/24361
    	
 
    	
GR   2010/6790
    
	
Ogemaw
    	
 
    	
Instrument   No. 3044799
    	
 
    	
Instrument   No. 3044800
    	
 
    	
Instrument   No. 3044801
    	
 
    	
Instrument   No. 3083352
    	
 
    	
Instrument   No. 3092393
    
	
Oscoda
    	
 
    	
L204,   P332
    	
 
    	
L204,   P479
    	
 
    	
L204,   P563
    	
 
    	
L208,   P03034
    	
 
    	
L210,   P00987
    
	
Otsego
    	
 
    	
L0976,   P078
    	
 
    	
L0976,   P222
    	
 
    	
L0976,   P303
    	
 
    	
L1187,   P72
    	
 
    	
L1228,   P493
    
	
Ottawa
    	
 
    	
L4372,   P557
    	
 
    	
L4373,   P001
    	
 
    	
L4373,   P221
    	
 
    	
Instrument   No. 0044941

L5754,   P426
    	
 
    	
Instrument   No. 2010-0015611
    
	
Presque   Isle
    	
 
    	
L383,   P100
    	
 
    	
L383,   P232
    	
 
    	
L383,   P301
    	
 
    	
Instrument   No.

200800008708   L469, P933
    	
 
    	
L489,   P842
    

 

4

 

	
County
    	
 
    	
Original Mortgage
   Indenture
    	
 
    	
First Supplemental
   Indenture
    	
 
    	
Second Supplemental
   Indenture
    	
 
    	
Fourth Supplemental
   Indenture
    	
 
    	
Fifth Supplemental
   Indenture
    
	
Roscommon
    	
 
    	
L997,   P1285
    	
 
    	
L997,   P1404
    	
 
    	
L997,   P1460
    	
 
    	
Instrument   No. 200800008515 L1079, P21
    	
 
    	
L1092,   P2232
    
	
Saginaw
    	
 
    	
L2269,   P1263
    	
 
    	
L2269,   P1264
    	
 
    	
L2269,   P1265
    	
 
    	
Instrument   No. 2008035230 L2516, P2158
    	
 
    	
Instrument   No. 2010010027

L2575,   P1024
    
	
St.   Joseph
    	
 
    	
L1205,   P86
    	
 
    	
L1205,   P196
    	
 
    	
L1205,   P243
    	
 
    	
L1510,   P1
    	
 
    	
L1571,   P810
    
	
Shiawassee
    	
 
    	
L1052,   P721
    	
 
    	
L1052,   P722
    	
 
    	
L1052,   P723
    	
 
    	
L1130,   P0333
    	
 
    	
L1146,   P0786
    
	
Tuscola
    	
 
    	
Instrument   No. 200400846443, L980, P619
    	
 
    	
Instrument   No. 200400846444, L980, P772
    	
 
    	
Instrument   No. 200400846445, L980, P862
    	
 
    	
Instrument   No. 200800914506 L1163, P891
    	
 
    	
L1196,   P1456
    
	
Van   Buren
    	
 
    	
L1403,   P256
    	
 
    	
L1403,   P257
    	
 
    	
L1403,   P258
    	
 
    	
Instrument   No.

LR-3191975   L1511,

P5
    	
 
    	
L1534,   P360
    
	
Washtenaw
    	
 
    	
L4352,   P238
    	
 
    	
L4352,   P239
    	
 
    	
L4352,   P240
    	
 
    	
Instrument   No. 5876781 L4710, P182
    	
 
    	
L4786,   P271
    
	
Wexford
    	
 
    	
L530,   P704
    	
 
    	
L530,   P834
    	
 
    	
L531,   P001
    	
 
    	
Instrument   No. 200800007690

L616,   P1393
    	
 
    	
L629,   P2044
    

 

5

 

Exhibit A

 

DESCRIPTION OF PROPERTIES

 

The following properties of the Company, owned as of the date hereof, have been acquired by the Company subsequent to the date of the Fifth Supplemental Indenture:

 

See Attached.

 

 

Exhibit B

 

SUBORDINATION TERMS

 

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

 

All capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Sixth Supplemental Indenture, dated as of October 5, 2012 (as in effect on the date hereof, the “Supplemental Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A.), as trustee (the “Trustee”).

 

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

 

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

 

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

 

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

 

 

been paid in full until the obligee of such Senior Debt Obligations shall have received payment in full in cash.

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

4

 

Exhibit C

 

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

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC

3.98% Senior Secured Note due 2042

 

	
Original   Interest Accrual Date: October 26, 2012 

Stated   Maturity: October 26, 2042 

Interest   Rate: 3.98% per annum 

Interest   Payment Dates: March 31 and September 30 

Regular   Record Dates: March 15 and September 15
    

 

This Note is not an Original Issue Discount Security
 within the meaning of the within-mentioned Indenture.  
 This Note is a Debt Security within the 
 meaning of the within-mentioned Indenture.

 

 

	
Registered   No. [RA - ]
    	
[DATE]
    
	
$[                     ](1)
    	
PPN   59447# AE3
    

 

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC, a limited liability company duly organized and existing under the laws of the State of Michigan (herein called the “Company”, which term includes any successor Corporation under the Indenture referred to below), for value received, hereby promises to pay to [                     ], or its registered assigns, the principal sum of [                                     ] DOLLARS ($           ) on the Stated Maturity specified above, and to pay interest (a) thereon from the Original Interest Accrual Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on the Interest Payment Dates specified above in each year, commencing on March 31, 2013 and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid or duly provided for and (b) to the extent permitted by law, on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.98% and (ii) 2.0% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date.  Notwithstanding the foregoing, interest payable at Maturity shall be paid to the Person to whom principal shall be paid.  Except as otherwise provided in said Indenture, any such interest not so timely paid or duly provided for shall forthwith cease to be payable to the Noteholder on such Regular Record Date and may either be paid 

 

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

 

 

to the Person in whose name this Note (or one or more Predecessor Securities) 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 of which shall be given to the Noteholders not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Securities of this series may be listed, and upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in said Indenture.

 

CERTIFICATE OF AUTHENTICATION

 

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

 

	
Date   of Authentication:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Bank of New York Mellon Trust Company, N.A. as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized   Officer
    

 

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

 

Subject to the home office payment obligation set forth in Section 2.02(b) of the Supplemental Indenture (referred to below), payment of the principal of and Make-Whole Amount, if any, on this Note and interest hereon at Maturity shall be made upon presentation of this Note at the office or agency of the Trustee in New York, New York at c/o The Bank of New York Mellon, Trust Services Window, 101 Barclay Street, New York, New York 10286, or at such other office or agency as may be designated for such purpose by the Company from time to time in accordance with the Indenture.  Subject to the home office payment obligation set forth in Section 2.02(b) of the Supplemental Indenture, payment of interest on this Note (other than interest at Maturity) shall be made as set forth in Section 307 of the Original Indenture (as defined below).  Payment of the principal of and Make-Whole Amount, if any, and interest on this Note, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

 

This Note is one of a duly authorized issue of securities of the Company (all such series of securities herein called the “Securities”) issued and issuable in one or more series under and equally secured by a First Mortgage Indenture, dated as of December 10, 2003 (such indenture as originally executed and delivered herein called the “Original Indenture” and as supplemented and modified by any and all indentures supplemental thereto, including the Supplemental Indenture referred to below, being herein called the “Indenture”), and has been issued pursuant to that certain Sixth Supplemental Indenture, dated as of October 5, 2012 (the “Supplemental Indenture”), each of the Indenture and the Sixth Supplemental Indenture being between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A.), as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a description of the property mortgaged, pledged and held in trust as security for payment of all amounts due under this Note, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of the Securities thereunder and of the terms and 

 

2

 

conditions upon which the Securities (including the Securities of this series) are, and are to be, authenticated and delivered and secured.  The acceptance of this Note shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture.  This Note is one of the series of Securities designated above.

 

Notwithstanding anything to the contrary in Section 113 of the Original Indenture, in the Supplemental Indenture or in this Note, if the Stated Maturity or any Redemption Date of this Note shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of the Original Indenture or the Supplemental Indenture or this Note) payment of interest on or principal (and premium, if any) of this Note due at the Stated Maturity or on any Redemption Date thereof need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Stated Maturity or on any Redemption Date thereof, provided that interest shall accrue on the Outstanding principal amount of this Note due at the Stated Maturity or on any Redemption Date thereof until the date of actual payment.  Interest hereon will be computed on the basis of a 360-day year of twelve 30-day months.

 

This Note is subject to mandatory redemption under the circumstances set forth in Section 501(a) of the Original Indenture and as set forth in Section 2.03 of the Supplemental Indenture.  This Note is subject to redemption at the option of the Company, in whole or in part, as set forth in Section 2.04 of the Supplemental Indenture.

 

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

 

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

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and interest and 

 

3

 

any Make-Whole Amount on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Trustee in New York, New York, which as of the date hereof is located at c/o The Bank of New York Mellon, Trust Services Window, 101 Barclay Street, New York, New York 10286, or such other office or agency as may be designated by the Company from time to time in accordance with the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in the form attached hereto as Annex A duly executed by the Holder hereof, or his attorney duly authorized in writing, and thereupon one or more new Securities of this series of authorized denominations and of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only as registered Securities, without coupons, and in denominations of $250,000 or any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of the same series and Tranche, of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Note or Notes to be exchanged at the office or agency of the Trustee in New York, New York at c/o The Bank of New York Mellon, Trust Services Window, 101 Barclay Street, New York, New York 10286, or such other office or agency as may be designated by the Company from time to time in accordance with the Indenture.

 

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

 

The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the absolute owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Securities of this series are not entitled to the benefit of any sinking fund.

 

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

 

As provided in Section 1401 of the Original Indenture, no recourse shall be had for the payment of the principal of or Make-Whole Amount, if any, or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, member, manager, stockholder, officer, director or employee, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities (including the 

 

4

 

Notes) are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities (including the Notes).

 

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

 

This Note shall be governed by and construed in accordance with the law of the State of New York (including, without limitation, Section 5-1401 of the New York General Obligations Law or any successor to such statute), except that (i) to the extent that the Trust Indenture Act shall be applicable, this Note shall be governed by and construed in accordance with the Trust Indenture Act and (ii) if the law of any jurisdiction wherein any portion of the Mortgaged Property that is Real Property is located shall govern the creation of a mortgage lien on and security interest in, or perfection, priority or enforcement of the Lien of the Indenture or exercise of remedies with respect to, such portion of the Mortgaged Property, this Note shall be governed by and construed in accordance with the law of such jurisdiction to the extent mandatory.

 

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

 

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

 

5

 

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

 

	
 
    	
MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC, a Michigan   limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: ITC Holdings Corp., its sole manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Cameron M. Bready, Executive Vice President and Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    

 

 

SCHEDULE A

 

SCHEDULE OF NOTATIONS

 

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

 

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

 

 

ANNEX A

 

FORM OF ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL SECURITY 
 OR OTHER IDENTIFYING NUMBER

 

	
 
    
	
 
    
	
 
    

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

 

	
 
    

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

 

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

 

 

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

 

SIGNATURE GUARANTEE

 

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

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