Document:

Exhibit
10.3

 

Trimaran
Fund Management, L.L.C.

622 Third Avenue

New York, New York  10017

 

 

June 1, 2005

 

 

International Transmission Holdings Limited
Partnership

c/o Ironhill
Transmission, LLC

c/o Greenbaum
Rowe Smith & Davis LLP

6 Becker Farm Road

Roseland, New Jersey 07068

 

ITC Holdings Corp. and International Transmission
Company

39500 Orchard Hill Place

Novi, Michigan  48375

 

Ladies and Gentlemen:

 

Reference
is made to that letter agreement (the “Letter Agreement”) dated
February 28, 2003 among International Transmission Holdings Limited
Partnership (the “Partnership”), International Transmission Company (the
“Company”) and Trimaran Fund Management, L.L.C. concerning the engagement (the
“Engagement”) of us by the Partnership and the Company to provide advisory,
consulting and financial services to the Partnership and the Company and to
their respective divisions, subsidiaries and affiliates (collectively,
“ITC”).  In exchange for our provision of
services pursuant to the Engagement, the Company agreed to pay us an annual
advisory fee equal to $300,000, such fee to be increased at a rate of 7%
annually, payable in quarterly installments in arrears at the end of each
quarter.

 

The
Partnership, ITC Holdings Corp. (“Holdings”), the Company and we hereby agree
to terminate the Engagement on the following terms and conditions:

 

1.               Upon the completion
of an initial public offering of equity securities by Holdings pursuant to an
effective registration statement, the Engagement shall automatically be
terminated and we shall have no further obligations to provide ITC or the
Partnership any advisory, consulting or financial services.

 

2.               As compensation for
our agreement to terminate the Engagement, Holdings agrees to pay us a one-time
advisory fee in a total amount equal to one million, seven hundred and
twenty-five thousand dollars ($1,725,000.00) upon the effectiveness of the
termination of the Engagement.

 

3.               In connection with
any future advisory, consulting or financial services (“Additional Retentions”)
that we, or any of our affiliates or partners, perform at ITC’s request after
the termination of the Engagement, we may invoice Holdings or the Company

 

 

for
fees that are mutually agreed upon in advance of the Additional Retention for
which Holdings or the Company is invoiced.

 

4.               In addition to any
fees that may be payable to us under the Engagement or any Additional
Retention, the Partnership, Holdings and the Company each also agree to
reimburse us and our affiliates, from time to time upon request, for all reasonable
out-of-pocket expenses incurred, including unreimbursed expenses incurred to
the date hereof, in connection with the Engagement or any Additional Retention,
including travel expenses and expenses of our counsel.

 

5.               Holdings and the
Company each agree to indemnify and hold us, our affiliates (including, without
limitation, affiliated investment entities) and their and our respective
partners, executives, officers, directors, employees, agents and controlling
persons (each such person, including us, being an “Indemnified Party”) harmless
from and against (i) any and all losses, claims, damages and liabilities
(including, without limitation, losses, claims, damages and liabilities arising
from or in connection with legal actions brought by or on behalf of the holders
or future holders of the outstanding securities of Holdings or the Company or
creditors or future creditors of Holdings or the Company), joint, several or
otherwise, to which such Indemnified Party may become subject under any
applicable federal or state law, or otherwise, related to or arising out of any
activity contemplated by the Letter Agreement, this agreement, the Engagement
or any Additional Retention, and our or our affiliates’ performance of any
services contemplated by the foregoing and (ii) any and all losses, claims,
damages and liabilities, joint, several or otherwise, related to or arising out
of any action or omission or alleged action or omission related to the
Partnership, the Company, International Transmission Company, LLC and Holdings
or any of their respective direct or indirect subsidiaries or the securities or
obligations of any such entities.  Holdings
and the Company will further, subject to the proviso to the immediately
preceding sentence, reimburse any Indemnified Party for all expenses (including
counsel fees and disbursements) upon request as they are incurred in connection
with the investigation of, preparation for or defense of any pending or
threatened claim or any action or proceeding arising from any of the foregoing,
whether or not such Indemnified Party is a party and whether or not such claim,
action or proceeding is initiated or brought by the Partnership; provided,
however, that neither Holdings nor the Company will be liable under the
foregoing indemnification provision (and amounts previously paid that are
determined not required to be paid by Holdings or the Company pursuant to the
terms of this paragraph shall be repaid promptly) to the extent that any loss,
claim, damage, liability or expense is found in a final judgment by a court to
have resulted from our willful misconduct, bad faith or gross negligence.  Holdings and the Company each agree that no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to Holdings or the Company related to or arising
out of the Letter Agreement, this agreement, the Engagement or any Additional
Retention, or our affiliates’ performance of any services contemplated by the
foregoing, except to the extent that any loss, claim, damage, liability or
expense is found in a final, non-appealable judgment by a court to have
resulted from our willful misconduct, bad faith or gross negligence.

 

Holdings
and the Company each also agree that, without the prior written consent of each
of us, they will not settle, compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding to which an
Indemnified Party is an actual or potential party and in respect of which
indemnification could be sought under the indemnification provision in the
immediately preceding paragraph, unless such settlement,

 

2

 

compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out
of such claim, action or proceeding.

 

Promptly
after receipt by an Indemnified Party of notice of any suit, action, proceeding
or investigation with respect to which an Indemnified Party may be entitled to
indemnification hereunder, such Indemnified Party will notify each of Holdings
and the Company in writing of the assertion of such claim or the commencement
of such suit, action, proceeding or investigation, but the failure so to notify
Holdings or the Company shall not relieve Holdings or the Company from any
liability which it may have hereunder, except to the extent that such failure
has materially prejudiced Holdings or the Company.  If Holdings or the Company elects within a
reasonable time after receipt of such notice, Holdings or the Company may
participate at its own expense in the defense of such suit, action, proceeding
or investigation.  Each Indemnified Party
may employ separate counsel to represent it or defend it in any such suit,
action, proceeding or investigation in which it may become involved or is named
as a defendant and, in such event, the reasonable fees and expense of such
counsel shall be borne by Holdings or the Company; provided, however,
that neither Holdings nor the Company will be required in connection with any such
suit, action, proceeding or investigation, or separate but substantially
similar actions arising out of the same general allegations or circumstances,
to pay the fees and disbursements of more than one separate counsel (other than
local counsel) for all Indemnified Parties in any single action or
proceeding.  Whether or not Holdings or
the Company participates in the defense of any claim, all of Holdings, the
Company and we shall cooperate in the defense thereof and shall furnish such
records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith.

 

If the
indemnification provided for in clause (i) of the first sentence of this
paragraph 5 is finally judicially determined by a court of competent
jurisdiction to be unavailable to an Indemnified Party, or insufficient to hold
any Indemnified Party harmless, in respect of any losses, claims, damages or
liabilities (other than any losses, claims, damages or liabilities found in a
final judgment by a court to have resulted from our willful misconduct, bad
faith or gross negligence), then Holdings and the Company, on the one hand, in
lieu of indemnifying such Indemnified Party, and we, on the other hand, will
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received, or sought to be
received, by Holdings and the Company on the one hand and us, solely in our
capacity as an advisor under the Letter Agreement or this agreement, as
applicable, on the other hand in connection with the transactions to which such
indemnification, contribution or reimbursement is sought, or (ii) if (but only
if) the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of Holdings and
the Company on the one hand and us on the other, as well as any other relevant
equitable considerations; provided, however, that in no event
shall our aggregate contribution hereunder exceed the amount of fees actually
received by us in respect of the transaction at issue pursuant to the Letter
Agreement or this agreement, as applicable. 
The amount paid or payable by a party as a result of the losses, claims,
damages and liabilities referred to above will be deemed to include any legal
or other fees or expenses reasonably incurred in defending any action or
claim.  Holdings, the Company and we
agree that it would not be just and equitable if

 

3

 

contribution pursuant to this
paragraph were determined by pro rata allocation or by any other method which
does not take into account the equitable considerations referred to in this
paragraph.  The indemnity, contribution
and expense reimbursement obligations that each of Holdings and the Company has
under this letter shall be in addition to any liability Holdings, the Company
or ITC may have, and notwithstanding any other provision of this letter, shall
survive the termination of the Engagement or any Additional Retention pursuant
to the Letter Agreement or this agreement, as applicable.

 

6.               Any advice or
opinions provided by us may not be disclosed or referred to publicly or to any
third party (other than Holdings’ legal, tax, financial or other advisors),
except in accordance with our prior written consent.

 

7.               In connection with
any Additional Retention, we shall act as an independent contractor, with
duties solely to ITC.  The provisions
hereof shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors and assigns.  Nothing in this agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective successors and assigns, and, to the extent expressly set forth
herein, the Indemnified Parties, any rights or remedies under or by reason of
this agreement.  Without limiting the
generality of the foregoing, the parties acknowledge that nothing in this
agreement, expressed or implied, is intended to confer on any present or future
holders of any securities of Holdings or its subsidiaries or affiliates, or any
present or future creditor of Holdings or its subsidiaries or affiliates, any
rights or remedies under or by reason of this agreement or any performance
hereunder.

 

8.               This agreement
shall be governed by and construed in accordance with the laws of New York
without regard to principles of conflicts of law.

 

9.               Each party hereto
represents and warrants that the execution and delivery of this agreement by
such party has been duly authorized by all necessary action of such party.

 

10.         If any term or provision
of this agreement or the application thereof shall, in any jurisdiction and to
any extent, be invalid and unenforceable, such term or provision shall be
ineffective, as to such jurisdiction, solely to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable any remaining
terms or provisions hereof or affecting the validity or enforceability of such
term or provision in any other jurisdiction. 
To the extent permitted by applicable law, the parties hereto waive any
provision of law that renders any term or provision of this agreement invalid
or unenforceable in any respect.

 

11.         Each party hereto waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) related to or arising out of our
retention pursuant to, or our performance of the services contemplated by this
agreement.

 

12.         It is expressly
understood that the foregoing paragraphs 2-6, 10 and 11 in their entirety, survive
any termination of this agreement.

 

4

 

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

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Trimaran Fund Management, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

AGREED TO AND ACCEPTED

 

	
  International Transmission Holdings Limited
  Partnership

  
	
   

  
	
  By:

  	
  Ironhill Transmission, LLC

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Lewis Eisenberg

  
	
   

  	
  Title: Manager

  
	
   

  
	
   

  
	
  ITC Holdings Corp.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  International Transmission Company

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:Exhibit
10.4

 

International
Transmission Holdings

Limited Partnership

c/o Ironhill Transmission, LLC

c/o 99 Wood Avenue South

P.O. Box 5600

Woodbridge, New Jersey 07095

 

	
   

  	
   

  	
  June 1, 2005

  

 

ITC Holdings Corp. and International Transmission
Company

39500 Orchard Hill Place

Novi, Michigan 
48375

 

Ladies and Gentlemen:

 

Reference
is made to that letter agreement (the “Letter Agreement”) dated February 28,
2003 among ITC Holdings Corp. (“ITCH”) and International Transmission Company
(the “Company”) and International Transmission Holdings Limited Partnership
concerning the engagement (the “Engagement”) of us by ITCH and the Company to
provide advisory, consulting and financial services to ITCH and the Company and
to their respective divisions, subsidiaries and affiliates (collectively,
“ITC”).  In exchange for our provision of
services pursuant to the Engagement, ITC and ITCH agreed to pay us annual fees
equal to $150,000 and $50,000, payable by the Company and ITCH, respectively,
to us in arrears within 30 days of the end of each year.

 

The
Company, ITCH and we hereby agree to terminate the Engagement on the following
terms and conditions:

 

1.               Upon the completion
of an initial public offering of equity securities by ITCH pursuant to an
effective registration statement, the Engagement shall automatically be
terminated and we shall have no further obligations to provide ITC or ITCH any advisory, consulting or financial services.

 

2.               As compensation for
our agreement to terminate the Engagement, ITCH agrees to pay us (or our
designee) a one-time advisory fee in a total amount equal to one million
dollars ($1,000,000.00) payable upon the effectiveness of the termination of
the Engagement.

 

3.               In connection with
any future advisory, consulting or financial services (“Additional Retentions”)
that we, or any of our affiliates or partners, perform at ITC’s request after
the termination of the Engagement, we may invoice ITCH or the Company for fees
that are mutually agreed upon in advance of the Additional Retention for which
ITCH or the Company is invoiced.

 

 

4.               In addition to any
fees that may be payable to us under the Engagement or any Additional
Retention, ITCH and the Company each also agree to reimburse us and our
affiliates, from time to time upon request, for all reasonable out-of-pocket
expenses incurred, including unreimbursed expenses incurred to the date hereof,
in connection with the Engagement or any Additional Retention, including travel
expenses and expenses of our counsel.

 

5.               ITCH and the
Company each agree to indemnify and hold us, our affiliates (including, without
limitation, our partners and affiliated investment entities) and their and our
respective partners, executives, officers, directors, employees, agents and
controlling persons (each such person, including us, being an “Indemnified
Party”) harmless from and against (i) any and all losses, claims, damages and
liabilities (including, without limitation, losses, claims, damages and
liabilities arising from or in connection with legal actions brought by or on
behalf of the holders or future holders of the outstanding securities of ITC or
creditors or future creditors of ITC), joint, several or otherwise, to which
such Indemnified Party may become subject under any applicable federal or state
law, or otherwise, related to or arising out of any activity contemplated by
the Letter Agreement, this agreement, the Engagement or any Additional
Retention, and our or our affiliates’ performance of any services contemplated
by the foregoing and (ii) any and all losses, claims, damages and liabilities,
joint, several or otherwise, related to or arising out of any action or
omission or alleged action or omission related to ITCH, the Company or
International Transmission Company, LLC or any of their respective direct or indirect
subsidiaries or the securities or obligations of any such entities.  ITCH and the Company will further, subject to
the proviso to the immediately preceding sentence, reimburse any Indemnified
Party for all expenses (including counsel fees and disbursements) upon request
as they are incurred in connection with the investigation of, preparation for
or defense of any pending or threatened claim or any action or proceeding
arising from any of the foregoing, whether or not such Indemnified Party is a party
and whether or not such claim, action or proceeding is initiated or brought by
ITCH; provided, however, that neither ITCH nor the Company will
be liable under the foregoing indemnification provision (and amounts previously
paid that are determined not required to be paid by ITCH or the Company
pursuant to the terms of this paragraph shall be repaid promptly) to the extent
that any loss, claim, damage, liability or expense is found in a final judgment
by a court to have resulted from our willful misconduct, bad faith or gross
negligence.  ITCH and the Company each
agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to ITC related to or arising out of
the Letter Agreement, this agreement, the Engagement or any Additional
Retention, or our affiliates’ performance of any services contemplated by the
foregoing, except to the extent that any loss, claim, damage, liability or
expense is found in a final, non-appealable judgment by a court to have
resulted from our willful misconduct, bad faith or gross negligence.

 

ITCH
and the Company each also agree that, without the prior written consent of us,
they will not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding to which an Indemnified Party
is an actual or potential party and in respect of which indemnification could
be sought under the indemnification provision in the immediately preceding
paragraph, unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out
of such claim, action or proceeding.

 

2

 

Promptly
after receipt by an Indemnified Party of notice of any suit, action, proceeding
or investigation with respect to which an Indemnified Party may be entitled to
indemnification hereunder, such Indemnified Party will notify each of ITCH and
the Company in writing of the assertion of such claim or the commencement of
such suit, action, proceeding or investigation, but the failure so to notify
ITCH or the Company shall not relieve ITCH or the Company from any liability
which it may have hereunder, except to the extent that such failure has
materially prejudiced either ITCH or the Company.  If either ITCH or the Company so elects
within a reasonable time after receipt of such notice, ITCH or the Company,
respectively, may participate at its own expense in the defense of such suit,
action, proceeding or investigation. 
Each Indemnified Party may employ separate counsel to represent it or
defend it in any such suit, action, proceeding or investigation in which it may
become involved or is named as a defendant and, in such event, the reasonable
fees and expense of such counsel shall be borne by ITCH or the Company; provided,
however, that neither ITCH nor the Company will be required in
connection with any such suit, action, proceeding or investigation, or separate
but substantially similar actions arising out of the same general allegations
or circumstances, to pay the fees and disbursements of more than one separate
counsel (other than local counsel) for all Indemnified Parties in any single
action or proceeding.  Whether or not
ITCH or the Company participates in the defense of any claim, all of ITCH, the
Company and we shall cooperate in the defense thereof and shall furnish such
records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith.

 

If the
indemnification provided for in clause (i) of the first sentence of this
paragraph 5 is finally judicially determined by a court of competent
jurisdiction to be unavailable to an Indemnified Party, or insufficient to hold
any Indemnified Party harmless, in respect of any losses, claims, damages or
liabilities (other than any losses, claims, damages or liabilities found in a
final judgment by a court to have resulted from our willful misconduct, bad
faith or gross negligence), then ITCH and the Company, on the one hand, in lieu
of indemnifying such Indemnified Party, and we, on the other hand, will
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received, or sought to be
received, by ITC on the one hand and us, solely in our capacity as an advisor
under the Letter Agreement or this agreement, as applicable, on the other hand
in connection with the transactions to which such indemnification, contribution
or reimbursement is sought, or (ii) if (but only if) the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of ITC on the one hand and us on the other, as well
as any other relevant equitable considerations; provided, however,
that in no event shall our aggregate contribution hereunder exceed the amount
of fees actually received by us in respect of the transaction at issue pursuant
to the Letter Agreement or this agreement, as applicable.  The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above will be
deemed to include any legal or other fees or expenses reasonably incurred in
defending any action or claim.  ITCH, the
Company and we agree that it would not be just and equitable if contribution
pursuant to this paragraph were determined by pro rata allocation or by any
other method which does not take into account the equitable considerations
referred to in this paragraph.  The
indemnity, contribution and expense reimbursement obligations that each of ITCH
and the Company has under this letter shall be in addition to any liability
ITCH, the Company or ITC may have, and

 

3

 

notwithstanding any other
provision of this letter, shall survive the termination of the Engagement or
any Additional Retention pursuant to the Letter Agreement or this agreement, as
applicable.

 

6.               Any advice or
opinions provided by us may not be disclosed or referred to publicly or to any
third party (other than ITC’s legal, tax, financial or other advisors), except
in accordance with our prior written consent.

 

7.               In connection with
any Additional Retention, we shall act as an independent contractor, with
duties solely to ITC.  The provisions
hereof shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors and assigns.  Nothing in this agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective successors and assigns, and, to the extent expressly set forth
herein, the Indemnified Parties, any rights or remedies under or by reason of
this agreement.  Without limiting the
generality of the foregoing, the parties acknowledge that nothing in this
agreement, expressed or implied, is intended to confer on any present or future
holders of any securities of ITCH or the Company or their respective
subsidiaries or affiliates, or any present or future creditor of ITCH or the
Company or their subsidiaries or affiliates, any rights or remedies under or by
reason of this agreement or any performance hereunder.

 

8.               This agreement
shall be governed by and construed in accordance with the laws of New York
without regard to principles of conflicts of law.

 

9.               Each party hereto
represents and warrants that the execution and delivery of this agreement by
such party has been duly authorized by all necessary action of such party.

 

10.         If any term or provision
of this agreement or the application thereof shall, in any jurisdiction and to
any extent, be invalid and unenforceable, such term or provision shall be
ineffective, as to such jurisdiction, solely to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable any remaining
terms or provisions hereof or affecting the validity or enforceability of such
term or provision in any other jurisdiction. 
To the extent permitted by applicable law, the parties hereto waive any
provision of law that renders any term or provision of this agreement invalid
or unenforceable in any respect.

 

11.         Each party hereto waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) related to or arising out of our
retention pursuant to, or our performance of the services contemplated by this agreement.

 

12.         It is expressly
understood that the foregoing paragraphs 2-6, 10 and 11 in their entirety,
survive any termination of this agreement.

 

4

 

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

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  International Transmission Holdings

  Limited Partnership

  
	
   

  	
   

  
	
   

  	
  By: Ironhill Transmission, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
  Name: Lewis Eisenberg

  
	
   

  	
   

  	
  Title: Manager

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED

  	
   

  
	
   

  	
   

  
	
  ITC Holdings Corp.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  International Transmission Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

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