Sixth Supplemental Indenture


    Exhibit
      4.2

     

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    SIXTH
      SUPPLEMENTAL INDENTURE

     

    


     

    FROM

     

    


     

    WISCONSIN
      PUBLIC SERVICE CORPORATION

     

    


     

    TO

     

    


     

    U.S.
      BANK
      NATIONAL ASSOCIATION

     

    (SUCCESSOR
      TO FIRSTAR BANK, NATIONAL ASSOCIATION AND 

     

    FIRSTAR
      BANK, MILWAUKEE, N.A., NATIONAL ASSOCIATION)

     

    


     

    TRUSTEE

     

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    Dated
      as of
      December 1, 2006

     

    


     

    SUPPLEMENTAL
      TO INDENTURE

     

    Dated
      as of
      December 1, 1998

     

    Senior
      Debt
      Securities

     

    


     

    


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    This
      SIXTH
      SUPPLEMENTAL INDENTURE is made as of the 1st day of December, 2006, by and
      between WISCONSIN PUBLIC SERVICE CORPORATION, a corporation duly organized
      and
      existing under the laws of the State of Wisconsin (the “Company”), and U.S. BANK
      NATIONAL ASSOCIATION (successor to Firstar Bank, National Association and
      Firstar Bank Milwaukee, National Association), a national banking association
      duly organized and existing under the laws of the United States, as trustee
      (the
“Trustee”).

     

    RECITALS
      OF
      THE COMPANY:

     

    WITNESSETH:
      that

     

    The
      Company has
      heretofore executed and delivered to the Trustee the Indenture (hereinafter
      referred to as the “Indenture”), made as of December 1, 1998;
      and

     

    Section
      3.01 of the
      Indenture provides that Securities may be issued from time to time in series
      pursuant to a supplemental indenture specifying the terms of each series of
      Securities; and

     

    The
      Company desires
      to establish a series of Securities to be designated “Senior Notes, Series Due
      February 1, 2013” (the “Securities of the Series due February 1,
      2013”); and

     

    Section
      10.01 of
      the Indenture provides that the Company and the Trustee may enter into
      indentures supplemental thereto for the purposes, among others, of establishing
      the form or terms of Securities of any series and adding to the covenants of
      the
      Company; and

     

    The
      Company and the
      Village of Weston, Wisconsin (the “Village”) have entered into a Third Amendment
      to Loan Agreement (as hereinafter defined) pursuant to which the Company has
      agreed to issue the Securities of the Series due February 1, 2013 subject to
      certain terms and conditions; and

     

    The
      execution and
      delivery of this Sixth Supplemental Indenture (herein, this “Supplemental
      Indenture”) has been duly authorized by a Board Resolution.

     

    NOW,
      THEREFORE,
      this Supplemental Indenture

     

    WITNESSETH,
      that,
      in order to set forth the terms and conditions upon which Securities of the
      Series due February 1, 2013 are, and are to be, authenticated, issued and
      delivered, and in consideration of the sum of one dollar duly paid to it by
      the
      Trustee at the execution of this Supplemental Indenture, the receipt whereof
      is
      hereby acknowledged, the Company covenants and agrees with the Trustee for
      the
      equal and proportionate benefit of the respective Holders from time to time
      of
      such Securities as follows:

     


    
      
        
        

      

      
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    ARTICLE
      I

    RELATION
      TO
      INDENTURE; DEFINITIONS

     

    SECTION
      1.1  

     

    This
      Supplemental
      Indenture constitutes an integral part of the Indenture.

     

    SECTION
      1.2  

     

    For
      all purposes of
      this Supplemental Indenture:

     

    (a)  The
      following terms
      shall, for all purposes of this Supplemental Indenture, have the following
      meanings unless the context otherwise requires:

     

    The
      term “1954
      Code” means the Internal Revenue Code of 1954 as in effect immediately prior to
      the effective date of the Tax Reform Act of 1986.

     

    The
      term “Projects”
means those of the facilities described in Exhibit A to the Third Amendment
      to
      Loan Agreement which are refinanced with the Series 2006 Village
      Bonds.

     

    The
      term “Series
      2006 Village Bonds” means the Village of Weston, Wisconsin Pollution Control
      Refunding Revenue Bonds, Series 2006 (Wisconsin Public Service Corporation
      Projects), to be authenticated and delivered under and pursuant to the 2006
      Village Indenture in the principal amount of $22,000,000.

     

    The
      term “Third
      Amendment to Loan Agreement” means the Third Amendment to Loan Agreement, dated
      as of December 1, 2006, between the Village and the Company.

     

    The
      term “Village”
means the Village of Weston, a municipal corporation and political subdivision
      duly organized and existing under the laws of the State of Wisconsin (and which
      is successor to the Town of Weston), located within the County of Marathon
      of
      the State of Wisconsin.

     

    The
      term “2006
      Village Indenture” means the Indenture of Trust, dated as of December 1,
      2006, between the Village and U.S. Bank National Association, as 2006 Village
      Indenture Trustee. 

     

    The
      term “2006
      Village Indenture Trustee” means the person, corporation or banking association
      acting as trustee from time to time under the 2006 Village
      Indenture.

     

    The
      term “2006
      Village Revenue Agreement” means the Loan Agreement, dated as of April 1, 1981,
      between the Village and the Company, as previously amended and as amended by
      the
      Third Amendment to Loan Agreement.

     

    (b)  Capitalized
      terms
      used but not otherwise defined herein shall have the respective meanings
      assigned to such terms in the Indenture;

     

    
      
        
        

      

      
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    (c)  All
      references
      herein to Articles and Sections, unless otherwise specified, refer to the
      corresponding Articles and Sections of this Supplemental Indenture;
      and

     

    (d)  The
      terms “hereof,”
“herein,” “hereby,” “hereto,” “hereunder,” and “herewith” refer to this
      Supplemental Indenture.

     

    ARTICLE
      II  

    THE
      SECURITIES

     

    There
      is hereby
      established a series of Securities pursuant to Section 3.01 of the Indenture
      as
      follows:

     

    (a)  The
      title of the
      Securities of the series hereby established is “Senior Notes, Series due
      February 1, 2013.”

     

    (b)  The
      aggregate
      principal amount of the Securities of the Series due February 1, 2013 which
      may be authenticated and delivered under the Indenture (except for Securities
      authenticated and delivered upon registration of transfer of, or in exchange
      for, or in lieu of other Securities of such series pursuant to Sections 2.05,
      3.04, 3.05, 3.06, 10.06 or 12.07 of the Indenture) shall be limited to
      Twenty-Two Million Dollars ($22,000,000).

     

    (c)  The
      Securities of
      the Series due February 1, 2013 are to be issued in registered form without
      coupons, in denominations of $5,000 and integral multiples thereof, and shall
      be
      substantially in the form of Appendix I
      attached hereto,
      which is incorporated herein by reference.

     

    (d)  The
      Stated Maturity
      of the Securities of the Series due February 1, 2013 is
      February 1, 2013.

     

    (e)  The
      Securities of
      the Series due February 1, 2013 shall bear interest at the rate of 3.95%
      per annum and
      such interest
      shall accrue from December 14, 2006 (or from the most recent Interest Payment
      Date to which interest on the Securities of the Series due February 1, 2013
      has been paid or provided for). The Interest Payment Dates for the Securities
      of
      the Series due February 1, 2013 shall be February 1 and August 1
      in each year commencing February 1, 2007, and the Regular Record Date for
      the interest payable on any Interest Payment Date shall be the fifteenth day
      (whether or not a Business Day) preceding such Interest Payment
      Date.

     

    (f)  Principal
      of and
      interest on the Securities of the Series due February 1, 2013 shall be
      payable in Dollars to the 2006 Village Indenture Trustee at its address
      appearing on the books for registration and registration of transfer at the
      Corporate Trust Office of the Trustee. The Securities of the Series due February
      1, 2013 shall be non-transferable except as may be required to effect a transfer
      to any successor 2006 Village Indenture Trustee.

     

    (g)  The
      Securities of
      the Series due February 1, 2013 shall be subject to redemption at any time
      at
      the option and direction of the Company, as a whole and not in part, at a
      Redemption Price equal to 100% of the principal amount thereof, together with
      accrued interest to the Redemption Date, if any one or more of the following
      events shall have occurred:

     

    
      
        
        

      

      
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            (i)  Unit
      3 (“Unit 3”)
      at the Company’s coal-fired power plant located in Marathon County, Wisconsin
      and known as the Weston Power Plant shall have been damaged or destroyed to
      such
      an extent that, in the opinion of the Board of Directors of the Company, it
      cannot reasonably be restored within six months to the condition thereof
      immediately preceding such damage or destruction;

     

            (ii)  Unit
      3 shall have
      been damaged or destroyed to such an extent that normal operation of Unit 3
      is
      thereby prevented for a period of at least six months;

     

            (iii)  title
      to, or
      temporary use of, all or substantially all of Unit 3 shall have been taken
      under
      the power of eminent domain or sold under the threat of such taking, or there
      shall be a taking of any part of the Projects or other property interest of
      the
      Company in connection with which Unit 3 is used as results or is likely to
      result in the inability to carry on normal operation of Unit 3 for a period
      of
      at least six months;

     

            (iv)  the
      2006 Village
      Revenue Agreement shall become void or unenforceable or impossible of
      performance in accordance with the intent and purpose of the parties as
      expressed therein, or unreasonable burdens or excessive liabilities related
      to
      the 2006 Village Revenue Agreement or the Projects shall be imposed on the
      Village or the Company as a result of any change in the Constitution of the
      State of Wisconsin or the Constitution of the United States of America or as
      a
      result of any legislative, administrative or judicial action;

     

            (v)  a
      final order or
      decree of any court or administrative body shall require that a substantial
      part
      of the operations at Unit 3 cease or be terminated to such extent that normal
      operation of Unit 3 will be, or is likely to be, prevented for a period of
      at
      least six months;

     

            (vi)  changes,
      which the
      Company cannot reasonably control, in the economic availability of materials,
      fuel, supplies, labor, equipment or other properties or things necessary for
      the
      efficient operation of Unit 3 shall have occurred which, in the judgment of
      the
      Board of Directors of the Company, render the continued operation of Unit 3
      uneconomic; or

     

            (vii)  changes
      in
      circumstances, including, but not limited to, changes in pollution control
      requirements, shall have occurred such that the Board of Directors of the
      Company shall determine that use of the Projects is no longer required or
      desirable.

     

    Any
      such redemption
      shall be on a date which is within one year following the occurrence of one
      of
      the events listed above permitting the exercise of the option.

    


    (h)  The
      Company shall
      call for redemption all of the Securities of the Series due February 1, 2013
      then Outstanding, and shall on the Redemption Date therefor redeem the same
      at a
      price equal to 100% of the principal amount thereof, together with accrued
      interest to the Redemption Date, in the event that the Company is notified
      by
      the 2006 Village Indenture Trustee that (i) an event of default has
      occurred and is continuing under Section 9.01(e) of the 2006 Village Indenture,
      and (ii) the 2006 Village Indenture Trustee has declared the principal of
      all 2006 Village Bonds then outstanding immediately due and payable pursuant
      to
      Section 9.02

     

     

    
      
        
        

      

      
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      of
        the
        2006 Village Indenture. The Redemption Date shall be the accelerated maturity
        date of the 2006 Village Bonds; provided, however, that such requirement
        of
        redemption shall be deemed to be waived if prior to the date fixed for such
        redemption of the Securities of the Series due February 1, 2013, the
        acceleration of the 2006 Village Bonds is waived or annulled.


    

     

    (i)  The
      Company shall
      call for redemption all (or part if, in the opinion of nationally recognized
      bond counsel, a corresponding partial redemption of the 2006 Village Bonds
      will
      preserve the exclusion from gross income for Federal income tax purposes of
      interest on the remaining 2006 Village Bonds) of the Securities of the Series
      due February 1, 2013 then Outstanding, and shall on the Redemption Date therefor
      redeem the same at a price equal to 100% of the principal amount thereof,
      together with accrued interest thereon to the Redemption Date, in the event
      that
      it is finally determined by the Internal Revenue Service or a court of competent
      jurisdiction that, as a result of a failure by the Company to observe any
      covenant, agreement or representation in the 2006 Village Revenue Agreement,
      the
      interest payable on the 2006 Village Bonds is includable for Federal income
      tax
      purposes in the gross income of any owner of a 2006 Village Bond (other than
      an
      owner who is a “substantial user” or a “related person” within the meaning of
      Section 103(b)(13) of the 1954 Code and the applicable regulations thereunder).
      Any such determination shall not be considered final for this purpose unless
      the
      Company has been given notice thereof, and if it so desires, has been afforded
      the opportunity, at its expense, to contest the same, either directly or in
      the
      name of any owner of 2006 Village Bonds, and until the conclusion of any
      appellate review, if sought. The Redemption Date shall be the 120th
      day after the date
      such determination becomes final or on such earlier date as the Company may
      designate.

     

    (j)  In
      the event that
      the Company shall desire to exercise its right, or is required by the provisions
      of this Article II, to redeem and pay all or any part of the Securities of
      the
      Series due February 1, 2013, it shall, except as modified herein, comply with
      the terms and conditions of Article XII of the Indenture with regard to the
      redemption of Securities of any series issued hereunder, and such redemption
      shall be made under and subject to the terms and provisions of said Article
      XII
      and in the manner and with the effect stated therein; provided, however,
      (i) payments in redemption of Securities of the Series due February 1, 2013
      shall be made directly by the Company to the Holder of the Securities entitled
      thereto; and (ii) the Company may avail itself of the credits described in
      Article III hereof. The Company shall not exercise any option to redeem on
      any
      date all or any part of the Securities of the Series due February 1, 2013 unless
      it shall give a valid direction under the 2006 Village Indenture for the
      redemption on such date of an equal amount of 2006 Village Bonds. Notice of
      each
      such optional redemption shall be hand delivered or mailed, by certified mail,
      with return receipt requested, at least thirty (30) days prior to the Redemption
      Date, to the Holder of the Securities which are to be redeemed at its address
      appearing on the books for registration and registration of transfer at the
      Corporate Trust Office of the Trustee. Such delivery or mailing (but not the
      receipt thereof or the return of the receipt so requested) shall be a condition
      to the redemption of the Securities. All Securities so redeemed shall forthwith
      be delivered to the Trustee and canceled, but only when the principal, premium,
      if any, and accrued interest thereon is paid in full.

     

    (k)  Securities
      of the
      Series due February 1, 2013 may be redeemed in part, but the portion of any
      such
      Security so redeemed in part shall be Five Thousand Dollars ($5,000) or


     

    
      
        
        

      

      
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    an
      integral
      multiple thereof. In case any Security shall be redeemed in part only, payment
      of the redemption price of such portion of the Security of the Series due
      February 1, 2013 shall be made by the Company (or Trustee, as the case may
      be)
      to the Holder thereof, at its address appearing on the books for registration
      and registration of transfer of Securities of the Series due February 1, 2013
      at
      the Corporate Trust Office of the Trustee, without presentation or surrender
      thereof, provided there is on file with the Company and Trustee (and not
      theretofore rescinded by written notice from such Holder to the Company and
      Trustee) a written commitment from such Holder to the effect that (i) payments
      will be so made, and (ii) such Holder will make notations on such Security
      or a
      paper attached thereto of the portion thereof so redeemed. Prior to any transfer
      by the Holder of any Security of the Series due February 1, 2013, the same
      shall
      be surrendered to the Company or Trustee for appropriate notation thereon of,
      or
      in exchange for a new Security or Securities for, the unredeemed balance of
      the
      principal amount thereof. The Trustee shall not be under any duty to determine
      that any of the notations mentioned herein have been made or be liable in any
      manner with respect thereto.

     

    (l)  In
      the event that
      an interest payment or maturity date or a date fixed for redemption of any
      Security of the Series due February 1, 2013 shall be a Saturday, Sunday or
      a
      legal holiday or a day on which banking institutions in the city of location
      of
      the registered address of the Holder are authorized by law to close, then
      payment of interest or principal (and premium, if any) need not be made on
      such
      date, but may be made on the next succeeding Business Day not a Saturday, Sunday
      or a legal holiday or a day upon which banking institutions in the city of
      location of the registered address of the Holder are authorized by law to close,
      with the same force and effect as if made on the date of maturity, interest
      payment date, or the date fixed for redemption, and no interest shall accrue
      for
      the period after such date.

     

    (m)  The
      Securities of
      the Series due February 1, 2013 shall not be subject to any sinking fund
      and shall not be redeemable at the option of the Holder thereof.

     

    (n)  The
      Related Series
      of Collateral Bonds being delivered to the Trustee in connection with the
      issuance of the Securities of the Series due February 1, 2013 is the
      Company’s First Mortgage Bonds, Collateral Series F.

     

    Such
      Securities of
      the Series due February 1, 2013 shall be initially authenticated and delivered
      upon delivery to the Trustee of the documents required by Section 3.01 of the
      Indenture.

     

    ARTICLE
      III

    PAYMENTS
      AND CREDITS

     

    The
      Company hereby
      covenants that it will duly and punctually pay to the Holder of Securities
      of
      the Series due February 1, 2013, issued under and secured by the Indenture
      and
      this Supplemental Indenture the principal of and interest on said Securities
      at
      the dates and place and in the manner mentioned in such Securities. Provided,
      however:

     

    Payments
      of the
      principal of, premium, if any, and interest on the Securities of the Series
      due
      February 1, 2013 may be made with moneys in the Bond Fund created under
      the 2006
      Village Indenture, as provided in the 2006 Village Revenue Agreement and the
      2006 Village Indenture. Money in said Bond Fund or 

     

    
      
        
        

      

      
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    earnings
      on
      investments which have been set aside by the 2006 Village Indenture Trustee
      at
      the request of the Company for payment of the principal of (whether at maturity
      or upon redemption), premium, if any, or interest on any Series 2006 Village
      Bonds shall be credited against the obligation of the Company to pay the
      principal of, premium, if any, or interest on Securities of the Series due
      February 1, 2013. The principal amount of any Series 2006 Village Bond or
      Bonds acquired by the Company and delivered to the Series 2006 Village Indenture
      Trustee for cancellation, or acquired by the 2006 Village Indenture Trustee
      and
      canceled, shall be credited against the obligation of the Company to pay the
      principal of the Securities of the Series due February 1, 2013.

     

    As
      the principal
      of, premium, if any, and interest on the Securities of the Series due February
      1, 2013 are thereby paid or deemed paid in full, and upon their receipt by
      the
      Company, such Securities shall be delivered to the Trustee for cancellation.
      The
      Company shall promptly inform the Trustee of all payments made and credits
      availed of with respect to its obligations on Securities of the Series due
      February 1, 2013. The Trustee shall not be required to recognize any payment
      made or credit availed of with respect to any Security of the Series due
      February 1, 2013 unless it has received (a) the Security for cancellation by
      it,
      or (b) a certificate of the 2006 Village Indenture Trustee specifying the amount
      of such payment or credit and the number of the Securities of the Series due
      February 1, 2013 with respect to which the payment or credit was applied. In
      the
      absence of receipt by the Trustee of the Security, any such certificate shall
      be
      controlling and conclusive.

     

    ARTICLE
      IV  

    TRANSFER
      OF
      COLLATERAL BONDS

     

    The
      Company hereby
      issues, delivers and transfers to the Trustee in connection with the issuance
      of
      the Securities of the Series due February 1, 2013, Twenty-Two Million
      Dollars ($22,000,000) aggregate principal amount of a related issue of
      Collateral Bonds of the Company designated “First Mortgage Bonds, Collateral
      Series F” (the “Collateral Bonds”), which has been fully registered in the
      name of the Trustee in such capacity, to be held in trust for the benefit of
      the
      Holders from time to time of the Securities of the Series due February 1, 2013
      and, if such transfer does not constitute a sale of the Collateral Bonds to
      the
      Trustee, the Company hereby grants a security interest in the Collateral Bonds
      for the benefit of such Holders, in each case as security for any and all
      obligations of the Company under the Indenture, this Supplemental Indenture
      and
      the Securities of the Series due February 1, 2013, including but not limited
      to
      (1) the full and prompt payment of the interest on, principal of, and premium,
      if any, on such Securities of the Series due February 1, 2013 when and as the
      same shall become due and payable in accordance with the terms and provisions
      of
      the Indenture and this Supplemental Indenture and such Securities of the Series
      due February 1, 2013, either at the Stated Maturity thereof, upon acceleration
      of the maturity thereof or upon redemption, and (2) the full and prompt payment
      of any interest on such Securities of the Series due February 1, 2013 when
      and
      as the same shall become due and payable in accordance with the terms and
      provisions of the Indenture and this Supplemental Indenture and such Securities
      of the Series due February 1, 2013. The Trustee shall enforce all of its rights
      under the First Mortgage Indenture as a holder of
      the Collateral
      Bonds transferred to it as provided in this Article IV for the benefit of
      the Holders of the Securities of the Series due February 1, 2013 and the
      proceeds of the enforcement 

     

    
      
        
        

      

      
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    of
      such rights
      shall be applied by the Trustee to satisfy the Company’s obligations under the
      Indenture, this Supplemental Indenture, and such Securities of the Series due
      February 1, 2013.

     

    The
      Company shall
      make payments of the principal of, and premium, if any, or interest on the
      Collateral Bonds to the Trustee, which payments shall be applied by the Trustee
      to satisfaction of all obligations then due on the Securities of the Series
      due
      February 1, 2013.

     

    The
      Collateral
      Bonds shall not be sold or transferred by the Trustee until the earlier of
      the
      Release Date or the prior retirement of the Securities of the Series due
      February 1, 2013 through redemption, repurchase or otherwise. Without limiting
      the generality of the foregoing, in no event shall the Collateral Bonds be
      sold
      or become the absolute property of any person in violation of the applicable
      provisions of Section 201.04(2) of the Wisconsin Statutes or any successor
      statutory provision. The “Release Date” shall be the date that all First
      Mortgage Bonds of the Company issued and outstanding under the First Mortgage
      Indenture, other than the Collateral Bonds, have been retired (at, before or
      after the maturity thereof) through payment, redemption or otherwise, provided
      that no Default or Event of Default has occurred and, at such time, is
      continuing under the Indenture.

     

    A
      copy of the form
      of Collateral Bond is attached hereto as Appendix II
      and its terms are
      hereby incorporated by reference herein.

     

    ARTICLE
      V  

    MISCELLANEOUS

     

    SECTION
      5.1  

     

    The
      Trustee has
      accepted the amendment of the Indenture effected by this Supplemental Indenture
      and agrees to execute the trust created by the Indenture as hereby amended,
      but
      only upon the terms and conditions set forth in the Indenture, including the
      terms and provisions defining and limiting the liabilities and responsibilities
      of the Trustee, and without limiting the generality of the foregoing, the
      Trustee shall not be responsible in any manner whatsoever for or with respect
      of
      any of the recitals or statements contained herein, all of which recitals or
      statements are made solely by the Company, or for or with respect to (a) the
      validity or sufficiency of this Supplemental Indenture or any of the terms
      or
      provisions hereof, (b) the proper authorization hereof by the Company by
      corporate action or otherwise, and (c) the due execution hereof by the
      Company.

     

    SECTION
      5.2  

     

    This
      Supplemental
      Indenture shall be construed in connection with and as a part of the
      Indenture.

     

    SECTION
      5.3

     

    (a)  If
      any provision of
      this Supplemental Indenture conflicts with another provision of the Indenture
      required to be included in indentures qualified under the Trust Indenture Act
      of
      1939, as amended (as enacted prior to the date of this Supplemental Indenture),
      

     

     

    
      
        
        

      

      
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    by
      any of the
      provisions of Sections 310 to 317, inclusive, of said act, such required
      provision shall control.

     

    (b)  In
      case any one or
      more of the provisions contained in this Supplemental Indenture or in the
      Securities issued hereunder should be invalid, illegal, or unenforceable in
      any
      respect, the validity, legality and enforceability of the remaining provisions
      contained herein and therein shall not in any way be affected, impaired,
      prejudiced or disturbed thereby.

     

    SECTION
      5.4  

     

    Whenever
      in this
      Supplemental Indenture either of the parties hereto is named or referred to,
      such name or reference shall be deemed to include the successors or assigns
      of
      such party, and all the covenants and agreements contained in this Supplemental
      Indenture by or on behalf of the Company or by or on behalf of the Trustee
      shall
      bind and inure to the benefit of the respective successors and assigns of such
      parties, whether so expressed or not.

     

    SECTION
      5.5  

     

    (a)  This
      Supplemental
      Indenture may be simultaneously executed in several counterparts, and all such
      counterparts executed and delivered, each as an original, shall constitute
      but
      one and the same instrument.

     

    (b)  The
      descriptive
      headings of the several Articles of this Supplemental Indenture were formulated,
      used and inserted in this Supplemental Indenture for convenience only and shall
      not be deemed to affect the meaning or construction of any of the provisions
      hereof.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    IN
      WITNESS WHEREOF,
      WISCONSIN PUBLIC SERVICE CORPORATION has caused this Supplemental Indenture
      to
      be executed by its Chairman, Chief Executive Officer, President, Vice Chairman
      or a Vice President, or any other officer selected by the Board of Directors,
      and its corporate seal to be hereunto affixed, duly attested by its Secretary
      or
      an Assistant Secretary, and U.S. BANK NATIONAL ASSOCIATION, as Trustee as
      aforesaid, has caused this Supplemental Indenture to be executed by one of
      its
      authorized signatories, as of December 1, 2006.

     

    WISCONSIN
      PUBLIC
      SERVICE 

    CORPORATION

    


    [SEAL]

    


                                   By:
/s/
      Bradley A.
      Johnson

    Bradley
      A.
      Johnson

    Vice
      President and
      Treasurer

    


    ATTEST:

    


    


    


    /s/
      Barth J. Wolf

    Barth
      J.
      Wolf

    Secretary

    


    U.S.
      BANK NATIONAL
      ASSOCIATION

    


    


    


    By:
/s/
      Peter M.
      Brennan

        Peter
      M.
      Brennan

        Vice
      President

    


    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      I


    No.
      R-_____                                                                         $__________

    


    (Form
      of
      Security of Series due February 1, 2013)

     

    WISCONSIN
      PUBLIC SERVICE CORPORATION

    Senior
      Note, 3.95% Series Due February 1, 2013

     

    WISCONSIN
      PUBLIC
      SERVICE CORPORATION, a corporation duly organized and existing under the laws
      of
      Wisconsin (herein called the “Company,” which term includes any successor
      corporation under the Indenture hereinafter referred to), for value received,
      hereby promises to pay to U.S. Bank National Association, as trustee (together
      with any successor trustee, being hereinafter referred to as the “2006 Village
      Indenture Trustee”) under the Indenture of Trust, dated as of December 1,
      2006 (the “2006 Village Indenture”) between the Village of Weston, Wisconsin and
      the 2006 Village Indenture Trustee, the principal sum of ______________
      Dollars ($_________) on February 1, 2013 and to pay interest thereon
      from December 14, 2006 or from the most recent Interest Payment Date to which
      interest has been paid or duly provided for, semi-annually on February 1
      and August 1 in each year, commencing February 1, 2007, at the rate of
      3.95% per annum, until the principal hereof is paid or made available for
      payment and (to the extent that the payment of such interest shall be legally
      enforceable) at the rate of 3.95% per annum on any overdue principal and premium
      and on any overdue installment of interest. The interest so payable, and
      punctually paid or duly provided for, on any Interest Payment Date will, as
      provided in such Indenture, be paid to the Person in whose name this Security
      (or one or more Predecessor Securities) is registered at the close of business
      on the Regular Record Date for such interest, which shall be the close of
      business on the fifteenth calendar day next preceding such Interest Payment
      Date
      (whether or not such day is a Business Day). Any such interest not so punctually
      paid or duly provided for will forthwith cease to be payable to the Holder
      on
      such Regular Record Date and may either be paid to the Person in whose name
      this
      Security (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 whereof shall be given to Holders of Securities
      of this series not less than 10 days prior to such Special Record Date, or
      be
      paid at any time in any other lawful manner, all as more fully provided in
      said
      Indenture.

     

    Payment
      of the
      principal of (and premium, if any) and any such interest on this Security will
      be made at the office or agency of the Trustee maintained for that purpose,
      in
      Milwaukee, Wisconsin, in Dollars, provided, however, that at the option of
      the
      Company payment of interest may be made by wire transfer of immediately
      available funds into the account specified by the Holder of this Security or
      by
      check mailed to the address of the Person entitled thereto as such address
      shall
      appear in the Security Register.

     

    Prior
      to the
      Release Date (as hereinafter defined), the Securities will be secured by First
      Mortgage Bonds, Collateral Series F (the “Collateral Bonds”), issued and
      delivered by the Company to the Trustee for the benefit of the Holders of the
      Securities (as defined herein), issued under the First Mortgage and Deed of
      Trust dated January 1, 1941, from the Company to First Wisconsin Trust Company
      (subsequently succeeded by U.S. Bank National Association) (the “Mortgage
      Trustee”) as supplemented and amended by the supplemental indentures thereto
      (the “First Mortgage Indenture”). Reference is made to the First Mortgage
      Indenture and the

     


    
      
        Appendix
          I Page 1

      

      
        
        

        
          

        

      

      
        
        

      

    


    Indenture
      for a
      description of the rights of the Trustee as holder of the Collateral Bonds,
      the
      property mortgaged and pledged under the First Mortgage Indenture, the rights
      of
      the Company and of the Mortgage Trustee in respect thereof, the duties and
      immunities of the Mortgage Trustee, the terms and conditions upon which the
      Collateral Bonds are held by the Trustee for the benefit of the Holders of
      Securities, and the circumstances under which additional First Mortgage Bonds
      may be issued.

     

    From
      and
      after such time as all First Mortgage Bonds (other than Collateral Bonds) issued
      under the First Mortgage Indenture have been retired through payment, redemption
      or otherwise (including those First Mortgage Bonds the payment for which has
      been provided for in accordance with the First Mortgage Indenture) at, before
      or
      after the maturity thereof and provided that no default or event of default
      under the Indenture has occurred and is continuing (the “Release Date”), the
      Collateral Bonds shall cease to secure the Securities in any manner, and, at
      the
      option of the Company, the Securities either (a) will become unsecured general
      obligations of the Company or (b) will be secured by first mortgage bonds issued
      under an indenture other than the First Mortgage Indenture. In certain
      circumstances prior to the Release Date as provided in the Indenture, the
      Company is permitted to reduce the aggregate principal amount of an issue of
      Collateral Bonds held by the Trustee, but in no event prior to the Release
      Date
      to an amount less than the aggregate principal amount outstanding of the related
      issue of Securities initially issued contemporaneously with such Collateral
      Bonds.

     

    The
      Securities of
      this series are issued in order to evidence and secure a loan made by the
      Village of Weston, Wisconsin (the “Village”), to the Company pursuant to a Loan
      Agreement, dated as of April 1, 1981 as amended from time to time, including
      a
      Third Amendment to Loan Agreement, dated as of December 1, 2006. In order
      to fund such loan, the Village has agreed to issue $22,000,000 in principal
      amount of its Pollution Control Refunding Revenue Bonds, Series 2006 (Wisconsin
      Public Service Corporation Projects) (“Series 2006 Village Bonds”) under and
      pursuant to the 2006 Village Indenture. The Series 2006 Village Bonds are
      payable from payments made, or caused to be made, by the Company of principal
      of, premium, if any, and interest on the Securities of this series. Upon certain
      terms and conditions, credits arising from purchase or redemption of the Series
      2006 Village Bonds shall be applied against payment obligations in connection
      with the Securities of this series and to the extent so applied shall satisfy
      a
      like amount otherwise due thereunder.

     

    This
      Security is
      one of a duly authorized issue of securities of the Company (herein called
      the
“Securities”), issued and to be issued under an Indenture, dated as of December
      1, 1998 (as amended and supplemented from time to time, herein called the
“Indenture”), between the Company and a predecessor of U.S. Bank National
      Association, as Trustee (herein called the “Trustee,” which term includes any
      successor trustee under the Indenture), to which Indenture and all other
      indentures supplemental thereto, including the Sixth Supplemental Indenture,
      dated as of December 1, 2006 (the “Sixth Supplemental Indenture”),
      reference is hereby made for a statement of the respective rights, limitations
      of rights, duties and immunities thereunder of the Company, the Trustee and
      the
      Holders of the Securities and of the terms upon which the Securities are, and
      are to be, authenticated and delivered. This Security is one of the series
      designated on the face hereof, limited in aggregate principal amount to
      $22,000,000.

     


    
      
        Appendix
          I Page 2

      

      
        
        

        
          

        

      

      
        
        

      

    


    In
      certain
      extraordinary events described in paragraph (g) of Article II of the Sixth
      Supplemental Indenture, the Securities of this series are subject to redemption
      within one year following such extraordinary event, in whole but not in part,
      at
      the option of the Company, in each case at a Redemption Price equal to the
      principal amount thereof, together with accrued interest to the Redemption
      Date.

     

    The
      Company shall
      call for redemption all of the Securities of this series then Outstanding,
      and
      shall on the Redemption Date therefor redeem the same at a price equal to 100%
      of the principal amount thereof, together with accrued interest to the
      Redemption Date, in the event that the Company is notified by the 2006 Village
      Indenture Trustee that (a) an event of default has occurred and is
      continuing under Section 9.01(e) of the 2006 Village Indenture, and (b) the
      2006 Village Indenture Trustee has declared the principal of all 2006 Village
      Bonds then outstanding immediately due and payable pursuant to Section 9.02
      of
      the 2006 Village Indenture. The Redemption Date shall be the accelerated
      maturity date of the 2006 Village Bonds; provided, however, that such
      requirement of redemption shall be deemed to be waived if prior to the date
      fixed for such redemption of the Securities of this series, the acceleration
      of
      the 2006 Village Bonds is waived or annulled. 

     

    The
      Company shall
      call for redemption all (or part if, in the opinion of nationally recognized
      bond counsel, a corresponding partial redemption of the 2006 Village Bonds
      will
      preserve the exclusion from gross income for Federal income tax purposes of
      interest on the remaining 2006 Village Bonds) of the Securities of this series
      then Outstanding, and shall on the Redemption Date therefor redeem the same
      at a
      price equal to 100% of the principal amount thereof, together with accrued
      interest thereon to the Redemption Date, in the event that it is finally
      determined by the Internal Revenue Service or a court of competent jurisdiction
      that, as a result of a failure by the Company to observe any covenant, agreement
      or representation in the 2006 Village Revenue Agreement, the interest payable
      on
      the 2006 Village Bonds is includable for Federal income tax purposes in the
      gross income of any owner of a 2006 Village Bond (other than an owner who is
      a
“substantial user” or a “related person” within the meaning of Section
      103(b)(13) of the 1954 Code and the applicable regulations thereunder). Any
      such
      determination shall not be considered final for this purpose unless the Company
      has been given notice thereof, and if it so desires, has been afforded the
      opportunity, at its expense, to contest the same, either directly or in the
      name
      of any owner of 2006 Village Bonds, and until the conclusion of any appellate
      review, if sought. The Redemption Date shall be the 120th
      day after the date
      such determination becomes final or on such earlier date as the Company may
      designate.

     

    In
      the event of
      redemption of this Security in part only, a new Security of this series for
      the
      unredeemed portion hereof will be issued in the name of the Holder hereof upon
      the cancellation hereof.

     

    If
      any Event of
      Default with respect to Securities of this series shall occur and be continuing,
      the principal of the Securities of this series may be declared due and payable
      in the manner and with the effect provided in the Indenture. Upon payment (a)
      of
      the amount of principal so declared due and payable and interest accrued thereon
      and (b) of interest on any overdue principal and overdue interest (in each
      case
      to the extent that the payment of such interest shall be legally enforceable),
      all of the Company’s obligations in respect of the payment of the principal of
      and interest, if any, on the Securities of this series shall
      terminate.

     


    
      
        Appendix
          I Page 3

      

      
        
        

        
          

        

      

      
        
        

      

    


    This
      Security is
      subject to Defeasance as described in the Indenture.

     

    The
      Indenture may
      be modified by the Company and the Trustee without consent of any Holder with
      respect to certain matters as described in the Indenture. In addition, the
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Company and
      the rights of the Holders of the Securities of each series to be affected under
      the Indenture at any time by the Company and the Trustee with the consent of
      the
      Holders of a majority in principal amount of the Securities at the time
      Outstanding of each series to be affected. The Indenture also contains
      provisions permitting the Holders of a majority in principal amount of the
      Securities of each series at the time Outstanding, on behalf of the Holders
      of
      all Securities of such series, to waive certain past defaults under the
      Indenture and their consequences. Any such consent or waiver by the Holder
      of
      this Security shall bind such Holder and all future Holders of this Security
      and
      of any Security issued upon the registration of transfer hereof or in exchange
      hereof or in lieu hereof, whether or not notation of such consent or waiver
      is
      made upon this Security.

     

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

     

    This
      Security is
      not transferable except as may be required to effect a transfer to any successor
      2006 Village Indenture Trustee. As provided in the Indenture and the Sixth
      Supplemental Indenture and subject to certain limitations therein set forth,
      any
      such permitted transfer of this Security is registrable in the Security
      Register, upon surrender of this Security for registration of transfer at the
      office or agency of the Company in any place where the principal of (and
      premium, if any) and interest on this Security are payable, duly endorsed by,
      or
      accompanied by a written instrument of transfer in form satisfactory to the
      Company and the Security Registrar duly executed by the Holder hereof or his
      attorney duly authorized in writing, and thereupon a new Security of this
      series, of authorized denomination and for the same Stated Maturity and
      aggregate principal amount, will be issued to the successor 2006 Village
      Indenture Trustee. 

     

    The
      Securities of
      this series are issuable only in registered form without coupons in
      denominations of $5,000 and integral multiples 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 this series of a different authorized denomination, as requested by the
      Holder surrendering the same.

     

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

     

    Prior
      to due
      presentment of this Security for registration of transfer, the Company, the
      Trustee and any agent of the Company or the Trustee may treat the Person in
      whose name this Security is registered as the owner hereof for all purposes,
      whether or not this Security be

     


    
      
        Appendix
          I Page 4

      

      
        
        

        
          

        

      

      
        
        

      

    


    overdue,
      and
      neither the Company, the Trustee nor any such agent shall be affected by notice
      to the contrary.

     

    The
      Indenture
      imposes certain limitations on the ability of the Company to, among other
      things, merge or consolidate with any other Person or sell, assign, transfer
      or
      lease all or substantially all of its properties or assets. All such covenants
      and limitations are subject to a number of important qualifications and
      exceptions. The Company must report periodically to the Trustee on compliance
      with the covenants in the Indenture.

     

    A
      director,
      officer, employee or shareholder, as such, of the Company shall not have any
      liability for any obligations of the Company under this Security or the
      Indenture or for any claim based on, in respect of, or by reason of, such
      obligations or their creation. Each Holder, by accepting a Security, waives
      and
      releases all such liability. The waiver and release are part of the
      consideration for the issuance of this Security.

     

    All
      capitalized
      terms used in this Security without definition which are defined in the
      Indenture shall have the meanings assigned to them in the
      Indenture.

     

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

     

    IN
      WITNESS WHEREOF,
      the Company has caused this instrument to be duly executed under its corporate
      seal.

     

    Wisconsin
      Public
      Service Corporation

    


    


    By:_________________________________ 

         ____________________
      President

    


    


    [SEAL]

    Attest:

    


    


    ________________________________

    ____________________
      Secretary

    


    



    
      
        Appendix
          I Page 5

      

      
        
        

        
          

        

      

      
        
        

      

    


    Form
      of
      Trustee’s Certificate of Authentication.

     

    Dated:
      _______________

     

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

     

     

    ___________________________
As
      Trustee

    


    


    By:___________________________

    Authorized
      Signatory


    
      
        Appendix
          I Page 6

      

      
        
        

        
          

        

      

      
        
        

      

    


    ASSIGNMENT
      FORM

     

    To
      assign this
      Security, fill in the form below: (I) or (we) assign and transfer this Security
      to

     

     

    _____________________________________________________________________________

    (Insert
      assignee’s
      social security or tax I.D. number)

    


     

    _______________________________________________________________________________

     

    _______________________________________________________________________________

     

    _______________________________________________________________________________

     

    _______________________________________________________________________________

    (Print
      or type
      assignee’s name, address and zip code)

    


    and
      irrevocably
      appoint __________________________________________________________ agent to
      transfer this Security on the books of the Company. The agent may substitute
      another to act for him.

     

    Dated:_______________________ Your
      Signature:__________________________________________________________

    (Sign
      exactly as
      your name

    appears
      on the
      other side of

    this
      Security)

    


    Signature
      Guaranty:________________________________________________

    [Signatures
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Transfer Agent, which requirements will include membership
      or participation in STAMP or such other signature guarantee program as may
      be
      determined by the Transfer Agent in addition to, or in substitution for, STAMP,
      all in accordance with the Exchange Act.]

    


    Social
      Security
      Number or Taxpayer Identification

    Number:_______________________________________

    


     


    
      
        
          Appendix
            I Page
            7

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
APPENDIX
      II

    
 

    (Form
      of
      Bond of Collateral Series F)

     

    No._____________                                                                 $____________ 

    


    Wisconsin
      Public
      Service Corporation

    (Incorporated
      under
      the laws of the State of Wisconsin)

    


    First
      Mortgage
      Bond, Collateral Series F

    


    THE
      FIRST MORTGAGE
      BONDS, COLLATERAL SERIES F (HEREINAFTER, “COLLATERAL BONDS”), REPRESENTED
      BY THIS CERTIFICATE ARE BEING ISSUED AND DELIVERED BY THE COMPANY TO U.S. BANK
      NATIONAL ASSOCIATION, AS TRUSTEE (IN SUCH CAPACITY, THE “SENIOR TRUSTEE”) UNDER
      AN INDENTURE, DATED AS OF DECEMBER 1, 1998, BETWEEN THE COMPANY AND A
      PREDECESSOR OF THE SENIOR TRUSTEE, AS PREVIOUSLY SUPPLEMENTED AND AS
      SUPPLEMENTED BY THE SIXTH SUPPLEMENTAL INDENTURE THERETO DATED AS OF DECEMBER
      1,
      2006 (AS SO SUPPLEMENTED, THE “SENIOR INDENTURE”). THE COLLATERAL BONDS ARE TO
      BE HELD IN TRUST AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS OF $22,000,000
      AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES, SERIES DUE FEBRUARY 1, 2013 (THE
      “RELATED SECURITIES”) ISSUED PURSUANT TO THE SENIOR INDENTURE.

     

    THE
      COLLATERAL
      BONDS MAY NOT BE SOLD OR OTHERWISE TRANSFERRED (EXCEPT TO A SUCCESSOR SENIOR
      TRUSTEE) UNTIL THE EARLIER OF THE RELEASE DATE (AS DEFINED BELOW) OR THE PRIOR
      RETIREMENT OF THE RELATED SECURITIES THROUGH REDEMPTION, REPURCHASE OR
      OTHERWISE.

     

    THE
      COMPANY SHALL
      MAKE PAYMENTS OF THE PRINCIPAL OF, AND PREMIUM, IF ANY, AND INTEREST ON, THE
      COLLATERAL BONDS, TO THE SENIOR TRUSTEE, WHICH PAYMENTS SHALL BE APPLIED BY
      THE
      SENIOR TRUSTEE TO THE SATISFACTION OF OBLIGATIONS ON THE RELATED
      SECURITIES.

     

    THE
      MATURITY DATE
      SPECIFIED ABOVE IS ALSO THE MATURITY DATE OF THE RELATED
      SECURITIES.

     

    Wisconsin
      Public
      Service Corporation,
      a corporation
      organized and existing under the laws of the State of Wisconsin (hereinafter
      called the Company), for value received, hereby promises to pay to U.S. BANK
      NATIONAL ASSOCIATION, as trustee for the benefit of the holders of the Related
      Securities, or registered assigns (in such capacity, the “Senior Trustee”), at
      the Corporate Trust Services Office of U.S. Bank National Association, in
      Milwaukee, Wisconsin, on the 1st day of February, 2013, the sum of
      ____________________________ DOLLARS ($___________) in lawful money of the
      United States of America, and to pay interest thereon from August 1, 2006 (or
      from the most recent date to which interest has been paid or duly provided
      for)
      semi-annually on February 1 and August 1 in each year, commencing
      February 1, 2007, (i) at the rate of 0% per annum prior to December 14,
      2006 and (ii) at the rate of 3.95% per annum from and after December 14, 2006,
      until the principal hereof is paid or made available for payment and (to the
      extent that the payment of

     


    
      
        Appendix
          II Page 1

      

      
        
        

        
          

        

      

      
        
        

      

    


    such
      interest shall
      be legally enforceable) at the same rate for the applicable period on any
      overdue principal and premium, if any, and on any overdue installment of
      interest. The principal and interest so payable on any February 1 or
      August 1 will be paid to the person or entity in whose name this bond is
      registered, at the address thereof as it appears on the Company’s books for
      registration and registration of transfer.

     

    The
      Related
      Securities are issued in order to evidence and secure a loan made by the Village
      of Weston, Wisconsin (“Village”), to the Company pursuant to a Loan Agreement,
      dated as of April 1, 1981 as amended from time to time, including a Third
      Amendment to Loan Agreement, dated as of December 1, 2006. In order to fund
      such loan, the Village has agreed to issue $22,000,000 in principal amount
      of
      its Pollution Control Refunding Revenue Bonds, Series 2006 (Wisconsin Public
      Service Corporation Projects) (“Series 2006 Village Bonds”) under and pursuant
      to the 2006 Village Indenture (as defined in the Supplemental Indenture). The
      Series 2006 Village Bonds are payable from payments made, or caused to be made,
      by the Company of principal of, premium, if any, and interest on the Related
      Securities. Upon certain terms and conditions, credits arising from purchase
      or
      redemption of the Series 2006 Village Bonds shall be applied against payment
      obligations in connection with the Related Securities and the bonds of this
      series and to the extent so applied shall satisfy a like amount otherwise due
      thereunder.

     

    This
      bond shall not
      be valid or become obligatory for any purpose unless and until U.S. Bank
      National Association, (successor to First Wisconsin Trust Company), as Trustee
      under the Indenture, or its successors thereunder, shall have signed the
      certificate of authentication endorsed hereon.

     

    This
      bond is one of
      a duly authorized issue of bonds of the Company, known as its First Mortgage
      Bonds, of the series and designation indicated on the face hereof, which issue
      of bonds consists, or may consist, of several series of varying denominations,
      dates and tenors, all issued and to be issued under and equally secured (except
      in so far as a sinking fund, or similar fund, established in accordance with
      the
      provisions of the Indenture, may afford additional security for the bonds of
      any
      specific series) by a First Mortgage and Deed of Trust (herein called the
“Indenture”) dated as of January 1, 1941, executed by the Company to
      First Wisconsin Trust Company (subsequently succeeded by U.S. Bank National
      Association, herein called the Trustee), as Trustee, to which Indenture and
      all
      instruments supplemental thereto reference is hereby made for a description
      of
      the property mortgaged and pledged, the nature and extent of the security,
      the
      rights of the holders of the bonds as to such security, and the terms and
      conditions upon which the bonds may be issued under the Indenture and any
      instruments supplemental thereto and are secured. The principal hereof may
      be
      declared or may become due on the conditions, in the manner and at the time
      set
      forth in the Indenture, upon the happening of a completed default as in the
      Indenture provided. This bond is one of a series created by a Supplemental
      Indenture (herein called the “Supplemental Indenture”) dated as of
      August 1, 2006, between the Company and the Trustee, which is supplemental
      to the Indenture.

     

    The
      Senior Trustee
      has agreed pursuant to the Senior Indenture to hold the bonds of this series
      as
      collateral for the benefit of the holders of the Related Securities under all
      circumstances and not to transfer (except to a successor trustee) such bonds
      until the earlier of the Release Date or the prior retirement of the Related
      Securities through redemption, repurchase or otherwise. “Release Date” means the
      date on which all First Mortgage Bonds of the Company

     


    
      
        Appendix
          II Page 2

      

      
        
        

        
          

        

      

      
        
        

      

    


    issued
      and
      outstanding under the Indenture, other than the bonds of this series and other
      bonds pledged as security for Securities issued under the Senior Indenture
      (collectively “Collateral Bonds”), have been retired (at, before or after the
      maturity thereof) through payment, redemption or otherwise, provided that no
      default or event of default has occurred and is continuing under the Senior
      Indenture. On the Release Date, the Senior Trustee shall deliver to the Company
      for cancellation all Collateral Bonds, and the Company shall cause the Senior
      Trustee to provide notice to all holders of Related Securities of the occurrence
      of the Release Date. As a result, on the Release Date, the bonds of this series
      shall cease to secure the Related Securities. Following the Release Date, the
      Company shall cause the Indenture to be discharged, and the Company shall not
      issue any additional Collateral Bonds thereunder, and from and after the Release
      Date, the Company’s obligations in respect of the Collateral Bonds shall be
      satisfied and discharged.

     

    With
      the consent of
      the Company and to the extent permitted by and as provided in the Indenture
      and/or any instruments supplemental thereto, the rights and obligations of
      the
      Company and/or of the holders of the bonds, and/or terms and provisions of
      the
      Indenture and/or of any instruments supplemental thereto may be modified or
      altered by consent of the holders of at least seventy percent (70%) in principal
      amount of the bonds then outstanding under the Indenture and any instruments
      supplemental thereto (excluding bonds challenged and disqualified from voting
      by
      reason of the interest of the Company or of certain related persons therein
      as
      provided in the Indenture); provided that no such modification or alteration
      shall permit the extension of the maturity of the principal of this bond or
      the
      reduction in the rate of interest hereon or any other modification in the terms
      of payment of such principal or interest or the taking of certain other action
      as more fully set forth in the Indenture without the consent of the holder
      hereof.

     

    The
      Company and the
      Trustee may deem and treat the person in whose name this bond is registered
      as
      the absolute owner hereof for the purpose of receiving payment of or on account
      of the principal hereof and interest hereon and for all other purposes, and
      shall not be affected by any notice to the contrary.

     

    In
      certain
      extraordinary events described in paragraph (b) of Section 1.04 of the
      Supplemental Indenture, the bonds of this series are subject to redemption
      within one year following such extraordinary event, in whole but not in part,
      at
      the option of the Company, in each case at a redemption price equal to the
      principal amount thereof, together with accrued interest to the redemption
      date.

     

    The
      Company shall
      call for redemption all of the bonds of this series then outstanding, and shall
      on the redemption date therefor redeem the same at a price equal to 100% of
      the
      principal amount thereof, together with accrued interest to the redemption
      date,
      in the event that the Company is notified by the 2006 Village Indenture Trustee
      (as defined in the Supplemental Indenture) that (i) an event of default has
      occurred and is continuing under Section 9.01(e) of the 2006 Village Indenture,
      and (ii) the 2006 Village Indenture Trustee has declared the principal of
      all Series 2006 Village Bonds then outstanding immediately due and payable
      pursuant to Section 9.02 of the 2006 Village Indenture. The redemption date
      shall be the accelerated maturity date of the Series 2006 Village Bonds;
      provided, however, that such requirement of redemption shall be deemed to be
      waived if prior to the date fixed for such

     


    
      
        Appendix
          II Page 3

      

      
        
        

        
          

        

      

      
        
        

      

    


    redemption
      of the
      bonds of this series, the acceleration of the Series 2006 Village Bonds is
      waived or annulled.

     

    The
      Company shall
      call for redemption all (or part if, in the opinion of nationally recognized
      bond counsel, a corresponding partial redemption of the Series 2006 Village
      Bonds will preserve the exclusion from gross income for Federal income tax
      purposes of interest on the remaining Series 2006 Village Bonds) of the bonds
      of
      this series then outstanding, and shall on the redemption date therefor redeem
      the same at a price equal to 100% of the principal amount thereof, together
      with
      accrued interest thereon to the redemption date, in the event that it is finally
      determined by the Internal Revenue Service or a court of competent jurisdiction
      that, as a result of a failure by the Company to observe any covenant, agreement
      or representation in the 2006 Village Revenue Agreement (as defined in the
      Supplemental Indenture), the interest payable on the Series 2006 Village Bonds
      is includable for Federal income tax purposes in the gross income of any owner
      of a Series 2006 Village Bond (other than an owner who is a “substantial user”
or a “related person” within the meaning of Section 103(b)(13) of the 1954 Code
      (as defined in the Supplemental Indenture) and the applicable regulations
      thereunder). Any such determination shall not be considered final for this
      purpose unless the Company has been given notice thereof, and if it so desires,
      has been afforded the opportunity, at its expense, to contest the same, either
      directly or in the name of any owner of Series 2006 Village Bonds, and until
      the
      conclusion of any appellate review, if sought. The redemption date shall be
      the
      120th
      day after the date
      such determination becomes final or on such earlier date as the Company may
      designate.

     

    Notice
      of any such
      redemption shall be hand delivered or mailed, by or on behalf of the Company,
      not less than thirty (30) days prior to the redemption date to the registered
      owner of the bonds so to be redeemed, at its address as the same shall appear
      on
      the Company’s books for registration and registration of transfer, all subject
      to the conditions and as more fully set forth in the Indenture and in the
      Supplemental Indenture, except that no newspaper publication shall be
      required.

     

    In
      the event that
      an event of default under Section 6.01 of the Senior Indenture has occurred
      and
      is continuing, and the Senior Trustee has declared the principal of all of
      the
      Related Securities then outstanding immediately due and payable (or such
      principal has become ipso facto immediately due and payable) under Section
      6.02
      of the Senior Indenture, then the Company shall call for redemption and redeem
      all of the bonds of this series then outstanding at a price equal to 100% of
      the
      principal amount thereof, together with accrued interest thereon to the
      redemption date. The redemption date shall be the accelerated maturity date
      of
      the Related Securities, and no prior notice of such redemption to the Trustee
      or
      the Senior Trustee shall be required.

     

    This
      bond is
      nontransferable except to the Senior Trustee and successor trustees thereto.
      To
      the extent that it is transferable, it is transferable by the registered owner
      hereof in person or by attorney duly authorized in writing, on books of the
      Company to be kept for that purpose at the corporate trust services office
      of
      the Trustee at Milwaukee, Wisconsin, upon surrender hereof for cancellation
      at
      said office and upon presentation of a written instrument of transfer duly
      executed. Thereupon the Company shall issue in the name of the transferee,
      and
      the Trustee shall authenticate and deliver, a new registered bond or bonds
      without coupons of the

     


    
      
        Appendix
          II Page 4

      

      
        
        

        
          

        

      

      
        
        

      

    


    same
      maturity and
      interest rate and of equal aggregate principal amount. Any such transfer shall
      be subject to the terms and conditions specified in the Indenture and the
      Supplemental Indenture.

     

    No
      recourse shall
      be had for the payment of principal of, premium, if any, or interest on this
      bond, or any part thereof, or of any claim based hereon or in respect hereof
      or
      of the Indenture or any instrument supplemental thereto, against any
      incorporator, or any past, present or future stockholder, officer or director
      of
      the Company or of any predecessor or successor corporation, either directly
      or
      through the Company, or through any such predecessor or successor corporation,
      or through any receiver or a trustee in bankruptcy, whether by virtue of any
      constitution, statute or rule of law or by the enforcement of any assessment
      or
      penalty or otherwise, all such liability being, by the acceptance hereof and
      as
      a part of the consideration for the issue hereof, expressly waived and released,
      as more fully provided in the Indenture.

     

    In
      Witness Whereof,
      Wisconsin Public Service Corporation
      has caused this
      bond to be signed in its name by the manual or facsimile signature of its
      President or a Vice President and its corporate seal or a facsimile thereof
      to
      be hereto affixed and attested by the manual or facsimile signature of its
      Secretary or an Assistant Secretary.

     

    Dated
      as
      of:

    


    


    Wisconsin
      Public
      Service Corporation

    


    


    


    By: _____________________________

    ______
      President

    Attest:

    


    _____________________________

    ____________
      Secretary

    



    
      
        Appendix
          II Page 5

      

      
        
        

        
          

        

      

      
        
        

      

    


    (Form
      of
      Trustee’s Certificate)

     

    This
      bond is one of
      the bonds of the series designated therein, described in the within mentioned
      Indenture and Supplemental Indenture.

     

    


    


    U.S.
      Bank National
      Association,

     As
      Trustee

    


    


                                    By:________________________  

    Authorized
      Signature

    


     

    


    (Form
      of
      Prepayment Record)

     

    PREPAYMENT
      RECORD

    


    Principal
      Amount Of
      Bond $__________

    


    Date
      of Maturity:
      February 1, 2013

    


    
      	
              Prepayments
                on Principal

            	 	 
	
              Amount

            	
              Date

            	
              Balance

              Outstanding

            	
              Signature
                of Authorized

              Officer
                and Title

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 


    

    


    
      
        Appendix
          II Page 6