Exhibit 10.2


 


ENVIRONMENTAL CONTROL PROPERTY PURCHASE
AND SALE AGREEMENT


 


by and between


 


WEPCO ENVIRONMENTAL TRUST FINANCE I,
LLC,


 


Issuer


 


and


 


WISCONSIN ELECTRIC POWER COMPANY,


 


Seller


 


 


 


Dated as of [________], 2021







 





 



 






     


     


    

 


TABLE OF CONTENTS


 




	ARTICLE I. DEFINITIONS AND RULES OF CONSTRUCTION	1
	SECTION 1.01.   Definitions and Rules of Construction	1
	ARTICLE II. TRANSFER OF ENVIRONMENTAL CONTROL PROPERTY	2
	SECTION 2.01.   Transfer of Environmental Control Property.	2
	SECTION 2.02.   Conditions to Transfer of Environmental Control Property	2
	ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER	4
	SECTION 3.01.   Organization and Good Standing	4
	SECTION 3.02.   Due Qualification	4
	SECTION 3.03.   Power and Authority	4
	SECTION 3.04.   Binding Obligation	4
	SECTION 3.05.   No Violation	5
	SECTION 3.06.   No Proceedings	5
	SECTION 3.07.   Approvals	5
	SECTION 3.08.   The Environmental Control Property.	5
	SECTION 3.09.   Limitations on Representations and Warranties	8
	ARTICLE IV. COVENANTS OF THE SELLER	9
	SECTION 4.01.   Existence	9
	SECTION 4.02.   No Liens	9
	SECTION 4.03.   Delivery of Collections	9
	SECTION 4.04.   Notice of Liens	10
	SECTION 4.05.   Compliance with Law	10
	SECTION 4.06.   Covenants Related to Environmental Trust Bonds and Environmental Control Property.	10
	SECTION 4.07.   Protection of Title	11
	SECTION 4.08.   Nonpetition Covenants	12
	SECTION 4.09.   Taxes	12
	SECTION 4.10.   Notice of Breach to Rating Agencies, Etc	12
	SECTION 4.11.   Use of Proceeds	12
	SECTION 4.12.   Further Assurances	13
	ARTICLE V. THE SELLER	13
	SECTION 5.01.   Liability of Seller; Indemnities.	13



 



     


     


    




 


	SECTION 5.02.   Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller	15
	SECTION 5.03.   Limitation on Liability of Seller and Others	16
	ARTICLE VI. MISCELLANEOUS PROVISIONS	16
	SECTION 6.01.   Amendment.	16
	SECTION 6.02.   Notices	17
	SECTION 6.03.   Assignment	18
	SECTION 6.04.   Limitations on Rights of Third Parties	18
	SECTION 6.05.   Severability	18
	SECTION 6.06.   Separate Counterparts	18
	SECTION 6.07.   Headings	18
	SECTION 6.08.   Governing Law	18
	SECTION 6.09.   Assignment to Indenture Trustee	18
	SECTION 6.10.   Limitation of Liability	18
	SECTION 6.11.   Waivers	19


 


EXHIBIT


 


		Exhibit A	Form of Bill of Sale



 



     


     


    




 





This ENVIRONMENTAL CONTROL PROPERTY PURCHASE
AND SALE AGREEMENT, dated as of [______], 2021 (this “Sale Agreement”), is by and between WEPCO ENVIRONMENTAL
TRUST FINANCE I, LLC, a Delaware limited liability company (the “Issuer”), and WISCONSIN ELECTRIC POWER COMPANY,
a Wisconsin corporation (together with its successors in interest to the extent permitted hereunder, the “Seller”).


 


RECITALS


 


WHEREAS, the Issuer desires to purchase
the Environmental Control Property created pursuant to the Statute and the Financing Order;


 


WHEREAS, the Seller is willing to sell its
rights and interests under the Financing Order to the Issuer whereupon such rights and interests shall become the Environmental
Control Property;


 


WHEREAS, the Issuer, in order to finance
the purchase of the Environmental Control Property, will issue the Environmental Trust Bonds under the Indenture; and


 


WHEREAS, the Issuer, to secure its obligations
under the Environmental Trust Bonds and the Indenture, will pledge, among other things, all right, title and interest of the Issuer
in and to the Environmental Control Property and this Sale Agreement to the Indenture Trustee for the benefit of the Secured Parties.


 


NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the parties hereto agree as follows:


 


ARTICLE
I.

DEFINITIONS AND RULES OF CONSTRUCTION


 


SECTION 1.01.                   
Definitions and Rules of Construction.


 


(a)       Unless
otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in that certain Indenture (including
Appendix A thereto) dated as of the date hereof (the “Indenture”), between the Issuer and U.S. Bank,
National Association, in its capacity as indenture trustee (the “Indenture Trustee”) and in its separate capacity
as a securities intermediary (the “Securities Intermediary”). Not all terms defined in Appendix A of
the Indenture are used in this Sale Agreement. The rules of construction set forth in Appendix A of the Indenture shall
apply to this Sale Agreement.


 


(b)       Whenever used in this Sale Agreement,
the following words and phrases shall have the following meanings:


 


“Bill of Sale” means
a bill of sale substantially in the form of Exhibit A hereto delivered pursuant to Section 2.02(a).


 


“Losses”
means (i) any and all amounts of principal and interest on the Environmental Trust Bonds not paid when due or when scheduled
to be paid in accordance with their terms and the amounts of any deposits by or to the Issuer required to have been made in
accordance with the terms of the Basic Documents or the Financing Order which are not made when so required and (ii) any and
all other liabilities, obligations, losses, claims, damages, payments, costs or expenses of any kind whatsoever.


 






     


     


    

 


ARTICLE
II.

TRANSFER OF ENVIRONMENTAL CONTROL PROPERTY


 


SECTION 2.01.                   
Transfer of Environmental Control Property.


 


(a)              
In consideration of the Issuer’s delivery to or upon the order of the Seller of $[___________], subject to the conditions
specified in Section 2.02, the Seller does hereby irrevocably sell, assign and otherwise transfer to the Issuer, without
recourse or warranty, except as set forth herein, all right, title and interest of the Seller in, to and under the Environmental
Control Property (such sale, assignment and transfer of the Environmental Control Property includes, to the fullest extent permitted
by the Statute, the right to impose, collect and receive Environmental Control Charges and the assignment of all revenues and proceeds
of or arising from the Environmental Control Charges related to the Environmental Control Property, as the same may be adjusted
from time to time). Such sale, assignment and transfer of the Environmental Control Property is hereby expressly stated to be a
sale or other absolute transfer and, pursuant to Section 196.027(5)(c) of the Statute and the Financing Order, shall constitute
a sale and absolute transfer of all of the Seller’s right, title and interest, in, to and under, and not a pledge of, or
secured transaction relating to, the Seller’s right, title and interest, in, to and under the Environmental Control Property.
The preceding sentence is the statement referred to in Section 196.027(5)(c) of the Statute. The Seller and the Issuer agree that
after giving effect to the sale, assignment and transfer contemplated hereby the Seller has no right, title or interest in, to
or under the Environmental Control Property to which a security interest could attach because (i) it has sold, assigned and transferred
all right, title and interest in and to the Environmental Control Property to the Issuer, and (ii) as provided in Section 196.027(5)(c)
of the Statute, after such transfer the Environmental Control Property is not subject to any claims of the Seller or the Seller’s
creditors, other than creditors holding a prior security interest in the Environmental Control Property perfected under Section
196.027(5)(b) of the Statute. If such sale, assignment and transfer is held by any court of competent jurisdiction not to be an
absolute transfer as provided in Section 196.027(5)(c) of the Statute, then such sale, assignment and transfer shall be treated
as a pledge of the Environmental Control Property and as the creation of a security interest (within the meaning of the Statute
and the applicable UCC) in the Environmental Control Property and, without prejudice to its position that it has absolutely transferred
all of its rights in the Environmental Control Property to the Issuer, the Seller hereby grants a security interest in the Environmental
Control Property to the Issuer (and to the Indenture Trustee for the benefit of the Secured Parties) to secure their respective
rights under the Basic Documents to receive the Environmental Control Charges and all other Environmental Control Property (the
 “Back-Up Security Interest”).(b)Subject to Section 2.02, the Issuer does hereby purchase the Environmental
Control Property from the Seller for the consideration set forth in this Section 2.01(a).


 






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SECTION 2.02.                   
Conditions to Transfer of Environmental Control Property. The obligation of the Seller to sell, and the obligation
of the Issuer to purchase, the Environmental Control Property on the Closing Date shall be subject to the satisfaction of each
of the following conditions:


 


(a)              on or prior to the Closing Date, the Seller shall have delivered to the Issuer a duly executed Bill of Sale identifying
the Environmental Control Property to be transferred on the Closing Date;


 


(b)             
on or prior to the Closing Date, the Seller shall have received the Financing Order creating the Environmental Control Property;


 


(c)              
as of the Closing Date, the Seller is not insolvent and will not have been made insolvent by such sale and the Seller is
not aware of any pending insolvency with respect to itself;


 


(d)              as of the Closing Date, the representations and warranties of the Seller set forth in this Sale Agreement shall be true
and correct with the same force and effect as if made on the Closing Date (except to the extent that they relate to an earlier
date); on and as of the Closing Date no breach of any covenant or agreement of the Seller contained in this Sale Agreement has
occurred and is continuing; and no Servicer Default shall have occurred and be continuing;


 


(e)               as of the Closing Date, (i) the Issuer shall have sufficient funds available to pay the purchase price for the Environmental
Control Property to be transferred on such date and (ii) all conditions to the issuance of the Environmental Trust Bonds intended
to provide such funds set forth in the Indenture shall have been satisfied or waived;


 


(f)               on or prior to the Closing Date, the Seller shall have taken all action required to transfer to the Issuer ownership of
the Environmental Control Property to be transferred on such date, free and clear of all Liens other than Liens created by the
Issuer pursuant to the Basic Documents and to perfect such transfer, including, without limitation, filing any statements or filings
under the Statute or the applicable UCC;


 


(g)               the Seller shall have delivered to the Rating Agencies and the Issuer any Opinions of Counsel required by the Rating Agencies;


 


(h)               the Seller shall have received and delivered to the Issuer and the Indenture Trustee an opinion or opinions of outside tax
counsel (as selected by the Seller, and in form and substance reasonably satisfactory to the Issuer and the Underwriters) to the
effect that (i) the Issuer will not be subject to U.S. federal income tax as an entity separate from its sole owner and that the
Environmental Trust Bonds will be treated as debt of the Issuer’s sole owner for U.S. federal income tax purposes and (ii)
for U.S. federal income tax purposes, the Seller will not be treated as recognizing gross income upon the issuance of the Environmental
Trust Bonds; 


 


(i)                on and as of the Closing Date, each of the LLC Agreement, the Servicing Agreement, this Sale Agreement, the Indenture, the
Financing Order and the Statute shall be in full force and effect;


 








(j)               
 the Environmental Trust Bonds shall have received a rating or ratings required by the Financing Order;


 






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(k)              
the Seller shall have delivered to the Indenture Trustee and the Issuer an Officer’s Certificate confirming the satisfaction
of each condition precedent specified in this Section 2.02; and


 


(l)               
the Seller shall have received the purchase price for the Environmental Control Property.


 


ARTICLE
III.

REPRESENTATIONS AND WARRANTIES OF SELLER


 


Subject to Section 3.09, the Seller
makes the following representations and warranties, as of the Closing Date, and the Seller acknowledges that the Issuer has relied
thereon in acquiring the Environmental Control Property. The representations and warranties shall survive the sale, assignment
and transfer of the Environmental Control Property to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture. The Seller agrees that (i) the Issuer may assign the right to enforce the following representations and warranties to
the Indenture Trustee and (ii) the representations and warranties inure to the benefit of the Issuer and the Indenture Trustee.


 


SECTION 3.01.         Organization and Good Standing. The Seller is a corporation duly organized, validly existing and in active status
under the laws of the state of Wisconsin, with the requisite corporate power and authority to own its properties as such properties
are currently owned and to conduct its business as such business is now conducted by it, and has the requisite corporate power
and authority to obtain the Financing Order and own the rights and interests under the Financing Order and to sell and assign those
rights and interests to the Issuer whereupon such rights and interests shall become “environmental control property”
as defined in Section 196.027(1)(h) of the Statute.


 


SECTION 3.02.         Due Qualification. The Seller is duly qualified to do business and is in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require
such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would
not be reasonably likely to have a material adverse effect on the Seller’s business, operations, assets, revenues or properties).


 


SECTION 3.03.         Power and Authority. The Seller has the requisite corporate power and authority to execute and deliver this Sale
Agreement and to carry out its terms; and the execution, delivery and performance of obligations under this Sale Agreement have
been duly authorized by all necessary corporate action on the part of the Seller under its organizational or governing documents
and laws.


 


SECTION
3.04.          Binding
Obligation. This Sale Agreement constitutes a legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, subject to applicable insolvency, reorganization, moratorium, fraudulent transfer and
other laws relating to or affecting creditors’ or secured parties’ rights generally from time to time in effect
and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law.


 



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SECTION 3.05.         
No Violation. The consummation of the transactions contemplated by this Sale Agreement and the fulfillment of the
terms hereof do not and will not: (a) conflict with or result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the Seller’s organizational documents or any indenture, or other
material agreement or instrument to which the Seller is a party or by which it or any of its property is bound; or (b) result in
the creation or imposition of any Lien upon any of the Seller’s properties pursuant to the terms of any such indenture, agreement
or other instrument (other than any Lien that may be granted in the Issuer’s favor or any Lien under the Basic Documents
or any Liens created by the Issuer pursuant to the Statute) or violate any existing law or any existing order, rule or regulation
applicable to the Seller of any Governmental Authority having jurisdiction over the Seller or its properties.


 


SECTION 3.06.         
No Proceedings. [Except as disclosed in Schedule 3.06], there are no proceedings pending and, to the Seller’s
knowledge, there are no proceedings threatened and, to the Seller’s knowledge, there are no investigations pending or threatened,
before any Governmental Authority having jurisdiction over the Seller or its properties involving or relating to the Seller or
the Issuer or, to the Seller’s knowledge, any other Person: (a) asserting the invalidity of the Statute, the Financing Order,
this Sale Agreement, any of the other Basic Documents or the Environmental Trust Bonds; (b) seeking to prevent the issuance of
the Environmental Trust Bonds or the consummation of any of the transactions contemplated by this Sale Agreement or any of the
other Basic Documents; (c) seeking any determination or ruling that could reasonably be expected to materially and adversely affect
the performance by the Seller of its obligations under, or the validity or enforceability of, the Statute, the Financing Order,
this Sale Agreement, any of the other Basic Documents or the Environmental Trust Bonds; or (d) seeking to adversely affect the
federal income tax or state income or franchise tax classification of the Environmental Trust Bonds as debt.


 


SECTION 3.07.         
Approvals. Except for UCC financing statement filings and other filings under the Statute, no approval, authorization,
consent, order or other action of, or filing with, any Governmental Authority is required in connection with the execution and
delivery by the Seller of this Sale Agreement, the performance by the Seller of the transactions contemplated hereby or the fulfillment
by the Seller of the terms hereof, except those that have been obtained or made and those that the Seller, in its capacity as Servicer
under the Servicing Agreement, is required to make in the future pursuant to the Servicing Agreement.


 


SECTION 3.08.         
The Environmental Control Property.


 


(a)        
Information. Subject to Section 3.08(h) below, at the Closing Date, all written information, as amended or
supplemented from time to time, provided by the Seller to the Issuer with respect to the Environmental Control Property (including
the Expected Amortization Schedule and the Financing Order) is true and correct in all material respects.


 






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(b)         Title.
It is the intention of the parties hereto that the sale, assignment and transfer of the Environmental Control Property herein
contemplated constitutes a sale or other absolute transfer of the Environmental Control Property from the Seller to the
Issuer and that no interest in, or right or title to, the Environmental Control Property shall be part of the Seller’s
estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. No portion of
the Environmental Control Property has been sold, transferred, assigned, pledged or otherwise conveyed by the Seller to any
Person other than the Issuer, and, to the Seller’s knowledge (after due inquiry), no security agreement, financing
statement or equivalent security or lien instrument listing the Seller as debtor covering all or any part of the
Environmental Control Property is on file or of record in any jurisdiction, except such as may have been filed, recorded or
made in favor of the Issuer or the Indenture Trustee in connection with the Basic Documents. The Seller has not authorized
the filing of any financing statement against it that includes a description of Environmental Trust Bond Collateral including
the Environmental Control Property other than any financing statement filed, recorded or made in favor of the Issuer or the
Indenture Trustee in connection with the Basic Documents.


 


(c)        
Transfer Filings. On the Closing Date, immediately upon the sale hereunder, the Environmental Control Property shall
be validly transferred and sold to the Issuer, and the Issuer shall own all of the Environmental Control Property free and clear
of all Liens other than Liens created by the Issuer pursuant to the Indenture. All actions or filings, including filings under
the Statute and the applicable UCC, necessary to give the Issuer a valid ownership interest in the Environmental Control Property
have been taken or made. No further action is required to establish the Issuer’s ownership interest. All applicable filings
also have been made to the extent required by applicable law in any jurisdiction to perfect the Back-Up Security Interest granted
by the Seller to the Issuer.


 


(d)        
Financing Order; Other Approvals. On the Closing Date, under the laws of the State of Wisconsin and the United States
in effect on the Closing Date: (i) the Financing Order pursuant to which the rights and interests of the Seller, including the
right to impose, collect and receive the Environmental Control Charges and, in and to the Environmental Control Property transferred
on such date have been created, is Final and in full force and effect; (ii) as of the issuance of the Environmental Trust Bonds,
the Environmental Trust Bonds are entitled to the protections provided by the Statute and, accordingly, the Financing Order and
the Environmental Control Charges are not revocable by the PSCW; (iii) under the terms of the Financing Order, the initial Environmental
Control Charges shall become effective the first day of the first full month following the issuance of the Environmental Trust
Bonds; (iv) the process by which the Financing Order creating the Environmental Control Property was adopted and approved, and
the Financing Order and the Tariff themselves, comply with all applicable laws, rules and regulations; and (v) no other approval,
authorization, consent, order or other action of, or filing with any Governmental Authority is required in connection with the
creation of the Environmental Control Property transferred on such date, except those that have been obtained or made.


 






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(e)         State
Action. Under the Statute, the State of Wisconsin pledged to and agreed with the Holders not to take or permit any action
that impairs the value of the Environmental Control Property or, except for the True-Up Adjustments, reduce, alter or impair
the Environmental Control Charges that are imposed, collected and remitted for the benefit of the Holders until any
principal, interest, premium, or other charge incurred, or contract to be performed, in connection with the Environmental
Trust Bonds are paid or performed in full. Furthermore, under the contract clauses of the State of Wisconsin and United
States constitutions, the State of Wisconsin, could not take any action of a legislative character, including the repeal or
amendment of the Statute or the Financing Order that substantially impairs the value of the Environmental Control Property
or, except for the True-Up Adjustments, substantially reduces, alters or impairs the Environmental Control Charges to be
imposed, collected and remitted to the Issuer for the benefit of the Holders of the Environmental Trust Bonds, unless such
action is a reasonable exercise of the sovereign powers of the State of Wisconsin and of a character reasonable and
appropriate to further a significant and legitimate public purpose and, under the takings clauses of the State of Wisconsin
and United States constitutions, the State of Wisconsin could not repeal or amend the Statute or the Financing Order or take
any other action in contravention of the State Pledge, without paying just compensation to the Holders, as determined by a
court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of
the Holders in the Environmental Control Property and deprives the Holders of their reasonable expectations arising from
their investments in the Environmental Trust Bonds. There is no assurance, however, that, even if a court were to award just
compensation, it would be sufficient to pay the full amount of principal of and interest on the Environmental Trust
Bonds.


 


(f)        
Assumptions. On the Closing Date, based upon the information available to the Seller on such date, the assumptions
used in calculating the Environmental Control Charges are reasonable and are made in good faith. Notwithstanding the foregoing,
the Seller makes no representation or warranty, express or implied, that amounts actually collected arising from those Environmental
Control Charges will in fact be sufficient to meet the payment obligations on the Environmental Trust Bonds or that the assumptions
used in calculating such Environmental Control Charges will in fact be realized.


 


(g)       
Creation of Environmental Control Property. Upon the effectiveness of the Financing Order and the transfer of the
Environmental Control Property pursuant to this Sale Agreement:


 


(i)        
For purposes of the Statute, the Environmental Control Property constitutes a present property right;


 


(ii)       
the Environmental Control Property consists of the right to impose, collect and receive Environmental Control Charges in
an amount necessary to provide for recovery of the principal of and interest on the Environmental Trust Bonds and other Financing
Costs, the right to obtain True-Up Adjustments of the Environmental Control Charges as provided in the Financing Order and the
Statute, and all revenues or other proceeds arising from those rights and interests; and


 


(iii)      the
Environmental Control Property shall continue to exist until the Environmental Trust Bonds are paid in full and all Financing Costs
have been recovered in full.


 


(h)         Nature
of Representations and Warranties. The representations and warranties set forth in this Section 3.08, insofar as
they involve conclusions of law, are made not on the basis that the Seller purports to be a legal expert or to be rendering
legal advice, but rather to reflect the parties’ good faith understanding of the legal basis on which the parties are
entering into this Sale Agreement and the other Basic Documents and the basis on which the Holders are purchasing the
Environmental Trust Bonds, and to reflect the parties’ agreement that, if such understanding turns out to be incorrect
or inaccurate, the Seller will be obligated to indemnify the Issuer and its permitted assigns (to the extent required by and
in accordance with Section 5.01), and that the Issuer and its permitted assigns will be entitled to enforce any rights
and remedies under the Basic Documents on account of such inaccuracy to the same extent as if the Seller had breached any
other representations or warranties hereunder.


 






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(i)         
Prospectus. As of the date hereof, the information describing the Seller under the caption “Review of the Environmental
Control Property” and “Wisconsin Electric Power Company — The Depositor, Sponsor, Seller and Initial Servicer”
in the prospectus dated [__], 2021 relating to the Environmental Trust Bonds is true and correct in all material respects.


 


(j)         
Solvency. After giving effect to the sale of the Environmental Control Property hereunder, the Seller:


 


(i)        
is solvent and expects to remain solvent;


 


(ii)       
is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended
purpose;


 


(iii)      
is not engaged in nor does it expect to engage in a business for which its remaining property represents unreasonably small
capital;


 


(iv)      
reasonably believes that it will be able to pay its debts as they come due; and


 


(v)       
is able to pay its debts as they mature and does not intend to incur, or believes that it will not incur, indebtedness that
it will not be able to repay at its maturity.


 


(k)        
No Court Order. There is no order by any court providing for the revocation, alteration, limitation or other impairment
of the Statute, the Financing Order, the Environmental Control Property or the Environmental Control Charges or any rights arising
under any of them or that seeks to enjoin the performance of any obligations under the Financing Order.


 


(l)         Survival of Representations and Warranties The representations and warranties set forth in this Section 3.08
shall survive the execution and delivery of this Sale Agreement and may not be waived by any party hereto except pursuant to a
written agreement executed in accordance with Article VI and as to which the Rating Agency Condition has been satisfied.


 


SECTION 3.09.          Limitations
on Representations and Warranties. Without prejudice to any of the other rights of the parties, the Seller will not be in
breach of any representation or warranty as a result of a change in law by means of any legislative enactment, constitutional
amendment or voter referendum. THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, THAT BILLED ENVIRONMENTAL
CONTROL CHARGES WILL BE ACTUALLY COLLECTED FROM CUSTOMERS AND NO REPRESENTATION THAT AMOUNTS COLLECTED WILL BE SUFFICIENT TO
MEET THE OBLIGATIONS ON THE ENVIRONMENTAL TRUST BONDS.


 






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ARTICLE
IV.

COVENANTS OF THE SELLER


 


SECTION 4.01.         
Existence. Subject to Section 5.02, so long as any of the Environmental Trust Bonds are Outstanding, the Seller
(a) will keep in full force and effect its existence and remain in good standing or equivalent status under the laws of the jurisdiction
of its organization, and (b) will obtain and preserve its qualification to do business, in each case to the extent that in each
such jurisdiction such existence or qualification is or shall be necessary to protect the validity and enforceability of this
Sale Agreement, the other Basic Documents to which the Seller is a party and each other instrument or agreement to which the Seller
is a party necessary or appropriate to the proper administration of this Sale Agreement and the transactions contemplated hereby
or to the extent necessary for the Seller to perform its obligations hereunder or thereunder.


 


SECTION 4.02.         No Liens. Except for the transfers under this Sale Agreement or any Lien for the benefit of the Issuer, the Holders
of the Environmental Trust Bonds or the Indenture Trustee, the Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on, any of the Environmental Control Property, or any interest therein,
and the Seller shall defend the right, title and interest of the Issuer and of the Indenture Trustee, on behalf of the Secured
Parties, in, to and under the Environmental Control Property against all claims of third parties claiming through or under the
Seller. Wisconsin Electric, in its capacity as Seller, will not at any time assert any Lien against, or with respect to, any of
the Environmental Control Property.


 


SECTION 4.03.         
Delivery of Collections.


 


(a)         In
the event that the Seller receives any EC Charge Collections or other payments in respect of the Environmental Control Charges
or the proceeds thereof, other than in its capacity as the Servicer, the Seller agrees to pay to the Servicer, on behalf of the
Issuer, all payments received by it in respect thereof as soon as practicable after receipt thereof. Prior to such remittance to
the Servicer by the Seller, the Seller agrees that such amounts are held by it in trust for the Issuer and the Indenture Trustee.


 


(b)         The
Seller shall not become a party to any future (i) trade receivables purchase and sale arrangement or similar arrangement
under which it sells all or any portion of its accounts receivables owing from Customers who are obligated to pay the
Environmental Control Charges unless the Indenture Trustee, the Seller and the other parties to such arrangement shall have
entered into an Intercreditor Agreement, substantially in the form of Exhibit D to the Indenture, with such changes as may be
agreed among the parties thereto so long as such changes do not materially and adversely affect any Holder’s rights in
and to any Environmental Trust Bond Collateral or otherwise under the Indenture, in connection therewith and the terms of the
documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly exclude
the Environmental Control Property (including the Environmental Control Charges) from any receivables or other assets pledged
or sold under such arrangement or (ii) sale agreement selling to any other Affiliate property consisting of charges similar
to the Environmental Control Charges sold pursuant to this Sale Agreement, payable by Customers pursuant to the Statute or
any similar law, unless the Seller and the other parties to such arrangement shall have entered into such Intercreditor
Agreement.


 






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SECTION 4.04.         Notice of Liens. The Seller shall notify the Issuer and the Indenture Trustee promptly after becoming aware of any
Lien on any of the Environmental Control Property, other than the transfers hereunder and any Lien pursuant to the Basic Documents,
including the Lien in favor of the Indenture Trustee for the benefit of the Holders of the Environmental Trust Bonds.


 


SECTION 4.05.         Compliance with Law. The Seller hereby agrees to comply with its organizational or governing documents and all laws,
treaties, rules, regulations and determinations of any Governmental Authority applicable to it, except to the extent that failure
to so comply would not materially adversely affect the Issuer’s or the Indenture Trustee’s interests in the Environmental
Control Property or under any of the Basic Documents to which the Seller is a party or of Seller’s performance of its obligations
under this Sale Agreement or under any of the other Basic Documents to which it is a party.


 


SECTION 4.06.         
Covenants Related to Environmental Trust Bonds and Environmental Control Property.


 


(a)        
So long as any of the Environmental Trust Bonds are Outstanding, the Seller shall treat the Environmental Control Property
as the Issuer’s property for all purposes other than financial accounting or tax purposes.


 


(b)        
So long as any of the Environmental Trust Bonds are Outstanding, the Seller shall treat such Environmental Trust Bonds as
debt of the Issuer and not that of the Seller, except for financial accounting and tax purposes. For U.S. federal income tax purposes
and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local or other taxes, so long
as any of the Environmental Trust Bonds are Outstanding, the Seller agrees to treat such Environmental Trust Bonds as indebtedness
of the Seller (as the sole owner of the Issuer) secured by the Environmental Trust Bond Collateral unless otherwise required by
appropriate taxing authorities.


 


(c)        
So long as any of the Environmental Trust Bonds are Outstanding, the Seller shall disclose in its financial statements that
the Issuer and not the Seller is the owner of the Environmental Control Property and that the assets of the Issuer are not available
to pay creditors of the Seller or its Affiliates (other than the Issuer).


 


(d)        
So long as any of the Environmental Trust Bonds are Outstanding, the Seller shall not own or purchase any Environmental
Trust Bonds.


 


(e)        
 So long as the Environmental Trust Bonds are Outstanding, the Seller shall disclose the effects of all transactions between
the Seller and the Issuer in accordance with generally accepted accounting principles.


 






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(f)         
The Seller agrees that, upon the sale by the Seller of the Environmental Control Property to the Issuer pursuant to this
Sale Agreement, (i) to the fullest extent permitted by law, including applicable PSCW Regulations and the Statute, the Issuer shall
have all of the rights originally held by the Seller with respect to the Environmental Control Property, including the right (subject
to the terms of the Servicing Agreement) to exercise any and all rights and remedies to collect any amounts payable by any Customer
in respect of the Environmental Control Property, notwithstanding any objection or direction to the contrary by the Seller (and
the Seller agrees not to make any such objection or to take any such contrary action) and (ii) any payment by any Customer directly
to the Issuer shall discharge such Customer’s obligations, if any, in respect of the Environmental Control Property to the
extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.


 


(g)        
So long as any of the Environmental Trust Bonds are Outstanding, (i) in all proceedings relating directly or indirectly
to the Environmental Control Property, the Seller shall affirmatively certify and confirm that it has sold all of its rights and
interests in and to such property (other than for financial accounting or tax purposes), (ii) the Seller shall not make any statement
or reference in respect of the Environmental Control Property that is inconsistent with the ownership interest of the Issuer (other
than for financial accounting or tax purposes), (iii) the Seller shall not take any action in respect of the Environmental Control
Property except solely in its capacity as the Servicer thereof pursuant to the Servicing Agreement or as otherwise contemplated
by the Basic Documents, (iv) the Seller shall not sell environmental control property under a separate financing order in connection
with the issuance of additional environmental trust bonds unless the Rating Agency Condition shall have been satisfied, and (v)
neither the Seller nor the Issuer shall take any action, file any tax return or make any election inconsistent with the treatment
of the Issuer, for U.S. federal income tax purposes and, to the extent consistent with applicable state tax law, state income and
franchise tax purposes, as a disregarded entity that is not separate from the Seller (or, if relevant, from another sole owner
of the Issuer).


 


SECTION 4.07.         Protection
of Title. The Seller shall execute and file such filings, including, without limitation, filings with the Wisconsin
Department of Financial Institutions pursuant to the Statute, and cause to be executed and filed such filings, all in such
manner and in such places as may be required by law to fully preserve, maintain, protect and perfect the ownership interest
of the Issuer, and the back-up precautionary security interest of the Issuer pursuant to Section 2.01, and the first
priority security interest of the Indenture Trustee in the Environmental Control Property, including, without limitation, all
filings required under the Statute and the applicable UCC relating to the transfer of the ownership of the rights and
interest in the Environmental Control Property by the Seller to the Issuer or the pledge of the Issuer’s interest in
the Environmental Control Property to the Indenture Trustee. The Seller shall deliver or cause to be delivered to the Issuer
and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as
available following such filing. The Seller shall institute any action or proceeding necessary to compel performance by the
PSCW, the State of Wisconsin or any of their respective agents of any of their obligations or duties under the Statute or the
Financing Order and the Seller agrees to take such legal or administrative actions, including defending against or
instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, in each case as may be
reasonably necessary (a) to seek to protect the Issuer and the Secured Parties from claims, state actions or other actions or
proceedings of third parties which, if successfully pursued, would result in a breach of any representation set forth in Article
III or any covenant set forth in Article IV and (b) to seek to block or overturn any attempts to cause a repeal
of, modification of or supplement to the Statute or the Financing Order, or the rights of Holders of the Environmental Trust
Bonds by legislative enactment or constitutional amendment that would be materially adverse to the Issuer or the Secured
Parties or which would otherwise cause an impairment of the rights of the Issuer or the Secured Parties. The costs of any
such actions or proceedings undertaken by the Seller will be reimbursed by the Issuer as an Operating Expense in accordance
with the priorities set forth in Section 8.02(e) of the Indenture. The Seller’s obligations pursuant to this Section
4.07 shall survive and continue notwithstanding the fact that the payment of Operating Expenses pursuant to Section
8.02(e) of the Indenture may be delayed (it being understood that the Seller may be required to advance its own funds to
satisfy its obligations hereunder).


 






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SECTION 4.08.         
Nonpetition Covenants. Notwithstanding any prior termination of this Sale Agreement or the Indenture, the Seller
shall not, prior to the date which is one year and one day after the termination of the Indenture and payment in full of the Environmental
Trust Bonds or any other amounts owed under the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process
of any Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any U.S.
federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the winding up or liquidation
of the affairs of the Issuer.


 


SECTION 4.09.         
Taxes. So long as any of the Environmental Trust Bonds are Outstanding, the Seller shall, and shall cause each of
its subsidiaries to, pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets
or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay
any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements,
result in a Lien on the Environmental Control Property; provided, that no such tax need be paid if the Seller or one of
its Affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and
if the Seller or such Affiliate has established appropriate reserves as shall be required in conformity with generally accepted
accounting principles.


 


SECTION 4.10.         
Notice of Breach to Rating Agencies, Etc. Promptly after obtaining knowledge thereof, in the event of a breach in
any material respect (without regard to any materiality qualifier contained in such representation, warranty or covenant) of any
of the Seller’s representations, warranties or covenants contained herein, the Seller shall promptly notify the Issuer, the
Indenture Trustee and the Rating Agencies of such breach. For the avoidance of doubt, any breach which would adversely affect scheduled
payments on the Environmental Trust Bonds will be deemed to be a material breach for purposes of this Section 4.10.


 


SECTION 4.11.         
Use of Proceeds. The Seller shall use the proceeds of the sale of the Environmental Control Property in accordance
with the Financing Order and the Statute.


 






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SECTION 4.12.         
Further Assurances. Upon the request of the Issuer, the Seller shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary to carry out the provisions and purposes of this Sale Agreement.


 


ARTICLE
V.

THE SELLER


 


SECTION 5.01.         
Liability of Seller; Indemnities.


 


(a)        
The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller
under this Sale Agreement.


 


(b)        
The Seller shall indemnify the Issuer and the Indenture Trustee (for the benefit of the Secured Parties) and each of their
respective officers, directors, employees, trustees, managers and agents for, and defend and hold harmless each such Person from
and against, any and all taxes (other than taxes imposed on Holders as a result of their ownership of an Environmental Trust Bond)
that may at any time be imposed on or asserted against any such Person as a result of the sale of the Environmental Control Property
to the Issuer, including any franchise, sales, gross receipts, general corporation, tangible personal property, privilege or license
taxes, but excluding any taxes imposed as a result of a failure of such Person to withhold or remit taxes with respect to payments
on any Environmental Trust Bond; it being understood that the Holders shall be entitled to enforce their rights against the Seller
under this Section 5.01(b) solely through a cause of action brought for their benefit by the Indenture Trustee as set forth
in the Indenture.


 


(c)       
The Seller shall indemnify the Issuer and the Indenture Trustee (for the benefit of the Secured Parties) and each of their
respective officers, directors, employees, trustees, managers and agents for, and defend and hold harmless each such Person from
and against, any and all taxes (other than taxes imposed on Holders as a result of their ownership of an Environmental Trust Bond)
that may at any time be imposed on or asserted against any such Person as a result of the Issuer’s ownership and assignment
of the Environmental Control Property, the issuance and sale by the Issuer of the Environmental Trust Bonds or the other transactions
contemplated in the Basic Documents, including any franchise, sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes, but excluding any taxes imposed as a result of a failure of such Person to withhold or remit taxes
with respect to payments on any Environmental Trust Bond.


 


(d)        
The Seller shall indemnify the Issuer, the Indenture Trustee (for the benefit of the Secured Parties) and each of their
respective officers, directors, employees and agents for, and defend and hold harmless each such Person from and against, all Losses
that may be imposed on, incurred by or asserted against each such Person, in each such case, as a result of the Seller’s
breach of any of its representations, warranties or covenants contained in this Sale Agreement.


 


(e)        
 Indemnification under Sections 5.01(b), 5.01(c), 5.01(d) and 5.01(f) shall include reasonable
out-of-pocket fees and expenses of investigation and litigation (including reasonable attorneys’ fees and expenses), except
as otherwise expressly provided in this Sale Agreement.


 






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(f)         
The Seller shall indemnify the Indenture Trustee (for itself) and each Independent Manager, and any of their respective
officers, directors, employees and agents (each, an “Indemnified Person”),
for, and defend and hold harmless each such Person from and against, any and all Losses incurred by any of such Indemnified Persons
as a result of the Seller’s breach of any of its representations and warranties or covenants
contained in this Sale Agreement, except to the extent of Losses either resulting from the willful misconduct, bad faith or gross
negligence of such Indemnified Person or resulting from a breach of a representation or warranty made by such Indemnified Person
in any of the Basic Documents that gives rise to the Seller’s breach. The Seller shall
not be required to indemnify an Indemnified Person for any amount paid or payable by such Indemnified Person in the settlement
of any action, proceeding or investigation without the prior written consent of the Seller, which consent shall not be unreasonably
withheld. Promptly after receipt by an Indemnified Person of notice of the commencement of any action, proceeding or investigation,
such Indemnified Person shall, if a claim in respect thereof is to be made against the Seller under this Section 5.01(f),
notify the Seller in writing of the commencement thereof. Failure by an Indemnified Person to so notify the Seller shall relieve
the Seller from the obligation to indemnify and hold harmless such Indemnified Person under this Section 5.01(f) only to
the extent that the Seller suffers actual prejudice as a result of such failure. With respect to any action, proceeding or investigation
brought by a third party for which indemnification may be sought under this Section 5.01(f), the Seller shall be entitled
to conduct and control, at its expense and with counsel of its choosing that is reasonably satisfactory to such Indemnified Person,
the defense of any such action, proceeding or investigation (in which case the Seller shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the Indemnified Person except as set forth below); provided, that
the Indemnified Person shall have the right to participate in such action, proceeding or investigation through counsel chosen by
it and at its own expense. Notwithstanding the Seller’s election to assume the defense
of any action, proceeding or investigation, the Indemnified Person shall have the right to employ separate counsel (including local
counsel), and the Seller shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the defendants in any
such action include both the Indemnified Person and the Seller and the Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it that are different from or additional to those available to the Seller, (ii) the Seller
shall not have employed counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person within a
reasonable time after notice of the institution of such action, (iii) the Seller shall authorize the Indemnified Person to employ
separate counsel at the expense of the Seller or (iv) in the case of the Indenture Trustee, such action exposes the Indenture Trustee
to a material risk of criminal liability or forfeiture or a Servicer Default has occurred and is continuing. Notwithstanding the
foregoing, the Seller shall not be obligated to pay for the fees, costs and expenses of more than one separate counsel for the
Indemnified Persons other than one local counsel, if appropriate.


 


(g)         The
Seller shall indemnify the Servicer (if the Servicer is not the Seller) for the costs of any action instituted by the
Servicer pursuant to Section 5.02(d) of the Servicing Agreement which are not paid as Operating Expenses in accordance with
the priorities set forth in Section 8.02(e) of the Indenture.


 






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(h)       
The remedies provided in this Sale Agreement are the sole and exclusive remedies against the Seller for breach of its representations
and warranties in this Sale Agreement.


 


(i)         
Indemnification under this Section 5.01 shall survive any repeal of, modification of, or supplement to, or judicial
invalidation of, the Statute or the Financing Order and shall survive the resignation or removal of the Indenture Trustee or the
termination of this Sale Agreement and will rank pari passu with other general, unsecured obligations of the Seller. The Seller
shall not indemnify any party under this Section 5.01 for any changes in law after the Closing Date, whether such changes
in law are effected by means of any legislative enactment, any constitutional amendment or any final and non-appealable judicial
decision.


 


SECTION 5.02.          Merger,
Conversion or Consolidation of, or Assumption of the Obligations of, Seller. Any Person (a) into which the Seller may be
merged, converted or consolidated and which is a Permitted Successor, (b) that may result from any merger, conversion or
consolidation to which the Seller shall be a party and which is a Permitted Successor, (c) that may succeed to the properties
and assets of the Seller substantially as a whole and which is a Permitted Successor, (d) which results from the division of
the Seller into two or more Persons and which is a Permitted Successor, or (e) which otherwise succeeds to all or
substantially all of the retail electric distribution business of the Seller (a “Permitted Successor”) and
which Person in any of the foregoing cases executes an agreement of assumption to perform all of the obligations of the
Seller hereunder (including the Seller’s obligations under Section 5.01 incurred at any time prior to or after
the date of such assumption), shall be the successor to the Seller under this Sale Agreement without further act on the part
of any of the parties to this Sale Agreement; provided, however, that (i) immediately after giving effect to such
transaction, no representation, warranty or covenant made pursuant to Article III or Article IV shall have been
breached and, if the Seller is the Servicer, no Servicer Default and no event which, after notice or lapse of time, or both,
would become a Servicer Default shall have occurred and be continuing, (ii) the Seller shall have delivered to the Issuer and
the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel from external counsel stating that such
consolidation, conversion, merger, division or succession and such agreement of assumption complies with this Section
5.02 and that all conditions precedent, if any, provided for in this Sale Agreement relating to such transaction have
been complied with, (iii) the Seller shall have delivered to the Issuer, the Indenture Trustee and each Rating Agency an
Opinion of Counsel from external counsel of the Seller either (A) stating that, in the opinion of such counsel, all filings
to be made by the Seller and the Issuer, including filings with the PSCW pursuant to the Statute and the applicable UCC, have
been executed and filed that are necessary to fully maintain the respective interests of the Issuer and the Indenture Trustee
in the Environmental Control Property and reciting the details of such filings or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to maintain such interests, (iv) the Seller shall have delivered to the Issuer,
the Indenture Trustee and each Rating Agency an Opinion of Counsel from independent tax counsel stating that, for U.S.
federal income tax purposes, such consolidation, conversion, merger, division or succession and such agreement of assumption
will not result in a material adverse U.S. federal income tax consequence to the Issuer or the Holders of Environmental Trust
Bonds and (v) the Seller shall have given each Rating Agency prior written notice of such transaction.  When any Person
(or more than one Person) acquires the properties and assets of the Seller substantially as a whole or otherwise becomes the
successor, by merger, conversion, consolidation, sale, transfer, lease or otherwise, to all or substantially all the assets
of the retail electric distribution business of the Seller in accordance with the terms of this Section 5.02, then,
upon satisfaction of all of the other conditions of this Section 5.02, the preceding Seller shall automatically and
without further notice be released from all of its obligations hereunder.


 






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SECTION 5.03.         
Limitation on Liability of Seller and Others. The Seller and any director, officer, employee or agent of the Seller
may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by
any Person, respecting any matters arising hereunder. Subject to Section 4.07, the Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Sale Agreement and that
in its opinion may involve it in any expense or liability.


 


ARTICLE
VI.

MISCELLANEOUS PROVISIONS


 


SECTION 6.01.         
Amendment. This Sale Agreement may be amended in writing by the Seller and the Issuer with ten Business Days’
prior written notice given to the Rating Agencies, but without the consent of any of the Holders, (i) to cure any ambiguity, to
correct or supplement any provisions in this Sale Agreement or for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions in this Sale Agreement or of modifying in any manner the rights of the Holders; provided,
however, that such action shall not, as evidenced by an Officer’s Certificate delivered to the Issuer and the Indenture
Trustee, adversely affect in any material respect the interests of any Holder or (ii) to conform the provisions hereof to the description
of this Sale Agreement in the Prospectus.


 


In addition, this Sale Agreement may be
amended in writing by the Seller and the Issuer with (i) the prior written consent of the Indenture Trustee, (ii) the satisfaction
of the Rating Agency Condition, and (iii) if any amendment would adversely affect in any material respect the interest of any Holder
of the Environmental Trust Bonds, the consent of a majority of the Holders of each affected Tranche of Environmental Trust Bonds.
In determining whether a majority of Holders have consented, Environmental Trust Bonds owned by the Issuer, Seller or any Affiliate
of the Issuer or Seller shall be disregarded, except that, in determining whether the Indenture Trustee shall be protected in relying
upon any such consent, the Indenture Trustee shall only be required to disregard any Environmental Trust Bonds it actually knows
to be so owned. Promptly after the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment
or consent to each of the Rating Agencies.


 


It shall not be necessary for the consent
of Holders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof.


 


Notwithstanding the foregoing, in no event
shall this Sale Agreement be amended without the approval of the PSCW if (1) such approval is required pursuant to Wis. Stat. §
196.52, or (2) such amendment would increase the ongoing Financing Costs of the Issuer.


 






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Prior to the execution of any amendment
to this Sale Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon (i) an Opinion of Counsel
from external counsel of the Seller stating that the execution of such amendment is authorized or permitted by this Sale Agreement
and that all conditions precedent have been satisfied and (ii) the Opinion of Counsel referred to in Section 3.01(c)(i) of the
Servicing Agreement. The Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Indenture Trustee’s own rights, duties or immunities under this Sale Agreement or otherwise.


 


SECTION 6.02.                   
Notices. Any notice, report or other communication given hereunder shall be in writing and shall be effective (i)
upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt
to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii)
on the date personally delivered to an authorized officer of the party to which sent or (iv) on the date transmitted by facsimile
or other electronic transmission (including email) with a confirmation of receipt in all cases, addressed as follows:


 


(a)              
in the case of the Seller, to Wisconsin Electric Power Company, at 231 West Michigan Street, Milwaukee, Wisconsin 53201,
Attention: Anthony L. Reese, Vice President and Treasurer, Telephone: (414) 221-2345, Email: anthony.reese@wecenergygroup.com; 


 


(b)              
in the case of the Issuer, to WEPCo Environmental Trust Finance I, LLC, at 231 West Michigan Street, Milwaukee, Wisconsin
53201, Attention: Anthony L. Reese, Vice President and Treasurer, Telephone: (414) 221-2579, Email: anthony.reese@wecenergygroup.com; 


 


(c)              
in the case of the Indenture Trustee, to the Corporate Trust Office;


 


(d)              
in the case of Fitch, to Fitch Ratings, Inc., 33 Whitehall Street, New York, New York 10004, Attention: ABS Surveillance,
Telephone: (212) 908-0500, Facsimile: (212) 908-0355, Email: [•];


 


(e)              
in the case of Moody’s, to Moody’s Investor Services, Inc., ABS/RMBS Monitoring Department, 25th
Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York, Email: servicereports@moodys.com; and


 


(f)               
in the case of S&P, to S&P Global Ratings, a division of S&P Global Inc., Structured Credit Surveillance, 55
Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@spglobal.com (all such notices to be
delivered to S&P in writing by email).


 


Each Person listed above may, by notice
given in accordance herewith to the other Person or Persons listed above, designate any further or different address to which subsequent
notices, reports and other communications shall be sent.


 






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SECTION 6.03.                   
Assignment. Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02,
this Sale Agreement may not be assigned by the Seller.


 


SECTION 6.04.                   
Limitations on Rights of Third Parties. The provisions of this Sale Agreement are solely for the benefit of the Seller,
the Issuer, the Indenture Trustee (for the benefit of the Secured Parties) and the other Persons expressly referred to herein,
and such Persons shall have the right to enforce the relevant provisions of this Sale Agreement. Nothing in this Sale Agreement,
whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the
Environmental Control Property or under or in respect of this Sale Agreement or any covenants, conditions or provisions contained
herein.


 


SECTION 6.05.                   
Severability. Any provision of this Sale Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remainder
of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.


 


SECTION 6.06.                   
Separate Counterparts. This Sale Agreement may be executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the
same instrument.


 


SECTION 6.07.                   
Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.


 


SECTION 6.08.                   
Governing Law. This Sale Agreement shall be construed in accordance with
the laws of the State of Wisconsin, without reference to its conflict of law provisions, and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.


 


SECTION 6.09.                   
Assignment to Indenture Trustee. The Seller hereby acknowledges and consents to any mortgage, pledge, assignment
and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Secured
Parties of all right, title and interest of the Issuer in, to and under this Sale Agreement, the Environmental Control Property
and the proceeds thereof and the assignment of any or all of the Issuer’s rights hereunder to the Indenture Trustee for the
benefit of the Secured Parties. For the avoidance of doubt, the Indenture Trustee is a third party beneficiary of this Sale Agreement
and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto.


 






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SECTION 6.10.                   
Limitation of Liability. It is expressly understood and agreed by the parties hereto that this Sale Agreement is
executed and delivered by the Indenture Trustee, not individually or personally but solely as Indenture Trustee on behalf of the
Secured Parties, in the exercise of the powers and authority conferred and vested in it. The Indenture Trustee in acting hereunder
is entitled to all rights, benefits, protections, immunities and indemnities accorded to it under the Indenture.


 


SECTION 6.11.                   
Waivers. Any term or provision of this Sale Agreement may be waived, or the time for its performance may be extended,
by the party or parties entitled to the benefit thereof; provided, however, that no such waiver delivered by the
Issuer shall be effective unless the Indenture Trustee has given its prior written consent thereto. Any such waiver shall be validly
and sufficiently authorized for the purposes of this Sale Agreement if, as to any party, it is authorized in writing by an authorized
representative of such party, with prompt written notice of any such waiver to be provided to the Rating Agencies. The failure
of any party hereto to enforce at any time any provision of this Sale Agreement shall not be construed to be a waiver of such provision,
nor in any way to affect the validity of this Sale Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Sale Agreement shall be held to constitute a waiver of any other
or subsequent breach.


 


{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK}


 






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IN WITNESS WHEREOF, the parties hereto have
caused this Sale Agreement to be duly executed by their respective officers as of the day and year first above written.


 


	 	WEPCO ENVIRONMENTAL TRUST FINANCE I, LLC
	 	as Issuer
	 	 
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	 	 
	 	WISCONSIN ELECTRIC POWER COMPANY
	 	as Seller
	 	 
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


	ACKNOWLEDGED AND ACCEPTED:	 
	 	 
	U.S. BANK, NATIONAL ASSOCIATION,

as Indenture Trustee	 
	
	 	 
	By:	 	 
	 	Name:	 	 
	 	Title:	 	 


 


Signature Page to Environmental Control
Property Purchase and Sale Agreement


 






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EXHIBIT A


 


FORM OF BILL OF SALE


 


See attached


 






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BILL OF SALE


 


This Bill of Sale is being delivered pursuant
to the Environmental Control Property Purchase and Sale Agreement, dated as of [________], 2021 (the “Sale Agreement”),
by and between Wisconsin Electric Power Company (the “Seller”) and WEPCo Environmental Trust Finance I, LLC
(the “Issuer”). All capitalized terms used but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Sale Agreement.


 


In consideration of the Issuer’s delivery
to or upon the order of the Seller of $[_______], the Seller does hereby irrevocably sell, assign and otherwise transfer to the
Issuer, without recourse or warranty, except as set forth in the Sale Agreement, all right, title and interest of the Seller in,
to and under the Environmental Control Property created or arising under the Financing Order dated November 17, 2020 issued by
the Public Service Commission of Wisconsin under the Statute (such sale, assignment and transfer of the Environmental Control Property
includes, to the fullest extent permitted by the Statute, the right to impose, collect and receive Environmental Control Charges
and the assignment of all revenues, collections, claims, rights, payments, money or proceeds of or arising from the Environmental
Control Charges related to the Environmental Control Property, as the same may be adjusted from time to time). Such sale, assignment
and transfer of the Environmental Control Property is hereby expressly stated to be a sale or other absolute transfer and, pursuant
to Section 196.027(5)(c) of the Statute and the Financing Order, shall constitute a sale and absolute transfer of all of the Seller’s
right, title and interest, in, to and under, and not a pledge of, or secured transaction relating to, the Seller’s right,
title and interest, in, to and under the Environmental Control Property. The preceding sentence is the statement referred to in
Section 196.027(5)(c) of the Statute. The Seller and the Issuer agree that after giving effect to the sale, assignment and transfer
contemplated hereby the Seller has no right, title or interest in, to or under the Environmental Control Property to which a security
interest could attach because (i) it has sold, assigned and transferred all right, title and interest in and to the Environmental
Control Property to the Issuer, and (ii) as provided in Section 196.027(5)(c) of the Statute, after such transfer the Environmental
Control Property is not subject to any claims of the Seller or the Seller’s creditors, other than creditors holding a prior
security interest in the Environmental Control Property perfected under Section 196.027(5)(b) of the Statute. If such sale, assignment
and transfer is held by any court of competent jurisdiction not to be an absolute transfer as provided in Section 196.027(5)(c)
of the Statute, then such sale, assignment and transfer shall be treated as a pledge of the Environmental Control Property and
as the creation of a security interest (within the meaning of the Statute and the applicable UCC) in the Environmental Control
Property and, without prejudice to its position that it has absolutely transferred all of its rights in the Environmental Control
Property to the Issuer, the Seller hereby grants a security interest in the Environmental Control Property to the Issuer (and to
the Indenture Trustee for the benefit of the Secured Parties) to secure their respective rights under the Basic Documents to receive
the Environmental Control Charges and all other Environmental Control Property.


 


The Issuer does hereby purchase the Environmental
Control Property from the Seller for the consideration set forth in the preceding paragraph.


 






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The Seller and the Issuer each acknowledge
and agree that the purchase price for the Environmental Control Property sold pursuant to this Bill of Sale and the Sale Agreement
is equal to its fair market value at the time of sale.


 


The Seller confirms that (i) each of the
representations and warranties on the part of the Seller contained in the Sale Agreement are true and correct in all respects on
the date hereof as if made on the date hereof and (ii) each condition precedent that must be satisfied under Section 2.02 of the
Sale Agreement has been satisfied upon or prior to the execution and delivery of this Bill of Sale by the Seller.


 


This Bill of Sale may be executed by the
parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.


 


This
Bill of Sale shall be construed in accordance with the laws of the State of Wisconsin, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such law.


 






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IN WITNESS WHEREOF, the Seller and the Issuer
have duly executed this Bill of Sale as of this [] day of [], 2021.


 


	 	WEPCO ENVIRONMENTAL TRUST FINANCE I, LLC,
	 	as Issuer
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	 
	 	WISCONSIN ELECTRIC POWER COMPANY,
	 	as Seller
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 






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