indenture.htm


     

    Exhibit
      (4.1)


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    EIGHTH
      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

    -----------------------

    


    Dated
      as of
      December 1, 2008

    


    SUPPLEMENTAL
      TO INDENTURE

    Dated
      as of December 1, 1998

    Senior
      Debt
      Securities

    


    


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    This
      EIGHTH
      SUPPLEMENTAL INDENTURE is made as of the 1st
      day of
      December, 2008, 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, N.A., 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 its Indenture (hereinafter referred to as
      the
“Indenture”), made as of December 1, 1998; and

     

    Section
      3.1 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, 6.375%
      Series Due December 1, 2015 (the “Securities of the Series due 2015”);
      and

     

    Section
      10.1 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
      execution and
      delivery of this Eighth 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 2015 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) Capitalized
      terms
      used but not otherwise defined herein shall have the respective meanings
      assigned to such terms in the Indenture;

     

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

     

    (c) 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, 6.375% Series Due
      December 1, 2015.”

     

    (b) The
      aggregate
      principal amount of the Securities of the Series due 2015 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) shall initially be limited to One Hundred
      and
      Twenty-Five Million Dollars ($125,000,000), subject to the right of the Company
      to reopen the Securities of the Series due 2015 for the issuance of additional
      Securities of the Series due 2015 on the terms and subject to the conditions
      specified below.

     

    (c) The
      Company shall
      have the right to reopen the Securities of the Series due 2015 for the issuance
      of additional Securities of such series (“Additional Securities of the Series
      due 2015”).  The issuance of any Additional Securities of the Series
      due 2015 shall constitute a further issuance of, and will be consolidated with,
      the Securities of the Series due 2015, so as to form a single
      series.  The Additional Securities of the Series due 2015 shall be
      substantially in the form hereinafter recited, but may contain such changes
      as
      may be appropriate to reflect their date or dates of issuance.  Where
      appropriate references to the Securities of the Series due 2015 in this
      Supplemental Indenture shall be deemed to include the Additional Securities
      of
      the Series due 2015.

     


    
      
        
        

      

      
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    (d) The
      Securities of
      the Series due 2015 are to be issued in permanent global form without
      coupons.  The beneficial owners of interests in such permanent Global
      Security or Securities may not exchange such interests for Securities of such
      series other than in the manner provided in Section 2.05 of the
      Indenture.  The Depositary for the Securities of the Series due 2015
      shall be The Depositary Trust Company.

     

    (e) The
      Stated Maturity
      of the Securities of the Series due 2015 is December 1, 2015.

     

    (f) The
      Securities of
      the Series due 2015 shall bear interest at the rate of 6.375% per annum, and
      such interest shall accrue from December 5, 2008 (or from the most recent
      Interest Payment Date to which interest on the Securities of the Series due
      2015
      has been paid or provided for).  The Interest Payment Dates for the
      Securities of the Series due 2015 shall be June 1 and December 1 in each year
      commencing June 1, 2009, 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.

     

    (g) Principal
      of and
      interest on the Securities of the Series due 2015 shall be payable in U.S.
      Dollars at the Corporate Trust Office of the Trustee.

     

    (h) The
      Securities of
      the Series due 2015 are subject to redemption in whole at any time or in part
      from time to time at the option and direction of the Company at a Redemption
      Price equal to the greater of (i) 100% of the principal amount of the Securities
      of the Series due 2015 to be redeemed or (ii) the sum of the present values
      of
      the remaining scheduled payments of principal and interest thereon (exclusive
      of
      interest accrued to the date of redemption), discounted to the Redemption Date
      on a semi-annual basis (assuming a 360 day year of twelve 30-day months) at
      the
      Treasury Rate as hereinafter defined, plus fifty hundredths of one percent
      (0.50%) plus in each case accrued and unpaid interest to the Redemption
      Date.  Such Redemption Date shall be set forth in an Officers’
Certificate delivered to the Trustee on or before the Redemption Date and upon
      which the Trustee may conclusively rely.

     

    For
      purposes of
      this paragraph (h):

     

    “Treasury
      Rate”
means, with respect to any Redemption Date, the rate per annum equal to the
      semiannual equivalent yield to maturity or interpolated (on a day count basis)
      of the Comparable Treasury Issue, assuming a price for the Comparable Treasury
      Issue (expressed as a percentage of its principal amount) equal to the
      Comparable Treasury Price for such Redemption Date.

     

    “Comparable
      Treasury Issue” means the United States Treasury security or securities selected
      by an Independent Investment Banker as having an actual or interpolated maturity
      comparable to the remaining term of the Notes that would be utilized, at the
      time of selection and in accordance with customary financial practice, in
      pricing new issues of corporate debt securities of comparable maturity to the
      remaining term of the Notes.

     

    “Independent
      Investment Banker” means one of the Reference Treasury Dealers appointed by the
      Trustee after consultation with the Company.


    
      
        
        

      

      
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    “Comparable
      Treasury Price” means, with respect to any Redemption Date, (i) the average
      of the Reference Treasury Dealer Quotations for the Redemption Date, after
      excluding the highest and lowest Reference Treasury Dealer Quotations for the
      Redemption Date, or (ii) if the Trustee obtains fewer than four Reference
      Treasury Dealer Quotations, the average of all the quotations which the Trustee
      obtains.

     

    “Reference
      Treasury
      Dealer Quotations” means, with respect to each Reference Treasury Dealer and any
      Redemption Date, the average, as determined by the Trustee, of the bid and
      asked
      prices for the Comparable Treasury Issue (expressed in each case as a percentage
      of its principal amount) quoted in writing to the Trustee by such Reference
      Treasury Dealer at 3:30 p.m., New York time, on the third business day preceding
      such Redemption Date.

     

    “Reference
      Treasury
      Dealer” means any primary U.S. Government securities dealer in the United States
      (a “Primary Treasury Dealer”) selected by the Company.

     

    (i) The
      Securities of
      the Series due 2015 shall not be subject to any sinking fund and shall not
      be
      redeemable at the option of the Holders thereof.

     

    (j) The
      Securities of
      the Series due 2015 shall initially be issued in whole in the form of one or
      more Global Securities.  If individual securities of the Series due
      2015 are issued under the conditions specified in Section 2.05 of the Indenture,
      individual certificates will be issued in denominations of $1,000 or any
      integral multiple thereof.

     

    (k) The
      Related Series
      of Collateral Bonds being delivered to the Trustee in connection with the
      issuance of the Securities of the Series due 2015 is the Company’s First
      Mortgage Bonds, Collateral Series H.

     

    Such
      Securities of
      the Series due 2015 and Additional Securities of the Series due 2015, if any,
      shall be initially authenticated and delivered from time to time upon delivery
      to the Trustee of the documents required by Section 3.1 of the Indenture and
      the
      form of Securities for the Securities of the Series due 2015 and Additional
      Securities of the Series due 2015, if any, substantially in the form of Security
      attached hereto as Appendix I, which is incorporated herein by
      reference.

     

    ARTICLE
      III

    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 2015 One Hundred and Twenty-Five Million
      Dollars ($125,000,000) aggregate principal amount of a related issue of
      Collateral Bonds of the Company designated “First Mortgage Bonds, Collateral
      Series H” (each, a “Related Issue,” as to the series of Securities it
      secures, and, 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 Related Issue of Securities and, if such
      transfer does not constitute a sale of the Collateral Bonds to the Trustee,
      the
      Company hereby grants a perfected 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 Related Issue of Securities, including but not limited to (1) the full
      and
      prompt payment of the interest


    
      
        
        

      

      
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    on,
      principal of,
      and premium, if any, on such Related Issue of Securities 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 Related Issue of Securities,
      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
      Related Issue of Securities 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 Related Issue of Securities.  The Trustee shall
      enforce all of its rights under the First Mortgage Indenture as a holder of
      each
      Related Issue of Collateral Bonds transferred to it as provided in this
      Article III for the benefit of the Holders of the respective Related Issue
      of Securities and the proceeds of the enforcement of such rights shall be
      applied by the Trustee to satisfy the Company’s obligations under the Indenture,
      this Supplemental Indenture, and such Related Issue of Securities.

     

    The
      Company shall
      make payments of the principal of, and premium or interest on each of the
      Collateral Bonds to the Trustee, which payments shall be applied by the Trustee
      to satisfaction of all obligations then due on the respective Related Issue
      of
      Securities.

     

    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 Related Issue of Securities 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
      IV

    MISCELLANEOUS

     

    SECTION
      4.1 

     

    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.


    
      
        
        

      

      
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    SECTION
      4.2 

     

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

     

    SECTION
      4.3 

     

    (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),
      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
      4.4 

     

    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
      4.5 

     

    (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.

     


    
      
        
        

      

      
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    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,
      2008.

    WISCONSIN
      PUBLIC
      SERVICE

       CORPORATION

    


    [SEAL]

    


    By: /s/
      Charles A. Schrock  

    Charles
      A. Schrock

    President
      and Chief Executive
      Officer

    


    


    


    


    ATTEST:

    


    


    
/s/
      Barth J. Wolf

    Barth
      J. Wolf

    Secretary

    


    U.S.
      BANK NATIONAL
      ASSOCIATION

    


    


    


    By: /s/
      Peter M. Brennan 

    Peter
      M. Brennan

    Vice
      President

    


    



    
      
        
        

      

      
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    APPENDIX
      I

                           $___________

    


    CUSIP:
      No.
      976843-BG6

    


    THIS
      SECURITY IS A
      GLOBAL SECURITY REGISTERED IN THE NAME OF THE DEPOSITARY (REFERRED TO HEREIN)
      OR
      A NOMINEE THEREOF AND UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
      FOR
      THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT
      BE
      TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
      OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
      DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
      OR
      A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.*

     

    UNLESS
      THIS
      CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
      TRUST
      COMPANY, A NEW YORK CORPORATION (55 WATER STREET, NEW YORK, NEW YORK), TO THE
      TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
      ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
      REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY AND
      ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
      REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.*

    
 

      
      ________________________________

       

      *  To
        be
        included so long as Security is a Global Security.

    


    
      
        
        

      

      
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    WISCONSIN
      PUBLIC SERVICE CORPORATION

    Senior
      Note, 6.375% Series Due December 1, 2015

     

    


    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 ____________________, or registered assigns, the
      principal sum of ____________________ on December 1, 2015 and to pay
      interest thereon from December 5, 2008 or from the most recent Interest Payment
      Date to which interest has been paid or duly provided for, semi-annually on
      June 1 and December 1 in each year, commencing June 1, 2009 at
      the rate of 6.375% 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 6.375% 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
      not
      inconsistent with the requirements of any securities exchange on which the
      Securities of this series may be listed, and upon such notice as may be required
      by such exchange, 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 Depositary so long as this
      note is in the form of Global Security and otherwise 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 H (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), Milwaukee,
      Wisconsin, as supplemented and amended by the supplemental indentures thereto
      (the “First Mortgage Indenture”).  Reference is made to the First
      Mortgage Indenture and the 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
      applicable


    
      
        
        

      

      
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    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.

     

    Reference
      is hereby
      made to the further provisions of this Security set forth on the reverse hereof,
      which further provisions shall for all purposes have the same effect as if
      set
      forth at this place.

     

    Unless
      the
      certificate of authentication hereon has been 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
      __________________________________

    


    Attest:

     

    
 

    _________________________________


    


    [SEAL]

    



    
      
        
        

      

      
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    Form
      of Trustee’s Certificate of Authentication.

     

    Dated:  December
      5, 2008

     

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

     

    _____________________________________________


    As
      Trustee

    


    


    By
      _____________________________________________

    Authorized
      Signatory

    


    


    Form
      of Reverse of Security.

     

    This
      Security is
      one of a duly authorized issue of securities of the Company (herein called
      the
“Securities”), issued and to be issued in one or more series under an Indenture,
      dated as of December 1, 1998 (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 indentures supplemental thereto 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 One
      Hundred and Twenty-Five Million Dollars ($125,000,000), subject to the right
      of
      the Company to reopen the Securities of this series for the issuance of
      additional Securities of this series on the terms and subject to the conditions
      specified in the Eighth Supplemental Indenture to the Indenture.

     

    The
      Securities of
      this series are subject to redemption upon not less than 30 nor more than 45
      days’ notice by first class mail, in whole at any time or in part from time to
      time at the option of the Company at a Redemption Price equal to the greater
      of
      (i) 100% of the principal amount of the Securities of this series to be redeemed
      or (ii) the sum of the present values of the remaining scheduled payments of
      principal and interest thereon (exclusive of interest accrued to the date of
      redemption), discounted to the Redemption Date on a semi-annual basis (assuming
      a 360 day year of twelve 30-day months) at the Treasury Rate as defined in
      the
      Eighth Supplemental Indenture to the Indenture, plus fifty hundredths of one
      percent (0.50%) plus in each case accrued and unpaid interest to the Redemption
      Date.

     

    In
      the event of redemption of this Security in part only, a new Security or
      Securities 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


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    manner
      and with the
      effect provided in the Indenture.  Upon payment (i) of the amount of
      principal so declared due and payable and (ii) 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.

     

    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.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the 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 one or more new Securities of this series,
      of authorized denominations and for the same Stated Maturity and aggregate
      principal amount, will be issued to the designated transferee or
      transferees.

     

    The
      Securities of
      this series are issuable only in registered form without coupons in
      denominations of $1,000 and any integral multiple thereof.  As
      provided in the Indenture and subject to certain limitations therein set forth,
      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.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    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 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.

     

    Pursuant
      to a
      recommendation promulgated by the Committee on Uniform Security Identification
      Procedures (“CUSIP”), the Company has caused CUSIP numbers to be printed on the
      Securities of this series as a convenience to the Holders of the Securities
      of
      this series.  No representation is made as to the correctness or
      accuracy of such numbers as printed on the Securities of this series and
      reliance may be placed only on the other identification numbers printed
      hereon.

     

    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.

    


    



    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    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:_______________________________________


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    APPENDIX
      II

     

    
 

    No.
      R-                                                                     
                                                                                                                 
$_____________

     

    (Form
      of Bond of Collateral Series H)

     

    Wisconsin
      Public Service Corporation

     

    (Incorporated
      under
      the laws of the State of Wisconsin)

    First
      Mortgage
      Bond, Collateral Series H

     

    THE
      FIRST MORTGAGE
      BONDS, COLLATERAL SERIES H (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 EIGHTH SUPPLEMENTAL INDENTURE THERETO DATED AS OF DECEMBER
      1, 2008 (AS SO SUPPLEMENTED, THE “SENIOR INDENTURE”).  THE COLLATERAL
      BONDS ARE TO BE HELD IN TRUST AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS
      OF
      THE SENIOR NOTES, 6.375% SERIES DUE DECEMBER 1, 2015 (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
      December, 2015, the sum of One Hundred Twenty-Five Million Dollars
      ($125,000,000) in lawful money of the United States of America, and to pay
      interest thereon from the date hereof (i) at the rate of 0% per annum prior
      to
      December 5, 2008, and (ii) at the rate of 6.375% per annum from and after
      December 5, 2008, in like money, until


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    the
      principal
      hereof becomes due and payable, said interest being payable on the 1st
      day of
      June and on the 1st
      day of
      December in each year commencing June 1, 2009.  The principal and
      interest so payable on any June 1 or December 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
      provisions of
      this bond are continued on the reverse hereof or attached pages and such
      continued provisions shall for all purposes have the same effect as though
      fully
      set forth at this place.

     

    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.

     

    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:  December 1, 2008

    Wisconsin
      public service corporation,

    


    


    By:_____________________________                                                                      
      

    _______________ President

     

    Attest:

     

    _____________________________

    ____________
      Secretary

    



    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    (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

    


    (Text
      appearing on reverse side of bond or attached pages)

     

    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 December 1, 2008, 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 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


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    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.

     

    The
      bonds of this
      Series are subject to redemption, prior to maturity, at the option of the
      Company in whole at any time or in part from time to time, upon payment of
      a
      redemption price equal to the greater of (i) 100% of the principal amount of
      the
      bonds to be redeemed or (ii) the sum of the present values of the remaining
      scheduled payments of principal and interest thereon (exclusive of interest
      accrued to the date of redemption), discounted to the redemption date on a
      semi-annual basis (assuming a 360 day year of twelve 30-day months) at the
      Treasury Rate (as defined in the Supplemental Indenture), plus fifty hundredths
      of one percent (0.50%) plus in each case accrued and unpaid interest to the
      redemption date, all subject to the conditions and as more fully set forth
      in
      the Indenture and the Supplemental Indenture.

     

    Notice
      of any such
      redemption shall be hand delivered or mailed 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
      and
      unpaid interest thereon to the redemption date.  The redemption date
      shall be the accelerated maturity date of the


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    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 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.

     

    (End
      of text of bond)

     

    


    (Form
      of Prepayment
      Record)

    


    PREPAYMENT
      RECORD

    


    Principal
      Amount of
      Bond $__________________

    


    Date
      of Maturity:
      December 1, 2015

    
      	
              Prepayments
                on Principal

            	 	 	 	 
	
              Amount

            	 	
              Date

            	 	
              Balance
                

              Outstanding

            	 	
              Signature
                of Authorized 

              Officer
                and Title

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


    

    



    
      
        
        

      

      
        19