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13919885. 1   AMENDED & RESTATED EMPLOYMENT AGREEMENT    THIS AMENDED & RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is   made and entered into as of the 1st day of November  2013, by and between MAGELLAN   PETROLEUM CORPORATION, a Delaware corporation (“Magellan” or the “Company”) and J.   Thomas Wilson, an individual residing at 55 W. 12th Ave., Unit 409, Denver 80204 (the   “Executive”).  Each of the Company and the Executive are individually referred to herein as a   “Party” and collectively as the “Parties.”     W I T N E S S E T H    WHEREAS, the Company appointed the Executive as the President and Chief Executive   Officer of the Company effective as of September 27, 2011 (the “Effective Date”);     WHEREAS, the Parties entered into an  Employment Agreement dated November 2, 2011   setting forth the terms and conditions of the Executive’s employment ( the “Original   Agreement”);     WHEREAS, the Parties entered into a restricted stock grant agreement and a stock option   award agreement on November 7, 2011 (together, the “Equity Incentive Agreements”) and an   indemnification agreement dated as of the date hereof and effective as of the Effective Date (the   “Indemnification Agreement”).    WHEREAS, effective November 6, 2012, the term of the Employment Agreement was   extended for one additional year to September 27, 2014; and     WHEREAS the parties wish to amend the Employment Agreement as provided herein.    NOW, THEREFORE, in consideration of the premises and mutual covenants contained   herein and for other good and valuable consideration, the receipt and sufficiency of which is   hereby acknowledged, the Parties, intending to be legally bound, agree as follows:    1. Employment.   1.1 Employment.  The Company hereby agrees to employ the Executive as of the   Effective Date, and the Executive hereby accepts employment with the Company in the positions   described below in Section 2.1, in accordance with the terms and provisions of this Agreement.      1.2 Term.  The term of this Agreement (the “Initial Term”) shall be the period   commencing on the Effective Date and ending on the earlier of: (a) December 31, 2015; or (b)   the date of termination of the Executive’s employment pursuant to Sections 6, 7 or 8 below,   whichever is applicable.  However, if not terminated earlier than December 31, 2015 in   accordance with the provisions of Sections 6, 7 or 8 below, this Agreement may be renewed for   additional one year terms (each, a “Renewal Term”) if the Parties mutually agree to do so and   they can agree on the terms and conditions of the renewal contract, which may take the form of   an Addendum to this Agreement. If, at the conclusion of the Initial Term or any Renewal Term,   as the case may be, either Party determines that they do not wish to renew this Agreement for an   additional one year term, that Party must provide the other with written notice six months prior     

 

13919885. 2   to the expiration of the Initial Term or Renewal, as the case may be, upon conclusion of which   the Agreement will terminate.  Upon termination of this Agreement for any reason (including a   Party’s written notice electing not to renew the Agreement delivered to the other Party under this   Section 1.2), the obligations of the Company under this Agreement shall cease and Executive shall   forfeit all right to receive any compensation or other benefits under this Agreement, except the   amounts payable under Sections 6, 7, 8 and 12 of this Agreement, as applicable.      2. Duties.      2.1 Offices. Beginning on the Effective Date, the Executive has assumed the duties of   President and Chief Executive Officer of the Company.  It is the intention of the Parties that   during the Initial Term and any subsequent Renewal Term hereof the Executive will serve in the   capacities described in this Section 2.1 and Section 2.3 and will devote substantially all of his   business time and attention and best efforts to the affairs of the Company and its subsidiaries and   the performance of his duties.  Nothing in this Agreement, however, shall prevent the Executive   from (i) participating in charitable, civic, educational, professional, community or industry   affairs or, with prior written approval of the Board of Directors (“Board”), serving on the board   of directors or advisory boards of other companies; and (ii) managing the Executive’s and the   Executive’s family’s personal investments so long as such activities do not materially interfere   with the performance of the Executive’s duties hereunder or create a potential business conflict   or the appearance thereof.        2.2 Office Locations.  The Executive shall be based at the Denver, Colorado,  but   shall be permitted to provide his services from additional locations including but not limited to   Bremen, Maine and Phoenix, Arizona, and shall provide his services at such other locations as   shall be reasonably necessary for the discharge of his duties under this Agreement.     2.3 Board Service. The Executive currently serves as a Class II Director of the   Company. The Board will nominate and support the Executive’s re-election as a Director at the   upcoming 2011 Annual Meeting of Shareholders. The Executive agrees to accept such   nomination and to serve as a Director, if elected.  In addition, during the period of his   employment as President and Chief Executive Officer the Board will recommend that the   Executive be elected as a Director of the Company’s wholly-owned subsidiary, Magellan   Petroleum Australia Limited (“MPAL”), and the Executive agrees to accept such nomination and   to serve as a Director of MPAL.    3. Compensation and Benefits.      3.1 Salary; Bonus.     (a) Salary.  As of the Effective Date, the Company shall pay the Executive an   annual base salary of Two Hundred and Sixty thousand ($260,000.00).Beginning January 1,   2013 and effective each January 1st thereafter, the Executive shall be eligible for an annual cost   of living increase based on a formula that shall be adopted for all employees of the Company.     (b) Bonus.   Provided that Executive is employed on each of the following   bonus dates, the Executive shall be paid a performance and retention bonus of $90,000.00 on     

 

13919885. 3   January 15, 2014 and a performance and retention bonus of $90,000.00 on January 15, 2015.   3.2 Equity Incentives. Pursuant to the Original Agreement, the Executive received (i)   a stock option award comprised of options to acquire 250,000 shares of the Company’s common   stock, par value $0.01 (“Common Stock”), exercisable at the closing trading market price of the   Common Stock on the Grant Date (defined below); and (ii) a grant of 100,000 restricted shares   of Common Stock (together, the “Equity Incentives”).  Consistent with the Company’s   compensation policy, the Equity Incentives were granted to the Executive on November 7, 2011   (the “Grant Date”).  Subject to the provisions set forth in Sections 6, 7 and 8 below, one-half of   the Equity Incentives vested on September 27, 2012, and the remaining one-half of the Equity   Incentives vested on September 27, 2013.    3.3 Benefit Programs.  The Executive shall be entitled to participate on substantially   the same terms as other members of senior management of the Company in all employee benefit   plans and programs of the Company (other than any severance plan, program or policy), as such   plans and programs are made available by the Company, subject to any restrictions or eligibility   requirements under such plans and programs, from time to time in effect for the benefit of senior   management of the Company, including, but not limited to, retirement plans, profit sharing plans,   group life insurance, hospitalization and surgical and major medical and dental coverages, short-   term and long-term disability.   3.4 Vacations and Holidays.  During the Term of this Agreement, the Executive shall   be entitled to vacation of four weeks per year at full pay or such greater vacation benefits as may   be provided for by the Company’s vacation policies applicable to senior management.  The   Executive shall also be entitled to such holidays as are established by the Company for all   employees.    4. Business and Advisory Expenses. The Executive shall be entitled to prompt   reimbursement for all reasonable, documented and necessary expenses incurred by the Executive   in performing his services hereunder in accordance with the policies of the Company, including   business class accommodations when traveling on international business trips, or to the extent   necessary in the Executive’s reasonable judgment, on domestic business trips, for the Company.    The Executive shall also be entitled to prompt reimbursement for his reasonable legal expenses   incurred in connection with the Executive’s negotiation and execution of this Agreement, the   Equity Incentive Agreements, and the Indemnification Agreement. The Executive shall properly   account for all such business and advisory expenses described in this Section 4 in accordance   with the policies and procedures established by the Company.     5. Separation from Service.  No termination of employment shall be deemed to have   occurred under this Agreement unless there has been a “Separation from Service” as defined   under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the   term “termination of employment” and the like in this Agreement shall be construed to mean   “Separation from Service” as so defined.   6. Termination of Employment by the Company.    6.1  Termination by the Company Other Than For Non-Renewal, Disability or Cause.       

 

13919885. 4     (a) The Company may terminate the Executive’s employment at any time and   for any reason, other than (i) pursuant to a written notice by the Company of its intention to   permit the Agreement to terminate at the end of the Initial Term or a Renewal Term in   accordance with Section 1.2; (ii) by reason of the Executive’s Disability (as defined in Section   6.2); or (iii) for Cause (as defined in Section 6.3), by giving the Executive a written notice of   termination at least 30 days before the date of termination (or such lesser notice period as the   Executive may agree to).      (b) In the event of any termination of employment by the Company described   in Section 6.1(a) above, the Executive shall be entitled to receive the following benefits:       (i) Salary: His base salary pursuant to Section 3.1(a) through the date of such   termination of employment, plus his base salary for the period of any vacation time   earned but not taken for the year of termination of employment (the “Salary Benefit”);       (ii) Other Benefits: Any other compensation and benefits to the extent actually   earned by the Executive under any other benefit plan or program of the Company as of   the date of such termination of employment, with such compensation and benefits to be   paid at the normal time for payment of such compensation and benefits to the extent not   previously paid (the “Other Benefits”);       (iii)  Reimbursements: Any reimbursement amounts for reasonable business   expenses approved by the Company and owing under this Agreement (the   “Reimbursement Benefit”);       (iv) Severance: A severance amount equal to the amount of base salary that the   Executive would have received if he remained employed for the balance of the Initial   Term or any Renewal Term negotiated pursuant to Section 1.2, as the case may be, based   upon his then-current base salary without further increase (the “Severance Benefit”).  The   amount of the Severance Benefit as so determined by this Section 6.1(b)(iv) shall be paid   during the remainder of the Initial or Renewal Term, as applicable, in equal monthly   installments commencing in the first month following the Executive’s Separation from   Service.      (v) Medical Coverage: If the Executive elects to continue insurance coverage   under the Company’s health insurance plans pursuant to COBRA, then for the period   beginning on the date of the Executive’s termination of employment and ending on the   earlier of (i) the date which is 18 months after the date of such termination of   employment or (ii) the date the Executive becomes eligible for health insurance benefits   under the group health plan of another employer, the Company shall pay, or reimburse   the Executive an amount equal to, the same dollar amount of the Executive’s premium   for COBRA coverage for the Executive and, if applicable, his spouse and dependent   children, as the Company paid prior to the Executive’s termination for group health   coverage under the Company’s health insurance plans for actively employed members of   management generally.  The Executive shall notify the Company promptly if he, while   eligible for benefits under this section , becomes eligible to receive health insurance   benefits from another employer (the “Medical Benefit”); and     

 

13919885. 5      (vi) Equity Incentives.  The Equity Incentives shall fully vest (the “Vesting   Benefit”).        (c) Notwithstanding anything else in this Agreement to the contrary, if either   Party gives written notice under Section 1.2 hereof of such Party’s intention to permit the   Agreement to terminate at the end of the Initial Term or a Renewal Term, as the case may be,   then the Executive shall not be entitled to the Severance Benefit or the Medical Benefit   following such termination.      6.2 Termination by the Company Due to Disability.        (a) If the Executive incurs a Disability, as defined in Section 6.2(b) below, the   Company may terminate the Executive’s employment by giving the Executive written notice of   termination at least 30 days before the date of such termination (or such lesser notice period as   the Executive may agree to).  In the event of such termination of the Executive’s employment   because of Disability, the Executive shall be entitled to receive the following benefits:      (i) The Salary Benefit;    (ii) The Other Benefits;    (iii)  The Reimbursement Benefit; and     (iv) The Vesting Benefit.    (b) For purposes of this Agreement, the Executive shall be considered to have   incurred a “Disability” if and only if the Executive shall be unable to perform the duties of his   employment with the Company for an aggregate period of more than 90 days in a consecutive   period of 52 weeks as a result of incapacity due to mental or physical illness or impairment   (other than as a result of addiction to alcohol or any drug) as determined by a physician selected   by the Company or its insurers and acceptable to the Executive or his legal representative.   6.3 Termination by the Company for Cause.    (a) The Company may terminate the Executive’s employment immediately for   “Cause” for any of the following reasons: (i) an act or acts of dishonesty or fraud by the   Executive relating to the performance of his services to the Company; (ii) a breach by the   Executive of his duties or responsibilities under this Agreement resulting in significant   demonstrable injury to the Company or any of its subsidiaries; (iii) the Executive’s conviction of   a felony or any crime involving moral turpitude; (iv) the Executive’s material failure (for reasons   other than death or Disability) to perform his duties under this Agreement or insubordination   (defined as refusal to execute or carry out lawful directions from the Board or its duly appointed   designees) where the Executive has been given written notice of the acts or omissions   constituting such failure or insubordination and the Executive has failed to cure such conduct,   where susceptible to cure, within 30 days following such notice; or (v) a breach by the Executive   of any provision of any material policy of the Company or any of his obligations under Section   13 of this Agreement.     

 

13919885. 6   (b) The Company shall exercise its right to terminate the Executive’s   employment for Cause by giving the Executive written notice of termination specifying in   reasonable detail the circumstances constituting such Cause.  In the event of such termination of   the Executive’s employment for Cause, the Executive shall be entitled to receive the following   benefits:       (i) The Salary Benefit;    (ii) The Other Benefits; and     (iii)  The Reimbursement Benefit.   7. Terminations of Employment by the Executive.     7.1 Termination by the Executive for Good Reason.   (a) The Executive may terminate his employment for Good Reason, as   defined in Section 7.1(b) below, by giving written notice of termination at least 30 days before   the date of such termination (or such lesser notice period as the Company or Executive may   agree to) specifying in reasonable detail the circumstances constituting such Good Reason.  In   the event of such termination, the Executive shall be entitled to receive the following benefits:      (i) The Salary Benefit;     (ii) The Other Benefits;    (iii) The Reimbursement Benefit;   (iv) The Severance Benefit;   (v) The Medical Benefit; and   (vi) The Vesting Benefit.      (b) For purposes of this Agreement, “Good Reason” shall mean only, without   the Executive’s written consent, (A) a material negative change in the scope of the authority,   functions, duties or responsibilities of Executive’s employment from that which is contemplated   by this Agreement; provided that a change in scope solely as a result of the Company no longer   being a public company or becoming a subsidiary of another entity shall not constitute Good   Reason; (B) the Company engaging the services of a long-term replacement President and Chief   Executive Officer; (C) any material breach by the Company of any provision of this Agreement   without the Executive having committed any material breach of the Executive’s obligations   hereunder (including Section 13 hereof), in each case of (A), (B), or (C), which breach is not   cured by the Company within 30 days following written notice thereof to the Company of such   breach.       If grounds for termination of employment for Good Reason occurs, and the Executive   fails to give notice of termination within 60 days after the occurrence of such event, the   Executive shall be deemed to have waived his right to terminate employment for Good Reason.    In addition, prospective changes to employee benefits for future employment made on an across-   the-board basis to all similarly situated executives of the Company and its subsidiaries shall not   be considered Good Reason.  Further, if termination for Good Reason is triggered during the   Initial Term or a Renewal Term but notice, provided consistent with the terms of this Agreement,     

 

13919885. 7   is not provided until the immediately following Renewal Term, if any,  the Severance Benefit   shall be zero.      7.2 Termination by the Executive Without Good Reason.  In addition to a non-   renewal of the Initial Term or a Renewal Term by the Executive under Section 1.2 hereof, the   Executive may terminate his employment at any time without Good Reason, by giving the   Company a written notice of termination to that effect at least 30 days before the date of   termination (or such lesser notice period as the Company may agree to); provided, however, that   the Company following receipt of such notice from the Executive may elect to have the   Executive’s employment terminate immediately following its receipt of such notice by paying to   the Executive an amount equal to one month of the Executive’s then-current base salary.  In the   event of the Executive’s termination of his employment pursuant to this Section 7(b), and in   addition to the amount set forth in the preceding sentence, if applicable, the Executive shall be   entitled to receive the following benefits:       (i) The Salary Benefit;    (ii) The Other Benefits; and    (iii)  The Reimbursement Benefit.   8. Termination of Employment By Death.    8.1 In the event of the death of the Executive during the course of his employment   hereunder, the Executive’s estate (or other person or entity having such entitlement pursuant to   the terms of the applicable plan or program) shall be entitled to receive the following benefits:        (i) The Salary Benefit;   (ii) The Other Benefits;    (iii)  The Reimbursement Benefit; and     (iv) The Vesting Benefit.   8.2 In addition, in the event of such death, the Executive’s beneficiaries shall receive   any death benefits owed to them under the Company’s employee benefit plans.   9. Conditions to Payment of Certain Benefits.  Notwithstanding anything in this Agreement   to the contrary, the Company’s obligation to pay or provide to the Executive the benefits   described in Sections 6.1(b)(iv) – (vi), 6.2(a)(iv), and 7.1(a)(iv) – (vi) of this Agreement shall be   subject to (i) the Executive’s compliance with the provisions of Section 13 hereof; (ii) delivery to   the Company of the Executive’s resignations from all officer, directorships and fiduciary   positions, if any, with the Company, MPAL and their respective subsidiaries and employee   benefit plans; and (iii) the Executive’s execution and delivery to the Company without   revocation of a valid Termination, Voluntary Release and Waiver of Rights Agreement, in   substantially the form attached to this Agreement as Exhibit A (the “Release”).  If the   documentation described in clause (ii) above and the Release described in clause (iii) above have   not been executed by the Executive and delivered to the Company within 30 days following the   termination of the Executive’s employment, the benefits referenced in this Section 9 shall be   forfeited and shall not be reinstated for any reason.     

 

13919885. 8      10. Golden Parachute Excise Tax.        10.1 In the event that any payment or benefit received or to be received by the   Executive pursuant to this Agreement or any other plan, program or arrangement of the   Company or any of its affiliates would constitute an “excess parachute payment” within the   meaning of Section 280G of the Code (“Excess Parachute Payment”), then any Severance   Benefit payable under this Agreement shall be reduced (by the minimum possible amounts) until   no amount payable to the Executive under this Agreement constitutes an Excess Parachute   Payment; provided, however, that no such reduction shall be made if the net after-tax payment   (after taking into account Federal, state, local or other income and excise taxes) to which the   Executive would otherwise be entitled without such reduction would be greater than the net   after-tax payment (after taking into account Federal, state, local or other income and excise   taxes) to the Executive resulting from the receipt of such payments with such reduction.     10.2 All determinations required to be made under this Section 10 shall be made by a   nationally recognized independent accounting firm mutually agreeable to the Company and the   Executive (the “Accounting Firm”) which shall provide detailed supporting calculations to the   Company and the Executive as requested by the Company or the Executive.  All fees and   expenses of the Accounting Firm shall be borne solely by the Company and shall be paid by the   Company upon demand of the Executive as incurred or billed by the Accounting Firm.  All   determinations made by the Accounting Firm pursuant to this Section 10 shall be final and   binding upon the Company and the Executive.   11. Entitlement to Other Benefits, Plans or Awards.  Except as otherwise provided in this   Agreement, this Agreement shall not be construed as limiting in any way any rights or benefits   that the Executive or his spouse, dependents or beneficiaries may have pursuant to any other   employee benefit plan or program of the Company.  All benefits, including, without limitation,   stock options, stock appreciation rights, restricted stock units and other awards under the   Company’s benefits, plans or programs, shall be subject to the terms and conditions of the plan   or arrangement under which such benefits accrue, are granted or are awarded.  In addition,   nothing herein shall be construed to prevent the Company from amending, altering, eliminating   or reducing any benefits, plans or programs so long as the Executive continues to receive   compensation and benefits consistent with those described in Section 3 hereof.   12. Officer Protections.  As required by the Company’s Restated Certificate of Incorporation,   the Company is entering into its customary Indemnification Agreement with the Executive under   which the Company agrees to indemnify the Executive to the fullest extent allowed under   Delaware law for any claims related to the Executive’s service as  President and Chief Executive   Officer and as a Director of the Company and MPAL and to provide coverage for the Executive   under the Company’s directors’ and officers’ liability insurance with tail coverage.     13. Executive’s Obligations.   13.1 Confidentiality.  The Executive agrees that he shall not, directly or indirectly, use,   make available, sell, disclose or otherwise communicate to any person, other than in the course   of the Executive’s employment and for the benefit of the Company, either during the period of     

 

13919885. 9   the Executive’s employment or at any time thereafter, any nonpublic, proprietary or confidential   information, knowledge or data relating to the Company, any of its subsidiaries, affiliated   companies or businesses, which shall have been obtained by the Executive during the   Executive’s employment by the Company.  The foregoing shall not apply to information that (i)   was known to the public prior to its disclosure to the Executive; (ii) becomes known to the public   subsequent to disclosure to the Executive through no wrongful act of the Executive or any   representative of the Executive; or (iii) the Executive is required to disclose by applicable law,   regulation or legal process (provided that the Executive provides the Company with prior notice   of the contemplated disclosure and reasonably cooperates with the Company at its expense in   seeking a protective order or other appropriate protection of such information).  Notwithstanding   clauses (i) and (ii) of the preceding sentence, the Executive’s obligation to maintain such   disclosed information in confidence shall not terminate where only portions of the information   are in the public domain.   13.2 Non-Solicitation.  In the event that the Executive receives payment of any   Severance Benefit under this Agreement, the Executive agrees that for the two year period   following the date of termination of his employment by the Company the Executive will not,   directly or indirectly, individually or on behalf of any other person, firm, corporation or other   entity, knowingly solicit, aid or induce any managerial level employee of the Company or any of   its subsidiaries or affiliates to leave such employment in order to accept employment with or   render services to or with any other person, firm, corporation or other entity unaffiliated with the   Company or knowingly take any action to materially assist or aid any other person, firm,   corporation or other entity in identifying or hiring any such employee (provided, that the   foregoing shall not be violated by general advertising not targeted at Company employees nor by   serving as a reference for an employee with regard to an entity with which the Executive is not   affiliated).  For the avoidance of doubt, if a managerial level employee on his or her own   initiative contacts the Executive for the primary purpose of securing alternative employment, any   action taken by the Executive thereafter shall not be deemed a breach of this Section 13.2.   13.3 Non-Competition.  The Executive acknowledges that the Executive performs   services of a unique nature for the Company that are irreplaceable, and that the Executive’s   performance of such services to a competing business will result in irreparable harm to the   Company.  Accordingly, under this Agreement, the Executive agrees that for a period of two   years following the date of termination of his employment by the Company for any reason,   whether voluntarily or involuntarily, and whether with or without Cause or Good Reason, he will   not, directly or indirectly, become connected with, promote the interest of, or engage in any other   business or activity that directly competes with any or all of the mineral assets, including but not   limited to, oil and natural gas, that the Company holds at the date of the Executive’s termination   of employment or has definitive plans to acquire within the 12 months following the date of the   Executive’s termination of employment. This clause does not apply to the Executive’s business   interests in Oregon existing as of the date of the execution of this Agreement or to any business   activity that results from the Company’s expansion into business activities outside of   exploration, purchase, development, marketing, sales or distribution of mineral assets, including   but not limited to oil and natural gas.   13.4 Non-Disparagement.  Each of the Executive and the Company (for purposes of   this Section 13.4, “the Company” shall mean only (i) the Company by press release or otherwise     

 

13919885. 10   and (ii) the executive officers and directors thereof and not any other employees) agrees not to   make any public statements that disparage the other Party, or in the case of the Company, its   subsidiaries, affiliates, officers, directors or business partners.  Notwithstanding the foregoing,   statements made in the course of sworn testimony in agency, administrative, judicial or arbitral   proceedings (including, without limitation, depositions in connection with such proceedings) or   otherwise as required by law shall not be subject to this Section 13.4.   13.5 Return of Company Property and Records.  The Executive agrees that upon   termination of the Executive’s employment, for any reason whatsoever, the Executive will   surrender to the Company in good condition (reasonable wear and tear excepted) all property and   equipment belonging to the Company and all records kept by the Executive containing the   names, addresses or any other information with regard to customers or customer contacts of the   Company, or concerning any proprietary or confidential information of the Company or any   operational, financial or other documents given to the Executive during the Executive’s   employment with the Company.   13.6 Cooperation.  The Executive agrees that, for a period of one year following   termination of the Executive’s employment for any reason, the Executive shall upon reasonable   advance notice, and to the extent it does not interfere with previously scheduled travel plans and   does not unreasonably interfere with other business activities or employment obligations, assist   and cooperate with the Company with regard to any matter or project in which the Executive was   involved during the Executive’s employment, including any litigation.  The Company shall   compensate the Executive for any lost wages (or, if the Executive is not then employed, provide   reasonable compensation as determined by the CNG Committee) and reimburse the Executive’s   reasonable expenses associated with such cooperation and assistance.  All such compensation   shall be paid monthly as the services are being performed by the Executive, and any such   reimbursement of expenses shall be subject to Section 4 hereof and shall be made within 30 days   after the Executive has provided the Company reasonable documentation for the expenses   incurred and in no event later than the end of the calendar year following the year in which the   expenses were incurred.   13.7 Assignment of Inventions.  The Executive shall promptly communicate and   disclose in writing to the Company all inventions and developments including software, whether   patentable or not, as well as patents and patent applications (hereinafter collectively called   “Inventions”), made, conceived, developed, or purchased by the Executive, or under which the   Executive acquires the right to grant licenses or to become licensed, alone or jointly with others,   which have arisen or which arise out of the Executive’s employment with the Company, or relate   to any matters directly pertaining to, the business of the Company or any of its subsidiaries;   provided however, that the Executive shall have no obligation to disclose, and shall retain all   rights to, Inventions made, conceived, developed, or purchased by him prior to his employment   with the Company or MPAL.  Included herein as if developed during the employment period is   any specialized equipment and software developed for use in the business of the Company.  All   of the Executive’s right, title and interest in, to, and under all such Inventions, licenses, and right   to grant licenses shall be the sole property of the Company.  As to all such Inventions, the   Executive will, upon request of the Company execute all documents which the Company deems   necessary or proper to enable it to establish title to such Inventions or other rights, and to enable   it to file and prosecute applications for letters patent of the United States and any foreign     

 

13919885. 11   country; and do all things (including the giving of evidence in suits and other proceedings) which   the Company deems necessary or proper to obtain, maintain, or assert patents for any and all   such Inventions or to assert its rights in any Inventions not patented.   13.8 Equitable Relief; Reformation; Survival.  The Parties acknowledge and agree that   the other Party’s remedies at law for a breach or threatened breach of any of the provisions of   this Section 13 would be inadequate and, in recognition of this fact, the Parties agree that, in the   event of such a breach or threatened breach, in addition to any remedies at law, the other Party,   without posting any bond, shall be entitled to obtain equitable relief in the form of specific   performance, temporary restraining order, a temporary or permanent injunction or any other   equitable remedy which may then be available.  If it is determined by a court of competent   jurisdiction in any state that any restriction in this Section 13 is excessive in duration or scope or   is unreasonable or unenforceable under the laws of that state, it is the intention of the Parties that   such restriction may be modified or amended by the court to render it enforceable to the   maximum extent permitted by the law of that state.  The obligations contained in this Section 13   shall survive the termination or expiration of the Executive’s employment with the Company and   shall be fully enforceable thereafter.   14. Alternative Dispute Resolution.  Any controversy, dispute or questions arising out of, in   connection with or in relation to this Agreement or its interpretation, performance or   nonperformance or any breach thereof shall be resolved through mediation.  In the event   mediation fails to resolve the dispute within 60 days after a mediator has been agreed upon or   such other longer period as may be agreed to by the Parties, or if the Parties fail to agree on a   mediator within 30 days of either Party’s request for mediation, such controversy, dispute or   question shall be settled by arbitration in accordance with the Center for Public Resources Rules   for Non Administered Arbitration of Business Disputes, by a sole arbitrator.  The arbitration shall   be governed by the United States Arbitration Act, 9 U.S.C. Sec. 1-16, and judgment upon the   award rendered by the arbitrator may be entered by any court having jurisdiction thereof.  The   place of the arbitration shall be Denver, Colorado.   15. General Provisions.    15.1 No Duty to Seek Employment.  The Executive shall not be under any duty or   obligation to seek or accept other employment following termination of employment, and no   amount, payment or benefits due to the Executive hereunder shall be reduced or suspended if the   Executive accepts subsequent employment, except as expressly set forth herein.    15.2 Deductions and Withholding.  All amounts payable or which become payable   under any provision of this Agreement shall be subject to any deductions authorized by the   Executive and any deductions and withholdings required by applicable laws.    15.3 Notices.  All notices, demands, requests, consents, approvals or other   communications (collectively “Notices”) required or permitted to be given hereunder or which   are given with respect to this Agreement shall be in writing and shall be delivered personally,   sent by facsimile transmission with a copy deposited in the United States mail, registered or   certified, return receipt requested, postage prepaid, or sent by overnight mail addressed as   follows:      

 

13919885. 12        To the Company:    Magellan Petroleum Corporation       1775 Sherman Street, Suite 1950       Denver, CO 80203       Attn: President and CEO       Facsimile:  (720)570-3859                                           To the Executive:  J. Thomas Wilson     55 West 12th Avenue, Unit 409     Denver, CO  80204                                         or such other address as such Party shall have specified most recently by written notice.  Notice   mailed as provided herein shall be deemed given when so delivered personally or sent by   facsimile transmission, or, if sent by overnight mail, on the day after the date of mailing.    15.4 Covenant to Notify Management.  The Executive shall abide by the ethics policies   of the Company as well as the Company’s other rules, regulations, policies and procedures.  The   Executive agrees to comply in full with all governmental laws and regulations as well as ethics   codes applicable.  In the event that the Executive is aware or suspects the Company, or any of its   officers or agents, of violating any such laws, ethics, codes, rules, regulations, policies or   procedures, the Executive agrees to bring all such actual and suspected violations to the attention   of the Company immediately so that the matter may be properly investigated and appropriate   action taken.  The Executive understands that the Executive is precluded from filing a complaint   not involving or related to the Executive’s individual rights with any governmental agency or   court having jurisdiction over wrongful conduct unless the Executive has first notified the   Company of the facts and permits it to investigate and correct the concerns.    15.5 Amendments and Waivers.  No provision of this Agreement may be modified,   waived or discharged unless such waiver, modification or discharge is agreed to in writing signed   by the Executive and the Company.  No waiver by either Party hereto at any time of any breach   by the other Party hereto of, or compliance with, any condition or provision of this Agreement to   be performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or   conditions at the same or at any prior or subsequent time.      

 

13919885. 13   15.6 Beneficial Interests.  This Agreement shall inure to the benefit of and be   enforceable by (a) the Company’s successors and assigns and (b) the Executive’s personal and   legal representatives, executors, administrators, successors, heirs, distributees, devisees and   legatees.  If the Executive shall die while any amounts are still payable to him hereunder, all such   amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this   Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee,   to the Executive’s estate.    15.7 Successors.  The Company shall require any successors (whether direct or   indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the   business and/or assets of the Company to assume expressly and agree to perform this Agreement   in the same manner and to the same extent that the Company would be required to perform.    15.8 Assignment.  This Agreement and the rights, duties, and obligations hereunder   may not be assigned or delegated by any Party without the prior written consent of the other   Party and any attempted assignment or delegation without such prior written consent shall be   void and be of no effect.  Notwithstanding the foregoing provisions of this Section 15.8, benefits   payable pursuant to this Agreement shall not be subject in any manner to anticipation, alienation,   sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the   Executive, and any attempt to alienate, transfer, assign or attach such benefits shall be void.    Notwithstanding the foregoing provisions of this Section 15.8, the Company may assign or   delegate its rights, duties and obligations hereunder to any person or entity which succeeds to all   or substantially all of the business of the Company through merger, consolidation,   reorganization, or other business combination or by acquisition of all or substantially all of the   assets of the Company without the Executive’s consent.    15.9 Choice of Law.  This Agreement shall be governed by and construed in   accordance with the laws of the State of Colorado without regard to the conflicts of law   provisions thereof.    15.10 Statute of Limitations.  The Executive and the Company hereby agree that there   shall be a three-year statute of limitations for the filing of any requests for arbitration or any   lawsuit relating to this Agreement or the terms or conditions of Executive’s employment by the   Company.  If such a claim is filed more than three years subsequent to the Executive’s last day of   employment it shall be precluded by this provision, regardless of whether or not the claim has   accrued at that time.    15.11 Right to Injunctive and Equitable Relief.  The Executive’s obligations under   Section 13 of this Agreement are of a special and unique character, which gives them a peculiar   value.  The Company cannot be reasonably or adequately compensated for damages in an action   at law in the event the Executive breaches such obligations.  Therefore, the Executive expressly   agrees that the Company shall be entitled to injunctive and other equitable relief without bond or   other security in the event of such breach in addition to any other rights or remedies which the   Company may possess or be entitled to pursue.  Furthermore, the obligations of the Executive   and the rights and remedies of the Company under Section 13 and this Section 15.11 are   cumulative and in addition to, and not in lieu of, any obligations, rights, or remedies as created     

 

13919885. 14   by applicable law.  The Executive agrees that the terms of this Section 15.11 shall survive the   term of this Agreement and the termination of the Executive’s employment.    15.12 Severability or Partial Invalidity.  The invalidity or unenforceability of any   provisions of this Agreement shall not affect the validity or enforceability of any other provision   of this Agreement, which shall remain in full force and effect.    15.13 Entire Agreement. This Agreement, along with Exhibit A attached hereto, the   Equity Incentive Agreements, and the Indemnification Agreement, constitute the entire   agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral   agreements, understandings, and negotiations between the Parties with respect to the subject   matter hereof and thereof.  This Agreement may not be changed orally and may only be modified   in writing signed by both Parties.  This Agreement, along with Exhibit A attached hereto, the   Equity Incentive Agreements, and the Indemnification Agreement, are intended by the Parties as   the final expression of their agreement with respect to such terms as are included herein and   therein and may not be contradicted by evidence of any prior or contemporaneous agreement.    The Parties further intend that this Agreement, along with Exhibit A attached hereto, the Equity   Incentive Agreements, and the Indemnification Agreement, constitute the complete and exclusive   statement of their terms and that no extrinsic evidence may be introduced in any judicial   proceeding involving such agreements.   15.14 Code Section 409A.  This Agreement is intended to comply with the provisions of   Section 409A of the Code.  The Parties intend that the benefits and payments provided under this   Agreement shall be exempt from, or comply with, the requirements of Section 409A of the   Code.  Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify   the Executive for any taxes or interest that may be assessed by the IRS pursuant to Section 409A   of the Code.       15.15 Counterparts.  This Agreement may be executed in any number of counterparts,   each of which when so executed shall be deemed an original but all of which together shall   constitute one and the same instrument.       * * * * *     

 

    

 

13919885. A-1   EXHIBIT A   TERMINATION, VOLUNTARY RELEASE AND WAIVER OF RIGHTS AGREEMENT         I, J. Thomas Wilson, freely enter into this Termination, Voluntary Release and Waiver of   Rights Agreement (the “Agreement”), unqualifiedly accept and agree to the relinquishment of my   title, responsibilities and obligations as  President and Chief Executive Officer of Magellan   Petroleum Corporation  (the “Company”), and concurrently and unconditionally agree to sever   my relationship as President and Chief Executive Officer of the Company, in consideration for the   voluntary payment to me by the Company of the benefits described in Section 9 of the   Employment Agreement, dated as of _____________2011, by and between me and the Company   (the “Employment Agreement”).    1. In exchange for this consideration, which I understand that the Company is not otherwise   obligated to provide to me, I voluntarily agree to waive and forego any and all claims, rights,   interests, covenants, contracts, warranties, promises, undertakings, actions, suits, causes of   action, obligations, debts, attorneys’ fees or other expenses, accounts, judgments, fines, fees,   losses and liabilities, of any kind, nature or description, in law (including all contract and tort   claims), equity or otherwise (collectively, “Claims”) that I may have against the Company as the   President and Chief Executive Officer of the Company beyond the rights set forth in the   Employment Agreement and to release the Company and their respective affiliates, subsidiaries,   officers, directors, employees, representatives, agents, successors and assigns (hereinafter   collectively referred to as “Releasees”) from any obligations any of them may owe to me in my   capacity as President and Chief Executive Officer of the Company except as set forth in my   Employment Agreement (and specifically not as a shareholder or director), accepting the   aforestated consideration as full settlement of any monies or obligations owed to me by   Releasees that may have arisen at any time prior to the date of my execution of this Agreement,   except as specifically provided below in the following paragraph number 2.    2. I do not waive, nor has the Company asked me to waive, any rights arising exclusively   under the Fair Labor Standards Act, except as such waiver may henceforth be made in a manner   provided by law.  I do not waive, nor has the Company asked me to waive, any vested benefits   that I may have or that I may have derived from the course of my employment with the   Company.  I understand that such vested benefits will be subject to and administered in   accordance with the established and usual terms governing same.  I do not waive any rights   which may in the future, after the execution of this Agreement, arise exclusively from a   substantial breach by the Company of a material obligation of the Company expressly   undertaken in consideration of my entering into this Agreement.   3. Except as set forth in paragraphs 2 and 9 hereof, I do fully, irrevocably and forever   waive, relinquish and agree to forego any and all Claims whatsoever, whether known or   unknown, in contract, tort or otherwise, that I may have or may hereafter have against the   Releasees or any of them arising out of or by reason of any cause, matter or thing whatsoever   arising out of my employment by the Company (other than as set forth in my Employment   Agreement) from the beginning of the world to the date hereof, including without limitation any     

 

13919885. A-2   and all matters relating to my employment with the Company and the cessation thereof and all   matters arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq., the   Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Family and Medical   Leave Act of 1993, 29 U.S.C. § 2601 et seq., the Age Discrimination in Employment Act of   1967, 29 U.S.C. § 621 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C.   § 1001 et seq., all as amended, or under any other laws, ordinances, executive orders, regulations   or administrative or judicial case law arising under the statutory or common laws of the United   States, the State of Texas or any other applicable county or municipal ordinance.    4. As a material inducement to the Company to enter into this Agreement, I, the   undersigned, recognize that I may have been privy to certain confidential, proprietary and trade   secret information of the Company which, if known to third parties, could be used in a manner   that would reduce the value of the Company for its shareholders.  In order to reduce the risk of   that happening, I, the undersigned, agree that for a period of two (2) years after termination of   employment, I, the undersigned, will not, directly or indirectly, assist, or be part of or have any   involvement in, any effort to acquire control of the Company through the acquisition of its stock   or substantially all of its assets, without the prior consent of the Board of Directors of the   Company.  This provision shall not prevent the undersigned from owning up to not more than   five percent (5%) of the outstanding publicly traded stock of any company; exercising any   Company stock options in accordance with the terms and conditions of the Company’s 1998   Stock Incentive Plan, or retaining any shares of Company stock owned by me on the date hereof.    5. Acknowledgements.   (a) I further acknowledge pursuant to the Older Worker’s Benefit Protection Act (29   U.S.C. § 626(f)), I expressly agree that the following statements are true:    (i) The payment of the benefits described in Section 9 of the Employment Agreement   is in addition to the standard employee benefits and anything else of value which the Company   owes me in connection with my employment with the Company or the separation of   employment.    (ii) I have 21 days from date of receipt to consider and sign this agreement.  If I   choose to sign this Agreement before the end of the 21 day period, that decision is completely   voluntary and has not been forced on me by the Company.    (iii) I will have seven days after signing the Agreement in which to revoke it, and the   Agreement will not become effective or enforceable until the end of those seven days.    (iv) I am now being advised in writing to consult an attorney before signing this   Agreement.    (v) I acknowledge that I have been given sufficient time to freely consult with an   attorney or counselor of my own choosing and that I knowingly and voluntarily execute this   Agreement, after bargaining over the terms hereof, with knowledge of the consequences made   clear, and with the genuine intent to release claims without threats, duress, or coercion on the   part of the Company.  I do so understanding and acknowledging the significance of such waiver.     

 

13919885. A-3   6. Further, in view of the above-referenced consideration voluntarily provided to me by the   Company, after due deliberation, I agree to waive any right to further litigation or claim against   any or all of the Releasees except as specifically provided in paragraphs 2 and 9 hereof.  I hereby   agree to indemnify and hold harmless the Releasees and their respective agents or representatives   from and against any and all losses, costs, damages or expenses, including, without limitation,   attorneys fees incurred by said parties, or any of them, arising out of any breach of this Agreement   by me or by any person acting on my behalf, or the fact that any representation made herein by   the undersigned was false when made.    7. As a material inducement to the Company to enter into this Agreement, I, the   undersigned, understand and agree that if I should fail to comply with the conditions hereof or to   carry out my obligations under this Agreement, all amounts previously paid under this Agreement   shall be immediately forfeited to the Company and that the right or claim to further payments   and/or benefits hereunder would likewise be forfeited.    8. As a further material inducement to the Company to enter into this Agreement, the   undersigned provides as follows:     First.  No Claims.  I represent that I have not filed any complaints or charges against the   Company, or any of the Releasees relating to the relinquishment of my former titles and   responsibilities at the Company or the terms of my employment with the Company and that if any   agency or court assumes jurisdiction of any complaint or charge against the Company or any of   the Releasees on behalf of me concerning my employment with the Company, I understand and   agree that I have, by my knowing and willing execution of this Agreement, waived my rights to   any form of recovery or relief against the Company, or any of the Releasees, including but not   limited to, attorney’s fees; provided, however, that this provision shall not preclude the   undersigned from pursuing appropriate legal relief against the Company for redress of a   substantial breach of a material obligation of the Company expressly undertaken in consideration   of my entering into this Agreement.     Second.  No Admission.  I acknowledge and understand that the consideration for this   release shall not be in any way construed as an admission by the Company or any of the   Releasees of any improper acts or any improper employment decisions, and that the Company,   specifically disclaims any liability on the part of itself, the Releasees, and their respective agents,   employees, representatives, successors or assigns in this regard.     Third.  Binding Nature.  I acknowledge and agree that this Agreement shall be binding   upon me, upon the Company, and upon our respective administrators, representatives, executives,   successors, heirs and assigns and shall inure to the benefit of said parties and each of them.     Fourth.  Entire Agreement. I represent, understand and agree that this Agreement sets   forth the entire agreement between the Parties hereto, and fully supersedes any and all prior   agreements or understandings between the Parties pertaining to the subject matter hereof, except   for the provisions of Section 15 of the Employment Agreement, the terms of which retain their   full force and effect, and which are in no way limited or curtailed by this Agreement.     Fifth. Modification.  This Agreement may not be altered or changed except by an     

 

13919885. A-4   agreement in writing that has been properly executed by the Party against whom any waiver,   change, modification or discharge is sought.     Sixth. Severability.  All provisions and terms of this Agreement are severable.  The   invalidity or unenforceability of any particular provision(s) or term(s) of this Agreement shall not   affect the validity or enforceability of the other provisions and such other provisions shall be   enforceable in law or equity in all respects as if such particular invalid or unenforceable   provision(s) or term(s) were omitted.  Notwithstanding the foregoing, the language of all parts of   this Agreement shall, in all cases, be construed as a whole, according to its fair meaning, and not   strictly for or against any of the Parties.     Seventh. No Disparagement.  I agree and promise that I will not make any public   statements which are disparaging or damaging to the reputation or business of the Company, its   subsidiaries, directors, officers or affiliates, and I will not make any oral or written statements or   reveal any information to any person, company, or agency which would interfere in any way with   the business relations between the Company or any of its subsidiaries or affiliates and any of their   customers, suppliers or vendors whether present or in the future; provided however, that   statements made in the course of sworn testimony in agency, administrative, judicial or arbitral   proceedings (including, without limitation, depositions in connection with such proceedings) or   otherwise as required by law shall not be subject to this section Seventh.      Eighth. Confidentiality.  The Company and the undersigned agree to refrain from   disclosing to third parties and to keep strictly confidential all details of this Agreement and any   and all information relating to its negotiation, except as necessary to each Party’s accountants or   attorneys.    9. Notwithstanding anything herein to the contrary, this release shall not affect, release or   terminate in any way the undersigned’s rights (i) to receive payments under the Employment   Agreement (ii) under the Indemnification Agreement entered by the Company and the   undersigned with respect to certain liabilities that the undersigned may incur as an officer of the   Company or (iii) under any option agreements and grants from the Company to the undersigned,   or any agreement between the undersigned and the Company relating to the undersigned’s rights   as an owner of stock or options in the Company.          * * * * *     

 

13919885. A-5   AFFIRMATION OF RELEASOR    I, J. Thomas Wilson, warrant that I am competent to execute this Termination, Voluntary   Release and Waiver of Rights Agreement and that I accept full responsibility thereof.     I, J. Thomas Wilson, warrant that I have had the opportunity to consult with an attorney of   my choosing with respect to this matter and the consequences of my executing this Termination,   Voluntary Release and Waiver of Rights Agreement.     I, J. Thomas Wilson, have read this Termination, Voluntary Release and Waiver of Rights   Agreement carefully and I fully understand its terms.  I execute this document voluntarily with   full and complete knowledge of its significance.        Executed this              day of _______, 20__ at                                                              .              J. Thomas Wilson          STATE OF_____________)         : ss.  ________  ________________ __, 2011      COUNTY OF ____________)        Subscribed and sworn to before me, a Notary Public in and for said County and State, this                day of                     , 20__ under the pains and penalties of perjury.              ________________________, , Notary Public           My Commission Expires:    County of Residence:      AGREED:     MAGELLAN PETROLEUM CORPORATION            By:            Name:         Title:Exhibit 4(c)3 12-31-2013

Exhibit 4(c)3

SUPERIOR WATER, LIGHT AND POWER COMPANY
2915 Hill Avenue, Superior, WI 54880

To

 
U.S. BANK NATIONAL ASSOCIATION
 (formerly First Bank (N.A.))

As Trustee Under Superior Water, Light and Power 
Company's Mortgage and Deed of Trust, 
Dated as of March 1, 1943

 
TWELFTH SUPPLEMENTAL INDENTURE

Dated as of December 2, 2013

This instrument drafted by 
Chapman and Cutler LLP
Chicago, IL 

TABLE OF CONTENTS 
	
					
	SECTION
	 HEADING 
	PAGE
	

	Parties
	1
	

	Recitals
	1
	

	ARTICLE I
	BONDS OF THE ELEVENTH SERIES
	7
	

	 
	Section 1.1
	7
	

	ARTICLE II
	COVENANTS AND RESTRICTIONS.
	10
	

	 
	Section 2.1
	10
	

	 
	Section 2.2
	11
	

	 
	Section 2.3
	11
	

	 
	Section 2.4
	11
	

	 
	Section 2.5
	11
	

	ARTICLE III
	MISCELLANEOUS PROVISIONS
	12
	

	 
	Section 3.1
	12
	

	 
	Section 3.2
	17
	

	 
	Section 3.3
	17
	

	 
	Section 3.4
	17
	

	 
	Section 3.5
	17
	

	 
	Section 3.6
	17
	

	 
	Section 3.7
	17
	

	Signature
	18
	

ATTACHMENTS TO SUPPLEMENTAL INDENTURE: 
EXHIBIT A - Form of Bond of the Eleventh Series 
EXHIBIT B - Assignment and Irrevocable Bond Power 

-i-

TWELFTH SUPPLEMENTAL INDENTURE 

SUPPLEMENTAL INDENTURE, dated as of the 2nd day of December, 2013, made and entered into by and between SUPERIOR WATER, LIGHT AND POWER COMPANY, a corporation of the State of Wisconsin, whose address is 2915 Hill Avenue, Superior, Wisconsin 54880 (the “Company”) and U.S. BANK NATIONAL ASSOCIATION (successor to Chemical Bank, as Corporate Trustee, and Peter Morse, as Co-Trustee), a national banking association, whose principal trust office at the date hereof is in Milwaukee, Wisconsin (the “Trustee”), as Trustee under the Mortgage and Deed of Trust dated as of March 1, 1943 (hereinafter called the “Mortgage”), which Mortgage was executed and delivered by the Company to secure the payment of bonds issued or to be issued under and in accordance with the provisions of the Mortgage, reference to which Mortgage is hereby made, this Twelfth Supplemental Indenture(the “Twelfth Supplemental Indenture”) being supplemental thereto; 

WHEREAS, said Mortgage was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on May 3, 1943, in Volume 191 of Mortgages at page 1, Document No. 362844; and 

WHEREAS, an instrument dated as of September 15, 1949, was executed by the Company appointing Russell H. Sherman as Co-Trustee in succession to said Howard B. Smith, resigned, under said Mortgage, and by Russell H. Sherman accepting the appointment as Co-Trustee under said Mortgage in succession to the said Howard B. Smith, which instrument was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on October 8, 1949, in Volume 196 of Mortgages at page 510, Document No. 398649; and 

WHEREAS, by the Mortgage, the Company covenanted that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectively the purposes of the Mortgage and to make subject to the lien of the Mortgage any property acquired after the date of the execution of the Mortgage and intended to be subject to the lien thereof; and 

WHEREAS, the Company executed and delivered its First Supplemental Indenture, dated as of March 1, 1951 (hereinafter called its “First Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on March 30, 1951, in Volume 205 of Mortgages at page 73, Document No. 405297; and 

WHEREAS, an instrument dated as of May 16, 1961, was executed by the Company appointing Richard G. Pintard as Co-Trustee in succession to said Russell H. Sherman, resigned, under said Mortgage and by Richard G. Pintard accepting the appointment as Co-Trustee under said Mortgage in succession to said Russell H. Sherman, which instrument was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on May 31, 1961, in Volume 256 of Mortgages at page 423, Document No. 453857; and 

WHEREAS, the Company executed and delivered its Second Supplemental Indenture, dated as of March 1, 1962 (hereinafter called its “Second Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on March 26, 1962, in Volume 261 of Mortgages at page 81, Document No. 457662; and 

 1

WHEREAS, an instrument dated as of June 23, 1976, was executed by the Company appointing Steven F. Lasher as Co-Trustee in succession to said Richard G. Pintard, resigned, under said Mortgage and by Steven F. Lasher accepting the appointment as Co-Trustee under said Mortgage in succession to said Richard G. Pintard, which instrument was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on July 16, 1976, in Volume 353 of Records at page 274, Document No. 532495; and 

WHEREAS, the Company executed and delivered its Third Supplemental Indenture, dated as of July 1, 1976 (hereinafter called its “Third Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on October 1, 1976, in Volume 355 of Records at page 683, Document No. 534332; and 

WHEREAS, an instrument dated as of December 30, 1977, was executed by the Company appointing C. G. Martens as Co-Trustee in succession, to said Steven F. Lasher, resigned, under said Mortgage and by C. G. Martens accepting the appointment as Co-Trustee under said Mortgage in succession to said Steven F. Lasher, which instrument was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on February 13, 1985, in Volume 436 of Records at page 264, Document No. 589308; and 

WHEREAS, the Company executed and delivered its Fourth Supplemental Indenture, dated as of March 1, 1985 (hereinafter called its “Fourth Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on March 19, 1985, in Volume 436 of Records at page 910, Document No. 589776; and 

WHEREAS, an instrument dated as of October 26, 1992, was executed by the Company appointing Peter Morse as Co-Trustee in succession to said C. G. Martens, resigned, under said Mortgage and by Peter Morse accepting the appointment as Co-Trustee under said Mortgage in succession to said C. G. Martens, which instrument was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on November 13, 1992, in Volume 539 of Records at page 9, Document No. 649056; and 

WHEREAS, the Company executed and delivered its Fifth Supplemental Indenture, dated as of December 1, 1992, (hereinafter called its “Fifth Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on December 28, 1992, in Volume 541 of Records at page 229, Document No. 650104; and 

WHEREAS, the Company executed and delivered its Sixth Supplemental Indenture, dated as of March 24, 1994 (hereinafter called its “Sixth Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on March 29, 1994, in Volume 568 of Records at page 757, Document No. 662228; and 

WHEREAS, the Company executed and delivered its Seventh Supplemental Indenture, dated as of November 1, 1994 (hereinafter called its “Seventh Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on January 18, 1995, in Volume 583 of Records at page 242, Document No. 669350; and 

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WHEREAS, an instrument dated as of January 20, 1995, was executed by The Prudential Insurance Company pursuant to Section 102 of the Mortgage appointing First Bank (N.A.) as Trustee in succession to Chemical Bank as Corporate Trustee and Peter Morse as Co-Trustee under said Mortgage and by First Bank (N.A.) (U.S. Bank National Association, successor) accepting the appointment as Trustee under such Mortgage in succession to said Chemical Bank and said Peter Morse, which instrument was recorded in the Office of the Register of Deeds in and for Douglas County, Wisconsin on April 6, 1995 in Volume 585 of Records at page 953, Document No. 670717; and 

WHEREAS, the Company executed and delivered its Eighth Supplemental Indenture, dated as of January 1, 1997 (hereinafter called its “Eighth Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on January 7, 1997, in Volume 617 of Records at page 536, Document No. 685699; and 

WHEREAS, the Company executed and delivered its Ninth Supplemental Indenture, dated as of October 1, 2007 (hereinafter called its “Ninth Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on September 27, 2007, as Document No. 810920; and 

WHEREAS, the Company executed and delivered its Tenth Supplemental Indenture, dated as of October 1, 2007 (hereinafter called its “Tenth Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on September 27, 2007, as Document No. 810921; and; 

WHEREAS, the Company executed and delivered its Eleventh Supplemental Indenture, dated as of December 1, 2008 (hereinafter called its “Eleventh Supplemental Indenture”), which was recorded in the office of the Register of Deeds in and for Douglas County, Wisconsin, on December 12, 2008, as Document No. 821566; and 

WHEREAS, in addition to the property described in the Mortgage, as heretofore supplemented, the Company has acquired certain other property, rights and interests in property; and 

WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Mortgage, bonds of a series entitled and designated First Mortgage Bonds, 3 3/8% Series due 1973 (the “Bonds of the First Series”), in the aggregate principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000), none of which Bonds of the First Series are now Outstanding; bonds of a series entitled and designated First Mortgage Bonds, 3 1/10% Series due 1981 (the “Bonds of the Second Series”), in the aggregate principal amount of Five Million Dollars ($5,000,000), none of which Bonds of the Second Series are now Outstanding; bonds of a series entitled and designated First Mortgage Bonds, 5% Series due 1992 (the “Bonds of the Third Series”), in the aggregate principal amount of Two Million Seven Hundred Thousand Dollars ($2,700,000), none of which Bonds of the Third Series are now outstanding; bonds of a series entitled and designated First Mortgage Bonds, 9 5/8% Series due 2001 (the “Bonds of the Fourth Series”), the interest rate for which bonds was modified to 6.10% by the Sixth Supplemental Indenture, in the aggregate principal amount of Three Million Dollars ($3,000,000), none of which bonds of the Fourth Series are now outstanding; bonds of a series entitled and designated First Mortgage Bonds, 12 1/2% Series due 1992 (the “Bonds of the Fifth Series”), in the aggregate principal amount of Three Million Five Hundred Thousand Dollars($3,500,000), none of which Bonds of the Fifth Series are now outstanding; Bonds of a series entitled and designated First Mortgage Bonds, 7.91% Series due 2013 (the “Bonds of the Sixth Series”), in the aggregate principal amount of Five Million Dollars ($5,000,000), none of which Bonds of the Sixth Series is now outstanding; Bonds of a series entitled and designated First Mortgage Bonds, 7.27% Series due December 15, 2008 (the “Bonds of the Seventh Series”), in the aggregate principal amount of Six Million Dollars ($6,000,000), none of which Bonds of the Seventh Series remains outstanding; Bonds of a series entitled and designated First Mortgage Bonds, 5.375% Series due 2021 (the “Bonds of the Eighth Series”), in the aggregate principal amount of Six Million Three Hundred Seventy Thousand Dollars ($6,370,000), the full amount of which remains outstanding; Bonds of a series entitled and designated First Mortgage Bonds, 5.75% Series due November 1, 2037 (the “Bonds of the Ninth Series”), in the aggregate principal amount of Six Million One Hundred Thirty Thousand Dollars ($6,130,000), the full amount of which remains outstanding; and Bonds of a series entitled and designated First Mortgage Bonds, 7.25% Series due December 15, 2013 (the “Bonds of the Tenth Series”), in the aggregate principal amount of Ten Million Dollars ($10,000,000), the full amount of which remains outstanding; and 

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WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds(other than Bonds of the First Series) issued thereunder shall be established by Resolution of the Board of Directors of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as the Board of Directors may, in its discretion, cause to be inserted therein; and 

WHEREAS, Section 120 of the Mortgage provides, among other things, that the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may establish the terms and provisions of any series of bonds other than said Bonds of the First Series, by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to be of record in all of the states in which any property at the time subject to the lien of the Mortgage shall be situated; and 

WHEREAS, the Company now desires to create a new series of bonds and to add to the covenants, limitations or restrictions contained in the Mortgage certain other covenants, limitations or restrictions to be observed by it and to amend the Mortgage; and 

WHEREAS, the execution and delivery by the Company of this Twelfth Supplemental Indenture, and the terms of the Bonds of the Eleventh Series hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate resolutions of said Board of Directors; 

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NOW, THEREFORE, THIS INDENTURE WITNESSETH: That Superior Water, Light and Power Company, in consideration of the premises and of One Dollar ($1) to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustee and in order further to secure the payment both of the principal of and interest and premium, if any, on the bonds from time to time issued under the Mortgage, according to their tenor and effect, and the performance of all the provisions of the Mortgage (including any instruments supplemental thereto and any modification made as in the Mortgage provided) and of said bonds, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the Mortgage) unto U.S. Bank National Association, as Trustee under the Mortgage, and to its successor or successors in said trust, and to said Trustee and its successors and assigns forever, all and singular the permits, franchises, rights, privileges, grants and property, real, personal and mixed, now owned or which may be hereafter acquired by the Company (except any of the character herein or in the Mortgage expressly excepted), including (but not limited to) its electric light and power works, gas works, water works, buildings, structures, machinery, equipment, mains, pipes, lines, poles, wires, easements, rights of way, permits, franchises, rights, privileges, grants and all property of every kind and description, situated in the City of Superior, Douglas County, Wisconsin, or elsewhere in Douglas County, Wisconsin, in Washburn County, Wisconsin, or in any other place or places now owned by the Company, or that may be hereafter acquired by it, including, but not limited to, the following described properties of the Company---that is to say: 

All Lands and Rights and Interests in Lands of the Company (except any such property as may have been released from the lien of the Mortgage), including, but not limited to, all such property acquired by the Company under the following deed which is referred to for more particular description thereof, to wit: 

Deed dated August 18, 2006, from the County of Douglas, in the State of Wisconsin, to the Company, which deed was recorded in the office of the Register of Deeds of the County of Douglas, State of Wisconsin, on August 18, 2006, as Document No. 798722; 

All other property, real, personal and mixed, acquired by the Company after the date of the execution and delivery of the Mortgage (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted), now owned or hereafter acquired by the Company and wheresoever situated, including (without in any wise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in this Twelfth Supplemental Indenture) all lands, power sites, flowage rights, water rights, water franchises, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts, and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants, works, reservoirs and tanks for the pumping and purification of water; all water works; all plants for the generation of electricity by water, steam and/or other power; all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, street and interurban railway systems, offices, buildings and other structures and the equipment thereof; all machinery, engines, boilers, dynamos, water, electric, gas and other machines, regulators, meters, transformers, generators, motors, water, electrical, gas and mechanical appliances, conduits, cables, water, steam, heat, gas or other mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture, chattels and choses in action; all municipal and other franchises, consents or permits; all lines for the transmission and distribution of water, electric current, gas, steam heat or hot water for any purpose, including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented, described. 

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Together with all and singular the tenements, hereditaments and appurtenances belonging or in any wise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof. 

It is hereby agreed by the Company that all the property, rights and franchises acquired by the Company after the date hereof (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted) shall be and are as fully granted and conveyed hereby and as fully embraced within the lien of the Mortgage as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed hereby. 

Provided that the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of the Mortgage, viz: (1) cash, shares of stock, bonds, notes and other obligations and other securities not hereafter specifically pledged, paid, deposited, delivered or held under the Mortgage or covenanted so to be; (2) merchandise, equipment, materials or supplies held for the purpose of sale in the usual course of business and fuel, oil and similar materials and supplies consumable in the operation of any properties of the Company; rolling stock, buses, motor coaches, automobiles and other vehicles; (3) bills, notes and accounts receivable, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or covenanted so to be; the last day of the term of any lease or leasehold which may heretofore have or hereafter may become subject to the lien of the Mortgage; (4) water, electric energy, gas, ice and other materials or products pumped, stored, generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; (5) the Company’s franchise to be a corporation; and (6) all permits, franchises, rights, privileges, grants and property in the state of Minnesota now owned or hereafter acquired unless such permits, franchises, rights, privileges, grants and property in the state of Minnesota shall have been subjected to the lien of the Mortgage by an indenture or indentures supplemental to the Mortgage, pursuant to authorization of the Board of Directors of the Company, whereupon all the permits, franchises, rights, privileges, grants and property then owned or thereafter acquired by the Company in the state of Minnesota (except property of the character expressly excepted from the lien of the Mortgage in clauses (1) to (5) above, inclusive), shall become and be subject to the lien of the Mortgage as part of the Mortgaged and Pledged Property and may be released, funded and otherwise dealt with on the same terms and subject to the same conditions and restrictions as though not theretofore excepted from the lien of the Mortgage; provided, however, that the property and rights expressly excepted from the lien and operation of the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that the Trustee or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 of the Mortgage. 

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To have and to hold all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto U.S. Bank National Association as Trustee, and its successors and assigns forever. 

In trust nevertheless, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Mortgage, as heretofore supplemented, this Twelfth Supplemental Indenture being supplemental thereto. 

And it is hereby covenanted by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as heretofore supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustee and the beneficiaries of the trust with respect to said property, and to the Trustee and its successors as Trustee of said property, in the same manner and with the same effect as if said property had been owned by the Company at the time of the execution of the Mortgage, and had been specifically and at length described in and conveyed to the Trustee by the Mortgage as part of the property therein stated to be conveyed. 

The Company further covenants and agrees to and with the Trustee and its successors in said trust under the Mortgage as follows: 

ARTICLE I 
BONDS OF THE ELEVENTH SERIES 

Section 1.1.     There shall be an eleventh series of bonds designated “First Mortgage Bonds, 4.15% Series due December 15, 2028” (the “Bonds of the Eleventh Series”), which shall be limited to $15,000,000 aggregate principal amount, and shall be issued as fully registered bonds without coupons in the denominations of $1,000 or any multiple thereof. The Bonds of the Eleventh Series shall be dated on the date of issuance thereof, mature on December 15, 2028 or upon earlier acceleration or redemption, and shall bear interest (computed on the basis of a 360-day year of twelve 30 day months) from their date of issuance, at the rate of 4.15% per annum, payable semiannually on June 15 and December 15 of each year commencing June 15, 2009 and at the rate of 6.15% per annum on any overdue payment of principal or premium, if any, and to the extent enforceable under applicable law, or any overdue payment of interest. The Bonds of the Eleventh Series shall be numbered R-1 and upward and otherwise shall be substantially in the form attached hereto as Exhibit A. Except as hereinafter provided, the principal of, and the premium, if any, and the interest on each said bond to be payable at the office of the Company in Superior, Wisconsin or agency of the Company in the City of St. Paul, Minnesota, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts. 

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Notwithstanding any provision to the contrary in the Mortgage or the Bonds of the Eleventh Series, the first paragraph of Section 9 of the Bond Purchase Agreement shall govern the method of payment of principal, premium, if any, and interest on the Bonds of the Eleventh Series to the holders thereof; provided, however, that the Trustee shall have no obligation to comply with the provisions of Section 9 of the Bond Purchase Agreement with respect to any transferee of the Purchaser or any other holder of the Bonds of the Eleventh Series until such transferee or holder shall have made the agreement described in Section 9 of the Bond Purchase Agreement. Subject to such proviso, the Trustee hereby consents to the method of payment described in Section 9 of the Bond Purchase Agreement. The Trustee shall not be liable or responsible to any holder of Bonds of the Eleventh Series entitled to the benefits of Section 9 of the Bond Purchase Agreement or to any transferee thereof or to the Company for any act or omission to act on the part of the Company or any such holder of Bonds of the Eleventh Series in connection with Section 9 of the Bond Purchase Agreement. The Company hereby indemnifies the Trustee against all liabilities, if any, resulting from acts or omissions on its part or on the part of the Company in connection with Section 9 of the Bond Purchase Agreement. 

The Bonds of the Eleventh Series shall be dated as of the date of authentication thereof by the Trustee (except that if any Bond of the Eleventh Series shall be authenticated on an interest payment date for the Bonds of the Eleventh Series to which interest has been paid, such Bond shall be dated as of the day following) and shall bear interest from the fifteenth day of June or December, as the case may be, next preceding the date of such Bond to which interest has been paid; provided, however, that if any such Bond shall be authenticated before June 15, 2014, such Bond shall bear interest from the date of the original issue of the Bonds of the Eleventh Series; and provided further that if the Company shall at the time of the authentication of any Bond of the Eleventh Series be in default in the payment of interest upon the Bonds of the Eleventh Series, such Bond shall be dated as of, and shall bear interest from, the date of the beginning of the period for which such interest is so in default. 

Upon notice as provided in the following paragraph, the Bonds of the Eleventh Series may be redeemed prior to maturity, in whole at any time or in part (in multiples of $500,000) from time to time, at the option of the Company, or by the application (either at the option of the Company or pursuant to the requirements of the Mortgage) of cash delivered to or deposited with the Trustee pursuant to the provisions of Section 39, Section 55, Section 61, Section 64 or Section 118 of the Mortgage or with the Proceeds of Released Property, in any such case at 100% of the principal amount of the Bonds being redeemed plus interest accrued thereon to the date of redemption, together with a premium equal to the Make-Whole Amount, if any, with respect to the Bonds of the Eleventh Series being redeemed determined five Business Days prior to the date of such redemption. 

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Notice of any redemption of the Bonds of the Eleventh Series shall be given by the Company by mail, postage prepaid, at least 30 but not more than 60 days prior to the date of redemption, to the registered owners of all Bonds of the Eleventh Series to be so redeemed at their respective addresses appearing on the books maintained by the Company pursuant to Section 13 of the Mortgage. Any notice which is mailed as herein provided shall be conclusively presumed to have been properly and sufficiently given on the date of such mailing, whether or not the registered owner receives the notice. In any case, failure to give notice by mail, or any defect in such notice, to the registered owner of any Bond of the Eleventh Series designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Bond of the Eleventh Series. Two Business Days prior to the redemption date specified in such notice, the Company shall provide each registered owner of Bonds of the Eleventh Series to be redeemed with written notice of the premium, if any, payable with respect thereto and a reasonably detailed computation of the Make-Whole Amount. 

All partial redemptions of Bonds of the Eleventh Series shall be made ratably among all registered owners thereof in the proportion which the principal amount of the Bonds held by each registered owner bears to the aggregate principal amount of all Bonds of the Eleventh Series then outstanding, computed to the nearest $1,000 principal amount of the Bonds of the Eleventh Series. 

In the event that the principal amount of the Bonds of the Eleventh Series is declared due and payable upon the occurrence of a Default or becomes due and payable pursuant to Section 73 of the Mortgage, there shall then become due and payable, together with the principal amount of the Bonds of the Eleventh Series and interest accrued thereon, a premium equal to the amount of the Make-Whole Amount which would have been payable with respect to such Bonds of the Eleventh Series, if they had been redeemed at the option of the Company pursuant to Section 1.1 in this Twelfth Supplemental Indenture on the date on which the Bonds of the Eleventh Series became due and payable; provided that such premium, if any, with respect to the Bonds of the Eleventh Series shall become due and payable only if such Default is, or such sale is made following a Default, other than one specified in subsections (e) or (f) of Section 65 of the Mortgage. 

Any Bonds of the Eleventh Series shall be transferable by the registered owner thereof in person, or by its attorney duly authorized in writing, at the office or agency of the Company in the City of St. Paul, Minnesota, or the office of the Company in Superior, Wisconsin, upon surrender thereof for cancellation, together with a written instrument of transfer in form approved by the Company duly executed by such registered owner or by its duly authorized attorney. Upon any such transfer, a new Bond or Bonds of the Eleventh Series for the same aggregate principal amount will be issued to the transferee in exchange therefor. Any Bond of the Eleventh Series may, at the option of the registered owner thereof and upon surrender thereof for cancellation at such office or agency, be exchanged as prescribed in the Mortgage for another Bond or Bonds of the Eleventh Series of other authorized denominations having the same aggregate principal amount. In the event any written instrument of transfer is required in connection with any transfer or exchange of any Bond of the Eleventh Series, an instrument in the form attached hereto as Exhibit B is hereby approved by the Company for the purposes of Section 12 of the Mortgage. 

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Notwithstanding any provision of Section 12 or Section 16 of the Mortgage, (a) no charge will be made by the Company for any transfer or exchange of any Bond of the Eleventh Series or, in the case of any lost, destroyed or mutilated Bond, the issuance, authentication and delivery of a new Bond of the Eleventh Series in substitution thereof, whether for any stamp tax or other governmental charge, if any, applicable thereto or otherwise, and the Company shall reimburse the Trustee for all expenses incurred in connection therewith and (b) in the event of any loss, destruction or mutilation of any Bond of the Eleventh Series, and a request by the holder for issuance of a new Bond of the Eleventh Series in substitution therefor, the holder’s unsecured indemnity agreement shall be deemed to be satisfactory to the Company and the Trustee for purposes of Section 16 of the Mortgage. 

Notwithstanding any provision of Section 15 of the Mortgage, Bonds of the Eleventh Series shall be authenticated, issued and delivered only as definitive bonds. Bonds of the Eleventh Series so authenticated, issued and delivered may be in the form of fully engraved bonds, bonds printed or lithographed on engraved borders, bonds printed or bonds typewritten. 

ARTICLE II 
COVENANTS AND RESTRICTIONS 

Section 2.1.     The Company covenants that, so long as any Bonds of the Eleventh Series are outstanding, it will not merge or consolidate with any other Person or sell, lease or transfer or otherwise dispose (a “Disposition”) of all or a Substantial Part of its assets, or assets which shall have contributed a Substantial Part of net income of the Company for any of the three fiscal years then most recently ended, to any Person; provided, however, that the Company may merge or consolidate with, or sell or transfer all or substantially all of its assets to, Allete, but only if (a) in the event that Allete is the continuing or surviving corporation or the acquiring corporation, Allete shall be a solvent corporation and shall expressly assume in writing all of the obligations of the Company under the Mortgage, this Twelfth Supplemental Indenture, the Bonds of the Eleventh Series and the Bond Purchase Agreement, including all covenants therein and herein contained, and Allete shall succeed to and be substituted for the Company with the same effect as if it had been named herein as a party hereto, and (b) the Company as the continuing or surviving corporation or Allete as the continuing or surviving corporation or acquiring corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale or other disposition, be in default under any of such obligations.  Notwithstanding the foregoing, the Company may make a Disposition and the assets subject to such Disposition shall not be included in the determination of Substantial Part to the extent that an amount equal to the net proceeds from such Disposition are, within 365 days of such Disposition (A) reinvested in assets of a similar nature of at least equivalent value to be used in the existing business of the Company, and/or (B) applied to the payment or prepayment of the Bonds of the Eleventh Series. For purposes of the foregoing clause (B), the net proceeds from such Disposition shall be used to prepay (not less than 30 or more than 60 days following such offer) the Bonds of the Eleventh Series at a price of 100% of the principal amount of the Bonds of the Eleventh Series to be prepaid (without any Make-Whole Amount) together with interest accrued to the date of prepayment; provided that if any holder of the Bonds of the Eleventh Series declines such offer, the amount that would have been paid to such holder shall be offered pro rata to the other holders of the Bonds of the Eleventh Series that have accepted the offer. A failure by a holder of Bonds of the Eleventh Series to respond in writing not later than 10 Business Days prior to the proposed prepayment date to an offer to prepay made pursuant to this Section 2.1 shall be deemed to constitute a rejection of such offer by such holder. 

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Section 2.2.     The Company covenants that, so long as any Bonds of the Eleventh Series shall remain outstanding, the Company will not issue, sell or otherwise dispose of any of its shares of capital stock to any Person other than Allete. 

Section 2.3.     The Company covenants that, so long as any of the Bonds of the Sixth Series are outstanding, or so long as the Company is subject to any covenant in any other debt instrument prohibiting it from owning Subsidiaries, the Company shall not have any Subsidiaries. 

Section 2.4.     The Company will not at any time permit any Subsidiary to, directly or indirectly, create, incur, assume, guarantee, have outstanding, or otherwise become or remain directly or indirectly liable with respect to, any Debt other than: 

(a)     Debt of a Subsidiary owed to the Company; 
    
(b)     Debt of a Subsidiary outstanding at the time such Subsidiary becomes a Subsidiary, provided that (i) such Debt shall not have been incurred in contemplation of such Subsidiary becoming a Subsidiary and (ii) immediately after such Subsidiary becomes a Subsidiary no Default or Potential Default shall exist, and provided, further, that such Debt may not be extended, renewed or refunded except as otherwise permitted by this Agreement; and 

(c)     Debt of a Subsidiary in addition to that otherwise permitted by the foregoing provisions of this Section 2.4, provided that on the date the Subsidiary incurs or otherwise becomes liable with respect to any such additional Debt and immediately after giving effect thereto and the concurrent retirement of any other Debt, 

(i)     no Default or Potential Default exists, and 

(ii)     simultaneously with the incurrence thereof, the Company delivers Net Earnings Certificate showing, on the date of issuance of such Debt by such Subsidiary, the Company’s Adjusted Net Earnings to be as required by Section 27 of the Indenture to issue at least $1.00 of additional bonds under the Indenture. 

Section 2.5.     A default by the Company in the observance of any covenant or agreement contained in Sections 2.1 through 2.4, inclusive, of this Twelfth Supplemental Indenture or the occurrence of an Event of Default (as defined herein) shall be deemed to constitute an additional and independent Default under, and defined in, Section 65 of the Mortgage. None of the additional Defaults provided for pursuant to this Section 2.5 are intended or shall be deemed to limit any of the Defaults currently expressed in the Mortgage and none of the Defaults currently expressed in the Mortgage are intended or shall be deemed to limit any of the additional Defaults provided for pursuant to this Section 2.5. 

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ARTICLE III
MISCELLANEOUS PROVISIONS 

Section 3.1.     For purposes of this Twelfth Supplemental Indenture, the following terms have the following meanings indicated below: 

“Allete” shall mean ALLETE, Inc., a Minnesota corporation, or any successor to Allete, Inc. 

“Bond Purchase Agreement” shall mean the Bond Purchase Agreement dated as of December 13, 2013, between the Company and the Purchaser. 

“Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in Chicago, Illinois, or Milwaukee, Wisconsin, are required or authorized to be closed. 

“Capitalized Lease Obligation” shall mean with respect to any Person any rental obligation which, under generally accepted accounting principles, would be required to be capitalized on the books of such Person, taken at the amount thereof accounted for as indebtedness (net of interest expense) in accordance with such principles. 

“Consolidated Net Worth” shall mean the net worth of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP. 

“Debt” means, with respect to any Person, without duplication, 
    
(a)     its liabilities for borrowed money; 
    
(b)     its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); 
        
(c)     its Capital Lease Obligations; 
    
(d)     all liabilities for borrowed money secured by any lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); and 

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(e)     any guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (d) hereof. 

Debt of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. 

“Disposition” shall have the meaning set forth for such term in Section 2.1. 

“Event of Default” shall mean any of the following events which shall occur and be continuing for any reason whatsoever at any time when any of the Bonds of the Eleventh Series shall be outstanding (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise): 

(i)     the Company defaults in the payment of any principal or premium, if any, payable with respect to any Bond of the Eleventh Series when the same shall become due, either by the terms thereof or otherwise as provided in the Mortgage, this Twelfth Supplemental Indenture or the Bond Purchase Agreement; or 

(ii)     the Company defaults in the payment of any interest on any Bond of the Eleventh Series for more than 5 days after the due date; or 

(iii)     the Company defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other obligation for money borrowed (or any Capitalized Lease Obligation, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for property whether or not secured by a purchase money mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto and as a result, the aggregate principal amount of all such defaulted obligations exceeds $100,000 or the Company fails to perform or observe any other agreement, term or condition contained in any agreement under which any such obligations are created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such obligations (or a trustee on behalf of such holder or holders) to cause, such obligations in the aggregate principal amount in excess of $100,000 to become due (or to be repurchased by the Company) prior to any stated maturity; or 

(iv)     any representation or warranty made by the Company in this Twelfth Supplemental Indenture or the Bond Purchase Agreement or by the Company or any of its officers in any writing furnished in connection with or pursuant to this Twelfth Supplemental Indenture or the Bond Purchase Agreement shall be false in any material respect on the date as of which made; or 

 13

(v)     the Company fails to perform or observe any agreement, term or condition contained in the Mortgage, this Twelfth Supplemental Indenture or the Bond Purchase Agreement; or 

(vi)     the Company makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or 

(vii)     any decree or order for relief in respect of the Company is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the Bankruptcy Law), of any jurisdiction; or 

(viii)     the Company petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Company or of any Substantial Part of the assets of the Company or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings relating to the Company under the Bankruptcy Law of any other jurisdiction; or 

(ix)     any such petition or application is filed, or any such proceedings are commenced, against the Company, and the Company by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings; or 

(x)     any order, judgment or decree is entered in any proceedings against the Company decreeing the dissolution of the Company and such order, judgment or decree remains unstayed and in effect for more than 60 days; or 

(xi)     any order, judgment or decree is entered in any proceedings against the Company decreeing a split-up of the Company which requires the divestiture of assets representing a Substantial Part of the assets of the Company or which requires the divestiture of assets which shall have contributed a Substantial Part of the net income of the Company for any of the three fiscal years then most recently ended, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or 

(xii)     a final judgment in an amount in excess of $100,000 is rendered against the Company and, within 60 days after entry thereof, such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, such judgment is not discharged; or 

(xiii)     Allete shall cease to own of record and beneficially 100% of the outstanding shares of capital stock of the Company. 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America. 

 14

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

“Called Principal” means, with respect to any Bond of the Eleventh Series, the principal of such Bond of the Eleventh Series that is to be prepaid or has become or is declared to be immediately due and payable, as the context requires. 

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

“Reinvestment Yield” means, with respect to the Called Principal of any Bond of the Eleventh Series, the yield to maturity implied by (i) the yields reported as of
10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  

In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury security with the maturity closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Bond of the Eleventh Series. 

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

 15

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

“Settlement Date” means, with respect to the Called Principal of any Bond of the Eleventh Series, the date on which such Called Principal is to be prepaid or has become or is declared to be immediately due and payable, as the context requires. 

“Person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof. 

“Proceeds of Released Property” shall mean the aggregate of the cash deposited with or received by the Corporate Trustee pursuant to the provisions of Section 59, Section 60, Section 61 (except such cash as is to be paid over to the Company under the provisions of Section 61), or Section 62 of the Mortgage. 

“Purchaser” means Thrivent Financial for Lutherans. 

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company. 

“Substantial Part” shall mean when used with respect to assets or net income 15% or more of such assets or net income, respectively. 

 16

Section 3.2.     The terms defined in the Mortgage, as heretofore supplemented, shall for all purposes of this Twelfth Supplemental Indenture have the meanings specified in the Mortgage, as heretofore supplemented. 

Section 3.3.     The Trustee hereby accepts the trust herein declared, provided and created and agrees to perform the same upon the terms and conditions herein and in the Mortgage, as heretofore supplemented, set forth and upon the following terms and conditions. 

Section 3.4.     The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Twelfth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XVII of the Mortgage shall apply to and form part of this Twelfth Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Twelfth Supplemental Indenture. 

Section 3.5.     Subject to the provisions of Article XVI and Article XVII of the Mortgage, whenever in this Twelfth Supplemental Indenture any of the parties hereto is named or referred to, this shall be deemed to include the successors or assigns of such party, and all the covenants and agreements in this Twelfth Supplemental Indenture contained 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 3.6.     Nothing in this Twelfth Supplemental Indenture, express or implied, is intended, or shall be construed, to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds Outstanding under the Mortgage, any right, remedy or claim under or by reason of this Twelfth Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements of this Twelfth Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the bonds and of the coupons Outstanding under the Mortgage. 

Section 3.7.     This Twelfth Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 

 17

IN WITNESS WHEREOF, Superior Water, Light and Power Company has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President or one of its Vice Presidents, and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries for and in its behalf, and U.S. Bank National Association has caused its corporate name to be hereunto affixed, and this instrument to be signed by its President and to be attested by its Secretary, all as of the 2nd day of December, 2013. 

SUPERIOR WATER, LIGHT AND POWER COMPANY 

	
		
	By:
	/s/ Bethany M. Owen

	 
	President

ATTEST: 
	
	
	/s/ Janet A. Blake

	Secretary

Executed, sealed and delivered by Superior Water, Light and Power Company in the presence of: 
	
	
	/s/ Kellie Damico

	/s/ Teri Nielson

                

                
        

 18

U.S. BANK NATIONAL ASSOCIATION, as 
Trustee 

	
		
	By:
	/s/ Steven F. Posto

	 
	Steven F. Posto

	 
	Vice President

ATTEST: 
	
	
	/s/ Peter M. Brennan

	Peter M. Brennan

	Vice President

                    

 19

STATE OF WISCONSIN     )
) SS. 
COUNTY OF DOUGLAS     ) 

Personally came before me this 22nd day of November, 2013, Bethany M. Owen, to me known to be the President, and Janet A. Blake, to me known to be the Secretary of the above-named SUPERIOR WATER, LIGHT AND POWER COMPANY, the corporation described in and which executed the foregoing instrument, and to me personally known to be the persons who as such officers executed the foregoing instrument in the name and behalf of said corporation, who, being by me duly sworn, did depose and say and acknowledge that they are respectively the President and Secretary of said corporation, that the seal affixed to said instrument is the corporate seal of said corporation, and that they signed, sealed and delivered said instrument in the name and on behalf of said corporation by authority of its Board of Directors, and said President and Secretary, then and there acknowledged said instrument to be the free act and deed of said corporation and that such corporation executed the same. 

Given under my hand and notarial seal this 22nd  day of November, 2013. 

                                                
	
	
	/s/ Hollie L. Randolph

	Hollie L. Randolph

	Notary Public, State of Wisconsin

	My Commission Expires 4/24/2016

 20

STATE OF WISCONSIN     )
) SS. 
COUNTY OF MILWAUKEE     ) 

Personally came before me this 25th day of November, 2013, Steven F. Posto, to me known to be the Vice President of the above-named U.S. BANK NATIONAL ASSOCIATION, the corporation described in and which executed the foregoing instrument, and to me personally known to be the persons who as such officers executed the foregoing instrument in the name and behalf of said corporation, who, being by me duly sworn, did depose and say and acknowledge that he is the Vice President of said corporation, and that he signed and delivered said instrument in the name and on behalf of said corporation by authority of its Board of Directors, and said Vice President then and there acknowledged said instrument to be the free act and deed of said corporation and that such corporation executed the same. 

Given under my hand and notarial seal this 25thday of November, 2013. 

                                                
	
	
	/s/ Erin F. Graham

	Erin F. Graham

	Notary Public, State of Wisconsin

	My Commission Expires 1/31/2016

 21

EXHIBIT A 
[FORM OF BOND OF THE ELEVENTH SERIES] 
SUPERIOR WATER, LIGHT AND POWER COMPANY
FIRST MORTGAGE BOND 

4.15% Series due December 15, 2028 
No. R-___                                                 $___              
SUPERIOR WATER, LIGHT AND POWER COMPANY, a corporation of the State of Wisconsin (hereinafter called the “Company”), for value received, hereby promises to pay to__________________or registered assigns, on December 15, 2028, ___________ DOLLARS ($         ) in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts, and to pay to the registered owner hereof interest thereon in like coin or currency (computed on the basis of a 360-day year of twelve 30-day months) at the rate of four and fifteen hundredths percent (4.15%) per annum semiannually on June 15 and December 15 of each year commencing June 15, 2014 until the principal thereof shall have become due and payable and at the rate of 6.15% per annum on any overdue payment of principal or premium, if any, and, to the extent enforceable under applicable law, on any overdue payment of interest. The principal hereof (and premium, if any) and interest hereon shall be paid at the office or agency of the Company in the City of St. Paul, Minnesota, or the office of the Company in Superior, Wisconsin or as shall be otherwise agreed to pursuant to the provisions of the Twelfth Supplemental Indenture hereinafter referred to. 
This bond is one of an issue of bonds of the Company issuable in series and is one of series designated the First Mortgage Bonds, 4.15% Series due December 15, 2028 (the “Bonds of the Eleventh Series”) created by the Twelfth Supplemental Indenture dated as of December 2, 2013 executed by the Company to U.S. Bank National Association (successor Trustee to Chemical Bank and Peter Morse), as Trustee, all bonds of all series being issued and to be issued under and equally secured by a Mortgage and Deed of Trust (herein, together with any indentures supplemental thereto, called the “Mortgage”), dated as of March 1, 1943, executed by the Company to Chemical Bank & Trust Company and Howard B. Smith, as Trustees (U.S. Bank National Association, successor Trustee). Reference is made to the Mortgage for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds and of the Trustee in respect thereof, the duties and immunities of the Trustee and terms and conditions upon which the bonds are and are to be secured and the circumstances under which additional bonds may be issued. 

A-1

With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Mortgage may be modified or altered by affirmative vote of the holders of at least seventy per centum (70%) in principal amount of the bonds then outstanding under the Mortgage and, if the rights of the holders of one or more, but less than all, series of bonds then outstanding are to be affected, then also by affirmative vote of the holders of at least seventy per centum (70%) in principal amount of the bonds then outstanding of each series of bonds so to be affected (excluding in any case bonds disqualified from voting by reason of the Company's interest therein as provided in the Mortgage); provided that, without the consent of the holder hereof, no such modification or alteration shall, among other things, impair or affect the right of the holder to receive payment of the principal of (and premium, if any) and interest on this bond, on or after the respective due dates and at the places and in the respective amounts expressed herein, or permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of the benefit of a lien on the mortgaged and pledged property, or give any bond or bonds secured by the Mortgage any preference over any other bond or bonds so secured, or reduce the percentage in principal amount of the bonds required to authorize or consent to any such modification or alteration of the Mortgage. 
The Bonds of the Eleventh Series may be redeemed prior to maturity, in whole at any time or in part (in multiples of $500,000) from time to time, at the option of the Company, or by the application (either at the option of the Company or pursuant to the requirements of the Mortgage) of cash delivered to or deposited with the Trustee pursuant to the provisions of Section 39, Section 55, Section 61, Section 64 or Section 118 of the Mortgage or with the Proceeds of Released Property (as defined in said Twelfth Supplemental Indenture), in any such case at 100% of the principal amount to be so redeemed, plus accrued interest thereon to the redemption date together with a premium equal to the Make-Whole Amount (as defined in said Twelfth Supplemental Indenture), if any, with respect to the Bonds of the Eleventh Series, being redeemed. 
Notice of any redemption of the Bonds of the Eleventh Series shall be given by mail at least 30 days prior to the redemption date, all as more fully provided in said Twelfth Supplemental Indenture and the Mortgage. Notice of redemption having been duly given, the Bonds of the Eleventh Series called for redemption shall become due and payable upon the redemption date, and if the redemption price shall have been deposited with the Trustee, interest thereon shall cease to accrue on and after the redemption date (unless such bonds shall have been properly presented for payment on, or within one year after, the redemption date and shall not have been paid) and on the redemption date or whenever thereafter the redemption price thereof shall have been deposited with the Trustee such bonds shall no longer be entitled to the lien of the Mortgage. 
The principal hereof may be declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in the Mortgage, upon the occurrence of a default as in the Mortgage provided. 
This bond is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by its duly authorized attorney, at the office or agency of the Company in the City of St. Paul, Minnesota or the office of the Company in Superior, Wisconsin upon surrender hereof for cancellation, together with a written instrument of transfer in form approved by the Company duly executed by the registered owner hereof or by its duly authorized attorney, and thereupon a new fully registered bond or bonds of the same series for a like principal amount will be issued to the transferee in exchange herefor as provided in the Mortgage. This bond may, at the option of the registered owner hereof and upon surrender hereof for cancellation at such office or agency, be exchanged as prescribed in the Mortgage for other registered bonds of the same series of other authorized denominations having a like aggregate principal amount. No charge will be made by the Company for any transfer or exchange of this bond or, in case this bond shall be lost, destroyed or mutilated, the issuance, authentication and delivery of a new bond in substitution 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 and for all other purposes and neither the Company nor the Trustee shall be affected by any notice to the contrary. 

A-2

As provided in the Mortgage, the Company shall not be required to make transfers or exchanges of bonds of any series for a period of ten (10) days next preceding any interest payment date for bonds of said series, or next preceding any designation of bonds of said series to be redeemed, and the Company shall not be required to make transfers or exchanges of any bonds designated in whole or in part for redemption. 
No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer, or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor of successor corporation, under any rule of law, statute, or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers, and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage. 
This bond shall not become obligatory until U.S. Bank National Association, the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of authentication certificate endorsed hereon. 

A-3

IN WITNESS WHEREOF, SUPERIOR WATER, LIGHT AND POWER COMPANY has caused this bond to be signed in its corporate name by its President or one of its Vice-Presidents and its Treasurer and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries on , 20____. 
SUPERIOR WATER, LIGHT AND POWER COMPANY 

	
		
	By
	 

	 
	Bethany M. Owen

	 
	President

	
		
	By
	 

	 
	Paul M. Holt

	 
	Treasurer

ATTEST: 
    	
		
	By
	 

	 
	Janet A. Blake

	 
	Secretary

                

A-4

[FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE] 
This bond is one of the bonds, of the series herein designated, described or provided for in the within-mentioned Mortgage. 
U.S. BANK NATIONAL ASSOCIATION, as Trustee 
                            	
		
	By
	 

	 
	Authorized Officer

A-5

EXHIBIT B 

ASSIGNMENT AND IRREVOCABLE BOND POWER 
FOR 
SUPERIOR WATER, LIGHT AND POWER COMPANY
FIRST MORTGAGE BOND 
_______% SERIES DUE ______________ 

FOR VALUE RECEIVED, ___________________________________ do___ hereby sell, assign and transfer unto _________________________ one First Mortgage Bond, ____% Series due ________________ of Superior Water, Light and Power Company (the “Company”)for __________________________ dollars ($____________), No. ________, standing in __________________ name __________ on the books of the Company and do___ hereby irrevocably constitute and appoint __________________________________ attorney to transfer the said bond on the books of the Company, with full power of substitution in the premises. 

IN WITNESS WHEREOF, _________________________ ha___ hereunto set ____ hand ___________ [and seal ___________] at ________________________________ this ____day of ___________________, 20_____. 
______________________________         ______________________________      [SEAL] 
______________________________         ______________________________      [SEAL] 
STATE OF ________________ )
) SS. 
COUNTY OF ______________ ) 

I, _____________________________, a notary public in and for said County, in the State aforesaid, do hereby certify, that                                                 
who _____ personally known to me to be the same person__ whose name__ _____ subscribed to the foregoing instrument, appeared before me this day in person and acknowledged  that___________________________ signed, sealed and delivered the said instrument as _______free and voluntary act for the use and purposes therein set forth. 
Given under my hand and official seal this ____ day of _______________, 20_____. 

                                                    
                                	
		
	 
	 

	 
	Notary Public

	 
	My Commission Expires

B-1

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