Document:

THIRTY-FIFTH

 

SUPPLEMENTAL INDENTURE

 

FROM

 

 

WISCONSIN PUBLIC SERVICE

CORPORATION

 

TO

 

U.S. BANK NATIONAL ASSOCIATION

(Successor to Firstar Bank National Association,

Successor to Firstar Trust Company,

Formerly Known as First Wisconsin Trust Company)

TRUSTEE

 

______________

 

DATED AS OF December 1, 2002

 

______________

 

SUPPLEMENTAL

To

First Mortgage and Deed of Trust

Dated as of January 1, 1941

 

WISCONSIN PUBLIC SERVICE CORPORATION

THIRTY-FIFTH SUPPLEMENTAL INDENTURE

Dated as of December 1, 2002

TABLE OF CONTENTS

____________

 

		
      

PAGE

    

	Parties	1
	Parties	1
	Recitals	1
	Form of Bond of Collateral Series C	3
	Form of Trustee's Certificate	5
	Form of Prepayment Record 	8
	Further Recitals	8
		
		

 

		
      Article I

Form of Execution of Bonds of New Series
	
			
	Sec. 1.01	 Terms of bonds of new series	9
	Sec. 1.02	 Limitation of new series to $150,000,000 	9
	Sec. 1.03	 Optional redemption of bonds of new series by Company	9
	Sec. 1.04	 Notice of, and selection of bonds of new series for,
            redemption	10
	Sec. 1.05	 Redemption in event of default under section 6.01 of
            the Senior Indenture	11
	Sec. 1.06	 Partial redemption and payments of redemption price
            without presentation of bonds and new series 	11
	Sec. 1.07	 Company not obligated to make any transfer of bonds of
            new series for fifteen days before any interest payment date	11
	Sec. 1.08	 Charges for transfer of bonds of new series	11
	Sec. 1.09	 Bonds of new series may be signed by facsimile
            signatures of Company officers	11
	Sec. 1.10	 Payment dates falling on Saturday, Sunday or legal
            holiday	12
	Sec. 1.11	 Bonds of new series redeemed or paid not reissuable,
            but may be basis for issuance of bonds of different series, credits
            or cash withdrawals	12
			
		
      Article II

Confirmation of Lien
	
			12
	Sec. 2.01	 Granting clauses and habendum 	
			
		
      Article III

Particular Covenants of the Company
	
			
	Sec. 3.01	 Duly authorized by law to execute and deliver
            Supplemental Indenture and issue bonds 	13
	Sec. 3.02	 Covenant of lawful possession, right to mortgage
            property and to maintain lien of Indenture	13
	Sec. 3.03	 Payment of principal and interest	13
	Sec. 3.04	 Nonliability of Trustee	13
			
		
      Article IV

Miscellaneous
	
			
	Sec. 4.01	 Recitals not made by Trustee. No representations made
            by Trustee. Trust accepted subject to terms and conditions of
            Indenture	13
	Sec. 4.02	 Supplemental Indenture to be construed as part of
            Indenture	14
	Sec. 4.03(a)	 References to either party to Supplemental Indenture
            includes successors or assigns 	14
	
      (b)     
	 Table of contents and descriptive headings of articles not to
            affect meaning 	14
	Sec. 4.04(a)	 Trust Indenture Act requirements control 	14
	
      (b)     
	 Severability of Supplemental Indenture provisions and bond

            provisions	14
	Sec. 4.05	 Provisions for execution in counterparts	14
	Sec. 4.06	 Supplemental Indenture effective on execution and
            delivery 	14
	Sec. 4.07	 Names and addresses of debtor and secured party 	14

 

        Thirty-Fifth Supplemental Indenture, made as of the 1st day of
December, 2002 by and between Wisconsin Public Service Corporation, a
corporation duly organized and existing under and by virtue of the laws of the
State of Wisconsin, having its principal office in the City of Green Bay in said
State (hereinafter sometimes called the "Company"), party of the first
part, and U.S. Bank National Association, (successor to Firstar Bank, National
Association, successor to Firstar Trust Company, formerly known as First
Wisconsin Trust Company), a national banking association duly organized and
existing under and by virtue of the laws of the United States, having its
Corporate Trust Services Office in the City of St. Paul in the State of
Minnesota, as Trustee (hereinafter sometimes called the "Trustee"),
party of the second part.

        Whereas, the Company has heretofore executed and delivered to the predecessor
of the Trustee its First Mortgage and Deed of Trust made as of
January 1, 1941 (hereinafter referred to as the "1941
Mortgage") and has heretofore executed and delivered to the predecessor of
the Trustee supplemental indentures dated and hereinafter referred to as
follows:

	
      Supplemental Indenture

      Dated (as of)

    	
      Hereinafter referred to as

      
	
      November 1, 1947
	
      First Supplemental Indenture*

	
      August 1, 1948
	
      Second Supplemental Indenture

	
      September 1, 1949
	
      Third Supplemental Indenture

	
      November 1, 1950
	
      Fourth Supplemental Indenture*

	
      May 1, 1953
	
      Fifth Supplemental Indenture*

	
      January 1, 1954
	
      Sixth Supplemental Indenture

	
      October 1, 1954
	
      Seventh Supplemental Indenture

	
      December 1, 1957
	
      Eighth Supplemental Indenture

	
      November 1, 1959
	
      Ninth Supplemental Indenture

	
      October 1, 1963
	
      Tenth Supplemental Indenture

	
      June 1, 1964
	
      Eleventh Supplemental Indenture

	
      November 1, 1967
	
      Twelfth Supplemental Indenture

	
      April 1, 1969
	
      Thirteenth Supplemental Indenture

	
      August 1, 1970
	
      Fourteenth Supplemental Indenture

	
      May 1, 1971
	
      Fifteenth Supplemental Indenture

	
      August 1, 1973
	
      Sixteenth Supplemental Indenture*

	
      September 1, 1973
	
      Seventeenth Supplemental Indenture

	
      October 1, 1975
	
      Eighteenth Supplemental Indenture

	
      February 1, 1977
	
      Nineteenth Supplemental Indenture

	
      July 15, 1980
	
      Twentieth Supplemental Indenture

	
      December 1, 1980
	
      Twenty-First Supplemental Indenture*

	
      April 1, 1981
	
      Twenty-Second Supplemental Indenture

	
      February 1, 1984
	
      Twenty-Third Supplemental Indenture

	
      March 15, 1984
	
      Twenty-Fourth Supplemental Indenture

	
      October 1, 1985
	
      Twenty-Fifth Supplemental Indenture

	
      December 1, 1987
	
      Twenty-Sixth Supplemental Indenture*

	
      September 1, 1991
	
      Twenty-Seventh Supplemental Indenture

	
      July 1, 1992
	
      Twenty-Eighth Supplemental Indenture

	
      October 1, 1992
	
      Twenty-Ninth Supplemental Indenture

	
      February 1, 1993
	
      Thirtieth Supplemental Indenture

	
      July 1, 1993
	
      Thirty-First Supplemental Indenture

	
      November 1, 1993 
	
      Thirty-Second Supplemental Indenture

	
      December 1, 1998
	
      Thirty-Third Supplemental Indenture

	
      August 1, 2001
	
      Thirty-Fourth Supplemental Indenture

 

_________________

*Includes amendments to or modifications of
certain provisions of the 1941 Mortgage.

 

(said 1941 Mortgage, as supplemented, amended or modified by the aforesaid
Supplemental Indentures, being hereinafter referred to as the
"Indenture", except as such term is differently defined and used in
and for the purposes of the Form of Bond of Collateral Series C and the Form of
Trustee's Certificate hereinafter set forth), whereby the Company granted,
bargained, sold, warranted, released, conveyed, assigned, transferred,
mortgaged, pledged, set over and confirmed unto the Trustee, and to its
respective successors in trust, upon the terms, conditions and trusts therein
set forth, all the property as therein described, real, personal and mixed, then
owned or thereafter acquired by the Company, with certain exceptions as in the
granting clauses and definitions of the Indenture set forth, to be held by the
Trustee in trust, under the terms and subject to the conditions of the
Indenture, as security for the bonds of the Company issued and to be issued
thereunder in accordance with the provisions of the Indenture; and

        Whereas, Section 2.01 of the 1941 Mortgage provides that bonds may be issued
thereunder in one or more series, each series to have such distinctive
designation as the Board of Directors of the Company may select for such series;
and

        Whereas, the Company has heretofore issued and there are now outstanding, in
accordance with the provisions of the 1941 Mortgage and said Supplemental
Indentures bonds of several series designated "First Mortgage Bonds, 6-1/8%
Series due October 1, 2005", "First Mortgage Bonds, 6.80%
Series due February 1, 2003", "First Mortgage Bonds, 7-1/8%
Series Due July 1, 2023", "First Mortgage Bonds Due
February 1, 2013", "First Mortgage Bonds Collateral
Series A" and "First Mortgage Bonds Collateral Series B; and

        Whereas, the Company has agreed to issue $150,000,000 in aggregate principal
amount of Senior Notes 4.875% Series Due December 1, 2012, (the "Related
Securities") pursuant to an Indenture, dated as of December 1, 1998,
between the Company and a predecessor of U.S. Bank National Association, as
trustee (the "Senior Trustee") as supplemented; and

        Whereas, in order to secure the Company's obligations to pay principal,
premium, if any, and interest on the Related Securities, the Company is desirous
of providing for the issuance under the Indenture of bonds of a new series
designated as "First Mortgage Bonds, Collateral Series C", in an
aggregate principal amount of not more than $150,000,000, the bonds of said
series to be issued as registered bonds without coupons in any denominations
that the Company may from time to time execute and deliver, the bonds of said
series, the Trustee's Certificate, and the Form of Prepayment Record to be
substantially in the tenor following:

(Form
of Bond of Collateral Series C)

No._____________                                                                                                        
$

Wisconsin Public Service Corporation

 

(Incorporated under the laws of the State of Wisconsin)

First Mortgage Bond, Collateral Series C

THE FIRST MORTGAGE BONDS, COLLATERAL SERIES C (HEREINAFTER,
"COLLATERAL BONDS"), REPRESENTED BY THIS CERTIFICATE ARE BEING ISSUED
AND DELIVERED BY THE COMPANY TO U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE (IN
SUCH CAPACITY, THE "SENIOR TRUSTEE") UNDER AN INDENTURE, DATED AS OF
DECEMBER 1, 1998, BETWEEN THE COMPANY AND A PREDECESSOR OF THE SENIOR
TRUSTEE, AS PREVIOUSLY SUPPLEMENTED AND AS SUPPLEMENTED BY THE THIRD
SUPPLEMENTAL INDENTURE THERETO DATED AS OF DECEMBER 1, 2002 (AS SO SUPPLEMENTED,
THE "SENIOR INDENTURE"). THE COLLATERAL BONDS ARE TO BE HELD IN TRUST
AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS OF $150,000,000 AGGREGATE PRINCIPAL
AMOUNT OF SENIOR NOTES, 4.875% SERIES DUE DECEMBER 1, 2012 (THE "RELATED
SECURITIES") ISSUED PURSUANT TO THE SENIOR INDENTURE.

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

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

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

        Wisconsin Public Service Corporation, a corporation organized and existing
under the laws of the State of Wisconsin (hereinafter called the Company), for
value received, hereby promises to pay to U.S. BANK NATIONAL ASSOCIATION, as
trustee for the benefit of the holders of the Related Securities, or registered
assigns (in such capacity, the "Senior Trustee"), at the Corporate
Trust Services Office of U.S. Bank National Association, in Saint Paul,
Minnesota, on the 1st day of December, 2012, the sum of
_________________________________ DOLLARS ($___________) in lawful money of the
United States of America, and to pay interest thereon from the date hereof at
the rate of four and eight hundred and seventy-five thousandths per cent
(4.875%) per annum, in like money, until the principal hereof becomes due and
payable, said interest being payable on the 1st day of June and on
the 1st day of December in each year commencing June 1, 2003. The
principal and interest so payable on any June 1 or December 1 will be
paid to the person or entity in whose name this bond is registered, at the
address thereof as it appears on the Company's books for registration and
registration of transfer.

        The provisions of this bond are continued on the reverse hereof or attached
pages and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.

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

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

Dated as of:

 

 

  
    
      
        
                          Wisconsin Public Service Corporation,

                           

                           

                          By:_______________________________

                                     
                          ______ President

        

      

    

  

Attest:

_____________________________

____________ Secretary

 

(Form
of Trustee's Certificate)

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

 

 

  
    
      
        
          
                          U.S. Bank National Association,

                          As Trustee

                           

                          By:_____________________________

                                        
                          Authorized Signature

            
              
                
                  
                    
                      
                        
                           

                           

                        

                      

                    

                  

                

              

            

          

        

      

    

  

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

 

        This bond is one of a duly authorized issue of bonds of the Company, known as
its First Mortgage Bonds, of the series and designation indicated on the face
hereof, which issue of bonds consists, or may consist, of several series of
varying denominations, dates and tenors, all issued and to be issued under and
equally secured (except in so far as a sinking fund, or similar fund,
established in accordance with the provisions of the Indenture, may afford
additional security for the bonds of any specific series) by a First Mortgage
and Deed of Trust (herein called the "Indenture") dated as of
January 1, 1941, executed by the Company to First Wisconsin Trust
Company (subsequently succeeded by U.S. Bank National Association, herein called
the Trustee), as Trustee, to which Indenture and all instruments supplemental
thereto reference is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security, the rights of the holders of the
bonds as to such security, and the terms and conditions upon which the bonds may
be issued under the Indenture and any instruments supplemental thereto and are
secured. The principal hereof may be declared or may become due on the
conditions, in the manner and at the time set forth in the Indenture, upon the
happening of a completed default as in the Indenture provided. This bond is one
of a series created by a Supplemental Indenture (herein called the
"Supplemental Indenture") dated as of December 1, 2002, between the
Company and the Trustee, which is supplemental to the Indenture.

        The Senior Trustee has agreed pursuant to the Senior Indenture to hold the
Bonds of this Series as collateral for the benefit of the holders of the Related
Securities under all circumstances and not to transfer (except to a successor
trustee) such Bonds until the earlier of the Release Date or the prior
retirement of the Related Securities through redemption, repurchase or
otherwise. "Release Date" means the date on which all First Mortgage
Bonds of the Company issued and outstanding under the Indenture, other than the
Bonds of this Series and other Bonds pledged as security for Securities issued
under the Senior Indenture (collectively "Collateral Bonds"), have
been retired (at, before or after the maturity thereof) through payment,
redemption or otherwise, provided that no default or event of default has
occurred and is continuing under the Senior Indenture. On the Release Date, the
Senior Trustee shall deliver to the Company for cancellation all Collateral
Bonds, and the Company shall cause the Senior Trustee to provide notice to all
holders of Related Securities of the occurrence of the Release Date. As a
result, on the Release Date, the Bonds of this Series shall cease to secure the
Related Securities. Following the Release Date, the Company shall cause the
Indenture to be discharged, and the Company shall not issue any additional
Collateral Bonds thereunder, and from and after the Release Date, the Company's
obligations in respect of the Collateral Bonds shall be satisfied and
discharged.

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

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

        The bonds of this Series are subject to redemption, prior to maturity, at the
option of the Company in whole at any time or in part from time to time, upon
payment of a redemption price equal to the greater of (i) 100% of the principal
amount of the bonds to be redeemed or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360 day year consisting of
twelve 30-day months) at the Treasury Yield (as defined in the Supplemental
Indenture) plus twenty-five hundredths of one percent (0.25%), plus in each case
accrued interest thereon to the redemption date, all subject to the conditions
and as more fully set forth in the Indenture and the Supplemental Indenture.

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

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

        This bond is nontransferable except to the Senior Trustee and successor
trustees thereto. To the extent that it is transferable, it is transferable by
the registered owner hereof in person or by attorney duly authorized in writing,
on books of the Company to be kept for that purpose at the corporate trust
services office of the Trustee at Saint Paul, Minnesota, upon surrender hereof
for cancellation at said office and upon presentation of a written instrument of
transfer duly executed. Thereupon the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new registered
bond or bonds without coupons of the same maturity and interest rate and of
equal aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Indenture and the Supplemental Indenture.

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

(End of text of bond)

 

(Form of Prepayment Record)

PREPAYMENT RECORD

 

Principal Amount Of Bond $__________

 

Date of maturity: December 1, 2012

 

	
      Prepayments on Principal
	 	 
	
      Amount
	
      Date
	
      Balance

      Outstanding

    	
      Signature of Authorized

      Officer and Title

    
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

and

        Whereas, the 1941 Mortgage provides that the Company and the Trustee may
enter into indentures supplemental thereto for the purposes, among others, of
providing the terms and conditions of the issue of the bonds of any new series;
and

        Whereas, the Company is presently engaged within the States of Wisconsin and
Michigan in conveying, distributing, supplying and serving electricity and gas
and intends that this Supplemental Indenture shall be received for record and
for filing in the appropriate public offices of said States or of any other
jurisdiction in which there may be located from time to time properties intended
to be subject to the lien of the Indenture in the manner and with the effect
provided by their respective laws in respect to mortgages by, and security
interests in existing and hereafter acquired properties of, a corporation so
engaged; and

        Whereas, the execution and delivery of this Supplemental Indenture and the
issue of bonds as in this Supplemental Indenture and the Indenture provided have
been duly authorized by a resolution adopted by the Board of Directors of the
Company; and

        Whereas, all things necessary to make the bonds of Collateral Series C , when
duly issued and executed by the Company, and authenticated and delivered by the
Trustee, valid, binding and legal obligations of the Company, and to make the
Indenture and this Supplemental Indenture valid, binding and legal instruments
for the security thereof, have been done and performed and the issue of said
bonds, as in this Supplemental Indenture and the Indenture provided, has been in
all respects duly authorized;

        Now, Therefore, This Supplemental Indenture Witnesseth: Wisconsin Public
Service Corporation, in consideration of the premises and of one dollar to it
duly paid by the Trustee at or before the ensealing and delivery of these
presents, the receipt whereof is hereby acknowledged, does hereby covenant and
agree to and with U.S. Bank National Association, as Trustee, as follows:

Article I.

Form And Execution Of Bonds
Of New Series

        SECTION 1.01. There is hereby created, for issuance under the Indenture on
the date of authentication and delivery of the Related Securities, a series of
bonds designated as Collateral Series C (herein sometimes referred to as the
bonds of Collateral Series C), each of which shall bear the descriptive
title "First Mortgage Bond, Collateral Series C". The bonds of
said series shall be issued only in the form of registered bonds without coupons
and shall be substantially of the tenor and purport, and in the form,
hereinbefore recited. The bonds of said series shall mature on December 1, 2012,
and shall be issued in any denominations that the Company may execute and
deliver. The bonds of said series shall bear interest at the rate of four and
eight hundred and seventy-five thousandths percent (4.875% ) per annum, payable
semiannually on June 1 and December 1 of each year commencing June 1,
2003. Bonds of said series issued prior to June 1, 2003 shall be dated as of
December 1, 2002 and bonds of said series issued on and after June 1, 2003 shall
be dated as provided in Section 2.09 of the 1941 Mortgage. Principal and
interest will be payable to the registered owner of the bonds of said series,
and at the address thereof, appearing on the Company's books for registration
and registration of transfer. Said bonds will be nontransferable except to the
Senior Trustee and successors thereto, if any.

        SECTION 1.02. The aggregate principal amount of all bonds of Collateral
Series C which may at any time be certified, issued and outstanding shall
be limited to $150,000,000, and bonds of said series may be executed,
authenticated, delivered and issued hereunder from time to time subject to the
restrictions and provisions contained in this Supplemental Indenture and in the
1941 Mortgage.

        SECTION 1.03. The bonds of Collateral Series C are subject to redemption
prior to maturity at the option of the Company, in whole at any time or in part
from time to time, at a redemption price equal to: to the greater of (i) 100% of
their principal amount or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360 day year consisting of twelve
30-day months) at the Treasury Yield (as hereinafter defined) plus twenty-five
hundredths of one percent (0.25%), plus in each case accrued interest to the
date of redemption. The redemption price shall be set forth in an Officers'
Certificate delivered to the Trustee on or before the redemption date.

        "Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.

        "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the bonds of Collateral Series C that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the bonds of Collateral
Series C. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with the
Company.

        "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Referenced Treasury Dealer
Quotations for such redemption date or (B) if the Trustee obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.

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

        SECTION 1.04. In the event that the Company shall desire to exercise its
right to redeem and pay all or any part of the bonds of Collateral Series C
pursuant to Section 1.03, it shall, except as modified herein, comply with the
terms and conditions of Article XI of the Indenture with regard to the
redemption of bonds of any series secured thereby, and such redemption shall be
made under and subject to the terms and provisions of said Article XI and in the
manner and with the effect stated therein; provided, however, (a) the Company
shall specify, in accordance with the provisions of this Supplemental Indenture,
those bonds of Collateral Series C which are to be redeemed if only a part
thereof are to be redeemed, and payments in redemption of bonds of Collateral
Series C shall be made directly by the Company to the registered owners of the
bonds entitled thereto; and (b) the provisions of Section 11.03(b) of the 1941
Mortgage shall not be applicable to any such redemption. The Company shall not
exercise any option to redeem on any date all or any part of the bonds of
Collateral Series C unless it shall give a valid direction under the Senior
Indenture for the redemption on such date of an equal amount of Related
Securities. Notice of each such redemption shall be hand delivered or mailed, by
certified mail, with return receipt requested, at least forty-five (45) days
prior to the redemption date, to the registered owner of the bonds which are to
be redeemed at its address appearing on the Company's books for registration and
registration of transfer. Such delivery or mailing (but not the receipt thereof
or the return of the receipt so requested) shall be a condition to the
redemption of the bonds. All bonds so redeemed shall forthwith be delivered to
the Trustee and cancelled, but only when the principal, premium, if any, and
accrued interest thereon is paid in full. The Trustee, when required to select
bonds of Collateral Series C for redemption, shall promptly notify the Company,
and the Company, when selecting bonds of Collateral Series C for redemption,
shall promptly notify the Trustee, in writing of the distinctive numbers of the
bonds selected for redemption in whole or in part. For the purpose only of
complying with the Indenture (particularly Section 11.02 thereof) in connection
with the redemption of bonds of Collateral Series C, for each $1,000 principal
amount of bonds authenticated and delivered hereunder there shall be assigned a
number in such manner and at such time as the Trustee or the Company shall deem
appropriate.

        SECTION 1.05. The Company shall call for redemption all of the bonds of the
Collateral Series C then outstanding, and shall on the redemption date therefor
redeem the same at a price equal to 100% of the principal amount thereof,
together with accrued interest to the redemption date, in the event that an
event of default has occurred and is continuing under Section 6.01 of the Senior
Indenture, and the Senior Trustee has declared the principal of all Related
Securities then outstanding immediately due and payable (or such principal has
become ipso facto immediately due and payable) pursuant to Section 6.02 of the
Senior Indenture. The redemption date shall be the accelerated maturity date of
the Related Securities; provided, however, that such requirement of redemption
shall be deemed to be waived if prior to the date fixed for such redemption of
the bonds of Collateral Series C, the acceleration of the Related Securities is
waived or annulled. Any provision of Article XI of the Indenture
notwithstanding, no prior notice of such redemption of the bonds of Collateral
Series C to the Trustee or the Senior Trustee shall be required.

        SECTION 1.06. Subject to the provisions of Section 1.04, Bonds of Collateral
Series C may be redeemed in part, but the portion of any such bond so redeemed
in part shall be One Thousand Dollars ($1,000) or an integral multiple thereof.
In case any bond shall be redeemed in part only, payment of the redemption price
of such portion of the bond of Collateral Series C shall be made by the Company
(or Trustee, as the case may be) to the registered owner thereof, at its address
appearing on the Company's books for registration and registration of transfer
of bonds of Collateral Series C without presentation or surrender thereof,
provided there is on file with the Company and Trustee (and not theretofore
rescinded by written notice from such registered owner to the Company and
Trustee) a written commitment from such registered owner to the effect that (1)
payments will be so made, and (2) such registered owner will make notations on
such bond or a paper attached thereto of the portion thereof so redeemed. Prior
to any transfer by the registered owner of any bond of Collateral Series C, the
same shall be surrendered to the Company or Trustee for appropriate notation
thereon of, or in exchange for a new bond or bonds for, the unredeemed balance
of the principal amount thereof. The Trustee shall not be under any duty to
determine that any of the notations mentioned herein have been made or be liable
in any manner with respect thereto.

        SECTION 1.07. The Company shall not be obligated to make any transfer of
bonds of Collateral Series C for a period of fifteen (15) calendar days next
preceding any interest payment date, or next preceding any selection by lot of
bonds to be redeemed. The Company shall not be obligated to make transfers of
any bonds called or being called for redemption.

        SECTION 1.08. No charge shall be made to any registered owner of any bond of
Collateral Series C for any transfer of bonds of said series except for any tax
or other governmental charge required to be paid in connection therewith.

        SECTION 1.09. The signatures of the President or a Vice President and of the
Secretary or an Assistant Secretary upon the bonds of Collateral Series C may be
facsimile signatures imprinted or otherwise reproduced on such bonds. Any such
facsimile signature shall have the same effect and shall be subject to the same
provisions set forth in Section 2.13 of the 1941 Mortgage as to signatures upon
bonds generally.

        SECTION 1.10. In the event that an interest payment or maturity date or a
date fixed for redemption of any bond of Collateral Series C shall be a
Saturday, Sunday or a legal holiday or a day on which banking institutions in
the city of location of the registered address of the owner are authorized by
law to close, then payment of interest or principal (and premium, if any) need
not be made on such date, but may be made on the next succeeding business day
not a Saturday, Sunday or a legal holiday or a day upon which banking
institutions in the city of location of the registered address of the owner are
authorized by law to close, with the same force and effect as if made on the
date of maturity, interest date, or the date fixed for redemption, and no
interest shall accrue for the period after such date.

        SECTION 1.11. Bonds of Collateral Series C which have been redeemed or have
been paid at maturity shall not be reissued as bonds of said series, but may be
made the basis for the issuance of additional bonds of any series hereafter
created, or credits may be taken or cash withdrawn on the basis thereof under
any applicable provisions of the 1941 Mortgage or any future supplemental
indenture.

Article II.

Confirmation of Lien

        SECTION 2.01. The Company, in order to record the description of, and confirm
unto the Trustee, certain property acquired after the execution and delivery of
the 1941 Mortgage and now subject to the lien thereof by virtue of the
provisions of the 1941 Mortgage conveying to the Trustee property acquired after
its execution and delivery, by these presents does grant, bargain, sell,
warrant, release, convey, assign, transfer, mortgage, pledge, set over and
confirm unto U.S. Bank National Association, as Trustee, and to its respective
successors in said trust forever, subject to the rights reserved by the Company
in and by other provisions of the Indenture and this Supplemental Indenture, all
of the property described and mentioned or enumerated or referred to in a
schedule hereto annexed and marked Schedule A, reference to said schedule
for a description and enumeration of the property therein described and
enumerated being hereby made with the same force and effect as if the same were
incorporated herein at length;

        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, tolls,
rents and revenues, issues, 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 every part and parcel thereof;

        To have and to hold all said properties, mortgaged, pledged or conveyed by
the Company as aforesaid, or intended so to be, unto the Trustee and its
successors and assigns forever, subject, however, to permissible encumbrances as
defined in the 1941 Mortgage; but in trust, nevertheless, for the same purposes
and upon the same conditions as are fully set forth in the Indenture, which is
hereby referred to.

Article III.

Particular Covenants Of The
Company

        In addition to the covenants contained in the Indenture, the Company hereby
covenants as follows:

        SECTION 3.01. That it is duly authorized under the laws of the State of
Wisconsin and under all other applicable provisions of law to create and issue
the bonds of Collateral Series C, and to execute and deliver this Supplemental
Indenture, and that all corporate action on its part for the creation and issue
of said bonds and the execution of this Supplemental Indenture has been duly and
effectually taken, and that said bonds when issued and delivered to the owners
thereof are and will be valid and enforceable obligations of the Company, and
that the Indenture is and always will be a valid mortgage and deed of trust to
secure the payment of said bonds.

        SECTION 3.02. That it is lawfully possessed of all the property mortgaged and
pledged by the Indenture; that it will maintain and preserve the lien of the
Indenture on the property mortgaged and pledged thereby in accordance with the
terms thereof and hereof so long as any of the bonds issued thereunder are
outstanding; and that it has good right and lawful authority to mortgage and
pledge the property mortgaged and pledged thereby as provided in and by the
Indenture; and that the same is free and clear of all liens and encumbrances,
except permissible encumbrances as defined in the Indenture.

        SECTION 3.03. That the Company will duly and punctually pay to the registered
owner of bonds of Collateral Series C issued under and secured by the Indenture
and this Supplemental Indenture the principal and interest of said bonds at the
dates and place and in the manner mentioned in such bonds.

        SECTION 3.04. That the Trustee shall not incur any liability by reason of any
default, failure or delay on the part of the Company to observe or perform its
covenants contained in this Article III.

Article IV.

Miscellaneous

        SECTION 4.01. The recitals of fact herein and in the bonds hereby created
contained (except the Trustee's Certificate) shall be taken as statements of the
Company and shall not be construed as made or warranted by the Trustee. The
Trustee makes no representations as to the validity of this Supplemental
Indenture or of the bonds issued under the Indenture by virtue hereof. Except as
herein otherwise provided, no duties, responsibilities or liabilities are
assumed, or shall be construed to be assumed, by the Trustee by reason of this
Supplemental Indenture other than as set forth in the Indenture; and this
Supplemental Indenture is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Indenture, as fully to
all intents as if the same were herein set forth at length.

        SECTION 4.02. This Supplemental Indenture shall be construed in connection
with and as a part of the Indenture.

        SECTION 4.03. (a) Whenever
in this Supplemental Indenture either of the parties hereto is named or referred
to, such reference shall be deemed to include the successors or assigns of such
party, and all the covenants and agreements in this 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.

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

        SECTION 4.04. (a) If any
provision of this Supplemental Indenture limits, qualifies, or conflicts with
another provision of this Supplemental Indenture or of the Indenture required or
deemed to be included in indentures qualified under the Trust Indenture Act of
1939 (as enacted prior to the date of this Supplemental Indenture) by any of
Sections 310 to 317, inclusive, of the said Act, such required provisions shall
control.

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

        SECTION 4.05. This Supplemental Indenture may be executed in several
counterparts, and all said counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.

        SECTION 4.06. This Supplemental Indenture shall be effective and binding from
and after the time of actual execution and delivery thereof, notwithstanding the
fact that such execution and delivery may occur prior or subsequent to December
1, 2002.

        SECTION 4.07. The debtor and its mailing address is
WISCONSIN PUBLIC SERVICE CORPORATION, 700 North Adams Street, P.O. Box 19001,
Green Bay, WI 54307. The secured party and its address, from which information
concerning the security interest hereunder may be obtained, is U.S. BANK
NATIONAL ASSOCIATION, Corporate Trust Services, 180 East Fifth Street, Suite
200, SPTF0210, Saint Paul, MN 55101.

        In Witness Whereof, the party of the first part has caused its corporate name
and seal to be hereunto affixed and this Supplemental Indenture to be signed by
its President or Vice President, and attested by its Secretary or an Assistant
Secretary, for and in its behalf, and the party of the second part has caused
its corporate name to be hereunto affixed, and this Supplemental Indenture to be
signed by its Assistant Vice President for and in its behalf, all done as of the
first day of December, 2002.

  
    
      
        
                          Wisconsin Public Service Corporation,

                           

                          By:  /s/ Joseph P. O'Leary

                          Joseph P. O'Leary

                          Senior Vice President and Chief Financial

                            Officer

          

        

      

    

  

                          (SEAL)

Attest:

 

/s/ Barth J. Wolf

Barth J. Wolf

Secretary

Executed by Wisconsin Public Service

Corporation, in presence of:

/s/ Mark N. Van De Laarschot

Mark N. Van De Laarschot

/s/ Christine G. Wiesner

Christine G. Wiesner

              
                
                  
                    
                      
                        
                          U.S. Bank National Association,

                            As Trustee,

                          By:  /s/ Peter M. Brennan

                          Peter M. Brennan

                          Assistant Vice President

                          

                        

                      

                    

                  

                

Executed by U.S. Bank National Association

in presence of:

/s/ Mark N. Van De Laarschot

Mark N. Van De Laarschot

/s/ Christine G. Wiesner

Christine G. Wiesner

 

State Of Wisconsin }

                             
} ss.

Brown County        }

 

        Personally came before me this 9th day of December,
A.D. 2002, Joseph P. O'Leary, to me known to be the Senior Vice
President and Chief Financial Officer, and Barth J. Wolf, to me known to be
the Secretary of the above-named Wisconsin Public Service Corporation, the
corporation described in and which executed the foregoing instrument, and to me
known to be the persons who as such officers executed the foregoing instrument
in the name and behalf of said corporation, and acknowledged the same, and
acknowledged 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 behalf of said corporation by authority of its Board of Directors
and said Joseph P. O'Leary and Barth J. Wolf then and there
acknowledged said instrument to be the free act and deed of said corporation by
each of them voluntarily executed.

        Given under my hand and notarial seal this 9th day of
December, A.D. 2002.

 

  
    
      
        
                          
                          /s/ Patricia L. Van Den Elzen

                          Patricia L. Van Den Elzen

                          Notary Public, Brown County, Wisconsin

                          My commission expires : June 6, 2004

        

      

    

  

(Notarial Seal)

 

 

State Of Wisconsin }

                             
} ss.

Brown County        }

        Personally came before me this 9th day of December,
A.D. 2002, Peter M. Brennan, to me known to be an Assistant Vice
President of the above-named U.S. Bank National Association, the corporation
described in and which executed the foregoing instrument, and to me known to be
the person who as such officer executed the foregoing instrument in the name and
behalf of said corporation, and acknowledged the same, and that he signed and
delivered said instrument in the name and behalf of said corporation by
authority of its Board of Directors and said Peter M. Brennan then and
there acknowledged said instrument to be the free act and deed of said
corporation by him voluntarily executed.

        Given under my hand and notarial seal this 9th day of
December, A.D. 2002.

 

  
    
      
        
                          /s/ Patricia L. Van Den Elzen

                          Patricia L. Van Den Elzen

                          Notary Public, Brown County, Wisconsin

                          My commission expires : June 6, 2004

        

      

    

  

(Notarial Seal)

 

This instrument was drafted by Attorney Michael S. Nolan of the law firm of
Foley & Lardner, Milwaukee, Wisconsin.

SCHEDULE A

        The property referred to in Article II of the foregoing Supplemental
Indenture from Wisconsin Public Service Corporation to U.S. Bank National
Association (successor to Firstar Bank, National Association, successor to
Firstar Trust Company, formerly known as First Wisconsin Trust Company),
Trustee, dated as of December 1, 2002 is that herein specifically described and
enumerated or referred to in this Schedule A.

BROWN COUNTY

Project 0150002025

        Lot Twelve (12), Block Twenty-Six (26), according to the recorded Eastman's
Addition, in the City of Green Bay, East side of Fox River, Brown County,
Wisconsin.

Tax Parcel No. 7-315

COLUMBIA COUNTY

Project 0150001999

        An undivided 31.8% interest in Part of the Southeast Quarter of the Northeast
Quarter (SE 1/4 - NE 1/4) of Section 27, Township 12 North, Range 9 East, Town of
Pacific, Columbia County, Wisconsin described as follows:

        Commencing at the Southwest corner of the Southeast Quarter of the Northeast
Quarter of Section 27; thence in an easterly direction 16 rods; thence northerly
10 rods; thence westerly 16 rods and thence southerly 10 rods to place of
beginning, except land heretofore conveyed for highway purposes and subject to
restrictions set forth in Document recorded at 412 of Records at Page 508.

Tax Parcel No. 032-367

DOOR COUNTY

Project 0150101003

        Part of the northwest one-quarter of the southwest one-quarter of Section 31,
Township 27 North, Range 25 East, Town of Nasewaupee, Door County, Wisconsin
more specifically described as follows;

        Commencing at a point on the west line of said Section 31, said point being S
1 degree 54' E, 313.80 feet from the west one-quarter corner of said Section 31;
thence N 88 degrees 06' E, 33.00 feet to a 1-1/4 inch iron pipe on the easterly
right-of-way line of School Lane and the point of beginning; thence N 1 degree 54' W,
along the easterly right-of-way line of School Lane, a distance of 220.00 feet
to a 1-1/4 inch iron pipe; thence N 88 degrees 06' E, 150.00 feet to a 1-1/4 inch iron
pipe; thence S 55 degrees 52'21" E, 68.00 feet to a 1-1/4 inch iron pipe; thence S
1 degree 54' E, 280.00 feet to a 1-1/4 inch iron pipe; thence S 88 degrees 06' W, 50.00 feet
to a 1-1/4 inch iron pipe; thence N 1 degree 54' W, 100.00 feet to a 1-1/4 inch iron
pipe; thence S 88 degrees 06' W, 155.00 feet, returning to the point of beginning.

Part of Tax Parcel No. 020-01-31272532A

KEWAUNEE COUNTY

Project ID 0150001967

        The North 250 feet of the West 865 feet, except the North 132 feet of the
West 165 feet, of the Northwest Quarter of the Northwest Quarter (NW 1/4 of NW
1/4), Section Twenty-six (26), Township Twenty-five (25) North, Range Twenty-four
(24) East, in the town of Lincoln, Kewaunee County, Wisconsin, except part sold
for road purposes.

Tax Parcel No. 31 010 26.063

Project ID 0150001974

        Lot One (1), Vol. 4 Certified Survey Maps, Page 323, Map No. 810; said map
being part of the Northeast Quarter of the Northeast quarter (NE 1/4 of NE 1/4),
Section Thirty-five (35), Township Twenty-three (23) North, Range Twenty-three
(23) East, in the Town of Montpelier, Kewaunee County, Wisconsin.

Tax Parcel No. 31 014 35.011

Project 0000101000

An additional undivided 17.8% interest as tenant in common in the following
described property for a total of 59% interest as tenant in common:

The following property all located in the Town of Carlton, Kewaunee County,
Wisconsin:

Parcel 1:

a. Government Lot 1

    Tax Parcel No. 31 004 25.GL 1

b. Government Lot 2

    Tax Parcel No. 31 004 25.GL 2

c. Government Lot 3

    Tax Parcel No. 31 004 25.GL 3

d. Government Lot 4 except the following described parcel:

    Commencing at the Southwest corner of said Section
    Twenty-five (25), Township Twenty-two (22) North, Range Twenty-four (24)
    East; thence South 88 degrees 51'44" East (True), this bearing deflecting
    North to East by an angle of 90 degrees 28'27" from the West line of said
    Section Twenty-five (25), a distance of 579.16 feet to the place of
    beginning of the parcel herewith to be conveyed; thence North 1 degree 43'55"
    East, 919.00 feet; thence South 88 degrees 16'05" East, 522.00 feet; thence
    South 1 degree 43'55" West, 919.00 feet; thence North 88 degrees 16'05" West,
    522.00 feet to the place of beginning.

Said tract contains 11.013 acres, more or less.

Tax Parcel No. 31 004 25.GL 4

e. The Northwest Quarter (NW 1/4) of the Northwest Quarter (NW 1/4)

    Tax Parcel No. 31 004 25.06

f. The Southwest Quarter (SW 1/4) of the Northwest Quarter (NW 1/4)

    Tax Parcel No. 31 004 25.07

All of the above being located in Section Twenty-five (25), Township
Twenty-two (22) North, Range Twenty-four (24) East

Parcel 2:

  
  a. Government Lot 1 except part sold to Kewaunee County in a deed recorded
  in the office of the Register of Deeds for Kewaunee County in Volume 70 of
  Deeds on page 178 as document no. 164133.

  Tax Parcel No. 31 004 36.GL 1

  b. Government Lot 2

  Tax Parcel No. 31 004 36.GL 2

  c. The North Eighty (80) Rods of Government Lot 3

  Tax Parcel No. 31 004 36.GL 3.1

All of the above being located in Section Thirty-six (36), Township
Twenty-two (22) North, Range Twenty-four (24) East.

Parcel 3:

  
  a. The South Half (S 1/2) of the Northeast Quarter (NE 1/4) of the Northeast
  Quarter (NE 1/4)

  Tax Parcel No. 31 004 26.012

  b. The Southwest Quarter (SW 1/4) of the Northeast Quarter (NE 1/4)

  Tax Parcel No. 31 004 26.03

  c. The Southeast Quarter (SE 1/4) of the Northeast Quarter (NE 1/4),
  excepting one acre heretofore sold to the Sandy Bay Cemetery Association.

  Tax Parcel No. 31 004 26.041

  d. The Northeast Quarter (NE 1/4) of the Southeast Quarter (SE 1/4)

  Tax Parcel No. 31 004 26.13

  e. The Northwest Quarter (NW 1/4) of the Southeast Quarter (SE 1/4)

  Tax Parcel No. 31 004 26.14

  f. The Southwest Quarter (SW 1/4) of the Southeast Quarter (SE 1/4)

  Tax Parcel No. 31 004 26.15

  g. The Southeast Quarter (SE 1/4) of the Southeast Quarter (SE 1/4)

  Tax Parcel No. 31 004 26.16

All of the above being located in Section Twenty-six (26), Township Twenty
Two (22) North, Range Twenty-four (24) East.

Parcel 4:

    a. The Northeast Quarter (NE 1/4) of the Northeast Quarter (NE 1/4)

    Tax Parcel No. 31 004 35.01

    b. The Northwest Quarter (NW 1/4) of the Northeast Quarter (NE 1/4)

    Tax Parcel No. 31 004 35.02

    c. The Southwest Quarter (SW 1/4) of the Northeast Quarter (NE 1/4)

    Tax Parcel No. 31 004 35.03

    d. The Southeast Quarter (SE 1/4) of the Northeast Quarter (NE 1/4)

    Tax Parcel No. 31 004 35.04

    e. The Northeast Quarter (NE 1/4) of the Southeast Quarter (SE 1/4)
    excepting the South 1 Rod

    Tax Parcel No. 31 004 35.13

All of the above being located in Section Thirty-five (35), Township
Twenty-two (22) North, Range Twenty-four (24) East.

MARATHON COUNTY

Project 0150002023

        Certified Survey Map Number 3512 recorded in the office of the Register of
Deeds for Marathon County, Wisconsin in Volume 13 of Certified Survey Maps, Page
107, being part of the North one-half of the Northwest fractional one-quarter
(N1/2-NW fr'l 1/4) of Section 19, Township 28 North, Range 8 East, in the Town
(now Village) of Weston, Marathon County, Wisconsin.

Tax Parcel No. 37-192-4-2808-192-0982

ONEIDA COUNTY

Project 0150002002

        Lot 1 of Volume 11 Certified Survey Map, page 2678, being a part of SW1/4 of
the NW1/4 of Section 29, Township 37 North, Range 11 East, Town of Piehl, Oneida
County, Wisconsin.

Tax Parcel No. PI448

SAWYER COUNTY

        That part of the South half of the Southwest Quarter (S1/2 of the SW1/4),
Section Fifteen (15), Township Thirty-nine (39) North, Range Nine (9) West, Town
of Sand Lake, Sawyer County, Wisconsin, described as follows: Commencing at the
South quarter corner of said Section 15; thence running variation South 87 degrees
West, along the South line of said Section, 452.5 feet to the point of
beginning; thence running variation North 68 degrees 30' West, 80 feet; thence running
variation North 79 degrees 25' West, 818 feet; thence running variation South 35 degrees 25'
West, 89.3 feet to the center line of the New State Trunk Highway
"27-70"; thence running Southeasterly, along said center line, 279.2
feet to the intersection with the Section line; thence running variation North
87 degrees East along the Section line, 691 feet to the point of beginning.

Tax Parcel No. 026-939-15 3403

WAUPACA COUNTY

 

Project 0150002020

 

        Outlot 1 of Certified Survey Map 5862 recorded in Volume 20 of Certified
Survey Maps, Page 115, Document Number 650050 Waupaca County Records being part
of the Northeast one-quarter of the Northeast one-quarter (NE 1/4-NE 1/4) of
Section 29, Township 22 North, Range 11 East, Town of Farmington, Waupaca
County, Wisconsin.

Tax Parcel No. 05-29-1102<PAGE>
                                                                   Exhibit 10.37

                      EMPLOYMENT AGREEMENT - JOE CALDARELLI

The following defines your compensation and benefits package, effective with
your appointment to the position of CEO of CPI.

-     Your base salary will be $300,000.00 US. This will be reduced by
      $10,000.00, and that $10,000.00 will be used to establish a discretionary
      expense account for your use. Since you are an employee of CPI Canada, the
      salary will be paid in Canadian Dollars, frozen at the exchange, rate in
      effect on March 19, 2002.

-     You will participate in the normal company benefits plan. Those benefits
      that are salary dependent will be pro-rated based on your base salary.

-     You will obtain short-term disability coverage through our insurance
      carriers to the maximum degree that they are willing to provide. Any
      shortfall between the insurance coverage and the normal coverage of 66
      2/3% of salary will be provided through self-insurance by CPI.

-     You will participate in the company's long-term disability plan to the
      maximum that the insurance coverage provides, up to the customary maximum
      of 60% of base salary.

-     You will continue to participate in the executive car program using the
      same formula that was in effect for you prior to your appointment.

-     You will participate in the company's Management Incentive Plan (MIP). The
      goals and the details for participation and the methodology for
      calculating the incentive will be set at the beginning of each Fiscal
      Year, by the Board of Directors. Although your participation and the
      details are subject to change, your target (nominal) participation is at
      1X salary.

-     Should it be necessary for CPI to terminate your employment, you will be
      entitled to a nominal severance of 24 months, but in any case, of no less
      than 18 months and no higher than 30 months. During that period you will
      be maintained "whole" in that you will continue to participate in the
      medical and all other benefits programs (with the exception of long-term
      disability) and you will be entitled to receive your management Incentive
      (MIP) for the entire year in which you are terminated, plus any earned but
      unpaid incentives for prior years. The management incentive will be based
      on the formula in effect for you at the time of termination and the
      company's performance during the relevant period, as though you had
      continued to be an employee during that period. (This clause will not
      apply if you are convicted of a felony offence).

This agreement is executed in Los Angeles on March 19, 2002.

         Signed:  /s/ John Baumer
                  ---------------
                   John Baumer

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