Document:

suppleindent.htm

     

    Exhibit
      (4.2)

     

    
    

    
      	 

              Document
                Number

            	 

              FORTIETH

              SUPPLEMENTAL
                INDENTURE

            	 
	 	 	
               
                

               

               

               

               

               

              Recording
                Area

            
	 	 	 

              Name
                and
                Return Address

               

              
              

              Wisconsin
                Public Service Corporation

              Attention:  Real
                Estate Department

              P.O.
                Box 19001

              Green
                Bay, Wisconsin 54307-9001

            
	 	 	 
	 	 	 

              See
                Schedule A hereto

            
	 	 	 

              Parcel
                Identification Number (PIN)

            
	 	 	 
	 

              This
                Supplemental Indenture, and the First Mortgage and Deed of Trust
                and the
                Supplemental Indentures described herein,  collectively, are a
                “construction mortgage” as defined in and for the purposes of section
                706.11 of the Wisconsin Statutes, as the same may be amended or renumbered
                from time to time.

            

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    FORTIETH

    

    

    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)

    AS
      TRUSTEE

    

    

    ______________

    

    

    DATED
      AS OF December 1, 2008

    

    

    ______________

    

    

    SUPPLEMENTAL

    To

    First
      Mortgage and Deed of Trust

    Dated
      as of January 1, 1941

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    WISCONSIN
      PUBLIC
      SERVICE CORPORATION

    FORTIETH
      SUPPLEMENTAL INDENTURE

    

    Dated
      as of
      December 1, 2008

    

    TABLE
      OF
      CONTENTS

    ____________

     

    
      	 	
               PAGE

            
	 Parties	
               1

            
	 Recitals	
               1

            
	 Form
              of Bond of
              Collateral Series H	
               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 $125,000,000, subject to right of Company to reopen
                such
                series for issuances of additional bonds 

            	
              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
                

            

    

    
      	
               

            	
              Sec.
                1.12

            	
              Company
                right
                to reopen new series and provisions applicable
                thereto 

            	
              12
                

            

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              Article
                II 

            

    

    
      	
               

            	
              Confirmation
                of Lien 

            

    

    

    
      	
               

            	
              Sec.
                2.01

            	
              Granting
                clauses and habendum 

            	
              13
                

            

    

    

    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. 

            	
              14
                

            

    

    
      	
               

            	
              Sec.
                3.03

            	
              Payment
                of
                principal and interest 

            	
              14
                

            

    

    
      	
               

            	
              Sec.
                3.04

            	
              Nonliability
                of Trustee 

            	
              14
                

            

    

    

    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 

            	
              14
                

            

    

    
      	
               

            	
              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	15
	 	 	(b)	 Severability
              of Supplemental Indenture provisions and bond provisions	15 
	
               

            	
              Sec.
                4.05

            	
              Provisions
                for execution in counterparts 

            	
              15
                

            

    

    
      	
               

            	
              Sec.
                4.06

            	
              Supplemental
                Indenture effective on execution and delivery 

            	
              15
                

            

    

    
      	
               

            	
              Sec.
                4.07

            	
              Names
                and
                addresses of debtor and secured party 

            	
              15
                

            

    

    

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    Fortieth
      Supplemental Indenture, made as of the 1st day of December, 2008 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 the County of Brown, in the State
      of Wisconsin (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 Milwaukee, in the County of
      Milwaukee, in the State of Wisconsin, 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

            

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
      

      
        	 

                Supplemental
                  Indenture

                Dated
                  (as
                  of)   

              	 

                Hereinafter
                  referred
                  to as  

              

      

      	
              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

            
	
              December
                1,
                2002                                                                
                

            	
              Thirty-Fifth
                Supplemental Indenture

            
	
              December
                1,
                2003                                                                
                

            	
              Thirty-Sixth
                Supplemental Indenture

            
	
              December
                1,
                2006                                                                
                

            	
              Thirty-Seventh
                Supplemental Indenture

            
	
              August
                1,
                2006                                                                
                

            	
              Thirty-Eighth
                Supplemental Indenture

            
	
              November
                1,
                2007                                                                
                

            	
              Thirty-Ninth
                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 H 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, 7-1/8% Series Due
      July 1, 2023”, “First Mortgage Bonds Collateral Series A”, “First
      Mortgage Bonds Collateral Series B”, “First Mortgage Bonds Collateral
      Series C”, “First Mortgage Bonds Collateral Series D”, “First Mortgage Bonds
      Collateral Series E”, “First Mortgage Bonds Collateral Series F”, and “First
      Mortgage Bonds Collateral Series G”; and

     

    Whereas,
      the
      Company has agreed to issue $125,000,000 in aggregate principal amount of Senior
      Notes 6.375% Series Due December 1, 2015 (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, subject to

    
      
        
        

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    the
      right of the
      Company to reopen the Related Securities for issuances of additional Related
      Securities of such series on the terms and subject to the conditions specified
      in such Indenture; 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 H”, in an aggregate principal amount of not
      more than $125,000,000, subject to the right of the Company to reopen such
      series for issuances of additional bonds of such series, 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 H)

     

    No._____________                                                                                                                                
      $

    

    Wisconsin
      Public Service Corporation

    

    (Incorporated
      under
      the laws of the State of Wisconsin)

    First
      Mortgage
      Bond, Collateral Series H

    

    THE
      FIRST MORTGAGE
      BONDS, COLLATERAL SERIES H (HEREINAFTER, “COLLATERAL BONDS”), REPRESENTED BY
      THIS CERTIFICATE ARE BEING ISSUED AND DELIVERED BY THE COMPANY TO U.S. BANK
      NATIONAL ASSOCIATION, AS TRUSTEE (IN SUCH CAPACITY, THE “SENIOR TRUSTEE”) UNDER
      AN INDENTURE, DATED AS OF DECEMBER 1, 1998, BETWEEN THE COMPANY AND A
      PREDECESSOR OF THE SENIOR TRUSTEE, AS PREVIOUSLY SUPPLEMENTED AND AS
      SUPPLEMENTED BY THE EIGHTH SUPPLEMENTAL INDENTURE THERETO DATED AS OF DECEMBER 1,
      2008 (AS SO
      SUPPLEMENTED, THE “SENIOR INDENTURE”).  THE COLLATERAL BONDS ARE TO BE
      HELD IN TRUST AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS OF THE SENIOR NOTES,
      6.375% SERIES DUE DECEMBER 1, 2015 (THE “RELATED
      SECURITIES”) ISSUED PURSUANT TO THE SENIOR INDENTURE.

     

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

     

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

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

     

    Wisconsin
      Public
      Service Corporation, a corporation organized and existing under the laws of
      the
      State of Wisconsin (hereinafter called the Company), for value received, hereby
      promises to pay to U.S. BANK NATIONAL ASSOCIATION, as trustee for the benefit
      of
      the holders of the Related Securities, or registered assigns (in such capacity,
      the “Senior Trustee”), at the Corporate Trust Services Office of U.S. Bank
      National Association, in Milwaukee, Wisconsin, on the 1st day of December,
      2015,
      the sum of __________________ Dollars ($_________) in lawful money of the United
      States of America, and to pay interest thereon from the date hereof (i) at
      the
      rate of 0% per annum prior to December 5, 2008, and (ii) at the rate of
      6.375% per annum from and after December 5, 2008, in like money, until the
      principal hereof becomes due and payable, said interest being payable on the
      1st
      day of June and on the 1st
      day of
      December in each year commencing June 1, 2009.  The principal and
      interest so payable on any June 1 or December 1 will be paid to the
      person or entity in whose name this bond is registered, at the address thereof
      as it appears on the Company’s books for registration and registration of
      transfer.

     

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

     

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

     

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

     

    Dated
      as
      of:

    

    

    Wisconsin
      public service corporation,

    

    

    

    By: ____________________________                                                                     
      

    ______
      President

    Attest:

    

    _____________________________

    ____________
      Secretary

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (Form
      of Trustee’s
      Certificate)

     

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

    

    

    U.S.
      Bank National Association,

       As
      Trustee

    

    

    By:   __________________________                                                                   
      

    Authorized
      Signature

    

    

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

    

    This
      bond is one of
      a duly authorized issue of bonds of the Company, known as its First Mortgage
      Bonds, of the series and designation indicated on the face hereof, which issue
      of bonds consists, or may consist, of several series of varying denominations,
      dates and tenors, all issued and to be issued under and equally secured (except
      in so far as a sinking fund, or similar fund, established in accordance with
      the
      provisions of the Indenture, may afford additional security for the bonds of
      any
      specific series) by a First Mortgage and Deed of Trust (herein called the
“Indenture”) dated as of January 1, 1941, executed by the Company to
      First Wisconsin Trust Company (subsequently succeeded by U.S. Bank National
      Association, herein called the Trustee), as Trustee, to which Indenture and
      all
      instruments supplemental thereto reference is hereby made for a description
      of
      the property mortgaged and pledged, the nature and extent of the security,
      the
      rights of the holders of the bonds as to such security, and the terms and
      conditions upon which the bonds may be issued under the Indenture and any
      instruments supplemental thereto and are secured.  The principal
      hereof may be declared or may become due on the conditions, in the manner and
      at
      the time set forth in the Indenture, upon the happening of a completed default
      as in the Indenture provided.  This bond is one of a series created by
      a Supplemental Indenture (herein called the “Supplemental Indenture”) dated as
      of December 1, 2008,
      between the
      Company and the Trustee, which is supplemental to the Indenture.

     

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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    the
      Release Date,
      the Bonds of this Series shall cease to secure the Related
      Securities.  Following the Release Date, the Company shall cause the
      Indenture to be discharged, and the Company shall not issue any additional
      Collateral Bonds thereunder, and from and after the Release Date, the Company’s
      obligations in respect of the Collateral Bonds shall be satisfied and
      discharged.

     

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

     

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

     

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

     

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

     

    In
      the event that an event of default under Section 6.01 of the Senior Indenture
      has occurred and is continuing, and the Senior Trustee has declared the
      principal of all of the Related Securities then outstanding immediately due
      and
      payable (or such principal has become ipso facto immediately due and payable)
      under Section 6.02 of the Senior Indenture, then the Company shall call for
      redemption and redeem all of the bonds of this series then outstanding at a
      price equal to 100% of the principal amount thereof, together with accrued
      and
      unpaid interest thereon to the redemption date.  The redemption date
      shall be the accelerated maturity date of the

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Related
      Securities,
      and no prior notice of such redemption to the Trustee or the Senior Trustee
      shall be required.

     

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

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

     

    (End
      of text of bond)

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (Form
      of Prepayment
      Record)

     

    PREPAYMENT
      RECORD

    

    Principal
      Amount Of
      Bond $__________

    

    Date
      of maturity:  December 1, 2015

    

    
      	
              Prepayments
                on
                Principal

            	 	 
	
              Amount

            	
              Date

            	
              Balance

              Outstanding

            	
              Signature
                of Authorized

              Officer
                and
                Title

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

    

    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 H, 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:

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    

    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 or dates of authentication
      and delivery of the Related Securities, a series of bonds designated as
      Collateral Series H (herein sometimes referred to as the bonds of Collateral
      Series H), each of which shall bear the descriptive title “First Mortgage Bond,
      Collateral Series H”.  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, 2015, 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 0% per annum prior to December
      5, 2008, and Six and Three Hundred Seventy-Five Thousandths percent (6.375%)
      per
      annum from and after December 5, 2008, payable semi-annually on June 1 and
      December 1 of each year commencing June 1, 2009.  Bonds of said series
      issued prior to June 1, 2009 shall be dated as of December 1, 2008 and bonds
      of
      said series issued on and after June 1, 2009 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 H which may at any time
      be
      certified, issued and outstanding shall be limited to $125,000,000, subject
      to
      the right of the Company to reopen such series for issuances of additional
      bonds
      of such series, 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 H 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 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 (exclusive of interest accrued to the date of redemption)
      discounted to the date of redemption on a semi-annual basis (assuming a 360
      day
      year consisting of twelve 30-day months) at the Treasury Rate (as hereinafter
      defined) plus fifty hundredths of one percent (0.50%), plus in each case accrued
      and unpaid interest to the 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
      Rate”
means, with respect to any redemption date, the rate per annum equal to the
      semiannual equivalent yield to maturity or interpolated (on a day count basis)
      of the Comparable Treasury Issue, assuming a price for the Comparable Treasury
      Issue (expressed as a percentage of its principal amount) equal to the
      Comparable Treasury Price for such redemption date.

     

    “Comparable
      Treasury Issue” means the United States Treasury security or securities selected
      by an Independent Investment Banker as having an actual or
      interpolated

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    maturity
      comparable
      to the remaining term of the bonds of Collateral Series H 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 H.

     

    “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 Reference Treasury Dealer Quotations for the redemption date, after
      excluding the highest and lowest Reference Treasury Dealer Quotations for the
      redemption date, or (ii) if the Trustee obtains fewer than four Reference
      Treasury Dealer Quotations, the average of all the quotations which the Trustee
      obtains.

     

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

     

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

     

    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 H 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 H which are to be
      redeemed if only a part thereof are to be redeemed, and payments in redemption
      of bonds of Collateral Series H 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 H 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 thirty (30) 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 and unpaid interest thereon is paid in full.  The Trustee,
      when required to select bonds of Collateral Series H for redemption, shall
      promptly notify the Company, and the Company, when selecting bonds of Collateral
      Series H 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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Indenture
      (particularly Section 11.02 thereof) in connection with the redemption of bonds
      of Collateral Series H, 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 H 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
      and
      unpaid 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 H, 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 H 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 H 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 H 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 H 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 H, 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 H 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 H for any transfer
      of bonds of said series except for any tax or other governmental charge required
      to be paid in connection therewith.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    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 H 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 H 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 H 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.

     

    SECTION
      1.12. The
      Company shall
      have the right to reopen the bonds of Collateral Series H, for issuances of
      additional bonds of such series (“Additional Bonds”), by written application
      pursuant to Section 4.01(a) of the 1941 Mortgage for the authentication and
      delivery of such Additional Bonds.  Additional Bonds may be executed,
      authenticated, delivered, and issued upon and subject to the provisions of
      the
      Indenture (including but not limited to those of Articles IV, V, VI, VII, and/or
      VIII thereof, if and as applicable); and upon (but only upon) such execution,
      authentication, delivery, and issuance, the following additional provisions
      shall be deemed to apply:

     

    The
      bonds of
      Collateral Series H are hereby reopened for the issuance of Additional Bonds
      in
      the aggregate principal amount specified in the written application of the
      Company, which shall constitute a further issuance of, and will be consolidated
      with, the bonds of Collateral Series H so as to form a single series with the
      bonds of Collateral Series H, and shall have the same terms as the bonds of
      such
      series, except that the Additional Bonds shall be dated (and shall bear
      interest) as provided in Section 1.01 of this Supplemental
      Indenture.  The Additional Bonds shall be substantially in the form
      hereinbefore recited but may contain such changes as may be appropriate to
      reflect their date or dates of issuance.

     

    All
      references to
      the bonds of Collateral Series H in this Supplemental Indenture, in the form
      of
      such bonds hereinbefore recited, and in such bonds shall be deemed to include
      the Additional Bonds issued hereunder, and the Additional Bonds shall be subject
      to, and be entitled to the benefits of, this Supplemental Indenture; except
      that
      the dates of issuance of, and the dates from which interest will begin to accrue
      on, the Additional Bonds shall be as set forth in this Section
      1.12.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    

    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
      H, 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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    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 H 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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    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, 2008.

     

    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, 1555 RiverCenter
      Drive, Suite 203, Milwaukee, WI 53212.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    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 on 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
      Vice President for and on its behalf, all done as of the first day of December,
      2008.

     

    Wisconsin
      Public Service Corporation,

    

    

    By: /s/
      Charles A. Schrock

    (SEAL)                                                                       Charles
      A. Schrock

    President
      and Chief Executive
      Officer

    

    Attest:

    

    
/s/
      Barth J. Wolf

    Barth
      J.
      Wolf

    Secretary

    

    Executed
      by
      Wisconsin Public Service

    Corporation,
      in
      presence of:

    
/s/
      Janet K. McKee

    Janet
      K.
      McKee

    
/s/
      Tchapo Napoe

    Tchapo
      Napoe

    

    U.S.
      Bank National
      Association,

        As
      Trustee,

    

    By: /s/
      Peter M.
      Brennan 

    Peter
      M. Brennan

    Vice
      President

    

    Executed
      by U.S.
      Bank National Association

    in
      presence of:

    

      
/s/
        Janet K. McKee

      Janet
        K.
        McKee

      
/s/
        Tchapo Napoe

      Tchapo
        Napoe

      

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

    

    State
      Of
      Wisconsin              
}

    }  ss.

    Brown
      County                       
}

    

    Personally
      came
      before me this 1st day of December, A.D. 2008, Charles A. Schrock, to me
      known to be the President and Chief Executive 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 Charles A. Schrock 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 1st day of
      December, A.D. 2008.

    

    
/s/
      Kim
      M. Michiels

    Kim
      M.
      Michiels

    Notary
      Public,
      Brown County, Wisconsin

    My
      commission expires:  February 19, 2012

    (Notarial
      Seal)

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    State
      Of
      Wisconsin              
}

    }  ss.

    Brown
      County                       
}

    

    Personally
      came
      before me this 1st day of December, A.D. 2008, Peter M. Brennan, to me
      known to be a 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 1st day of December, A.D. 2008.

    
 

    /s/
      Kim M. Michiels

    Kim
      M.
      Michiels

    Notary
      Public,
      Brown County, Wisconsin

    My
      commission expires:  February 19, 2012

    

    (Notarial
      Seal)

    

    

    

    

    This
      instrument was
      drafted by Attorney Larry J. Bonney of the law firm of Foley & Lardner LLP,
      Milwaukee, Wisconsin.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    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, 2008,
      is that herein specifically described and enumerated or referred to in this
      Schedule A.

    

    Brown
      County,
      Wisconsin

     

    Project
      0150007039

     

    Lot
      One (1), Volume
      53 Certified Survey Map, Page 287, Map No. 7777; said map being Lot Nine (9),
      Lots Eleven (11) through Twenty-two (22), and the un-numbered part of Block
      Sixteen (16), all located in Block Sixteen (16), C.L.A. Tanks Fourth Addition;
      part of vacated Seventh Street; and part of Private Claims 5 & 6, West side
      of the Fox River, City of Green Bay, Brown County, Wisconsin.

     

    APN:
      Part of
      1-1404-1 and Part of 1-836 and Part of 1-835 and Effective 2009
      1-835

    

    Kewaunee
      County,
      Wisconsin

     

    Part
      of the
      Southwest Quarter (SW 1/4) of the Southwest Quarter (SW 1/4) of Section Eight
      (8), Township Twenty-three (23) North, Range Twenty-five (25) East, City of
      Kewaunee, Kewaunee County, Wisconsin, described as follows:

     

    Commencing
      at the
      Southwest corner of said section, which is marked by a nail; thence N88°07’29”E along the South
      line
      of said Southwest Quarter (SW 1/4) section 250.00 feet to the point of
      beginning; thence S00°52’39”E a distance of 46.59
      feet; thence N83°19’03”E a distance of 329.47
      feet; thence N79°17’06”E a distance of 123.48
      feet to an existing iron pipe; thence S88°07’29”W a distance of 449.51
      feet to the point of beginning.

     

    Part
      of Tax Parcel
      Number:  31 241 SW8 40-2

    
      
        
          A-1

          MILW

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Oneida
      County,
      Wisconsin

     

    Project
      0150007041

     

    Lots
      Four (4) and
      Five (5) of Certified Survey Map No. 3081, recorded in Vol. 13 Certified
      Surveys, Page 3081, Map No. 3081, as Document No. 608922; said Map being part
      of
      the Southeast Quarter of the Northwest Quarter (SE 1⁄4 of the NW 1⁄4), Section
      Thirty-three (33), Township Thirty-seven (37) North, Range Nine (9) East, in
      the
      City of Rhinelander, Oneida County, Wisconsin.

     

    Less
      and except the
      following:

     

    A
      parcel of land located in part of the SE 1⁄4 of the NW 1⁄4, Section 33, T 37 N, R 9
      E, City of Rhinelander, Oneida County, Wisconsin described as
      follows:

    

    Commencing
      at the
      south 1⁄4 corner of said Section 33, thence N 03o50’26” E a distance of 2222.55’
to an iron pipe, thence N 03o47’08” E a distance of 32.88’ to an iron pipe,
      thence N 85o04’37” W a distance of 609.24’ to the point of beginning, thence
      along the arc of a curve concave to the southwest having a radius of 60.00'
      and
      a long chord which bears N 57°18'51" W 58.20' a distance of 60.76' to an iron
      pipe, thence S 03°39' 30" W a distance of 27.12' to a point, thence S 85°04'37"
      E a distance of 50.90' to the point of beginning.  Parcel contains 985
      sq. ft

     

    Part
      of Tax Parcel
      Number: RH 9333-0813; RH 9333-0814

     

    Project
      0150007042

     

    Lot
      One (1) of
      Certified Survey Map No. 3486, recorded in Vol. 15 Certified Surveys, Page
      3486
      as Doc. No. 654875, being part of the Northeast Quarter of the Southwest Quarter
      (NE 1⁄4 of the SW 1⁄4), Section Thirty-three (33), Township Thirty-seven (37) North,
      Range Nine (9) East, in the City of Rhinelander, Oneida County,
      Wisconsin.

     

    Less
      and except the
      following:

     

    A
      parcel of land located in part of the
      NE1⁄4 of the SW1⁄4, Section 33, T 37 N, R 9 E, City of Rhinelander, Oneida County,
      Wisconsin described as follows:

    

    Commencing
      at the south 1⁄4 corner of said
      Section 33 marked by an Oneida County Monument, then N 03o50’26” E a distance of
      2189.48’ to an iron pipe, thenceN 85o04’37” W a distance of 610.64’ to an iron
      pipe and point of beginning, thence along the arc of a curve concave to the
      north having a radius of 60.00’ and a long chord which bears N 85o04’37” W
      100.13’ a distance of 118.27’ to an iron pipe, thence S 85o04’37” E a distance
      of 100.13’ to the point of beginning.  Parcel contains 1890 sq.
      ft.

     

    Part
      of Tax Parcel
      Number: RH 9333-0900

     

    Project
      0150008021

     

    A
      parcel of land located in part of the Southeast Quarter of the Northwest Quarter
      (SE 1⁄4 of the NW 1⁄4) and in the Northeast Quarter of the Southwest Quarter (NE 1⁄4
of the SW 1⁄4), Section

    
      
        
          A-2

          MILW_

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Thirty-three
      (33),
      Township Thirty-seven (37) North, Range Nine (9) East, in the City of
      Rhinelander, Oneida County, Wisconsin, described as follows:

     

    Commencing
      at the
      South quarter corner of said Section 33 marked by an Oneida County Monument;
      thence North 03 deg. 50 min. 26 sec. East a distance of 2189.48 feet to an
      iron
      pipe and point of beginning; thence North 85 deg. 04 min. 37 sec. West a
      distance of 610.64 feet to an iron pipe; thence along the arc of a curve concave
      to the West having a radius of 60.00 feet and a long chord which bears North
      05
      deg. 02 min. 02 sec. East 65.94 feet a distance of 69.81 feet to an iron pipe;
      thence South 85 deg. 04 min. 37 sec. East a distance of 609.24 feet to an iron
      pipe; thence South 03 deg. 47 min. 08 sec. West a distance of 32.88 feet to
      a
      brass capped iron pipe; thence South 03 deg. 50 min. 26 sec. West a distance
      of
      33.07 feet to the point of beginning.

     

    Tax
      Parcel
      Number:  RH 9333-0808

     

    

    Sheboygan
      County,
      Wisconsin

     

    Project
      0150007052

     

    A
      13.4% interest in and to the following:

     

    Part
      of the NE 1⁄4 of
      the NW 1⁄4 of Section 2, Township 14 North, Range 23 East, Town of Wilson,
      Sheboygan County, Wisconsin described as follows:  Commencing at a
      point that is 1011.6 feet South and 207.52 feet East of the Northwest corner
      of
      the NE 1⁄4 of the NW 1⁄4 of said Section, Township and Range; thence South 6 degrees
      12 minutes West 120 feet; thence South 83 degrees 48 minutes East 192 feet;
      thence North 6 degrees 12 minutes East 120 feet; thence North 83 degrees 48
      minutes West 192 feet to the point of beginning.

     

    Part
      of the NE 1⁄4 of
      the NW 1⁄4 of Section 2, Township 14 North, Range 23 East, Town of Wilson,
      Sheboygan County, Wisconsin, described as follows:  coming at the
      intersection of the centerline of Black River Road with the North line of said
      Section, Township and Range; thence South 42 degrees 03 minutes East along
      said
      centerline 583.5 feet; thence South 6 degrees 12 minutes West 592.35 feet to
      the
      place of beginning; thence South 6 degrees 12 minutes West 120 feet; thence
      South 83 degrees 48 minutes East 13.4 feet to the West line of South Eighth
      Street; thence North 5 degrees 07 minutes East along said West line 120.03
      feet;
      thence North 83 degrees 48 minutes West 11.4 feet to the place of
      beginning.

     

    Tax
      Key Number
      59030450490

    
      
        
          A-3

          MILW_

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Menominee
      County,
      Michigan

     

     

    Project
      0150008024

     

    A
      parcel of land being a part of the Southeast Quarter of the Southeast Quarter
      (SE 1/4 - SE 1/4) of Section Ten (10), Township Thirty-two (32), Range
      Twenty-seven (27) West, in the Township of Menominee, Menominee County,
      Michigan, described as follows:

     

    Commencing
      at the
      Southeast Corner of said Section 10, Township 32 North, Range 27 West; thence
      North 00 deg. 40 min. 36 sec. East, 33.11 feet along the East Line of the SE
      1/4
      of the SE 1/4 of Section 10 to the Southerly Line of Lot 3, Certified Survey
      No.
      58, Menominee County, Michigan Registry; thence North 85 deg. 37 min. 05 sec.
      West, 564.51 feet along the Southerly Line of Lots 3 and 2, Certified Survey
      No.
      58 to the Southwest Corner of said Lot 2; thence North 00 deg. 24 min. 10 sec.
      East, 408.20 feet along the Westerly Line of Lots 2 and 1, Certified Survey
      No.
      58 to the Northeast Corner of land described in Liber 231, Page 613; thence
      North 85 deg. 05 min. 30 sec. West 45.78 feet along the Northerly Line of land
      described in Liber 231, Page 613 to the Point of Beginning of herein described
      parcel; thence continue North 85 deg. 05 min. 30 sec. West, 253.47 feet along
      said Northerly Line to the Easterly right of way line of the Chicago and
      Northwestern Railroad (fka Wisconsin Central Railroad); thence North 00 deg.
      28
      min. 00 sec. East, 25.08 feet along said Easterly Line; thence South 85 deg.
      05
      min. 30 sec. East, 255.50 feet thence South 05 deg. 07 min. 39 sec. West, 25.00
      feet to the Point of Beginning.

    
      
        
          A-4

          MILW_c55862_ex10-1.htm

 

	COMPENSATION
          AGREEMENT (the “Agreement”),
      dated as of December 1, 2008, by and between
        ELITE PHARMACEUTICALS, INC.,
          a Delaware corporation (the “Company”),
    and Jerry I. Treppel (the “Director”). 

 

INTRODUCTION

          WHEREAS, the Director currently serves as a director on the Board of Directors of the Company (the “Board”); and 

          WHEREAS, the Board
  has elected the Director as the non-executive Chairman of the Board and the
    Director is willing to serve in such capacity for the compensation and upon
    the terms set forth in this Agreement.

          NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

          1.     Term. The term of the Director’s service as non-executive Chairman of the Board under this Agreement shall commence on the date
hereof and end immediately prior to the next annual meeting of the Company’s stockholders (the “Term”); provided, however, that following such annual meeting, and each subsequent annual meeting of the Company’s stockholders, if the Board elects the Director to continue as the non-executive Chairman of the Board, then the Term shall be extended
through the earlier of (a) the date of the next subsequent annual meeting of the Company’s stockholders and (ii) the date upon which the Director shall no longer serve as the non-executive Chairman of the Board (such additional extension(s),
the “Extended Term”); references in this Agreement to the Term shall include the Extended Term. Either party hereto may terminate this agreement, effective immediately upon the
giving of written notice. 

          2.     Duties.  During the Term, the Director shall serve as the non-executive Chairman of the Board and shall be neither an employee nor officer
of the Company and shall not serve in any other capacity with the Company or any of its affiliates.  The Director shall perform his duties as the non-executive Chairman of the Board in a manner consistent with applicable legal and corporate
governance standards: (a) regularly attend and preside at Board meetings, (b) chair the annual meeting of the Company’s stockholders, (c) be eligible to serve on such committees of the Board, and (d) perform such other duties commensurate with
his position as a non-executive Chairman of the Board. The Director may serve on one or more committees of the Board consistent with this Section 2. 

          3.     Commitment. During and throughout the Term, the Director will devote such reasonable time, attention, skill and efforts to the business
and affairs of the Company as is necessary to discharge the duties and responsibilities assigned to the Director hereunder in his capacity as the non-executive Chairman of the Board and shall serve the Company faithfully and to the best of his
ability. 

          4.     Compensation; Expenses.

                    (a)     Cash Compensation.  During the Term, the Director shall be entitled to receive monthly compensation at a rate of $2,083.33 (the
“Cash Compensation”), 

 

which amount shall be in lieu of and not in addition to any cash directors’ fees and other compensation paid to other non-employee members of the Board. Payments to the Director of the Cash Compensation set forth in this
Section 4(a) shall be made within ten (10) business days of the end of each calendar month and in accordance with the Company’s customary pay practices for its employees.
Notwithstanding the foregoing, if during the Term or any Extended Term, the Director is not re-elected to the Board at any annual meeting of the Company’s stockholders, the Company shall only be obligated to pay the Director his pro rata portion of the Cash Compensation through the date of such annual meeting. The Cash Compensation shall be subject to review by the Board from time to time.

                    (b)     Special Compensation. The Company shall grant to the Director under its 2004 Stock Option Plan (the “Plan”), non-qualified stock options to purchase 180,000 shares of common stock of the Company (“Common Stock”) at an exercise price
per share of $0.06 (the “Options”). The Options will have a term of ten (10) years and shall be subject to the terms and conditions set forth in an option agreement in the form
attached hereto as Exhibit A (the “Option Agreement”).

                    (c)     Expenses. The Company shall promptly reimburse the Director for expenses he reasonably incurs in connection with the performance of the
services hereunder (including business travel and entertainment expenses), against receipts or other appropriate written evidence of such expenditures as required by the appropriate Internal Revenue Service regulations and/or the expense
reimbursement policies of the Company. 

          5.     Indemnity Obligations. Company agrees to indemnify the Director to the fullest extent permitted by law in accordance with the By-Laws of
the Company against (a) reasonable expenses, including attorneys’ fees, incurred by him in connection with any threatened, pending, or completed civil, criminal, administrative, investigative, or arbitrative action, suit, or proceeding (and any
appeal therein), whether or not brought by or on behalf of the Company, seeking to hold him liable by reason of the fact that he is or was acting in such capacity, and (b) reasonable payments made by him in satisfaction of any judgment, money
decree, fine (including an excise tax assessed with respect to an employee benefit plan), penalty, or settlement for which he may have become liable in any such action, suit, or proceeding. The Director agrees to indemnify and hold the Company
harmless from and against any and all claims, demands, liabilities, damages, costs, and expenses (including, without limitation, reasonable attorneys’ fees) made against the Company resulting from the Director’s gross negligence, willful
misconduct or reckless actions. 

          6.     Independent Contactor. The Director’s status under this Agreement is that of an independent contractor and not an employee of the
Company. The Director shall be responsible for, and agrees to comply with, obligations under federal and state tax laws for payment of income and, if applicable, self-employment tax. 

          7.     Miscellaneous.

2

                    (a)     Assignment. The rights and obligations of the Director under this Agreement may not be assigned or delegated by the Director without the
prior written consent of the Company. 

                    (b)     Binding Effect.  This Agreement shall extend to and be binding upon the Director, his successors, permitted assigns, heirs and legal
representatives, and shall inure to the benefit of the Company, its successors and assigns. 

                    (c)     Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly
given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which
it is so mailed: 

	           	
If to the Director, to:		 	
As listed in the records of the Company.	
	 	
	 	
If to the Company to:		 	
Elite Pharmaceuticals, Inc.	
	 	 		 	
165 Ludlow Avenue	
	 	 		 	
Northvale, NJ 07647	
	 	 		 	
Attn: Board of Directors	

                    (d)     Waiver.  A waiver by a party hereto of a breach of any term, covenant or condition of this Agreement by the other party hereto shall not
operate or be construed as a waiver of any other or subsequent breach by such party of the same or any other term, covenant or condition hereof. 

                    (e)     Entire Agreement. This Agreement sets forth the entire agreement between the parties with respect to the subject matter hereof and no
waiver, modification, change or amendment of any of its provisions shall be valid unless in writing and signed by the party against whom such claimed waiver, modification, change or amendment is sought to be enforced. This Agreement supersedes all
prior understandings, whether oral or written, between the Director and the Company.

                    (f)       Authority. The parties each represent and warrant that they have the power, authority and right to enter
into this Agreement and to carry out and perform the terms, covenants and conditions hereof. 

                    (g)       Applicable Law; Choice of Forum.  This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of New Jersey without giving effect to principles relating to conflicts of law. Any legal action or proceeding filed in connection with this Agreement shall be filed in a forum in the State of New Jersey. The parties
hereby consent to the sole and exclusive jurisdiction of the courts in the State of New Jersey and agree not to raise any defense or make any argument that the pendency of any legal action or proceeding in such courts is inconvenient. 

3

                    (h)       Severability.  In the event that any of the provisions of this Agreement, or any portion thereof, shall be
held to be invalid or unenforceable, the validity and enforceability of the remaining provisions hereof shall not be affected or impaired but shall remain in full force and effect. 

                    (i)       Descriptive Headings.  Descriptive headings are for convenience only and shall not control or affect the
meaning or construction of any term or provision of this Agreement. 

                    (j)       Counterparts; Delivery by Facsimile or Email. This Agreement may be executed in any number of counterparts
with the same effect as if all parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one agreement. This Agreement and any amendments hereto, to the extent signed and delivered by means of a
facsimile machine or email, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No
party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile
machine or email as a defense to the formation of a contract and each such party forever waives any such defense.  

[Signature Page Follows]

 

 

 

4

           IN WITNESS WHEREOF, the parties hereto have executed this Compensation Agreement as of the day and year first above written. 

	 	
      ELITE PHARMACEUTICALS, INC.	
	 	 	 	
	 	 	 	
	 	By:  	 	 
	 	 	
      Chris Dick, Chief Operating Officer 
	 
	 	 	 	
	 	 	 	
	 	 	 	 
	 	 	
      JERRY I. TREPPEL 	 

 

 

5

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