Document:

Exhibit

Exhibit 4.01

PUBLIC SERVICE COMPANY
OF COLORADO
TO
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
_____________________
Supplemental Indenture No. 26
Dated as of June 1, 2016
Supplemental to the Indenture
dated as of October 1, 1993
_____________________
Establishing the Securities of Series No. 29 
designated 3.55% First Mortgage Bonds, due 2046

SUPPLEMENTAL INDENTURE NO. 26, dated as of June 1, 2016, between PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the laws of the State of Colorado (hereinafter sometimes called the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as successor trustee (hereinafter sometimes called the “Trustee”) to Morgan Guaranty Trust Company of New York under the Indenture, dated as of October 1, 1993 (hereinafter called the “Original Indenture”), as previously supplemented and as further supplemented by this Supplemental Indenture No. 26.  The Original Indenture and any and all indentures and all other instruments supplemental thereto are hereinafter sometimes collectively called the “Indenture”.
Recitals of the Company
The Original Indenture was authorized, executed and delivered by the Company to provide for the issuance from time to time of its Securities (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Securities.  The Original Indenture has been recorded in the office of the Clerk and Recorder of each county in the State of Colorado in which the Company owns real property that is used in or in connection with the Electric Utility Business, as more fully set forth in Schedule A hereto.
The Company has heretofore executed and delivered to the Trustee the Supplemental Indentures referred to in Schedule B hereto for the purpose of establishing various series of Securities and appointing previous successor Trustees.
The Company desires to establish a new series of Securities to be designated “3.55% First Mortgage Bonds, Series No. 29 due 2046” such series of Securities to be hereinafter sometimes called “Series No. 29”.
The Company has duly authorized the execution and delivery of this Supplemental Indenture No. 26 to establish the Securities of Series No. 29 and has duly authorized the issuance of such Securities; and all acts necessary to make this Supplemental Indenture No. 26 a valid agreement of the Company, and to make the Securities of Series No. 29 valid obligations of the Company, have been performed.
Granting Clauses
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 26 WITNESSETH, that, in consideration of the premises and of the purchase of the Securities by the Holders thereof, and in order to secure the payment of the principal of and premium, if any, and interest, if any, on all Securities from time to time Outstanding and the performance of the covenants contained therein and in the Indenture and to declare the terms and conditions on which such Securities are secured, the Company hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms to the Trustee, and grants to the Trustee a security interest in, the following:
Granting Clause First
All right, title and interest of the Company, as of the date of the execution and delivery of this Supplemental Indenture No. 26, in and to property (other than Excepted Property), real, personal and mixed and wherever situated, in any case used or to be used in or in connection with the Electric Utility Business (whether or not such use is the sole use of such property), including without limitation (a) all lands and interest in land described or referred to in Schedule C hereto; (b) all other lands, easements, servitudes, licenses, permits, rights of way and other rights and interests in or relating to real property used or to be used in or in connection with the Electric Utility Business or relating to the occupancy or use of such real property, subject however, to the exceptions and exclusions set forth in 

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clause (a) of Granting Clause First of the Original Indenture; (c) all plants, generators, turbines, engines, boilers, fuel handling and transportation facilities, air and water pollution control and sewage and solid waste disposal facilities and other machinery and facilities for the generation of electric energy; (d) all switchyards, lines, towers, substations, transformers and other machinery and facilities for the transmission of electric energy; (e) all lines, poles, conduits, conductors, meters, regulators and other machinery and facilities for the distribution of electric energy; (f) all buildings, offices, warehouses and other structures used or to be used in or in connection with the Electric Utility Business; (g) all pipes, cables, insulators, ducts, tools, computers and other data processing and/or storage equipment and other equipment, apparatus and facilities used or to be used in or in connection with the Electric Utility Business; (h) any or all of the foregoing properties in the process of construction; and (i) all other property, of whatever kind and nature, ancillary to or otherwise used or to be used in conjunction with any or all of the foregoing or otherwise, directly or indirectly, in furtherance of the Electric Utility Business;
Granting Clause Second
Subject to the applicable exceptions permitted by Section 810(c), Section 1303 and Section 1305 of the Original Indenture, all property (other than Excepted Property) of the kind and nature described in Granting Clause First which may be hereafter acquired by the Company, it being the intention of the Company that all such property acquired by the Company after the date of the execution and delivery of this Supplemental Indenture No. 26 shall be as fully embraced within and subjected to the Lien hereof as if such property were owned by the Company as of the date of the execution and delivery of this Supplemental Indenture No. 26;
Granting Clause Fourth
All other property of whatever kind and nature subjected or required to be subjected to the Lien of the Indenture by any of the provisions thereof;
This Instrument shall constitute a financing statement under the Colorado Uniform Commercial Code (the “UCC”) to be filed in the real estate records, and is filed as a fixture filing under the UCC covering goods which are, or are to become, fixtures on the real property described herein, in the Original Indenture and all supplements to the Original Indenture;
Excepted Property
Expressly excepting and excluding, however, from the Lien and operation of the Indenture all Excepted Property of the Company, whether now owned or hereafter acquired;
TO HAVE AND TO HOLD all such property, real, personal and mixed, unto the Trustee, its successors in trust and their assigns forever;
SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution and delivery of the Original Indenture, (b) as to property acquired by the Company after the date of the execution and delivery of the Original Indenture, Liens existing or placed thereon at the time of the acquisition thereof (including, but not limited to, the Lien of any Class A Mortgage and purchase money Liens), (c) Retained Interests and (d) any other Permitted Liens, it being understood that, with respect to any property which was at the date of execution and delivery of the Original Indenture or thereafter became or hereafter becomes subject to the Lien of any Class A Mortgage, the Lien of the Indenture shall at all times be junior, subject and subordinate to the Lien of such Class A Mortgage;

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IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the Holders from time to time of all Outstanding Securities without any priority of any such Security over any other such Security;
PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article Nine of the Original Indenture, and if, thereafter, the principal of and premium, if any, and interest, if any, on the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 603 of the Original Indenture, then and in that case the Indenture shall terminate, and the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise the Indenture, and the estate and rights thereby granted shall be and remain in full force and effect; and
THE PARTIES HEREBY FURTHER COVENANT AND AGREE as follows:
ARTICLE ONE

Securities of Series No. 29
There are hereby established the Securities of Series No. 29, which shall have the terms and characteristics set forth below (the lettered subdivisions set forth below corresponding to the lettered subdivisions of Section 301 of the Original Indenture):
(a)    the title of the Securities of Series No. 29 shall be “3.55% First Mortgage Bonds, Series No. 29 due 2046”; 
(b)    the Securities of Series No. 29 shall initially be authenticated and delivered in the aggregate principal amount of $250,000,000.  The Securities of Series No. 29 may be reopened and additional Securities of Series No. 29 may be issued in excess of the amount initially authenticated and delivered, provided that such additional Securities of Series No. 29 will contain the same terms (including the Stated Maturity and interest payment terms), except for the public offering price, issue date, and if applicable, the first interest payment date, as the other Securities of Series No. 29.  Any such additional Securities of Series No. 29, together with the Securities of Series No. 29 initially authenticated, shall constitute a single series for purposes of the Indenture and shall be limited to an aggregate principal amount of $1,000,000,000;
(c)    interest on the Securities of Series No. 29 shall be payable to the Persons in whose names such Securities are registered at the close of business on the Regular Record Date for such interest, except as otherwise expressly provided in the form of such Securities attached as Exhibit A hereto;
(d)    the principal of the Securities of Series No. 29 shall be payable on June 15, 2046, the Stated Maturity for Series No. 29;
(e)    the Securities of Series No. 29 shall bear interest at a rate of 3.55% per annum; interest shall accrue on the Securities of Series No. 29 from June 13, 2016 or the most recent date to which interest has been paid or duly provided for; the Interest Payment Dates for such Securities shall be June 15 and December 15 in each year, commencing December 15, 2016, and the Regular Record Dates with respect to the Interest Payment Dates for such Securities shall be June 1 and December 1 in each year, respectively (whether or not a Business Day);

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(f)    the Corporate Trust Office of U.S. Bank National Association in New York, New York shall be the place at which (i) the principal of, premium, if any, and interest, if any, on the Securities of Series No. 29 shall be payable, (ii) registration of transfer of such Securities may be effected, (iii) exchanges of such Securities may be effected and (iv) notices and demands to or upon the Company in respect of such Securities and the Indenture may be served; and U.S. Bank National Association shall be the Security Registrar for such Securities; provided, however, that the Company reserves the right to change, by one or more Officer’s Certificates, any such place or the Security Registrar; and provided, further, that the Company reserves the right to designate, by one or more Officer’s Certificates, its principal office in Denver, Colorado, as any such place or itself as the Security Registrar;
(g)    the Securities of Series No. 29 shall be redeemable at the option of the Company at any time prior to December 15, 2045, in whole or in part, at a “make whole” redemption price equal to the greater of (i) 100% of the principal amount thereof to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on such Securities to be redeemed that would be due if such Securities matured on December 15, 2045 (excluding the portion of any such accrued and unpaid interest to but excluding the Redemption Date), discounted to but excluding the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 20 basis points, plus, in each case, accrued and unpaid interest to but excluding the Redemption Date.  At any time on or after December 15, 2045, the Company may redeem the Securities of Series No. 29, in whole or in part, at 100% of the principal amount being redeemed plus accrued and unpaid interest thereon to but excluding the Redemption Date. 
For purposes hereof, the following defined terms shall have the meaning ascribed to them:
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Securities of Series No. 29 (assuming, for this purpose, that the Securities of Series No. 29 matured on December 15, 2045) 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 Securities of Series No. 29.
“Comparable Treasury Price” means (i) the average of the Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations for such Redemption Date, or (ii) if the Trustee obtains fewer than four Reference Treasury Dealer Quotations for the Redemption Date, the average of all of the Reference Treasury Dealer Quotations for such Redemption Date.
“Independent Investment Banker” means Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and PNC Capital Markets LLC or their respective successors or, if such firms or their successors are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Company.
“Primary Treasury Dealer” means any primary U.S. Government securities dealer in the United States.
“Reference Treasury Dealer” means (1) each of Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC (or their respective affiliates which are Primary Treasury Dealers), and a Primary Treasury Dealer selected by PNC Capital Markets LLC and any other Primary Treasury 

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Dealer designated by, and not affiliated with Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and PNC Capital Markets LLC, or their respective successors, provided, however, that if any of the foregoing or any of their respective designees, ceases to be a Primary Treasury Dealer, the Company will appoint another Primary Treasury Dealer as a substitute and (2) any other Primary Treasury Dealer selected by the Company after consultation with an Independent Investment Banker.
“Reference Treasury Dealer Quotations” means, for any Reference Treasury Dealer and any Redemption Date, the average, as determined by an Independent Investment Banker, 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 an Independent Investment Banker by the Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding the Redemption Date. 
“Treasury Yield” means, for any Redemption Date (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Yield will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using 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.  The Treasury Yield for any Redemption Date shall be calculated on the third Business Day preceding such Redemption Date.
(h)    not applicable;
(i)    the Securities of Series No. 29 shall be issuable only in denominations of $1,000 and integral multiples in excess thereof;
(j)    not applicable;
(k)    not applicable;
(l)    not applicable;
(m)    not applicable;
(n)    not applicable;
(o)    not applicable;
(p)    not applicable;
(q)    the Securities of Series No. 29 are to be initially registered in the name of Cede & Co., as nominee for The Depository Trust Company (the “Depositary”).  Such Securities shall not be transferable or exchangeable, nor shall any purported transfer be registered, except as follows:

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(i)    such Securities may be transferred in whole, and appropriate registration of transfer effected, if such transfer is by such nominee to the Depositary, or by the Depositary to another nominee thereof, or by any nominee of the Depositary to any other nominee thereof, or by the Depositary or any nominee thereof to any successor securities depositary or any nominee thereof; and
(ii)    such Securities may be exchanged for definitive Securities registered in the respective names of the beneficial holders thereof, and thereafter shall be transferable without restriction, if:
(A)    the Depositary, or any successor securities depositary, shall have notified the Company and the Trustee that it is unwilling or unable to continue to act as securities depositary with respect to such Securities or the Depositary has ceased to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and the Trustee shall not have been notified by the Company within ninety (90) days of the identity of a successor securities depositary with respect to such Securities; or
(B)    the Company shall have delivered to the Trustee a Company Order to the effect that such Securities shall be so exchangeable on and after a date specified therein; or
(C)    (1) an Event of Default shall have occurred and be continuing, (2) the Trustee shall have given notice of such Event of Default pursuant to Section 1102 of the Original Indenture, and (3) there shall have been delivered to the Company and the Trustee an Opinion of Counsel to the effect that the interests of the beneficial owners of such Securities in respect thereof will be materially impaired unless such owners become Holders of definitive Securities;
(r)    not applicable;
(s)    no service charge shall be made for the registration of transfer or exchange of the Securities of Series No. 29; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the exchange or transfer;
(t)    not applicable;

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	(u)
	(i)    If the Company shall have caused the Company’s indebtedness in respect of any Securities of Series No. 29, to have been satisfied and discharged prior to the Maturity of such Securities, as provided in Section 901 of the Original Indenture, the Company shall, promptly after the date of such satisfaction and discharge, give a notice to each Person who was a Holder of any of such Securities on such date stating (A)(1) the aggregate principal amount of such Securities and (2) the aggregate amount of any money (other than amounts, if any, deposited in respect of accrued interest on such Securities) and the aggregate principal amount of, the rate or rates of interest on, and the aggregate fair market value of, any Eligible Obligations deposited pursuant to Section 901 of the Original Indenture with respect to such Securities and (B) that the Company will provide (and the Company shall promptly so provide) to such Person, or any beneficial owner of such Securities holding through such Person (upon written request to the Company sent to an address specified in such notice), such other information as such Person or beneficial owner, as the case may be, reasonably may request in order to enable it to determine the federal income tax consequences to it resulting from the satisfaction and discharge of the Company’s indebtedness in respect of such Securities.  Thereafter, the Company shall, within forty-five (45) days after the end of each calendar year, give to each Person who at any time during such calendar year was a Holder of such Securities a notice containing (X) such information as may be necessary to enable such Person to report its income, gain or loss for federal income tax purposes with respect to such Securities or the assets held on deposit in respect thereof during such calendar year or the portion thereof during which such Person was a Holder of such Securities, as the case may be (such information to be set forth for such calendar year as a whole and for each month during such year) and (Y) a statement to the effect that the Company will provide (and the Company shall promptly so provide) to such Person, or any beneficial owner of such Securities holding through such Person (upon written request to the Company sent to an address specified in such notice), such other information as such Person or beneficial owner, as the case may be, reasonably may request in order to enable it to determine its income, gain or loss for federal income tax purposes with respect to such Securities or such assets for such year or portion thereof, as the case may be.  The obligation of the Company to provide or cause to be provided information for purposes of income tax reporting by any Person as described in the first two sentences of this paragraph shall be deemed to have been satisfied to the extent that the Company has provided or caused to be provided substantially comparable information pursuant to any requirements of the Internal Revenue Code of 1986, as amended from time to time (the “Code”) and United States Treasury regulations thereunder.

(ii)    Notwithstanding the provisions of subparagraph (i) above, the Company shall not be required to give any notice specified in such subparagraph or to otherwise furnish any of the information contemplated therein if the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize income, gain or loss for federal income tax purposes as a result of the satisfaction and discharge of the Company’s indebtedness in respect of such Securities and such Holders will be subject to federal income taxation on the same amounts and in the same manner and at the same times as if such satisfaction and discharge had not occurred.
(iii)    Anything in this clause (u) to the contrary notwithstanding, the Company shall not be required to give any notice specified in subparagraph (i) or to otherwise furnish the information contemplated therein or to deliver any Opinion of Counsel contemplated by subparagraph (ii) if the Company shall have caused Securities of Series No. 29 to be deemed to have been paid for purposes of the Indenture, as provided in Section 901 of the Original Indenture, but shall not have effected the 

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satisfaction and discharge of its indebtedness in respect of such Securities pursuant to such Section.
(v)    The Securities of Series No. 29 shall be substantially in the form attached hereto as Exhibit A, and shall have such further terms as are set forth in such form.
ARTICLE TWO
     
Miscellaneous Provisions
This Supplemental Indenture No. 26 is a supplement to the Original Indenture.  As previously supplemented and further supplemented by this Supplemental Indenture No. 26, the Original Indenture is in all respects ratified, approved and confirmed, and the Original Indenture, all previous supplements thereto and this Supplemental Indenture No. 26 shall together constitute one and the same instrument.

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 26 to be duly executed as of the day and year first above written.

	
		
	 
	PUBLIC SERVICE COMPANY OF COLORADO

	 
	 

	 
	 

	 
	By:      /s/ Brian J. Van Abel                                             

	 
	          Name: Brian J. Van Abel

	 
	          Title: Vice President and Treasurer

STATE OF MINNESOTA    )
) ss:
COUNTY OF HENNEPIN    )

The foregoing was acknowledged before me this 6th day of June, 2016, by Brian J. Van Abel, the Vice President and Treasurer of Public Service Company of Colorado, a corporation organized under the laws of Colorado, on behalf of the corporation.
Witness my hand and official seal.
My commission expires:  January 31, 2020

	
		
	 
	      /s/ Sharon M. Quellhorst                                            

	 
	Name: Sharon M. Quellhorst

	 
	           Notary Public

[Signature Page – Supplemental Indenture (PSCo)]

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	U.S. BANK NATIONAL ASSOCIATION,

	 
	                                                        Trustee

	 
	 

	 
	By:      /s/ K. Wendy Kumar                                             

	 
	          Name: K. Wendy Kumar

	 
	          Title: Vice President

STATE OF NEW YORK    )
) ss:
COUNTY OF QUEENS    )
On the 6th day of June, 2016, before me personally came K. Wendy Kumar, to me known, who, being by me duly sworn, did depose and say that she is a Vice President of U.S. Bank National Association, the banking association described in and which executed the foregoing instrument; and that she signed her name thereto by authority of the Board of Directors of said banking association.

	
		
	 
	      /s/ Carolyn R. Sinclair                                            

	 
	Name: Carolyn R. Sinclair

	 
	           Notary Public, State of New York

[Signature Page – Supplemental Indenture (Trustee)]

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EXHIBIT A
FORM OF SECURITY

(See legend at the end of this Security for 
restrictions on transfer)

PUBLIC SERVICE COMPANY OF COLORADO 
First Mortgage Bond, Series No. 29

	
		
	Original Interest Accrual Date
Interest Rate:
Stated Maturity:
Interest Payment Dates:
Regular Record Dates:
	June 13, 2016
3.55% per annum
June 15, 2046
June 15 and December 15
June 1 and December 1

This Security is not a Discount Security
within the meaning of the within‐mentioned Indenture
_________________________________________
Principal Amount    Registered No. 
$    
PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the laws of the State of Colorado (herein called the “Company,” which term includes any successor corporation under the Indenture referred to below), for value received, hereby promises to pay to
, or registered assigns, the principal sum of 
Dollars on the Stated Maturity specified above, and to pay interest thereon from the Original Interest Accrual Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi‐annually in arrears on the Interest Payment Dates specified above in each year, commencing December 15, 2016 and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid or duly provided for.  The interest so payable, and paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date.  Notwithstanding the foregoing, interest payable at Maturity shall be paid to the Person to whom principal shall be paid.  Except as otherwise provided in said Indenture, any such interest not so paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities of this series not less than 15 days prior to such Special Record Date, or be paid in such other manner as permitted by the Indenture.
Payment of the principal of this Security and interest hereon at Maturity shall be made upon presentation of this Security at the Corporate Trust Office of U.S. Bank National Association in New York, 

EXHIBIT A-1

New York or at such other office or agency as may be designated for such purpose by the Company from time to time.  Payment of interest on this Security (other than interest at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, except that if such Person shall be a securities depositary, such payment may be made by such other means in lieu of check as shall be agreed upon by the Company, the Trustee and such Person.  Payment of the principal of and interest on this Security, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and issuable in one or more series under and equally secured by an Indenture, dated as of October 1, 1993 (such Indenture as originally executed and delivered and as supplemented or amended from time to time thereafter, together with any constituent instruments establishing the terms of particular Securities, being herein called the “Indenture”), between the Company and U.S. Bank National Association as successor trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the property mortgaged, pledged and held in trust, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of the Securities thereunder and of the terms and conditions upon which the Securities are, and are to be, authenticated and delivered and secured.  The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture.  This Security is one of the series designated above.
If any Interest Payment Date or the Stated Maturity shall not be a Business Day (as hereinafter defined), payment of the amounts due on this Security on such date may be made on the next succeeding Business Day; and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date or Stated Maturity, as the case may be, to such Business Day.
This Security shall be redeemable at the option of the Company at any time prior to December 15, 2045, in whole or in part, at a “make whole” redemption price equal to the greater of (i) 100% of the principal amount hereof to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Security to be redeemed that would be due if this Security matured on December 15, 2045 (excluding the portion of any such accrued and unpaid interest to but excluding the Redemption Date), discounted to but excluding the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 20 basis points, plus, in each case, accrued and unpaid interest to but excluding the Redemption Date.  At any time on or after December 15, 2045, the Securities shall be redeemable, in whole or in part, at 100% of the principal amount being redeemed plus accrued and unpaid interest thereon to but excluding the Redemption Date. For purposes hereof, the following defined terms shall have the meaning ascribed to them:
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of this Security (assuming for this purpose, that this Security matured on December 15, 2045) 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 this Security.
“Comparable Treasury Price” means (i) the average of the Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations for such Redemption Date, or (ii) if the Trustee obtains fewer than four Reference Treasury Dealer Quotations for the Redemption Date, the average of all of the Reference Treasury Dealer Quotations for such Redemption Date.

EXHIBIT A-2

“Independent Investment Banker” means Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and PNC Capital Markets LLC or their respective successors or, if such firms or their successors are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Company.
“Primary Treasury Dealer” means any primary U.S. Government securities dealer in the United States.
“Reference Treasury Dealer” means (1) each of Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC(or their respective affiliates which are Primary Treasury Dealers), and a Primary Treasury Dealer selected by PNC Capital Markets LLC and any other Primary Treasury Dealer designated by, and not affiliated with Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and PNC Capital Markets LLC, or their respective successors, provided, however, that if any of the foregoing, or any of their respective designees ceases to be a Primary Treasury Dealer, the Company will appoint another Primary Treasury Dealer as a substitute and (2) any other Primary Treasury Dealer selected by the Company after consultation with an Independent Investment Banker.
“Reference Treasury Dealer Quotations” means, for any Reference Treasury Dealer and any Redemption Date, the average, as determined by an Independent Investment Banker, 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 an Independent Investment Banker by the Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding the Redemption Date. 
“Treasury Yield” means, for any Redemption Date (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Yield will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using 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.  The Treasury Yield for any Redemption Date shall be calculated on the third Business Day preceding such Redemption Date.
If an Event of Default shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders 

EXHIBIT A-3

of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Indenture permits the Trustee to enter into one or more supplemental indentures for limited purposes without the consent of any Holders of Securities.  The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in the Indenture and subject to certain limitations therein set forth, this Security or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and, at the election of the Company, the Company’s entire indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due, without regard to any reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient to pay when due the principal of and interest on this Security when due.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office of U.S. Bank National Association in New York, New York or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series of authorized denominations and of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only as registered Securities, without coupons, and only in denominations of $1,000 and integral multiples in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of the same series, of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Security or Securities to be exchanged at the office of U.S. Bank National Association, in New York, New York or such other office or agency as may be designated by the Company from time to time.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act of 1939, as then in effect or any successor statute shall be applicable and except to the extent that the law of any jurisdiction wherein any portion of the property mortgaged pursuant to the Indenture or any indenture supplemental 

EXHIBIT A-4

thereto is located shall mandatorily govern the perfection, priority or enforcement of the lien of the Indenture and all indentures supplemental thereto with respect to such portion of the mortgaged property.
As used herein, “Business Day” means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in The City of New York, New York, or other city in which is located any office or agency maintained for the payment of principal or interest on this Security, are authorized or required by law, regulation or executive order to remain closed.  All other terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for the payment of the principal of or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, shareholder, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

EXHIBIT A-5

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
	
		
	 
	PUBLIC SERVICE COMPANY OF COLORADO

	 
	 

	 
	 

	 
	By:___________________________________

	 
	            [Vice President and Treasurer]

	
		
	Attest:_____________________________
	 

	            Assistant Secretary
	 

CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
	
		
	Dated:___________________________________
	 

	
			
	U.S. BANK
NATIONAL ASSOCIATION,
as Trustee
	OR

	U.S. BANK 
NATIONAL ASSOCIATION,
as Trustee

	By:__________________________ 
	 
	By:__________________________

	 Authorized Officer
	 
	     as Authenticating Agent

	
		
	 
	By:__________________________

	 
	    Authorized Officer

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a limited-purpose trust company organized under the New York Banking Law (“DTC”), to the Company or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
This Security may not be transferred or exchanged, nor may any purported transfer be registered, except (i) this Security may be transferred in whole, and appropriate registration of transfer effected, if such transfer is by Cede & Co., as nominee for The Depository Trust Company (the “Depositary”), to the 

EXHIBIT A-6

Depositary, or by the Depositary to another nominee thereof, or by any nominee of the Depositary to any other nominee thereof, or by the Depositary or any nominee thereof to any successor securities depositary or any nominee thereof; and (ii) this Security may be exchanged for definitive Securities registered in the respective names of the beneficial holders hereof, and thereafter shall be transferable without restrictions if:  (A) the Depositary, or any successor securities depositary, shall have notified the Company and the Trustee that it is unwilling or unable to continue to act as securities depositary with respect to the Securities and the Trustee shall not have been notified by the Company within ninety (90) days of the identity of a successor securities depositary with respect to the Securities; or (B) the Company shall have delivered to the Trustee a Company Order to the effect that the Securities shall be so exchangeable on and after a date specified therein or (C) (1) an Event of Default shall have occurred and be continuing, (2) the Trustee shall have given notice of such Event of Default pursuant to Section 1102 of the Original Indenture and (3) there shall have been delivered to the Company and the Trustee an Opinion of Counsel to the effect that the interests of the beneficial owners of such Securities in respect thereof will be materially impaired unless such owners become Holders of definitive Securities.

	
					
	 
	 
	_____
	 
	 

	 
	 
	 
	 
	 

	             FOR VALUE RECEIVED the undersigned herby sells, assigns and transfers unto

	 

	[please insert social security or other identifying number of assignee]

	 
	 
	 
	 
	 

	 

	[please print or typewrite name and address of assignee]

	 
	 
	 
	 
	 

	 

	 
	 
	 
	 
	 

	the within Security of PUBLIC SERVIC COMPANY OF COLORADO and does hereby irrevocably constitute and

	appoint                                                                        , Attorney, to transfer said Security on the books of the 

	within-mentioned Company, with full power of substitution in the premises.

	 
	 
	 
	 
	 

	Dated:___________________________________
	 
	 
	 

	 
	 
	 
	 
	 

______________________________________________________
Notice: The signature to this assignment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatsoever.

EXHIBIT A-7

SCHEDULE A

The following table sets forth recording information relating to the recordation, in each of the specified Colorado counties, of the Indenture dated as of October 1, 1993, granted by Public Service Company of Colorado to Morgan Guaranty Trust Company of New York, Trustee (recording information for Supplemental Indentures is not shown in this table):  

	
						
	COUNTY
	DATE
	TIME
	RECEPTION NUMBER
	BOOK/FILM
	PAGE

	Adams
	Oct. 13, 1993
	01:35 P.M.
	Reception No. B1183903
	Book 4170
	Page 324

	Alamosa
	Oct. 12, 1993
	03:00 P.M.
	Reception No. 265666
	Book 475
	Page 160

	Arapahoe
	Oct. 13, 1993
	04:07 P.M.
	Reception No. 141032
	Book 7186
	Page 383

	Archuleta
	Oct. 12, 1993
	02:21 P.M.
	Reception No. 93006202
	 
	 

	Baca
	May 16, 2013
	09:50 A.M.
	Reception No. 418754
	 
	 

	Bent
	Oct. 12, 1993
	11:35 A.M.
	Reception No. 278521
	Book 435
	Page 1

	Boulder
	Oct. 13, 1993
	03:04 P.M.
	Reception No. 01347991
	Film 1888
	 

	Broomfield
	Sept. 12, 2002
	02:47 P.M.
	Reception No. 20020l33l3
	 
	 

	Chaffee
	Oct. 14, 1993
	11:00 A.M.
	Reception No. 269673
	Book 539
	Page 518

	Cheyenne
	May 15, 2013
	11:39 A.M.
	Reception No. 236363
	 
	 

	Clear Creek
	Oct. 12, 1993
	02:25 P.M.
	Reception No. 163701
	Book 505
	Page 631

	Conejos
	Oct. 13, 1993
	09:56 A.M.
	Reception No. 205693
	Book 354
	Page 776

	Costilla
	Oct. 13, 1993
	09:00 A.M.
	Reception No. 191898
	Book 291
	Page 117

	Crowley
	Oct. 13, 1993
	08:40 A.M.
	Reception No. 148850
	Book 244
	Page 195

	Custer
	May 15,2013
	09:18 A.M.
	Reception No. 221251
	 
	 

	Delta
	Oct. 13, 1993
	09:37 A.M.
	Reception No. 471619
	Book 709
	Page 50

	Denver
	Oct. 12, 1993
	11:24 A.M.
	Reception No. 9300139814
	 
	 

	Dolores
	Oct. 14, 1993
	12:50 P.M.
	Reception No. 133132
	Book 260
	Page 300

	Douglas
	Oct. 12, 1993
	03:08 P.M.
	Reception No. 9348340
	Book 1154
	Page 1

	Eagle
	Oct. 12, 1993
	04:48 P.M.
	Reception No. 518046
	Book 621
	Page 978

	Elbert
	Oct. 12, 1993
	03:01 P.M.
	Reception No. 313722
	Book 480
	Page 183

	El Paso
	Oct. 12, 1993
	01:38 P.M.
	Reception No. 002368410
	Book 6282
	Page 51

	Fremont
	Oct. 12, 1993
	01:30 P.M.
	Reception No. 608790
	Book 1154
	Page 31

	Garfield
	Oct. 12, 1993
	02:20 P.M.
	Reception No. 453596
	Book 878
	Page 193

	Gilpin
	Oct. 12, 1993
	02:20 P.M.
	Reception No. 79260
	Book 551
	Page 413

	Grand
	Oct. 12, 1993
	12:45 P.M.
	Reception No. 93010260
	 
	 

	Gunnison
	Oct. 12, 1993
	04:30 P.M.
	Reception No. 446179
	Book 733
	Page 1

	Hinsdale
	May 14, 2013
	05:20 PM
	Reception No. 100157
	 
	 

	Huerfano
	Oct. 12, 1993
	11:15 A.M.
	Reception No. 9244
	Book 21M
	Page 316

	Jefferson
	Oct. 13, 1993
	09:30 A.M.
	Reception No. 93163438
	 
	 

	Kiowa
	Oct. 12, 1993
	01:00 P.M.
	Reception No. 249124
	Book 409
	Page 40

	Kit Carson
	May 15, 2013
	09:40 AM
	Reception No. 201300563130
	 
	 

	La Plata
	Oct. 12, 1993
	03:38 P.M.
	Reception No. 655580
	 
	 

	Lake
	Oct. 12, 1993
	03:00 P.M.
	Reception No. 305501
	Book 506
	Page 635

	Larimer
	Oct. 13, 1993
	10:23 A.M.
	Reception No. 93075587
	 
	 

	Las Animas
	May 15, 2013
	09:24 AM
	Reception No. 201300720666
	 
	 

	Logan
	Oct. 12, 1993
	01:10 P.M.
	Reception No. 606328
	Book 874
	Page 484

SCHEDULE A-1

	
						
	COUNTY
	DATE
	TIME
	RECEPTION NUMBER
	BOOK/FILM
	PAGE

	Mesa
	Oct. 12, 1993
	12:06 P.M.
	Reception No. 1656362
	Book 2014
	Page 129

	Mineral
	May 16, 2013
	10:40 AM
	Reception No. 68174
	 
	 

	Moffat
	Oct. 12, 1993
	11:00 A.M.
	Reception No. 350044
	 
	 

	Montezuma
	Oct. 13, 1993
	10:10 A.M.
	Reception No. 435373
	Book 0679
	Page 756

	Montrose
	Oct. 12, 1993
	03:06 P.M.
	Reception No. 591244
	Book 862
	Page 281

	Morgan
	Oct. 12, 1993
	12:54 P.M.
	Reception No. 738426
	Book 959-60
	Page 857

	Otero
	May 15, 2013
	08:02 AM
	Reception No. 634927
	 
	 

	Ouray
	Oct. 13, 1993
	11:08 A.M.
	Reception No. 154688
	Book 221
	Page 500

	Park
	Oct. 14, 1993
	10:00 A.M.
	Reception No. 417879
	Book 504
	Page 365

	Pitkin
	Oct. 14, 1993
	03:56 P.M.
	Reception No. 362054
	Book 726
	Page 791

	Prowers
	Oct. 12, 1993
	02:00 P.M.
	Reception No. 462785
	 
	 

	Pueblo
	Oct. 12, 1993
	11:54 A.M.
	Reception No. 1021381
	Book 2685
	Page 768

	Rio Blanco
	Oct. 12, 1993
	02:18 P.M.
	Reception No. 249980
	Book 506
	Page 838

	Rio Grande
	Oct. 13, 1993
	11:46 A.M.
	Reception No. 337091
	Book 450
	Page 43

	Routt
	Oct. 12, 1993
	11:12 A.M.
	Reception No. 428347
	Book 689
	Page 2575

	Saguache
	Oct. 13, 1993
	11:05 A.M.
	Reception No. 304092
	Book 486
	Page 625

	San Juan
	Oct. 13, 1993
	10:27 A.M.
	Reception No. 136438
	Book 240
	Page 702

	San Miguel
	Oct. 12, 1993
	04:05 P.M.
	Reception No. 287896
	Book 518
	Page 813

	Sedgewick
	Oct. 12, 1993
	02:15 P.M.
	Reception No. 179877
	Book 203
	Page 55

	Summit
	Oct. 12, 1993
	01:40 P.M.
	Reception No. 453148
	 
	 

	Teller
	Oct. 13, 1993
	08:00 A.M.
	Reception No. 412373
	Book 698
	Page 104

	Washington
	Oct. 12, 1993
	11:20 A.M.
	Reception No. 802111
	Book 925
	Page 955

	Weld
	Oct. 13, 1993
	09:54 A.M.
	Reception No. 2354434
	Book 1406
	Page 1

	Yuma
	May 20, 2013
	11:59 AM
	Reception No. 00557180
	 
	 

SCHEDULE A-2

SCHEDULE B
SUPPLEMENTAL INDENTURES
	
				
	Date of 
Supplemental 
Indenture
	Series of Bonds
	Principal Amount Issued
	Principal 
Amount 
Outstanding

	November 1, 1993
	Series No. 1
	$134,500,000
	None

	January 1, 1994
	Series No. 2 due 2001
	$102,667,000
	None

	 
	and
	 
	 

	 
	Series No. 2 due 2024
	$110,000,000
	None

	September 2, 1994
	None
	None
	None

	(Appointment of
	 
	 
	 

	Successor Trustee)
	 
	 
	 

	May 1, 1996
	Series No. 3
	$125,000,000
	None

	November 1, 1996
	Series No. 4
	$250,000,000
	None

	February 1, 1997
	Series No. 5
	$150,000,000
	None

	April 1, 1998
	Series No. 6
	$250,000,000
	None

	August 15, 2002
	Series No. 7
	$48,750,000
	None

	September 1, 2002
	Series No. 8
	$600,000,000
	None

	September 15, 2002
	Series No. 9
	$530,000,000
	None

	April 1, 2003
	Series No. 10
	$600,000,000
	None

	March 1, 2003
	Series No. 11
	$250,000,000
	None

	September 15, 2003
	Series No. 12
	$250,000,000
	None

	May 1, 2003
	Series No. 13
	$350,000,000
	None

	September 1, 2003
	Series No. 14
	$300,000,000
	None

	September 1, 2003
	Series No. 15
	$275,000,000
	None

	August 1, 2005
	Series No. 16
	$129,500,000
	$129,500,000

	August 1, 2007
	Series No. 17
	$350,000,000
	$350,000,000

	August 1, 2008
	Series No. 18 due 2018
	$300,000,000
	$300,000,000

	 
	and
	 
	 

	 
	Series No. 19 due 2038
	$300,000,000
	$300,000,000

	May 1, 2009
	Series No. 20 due 2019
	$400,000,000
	$400,000,000

	November 1, 2010
	Series No. 21 due 2020
	$400,000,000
	$400,000,000

	August 1, 2011
	Series No. 22 due 2041
	$250,000,000
	$250,000,000

	September 1, 2012
	Series No. 23 due 2022
	$300,000,000
	$300,000,000

	 
	and
	 
	 

	 
	Series No. 24 due 2042
	$500,000,000
	$500,000,000

	March 1, 2013
	Series No. 25 due 2023
	$250,000,000
	$250,000,000

	 
	and
	 
	 

	 
	Series No. 26 due 2043
	$250,000,000
	$250,000,000

	March 1, 2014
	Series No. 27 due 2044
	$300,000,000
	$300,000,000

	May 1, 2015
	Series No. 28 due 2025
	$250,000,000
	$250,000,000

	June 1, 2016
	Series No. 29 due 2046
	$250,000,000
	$250,000,000

SCHEDULE B-1

SCHEDULE C
DESCRIPTION OF PROPERTY
The following properties are in the State of Colorado and the counties thereof: 
ADAMS COUNTY
Thornton Substation
That part of the Northwest 1⁄4 of Section 29, Township 1 South, Range 67 West of the 6th P.M., County of Adams, State of Colorado, more particularly described as follows:

Beginning at the Northwest 1⁄4 corner of said Section 29; Thence N 89 degrees 22 minutes 25 seconds E along the North line of said Section 29, a distance of 30.00 feet; Thence S 00 degrees 22 minutes 08 seconds E parallel with the West line of said Northwest 1⁄4 of said Section 29, a distance of 30.00 feet to the True Point of Beginning; Thence S 00 degrees 22 minutes 08 seconds E along said West line, a distance of 425.00 feet; Thence N 89 degrees 22 minutes 25 seconds E parallel with the North line of said Section 29, a distance of 696.96 feet; Thence N 00 degrees 22 minutes 08 seconds W parallel with the West line of said Northwest 1⁄4 a distance of 425.00 feet; Thence S 89 degrees 22 minutes 25 seconds W parallel with the North line of said Northwest 1⁄4 of Section 29, a distance of 696.96 feet to the True Point of Beginning.

Except that portion conveyed to the City of Thornton, a Municipal corporation by Deed recorded August 5, 2004 at Reception No. 20040805000727730

And

Except that portion conveyed to the City of Thornton, a Municipal corporation by Deed recorded February 15, 2005 at Reception No. 20050215000155730,

County of Adams,
State of Colorado.
CITY AND COUNTY OF DENVER
Argo Substation (Vacated Alley Expansion Area)
The east half of the alley in Block 3, VIADUCT ADDITION, recorded on October 8, 1887 in the City and County of Denver Clerk and Recorder’s Office, as vacated by Ordinance Number 418-2012 recorded at Reception No. 2012110943 on August 17, 2012, in the City and County of Denver Clerk and Recorder’s Office, and located in the Southeast Quarter of Section 21, Township 3 South, Range 68 West of the Sixth Principal Meridian,

City and County of Denver,
State of Colorado.

SCHEDULE C-1

JEFFERSON COUNTY
Moon Gulch Substation
Lot B, Block ID,
VAUXMONT MINOR SUBDIVISION NO. 3,

County of Jefferson,
State of Colorado.
WELD COUNTY
Pleasant Valley Substation Expansion Tract (Hungenberg)
The North 255.00 feet of the East 250.00 feet of the Northeast 1/4 of Section 27, Township 6 North, Range 65 West of the 6th P.M., County of Weld, State of Colorado, EXCEPTING the Northerly and Easterly 30 feet thereof and ALSO EXCEPTING that parcel of land described in Book 1327 at Page 80 recorded on March 24, 1952 in Weld County Clerk and Recorder's Office, the parcel covered by this description being additionally described as follows:
COMMENCING at the Northeast corner of said Section 27, whence the North 1/4 corner of said Section 27 bears North 89°29'45" West, a distance of 2659.76 feet;
thence South 75°09'01" West, a distance of 113.30 feet to the POINT OF BEGINNING, said point being the Northwest corner of said parcel of land described in Book 1372 at Page 80;
thence the following two (2) courses along the Westerly and Southerly lines of said parcel of land described in Book 1372 at Page 80:
		
	1)
	South 00°59'03" East, along a line being 110.00 feet Westerly of and parallel with the Easterly line of said Northeast 1/4 of Section 27, a distance of 95.03 feet;

		
	2)
	South 89°29'45" East, along a line being 125.00 feet Southerly of and parallel with the Northerly line of said Northeast 1/4 of Section 27, a distance of 80.03 feet;

thence South 00°59'03" East, along a line, being 30.00 feet Westerly of and parallel with said Easterly line of the Northeast 1/4 of Section 27, a distance of 130.04 feet;
thence North 89°29'45" West, along a line being 255.00 feet Southerly of and parallel with said Northerly line of the Northeast 1/4 of Section 27, a distance of 220.07 feet;
thence North 00°59' 03"West, along a line being 250.00 feet Westerly of and parallel with said Easterly line of the Northeast 1/4 of Section 27, a distance of 225.08 feet;
thence South 89°29'45" East, along a line being 30.00 feet Southerly of and parallel with said Northerly line of the Northeast 1/4 of Section 27, a distance of 140.05 feet to the POINT OF BEGINNING,
County of Weld,
State of Colorado.
Cloverly Substation
All that part of the East Half of the Northeast Quarter (E/2 NE1/4) of Section 27, Township 6 North, Range 65 West of the 6th P.M., Weld County, Colorado, described as follows:
Commencing at the Northeast corner of Section 27;  thence N89°29'42"W,  along the North line of the Northeast Quarter (NE/4), a distance of 410.02 feet; thence S0°59"04"E, a distance of 30 feet to a point on the South right-of-way line of Weld County Road 66 as now established and the Point of Beginning of the tract of land herein described; thence continuing S0°59"04"E, a distance of 699.99 feet; thence S89°29'32"E, 

SCHEDULE C-2

a distance of 380.00 feet to a point on the West right-of-way line of Weld County Road 45; thence along said West right-of-way  line, N0°59'00"W, a distance  of 474.93 feet to the Southeast corner of a tract of land recorded in Reception No. 3772221; thence along the South line of said recorded Reception No. 3772221, N89°29'42"W, a distance of 220.07  feet to the Southwest  corner of said recorded Reception No. 3772221; thence along the West line of said recorded Reception No. 3772221, N0°59'00"W, a distance of 225.08 feet to the Northwest corner of said recorded Reception No. 3772221, being also a point on the South right-of-way  line of Weld County Road 66, as now established; thence along said South right-of-way line, N89°29'42"W, a distance of 159.94 feet to the Point of Beginning,
County of Weld,
State of Colorado.
Containing 216,395 square feet or 4.968 acres, more or less.
The basis of bearings for this description is the North line of Section 27, Township 6 North, Range 65 West of the 6th P.M. as bearing N89°29'42"W.

SCHEDULE C-3Exhibit

Exhibit 10.1

EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made and entered into effective the 1st day of July, 2016, the (“Effective Date”) by and between SEITEL, INC., a Delaware corporation (together with its successors and assigns, the “Company”), and KEVIN P. CALLAGHAN (the “Executive”).
W I T N E S S E T H
WHEREAS, the Executive was employed by the Company immediately prior to the Effective Date as the Chief Operating Officer of the Company pursuant to that certain First Amended and Restated Employment Agreement by and between the Company and the Executive, dated March 24, 2005, as amended and the Employment Agreement by and between the Company and the Executive, dated January 30, 2007, as amended, (collectively, the “Prior Employment Agreements”),
WHEREAS, the Company desires to terminate the Prior Employment Agreements and continue to employ the Executive in a changed capacity and to enter into a new agreement embodying the terms of such new employment (this “Agreement”) and the Executive desires to resign his position as Chief Operating Officer and enter into this Agreement to accept such new and changed employment, subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive (individually a “Party” and together the “Parties”) agree as follows:
		
	1.
	Definitions

		
	a.
	“Affiliate” of a specified Person or entity shall mean a Person or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Person or entity specified.  For the purposes of the term “Affiliate,” control with respect to a Person, means the possession, directly or indirectly, of the power to (i) vote 10% or more of the securities having ordinary voting power for the election of directors (or comparable positions of such Person) or (ii) direct or cause the direction of the management and policies of such Person, whether through voting of securities, by contract, or otherwise, and the terms controlling and controlled have meanings correlative to the foregoing.

		
	b.
	“Base Salary” shall mean the annualized salary provided for in Section 4 below.

		
	c.
	“Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 under the Securities Exchange Act of 1934 and any successor to such Rule.

		
	d.
	“Board” shall mean the Board of Directors of the Company.

		
	e.
	“Cause” shall mean:

		
	i.
	willful misconduct or gross negligence by the Executive in the performance of his duties under this Agreement;

		
	ii.
	breach of this Agreement by the Executive, which, if curable, is not substantially cured to the satisfaction of the Company determined by the Company in its sole discretion within ten (10) days after Executive’s receipt of written notice from the Company of such breach;

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	iii.
	failure by the Executive to perform his duties, if not cured to the satisfaction of the Company determined by the Company within ten (10) days after Executive’s receipt of written notice from the Company of such breach, other than a failure resulting from Executive’s incapacity due to Disability;

		
	iv.
	a material violation by the Executive of the Company’s Code of Business Conduct or the Company’s policies or procedures; or

		
	v.
	conviction of the Executive of, or a plea of nolo contendere to, a felony, or his engagement in fraud or other willful misconduct which is injurious to the business or reputation of the Company.

		
	f.
	“Change in Control” means the occurrence of any of the following events:

		
	i.
	any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Existing Stockholders at February 14, 2007, is or becomes the Beneficial Owner of Voting Stock representing more than 50% of the voting power of the total outstanding Voting Stock of the Company;

		
	ii.
	during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (together with any new directors whose election to such Board or whose nomination for election by the stockholders of the Company was approved by a vote of the majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of the Company;

		
	iii.
	(a) all or substantially all of the assets of the Company and its subsidiaries taken as a whole are sold or otherwise transferred to any Person other than a wholly-owned subsidiary of the Parent or one or more Existing Stockholders at February 14, 2007 or (b) the Company consolidates or merges with or into another Person or any Person consolidates or merges with or into the Company, in either case under this clause (iii)(b), in one transaction or a series of related transactions in which immediately after the consummation thereof Person beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Company immediately prior to such consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, Voting Stock representing a majority of the total voting power of the Voting Stock of the Company or the surviving or transferee Person; or

		
	iv.
	the Company shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the stockholders of the Company.

For purposes of this definition, (i) a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement and (ii) any holding company whose only significant asset is equity interests of the Company shall not itself be considered a “person” or “group” for purposes of clause (i) or (ii) above.
		
	g.
	“Commencement Date” shall mean July 1, 2016.

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	h.
	“Date of Termination” shall mean:

		
	i.
	if the Executive’s employment is terminated by the Company, the date the Company informs the Executive that his employment is so terminated;

		
	ii.
	if the Executive voluntarily resigns his employment, the date the Company receives notice from the Executive that Executive is terminating his employment;

		
	iii.
	if the Executive’s employment is terminated by reason of death, the date of death; or,

		
	iv.
	if the Executive’s employment is terminated for any reason (voluntarily or involuntarily) after a Change in Control other than for Cause, the applicable of the date the Company informs the Executive he is terminated or the date the Executive provides notice to the Company of his termination.

		
	i.
	“Disability” shall mean the Executive’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities for a period of ninety (90) days during any twelve-month period as determined by the Company.  The Executive agrees to submit to any examination that is necessary for a determination of Disability and agrees to provide any information necessary for a determination of Disability, including any information that is protected by the Health Insurance Portability and Accountability Act.

		
	j.
	“Existing Stockholders at February 14, 2007” means any of (a) Parent, ValueAct Capital Master Fund, L.P., ValueAct Capital Partners, L.P., ValueAct Capital Partners II, L.P., ValueAct Capital International, Ltd. and its successor ValueAct Capital International I, L.P., ValueAct Capital International II, L.P., VA Partners, LLC, ValueAct Capital Management, LLC or any of their respective Affiliates (collectively, the “ValueAct Entities”), (b) any present or former managing director, director, general partner, member, limited partner, officer, stockholder or employee of any ValueAct Entity, (c) any present or former officers and directors of the Company, and (d) any (x) spouse, lineal descendant (in each case, natural or adopted), siblings, or ancestors of any Person, who is an individual, in clause (b) and (c) above, and (y) any estate or trust, the beneficiaries of which, or corporation, partnership, limited liability corporation or other entity, the stockholders, partners, members, owners or Persons holding a controlling interest of which, consist of one or more Persons referred to in the immediately preceding clause (x).

		
	k.
	“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.

		
	l.
	“Subsidiary” means any corporation (other than the Company), partnership, joint venture or other business entity of which 50% of more of the outstanding voting power is owned, directly or indirectly, by the Company.

		
	m.
	“Term” shall have the meaning ascribed to such term in Section 2 below.

		
	n.
	“Voting Stock” with respect to any Person, means securities of any class of equity interests of such Person entitling the holders thereof (whether at all times or for only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.

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	2.
	Term of Employment

The term of the Executive’s employment hereunder (the “Term”) shall begin on the Commencement Date (July 1, 2016) and end at the close of business on the day before the second anniversary of the Commencement Date, or June 30, 2018 (“Termination Date”).  Notwithstanding the foregoing, in the event unforeseen circumstances arise such that Company would like to shorten the Term, it is agreed that the Company will provide the other party with at least thirty (30) days written notice of its intent to terminate this Agreement before the end of the Term.  The Term shall end on the date on which the Executive’s employment is terminated by either Party in accordance with the provisions herein. The period from the Commencement Date through the Date of Termination shall be the “Employment Period.”
		
	3.
	Position; Duties and Responsibilities; Non-competition; Directorship; Resignation

During the Term, the Executive shall be employed as a Senior Advisor to the CEO and shall perform other duties and responsibilities as reasonably determined by the CEO consistent with the duties and responsibilities normally associated with such position in the Company and shall make himself reasonably available to the CEO, Centerbridge Partners, L.P., and ValueAct, including the opportunity to attend at the Company’s office, and to attend meetings at the request of the CEO.  The Executive, in carrying out his duties under this Agreement, shall report to the CEO of the Company.  The Executive shall devote a reasonable amount of his business time, energy and best efforts to the business and affairs of the Company.  Anything herein to the contrary notwithstanding, nothing shall preclude the Executive from (i) subject to the reasonable approval of the Board, serving on the boards of directors of trade associations and/or charitable organizations, (ii) engaging in charitable activities and community  affairs and (iii) managing his personal investments and affairs, provided that the activities described in the preceding clauses (i) through (iii) do not interfere with the proper performance of his duties and responsibilities for the Company or violate any term of this Agreement, including but not limited to, Section 10.
Non-compete.  During the Term, the Executive shall not (1) compete or engage in any business, directly or indirectly, with Company or its Affiliates in the seismic data or similar business of the Company or of its Affiliates in any geographical area where the Company or its Affiliates have or have solicited any business, or at any time during the two (2) years preceding the Date of Termination, had any business (the “Area of No-Compete”) as an individual, owner, investor, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant, or in any relationship or capacity, (2) without limiting the foregoing, shall not solicit or negotiate, or manage, supervise or direct others in the solicitation or negotiation of, any contract or agreement that constitutes or would constitute engaging in competition with the seismic data business in the portions of the Area of No-Compete, or (3) solicit, take away, attempt to solicit or take away, or do any act the foreseeable consequences of which would lead to the solicitation or taking away of any marketing prospects, projects or customers of Company’s business in the Area of No-Compete, even if this Agreement is terminated by either party prior to the expiration of the Term, being June 30, 2018.
Directorship, Resignation. During the Term of this Agreement, Executive shall continue to serve without compensation, at the will of the Board of Directors of the Company, as a Director on the Board of Directors of the Company and of Seitel Holdings, Inc. through June 30, 2018.  Notwithstanding any other provision of this Agreement, prior to acceptance of this Agreement upon the termination of the Prior Agreements unless otherwise requested by the Board, Executive shall immediately resign as a Director from the Board of Directors from all boards of directors of any Affiliate and directly or indirectly owned subsidiary of the Company of which he may be a member, and as a trustee of, or fiduciary to, any employee benefit plans of the Company or any Affiliate. The Executive shall also resign as an Officer 

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from any Affiliate and directly or indirectly owned subsidiary of the Company.  The Executive hereby agrees to execute any and all documentation of such resignations upon request by the Company, but he shall be treated for all purposes as having so resigned upon termination of his Prior Employment Agreement, regardless of when or whether he executes any such documentation.
		
	4.
	Base Salary

During the Term, the Executive shall be paid an annual Base Salary of $256,000 payable in accordance with the regular payroll practices of the Company.
		
	5.
	Bonus

The Executive will not be entitled to receive any Cash Bonus that may be determined under the annual incentive plan or program of the Company.
		
	6.
	Stock Options

The Executive will be entitled to receive Stock Options which he was entitled to receive under Prior Employment Agreements.
The Executive will not be entitled to receive any new shares or options to purchase effective as of the Commencement Date. 
		
	7.
	Employee Benefit Programs

During the Term, the Executive shall be entitled to participate in all employee savings and welfare benefit plans and other employee programs made available to the Company’s senior-level executives, as such plans or programs may be amended and as may be in effect from time to time, including, without limitation, savings and other retirement plans or programs, medical, dental, hospitalization, short-term and long-term disability and life insurance plans, accidental death and dismemberment protection, travel accident insurance. Notwithstanding the foregoing, nothing contained herein shall require the Company to establish or continue any particular employee benefit plan or program.
		
	8.
	Reimbursement of Business and Other Expenses; Perquisites; Vacation

		
	a.
	During the Term, the Executive is authorized to incur reasonable and necessary business expenses in carrying out his duties and responsibilities under this Agreement and the Company shall promptly reimburse him for such expenses incurred in connection with carrying out the business of the Company, subject to documentation in accordance with the Company’s policy.

		
	b.
	The Executive shall be entitled to five (5) weeks paid vacation per calendar year.

		
	9.
	Benefits Upon Termination of Employment

		
	a.
	Termination upon Death.  In the event the Executive’s employment is terminated upon death, the Executive (or his estate or legal representative, as the case may be) shall be entitled to:

		
	i.
	an amount equal to the Base Salary that would have been payable through the end of the Term to be paid in a lump sum as soon as administratively feasible; 

		
	ii.
	any Equity Awards shall immediately vest and become exercisable;

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	iii.
	any amounts earned, accrued or owing to the Executive but not yet paid under Section 8 above; and

		
	iv.
	any other payment and benefit in accordance with applicable plans or programs of the Company.

		
	b.
	Termination Upon Disability.  In the event Executive is terminated on account of Disability, the Executive (or his estate or legal representative), subject to Section 9(g), shall be entitled to receive:

		
	i.
	an amount equal to the Base Salary that would have been payable through the end of the Term reduced by any disability insurance payments payable to Executive from any policy, plan or program sponsored by the Company or its Affiliates to be paid in a lump sum as soon as administratively feasible after the Date of Termination but in no event later than three months after the Date of Termination;

		
	ii.
	any Equity Awards shall immediately vest and become exercisable;

		
	iii.
	any amounts earned, accrued or owing to the Executive but not yet paid under Section 8 above; and

		
	iv.
	except as provided in 9(g) below, any other payment and benefit in accordance with applicable plans or programs of the Company.

		
	c.
	Termination by the Company for Cause.

		
	i.
	In the event the Company terminates the Executive’s employment for Cause, the Executive shall be entitled to:

		
	1.
	Base Salary through the Date of Termination;

		
	2.
	any other payment and benefit in accordance with the applicable plans or programs of the Company.

		
	ii.
	In the event the Company terminates the Executive’s employment for Cause, prior to the end of the Term of this Agreement, the Executive and his eligible dependent’s participation in Company’s group medical and dental benefits plans in which he and his eligible dependents were participating immediately prior to the Date of Termination, shall cease and the Executive and his eligible dependents, if applicable, may elect group continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).

		
	d.
	Voluntary Resignation by the Executive.

		
	i.
	In the event the Executive voluntarily resigns, the Executive shall be entitled to

		
	1.
	Base salary that would have been payable through the Termination Date;

		
	2.
	any amounts earned, accrued or owing to the Executive but not yet paid under Section 8 above.

		
	ii.
	In the event the Executive elects to voluntarily terminate his employment with the Company prior to the end of the Term of this Agreement, the Executive and his eligible dependent’s participation in Company’s group medical and dental benefits plans in which 

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he and his eligible dependents were participating immediately prior to the Date of Termination, shall cease and the Executive and his eligible dependents, if applicable, may elect group continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).
		
	e.
	Coordination.  If any amount is payable to Executive under any one subsection of Section 9(a) through (d), no amounts shall be payable under any other subsection of this Section 9; for example, if any amount is payable to Executive under Section 9(d), no amounts shall be payable pursuant to Sections 9(a) - (c).

		
	f.
	Exclusivity of Benefits; Release of Claims.  Subject to Section 13, any payments provided pursuant to this Section 9 shall be in lieu of any salary continuation arrangements or any other severance-type payments under any other severance program of the Company or its Affiliates. In order to be entitled to the payments, rights and other entitlements in this Section 9, the Executive shall be required to execute and deliver a general release of claims in favor of the Company and its Affiliates and their officers, directors and employees and their successors and assigns including, but not limited to, any claims under the Age Discrimination in Employment Act, in the form and subject to such terms as provided  to him by the Company and Executive must execute the release and not revoke such general release within the applicable time periods therein.

		
	g.
	No Mitigation.  Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment and there shall be no offset against amounts due to him on account of any remuneration or benefits provided by any subsequent employment he may obtain, except as expressly provided herein with respect to eligibility for medical benefits with a subsequent employer.

		
	10.
	Confidentiality

		
	a.
	Confidentiality.

		
	i.
	Concurrent herewith and during the Employment Period, the Executive will create, receive and/or have access to trade secrets or proprietary or confidential information of the Company and its Affiliates consisting of written, oral, and visual material including, but not limited to, client lists, corporation and personal business contacts and relationships, corporation  and personal business opportunities, memoranda, computer disks or files, rolodex cards or other lists of names, addresses or telephone numbers, financial information, projects, prospects, potential projects and prospects (including ideas and concepts for potential prospects) projects and prospects in development, business strategies, contracts, releases, and other documents, materials or writings that belong to the Company or its Affiliates including  those which are prepared or created by Executive or come into the possession of Executive by any means or manner and which relate directly or indirectly to one or more of the parties which compromise Company or its Affiliates or any of them (all of the above collectively referred to herein as the “Confidential Information” or “Trade Secrets”).

		
	ii.
	The Confidential Information is, and at all times shall be and remain, private and confidential and the sole and exclusive property of, and owned and controlled by, the Company regardless whether said Confidential Information is in tangible or intangible form.

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	iii.
	Except to the extent required in connection with the performance of his duties for the conduction of the business of the Company, Executive shall not make copies of any Confidential Information, nor shall Executive remove any such Confidential Information from Company’s office location without the prior express written consent of Company. Any and all Confidential Information and any and all other property of Company that is in the possession or control of Executive shall be returned to Company forthwith upon the termination of Executive’s employment by Company.

		
	iv.
	Executive shall not, directly or indirectly, verbally or otherwise, either during the Employment Period or after the Employment  Period, provide any Person, firm or entity with any of the Confidential Information or cause, or permit, the same to be published, disseminated or disclosed (herein collectively “Disclosure”) to any Person, firm or entity whatsoever including, but not limited to, Company’s business associates or competitors (herein collectively “Third Parties”) and shall take any and all action possible to present such Disclosure to any Third Parties except for the sole purpose to conduct the Company’s business.

		
	v.
	Except as authorized by the foregoing for the conduction of the Company’s business, Executive is aware that any Disclosure of Confidential Information by Executive to Third Parties will be, and is, a breach of Executive’s employment, a breach of trust and confidence, a breach of fiduciary duty, invasion of privacy, a misappropriation of Company’s trade secrets and/or exclusive property rights, and may constitute fraud and deceit.

		
	vi.
	Except as authorized by the foregoing for the conduction of the Company’s business, Executive is aware that Disclosure of any of the Confidential Information to Third Parties could cause Company  to suffer major adverse economic consequences due to the fact that such disclosure could result in (a) the diversion of Company’s business opportunities, and (b) the dilution or diminution in value of Company’s business opportunities and (c) other adverse consequences in addition to those set forth above.

		
	vii.
	In the event that Executive is compelled by subpoena or other similar compulsory means to testify or provide evidence in a manner that constitutes engaging in a prohibited Disclosure of Confidential Information, it shall be presumed that no violation of this Agreement has occurred with respect to that compulsory prohibited Disclosure if, immediately upon first learning that such prohibited Disclosure may be compelled, Executive notifies Company of all facts relative thereto and makes every effort to assert Company’s trade secret privilege and all other privileges and rights of Company to keep the Confidential  Information, including the prohibited Disclosure, secret and confidential.  However, under no circumstances shall Executive volunteer to engage in any such prohibited communication or Disclosure.

		
	viii.
	The Executive hereby sells, assigns and transfers to the Company all of his right, title and interest in and to all inventions, discoveries, improvements and copyrightable subject matter (the “rights”) which during the course of his employment are made or conceived by him, alone or with others, and which are within or arise out of any general field of the Company’s business or arise out of any work he performs, or information he receives regarding the business of the Company, while employed by the Company.  The Executive shall fully disclose to the Company as promptly as available all information known or possessed by him concerning the rights referred to in the preceding sentence, and upon 

- 8 -

request by the Company and without any further remuneration in any form to him by the Company, but at the expense of the Company, execute all applications for patents and for copyright registration, assignments thereof and other instruments and do all things which the Company may deem necessary to vest and maintain in it the entire right, title and interest in and to all such rights.
		
	b.
	Return of Materials.  Promptly upon the termination of Executive’s employment for any reason and in any event within five days after request by the Company, Executive shall return all Confidential Information and all copies thereof to the Company, and Executive shall destroy all extracts, memoranda, notes and any other material prepared by Executive based upon Confidential Information.

		
	11.
	Cooperation

Following the Date of Termination, upon reasonable request by the Company, the Executive shall cooperate with the Company with respect to any litigation or other dispute relating to any matter in which he was involved or had knowledge during his employment with the Company.  The Company shall reimburse the Executive for all reasonable and necessary out-of-pocket costs, such as travel, hotel and meal expenses, incurred by the Executive in providing any cooperation pursuant to this Section 11.
		
	12.
	Assignability; Binding Nature

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case of the Executive) and assigns. For purposes of this Section 12, a successor or assign of the Company shall include any type of successor or assign of the Company upon a Change in Control and Executive’s consent to the assignment shall not be required. No rights or obligations, benefits or payments of the Executive under this Agreement may be assigned or transferred by the Executive other than his rights to compensation and benefits, which may be transferred only by will, operation of law or in accordance with Section 19 below.
		
	13.
	Entire Agreement

This Agreement contains the entire understanding and agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements (including, but not limited to the Prior Employment Agreements, except for entitlements of Stock Awards and Options granted under Prior Employment Agreements or other equity award documents), understandings, discussions, negotiations and undertakings, whether written or oral, between the Parties with respect thereto. In the event of any inconsistency between any provision of this Agreement and any other provision of any other plan, policy or program of, or other agreement with, the Company, the provisions of this Agreement shall control.
		
	14.
	Amendment or Waiver

No provision in this Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and an authorized officer of the Company. No waiver by either Party of any breach by the other Party of any condition or provision contained in this Agreement to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by the Party against whom it is being enforced (either the Executive or an authorized officer of the Company, as the case may be).

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	15.
	Severability

In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.
		
	16.
	Survivorship

The respective rights and obligations of the Parties hereunder, including, without limitation, Section 9 (termination of employment), Section 10 (confidentiality), Section 11 (cooperation), and Section 19 (resolution of disputes), shall survive any termination of the Executive’s employment to the extent necessary to the intended preservation of such rights and obligations.
		
	17.
	Beneficiaries/References

The Executive shall be entitled, to the extent permitted under applicable plans, agreements or law, to select and change a beneficiary or beneficiaries to receive any benefit payable hereunder following the Executive’s death by giving the Company written notice thereof. In the event of the Executive’s death or a judicial determination of his incompetence, reference in this Agreement to the Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative.
		
	18.
	Governing Law and Jurisdiction

This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Texas, County of Harris, without reference to principles of conflicts of law, except as preempted by applicable federal law.
		
	19.
	Resolution of Disputes

		
	a.
	Arbitration.  All disputes and controversies of every kind and nature between any parties hereto arising out of or in connection with this Agreement or the transactions described herein as to the construction, validity, interpretation or meaning, performance, non-performance, enforcement, operation or breach, shall be submitted to arbitration pursuant to the following procedures:

		
	i.
	After a dispute or controversy arises, any party may, in a written notice delivered to the other parties to the dispute, demand such arbitration.  Such notice shall designate the name of the arbitrator (who shall be an impartial person) appointed by such party demanding arbitration, together with a statement of the matter in controversy.

		
	ii.
	Within thirty (30) days after receipt of such demand, the other parties shall, in a written notice delivered to the first party, name such parties’ arbitrator (who shall be an impartial person). If such parties fail to name an arbitrator, then the second arbitrator shall be named by the American Arbitration Association (the “AAA”).  The two arbitrators so selected shall name a third arbitrator (who shall be an impartial person) within thirty (30) days, or in lieu of such agreement on a third arbitrator by the two arbitrators so appointed, the third arbitrator shall be appointed by the AAA.  If any arbitrator appointed hereunder shall die, resign, refuse or become unable to act before an arbitration decision is rendered, then the vacancy shall be filled by the method set forth in this Section for the original appointment of such arbitrator.

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	iii.
	Each party shall bear its own arbitration costs and expenses. The arbitration hearing shall be held in Houston, Texas at a location designated by a majority of the arbitrators.  The Commercial Arbitration Rules of the American Arbitration Association shall be incorporated by reference at such hearing and the substantive laws of the State of Texas (excluding conflict of laws provisions) shall apply.

		
	iv.
	The arbitration hearing shall be concluded within ten (10) days unless otherwise ordered by the arbitrators and the written award thereon shall be made within fifteen (15) days after the close of submission of evidence. An award rendered by a majority of the arbitrators appointed pursuant to this Agreement shall be final and binding on all parties to the proceeding, shall resolve the question of costs of the arbitrators and all related matters, and judgment on such award may be entered and enforced by either party in any court of competent jurisdiction.

		
	v.
	Except as set forth in Section 19(b) and (c), the parties stipulate that the provisions of this Section shall be a complete defense to any suit, action or proceeding instituted in any federal, state or local court or before any administrative tribunal with respect to any controversy or dispute arising out of this Agreement or the transactions described herein.  The arbitration provisions hereof shall, with respect to such controversy or dispute, survive the termination or expiration of this Agreement.

No party to an arbitration may disclose the existence or results of any arbitration hereunder without the prior written consent of the other parties; nor will any party to an arbitration disclose to any third party any confidential information disclosed by any other party to an arbitration in the course of an arbitration hereunder without the prior written consent of such other party.
		
	b.
	Emergency Relief. Notwithstanding anything in this Section 19(a) to the contrary, any party may seek from a court any provisional remedy that may be necessary to protect any rights or property of such party pending the establishment of the arbitral tribunal or its determination of the merits of the controversy or to enforce a party’s rights under this Section 19.

		
	c.
	Emergency or Extraordinary Relief Related to Section 10. Notwithstanding the foregoing, the Company shall have right to seek emergency or extraordinary relief, including but not limited to, a temporary restraining order, injunctive relief or any relief described in Section 10, for Executive’s breach or threatened breach of any provision in Section 10 of this Agreement.

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	20.
	Notices

Any notice given to a Party shall be in writing and shall be deemed to have been given (i) when delivered personally, (ii) three days after being sent by certified or registered mail, postage prepaid, return receipt requested or (iii) two days after being sent by overnight courier (provided that a written acknowledgement of receipt is obtained by the overnight courier), with any such notice duly addressed to the Party concerned at the address indicated below or to such other address as such Party may subsequently give such notice of in accordance with this Section 20:    
	
		
	If to the Company:
	Seitel, Inc.

	 
	10811 S. Westview Circle, Suite 100, Bldg. C

	 
	Houston, Texas 77043

	 
	Attention: General Counsel

	 
	 

	with a required copy to:
	ValueAct Capital Master Fund, L.P.

	 
	One Letterman Drive

	 
	Building D, 4th Floor

	 
	San Francisco, Ca 94129

	 
	Attention: Allison Bennington, General Counsel

	 
	 

	with a required copy to:
	Centerbridge Capital Partners II, L.P.

	 
	375 Park Avenue, 12th Floor

	 
	New York, NY  10152

	 
	Attention:  Kyle Cruz

	 
	 

	If to the Executive:
	Kevin P. Callaghan

	 
	5603 Peninsula Park

	 
	Houston, TX 77041

		
	21.
	Withholding

The Company may withhold or deduct from any and all amounts payable under this Agreement (a) such federal, state, local and other taxes or deductions as may be required to be withheld pursuant to applicable law or regulation, (b) all other normal employee deductions made with respect to the employee plans and programs in which Executive participates.

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	22.
	General Assets

All payments to Executive provided for under this Agreement shall be paid in cash from the Company and no special or separate funds shall be established and no segregation of assets shall be made to assure payment.  To the extent that any Person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.
		
	23.
	Executive Acknowledgements

Executive acknowledges that (a) he is knowledgeable and sophisticated as to business matters, including the subject matters of this Agreement, (b) he has read this Agreement, (c) he has been advised by the Company to consult an independent attorney, and (d) he understands the terms and conditions of this Agreement. Executive represents that he is free to enter into this Agreement and that he is not subject to another employment agreement or covenant not to compete that would conflict with this Agreement.
		
	24.
	Headings

The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
		
	25.
	Certain Interpretive Matters

The definitions contained in this Agreement are applicable to the singular as well as plural form of such terms and to the masculine as well as to the feminine and neuter genders of such term.
		
	26.
	Code Section 409A

The parties intend that this Agreement be drafted and administered in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), including, but not limited to, any future amendments to Code Section 409A, and any other Internal Revenue Service or other governmental rulings or interpretations (“IRS Guidance”) issued pursuant to Code Section 409A so as not to subject the Executive to payment of interest or any additional tax under Code Section 409A.  For purposes of Code Section 409A, each payment of the severance under Section 9 shall be treated a separate payment.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” (within the meaning of Code Section 409A and IRS Guidance).  Any amounts eligible for reimbursement under this Agreement during a taxable year may not affect expenses eligible for reimbursement in any other taxable year, and any right to reimbursement under this Agreement is not subject to liquidation or exchange for another benefit.
[signature page follows]

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	27.
	Counterparts

This Agreement may be executed in two or more counterparts.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of June 9, 2016.

SEITEL, INC.

	
			
	By:
	/s/ Robert D. Monson
	 

	 
	 
	 

	Print Name:
	Robert D. Monson
	 

	 
	 
	 

	Title:
	President and Chief Executive Officer
	 

EXECUTIVE

	
			
	By:
	/s/ Kevin P. Callaghan
	 

	 
	 
	 

	Print Name:
	Kevin P. Callaghan
	 

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