Document:

<PAGE>
                                                                    Exhibit 10.5

                              TORCH OFFSHORE, INC.
                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of August,
2003 (the "Effective Date"), and is entered into between Torch Offshore, Inc., a
Delaware corporation (the "Corporation"), and Patrice Chemin, a person of the
full age of majority (the "Employee").

     1.   Employment and Duties.

          (a) The Corporation agrees to employ the Employee as Vice President,
     International Business Development, as of the effective date of this
     Agreement for the period set forth in paragraph 1(c) below, unless
     employment is terminated sooner as provided herein.

          (b) The Employee accepts employment and agrees to devote his full time
     and attention to the performance of his duties as determined, from time to
     time, by the Chief Executive Officer or the Board of Directors of the
     Corporation.

          (c) The Employee shall commence his duties as of September 22, 2003
     (or other agreeable date) (the "Hire Date"), and shall continue to serve in
     the employ of the Corporation until September 22, 2005 (the "Initial
     Term"), except as provided herein. Upon the expiration of the Initial Term,
     this Agreement shall be automatically renewed for successive one-year terms
     unless terminated by either party at least sixty (60) days prior to the end
     of the then current term (each successive year is the "Renewal Term").

          (d) Compensation. The Corporation shall pay to the Employee the
     following amounts, subject to the terms and conditions set forth in this
     Agreement:

          (e) An annual salary of $200,000.00, such amount shall be prorated and
     paid in accordance with the Corporation's customary payroll practices.

          (f) The Employee shall be eligible to participate in the Corporation's
     Incentive Bonus Plan, as determined by the Compensation Committee of the
     Board of Directors of the Corporation, in its sole discretion, during the
     fiscal year commencing January 1, 2004 and ending December 31, 2004, based
     on the financial results of such fiscal year and subject to the terms and
     conditions of such bonus plan. The Employee's eligibility to participate in
     such bonus plan during subsequent fiscal year time periods shall be
     determined by the Compensation Committee of the Board of Directors of the
     Corporation, in its sole discretion.

          (g) If the Corporation terminates the employment of the Employee for
     any reason other than Cause (as defined herein), then the Corporation shall
     pay to the Employee severance payments of six (6) month's of salary at his
     then current rate, to be paid in accordance with the Corporation's standard
     payroll practices.

          Any amount(s) payable under this Agreement shall be subject to the
withholding of such income and employment taxes as may be required by law to be
withheld.

     2.   Payment or Reimbursement of Expenses. Subject to compliance by the
Employee with such policies regarding expenses and expense reimbursements as may
be adopted, from time to time, by the Corporation, the Employee shall be paid or
reimbursed for reasonable expenses actually incurred in

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connection with the performance of his duties hereunder and in the furtherance
of the business and affairs of the Corporation. Any such reimbursement shall be
made within a reasonable period after presentation by the Employee of an
itemized account of such expenses, accompanied by appropriate receipts
satisfactory to the Corporation. In no event shall any expense be paid or
reimbursed, unless properly accounted for to the extent necessary to
substantiate the Corporation's Federal income tax deduction under the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder or any similar state or federal law or
regulation.

     3.   Relocation Expenses. The Employee shall be paid a one-time lump sum
of $35,000.00 to cover expenses incurred in connection with the Employee's
relocation. The Employee shall be entitled to a monthly miscellaneous living
allowance of $1,500.00 (the "Living Allowance") during the three (3)-month
period immediately following the Hire Date pursuant to the Company's normal
payroll practices.

     4.   Additional Benefits.

          (a) The Employee shall be eligible to participate in such qualified
     employee benefit plans and other welfare or fringe benefits as may be
     maintained by the Corporation for the benefit of employees, from time to
     time. Such participation shall be determined in accordance with the terms
     and conditions of each such separate plan or program.

          (b) The Employee expressly acknowledges and agrees that,
     notwithstanding any provision of this Agreement to the contrary, the
     Employee shall not be eligible to receive from the Corporation any form of
     severance pay or other form of termination benefit, except as expressly
     provided herein (other than coverage under COBRA or other form of legally
     mandated benefit available after the termination of employment).

          (c) The Employee shall be entitled to twenty (20) business days of
     paid vacation during the Initial Term and each Renewal Term thereafter, if
     any.

          (d) The Employee shall be entitled to receive a monthly car allowance
     of $500.00 for use of an automobile for business purposes and shall be
     reimbursed for business mileage (non-commuting and non-personal) at $0.11
     per mile, subject to approval by the Chief Financial Officer of the
     Corporation. The Employee shall document any such business mileage in a log
     book in the form and manner established by the Chief Financial Officer of
     the Corporation and shall use the data in such log book to seek
     reimbursement for business mileage.

          (e) The Employee shall be granted an award of 15,000 option shares
     pursuant to the Corporation's 2001 Long Term Incentive Plan at a strike
     price to be determined on the Hire Date.

     5.   Termination.

          (a) Either party may terminate this Agreement by providing the other
     party with sixty (60) days advance written notice.

          (b) If the Employee dies or becomes totally disabled (as determined by
     the Board of Directors or the Chief Executive Officer of the Corporation),
     this Agreement and the Employee's rights hereunder shall automatically
     terminate as of the date of such death or disability.

          (c) The Corporation may terminate this Agreement and the Employee's
     rights hereunder at any time for Cause, which shall mean (i) any willful
     breach of duty by the Employee in the course of the performance of his
     duties hereunder or for the habitual neglect by the Employee of such
     duties, each as determined by the Board of Directors of the Corporation,
     which

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     continues after written notice to the Employee; (ii) the conviction of any
     felony or plea of "no contest" to any charge that the Employee has
     committed any felony; (iii) arrest or formal charge with having committed
     any felony which involves embezzlement, theft, bribery, or other
     business-related crimes or any aggravated crime against a person; (iv)
     arrest or otherwise formal charge with a felony or any crime involving
     moral turpitude or any other criminal activity or unethical conduct which,
     in the opinion of the Board of Directors of the Corporation, would
     materially impair the Employee's ability to perform his duties hereunder or
     would impair the business reputation of the Corporation; (v) failure or
     refusal to comply with the policies, standards and regulations of the
     Corporation after written notice to the Employee; or (vi) breach of the
     provisions of paragraph 8 hereof.

     6.   Noncompetition and Nonsolicitation. For a period of six (6) months
following any termination of the Employee's employment by the Corporation, the
Employee agrees that, with respect to (a) the parishes within the State of
Louisiana set forth on Schedule A attached hereto, (b) the counties within the
States of Texas, Alabama, Florida, and Mississippi set forth on Schedule A
attached hereto, including the territorial waters of the United States located
offshore of such areas, (c) France, (d) Italy, (e) Athens, (f) United Arab
Emirates and (g) Norway, each of which the Employee stipulates and agrees that
the Corporation carries on or intends to carry on a like business, the Employee
shall not, directly or indirectly, for his own benefit or to the detriment of
the Corporation or its subsidiaries or affiliates:

          (a) Own, manage, operate, control, or participate in the ownership,
     management, operation, or control of a business (however structured) that
     carries on or engages in any manner (excluding stock in a publicly held
     corporation), in the Pipelay and Subsea Construction Business. For this
     purpose, the term "Pipelay and Subsea Construction Business" shall refer to
     the installation, laying, and/or burying of transmission lines, trunk
     lines, and flowlines, laying of all rigid, flexible, reeled, or coiled
     tubing and installing, laying, and/or burying of control, power umbilicals
     and subsea communication or power cables, and pipeline tie-ins, pipeline
     burial, riser installation and survey, inspection, maintenance, and repair
     services in connection with oil and gas pipelines;

          (b) Perform any services similar to the primary services he performed
     while employed by the Corporation or any of its subsidiaries or affiliates
     for any person, partnership, corporation, association, group, or other
     entity engaged in the Pipelay and Subsea Construction Business (as defined
     above), whether as an employee, independent contractor, or otherwise; or

          (c) Directly or indirectly, (i) induce, entice, recruit or solicit or
     attempt to induce, entice, recruit or solicit any employee of the
     Corporation or any of its subsidiaries or affiliates for any purpose or in
     any manner detrimental to the Corporation or its business or operations,
     (ii) employ any employee of the Corporation or any of its subsidiaries or
     affiliates or (iii) contact, communicate with, solicit or attempt to
     solicit the business of any customer or acquisition prospect of the
     Corporation or any of its subsidiaries or affiliates.

           The Employee acknowledges that these foregoing prohibitions, for
which he received consideration from the Corporation as provided in paragraph
2(c) hereof, are ancillary to otherwise enforceable provisions of this
Agreement. The Employee further acknowledges that he will derive significant
value from the Corporation's agreement in paragraph 8 hereof to provide the
Employee with that Confidential Information to enable the Employee to optimize
the performance of the Employee's duties to the Corporation or any of its
subsidiaries or affiliates. The Employee further acknowledges that his
fulfillment of the obligations contained in this Agreement, including, but not
limited to, the Employee's obligation neither to disclose nor to use the
Corporation's Confidential Information other than for the Corporation's
exclusive benefit and the Employee's obligations not to compete and not to

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solicit contained in this paragraph 7 above, are necessary to protect the
Corporation's Confidential Information and, consequently, to preserve the value
and goodwill of the Corporation.

     The Employee acknowledges that the time, geographic area and scope
limitations of the Employee's obligations under this paragraph 7 above are
reasonable and do not impose a greater restraint than is necessary to protect
the good will or other business interests of the Company, such as the
Corporation's need to protect its Confidential Information. The Employee further
acknowledges that he will not be precluded from gainful employment if the
Employee is obligated not to compete with the Corporation during the period and
within the geographic areas as described above.

     The parties hereto agree that each of the foregoing prohibitions in this
paragraph 7 is intended to constitute a separate restriction, one for each city,
county, parish, state and country in the restricted geographic area. In the
event that the prohibitions in this paragraph 7 are deemed to exceed the time,
geographic area or scope limitations permitted by the governing law, then such
provisions shall be reformed to the maximum time, geographic area or scope
limitations, as the case may be, then permitted by such law. Further, should any
such prohibition be declared invalid or unenforceable and unable to be reformed
as described above, such prohibition shall be deemed severable from and shall
not affect the remainder thereof.

     7.   Confidential Information.

          (a) The Corporation agrees that it will provide the Employee with
     Confidential Information, as defined below, that will enable the Employee
     to optimize the performance of the Employee's duties to the Corporation. In
     exchange, the Employee agrees to use such Confidential Information solely
     for the Corporation's benefit. The Corporation and the Employee agree and
     acknowledge that its provision of such Confidential Information is not
     contingent on the Employee's continued employment with the Corporation or
     any of its subsidiaries or affiliates. Notwithstanding the preceding
     sentence, upon the termination of the Employee's employment for any reason,
     the Corporation shall have no obligation to provide the Employee with its
     Confidential Information. "Confidential Information" means any proprietary
     information, technical data, trade secrets or know-how of the Corporation
     or any of its subsidiaries or affiliates, including, but not limited to,
     research, product plans, products services, customer lists and customers
     (including, but not limited to, customers of the Corporation on whom the
     Employee called or with whom the Employee became acquainted during the term
     of the Employee's employment), markets, software, developments, inventions,
     processes, formulas, technology, designs, drawings, engineering, hardware
     configuration information, marketing finances or other business information
     disclosed to the Employee by the Corporation either directly or indirectly
     in writing, orally or by drawings or observation of parts or equipment.
     Confidential Information does not include any of the foregoing items which
     has become publicly known and made generally available through no wrongful
     act of the Employee or of others who were under confidentiality obligations
     as to the item or items involved or improvements or new versions.

          (b) The Employee further agrees not to disclose, either while employed
     by the Corporation or any of its subsidiaries or affiliates or at any time
     thereafter, to any person not employed by the Corporation or not engaged by
     the Corporation to render services to the Corporation, without prior
     written authorization of the Corporation, any Confidential Information.
     This paragraph 8 shall not preclude the Employee from disclosure of
     Confidential Information required by law or court order. The Employee
     further agrees that, upon the expiration or termination of this Agreement
     for any reason, he will not take with him, without the prior written
     authorization of the Corporation, any document, magnetic or other storage
     media, or any other books, records, files, or confidential or proprietary
     information of the Corporation or any of its subsidiaries or affiliates.

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<PAGE>

          (c) Upon the expiration or termination of the term of this Agreement
     or upon the request of the Corporation or any subsidiary or affiliate, the
     Employee shall promptly deliver to the Corporation (and shall not keep in
     the Employee's possession) all Confidential Information, all written
     materials, records, and documents made by the Employee or in the possession
     of the Employee during or after the term of this Agreement concerning the
     business or affairs of the Corporation or any of its subsidiaries or
     affiliates, and any other items or property held by or for the Employee,
     but owned or used by the Corporation or such subsidiary or affiliate, as
     the case may be.

     8.   Notices. All notices, requests, demands, and other communications
provided for by this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person or mailed by United States certified
mail, return receipt required, postage prepaid, addressed as follows:

          If to the Employee:               If to the Corporation:

          Patrice Chemin                    Torch Offshore, Inc.
          __________________________        401 Whitney Avenue, Suite 400
          __________________________        Gretna, Louisiana  70056
          __________________________        Attention:  Lyle Stockstill, CEO

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

     9.   Governing Law. The provisions of this Agreement shall be construed in
accordance with the substantive local law of the State of Louisiana, without
consideration of the conflicts of law provisions thereof.

     10.   Successors. This Agreement shall be assignable by the Corporation,
with the prior written consent of the Employee. The Employee's obligation to
provide services hereunder, being personal to the Employee, may not be assigned
by the Employee.

     11.   Remedies. Each party acknowledges that the other party will have no
adequate remedy at law if the first party violates certain of the terms of this
Agreement, and that the other party shall have the right, to the extent
permitted by applicable law, in addition to any other rights or remedies it may
have, to obtain from any court of competent jurisdiction, injunctive relief to
restrain any breach or threatened breach hereof or otherwise to specifically
enforce the provisions hereof.

     12.   Waiver. No waiver of any obligation, right or remedy under this
Agreement shall be effective, unless such waiver is made in writing, specifying
the terms of this Agreement subject to waiver and executed by the party to be
charged with such waiver. A waiver by either party of any of his or its rights
or remedies hereunder on any occasion shall not be a bar to the exercise of the
same right or remedy on any subsequent occasion or of the exercise of any other
right or remedy at any time.

     13.   Integration and Amendments. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any prior agreement or understanding, whether
written or oral, relating to such subject matter. No modification or amendment
to this Agreement shall be effective or binding unless in writing, specifying
such modification or amendment, executed by both of the parties hereto.

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<PAGE>

     14.   Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the construction or interpretation of this
Agreement.

     15.   Severability. Should any section, provision, or portion of this
Agreement be declared invalid or unenforceable in any jurisdiction, then such
section, provision, or portion shall be deemed to be (a) severable from this
Agreement as to such jurisdiction (but not elsewhere) and shall not affect the
remainder hereof and (b) amended to the extent, and only to the extent,
necessary to permit such section, provision, or portion, as the case may be, to
be valid and enforceable in such jurisdiction (but not elsewhere).

     16.   Survival of Certain Provisions. The rights and obligations of the
Employee under paragraphs 7 and 8 hereof shall survive the expiration or
termination of this Agreement.

           THIS AGREEMENT was executed in multiple counterparts, each of which
shall be deemed an original, as of the dates set forth below, but to be
effective as of the Effective Date.

EMPLOYEE:                             TORCH OFFSHORE, INC.

/s/ PATRICE CHEMIN                    By: /s/ WILLIE BERGERON
------------------                       -------------------
Patrice Chemin                        Title: Chief Operating Officer

Date: September 22, 2003              Date: September 22, 2003

Schedule A - Counties and Parishes in which Competition is Prohibited

I.       TEXAS

         Jefferson                    Chambers                 Harris
         Galveston                    Brazoria
         Calhoun                      Aransas
         Nueces                       Cameron

II.      LOUISIANA

         Cameron                      Vermilion                Lafayette
         Iberia                       St. Mary                 Orleans
         Terrebonne                   Lafourche
         Jefferson                    Plaquemines

III.     MISSISSIPPI

         Hancock                      Harrison
         Jackson

IV.      ALABAMA

         Mobile

V.       FLORIDA

         Escambia                     Santa Rosa
         Pinnellas                    Hillsborough
         Manatee                      Brevard

                                       47exv4w04

 

SOUTHWESTERN PUBLIC SERVICE COMPANY

and

JPMORGAN CHASE BANK,

as Successor to

THE CHASE MANHATTAN BANK,

As Trustee

THIRD SUPPLEMENTAL INDENTURE

Dated as of October 1, 2003

Supplementing the Indenture

Dated as of February 1, 1999

 

 

     THIS THIRD SUPPLEMENTAL INDENTURE, dated as of October 1, 2003 is between
SOUTHWESTERN PUBLIC SERVICE COMPANY, a New Mexico corporation (hereinafter
called the “Issuer” or the “Company”), having its principal office at Tyler at
Sixth Street, Amarillo, Texas 79101, and JPMORGAN CHASE BANK, as successor to
THE CHASE MANHATTAN BANK, as Trustee (hereinafter called the “Trustee”), having
its office at 4 New York Plaza, 15th Floor, New York, New York 10004.

Recitals of the Issuer

     The Issuer and the Trustee have heretofore entered into an Indenture,
dated as of February 1, 1999, a First Supplemental Indenture, dated as of March
1, 1999 and a Second Supplemental Indenture dated as of October 1, 2001 (such
Indenture, as supplemented by the First Supplemental Indenture, the Second
Supplemental Indenture and this Supplemental Indenture, being hereinafter
referred to as the “Indenture”), relating to the issuance at any time or from
time to time of its Securities on terms to be specified at the time of
issuance. Terms used and not otherwise defined herein shall (unless the
context otherwise clearly requires) have the respective meanings given to them
in the Indenture.

     The Indenture provides in Article Two thereof that, prior to the issuance
of Securities of any series, the form of such Securities and the terms
applicable to such series shall be established in, or pursuant to, the
authority granted in a resolution of the Board of Directors (delivered to the
Trustee in the form of a Bond Resolution) or established in one or more
indentures supplemental thereto.

     The Issuer desires by this Supplemental Indenture, among other things, to
establish the form of the Securities of two series, to be titled Series C
Senior Notes, 6% due 2033 and Series D Senior Notes, 6% due 2033 of the Issuer,
and to establish the terms applicable to such series, pursuant to Sections 2.01
and 10.01 of the Indenture. The Issuer has duly authorized the execution and
delivery of this Supplemental Indenture.

     Article Ten of the Indenture provides that the Issuer, when authorized by
a resolution of its Board of Directors, and the Trustee may from time to time
and at any time amend the Indenture without the consent of Securityholders for
certain purposes enumerated in Section 10.01 thereof, including purposes set
forth in subsection (4) of said Section 10.01.

     The execution and delivery of this Supplemental Indenture by the parties
hereto are in all respects authorized by the provisions of the Indenture. All
things necessary have been done to make this Supplemental Indenture a valid
agreement of the Issuer, in accordance with its terms.

     NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:

     For and in consideration of the premises, it is mutually covenanted and
agreed, as follows:

 

 

ARTICLE I.

ESTABLISHMENT OF SERIES C NOTES, 6% DUE 2033 AND

SERIES D NOTES, 6% DUE 2033

     Section 1.01. For all purposes as of this Supplemental Indenture, except
as otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following respective meanings:

     “Exchange Documents” has the meaning set forth in Section 1.02 hereof.

     “Exchange Notes” means the Series D Notes to be issued under the Indenture
and this Supplemental Indenture in exchange for the Initial Notes pursuant to
the Exchange Offer.

     “Exchange Offer” means the offer by the Company, pursuant to an effective
registration statement filed with the Securities and Exchange Commission, to
exchange all of the Series D Notes for all of the outstanding Series C Notes in
accordance with the terms and provisions of the Registration Rights Agreement.

     “Exchange Offer Consummation Date” means the date on which the Exchange
Offer is consummated in accordance with the terms and provisions of the
Registration Rights Agreement.

     “Initial Notes” means the Series C Notes being issued by the Company under
the Indenture and this Supplemental Indenture and sold to the Initial
Purchasers pursuant to the Purchase Agreement.

     “Initial Purchasers” has the meaning set forth in the Purchase Agreement.

     “Purchase Agreement” means the Purchase Agreement dated as of October 1,
2003 among the Company and the Initial Purchasers.

     “Registration Rights Agreement” means the Registration Rights Agreement
dated as of October 6, 2003 among the Company and the Initial Purchasers.

     “Series C Notes” has the meaning set forth in Section 1.02 of this
Supplemental Indenture.

     “Series D Notes” has the meaning set forth in Section 1.02 of this
Supplemental Indenture.

     Section 1.02. The title of the series of the Securities established by
this Supplemental Indenture shall be (i) Series C Senior Notes, 6% due 2033 of
the Issuer (hereinafter called the “Series C Notes”), and (ii) Series D Notes,
6% due 2033 of the Issuer (hereinafter called the “Series D Notes”). The
Series C Notes shall be issued in registered form substantially in the form set
forth in Exhibit A hereto (which is hereby incorporated herein and made a part
hereof), subject to changes in the form thereof made by the Issuer and
acceptable to the Trustee. On the

2

 

     Exchange Offer Consummation Date, the Company shall execute and deliver to
the Trustee, and upon delivery of (a) an Officers’ Certificate to the Trustee
in accordance with the provisions of Section 2.01 of the Indenture, (b) an
Opinion of Counsel to the Trustee in accordance with Sections 2.01 and 11.01 of
the Indenture, (c) a written order requesting that the Trustee authenticate and
deliver the Series D Notes and cancel the Series C Notes, and (d) bond
resolutions certified by the Issuer’s Secretary, Assistant Secretary or any
other officer of similar authority (the “Exchange Documents”), the Trustee
shall authenticate and deliver, the Series D Notes substantially in the form
set forth in Exhibit A hereto, in exchange for a like principal amount of
Series C Notes validly surrendered to the Company and/or the Trustee, as
applicable, pursuant to the Exchange Offer and in accordance with the
Registration Rights Agreement. Such Exchange Documents from the Company shall
specify the amount of the Series D Notes to be authenticated and delivered and
the date on which such Series D Notes are to be authenticated and delivered.

     Section 1.03. The Series C Notes shall be limited to $100,000,000 in
aggregate principal amount. The Series D Notes shall be limited in aggregate
principal amount to $100,000,000 less the aggregate principal amount of Series
C Notes then outstanding and which are not exchanged in the Exchange Offer.
The aggregate principal amount of the Series C Notes together with the Series D
Notes outstanding at any time may not exceed $100,000,000.

     Section 1.04.

		
	 	     (a) The Series C Notes shall be dated their date of authentication
as provided in the Indenture and shall bear interest from their date at
the rate of 6% per annum, payable semi-annually on April 1 and October 1
of each year, commencing April 1, 2004. The record dates with respect to
such April 1 and October 1 interest payment dates shall be March 15 and
September 15, respectively.
	 
	 	     (b) The Series D Notes shall be dated the date of their
authentication in exchange for any Series C Notes delivered for transfer
or exchange pursuant to the Exchange Offer, as provided in the Indenture
and shall bear interest from the last interest payment date to which
interest has been paid on the Series C Notes that were exchanged for said
Series D Notes, provided that if no interest has yet been paid on said
Series C Notes, the Series D Notes shall bear interest from October 6,
2003 at the rate of 6% per annum, payable semi-annually on April 1 and
October 1 of each year. The record dates with respect to such April 1
and October 1 interest payment dates shall be March 15 and September 15,
respectively.
	 
	 	     (c) Any Initial Notes which are presented to the Company and/or the
Trustee for exchange pursuant to an Exchange Offer in accordance with the
terms thereof shall be exchanged for Exchange Notes of equal principal
amount upon surrender to the Company and/or the Trustee of the Initial
Notes to be exchanged; provided, however, that the Initial Notes so
surrendered for exchange shall be duly endorsed and accompanied by a
letter of transmittal or written instrument of transfer in form
satisfactory to the Company and to the Trustee, duly executed by the
Holder thereof or its attorney who shall be duly authorized in writing to
execute such document. Pursuant to the terms of the Exchange Offer,
whenever any Initial Notes are so surrendered for exchange, the Company
shall

3

 

		
	 	execute, and the Trustee, upon receipt of the Exchange Documents
from the Company, shall authenticate and deliver to and in the name of
each Holder that has properly tendered its Initial Notes for exchange the
same aggregate principal amount of Exchange Notes as the Initial Notes
that have been so surrendered and such Initial Notes shall be retired.
	 
	 	     (d) The Series C Notes and the Series D Notes shall not be subject
to any sinking fund.

     Section 1.05.

		
	 	     (a) The Series C Notes and Series D Notes shall be issued in fully
registered form without coupons in denominations of $1,000 and integral
multiples thereof.
	 
	 	     (b) The Series C Notes (1) if issued to “qualified institutional
buyers” (each a “QIB”), as defined in Rule 144A (“Rule 144A”) under the
Securities Act of 1933, as amended (the “Securities Act”), in reliance on
Rule 144A shall be issued in the form of one or more Rule 144A global
notes or (2) if issued in offshore transactions to non-U.S. persons in
reliance on Regulation S under the Securities Act (“Regulation S”), shall
be issued in the form of one or more Regulation S global notes, and in
case of either (1) or (2) above, such Rule 144A global notes and
Regulation S global notes (i) shall be deposited on behalf of the Holders
of the Series C Notes represented thereby with the Trustee, as custodian
for The Depository Trust Company (the “Depository”), (ii) shall be
registered in the name of the Depository or its nominee and (iii) may
from time to time be increased or decreased in principal amount by
adjustments made on the records of the Trustee and the Depository or its
nominee. For purposes hereof, (A) “Rule 144A global notes” means one or
more global Securities deposited with a custodian for, and registered in
the name of a nominee of, the Depository, interests in which will be held
for the benefit of purchasers of securities in transactions under Rule
144A, and (B) “Regulation S global notes” means one or more global
Securities deposited with a custodian for, and registered in the name of
a nominee of, the Depository, interests in which will be held for the
benefit of purchasers of the securities in offshore transactions under
Regulation S.
	 
	 	     (c) Except as provided in subparagraph (f) hereof, the Series C
Notes and the Series D Notes are to be initially registered in the name
of Cede & Co., as nominee for the Depository. Subject to subparagraphs
(d), (e) and (f) hereof, such Series C Notes and Series D Notes shall not
be transferable or exchangeable, nor shall any purported transfer be
registered, except as follows:

		
	 	     (i) such Series C Notes and Series D Notes may be transferred
in whole, and appropriate registration of transfer effected, if
such transfer is by such nominee to the Depository, or by the
Depository to another nominee thereof, or by any nominee of the
Depository to any other nominee thereof, or by the Depository or
any nominee thereof to any successor securities depository or any
nominee thereof; and

4

 

		
	 	     (ii) such Series C Notes and Series D Notes may be exchanged
for definitive Series C Notes and Series D Notes of the same series
registered in the respective names of the beneficial owners
thereof, and, subject to subparagraph (d), (e) and (f) below,
thereafter shall be transferable without restriction, if:

		
	 	     (A) the Depository, or any successor securities
depositary, shall have notified the Company and the Trustee
in writing that it is unwilling or unable to continue to act
as securities depository with respect to such Series C Notes
or Series D Notes, as the case may be, or the Depository 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
depository with respect to such Series C Notes or Series D
Notes, as the case may be;
	 
	 	     (B) the Company shall have delivered to the Trustee an
Officers’ Certificate and Opinion of Counsel to the effect
that such Series C Notes or Series D Notes, as the case may
be, shall be so exchangeable on and after a date specified
therein; or
	 
	 	     (C) (x) an Event of Default shall have occurred and be
continuing, (y) the Trustee shall have given notice of such
Event of Default pursuant to Article 6 of the Indenture and
(z) 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 Series C Notes or
Series D Notes, as the case may be, in respect thereof will
be materially impaired unless such owners become Holders of
definitive Series C Notes or Series D Notes, as the case may
be.

		
	 	     (d) All Series C Notes and all beneficial interests in one or more
Series C Notes and all Securities issued upon registration of, transfer
of, or in exchange for, any such Securities (other than Exchange Notes or
Securities sold pursuant to an effective registration statement under the
Securities Act or Securities issued, directly or indirectly, upon
registration of transfer of, or in exchange for, any such Securities),
shall be restricted securities within the meaning of Rule 144 under the
Securities Act (collectively, “Restricted Securities”) and shall be
subject to the restrictions on transfer provided in the legends set forth
on the Restricted Securities. The registered Holder of each Registered
Security, by such registered Holder’s acceptance thereof, agrees to be
bound by such restrictions on transfer. All Restricted Securities shall
bear on their faces the applicable legends limiting transferability set
forth on the form of the Series C Notes attached hereto as Exhibit A.
	 
	 	     Each registered Holder of a beneficial interest in a global Security
that is a Restricted Security will be deemed to have represented and
agreed to offer, sell, pledge or otherwise transfer such beneficial
interest only in accordance with the legend set forth on the face of the
Restricted Securities.

5

 

		
	 	     Subject to the restrictions on transfer and exchange set forth
herein and in the Indenture, the Holder of any Series C Notes or Series D
Notes issued hereunder may transfer or exchange such Series C Notes or
Series D Notes, as the case may be, in whole or in part by surrendering
them to the Trustee or its agent, together with (A) an executed
instrument of assignment and transfer (in the case of a transfer) or a
written request for exchange (in the case of exchange), and, in the case
of Series C Notes that are Restricted Securities, a certificate
substantially in the form set forth in Exhibit B hereto, and (B)
additional certifications and evidence in forms satisfactory to the
Trustee that such transfer or exchange is in compliance with the
Securities Act and the restrictions on transfer set forth in such
Securities as may be required pursuant to the terms of this Supplemental
Indenture.
	 
	 	     (e) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A global note or a beneficial interest
therein prior to (x) the date which is two years (or such shorter period
of time as permitted by Rule 144(k) of the Securities Act) after the
later of the date of original issuance of the Series C Notes and the last
date on which the Company or any “affiliate” (as defined in Rule 144
under the Securities Act) of the Company was the owner of Series C Notes
(or any predecessor of the Series C Notes) or (y) such later date, if
any, as may be required by applicable law:

		
	 	     (i) a transfer of a Rule 144A global note or a beneficial
interest therein to a QIB in accordance with Rule 144A shall be
made upon the representation of the transferee that it is
purchasing the Series C Notes for its own account or an account
with respect to which it exercises sole investment discretion and
that it and any such account is a QIB and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
	 
	 	     (ii) a transfer of a Rule 144A global note or a beneficial
interest therein in accordance with Regulation S shall be made upon
receipt by the Trustee or its agent of a certificate substantially
in the form set forth in Exhibit C hereto from the proposed
transferor and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certifications and/or other
information satisfactory to each of them that the transfer of such
Rule 144A global note or a beneficial interest therein is not
prohibited by any securities laws, including, but not limited to,
the Securities Act.

		
	 	     (f) The following provisions shall apply with respect to any
proposed transfer of a Regulation S global note or a beneficial interest
therein prior to (x) the date which is two years (or such shorter period
of time as permitted by Rule 144(k) of the Securities Act) after the
later of the date of original issuance of the Series C Notes and the last
date on which the Company or any “affiliate” (as defined in Rule 144
under the Securities Act) of the Company was the owner of the Series C
Notes (or any predecessor of the Series C Notes) or (y) such later date,
if any, as may be required by applicable law:

6

 

		
	 	     (i) a transfer of a Regulation S global note or a beneficial
interest therein to a QIB in accordance with Rule 144A shall be
made upon the representation of the transferee that it is
purchasing the Series C Notes for its own account or an account
with respect to which it exercises sole investment discretion and
that it and any such account is a QIB and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
	 
	 	     (ii) a transfer of a Regulation S global note or a beneficial
interest therein in accordance with Regulation S shall be made upon
receipt by the Trustee or its agent of a certificate substantially
in the form set forth in Exhibit C hereto from the proposed
transferor and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certifications and/or other
information satisfactory to each of them that the transfer of such
Regulation S global note or a beneficial interest therein is not
prohibited by any securities law, including, but not limited to,
the Securities Act.

		
	 	     Prior to or on the expiration of the 40-day “distribution compliance
period” within the meaning of Rule 903 of Regulation S under the
Securities Act (the “Distribution Compliance Period”), beneficial
interests in a Regulation S global note may only be held through the
operator of the Euroclear System (“Euroclear”) or Clearstream Banking, a
societe anonyme (“Clearstream”) (as indirect participants in the
Depository), or another agent member of Euroclear or Clearstream acting
for and on behalf of them, unless such beneficial interests in the
Regulation S global note are exchanged for interests in the Rule 144A
global note in accordance with the certification requirements hereof.

     Section 1.06. The Issuer hereby appoints, or confirms the appointment of,
JPMorgan Chase Bank as the initial Trustee, Transfer Agent and Paying Agent,
subject to the provisions of the Indenture with respect to resignation, removal
and succession, and subject, further, to the right of the Issuer to appoint
additional agents (including Paying Agents).

     Section 1.07. The terms of the Series C Notes and Series D Notes shall be
as set forth in Exhibit A hereto, and shall include the payment and other terms
reflected on the Series C Notes and Series D Notes, as the case may be, as
actually executed, authenticated and delivered under the Indenture.

7

 

ARTICLE II.

MISCELLANEOUS

     Section 2.01. The recitals contained herein shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the
sufficiency or validity of this Supplemental Indenture.

     Section 2.02. The Indenture, as supplemented by this Supplemental
Indenture, is in all respects hereby adopted, ratified and confirmed.

     Section 2.03. This Supplemental Indenture may be executed in any number of
counterparts, and on separate counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the same
instrument.

     Section 2.04. If any provision of this Supplemental Indenture limits,
qualifies or conflicts with the duties imposed by any of Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, through operation of Section 318(c), such imposed
duties shall control.

     Section 2.05. The Article headings herein are for convenience only and
shall not affect the interpretation hereof.

8

 

     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed and attested as of the 1st day of October, 2003.

	 	 	 	 
	 	
SOUTHWESTERN PUBLIC SERVICE COMPANY
	 
	 	By:	 	 
	 
	 	 	 	
/s/ BENJAMIN G.S. FOWKE, III

Name: BENJAMIN G.S. FOWKE, III

Title: Vice President and Treasurer
	 
	 	 	 	[Seal]
	 
	 	Attest:	 	 
	 
	 	 	 	
/s/ ANNE M. ZIEBELL

Name: ANNE M. ZIEBELL

Title: Assistant Corporate Secretary

JPMORGAN CHASE BANK, as Trustee

By: /s/ JAMES D. HEANEY

Authorized Signatory

Name: James D. Heaney

Title: Vice President

Attest: DIANE DARCONTE

Name: 

Title: Trust Officer

 

 

EXHIBIT A

	 	 	 	 	 
	CUSIP: No _________________	 	
 	 	$_____________

     [THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF SOUTHWESTERN PUBLIC SERVICE COMPANY (THE
“COMPANY”) THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED OTHER THAN (A)(1) TO THE COMPANY, (2) IN A TRANSACTION ENTITLED TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT,
(3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (4) OUTSIDE THE UNITED STATES IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT,
(5) IN ACCORDANCE WITH ANOTHER APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON THE DELIVERY OF AN OPINION
OF COUNSEL IN A FORM ACCEPTABLE TO THE COMPANY AND THE TRUSTEE AND ANY
CERTIFICATES OR OTHER INFORMATION THE COMPANY AND THE TRUSTEE MAY SO REQUIRE)
OR (6) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT AND (B) IN EACH CASE IN ACCORDANCE WITH APPLICABLE
SECURITIES LAWS OF EACH STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT.]1

     [THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE PRECEDING PARAGRAPH. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE RESALE
RESTRICTION TERMINATION DATE) WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE OF THE SECURITIES OF THIS SERIES AND THE LAST DATE ON WHICH
THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY), ONLY AS SET FORTH IN THE PRECEDING
PARAGRAPH, SUBJECT

	 	 	1 To be inserted only in Series C Notes.

A-1

 

     TO THE COMPANY’S AND THE TRUSTEE’S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM (FORMS OF WHICH MAY BE OBTAINED
FROM THE COMPANY OR THE TRUSTEE) COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE COMPANY AND THE TRUSTEE.]2

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

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

SOUTHWESTERN PUBLIC SERVICE COMPANY

Series [C]1 [D]3 Senior Notes, 6% due 2033

Southwestern Public Service Company promises to pay to Cede & Co. or registered
assigns the principal sum of ___________ United States Dollars on October 1,
2033.

	 	 	 
	Interest Payment Dates:	 	
April 1 and October 1
	Record Dates:	 	
March 15 and September 15

	 	 	1 To be inserted only in Series C Notes.
	 
	 	 	2 To be inserted only in Regulation S Global Note.
	 
	 	 	3 To be inserted only in Series D Notes.

A-2

 

SOUTHWESTERN PUBLIC SERVICE COMPANY

Series [C]1 [D]3 Senior Notes, 6% due 2033

	 	1.	 	Interest.

     Southwestern Public Service Company (“Company”), a corporation organized
and existing under the laws of the State of New Mexico, promises to pay
interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest on April 1 to the holder of record on
March 15 and on October 1 to the holder of record on September 15 of each year
commencing April 1, 2004. Interest on this Note will accrue from [the most
recent date to which interest has been paid or, if no interest has been paid,
from October 6, 2003]1 [the last date to which interest has been paid on the
Series C Notes, 6% due 2033 that were exchanged for this Note, or if no
interest has been paid on such Series C Notes, 6% due 2033, from October 6,
2003]3. Interest will be computed on the basis of a 360-day year of twelve
30-day months.

	 	2.	 	Method of Payment.

     The Company will pay interest on this Note to the person who is the
registered Holder of the Note at the close of business on the record date for
the next interest payment date, except as otherwise provided in the Indenture.
This Note must be surrendered to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such money. It
may mail an interest check to the Holder’s registered address.

	 	3.	 	Bond Agents.

     Initially, JPMorgan Chase Bank, 2001 Bryan Street, 9th Floor, Dallas,
Texas 75201, Attention: Institutional Trust Services, will act as Paying Agent
and Transfer Agent. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company or any
Affiliate may act in any such capacity. Subject to certain conditions, the
Company may change the Trustee.

	 	4.	 	Indenture.

     This Note is one of a series of securities issued under an Indenture dated
as of February 1, 1999 (“Indenture”) between the Company and JPMorgan Chase
Bank, as successor to The Chase Manhattan Bank (“Trustee”). The terms of this
Note include those stated in the Indenture including in the Third Supplemental
Indenture (the “Supplemental Indenture”) dated as of October 1, 2003 creating
the Notes of this series and those made part of the Indenture by the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb). Securityholders
are referred to the Indenture, the Supplemental Indenture and the Act for a
statement of such terms.

	 	 	1 To be inserted only in Series C Notes.
	 
	 	 	3 To be inserted only in Series D Notes.

A-3

 

	 	5.	 	Redemption.

     The Notes of this series are subject to redemption upon not less than 30
days’ notice by first class mail, in whole at any time or in part from time to
time at the option of the Company at a “make-whole” redemption price equal to
the greater of (i) 100% of the principal amount of the Notes of this series to
be redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the date fixed for
redemption 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 accrued and
unpaid interest to the date fixed for redemption.

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

     “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 Notes of this series that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes of this series.

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

     “Independent Investment Banker” means Citigroup Global Markets Inc. or its
successor or, if such firm or its successor is unwilling or unable to select
the Comparable Treasury Issue, one of the remaining Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.

     “Reference Treasury Dealer” means (i) each of Citigroup Global Markets
Inc. and Credit Suisse First Boston LLC and any other primary U.S. Government
securities dealer in the United States (a “Primary Treasury Dealer”) designated
by, and not affiliated with, Citigroup Global Markets Inc. and Credit Suisse
First Boston LLC and their respective successors, provided, however, that if
any of the foregoing or any of its designees shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor another Primary Treasury
Dealer, and (ii) any other Primary Treasury Dealer selected by the Company.

A-4

 

     “Reference Treasury Dealer Quotations” means, with respect to each
Reference Treasury Dealer and any date fixed for redemption, the average, as
determined by the 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 the Independent Investment Banker by
such Reference Treasury Dealer at 5:00 p.m. on the third business day preceding
such date fixed for redemption.

     In the event of redemption of this Note in part only, a new Note or Notes
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.

	 	6.	 	Notice of Redemption.

     Notice of redemption will be mailed at least 30 days before the date fixed
for redemption to the Holder hereof to be redeemed at such Holder’s registered
address.

     A notice of redemption may provide that it is subject to the occurrence of
any event before the date fixed for such redemption as described in such notice
(“Conditional Redemption”) and such notice of Conditional Redemption shall be
of no effect unless all such conditions to the redemption have occurred before
such date or have been waived by the Company.

	 	7.	 	Denominations, Transfer, Exchange.

     The Notes of this series are in registered form without coupons in
denominations of $1000 and whole multiples of $1000. The transfer of this Note
may be registered and this Note may be exchanged as provided in the Indenture.
The Transfer Agent may require a holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or the Indenture. The Transfer Agent need not exchange or
register the transfer of this Note or portion thereof selected for redemption.
Also, it need not exchange or register the transfer of this Note for a period
of 15 days before a selection of Securities to be redeemed.

     [Any Notes of this series which are presented to the Company and/or the
Trustee for exchange pursuant to an Exchange Offer in accordance with the terms
thereof shall be exchanged for Exchange Notes of equal principal amount upon
surrender to the Company and/or the Trustee of the Notes of this series to be
exchanged; provided, however, that the Notes of this series so surrendered for
exchange shall be duly endorsed and accompanied by a letter of transmittal or
written instrument of transfer in form satisfactory to the Company, duly
executed by the registered Holder thereof or its attorney who shall be duly
authorized in writing to execute such document. Whenever any Notes of this
series are so surrendered for exchange, the Company shall execute, and the
Trustee, upon receipt of the Exchange Documents, shall authenticate and deliver
to and in the name of each registered holder that has properly tendered its
Notes of this series for exchange, the same aggregate principal amount of
Exchange Notes as the Notes of this series that have been so surrendered. For
purposes hereof, the following defined terms shall have the meaning ascribed to
them:

A-5

 

		
	 	“Exchange Offer” means the offer by the Company, pursuant to an
effective registration statement filed with the Securities and
Exchange Commission, to exchange the Exchange Notes for all of the
outstanding Notes of this series.
	 
	 	“Exchange Notes” means senior notes of the Company identical in all
material respects to the Notes of this series presented for
exchange pursuant to the Exchange Offer (except that the transfer
restrictions shall be modified or eliminated, as appropriate) and
to be issued under the Indenture].1

	 	8.	 	Persons Deemed Owners.

     The registered holder of this Note may be treated as its owner for all
purposes.

	 	9.	 	Amendments and Waivers.

     Subject to certain exceptions, the Indenture or the Notes of this series
may be amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment. Subject to
certain exceptions, a default on a series may be waived with the consent of the
holders of a majority in principal amount of the series.

     Without the consent of any Securityholder, the Indenture or the Notes of
this series may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of Company
obligations to Securityholders; or to make any change that does not materially
adversely affect the rights of any Securityholder.

	 	10.	 	Restrictive Covenants.

     The Notes of this series are unsecured general obligations of the Company
limited to $100,000,000 principal amount [minus the aggregate principal amount
of all outstanding Series C Senior Notes, 6% due 2033 that are not being
exchanged for Notes of this series]3. The Indenture does not limit other
unsecured debt.

	 	11.	 	Successors.

     When a successor assumes all the obligations of the Company under the
Securities and the Indenture, the Company will be released from those
obligations.

	 	12.	 	Defeasance Prior to Redemption or Maturity.

     Subject to certain conditions as set forth in Article 8 of the Indenture,
the Company at any time may terminate some or all of its obligations under this
Note and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on this Note
to redemption or maturity. U.S. Government Obligations are securities backed
by the full faith and credit of the United States of America or certificates
representing an ownership interest in such Obligations.

	 	 	1 To be inserted only in Series C Notes.
	 
	 	 	3 To be inserted only in Series D Notes.

A-6

 

	 	13.	 	Defaults and Remedies.

     An Event of Default includes: default for 60 days in payment of interest
on the Notes of this series; default in payment of principal on the Notes of
this series; default by the Company for 90 days after notice to it in the
performance of any of its other agreements applicable to the Notes of this
series; certain events of bankruptcy or insolvency; and any other Event of
Default provided for in this series. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the Notes of this series may declare the principal of all the Notes of this
Series to be due and payable immediately.

     The Securityholders of a majority in principal amount of Notes of this
series may, by notice to the Trustee, rescind an acceleration so long as the
rescission would not conflict with any judgment or decree and if all existing
events of default on the Notes of this series have been cured or waived except
non-payment of principal or interest that has become due solely because of the
acceleration.

     Securityholders may not enforce the Indenture or the Notes of this series
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes of this
series. Subject to certain limitations, holders of a majority in principal
amount of the Notes of this series may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of
any continuing default (except a default in payment of principal or interest)
if it determines that withholding notice is in their interests. The Company
must furnish annual compliance certificates to the Trustee.

	 	14.	 	Trustee Dealings with Company.

     JPMorgan Chase Bank, the Trustee under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.

	 	15.	 	No Recourse Against Others.

     A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under this Note
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder hereof by accepting this Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of this Note.

	 	16.	 	Authentication.

     This Note shall not be valid until authenticated by a manual signature of
the Trustee.

	 	17.	 	Abbreviations.

     Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as: TEN COM (tenants in common), TEN ENT (tenants by the
entireties), JT

A-7

 

TEN (joint tenants with right of survivorship and not as tenants in
common), CUST (custodian), and U/G/M/A (Uniform Gifts to Minors Act).

     The Company will furnish to the Holder hereof upon written request and
without charge a copy of the Indenture including the Supplemental Indenture,
which contains the text of this Note in larger type. Requests may be made to:
Southwestern Public Service Company, c/o Xcel Energy Inc., 800 Nicollet Mall,
Suite 2900, Minneapolis, Minnesota 55402, Attention: Corporate Secretary.

A-8

 

Dated: ____________, ______

	 	 	 	 	 
	JPMORGAN CHASE BANK

Transfer Agent and Paying Agent	 	SOUTHWESTERN PUBLIC SERVICE COMPANY
	 	 	
By:	 	 
	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	
By:	 	 
	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
(SEAL)
	 	 	
Attest:	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title: [Assistant] Secretary

Certificate of Authentication

JPMorgan Chase Bank, as Trustee, certifies

that this is one of the Notes referred to in the

within-mentioned Indenture.

JPMORGAN CHASE BANK

By:

Authorized Signature

Name:

Title:

A-9

 

ASSIGNMENT FORM

     To assign this Note, fill in the form below:

I or we assign and transfer this Note to:

	 	 	 	 	 
	 	
	 
	 	:	:
	 	:	:
	 	
	 
	 	(Insert
assignee’s Soc. Sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip
code)

and irrevocably appoint
                                                   agent to transfer this
Note on the books of the Company. That agent may substitute another to act for
him.

	 	 	 	 	 
	Date: __________________	 	 	
Your Signature ___________________
	 	     

(Sign exactly as your name appears on the other side of This Note)

A-10

 

EXHIBIT B

[Form of Transferor Certificate]

CERTIFICATE TO SOUTHWESTERN PUBLIC SERVICE COMPANY

AND TRUSTEE

SERIES C NOTES

This is to certify that as of the date
hereof with respect to U.S. $____________
principal amount of the above-captioned securities presented or surrendered on
the date hereof (the “Surrendered Notes”) for registration of transfer or for
exchange where the securities issuable upon such exchange are to be registered
in a name other than that of the undersigned holder (each such transaction
being a “transfer”), the undersigned holder of the Surrendered Notes represents
and certifies for the benefit of Southwestern Public Service Company and
JPMorgan Chase Bank, as Trustee, that the transfer of Surrendered Notes
associated with such transfer complies with the restrictive legend set forth on
the face of the Surrendered Notes for the reason checked below:

	 	[  ]	 	The Surrendered Notes are being transferred to a person whom
we reasonably believe is a “qualified institutional buyer”
(as defined in Rule 144A under the Securities Act of 1933) (a
“QIB”) that purchases for its own account or for the account
of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A under the
Securities Act; or
	 
	 	[  ]	 	The transfer of the Surrendered Notes complies with Rule 144
under the Securities Act;1 or
	 
	 	[  ]	 	The transfer of the Surrendered Notes complies with another
applicable exemption from the registration requirements of
the Securities Act.1

[Name of holder]

Dated: ____________, ______

[To be dated the date of presentation or surrender]

	 	 	1 These transfers may require an opinion of counsel.

B-1

 

EXHIBIT C

[Form of Regulation S Transfer Certificate]

[date]

Southwestern Public Service Company

Tyler at Sixth Street

Amarillo, Texas 79101

JPMorgan Chase Bank

4 New York Plaza, 15th Floor

New York, New York 10004

Dear Ladies and Gentlemen:

     In
connection with our proposed sale of $ ____________ aggregate principal
amount of Series C Senior Notes, 6% due 2033 (the “Notes”) of Southwestern
Public Service Company (the “Company”), we confirm that:

		
	 	     (b) the offer of the Notes was not made to a person in the United
States;
	 
	 	     (c) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
	 
	 	     (d) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
	 
	 	     (e) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

     In addition, if the sale is made during a Distribution Compliance Period
(within the meaning of Regulation S), we confirm that, to the best of our
knowledge after due inquiry, the purchaser is not a U.S. Person (within the
meaning of Regulation S).

     Further, if the sale is made during a Distribution Compliance Period and
the provisions of Rule 903(a)(3) or Rule 904(b)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(a)(3) or Rule 904(b)(1), as the case may
be.

C-1

 

     The Company and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.

	 	 	 	 	 
	 	 	 	 	Very truly yours,

[Name of Transferor]
	 
	Date: ________________	 	
     
	 	By:
_______________________

C-2

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