Document:

NRG Energy, Inc.

 

Exhibit 10.42

SUPPORT AND CAPITAL SUBSCRIPTION AGREEMENT

     This Agreement is made as of May 29, 2002, by and between Xcel Energy,
Inc., a Minnesota corporation (“Xcel”) and NRG Energy, Inc., a Delaware
corporation (“NRG”).

Recitals

     A.     Xcel is the owner of 74.3% of the outstanding shares of NRG.

     B.     The parties hereto desire to take certain actions to enhance and
maintain the credit rating of NRG and NRG’s ability to issue indebtedness upon
favorable terms and to enhance the ability of other direct and indirect
subsidiaries of NRG to issue upon favorable terms indebtedness which may be
guaranteed by NRG.

     IN CONSIDERATION of the mutual promises herein contained, the parties
hereto agree as follows:

     1.     Stock Ownership. During the term of this Agreement, Xcel will own at
least 74.3% of the voting capital stock of NRG now or hereafter issued and
outstanding.

     2.     Capital Subscription. If, during the term of this Agreement, NRG
requires funds to avoid a downgrading of its credit rating by any of the
nationally recognized United States credit rating agencies or to make payment
when due (i) upon any of its indebtedness for borrowed money or (ii) as a
result of its guarantee of payment of any indebtedness for borrowed money of
any direct or indirect subsidiary of NRG (hereinafter, such indebtedness and
guarantee obligations being collectively referred to as “Debt”), Xcel shall
provide such funds to NRG up to a maximum aggregate amount of $300,000,000.
Xcel may elect to provide such funds either as equity or as a loan. If such
funds are provided to NRG as a loan, such loan shall be evidenced by a
Subordinated Convertible Note in substantially the form attached hereto as
Exhibit I or, if Xcel shall otherwise elect, on such terms and conditions,
including maturity and rate of interest, as Xcel and NRG shall agree.
Notwithstanding the foregoing, any such loan shall be subordinated in all
respects to any Debt outstanding during the term of such loan. If such funds
are to be provided as equity, such equity shall be in the form of common stock
of NRG and shall be sold at a price per share determined as follows: (i) if at
such time NRG’s common stock is listed on any established stock exchange or a
national market system, a price per share determined by the Independent
Directors Committee of the Board of Directors of NRG and approved by the
Finance Committee of the Board of Directors of Xcel, which shall not be less
than the most recent closing price of a share of such common stock on the
principal exchange upon which such common stock is traded, or (ii) if at such
time NRG’s common stock is not so traded, at a price established in good faith
by the Board of Directors of NRG and approved by the Finance Committee of the
Board of Directors of Xcel.

     3.     Dividend Restriction. From the date of this Agreement, Xcel will not
require and NRG will not pay any dividends on its capital stock.

 

 

     4.     No Guarantee of Indebtedness. This Agreement is not, and nothing
herein contained, and nothing done pursuant hereto by Xcel, shall be construed
or deemed to constitute, a direct or indirect guarantee of any Debt by Xcel to
any person, firm, corporation or other entity to whom NRG is liable for payment
of any Debt (hereinafter, a “Creditor”).

     5.     Waiver. Xcel hereby waives any failure or delay on the part of NRG in
asserting or enforcing any of its rights or in making any claims or demands
hereunder.

     6.     Termination, Amendment. This Agreement may not be amended or
terminated, except as provided in this paragraph. NRG and Xcel may modify or
terminate any or all of the provisions of this Agreement if two nationally
recognized United States credit rating organizations confirm in writing that
their ratings of the indebtedness of NRG would be the same whether or not such
provisions were in effect.

     7.     Rights of Creditors. The obligations of Xcel pursuant to this
Agreement are to NRG only and do not run to and are not enforceable directly by
any Creditor, nor shall this Agreement cause Xcel to be responsible for the
payment to a Creditor of any obligation of NRG or of any entity the obligations
of which have been guaranteed as to payment by NRG; provided, however, that any
Creditor shall have the right to demand that NRG enforce NRG’s rights under
this Agreement, and if NRG fails or refuses to take timely action to enforce
such rights, such Creditor may proceed against Xcel to enforce, on behalf of
NRG, NRG’s rights under this Agreement.

     8.     Notices. Any notice, instruction, request, consent, demand or other
communication required or contemplated by this Agreement to be in writing,
shall be given or made or communicated by United States first class mail,
addressed as follows:

	 	 	 	 	 
	If to NRG:	 	
901 Marquette Avenue
	 	(with a copy to the
	 	 	
Suite 2300
	 	then current address
	 	 	
Minneapolis, Minnesota 55402
	 	of the corporation’s
	 	 	
Attention: James. J. Bender
	 	registered agent)
	 
	If to Xcel:	 	
800 Nicollet Mall
	 	(with a copy to the
	 	 	
Minneapolis, Minnesota 55402
	 	then current address
	 	 	
Attention: Gary Johnson
	 	of the corporation’s
registered agent)

     9.     Successors. The covenants, representations, warranties and agreements
herein set forth shall be mutually binding upon, and inure to the mutual
benefit of, Xcel, NRG and their successors.

     10.     Governing Law. This Agreement shall be governed by the laws of the
State of Minnesota.

2

 

     IN WITNESS WHEREOF, the parties hereto have set their hands and have
affixed their corporate seals as of the day and year first above written.

	 	 	 
	(SEAL)	 	
XCEL ENERGY, INC.
	 
	Attest:

	 	
By:  /s/ Paul Pender

Vice President &Treasurer
	 
	(SEAL)	 	
NRG ENERGY, INC.
	 
	Attest:

	 	
By:  /s/ Brian B. Bird

Vice President &Treasurer

3<PAGE>
                                                                     Exhibit 4.1

                              NEVADA POWER COMPANY

                              OFFICER'S CERTIFICATE

                                  May 13, 2002

         I, the undersigned officer of Nevada Power Company (the "Company"), do
hereby certify that I am an Authorized Officer of the Company as such term is
defined in the Indenture (as defined herein). I am delivering this certificate
pursuant to the authority granted in the Board Resolutions of the Company dated
May 13, 2002, and Sections 1.04, 2.01, 3.01, 4.01(a) and 4.02(b)(i) of the
General and Refunding Mortgage Indenture dated as of May 1, 2001, as heretofore
amended and supplemented to the date hereof (as heretofore amended and
supplemented, the "Indenture"), between the Company and The Bank of New York, as
Trustee (the "Trustee"). Terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Indenture, unless the context
clearly requires otherwise. Based upon the foregoing, I hereby certify on behalf
of the Company as follows:

         1.       The terms and conditions of the Securities of the series
described in this Officer's Certificate are as follows (the lettered
subdivisions set forth in this Paragraph 1 corresponding to the lettered
subdivisions of Section 3.01 of the Indenture):

         (a)      The Securities of the fourth series to be issued under the
         Indenture shall be designated "General and Refunding Mortgage Bond,
         Series D, due April 15, 2004" (the "Bond").

         (b)      The Bond shall be authenticated and delivered in the aggregate
         principal amount of $130,000,000.

         (c)      Not applicable.

         (d)      The principal of the Bond shall be payable by the Company in
         whole or in installments on such date or dates as the Company has any
         obligations to the holders of the Series B Notes (as defined in the
         Senior Note Indenture defined below) under the terms therein (whether
         upon scheduled maturity, required prepayment, acceleration, demand or
         otherwise), but not later than April 15, 2004. The amount of principal
         of the Bond payable by the Company on any such date shall equal the
         aggregate outstanding principal amount of the Series B Notes due and
         payable on such date (but, in no event, shall exceed the aggregate
         principal amount of the Bond). The obligation of the Company to make
         any payment of the principal on the Bond shall be fully or partially,
         as the case may be, deemed to have been paid or otherwise satisfied and
         discharged to the extent that the Company has redeemed any part of the
         Series B Notes.

         (e)      The Bond shall bear interest from the time hereinafter
         provided at such rate per annum as shall cause the amount of interest
         payable on each Interest Payment Date (as hereinafter defined) on the
         Bond to equal the amount of interest payable on such Interest Payment
         Date on the Series B Notes. Such interest on the Bond shall be payable
         on the

3390272
<PAGE>

         same dates as interest is payable from time to time on the Series B
         Notes (each such date herein called an "Interest Payment Date"), until
         the maturity of the Bond, or, in the case the Senior Note Trustee (as
         defined below) shall demand redemption of the Bond, until the
         redemption date, or, in the case of any default by the Company in the
         payment of the principal due on the Bond, until the Company's
         obligation with respect to the payment of such principal shall be
         discharged as provided in the Indenture. The amount of interest payable
         from time to time on the Series B Notes and the dates on which such
         interest is payable are set forth in the Senior Note Indenture (as
         defined below). Each Bond shall bear interest from the later of the
         date of initial authentication of such Bond or the most recent Interest
         Payment Date to which interest has been paid. The obligation of the
         Company to make any payment of interest on the Bond shall be fully or
         partially, as the case may be, deemed to have been paid or otherwise
         satisfied and discharged to the extent that the Company has paid the
         interest on the Series B Notes.

         (f)      The Corporate Trust Office of The Bank of New York in New
         York, New York shall be the place at which (i) the principal of and
         interest on the Bond shall be payable, (ii) registration of transfer of
         the Bond may be effected, (iii) exchanges of the Bond may be effected
         and (iv) notices and demands to or upon the Company in respect of the
         Bond and the Indenture may be served; and The Bank of New York shall be
         the Security Registrar for the Bond; PROVIDED, HOWEVER, that the
         Company reserves the right to change, by one or more Officer's
         Certificates, with the consent of the Administrative Agent, 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 Las Vegas, Nevada as any such
         place or itself as the Security Registrar; PROVIDED, HOWEVER, that
         there shall be only a single Security Registrar for the Bond. The
         principal of the Bond shall be payable without the presentment or
         surrender thereof.

         (g)      Not applicable.

         (h)      Not applicable.

         (i)      The Bond is issuable only in denominations of $130,000,000.

         (j)      Not applicable.

         (k)      Not applicable.

         (l)      Not applicable.

         (m)      See subsection (d) above.

         (n)      Not applicable.

         (o)      Not applicable.

         (p)      Not applicable.

3390272                                 2
<PAGE>

         (q)      The Bond shall be evidenced by a single registered Bond in the
         principal amount and denomination of One Hundred Thirty Million Dollars
         ($130,000,000). The Bond shall be dated May 13, 2002, shall mature no
         later than April 15, 2004, unless sooner paid, and shall bear interest
         at the rate specified in subsection (e) above. The Bond may be executed
         by the Company and delivered to the Trustee for authentication and
         delivery. The principal of and interest on the Bond shall be payable at
         the Corporate Trust Office of the Trustee in New York, New York.

                  The single Bond shall be identified by the number D-1 and
         shall upon issuance be delivered by the Company to, and registered in
         the name of The Bank of New York (as successor to IBJ Whitehall Bank &
         Trust Company), as trustee under the Senior Note Indenture defined
         below (the "Senior Note Trustee"), and shall be transferable only as
         required to effect an assignment thereof to a successor or an assign of
         the Senior Note Trustee under the Senior Note Indenture. The Bond is to
         be issued to the Senior Note Trustee to (i) secure the Company's
         obligations to make payments under the terms of the Series B Notes
         issued under the Senior Unsecured Note Indenture, dated as of March 1,
         1999, as supplemented by Supplemental Indenture No. 1, dated as of
         March 1, 1999, and Supplemental Indenture No. 2, dated as of April 1,
         1999 (as heretofore or hereafter supplemented, modified or amended from
         time to time, the "Senior Note Indenture"), and (ii) provide to the
         holders of the Series B Notes the benefits of the security provided for
         the Bond pursuant to the Indenture. The single Bond shall be held by
         the Senior Note Trustee subject to the terms of the Pledge Agreement,
         dated as of May 13, 2002, between the Company and the Senior Note
         Trustee.

                  Bonds issued upon transfer shall be numbered consecutively
         from D-2 upwards and issued in the same $130,000,000 denomination but,
         to the extent that the aggregate outstanding principal amount of the
         Series B Notes shall have theretofore been reduced, the registered
         holder thereof shall duly note on the Bonds like reduction in such
         amount in the principal in the Schedule of Prepayments to such Bond and
         upon any transfer of said Bond, such Schedule of Prepayments shall
         transfer to the subsequently issued Bond.

                  See also subsection (s) below.

         (r)      Not applicable.

         (s)      The holder of the Bond by acceptance of the Bond agrees to
         restrictions on transfer and to waivers of certain rights of exchange
         as set forth herein. In addition, the Bond has not been registered
         under the Securities Act of 1933 and the Bond may not be transferred
         without compliance with applicable securities laws. The Bond is not
         transferable except to a successor to the Senior Note Trustee under the
         Senior Note Indenture.

         (t)      For purposes of the Bond, "Business Day" shall mean any day
         that is not a Saturday, Sunday or other day on which commercial banks
         in New York, New York are authorized or required by law to remain
         closed.

3390272                                 3

<PAGE>

         (u)      The Trustee may conclusively presume that the obligation of
         the Company to pay the principal of and interest on the Bond shall have
         been fully satisfied and discharged unless and until it shall have
         received a written notice from the Senior Note Trustee, stating that
         the payment of principal of or interest on the Bond has not been fully
         paid when due and specifying the amount of funds required to make such
         payment.

                  The Bond shall have such other terms and provisions as are
         provided in the form thereof attached hereto as EXHIBIT A, and shall be
         issued in substantially such form.

         2.       The undersigned has read all of the covenants and conditions
contained in the Indenture, and the definitions in the Indenture relating
thereto, relating to the issuance of the Bond and in respect of compliance with
which this certificate is made.

                  The statements contained in this certificate are based upon
the familiarity of the undersigned with the Indenture, the documents
accompanying this certificate, and upon discussions by the undersigned with
officers and employees of the Company familiar with the matters set forth
herein.

                  In the opinion of the undersigned, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenants and conditions have been
complied with.

                  In the opinion of the undersigned, such conditions and
covenants have been complied with.

         IN WITNESS WHEREOF, the undersigned has executed this Officer's
Certificate as of the date first written above.

                                 By:
                                    ----------------------------------------
                                    Name:  Dennis D. Schiffel
                                    Title: Senior Vice President and Chief
                                           Financial Officer

Acknowledged and Received on
May __, 2002

THE BANK OF NEW YORK,
as Trustee

By:
   -------------------------------------------
Name:
     -----------------------------------------
Title:
      ----------------------------------------

3390272                                 4
<PAGE>

                                    EXHIBIT A
                                    ---------

                                  FORM OF BOND

                                 See Exhibit 4.2

3390272                                 5

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