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Exhibit 4.2    
    


        SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of December 12,
2003 among UAE Ref-Fuel II Corp (the "Guaranteeing Subsidiary"), a subsidiary of MSW Energy Holdings II LLC (or its permitted successor), a
Delaware corporation (the "Company"), the Company, the other Guarantors (as defined in the Indenture referred to herein) and Wells Fargo Bank Minnesota,
National Association, as trustee under the indenture referred to below (the "Trustee"). 


 
 

WITNESSETH    
    


        WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as
of November 24, 2003 providing for the issuance of 73/8% Senior Secured Notes due 2010 (the "Notes"); 



        WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the
"Note Guarantee"); and 


        WHEREAS,
pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 


        NOW
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee
mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 


        1.    Capitalized Terms.    Capitalized terms used herein without definition shall have the meanings assigned to them
in the Indenture. 


        2.    Agreement to Guarantee.    The Guaranteeing Subsidiary hereby agrees as follows: 



        (a)   Along
with all Guarantors named in the Indenture, to jointly and severally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, the Notes or the obligations of the Company hereunder or thereunder, that: 



        (i)    the
principal of, and premium and Additional Interest, if any, and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and 


        (ii)   in
case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. 




        (b)   The
obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. 






 

        (c)   The
following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all demands whatsoever. 



        (d)   This
Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture. 


        (e)   If
any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. 


        (f)    The
Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby. 


        (g)   As
between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. 


        (h)   The
Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Note Guarantee. 


        (i)    Pursuant
to Section 11.02 of the Indenture, after giving effect to any maximum amount and all other contingent and fixed liabilities that are relevant under any
applicable Bankruptcy or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under Article 10 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of
such Guarantor under this Note Guarantee will not constitute a fraudulent transfer or conveyance. 




        3.    Execution and Delivery.    Each Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full
force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. 



        4.    Guaranteeing Subsidiary May Consolidate, Etc. on Certain Terms.    



        (a)   Except
as otherwise provided in Section 11.04 of the Indenture, the Guaranteeing Subsidiary may not sell or otherwise dispose of all or substantially all of its
assets to, or consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor unless: 



        (i)    immediately
after giving effect to such transaction, no Default or Event of Default exists; and 



        (ii)   the
Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the
obligations of that Guarantor, pursuant to a supplemental indenture in form and substance 




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reasonably
satisfactory to the Trustee, under the Notes, the Indenture and the Note Guarantee on the terms set forth herein or therein. 




        (b)   In
case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable under the Indenture which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. 


        (c)   Except
as set forth in Articles 4 and 5 and Section 11.04 of Article 11 of the Indenture, and notwithstanding clauses (a) and (b) above,
nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 




        5.    Releases.    



        (a)   In
the event of any sale or other disposition of all or substantially all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company,
then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property
(in the event of a sale or other disposition of all
or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Note Guarantee. Upon delivery by the Company to the Trustee of an Officers' Certificate
and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of the Indenture, including without limitation Section 4.10
of the Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee. The Note Guarantee of a
Guarantor shall be released upon its designation by MSW Energy II as an Unrestricted Subsidiary in accordance with the terms of the Indenture. 


        (b)   Any
Guarantor not released from its obligations under its Note Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the
other obligations of any Guarantor under the Indenture as provided in Article 11 of the Indenture. 




        6.    No Recourse Against Others.    No past, present or future director, officer, employee, incorporator, partner,
member, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees,
the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and
releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy. 



        7.    NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT  


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 WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.    


        8.    Counterparts.    The parties may sign any number of copies of this Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. 


        9.    Effect of Headings.    The Section headings herein are for convenience only and shall not affect the
construction hereof. 


        10.    The Trustee.    The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity
or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company. 


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        IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. 


        Dated:
December 12, 2003 



	 	UAE Ref-Fuel II Corp.
	

 	

By:	

/s/  KIRK J. BILY      

	 	Name:	Kirk J. Bily
	 	Title:	Assistant Secretary
	

 	

MSW Energy Holdings II LLC
	

 	

By:	

/s/  JOHN T. MILLER      

	 	Name:	John T. Miller
	 	Title:	Chief Executive Officer
	

 	

MSW Energy Finance Co. II, Inc.
	

 	

By:	

/s/  JOHN T. MILLER      

	 	Name:	John T. Miller
	 	Title:	Chief Executive Officer
	

 	

Wells Fargo Bank Minnesota, National Association as Trustee
	

 	

By:	

/s/  JOE O'DONNELL      

	 	 	Authorized Signatory




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Exhibit 4.2


WITNESSETH