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Exhibit 4.4

EXECUTION COPY  

$200,000,000  

 MSW Energy Holdings LLC

MSW Energy Finance Co., Inc.  

 81/2% Senior Secured Notes due 2010  

 
  REGISTRATION RIGHTS AGREEMENT    
    

June 25,
2003 

Credit
Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010-3629 

Dear
Sirs: 

        MSW
Energy Holdings LLC, a Delaware limited liability company ("MSW Energy"), and MSW Energy Finance Co., Inc., a Delaware
corporation ("MSW Finance" and, together with MSW Energy, the "Issuers") propose to issue and sell to
Credit Suisse First Boston LLC (the "Initial Purchaser"), upon the terms set forth in a purchase agreement, dated as of June 11, 2003 (the
"Purchase Agreement"), $200,000,000 aggregate principal amount of its 81/2% Senior Secured Notes due 2010 (the
"Initial Securities") to be guaranteed by Duke Energy Hudson LLC (the "Guarantor"), upon its acquisition
by MSW (collectively with the Issuers, the "Company"). The Initial Securities will be issued pursuant to an Indenture, dated as of June 25, 2003
(the "Indenture"), among the Issuers, the Guarantor and Wells Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"). As an inducement to the Initial Purchaser to enter into the Purchase Agreement, the Company agrees with the Initial Purchaser, for the
benefit of the Initial Purchaser and the holders of the Securities (as defined below) (collectively the "Holders"), as follows: 

        1.    Registered Exchange Offer.    Unless not permitted by applicable law (after the Company has complied with the
ultimate paragraph of this Section 1), the Company shall prepare and, not later than 90 days (such 90th day being a "Filing Deadline")
after the date on which the Initial Purchaser purchases the Initial Securities pursuant to the Purchase Agreement (the "Closing Date"), file with the
Securities and Exchange Commission (the "Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a
proposed offer (the "Registered Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not
prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate
principal amount of debt securities of the Company issued under the Indenture, identical in all material respects to the Initial Securities and registered under the Securities Act (the
"Exchange Securities"). The Company shall use its commercially reasonable best efforts to (i) cause such Exchange Offer Registration Statement to
become effective under the Securities Act within 180 days after the Closing Date (such 180th day being an "Effectiveness Deadline") and
(ii) keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer
is mailed to the Holders (such period being called the "Exchange Offer Registration Period"). 

        If
the Company commences the Registered Exchange Offer, the Company (i) will be entitled to consummate the Registered Exchange Offer 30 business days after such commencement
(provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer) and (ii) will be required to
consummate the Registered Exchange Offer no later than 30 business days after the date on which the Exchange Offer Registration Statement is declared effective (such 30th business day being the
"Consummation Deadline"). 

 

        Following
the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall as soon as practicable commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is
not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to
participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United
States. 

        The
Company acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption
therefrom, (i) each Holder which is a broker-dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities,
for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in (a) Annex A
hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if the
Initial Purchaser elects to sell Securities (as defined below) acquired in exchange for Initial Securities constituting any portion of an unsold allotment, the Initial Purchaser is required to deliver
a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale. 

        The
Company shall use its commercially reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein,
in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply
with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any
amendment or supplement thereto must be delivered by an Exchanging Dealer or the Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and
the Initial Purchaser have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and
any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after the consummation
of the Registered Exchange Offer; provided further, that during such period the Company may suspend the availability of the Exchange Offer Registration Statement, without being required to pay any
Additional Interest, upon written notice to the Initial Purchaser, the Holders of Transfer Restricted Securities and each Exchanging Dealer (which notice shall be accompanied by an instruction to
suspend the use of any prospectus), for 60 days in any calendar year (each such period, a "Suspension Period") if there is a possible
acquisition, business combination, other similar transaction, business development, or event involving the Company that would require the disclosure thereof in the Exchange Offer Registration
Statement and the Company reasonably determines in the exercise of its good faith judgment that such disclosure, at such time, would have a material adverse effect on the business, operations or
prospects of the Company; provided that such written notice will be sufficient if it only refers to this paragraph and provides notice that a Suspension Period has occurred and instructs the recipient
not to use any prospectus until further notice. 

        If,
upon consummation of the Registered Exchange Offer, the Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously
with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to the 

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Initial
Purchaser upon the written request of the Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by the Initial
Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects to the Initial Securities (the "Private
Exchange Securities"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the
"Securities". 

        In
connection with the Registered Exchange Offer, the Company shall: 

        (a)   mail
to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related
documents, provided that the Company shall only be required to mail such prospectus to Holders of which it is aware after due inquiry; 

        (b)   keep
the Registered Exchange Offer open for not less than 30 days (or longer, if required by applicable law) after the date on which the Exchange Offer
Registration Statement was declared effective by the Commission; 

        (c)   utilize
the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an
affiliate of the Trustee; 

        (d)   permit
Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer
shall remain open; and 

        (e)   otherwise
comply in all material respects with all applicable laws. 

        As
soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall: 

        (x)   accept
for exchange all the Initial Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; 

        (y)   deliver
to the Trustee for cancellation all the Initial Securities so accepted for exchange; and 

        (z)   cause
the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, either Exchange Securities or Private Exchange Securities, as the case
may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange. 

        The
Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent
together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter. 

        Interest
on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment
date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial
Securities. 

        Each
Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer
(i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of
the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to 

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the
extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if
such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other
trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. 

        Notwithstanding
any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part
thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration
Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. 

        If
following the date hereof there has been announced a change in Commission policy with respect to exchange offers that in the reasonable opinion of counsel to the Company raises a
substantial question as to whether the Registered Exchange Offer is permitted by applicable federal law, the Company will seek a no-action letter or other favorable decision from the
Commission allowing the Company to consummate the Registered Exchange Offer. The Company will pursue the issuance of such a decision to the Commission staff level. In connection with the foregoing,
the Company will take all such other actions as may be requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation
(i) participating in telephonic conferences with the Commission, (ii) delivering to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if
any, upon which such counsel has concluded that the Registered Exchange Offer should be permitted and (iii) diligently pursuing a resolution (which need not be favorable) by the Commission
staff. 

        2.    Shelf Registration.    If, (i) the Company is not required to file the Exchange Offer Registration
Statement, (ii) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as
contemplated by Section 1 hereof, (iii) the Initial Purchaser so requests with respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged for
Exchange Securities in the Registered Exchange Offer and held by it following the consummation of the Registered Exchange Offer or (iv) (a)(1) any Holder is prohibited by applicable law
or Commission policy from participating in the Registered Exchange Offer, (2) any Holder receives Exchange Securities in the Registered Exchange Offer which may not be resold to the public
without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales or (3) in the case of any Holder that
is a broker-dealer and owns Securities acquired directly from the Issuers or an affiliate of the Issuers and (b) any such Holder so notifies the Issuers prior to the 20thday
following the Consummation Deadline), the Company shall take the following actions (the date on which any of the conditions described in the foregoing clauses (i) through (iv) occur, including
in the case of clause (iv) the receipt of the required notice, being a "Trigger Date"): 

        (a)   The
Company shall promptly (but in no event more than 90 days after the Trigger Date (such 90th day being a "Filing
Deadline")) file with the Commission and thereafter use its commercially reasonable best efforts to cause to be declared effective no later than 180 days after the
Trigger Date (such 180th day being an "Effectiveness Deadline") a registration statement (the "Shelf Registration
Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an appropriate form
under the Securities Act relating to the offer 

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and
sale of the Transfer Restricted Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415
under the Securities Act (hereinafter, the "Shelf Registration"); provided, however, that no Holder
(other than the Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the
provisions of this Agreement applicable to such Holder. 

        (b)   The
Company shall use its commercially reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included
therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the date of its
effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are no longer
restricted securities (as defined in Rule 144 under the Securities Act, or any successor rule thereof)(such applicable period being herein referred to as the "Shelf
Registration Period"); provided, however, that during such time the Shelf Registration Statement is required to be effective, the Company may institute a Suspension Period
regarding the availability of the Shelf Registration Statement and the related prospectus, without being required to pay any Additional Interest, upon written notice to the Initial Purchaser, the
Holders of Transfer Restricted Securities and each Participating Broker-Dealer (which notice shall be accompanied by an instruction to suspend the use of any prospectus), if there is a possible
acquisition, business combination, other similar transaction, business development, or event involving the Company that would require the disclosure thereof in the Registration Statement and the
Company reasonably determines in the exercise of its good faith judgment that such disclosure, at such time, would have a material adverse effect on the business, operations or prospects of the
Company; provided that such written notice will be sufficient if it only refers to this paragraph and provides notice that a Suspension Period has occurred and instructs the recipient not to use any
prospectus until further notice. 

        (c)   Notwithstanding
any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements
of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

        3.    Registration Procedures.    In connection with any Shelf Registration contemplated by Section 2 hereof
and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply: 

        (a)   The
Company shall (i) furnish to the Initial Purchaser, as reasonably requested, prior to the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the prospectus included therein; (ii) include the information set forth in Annex A hereto on the cover, in
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus
forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer;
(iii) if requested by the Initial Purchaser, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the
prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, 

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which
shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such broker-dealer in the
Registered Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the
Commission or such positions or policies, in the reasonable judgment of the Initial Purchaser based upon advice of counsel (which may be in-house counsel), represent the prevailing views
of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders who propose to sell Securities pursuant to the Shelf Registration
Statement as selling securityholders. 

        (b)   The
Company shall give written notice to the Initial Purchaser, the Holders of the Securities and any Participating Broker-Dealer from whom the Company has received
prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which written notice pursuant to clauses (ii)-(vi) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes, if any, have been made): 

          (i)  when
the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective; 

         (ii)  of
any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information; 

        (iii)  of
the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; 

        (iv)  of
the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or, if known, any threatening of any proceeding for such purpose; 

         (v)  of
the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the
prospectus, in the light of the circumstances under which they were made) not misleading; and 

        (vi)  of
any Suspension Period. 

        (c)   The
Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration
Statement. 

        (d)   The
Company shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf
Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference). 

        (e)   The
Company shall deliver to each Exchanging Dealer and the Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange
Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Initial Purchaser or any such Holder requests, all exhibits
thereto (including those incorporated by reference). 

6

  

        (f)    The
Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as
many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The
Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto, in accordance with applicable law, by each of the selling Holders of
the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. 

        (g)   The
Company shall deliver to the Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus
following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such
persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto, in accordance with applicable
law, by the Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, in connection with the
offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement. 

        (h)   Prior
to any public offering of the Securities pursuant to any Registration Statement the Company shall use its commercially reasonable best efforts to register or
qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under
the securities or "blue sky" laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things reasonably necessary or
advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the
Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general
service of process or to taxation in any jurisdiction where it is not then so subject. 

        (i)    The
Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold
pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of
the Securities pursuant to such Registration Statement. 

        (j)    Upon
the occurrence of any event contemplated by paragraphs (ii) through (vi) of Section 3(b) above during the period for which the Company is required to
maintain an effective Registration Statement, the Company shall, if updating the information in the prospectus is required, promptly prepare and file a post-effective amendment to the
Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the
prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Company notifies the Initial Purchaser, the Holders of the Securities and any known Participating Broker-Dealer in accordance with
paragraphs (ii) through (vi) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made or until the end of any Suspension
Period, then the Initial Purchaser, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf
Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above 

7

 

shall
each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchaser, the Holders of the Securities and any known
Participating Broker-Dealer shall have received an amended or supplemented prospectus pursuant to this Section 3(j). 

        (k)   Not
later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities
or the Private Exchange Securities, as the case may be, and provide the applicable trustee with printed or typewritten certificates for the Initial Securities, the Exchange Securities or the Private
Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company. 

        (l)    The
Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf
Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning
with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period. 

        (m)  The
Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall
be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture. 

        (n)   The
Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder
and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the
Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request. 

        (o)   The
Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as
any Holder of the Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration. 

        (p)   In
the case of any Shelf Registration, subject to the execution of customary confidentiality agreements, the Company shall (i) make reasonably available at
reasonable times and upon reasonable notice for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any
attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the
Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any
such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering
pursuant to clauses (i) and (ii) above shall be coordinated on behalf of the Initial Purchaser by you and on behalf of the other parties, by one counsel designated by and on behalf of such
other parties as described in Section 4(b) hereof. 

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        (q)   In
the case of any Shelf Registration, the Company, if requested by any Holder of Securities covered thereby, shall cause (i) its counsel to deliver an opinion
and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective
date of such Shelf Registration Statement, which opinion shall cover matters customary for underwritten offerings of debt securities of companies similar to the Company; (ii) its officers to
execute and deliver all customary documents and certificates and updates thereof reasonably requested by any underwriters of the applicable Securities and (iii) its independent public
accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holders of
the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72., Letters for
Underwriters and Certain Other Requesting Parties, as amended by Statements on Auditing Standards No. 76 and No. 86. 

        (r)   In
the case of the Registered Exchange Offer, if requested by the Initial Purchaser or any known Participating Broker-Dealer, the Company shall cause (i) its
counsel to deliver to the Initial Purchaser or such Participating Broker-Dealer a signed opinion delivered pursuant to Section 6(c) of the Purchase Agreement with such changes as are customary
in connection with the preparation of a Registration Statement and (ii) its independent public accountants and the independent public accountants with respect to any other entity for which
financial information is provided in the Registration Statement to deliver to the Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as
to the substance thereof as set forth in Section 6(a) and (j) of the Purchase Agreement, with appropriate date changes. 

        (s)   If
a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as
directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or caused to be marked, on the Initial Securities so
exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be
marked as paid or otherwise satisfied. 

        (t)    In
the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling
group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities
Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including
Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such
Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made
through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules. 

        (u)   The
Company shall use its commercially reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration
Statement contemplated hereby. 

9

 

        4.    Registration Expenses.    (a) All expenses incident to the Company's performance of and compliance with
this Agreement (other than any underwriting discounts and commissions in an underwritten offering in connection with any Shelf Registration) will be borne by the Company, regardless of whether a
Registration Statement is ever filed or becomes effective, including without limitation; 

          (i)  all
reasonable registration and filing fees and expenses; 

         (ii)  all
fees and expenses of compliance with federal securities and state "blue sky" or securities laws; 

        (iii)  all
expenses of printing (including printing certificates for the Securities to be issued in the Registered Exchange Offer and the Private Exchange and printing of
Prospectuses), messenger and delivery services and telephone; 

        (iv)  all
fees and disbursements of counsel for the Company; 

         (v)  all
application and filing fees in connection with listing the Exchange Securities on a national securities exchange or automated quotation system pursuant to the
requirements hereof; and 

        (vi)  all
fees and disbursements of independent certified public accountants of the Company (including the expenses of any special audit and comfort letters required by or
incident to such performance). 

The
Company will bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any person, including special experts, retained by the Company. 

        (b)   In
connection with any Registration Statement required by this Agreement, the Company will reimburse the Initial Purchaser and the Holders of Transfer Restricted
Securities who are tendering Initial Securities in the Registered Exchange Offer and/or selling or reselling Securities pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements not to exceed $25,000 of not more than one counsel, who shall be Latham &
Watkins LLP unless another firm shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. 

        5.    Indemnification.    (a) The Company agrees to indemnify and hold harmless each Holder of the Securities,
any Participating Broker-Dealer or any of its officers and directors and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or
the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the "Indemnified Parties")
from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions
relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the
Company shall not be liable in any 

10

 

such
case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a
Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration in reliance upon and in conformity with written
information pertaining to such Holder or Participating Broker-Dealer, as the case may be, and furnished to the Company by or on behalf of such Holder or Participating Broker-Dealer, as the case may
be, specifically for inclusion therein, (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf
Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the person asserting any
such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered by such Holder or Participating
Broker-Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer results from the fact that there was
not sent or given to such person, at or prior to the written confirmation of the sale of such Securities to such person, a copy of the final prospectus if the Company had previously furnished copies
thereof to such Holder or Participating Broker-Dealer and (iii) the Company shall not, in connection with any one action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel)
for all indemnified parties, such firm to be designated in writing by and on behalf of Holders as described in Section 4 hereof; provided further,
however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify
underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent (and subject to the same
exceptions) as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders or Participating Broker-Dealers. 

        (b)   Each
Holder of the Securities and each Participating Broker-Dealer, severally and not jointly, will indemnify and hold harmless the Company and its officers and
directors and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against
any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder or Participating Broker-Dealer, as the case may be, and furnished to the Company by
or on behalf of such Holder or Participating Broker-Dealer, as the case may be, specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall
reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or its officers and directors or any such controlling person in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder and each Participating Broker-Dealer, as the
case may be, may otherwise have to the Company or any of its controlling persons. 

        (c)   Promptly
after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party 

11

 

under
this Section 5, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to
the indemnified party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the
defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party. 

        (d)   If
the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party
or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect
thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party,
as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this
Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the
Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the 

12

 

Company
within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company. 

        (e)   The
agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 

        6.    Additional Interest Under Certain Circumstances.    (a) Additional interest (the
"Additional Interest") with respect to the Securities shall be assessed as follows if any of the following events occur (each such event in
clauses (i) through (v) below being herein called a "Registration Default"): 

          (i)  any
Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline; 

         (ii)  any
Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the applicable Effectiveness Deadline; 

        (iii)  the
Registered Exchange Offer has not been consummated on or prior to the Consummation Deadline; 

        (iv)  any
Registration Statement required by this Agreement has been declared effective by the Commission but (A) such Registration Statement thereafter ceases to be
effective or (B) such Registration Statement or the related prospectus ceases to be usable in connection with resales of Transfer Restricted Securities during the periods specified herein
because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such
Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder; or 

         (v)  after
the 60th day in any calendar year of any Suspension Period, the suspension referred to in Sections 1 or 2 has not been terminated. 

Each
of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Company or pursuant to
operation of law or as a result of any action or inaction by the Commission. 

        Additional
Interest shall accrue on the Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default
shall occur to but excluding the date on which all such Registration Defaults have been cured, in the form of an increase in the annual interest rate borne by the Securities, at a rate of 0.25% per
annum (the "Additional Interest Rate") for the first 90-day period immediately following the occurrence of such Registration Default. The
Additional Interest Rate shall increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum
Additional Interest Rate of 1.0% per annum. 

        (b)   A
Registration Default referred to in Section 6(a)(iv) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement
or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration
Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to
permit Holders to use the related prospectus or (y) other material events, with respect to the Company that would need to be described in such Shelf Registration Statement or the related
prospectus and (ii) in the case of clause (y), the Company is 

13

 

proceeding
promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided,
however, that in any case if such Registration Default occurs for a continuous period in excess of 30 days, Additional Interest shall be payable in accordance with the
above paragraph from the day such Registration Default occurs until such Registration Default is cured. 

        (c)   Any
amounts of Additional Interest due pursuant to Section 6(a) will be payable in cash on the regular interest payment dates with respect to the Securities. The
amount of Additional Interest will be determined by multiplying the applicable Additional Interest Rate by the principal amount of the Securities and further multiplied by a fraction, the numerator of
which is the number of days such Additional Interest Rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and
the denominator of which is 360. 

        (d)   "Transfer Restricted Securities" means each Security until (i) the date on which such Security has been exchanged
by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange
Offer of an Initial Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy
of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Security has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable
pursuant to Rule 144 under the Securities Act. 

        7.    Rules 144 and 144A.    The Company shall use its commercially reasonable best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any
Holder of Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take
such further action as any Holder of Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Initial Securities identified to the Company by the Initial Purchaser upon request. If the Company ceases to be a
reporting company under the Exchange Act, upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such
requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 

        8.    Underwritten Registrations.    If any of the Transfer Restricted Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing
Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering, which
Managing Underwriter shall be reasonably acceptable to the Company. 

        No
person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 

14

   
        9.    Miscellaneous.    

        (a)    Remedies.    The Company acknowledges and agrees that any failure by the Company to comply with its obligations
under Section 1 and 2 hereof may result in material irreparable injury to the Initial Purchaser or the Holders for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchaser or any Holder may obtain such relief as may be required to specifically enforce the
Company's obligations under Sections 1 and 2 hereof. The Company further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 

        (b)    No Inconsistent Agreements.    The Company will not on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any agreement in effect on the date hereof. 

        (c)    Amendments and Waivers.    The provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Securities affected
by such amendment, modification, supplement, waiver or consents. 

        (d)    Notices.    All notices and other communications provided for or permitted hereunder shall be made in writing
by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery: 

        (1)   if
to a Holder of the Securities, at the most current address given by such Holder to the Company. 

        (2)   if
to the Initial Purchaser; 

Credit
Suisse First Boston LLC

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.: (212) 325-8278

Attention: Transactions Advisory Group 

with
a copy to: 

Latham &
Watkins LLP

885 Third Avenue

Suite 1000

New York, NY 10022

Fax No.: (212) 751-4864

Attention: Peter Labonski 

        (3)   if
to the Company, at the addresses as follows: 

MSW
Energy Holdings LLC

c/o DLJ Merchant Banking Partners

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.: (646) 935-7043

Attention: Daniel Clare 

and

c/o
AIG Highstar Capital, L.P.

175 Water Street

26th Floor

New York, NY 10038

Fax No.: (212) 458-2222

Attention: Michael Miller 

15

 

with
a copy to: 

Bingham
McCutchen LLP

150 Federal Street

Boston, MA 02110-1726

Fax No.: (617) 951-8736

Attention: John R. Utzschneider 

        All
such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the
mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery. 

        (e)    Third Party Beneficiaries.    The Holders shall be third party beneficiaries to the agreements made hereunder
between the Company, on the one hand, and the Initial Purchaser, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary
or advisable to protect their rights or the rights of Holders hereunder. If any transferee or any Holder shall acquire any Transfer Restricted Securities in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by acquiring and holding such Transfer Restricted Securities, such transferee shall be
conclusively deemed to have agreed to be bound by all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement. 

        (f)    Successors and Assigns.    This Agreement shall be binding upon the Company and its successors and assigns. 

        (g)    Counterparts.    This Agreement may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 

        (h)    Headings.    The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. 

        (i)    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. 

        (j)    Severability.    If any one or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby. 

        (k)    Securities Held by the Company.    Whenever the consent or approval of Holders of a specified percentage of
principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 

        (l)    Guarantor.    Immediately after the closing of the Acquisition, the Company will cause the Guarantor to become
a party to this Agreement by causing the Guarantor to execute and deliver a signature page to this Agreement to the Initial Purchaser on the closing of the Acquisition; it being acknowledged and
agreed that all representations and warranties made by or with respect to the Guarantor and all covenants of the Guarantor shall not be effective unless and until the Guarantor executes and delivers a
signature page to this Agreement. 

16

 

        If
the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Initial Purchaser, the Issuers and the Guarantor in accordance with its terms. 

	 	 	Very truly yours,
	

 	
 	

MSW Energy Holdings LLC
	

 	
 	

by:	
 	

/s/  MICHAEL J. MILLER      

	 	 	Name:	 	Michael J. Miller
	 	 	Title:	 	CEO
	

 	
 	

MSW Energy Finance Co., Inc.
	

 	
 	

by:	
 	

/s/  DANIEL H. CLARE      

	 	 	Name:	 	Daniel H. Clare
	 	 	Title:	 	Secretary
	

 	
 	

MSW Energy Hudson LLC
	

 	
 	

By:	
 	

MSW Energy Holdings LLC, its Sole Member
	

 	
 	

by:	
 	

/s/  MICHAEL J. MILLER      

	 	 	Name:	 	Michael J. Miller
	 	 	Title:	 	CEO

The
foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written. 

CREDIT SUISSE FIRST BOSTON LLC

	by	 	 	 	 
	 	 	/s/  JOHN CAVALIER      
 Name: John Cavalier

Title: Managing Director	 	 

17

ANNEX A  

        Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of
Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities.
The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution." 

ANNEX B  

        Each broker-dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such
broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See
"Plan of Distribution." 

ANNEX C  

PLAN OF DISTRIBUTION  

        Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange
Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for
a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition,
until                        , 2003 all dealers effecting transactions in the Exchange Securities may be required to deliver a
prospectus.(1) 

        The
Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the
Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the
Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of
any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates
in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission
or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 

        For
a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act. 

	(1)
	In
addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus. 

ANNEX D  

        [    ]
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO. 

	Name:	 	 	 	 
	 	 	
	 	 
	Address:	 	 	 	 
	 	 	
	 	 

If
the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a
broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 

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Exhibit 4.5

Execution Copy  

 
 

PLEDGE AND SECURITY AGREEMENT    
    
    dated as of June 25, 2003    
    
    among    
    
    MSW Energy Holdings LLC
  as Grantor,    
    
    and    
    
    MSW Energy
Finance Co., Inc.
  as Grantor,    
    
    and    
    
    Wells Fargo Bank Minnesota, National Association,
  as Collateral Agent    
    

 
 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	PAGE

	Section 1.	 	DEFINITIONS	 	1
	(a)	 	General Definitions	 	1
	(b)	 	Definitions; Interpretation	 	8
	

Section 2.	
 	

GRANT OF SECURITY	
 	

9
	(a)	 	Grant of Security	 	9
	(b)	 	Certain Limited Exclusions	 	9
	

Section 3.	
 	

SECURITY FOR OBLIGATIONS	
 	

10
	(a)	 	Security for Obligations	 	10
	(b)	 	Continuing Liability under Collateral	 	10
	(c)	 	Authorization to File Financing Statements	 	10
	

Section 4.	
 	

REPRESENTATIONS AND WARRANTIES AND COVENANTS	
 	

11
	(a)	 	Generally	 	11
	(b)	 	Investment Related Property	 	13
	

Section 5.	
 	

ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES	
 	

18
	(a)	 	Access; Right of Inspection	 	18
	(b)	 	Further Assurances	 	18
	

Section 6.	
 	

COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT; POWER OF ATTORNEY	
 	

19
	

Section 7.	
 	

REMEDIES	
 	

20
	(a)	 	Generally	 	20
	(b)	 	Application of Proceeds	 	21
	(c)	 	Sales on Credit	 	21
	(d)	 	Investment Related Property	 	21
	

Section 8.	
 	

COLLATERAL AGENT	
 	

22
	

Section 9.	
 	

CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS	
 	

23
	

Section 10.	
 	

STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM	
 	

23
	

Section 11.	
 	

INDEMNITY AND EXPENSES	
 	

24
	 	 	 	 	 

i

 

	Section 12.	 	MISCELLANEOUS	 	24
	(a)	 	Notices	 	24
	(b)	 	Expenses	 	25
	(c)	 	Amendments and Waivers	 	25
	(d)	 	Successors and Assigns	 	25
	(e)	 	Independence of Covenants	 	26
	(f)	 	Survival of Representations, Warranties and Agreements	 	26
	(g)	 	Marshaling; Payments Set Aside	 	26
	(h)	 	Severability	 	26
	(i)	 	Headings	 	26
	(j)	 	APPLICABLE LAW	 	26
	(k)	 	CONSENT TO JURISDICTION	 	26
	(l)	 	WAIVER OF JURY TRIAL	 	26
	(m)	 	Counterparts	 	27
	(n)	 	Effectiveness	 	27
	(o)	 	Entire Agreement	 	27

Exhibit A—Pledge Supplement
 Exhibit B—Joinder Agreement 

ii

        This PLEDGE AND SECURITY AGREEMENT, dated as of June 25, 2003 (this "Agreement"), among MSW Energy Holdings LLC, a Delaware limited
liability company ("MSW Holdings"), MSW Energy Finance Co., Inc. ("MSW Finance") (MSW Holdings
and MSW Finance, together with any other Person that executes a Pledge Supplement substantially in the form of Exhibit A hereto, each, a
"Grantor" and collectively, the "Grantors"), and Wells Fargo Bank Minnesota, National Association,
acting in the capacity of agent for the benefit of the Secured Parties (as defined below) (the "Collateral Agent"). 

RECITALS:  

        WHEREAS, pursuant to that certain Indenture, dated the date hereof (the
"Indenture"), among the Grantors, the Guarantors party thereto and Wells Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"), the Grantors intend to offer (the "Offering") $200,000,000 of 81/2% Senior
Secured Notes due 2010 (the "Notes"). 

        WHEREAS, as security for the full and final payment and performance of the Note Obligations and the Parity Lien Obligations, the Grantors
have entered into this Agreement, pursuant to which the Grantors will grant a security interest in or pledge the Collateral (as defined below). Upon the incurrence of any Parity Lien Obligations, the
provider of such Parity Lien Obligations will become a Secured Party under this Agreement by executing a Joinder Agreement substantially in the form of  Exhibit B hereto. 

        WHEREAS, MSW Holdings intends to acquire prior to September 30, 2003 all of the capital stock of Duke Energy Hudson, LLC
("Duke Hudson"). In addition, MSW Holdings intends to acquire all of the capital stock of Duke Energy Erie, LLC ("Duke
Erie") within two and one half years of acquiring Duke Hudson. Prior to the acquisition of Duke Hudson by MSW Holdings, Duke Hudson will own 49.8% of the capital stock of
Duke/UAE Ref-Fuel LLC ("Duke/UAE") and Duke Erie will own 0.2% of the capital stock of Duke/UAE. Upon acquisition of both Duke Hudson and
Duke Erie, MSW Holdings will indirectly own 50% of the capital stock of Duke/UAE. Duke/UAE owns 100% of the capital stock of American Ref-Fuel Company LLC, a Delaware limited liability
company ("ARC"). Upon acquisition by MSW Holdings, each of Duke Hudson and Duke Erie will become a Grantor under this Agreement by executing a Pledge
Supplement substantially in the form of Exhibit A hereto. 

AGREEMENT:  

        NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, each Grantor and the Collateral Agent agree as follows: 

        Section 1.    DEFINITIONS    

        (a)    General Definitions.    In this Agreement, the following terms shall have the following meanings: 

        "Account Debtor" shall mean each Person who is obligated on a Receivable or any Supporting Obligation related thereto. 

        "Accounts" shall mean all "accounts" as defined in Article 9 of the UCC, including Health-Care Insurance Receivables. 

        "Affiliate" of any specified Person shall mean any other Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise;  provided, that beneficial ownership of 10% or more of
the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the
terms "controlling," "controlled by" and "under common control with" have correlative meanings. 

        "Agreement" shall have the meaning set forth in the preamble. 

 

        "ARC" shall have the meaning set forth in the recitals. 

        "Authenticate" shall mean "authenticate" as defined in Article 9 of the UCC. 

        "Bankruptcy Code" shall mean Title 11 of the United States Code entitled "Bankruptcy," as now and hereafter in effect, or any successor
statute. 

        "Cash Proceeds" shall mean all proceeds of any Collateral consisting of cash, checks and other near-cash items. 

        "Chattel Paper" shall mean all "chattel paper" as defined in Article 9 of the UCC, including, without limitation, "electronic
chattel paper" or "tangible chattel paper," as each term is defined in the UCC. 

        "Closing Date" shall mean the date on which the Indenture is made. 

        "Collateral" shall have the meaning set forth in Section 2(a) hereof. 

        "Collateral Agent" shall have the meaning set forth in the preamble. 

        "Collateral Documents" shall mean this Agreement, the Deposit Agreement and all other instruments, documents and agreements delivered by
any of the parties to the Transaction Documents pursuant to this Agreement or any other Transaction Document in order to grant or perfect a lien in favor of the Collateral Agent on any real, personal
or mixed property of such party as security for the Secured Obligations. 

        "Collateral Records" shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon. 

        "Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall
include any security agreement or other agreement granting a lien or security interest in such real or personal property. 

        "Commercial Tort Claims" shall mean all "commercial tort claims" as defined in Article 9 of the UCC, including, without limitation,
all commercial tort claims listed and described with specification on Schedule IV hereto (as such schedule may be amended or supplemented from
time to time). 

        "Commodities Accounts" (i) shall mean all "commodity accounts" as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all of the accounts listed on Schedule II hereto under the heading "Commodities Accounts" (as such schedule may be
amended or supplemented from time to time). 

        "Controlled Foreign Corporation" shall mean "controlled foreign corporation" as defined in the Tax Code. 

        "Copyright Licenses" shall mean any and all agreements granting any right in, to or under Copyrights (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to in Schedule III(b) (as such schedule may be amended or
supplemented from time to time). 

        "Copyrights" shall mean all United States, state and foreign copyrights, including but not limited to copyrights in software and
databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, now or hereafter in force throughout the world, all registrations and
applications for any of the foregoing including, without 

2

 

limitation,
the applications referred to in Schedule III(a) (as such schedule may be amended or supplemented from time to time), all rights
corresponding thereto throughout the world, all extensions and renewals of any thereof, the right to sue for past, present and future infringements of any of the foregoing, and all proceeds of the
foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit. 

        "Deposit Accounts" (i) shall mean all "deposit accounts" as defined in Article 9 of the UCC and (ii) shall include,
without limitation, all of the accounts listed on Schedule II hereto under the heading "Deposit Accounts" (as such schedule may be amended or
supplemented from time to time). 

        "Deposit Agreement" shall mean that Deposit Agreement, dated the date hereof, among the MSW Holdings, MSW Finance, Wells Fargo Bank
Minnesota, National Association, as Collateral Agent, and Wells Fargo Bank Minnesota, National Association, as Depositary Agent. 

        "Documents" shall mean all "documents" as defined in Article 9 of the UCC. 

        "Documents Evidencing Goods" shall mean all Documents evidencing, representing or issued in connection with Goods. 

        "Duke/UAE" shall have the meaning set forth in the recitals. 

        "Duke Erie" shall have the meaning set forth in the recitals. 

        "Duke Essex Payment Account" shall have the meaning given in Section 2.1 of the Deposit Agreement. 

        "Duke Essex Payment Escrow Account" has the meaning set forth in the Deposit Agreement. 

        "Duke Essex Payment Reserve Account" shall have the meaning given in Section 2.1 of the Deposit Agreement. 

        "Duke Hudson" shall have the meaning set forth in the recitals. 

        "Equipment" shall mean: (a) all "equipment" as defined in the UCC, (b) all machinery, manufacturing equipment, data
processing equipment, computers, office equipment, furnishings, furniture, appliances, and tools (in each case, regardless of whether characterized as equipment under the UCC), (c) all Fixtures
and (d) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefor,
wherever located, now or hereafter existing. 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto. 

        "Escrow Agreement" shall mean that Escrow Agreement, dated the date hereof, among MSW Holdings, MSW Finance, Credit Suisse First Boston
LLC and Wells Fargo Bank Minnesota, National Association, as Escrow Agent. 

        "Event of Default" shall mean the occurrence of an "Event of Default" under the Indenture or any Parity Debt Document. 

        "Excluded Collateral" shall mean the Duke Essex Payment Reserve Account, the Duke Essex Payment Escrow Account and letters of credit and
guaranties or other agreements pledged in favor of banks and proceeds thereof as permitted by clause 11 of the definition of "Permitted Liens" in the Indenture. 

        "Fixtures" shall mean all "fixtures" as defined in Article 9 of the UCC. 

3

 

        "GAAP" shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in effect on the date of the Closing Date. 

        "General Intangibles" (a) shall mean all "general intangibles" as defined in Article 9 of the UCC and (b) shall
include, without limitation, all interest rate or currency protection or hedging arrangements, all contracts, all tax refunds and all licenses, permits, concessions and authorizations, (in each case,
regardless of whether characterized as general intangibles under the UCC). 

        "Goods" (a) shall mean all "goods" as defined in Article 9 of the UCC and (b) shall include, without limitation, all
Inventory, Equipment, Documents Evidencing Goods and Software Embedded In Goods. 

        "Health-Care-Insurance Receivable" shall have the meaning specified in the UCC. 

        "Indemnitee" shall mean the Collateral Agent, and its Affiliates' officers, partners, directors, trustees, employees and agents. 

        "Indenture" shall have the meaning set forth in the recitals. 

        "Instruments" shall mean all "instruments" as defined in Article 9 of the UCC. 

        "Insurance" shall mean: (a) all insurance policies covering any or all of the Collateral (regardless of whether the Collateral
Agent is the loss payee thereof) and (b) any key man life insurance policies. 

        "Intellectual Property" shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses. 

        "Intellectual Property Licenses" shall mean, collectively, the Copyright Licenses, Patent Licenses, Trademark Licenses, and Trade Secret
Licenses. 

        "Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and
any successor statute. 

        "Inventory" shall mean: (a) all "inventory" as defined in the UCC and (b) all goods held for sale or lease or to be
furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Grantor's business; all goods in which any Grantor has an interest in mass or a joint or other
interest or right of any kind; and all goods which are returned to or repossessed by any Grantor, and all accessions thereto and products thereof (in each case, regardless of whether characterized as
inventory under the UCC). 

        "Investment Accounts" shall mean Securities Accounts, Commodities Accounts and Deposit Accounts. 

        "Investment Related Property" shall mean: (a) all "investment property" (as such term is defined in Article 9 of the UCC)
and (b) all of the following (regardless of whether classified as investment property under the UCC): all (i) Pledged Equity Interests, (ii) Pledged Debt, (iii) the
Investment Accounts and (iv) Certificates of Deposit. 

        "Letter of Credit Right" shall mean "letter-of-credit right" as defined in Article 9 of the UCC. 

4

 

        "Lien" shall mean, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to see or give a security interest in and any filing of or agreement to give any financing statement under the UCC (or equivalent statutes) of any jurisdiction. 

        "Material Adverse Effect" shall mean a material adverse effect on (a) the condition (financial or other), business, properties or
results of operations, of Grantors and their subsidiaries taken as a whole; (b) the ability of any Grantor to fully and timely perform its Secured Obligations; (c) the legality,
validity, binding effect or enforceability against any Grantor of a Transaction Document to which it is a party; or (d) the rights, remedies and benefits available to, or conferred upon, any
agent and Collateral Agent under any Secured Obligation. 

        "Material Contract" shall mean any contract or other arrangement to which any Grantor is a party for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect. 

        "Money" shall mean "money" as defined in the UCC. 

        "MSW Finance" shall have the meaning set forth in the preamble. 

        "MSW Holdings" shall have the meaning set forth in the preamble. 

        "Non-Assignable Contract" shall mean any agreement, contract or license to which any Grantor is a party that by its terms
purport to restrict or prevent the assignment or granting of a security interest therein (either by its terms or by any federal or state statutory prohibition or otherwise irrespective of whether such
prohibition or restriction is enforceable under Section 9-406 through 409 of the UCC). 

        "Note Obligations" has the meaning set forth in the Indenture. 

        "Notes" shall have the meaning set forth in the recitals. 

        "Parity Debt Document" means each agreement governing, securing or relating to any Parity Lien Obligations. 

        "Parity Lien Obligations" has the meaning set forth in the Indenture. 

        "Patent Licenses" shall mean all agreements granting any right in, to, or under Patents (whether such Grantor is licensee or licensor
thereunder) including without limitation, each agreement referred to in Schedule III(d) hereto (as such schedule may be amended or supplemented
from time to time). 

        "Patents" shall mean all United States, state and foreign patents and applications for letters patent, including, but not limited to, each
patent and patent application referred to in Schedule III(c) hereto (as such schedule may be amended or supplemented from time to time), all
reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations of any of the foregoing, all rights corresponding thereto throughout the
world, the right to sue for past, present and future infringements of any of the foregoing and all proceeds of the foregoing including, without limitation, royalties, income, payments, claims, damages
and proceeds of suit. 

        "Payment Intangible" shall have the meaning specified in the UCC. 

        "Permitted Lien" shall mean any "Permitted Lien" under the Indenture. 

        "Permitted Sale" shall mean those sales, transfers or assignments permitted by the Indenture. 

        "Pledge Supplement" means an agreement in substantially the form of Exhibit A  hereto. 

5

 

        "Person" shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity. 

        "Pledged Alternative Equity Interests" shall mean all participation or other interests in any equity or profits of any business entity and
the certificates, if any, representing such interests and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of such interests and any other warrant, right or option to acquire any of the foregoing;  provided, however,
that Pledged Alternative Equity Interests shall not include any Pledged Stock, Pledged Partnership Interests, Pledged LLC Interests
and Pledged Trust Interests. 

        "Pledged Debt" shall mean all indebtedness for borrowed money owed to such Grantor, whether or not evidenced by any instrument or
promissory note, including, without limitation, all indebtedness described on Schedule II hereto under the heading "Pledged Debt" (as such
schedule may be amended or supplemented from time to time), all monetary obligations owing to any Grantor from any other Grantor the instruments evidencing any of the foregoing, and all interest,
cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing. 

        "Pledged Equity Interests" shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests and
Pledged Alternative Equity Interests. 

        "Pledged LLC Interests" shall mean all interests in any limited liability company including, without limitation, all limited liability
company interests listed on Schedule II hereto under the heading "Pledged LLC Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such limited liability company interests and any interest of such Grantor on the books and records of such limited liability company or on the
books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests and any other warrant, right or option to
acquire any of the foregoing. 

        "Pledged Partnership Interests" shall mean all interests in any general partnership, limited partnership, limited liability partnership or
other partnership including, without limitation, all partnership interests listed on Schedule II hereto under the heading "Pledged Partnership
Interests" (as such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such partnership interests and any interest of such Grantor on the books and
records of such partnership or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and any other
warrant, right or option to acquire any of the foregoing. 

        "Pledged Stock" shall mean all shares of capital stock owned by such Grantor, including, without limitation, all shares of capital stock
described on Schedule II hereto under the heading "Pledged Stock" (as such schedule may be amended or supplemented from time to time), and the
certificates, if any, representing such shares and any interest of such Grantor in the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to
such shares, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of the foregoing. 

6

  

        "Pledged Trust Interests" shall mean all interests in a Delaware business trust or other trust including, without limitation, all trust
interests listed on Schedule II hereto under the heading "Pledged Trust Interests" (as such schedule may be amended or supplemented from time to
time) and the certificates, if any, representing such trust interests and any interest of such Grantor on the books and records of such trust or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such trust interests and any other warrant, right or option to acquire any of the foregoing. 

        "Proceeds" shall mean: (a) all "proceeds" as defined in Article 9 of the UCC, (b) payments or distributions made with
respect to any Investment Related Property and (c) whatever is receivable or received when Collateral or proceeds are sold, leased, licensed, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary. 

        "Receivables" shall mean all (a) Accounts, (b) Chattel Paper, (c) Payment Intangibles, (d) Instruments and
(e) to the extent not otherwise covered above, all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise
disposed of, or services rendered or to be rendered, regardless of how classified under the UCC together with all of Grantors' rights, if any, in any goods or other property giving rise to such right
to payment and all Collateral Support and Supporting Obligations related thereto and all Receivables Records. 

        "Receivables Records" shall mean (a) all original copies of all documents, instruments or other writings or electronic records or
other Records evidencing the Receivables, (b) all books, correspondence, credit or other files, Records, ledger sheets or cards, invoices, and other papers relating to Receivables, including,
without limitation, all tapes, cards, computer tapes, computer discs, computer runs, record keeping systems and other papers and documents relating to the Receivables, whether in the possession or
under the control of Grantor or any computer bureau or agent from time to time acting for Grantor or otherwise, (c) all evidences of the filing of financing statements and the registration of
other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other creditors or agents thereof, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or other registration officers, (d) all credit information, reports and memoranda relating thereto and (e) all
other written or non-written forms of information related in any way to the foregoing or any Receivable. 

        "Record" shall have the meaning specified in the UCC. 

        "Secured Obligations" shall mean all obligations of every nature of each Grantor from time to time owed to the Collateral Agent or any
Secured Party hereunder or under the Deposit Agreement, all Note Obligations and all Parity Lien Obligations. 

        "Secured Party" shall mean the Trustee and the Holders of the Notes and all holders of Parity Lien Obligations and any trustee or agent
acting on their behalf. 

        "Securities" shall mean any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in
general any instruments commonly known as "securities" or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right
to subscribe to, purchase or acquire, any of the foregoing. 

        "Securities Accounts" (a) shall mean all "securities accounts" as defined in Article 8 of the UCC (except for the Duke Essex
Payment Reserve Account and the Duke Essex Payment Escrow 

7

 

Account)
and (b) shall include, without limitation, all of the accounts listed on Schedule II hereto under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time). 

        "Software Embedded in Goods" means, with respect to any Goods, any computer program embedded in Goods and any supporting information
provided in connection with a transaction relating to the program if (a) the program is associated with the Goods in such a manner that it customarily is considered part of the Goods or
(b) by becoming the owner of the Goods a person acquires a right to use the program in connection with the Goods. 

        "State" shall mean a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory
or insular possession subject to the jurisdiction of the United States. 

        "Supporting Obligation" shall mean all "supporting obligations" as defined in the UCC. 

        "Tax Code" shall mean the United States Internal Revenue Code of 1986, as amended from time to time. 

        "Trade Secret Licenses" shall mean any and all agreements granting any right in or to Trade Secrets (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to in Schedule III(g) hereto (as such schedule may be amended or
supplemented from time to time). 

        "Trade Secrets" shall mean all trade secrets and all other confidential or proprietary information and know-how (all of the
foregoing being collectively called a "Trade Secret"), whether or not reduced to a writing or other tangible form, including all documents and things
embodying, incorporating, or referring in any way to such Trade Secret, the right to sue for past, present and future infringement of any Trade Secret, and all proceeds of the foregoing, including,
without limitation, royalties, income, payments, claims, damages and proceeds of suit. 

        "Trademark Licenses" shall mean any and all agreements granting any right in or to Trademarks (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to in Schedule III(f) hereto (as such schedule may be amended or
supplemented from time to time). 

        "Trademarks" shall mean all United States, state and foreign trademarks, service marks, certification marks, collective marks, trade
names, corporate names, d/b/as, business names, fictitious business names, internet domain names, trade styles, logos, other source or business identifiers, designs and general intangibles of a like
nature, rights of publicity and privacy pertaining to the right to use names likeness and biographical data as real, all registrations and applications for any of the foregoing including, but not
limited to, the registrations and applications referred to in Schedule III(e) hereto (as such schedule may be amended or supplemented from time
to time), the goodwill of the business symbolized by the foregoing, the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and
all proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit. 

        "Transaction Documents" shall mean the Indenture, this Agreement and the Deposit Agreement. 

        "Trustee" shall have the meaning set forth in the recitals. 

        "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York. 

        (b)    Definitions; Interpretation.    All capitalized terms used herein (including the preamble and recitals hereto)
and not otherwise defined herein shall have the meanings ascribed thereto in the 

8

 

Indenture
or, if not defined therein, in the UCC. References to "Sections," "Annexes" and "Schedules" shall be to Sections, Annexes and Schedules, as the case may be, of this Agreement unless
otherwise specifically provided. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be
given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word
"include" or "including," when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. If any conflict or inconsistency
exists between this Agreement and the Indenture, the Indenture shall govern. All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or
amendment to any Article of the UCC. 

        Section 2.    GRANT OF SECURITY    

        (a)    Grant of Security.    Each Grantor hereby grants to the Collateral Agent a security interest and continuing
lien on all of such Grantor's right, title and interest in, to and under all personal property of such Grantor including, but not limited to the following, in each case whether now owned or existing
or hereafter acquired or arising and wherever located, but excluding all Excluded Collateral (all of which being hereinafter collectively referred to as the
"Collateral,"): 

          (i)  Documents; 

         (ii)  Goods
(including Documents Representing Goods and Software Embedded in Goods); 

        (iii)  Insurance;

        (iv)  Intellectual
Property; 

         (v)  Investment
Related Property (including Deposit Accounts); 

        (vi)  Letter
of Credit Rights; 

       (vii)  Money; 

      (viii)  General
Intangibles; 

        (ix)  Receivables
and Receivable Records; 

         (x)  Commercial
Tort Claims; 

        (xi)  to
the extent not otherwise included above, all General Intangibles, Material Contracts, motor vehicles and other personal property of any kind and all Collateral
Records, Collateral Support and Supporting Obligations relating to any of the foregoing; and 

       (xii)  to
the extent not otherwise included above, all Proceeds, products, accessions, rents and profits of or in respect of any of the foregoing. 

        (b)    Certain Limited Exclusions.    Notwithstanding anything herein to the contrary, in no event shall the security
interest granted under Section 2(a) hereof attach to (i) any lease, license, contract, property rights or agreement to which each Grantor is a party or any of its rights or interests
thereunder if and for so long as the grant of such security interest shall constitute or result in (A) the abandonment, invalidation or unenforceability of any right, title or interest of any
Grantor therein or (B) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any
such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or 

9

 

principles
of equity), provided however that such security interest shall attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not
result in any of the consequences specified in (A) or (B) including, without limitation, any proceeds of such lease, license, contract, property rights or agreement; or (ii) in
any of the outstanding capital stock of a Controlled Foreign Corporation in excess of 65% of the voting power of all classes of capital stock of such Controlled Foreign Corporation entitled to vote;
provided that immediately upon the amendment of the Tax Code to allow the pledge of a greater percentage of the voting power of capital stock in a Controlled Foreign Corporation without adverse tax
consequences, the Collateral shall include, and the security interest granted by each Grantor shall attach to, such greater percentage of capital stock of each Controlled Foreign Corporation or
(iii) any Excluded Collateral. When funds are disbursed from the Investment Accounts (other than funds then deposited into or transferred to another Account that is subject to the security
interests granted under this Agreement) in accordance with the terms of the Deposit Agreement, such funds shall be cease to be subject to the security interests granted under this Agreement. 

        SECTION 3.    SECURITY FOR OBLIGATIONS    

        (a)    Security for Obligations.    This Agreement secures, and the Collateral is collateral security for, the prompt
and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Secured
Obligations. 

        (b)    Continuing Liability under Collateral.    Notwithstanding anything herein to the contrary, (i) each
Grantor shall remain liable for all obligations under the Collateral and nothing contained herein is intended or shall be a delegation of duties to the Collateral Agent or any Secured Party,
(ii) each Grantor shall remain liable under each of the agreements included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged
LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Collateral Agent nor any Secured
Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other
document related thereto nor shall the Collateral Agent nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any
obligation to take any action to collect or enforce any rights under any agreement included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests
or Pledged LLC Interests and (iii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral. 

        (c)    Authorization to File Financing Statements.    Each Grantor hereby authorizes the filing of any financing
statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as the Collateral Agent may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to the Collateral Agent in connection herewith. Such financing statements may describe the collateral in the same manner as described in
any security agreement or pledge agreement entered into by the parties in connection herewith or may contain an indication or description of collateral that describes such property in any other manner
as the Collateral Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the collateral granted to the Collateral Agent in
connection herewith, including, without limitation, describing such property as "all assets" or "all personal property" whether now owned or hereafter acquired. 

10

 

        SECTION 4.    REPRESENTATIONS AND WARRANTIES AND COVENANTS    

        (a)    Generally.    

        (i)    Representations and Warranties.    Each Grantor hereby represents and warrants, on the date hereof, that: 

        (A)  it
owns the Collateral purported to be owned by it or otherwise has the rights it purports to have in each item of Collateral and, as to all Collateral whether now
existing or hereafter acquired, except as otherwise permitted under the Indenture, will continue to own or have such rights in each item of the Collateral, in each case free and clear of any and all
Liens, rights or claims of all other Persons other than Permitted Liens, including, without limitation, liens arising as a result of such Grantor becoming bound (as a result of merger or otherwise) as
debtor under a security agreement entered into by another Person; 

        (B)  such
Grantor has been duly organized as a corporation, limited liability company or other entity, as appropriate, solely under the laws of its State of incorporation or
formation, as appropriate, and
remains duly existing as such. Such Grantor has not filed any certificates of domestication, transfer or continuance in any other jurisdiction. 

        (C)  the
execution and delivery of this Agreement by such Grantor and the performance by it of its obligations under this Agreement are within its corporate, limited
liability company or other powers and have been duly authorized by all necessary corporate, limited liability company or other action; 

        (D)  upon
the filing of all UCC financing statements naming each Grantor as "grantor" and the Collateral Agent as "Collateral Agent" and describing the Collateral in the
filing offices set forth opposite such Grantor's name on Schedule I(e) hereof (as such schedule may be amended or supplemented from time to
time), the security interests granted to the Collateral Agent hereunder constitute valid and perfected first priority Liens, to the extent that security interests may be perfected by the filing of UCC
financing statements; 

        (E)  other
than the financing statements filed in favor of the Collateral Agent, no effective UCC financing statement, fixture filing or other instrument similar in effect
under any applicable law covering all or any part of the Collateral is on file in any filing or recording office except for financing statements for which proper termination statements have been
delivered to the Collateral Agent for filing; 

        (F)  no
authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for either (1) the
pledge or grant by any Grantor of the Liens purported to be created in favor of the Collateral Agent hereunder or (2) the exercise by Collateral Agent of any rights or remedies in respect of
any Collateral (whether specifically granted or created hereunder or created or provided for by applicable law), except (a) for the filings contemplated by clause (D) above and
(b) as may be required, in connection with the disposition of any Investment Related Property, by laws generally affecting the offering and sale of Securities and as may be required under
federal laws pertaining to Intellectual Property; 

        (G)  all
actions and consents, including all filings, notices, registrations and recordings necessary or desirable for the exercise by the Collateral Agent of the voting or
other rights provided for in this Agreement or the exercise of remedies in respect of the Collateral have been made or obtained except for the recording of the security interest in the applicable
Intellectual Property registries with respect to registration of Intellectual Property or pending applications for Intellectual Property, the taking of appropriate actions to perfect the lien under
applicable foreign law with respect to non-U.S. Intellectual Property, and registration of copyrights; 

11

 

        (H)  it
has indicated on Schedule I(a) hereto (as such schedule may be amended or supplemented from time to time):
(1) the type of organization of such Grantor, (2) the jurisdiction of organization of such Grantor, (3) its organizational identification number and (4) the jurisdiction
where the chief executive office or its sole place of business is (or if such Grantor is a natural person principal residence and principal place of business), and for the one-year period
preceding the date hereof has been, located. 

        (I)   the
full legal name of such Grantor is as set forth on Schedule I(a) and it has not done in the last five
(5) years, and does not do, business under any other name (including any trade-name or fictitious business name) except for those names set forth on  Schedule I(b) (as such schedule may be
amended or supplemented from time to time); 

        (J)   except
as provided on Schedule I(c), it has not changed its name, jurisdiction of organization, chief executive
office or sole place of business (or, if such Grantor is a natural person, principal residence or principal place of business) or its corporate structure in any way (e.g. by merger, consolidation,
change in corporate form or otherwise) within the past five (5) years; 

        (K)  such
Grantor has not within the last five (5) years become bound (whether as a result of merger or otherwise) as debtor under a security agreement entered into by
another Person, which has not heretofore been terminated other than the agreements identified on Schedule I(d) hereof (as such schedule may be
amended or supplemented from time to time); 

        (L)  with
respect to each agreement identified on Schedule I(d), it has indicated on  Schedule I(a) and Schedule I(b)
the information required with respect to each Grantor
under each such agreement; 

        (M) all
information supplied by any Grantor with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects; and 

        (N)  none
of the Collateral constitutes, or is the Proceeds of, "farm products" (as defined in the UCC). 

        (ii)    Covenants and Agreements.    Each Grantor hereby covenants and agrees that: 

        (A)  except
for the security interest created by this Agreement and other Permitted Liens, it shall not create or suffer to exist any Lien upon or with respect to any of the
Collateral, and such Grantor shall defend the Collateral against all Persons at any time claiming any interest therein that is not a Permitted Lien; 

        (B)  it
shall not use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or
any policy of insurance covering the Collateral; 

        (C)  it
shall not change such Grantor's name, identity, corporate structure (e.g. by merger, consolidation, change in corporate form or otherwise), sole place of business (or
principal residence if such Grantor is a natural person), chief executive office, type of organization or jurisdiction of organization or establish any trade names unless it shall have
(1) notified the Collateral Agent in writing, by executing and delivering to the Collateral Agent a completed Pledge Supplement, substantially in the form of  Exhibit A attached hereto,
together with all Supplements to Schedules thereto, at least ten (10) days prior to any such change or
establishment, identifying such new proposed name, identity, corporate structure, sole place of business (or principal residence if such Grantor is a natural person), chief executive office,
jurisdiction of organization or trade name and providing such other information in connection therewith as the Collateral Agent may reasonably request and (2) taken all actions necessary or
reasonably required by the Collateral Agent to maintain the continuous validity, perfection and priority of the Collateral Agent's security interest in the Collateral granted or intended to be granted
and agreed to hereby; 

12

  

        (D)  it
shall pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Collateral, except to the extent the validity thereof is being contested in good faith; provided, such Grantor
shall in any event pay such taxes, assessments, charges, levies or claims not later than five (5) days prior to the date of any proposed sale under any judgment, writ or warrant of attachment
entered or filed against such Grantor or any of the Collateral as a result of the failure to make such payment; 

        (E)  upon
such Grantor or any officer of such Grantor obtaining knowledge thereof, it shall promptly notify the Collateral Agent in writing of any event that may materially
and adversely affect the value of the Collateral or any portion thereof, the ability of any Grantor or the Collateral Agent to dispose of the Collateral or any portion thereof, or the rights and
remedies of the Collateral Agent in relation thereto, including, without limitation, the levy of any legal process against the Collateral or any portion thereof; 

        (F)  it
shall not take or permit any action which would be reasonably likely to impair the Collateral Agent's rights in the Collateral; and 

        (G)  it
shall not sell, transfer or assign (by operation of law or otherwise) any Collateral, except for Permitted Sales. 

        (b)    Investment Related Property.    

        (i)    Pledged Equity Interests    

        (A)    Representations and Warranties.    Each Grantor hereby represents and warrants, on the date hereof, that: 

        (1)   Schedule II(a) hereto (as such schedule may be amended or supplemented from time to time) sets forth under the
headings "Pledged Stock, "Pledged LLC Interests," "Pledged Partnership Interests" and "Pledged Trust Interests," respectively, all of the Pledged Stock, Pledged LLC Interests, Pledged Partnership
Interests and Pledged Trust Interests owned by any Grantor and such Pledged Equity
Interests constitute the percentage of issued and outstanding shares of stock, percentage of membership interests, percentage of partnership interests or percentage of beneficial interest of the
respective issuers thereof indicated on such Schedule; 

        (2)   except
as set forth on Schedule II(b) hereto it has not acquired any equity interests of another entity within the
past five (5) years. 

        (3)   it
is the record and beneficial owner of the Pledged Equity Interests free of all Liens, rights or claims of other Persons other than Permitted Liens and the Liens
granted hereby and there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is
convertible into, or that requires the issuance or sale of, any Pledged Equity Interests; 

        (4)   except
for those that have been previously obtained or made and remain in full force and effect, no consent of any Person including any other general or limited partner,
any other member of a limited liability company, any other shareholder or any other trust beneficiary is necessary or desirable in connection with the creation, perfection or first priority status of
the security interest of the Collateral Agent in any Pledged Equity Interests or the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement or the exercise of
remedies in respect thereof; and 

13

 

        (5)   none
of the Pledged LLC Interests nor Pledged Partnership Interests are or represent interests in issuers that are: (a) registered as investment companies,
(b) are dealt in or traded on securities exchanges or markets or (c) have opted to be treated as securities under the uniform commercial code of any jurisdiction except for Duke Hudson
and Duke Erie; each of Duke Hudson and Duke Erie have opted to have their membership interests treated as securities under the uniform commercial code of the State of Delaware. 

        (B)    Covenants and Agreements.    Each Grantor hereby covenants and agrees that: 

        (1)   without
the prior written consent of the Collateral Agent, it shall not vote to enable or take any other action to: (a) amend or terminate any partnership
agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents in any way that materially adversely affects the rights of such
Grantor with respect to any Investment Related Property or adversely affects the validity, perfection or priority of the Collateral Agent's security interest, (b) permit any issuer of any
Pledged Equity Interest to issue any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or
granting the right of purchase or exchange for any stock or other equity interest of
any nature of such issuer, unless permitted by the Indenture or unless such interests are issued to a Grantor and such Grantor pledges such interests hereunder, (c) other than as permitted
under the Indenture, permit any issuer of any Pledged Equity Interest to dispose of all or a material portion of their assets, (d) waive any default under or breach of any terms of
organizational document relating to the issuer of any Pledged Equity Interest or the terms of any Pledged Debt, if such default materially adversely affects the rights of the Collateral Agent with
respect to any Collateral or (e) cause any issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the UCC) on the date hereof to elect or
otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the UCC, unless such Grantor shall promptly notify the
Collateral Agent in writing of any such election or action and, in such event, shall take all steps necessary or advisable to establish the Collateral Agent's "control" thereof; 

        (2)   it
shall comply in all material respects with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged
Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any Investment Related Property; 

        (3)   without
the prior written consent of the Collateral Agent, it shall not permit any issuer of any Pledged Equity Interest to merge or consolidate unless (i) such
issuer creates a security interest that is perfected by a filed financing statement (that is not effective solely under section 9-508 of the UCC) in collateral in which such new
debtor has or acquires rights, and (ii) all the outstanding capital stock or other equity interests of the surviving or resulting corporation, limited liability company, partnership or other
entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent
Grantors; provided, that if the surviving or resulting Grantors upon any such merger or consolidation involving an issuer which is a Controlled Foreign
Corporation, then such Grantor shall only be required to pledge equity interests in accordance with Section 2 hereof; and 

        (4)   each
Grantor consents to the grant by each other Grantor of a security interest in all Investment Related Property to the Collateral Agent and, without limiting the 

14

 

foregoing,
consents to the transfer of any Pledged Partnership Interest and any Pledged LLC Interest to the Collateral Agent or its nominee following an Event of Default and to the substitution of the
Collateral Agent or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto. 

        (ii)    Investment Accounts.    

        (A)    Representations and Warranties.    Each Grantor hereby represents and warrants, as of the date hereof, that: 

        (1)   Schedule II(a) hereto (as such schedule may be amended or supplemented from time to time) sets forth under the
headings "Securities Accounts" and "Commodities Accounts," respectively, all of the Securities Accounts and Commodities Accounts in which each Grantor has an interest. Each Grantor is the sole
entitlement holder of each such Securities Account and Commodities Account, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Collateral Agent pursuant
hereto) having "control" (within the meanings of Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any such Securities Account or Commodity Account or
any securities or other property credited thereto; 

        (2)   Schedule II(a) hereto (as such schedule may be amended or supplemented from time to time) sets forth under the
heading "Deposit Accounts" all of the Deposit Accounts in which each Grantor has an interest and each Grantor is the sole account holder of each such Deposit Account and such Grantor has not consented
to, and is not otherwise aware of, any Person (other than the Collateral Agent pursuant hereto) having either sole dominion and control (within the meaning of common law) or "control" (within the
meaning of Section 9-104 of the UCC) over, or any other interest in, any such Deposit Account or any money or other property deposited therein; and 

        (3)   each
Grantor has taken all actions necessary or desirable, including those specified in Section 4(b)(iii)(B) below to: (a) establish the Collateral Agent's
"control" (within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion of the Investment Related Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts, Securities Entitlements or Commodity Accounts (each as defined in the UCC); (b) establish the Collateral Agent's "control" (within the meaning of
Section 9-104 of the UCC) over all Deposit Accounts; and (d) to deliver all Instruments to the Collateral Agent. 

        (B)    Delivery and Control.    With respect to any Investment Related Property consisting of Securities Accounts or
Securities Entitlements not otherwise covered by the Deposit Agreement, it shall cause the securities intermediary maintaining such Securities Account or Securities Entitlement to enter into an
agreement in form and substance reasonably satisfactory to the Collateral Agent pursuant to which it shall agree to comply with the Collateral Agent's "entitlement orders" without further consent by
such Grantor. With respect to any Investment Related Property that is a "Deposit Account" not otherwise covered by the Deposit Agreement, it shall cause the depositary institution maintaining such
account to enter into an agreement in form and substance reasonably satisfactory to the Collateral Agent, pursuant to which the Collateral Agent shall have "control" (within the meaning of
Section 9-104 of the UCC) over such Deposit Account. Each Grantor shall have entered into such control agreement or agreements with respect to: (i) any Securities Accounts,
Securities Entitlements or Deposit Accounts that exist on the date hereof, as of or prior to the date hereof, and (ii) any Securities Accounts, Securities Entitlements or Deposit Accounts that
are created or acquired after the date hereof, as of or prior to the deposit or transfer of any such 

15

 

Securities
Entitlements or funds, whether constituting moneys or investments, into such Securities Accounts or Deposit Accounts. 

        (iii)    Investment Related Property Generally    

        (A)    Covenants and Agreements.    Each Grantor hereby covenants and agrees that: 

        (1)   in
the event it acquires rights in any Investment Related Property after the date hereof, it shall deliver to the Collateral Agent all necessary Supplements to the
Schedules hereto, reflecting such new Investment Related Property and all other Investment Related Property. Notwithstanding the foregoing, it is understood and agreed that the security interest of
the Collateral Agent shall attach to all Investment Related Property immediately upon any Grantor's acquisition of rights therein and shall not be affected by the failure of any Grantor to deliver a
supplement to Schedule II as required hereby; 

        (2)   except
as provided in the next sentence, in the event such Grantor receives any dividends, interest or distributions on any Investment Related Property, or any
securities or other property upon the merger, consolidation, liquidation or dissolution of any issuer of any Investment Related Property, then (a) such dividends, interest or distributions and
securities or other property shall be included in the definition of Collateral without further action and (b) such Grantor shall immediately take all steps, if any, necessary or advisable to
ensure the validity, perfection, priority and, if applicable, control of the Collateral Agent over such Investment Related Property (including, without limitation, delivery thereof to the Collateral
Agent) and pending any such action such Grantor shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Collateral Agent and shall
be segregated from all other property of such Grantor. Notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Collateral Agent authorizes each Grantor
to retain all ordinary cash dividends and distributions paid in the normal course of the business of the issuer and consistent with the past practice of the issuer and all scheduled payments of
interest; 

        (3)   If
any issuer of any Investment Related Property is located in a jurisdiction outside of the United States, each Grantor shall take such additional actions, including,
without limitation, causing the issuer to register the pledge on its books and records or making such filings or recordings, in each case as may be necessary or advisable, under the laws of such
issuer's jurisdiction to insure the validity, perfection and priority of the security interest of the Collateral Agent. Upon the occurrence of an Event of Default, the Collateral Agent shall have the
right, without notice to any Grantor, to transfer all or any portion of the Investment Related Property to its name or the name of its nominee or agent. In addition, the Collateral Agent shall have
the right at any time, without notice to any Grantor, to exchange any certificates or instruments representing any Investment Related Property for certificates or instruments of smaller or larger
denominations. 

        (B)    Delivery and Control.    Each Grantor agrees that with respect to any Investment Related Property in which it
currently has rights it has complied with the provisions of this Section 4(b)(iii)(B) on or before the date hereof and with respect to any Investment Related Property hereafter acquired by such
Grantor it shall comply with the provisions of this Section 4(b)(iii)(B) immediately upon acquiring rights therein, in each case in form and substance reasonably satisfactory to the Collateral
Agent. With respect to any Investment Related Property that is represented by a certificate or that is an "instrument" (other than any Investment Related Property credited to a Securities Account) it
shall cause such certificate or instrument to be delivered to the Collateral Agent, indorsed in blank by an "effective indorsement" (as defined in Section 8-107 of the UCC),
regardless of whether such certificate 

16

 

constitutes
a "certificated security" for purposes of the UCC. With respect to any Investment Related Property that is an "uncertificated security" for purposes of the UCC (other than any
"uncertificated securities" credited to a Securities Account), it shall cause the issuer of such uncertificated security to either (i) register
the Collateral Agent as the registered owner thereof on the books and records of the issuer or (ii) execute an agreement in form and substance reasonably satisfactory to the Collateral Agent,
pursuant to which such issuer agrees to comply with the Collateral Agent's instructions with respect to such uncertificated security without further consent by such Grantor. Without limiting the
foregoing, promptly upon acquisition of each of Duke Hudson and Duke Erie, MSW Holdings shall deliver to the Collateral Agent certificates evidencing the membership interests of each of Duke Hudson
and Duke Erie. 

        (C)    Voting and Distributions; Right to Access Funds.    

So
long as no Event of Default shall have occurred and be continuing: 

        (1)   each
Grantor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Investment Related Property or any
part thereof for any purpose not prohibited by the terms of this Agreement or the Indenture; provided, no Grantor shall exercise or
refrain from exercising any such right if the Collateral Agent shall have notified such Grantor in writing that, in the Collateral Agent's reasonable judgment, such action would result in a Default or
Event of Default; 

        (2)   the
Collateral Agent shall promptly execute and deliver (or cause to be executed and delivered) to each Grantor all proxies, and other instruments as such Grantor may
from time to time reasonably request for the purpose of enabling such Grantor to exercise the voting and other consensual rights when and to the extent which it is entitled to exercise pursuant to
clause (1) above; and 

        (3)   each
Grantor shall be permitted to access and withdraw cash and other funds held in any Investment Accounts for any purpose permitted under the Indenture; provided that
such rights with respect to cash and funds held in Investment Accounts maintained under the Deposit Agreement shall be subject to the provisions of the Deposit Agreement. 

Upon
the occurrence and during the continuation of an Event of Default: 

        (1)   unless
the Collateral Agent elects otherwise and gives written notice following the occurrence of such Event of Default to the Grantors, all rights of each Grantor to
exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become
vested in the Collateral Agent which shall thereupon have the sole right to exercise such voting and other consensual rights as permitted by law; and 

        (2)   in
order to permit the Collateral Agent to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive hereunder: (a) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral
Agent all proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (b) each Grantor acknowledges that the Collateral Agent may
utilize the power of attorney set forth in Section 6. 

17

   
        Section 5.    ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES.    

        (a)    Access; Right of Inspection.    The Collateral Agent shall at all times, upon reasonable prior notice (unless
an Event of Default shall have occurred and be continuing, in which case prior notice shall not be required), have full and free access during normal business hours to all the books, correspondence
and records of each Grantor, and the Collateral Agent and its representatives may examine the same, take extracts therefrom and make photocopies thereof, and each Grantor agrees to render to the
Collateral Agent, at such Grantor's cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. The Collateral Agent and its representatives shall at all
times also have the right, upon reasonable prior notice (unless an Event of Default shall have occurred and be continuing, in which case prior notice shall not be required), to enter any premises of
each Grantor and inspect any property of each Grantor where any of the Collateral of such Grantor granted pursuant to this Agreement is located for the purpose of inspecting the same, observing its
use or otherwise protecting its interests therein. 

        (b)    Further Assurances    

          (i)  Each
Grantor agrees that from time to time, at the expense of such Grantor, that it shall promptly Authenticate, execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or that the Collateral Agent may reasonably request, in order to create and/or maintain the validity, perfection or priority
of and protect any security interest granted or purported to be granted hereby or to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor shall: 

        (A)  file
such financing or continuation statements, or amendments thereto, and execute and deliver such other agreements, instruments, endorsements, powers of attorney or
notices, as may be necessary or desirable, or as the Collateral Agent may reasonably request, in order to perfect and preserve the security interests granted or purported to be granted hereby; 

        (B)  take
all actions necessary to ensure the recordation of appropriate evidence of the liens and security interest granted hereunder in the Intellectual Property with any
intellectual property registry in which said Intellectual Property is registered or in which an application for registration is pending including, without limitation, the United States Patent and
Trademark Office, the United States Copyright Office, the various Secretaries of State, and the foreign counterparts on any of the foregoing; 

        (C)  at
the Collateral Agent's request, appear in and defend any action or proceeding that may affect such Grantor's title to or the Collateral Agent's security interest in
all or any part of the Collateral. 

         (ii)  Each
Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, or any similar document in any
jurisdictions and with any filing offices as the Collateral Agent may determine, in its sole discretion, are necessary or advisable to perfect or otherwise protect the security interest granted to the
Collateral Agent herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such
property in any other manner as the Collateral Agent may determine, in its sole discretion, is necessary, advisable or reasonably prudent to ensure the perfection of the security interest in the
Collateral granted to the Collateral Agent herein, including, without limitation, describing such property as "all assets" or "all personal property, whether now owned or hereafter acquired. Each
Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral. 

18

 

        (iii)  Each
Grantor hereby authorizes the Collateral Agent to modify this Agreement after obtaining such Grantor's approval of or signature to such modification by amending  Schedule III hereto (as such
schedule may be amended or supplemented from time to time) to include reference to any right, title or interest in
any existing Intellectual Property or any Intellectual Property acquired or developed by any Grantor after the execution hereof. 

        Section 6.    COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT; POWER OF ATTORNEY.    Each
Grantor hereby irrevocably appoints the Collateral Agent (such appointment being coupled with an interest) as such Grantor's attorney-in-fact, with full authority in the place
and stead of such Grantor and in the name of such Grantor, the Collateral Agent or otherwise, from time to time in the Collateral Agent's discretion to take any action and to execute any instrument
that the Collateral Agent may deem reasonably necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, the following: 

        (a)   upon
the occurrence and during the continuance of any Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to the
Collateral Agent pursuant to the Transaction Documents; 

        (b)   upon
the occurrence and during the continuance of any Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the Collateral; 

        (c)   upon
the occurrence and during the continuance of any Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in
connection with clause (b) above; 

        (d)   upon
the occurrence and during the continuance of any Event of Default, to file any claims or take any action or institute any proceedings that the Collateral Agent may
deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Collateral Agent with respect to any of the Collateral; 

        (e)   to
prepare, sign, and file for recordation in any intellectual property registry, appropriate evidence of the lien and security interest granted herein in the
Intellectual Property in the name of such Grantor as assignor; 

        (f)    upon
the occurrence and during the continuance of any Event of Default, to take or cause to be taken all actions necessary to perform or comply or cause performance or
compliance with the terms of this Agreement, including, without limitation, access to pay or discharge taxes or Liens (other than Permitted Liens) levied or placed upon or threatened against the
Collateral, and the amounts necessary to discharge the same to be determined by the Collateral Agent in its sole discretion, any such payments made by the Collateral Agent to become obligations of
such Grantor to the Collateral Agent, due and payable immediately without demand; and 

        (g)   upon
the occurrence and during the continuance of any Event of Default, generally to sell, transfer, lease, license, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and to do, at the Collateral Agent's option and such
Grantor's expense, at any time or from time to time, all acts and things that the Collateral Agent deems reasonably necessary to protect, preserve or realize upon the Collateral and the Collateral
Agent's security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do. 

19

 

        Section 7.    REMEDIES.    

        (a)    Generally.    

          (i)  Subject
to clause (v) below, if any Event of Default shall have occurred and be continuing, the Collateral Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein, in the Deposit Agreement or otherwise available to it at law or in equity, all the rights and remedies of the Collateral Agent on default
under the UCC (whether or not the UCC applies to the affected Collateral) to collect, enforce or satisfy any Secured Obligations then owing, whether by acceleration or otherwise, and also may pursue
any of the following separately, successively or simultaneously: 

        (A)  require
any Grantor to, and each Grantor hereby agrees that it shall at its expense and promptly upon request of the Collateral Agent forthwith, assemble all or part of
the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place to be designated by the Collateral Agent that is reasonably convenient to both parties; 

        (B)  enter
onto the property where any Collateral is located and take possession thereof with or without judicial process; 

        (C)  prior
to the disposition of the Collateral, store, process, repair or recondition the Collateral or otherwise prepare the Collateral for disposition in any manner to the
extent the Collateral Agent deems appropriate; and 

        (D)  without
notice except as specified below or under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive basis) or otherwise dispose of the Collateral or
any part thereof in one or more parcels at public or private sale, at any of the Collateral Agent's offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable; 

         (ii)  The
Collateral Agent or any Secured Party may be the purchaser of any or all of the Collateral at any public or private (to the extent the portion of the Collateral
being privately sold is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations) sale in accordance with the UCC and the Collateral
Agent, as collateral agent for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter
enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least twenty (20) days notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Each Grantor agrees that it would not be commercially unreasonable for the Collateral Agent to dispose of the Collateral or any portion thereof by using
Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Each
Grantor hereby waives any claims against the Collateral 

20

 

Agent
arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if
the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations, each Grantor shall be liable for the deficiency and the fees of any attorneys employed by the Collateral Agent to collect such deficiency. Each Grantor further
agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Collateral Agent, that the Collateral Agent has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior to their
stated maturities. Nothing in this Section shall in any way alter the rights of the Collateral Agent hereunder. 

        (iii)  The
Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. The Collateral Agent may specifically disclaim or modify any
warranties of title or the like. This procedure will not be considered to adversely effect the commercial reasonableness of any sale of the Collateral. 

        (iv)  The
Collateral Agent shall have no obligation to marshall any of the Collateral. 

         (v)  The
Collateral Agent agrees that prior to foreclosing on or exercising any remedies with respect to the equity interests in Duke/UAE Ref-Fuel LLC pledged
pursuant to this Agreement, the Collateral Agent will comply with the right of first offer provisions contained in the Duke/UAE Ref-Fuel LLC Limited Liability Company Agreement. 

        (b)    Application of Proceeds.    Except as expressly provided elsewhere in this Agreement, all proceeds received by
the Collateral Agent in respect of any sale, any collection from, or other realization upon all or any part of the Collateral shall be applied in full or in part by the Collateral Agent against, the
Secured Obligations in the following order of priority: first, to the payment of all costs and expenses of such sale, collection or other realization,
including reasonable compensation to the Collateral Agent and its agents and counsel, and all other expenses, liabilities and advances made or incurred by the Collateral Agent in connection therewith,
and all amounts for which the Collateral Agent is entitled to indemnification hereunder (in its capacity as the Collateral Agent) and all advances made by the Collateral Agent hereunder for the
account of the applicable Grantor, and to the payment of all costs and expenses paid or incurred by the Collateral Agent in connection with the exercise of any right or remedy hereunder or under any
Transaction Document, all in accordance with the terms hereof or thereof; second, to the extent of any excess of such proceeds, to the payment of all
other Secured Obligations for the ratable benefit of each Secured Party; and third, to the extent of any excess of such proceeds, to the payment to or
upon the order of such Grantor or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. 

        (c)    Sales on Credit.    If Collateral Agent sells any of the Collateral upon credit, Grantor will be credited only
with payments actually made by purchaser and received by Collateral Agent and applied to indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Collateral Agent may
resell the Collateral and Grantor shall be credited with proceeds of the sale. 

        (d)    Investment Related Property.    

          (i)  Each
Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933, as amended, (the "Securities
Act") and applicable state securities laws, the Collateral Agent may be compelled, with respect to any sale of all or any part of the Investment Related Property conducted
without prior registration or qualification of such Investment Related 

21

 

Property
under the Securities Act and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Investment Related Property for their own account,
for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sale may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances, each Grantor
agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Investment Related Property for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it. If the Collateral Agent determines to exercise its right to sell any or all of
the Investment Related Property, upon written request, each Grantor shall and shall cause each issuer of any Pledged Stock to be sold hereunder, each partnership and each limited liability company
from time to time to furnish to the Collateral Agent all such information as the Collateral Agent may request in order to determine the number and nature of interest, shares or other instruments
included in the Investment Related Property which may be sold by the Collateral Agent in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect. 

         (ii)  Upon
the occurrence and during the continuation of an Event of Default, the Collateral Agent shall have the right to apply the balance from any Deposit Account or
instruct the bank at which any Deposit Account is maintained to pay the balance of any Deposit Account to or for the benefit of the Collateral Agent. 

        Section 8.    COLLATERAL AGENT.    

        The
Collateral Agent has been appointed to act as Collateral Agent hereunder by each Secured Party either pursuant to the Transaction Documents or by their acceptance of the benefits
hereof. The Collateral Agent shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from
taking any action (including, without limitation, the release or substitution of Collateral), solely in accordance with this Agreement and the Indenture. Without the written consent of the Collateral
Agent that would be affected thereby, no amendment, modification, termination, or consent shall be effective if the effect thereof would release all or substantially all of the Collateral except as
expressly provided herein. In furtherance of the foregoing provisions of this Section, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to
realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the
benefit of each Secured Party in accordance with the terms of this Section. Collateral Agent may resign at any time by giving thirty (30) days' prior written notice thereof to each Secured
Party and the Grantors, and Collateral Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to the Grantors and Collateral Agent
signed by the parties holding more than 50% of the Secured Obligations, including for this purpose any unfunded commitments (the "Requisite Parties").
Upon any such notice of resignation or any such removal, the Requisite Parties shall have the right, upon five (5) Business Days' notice to the Collateral Agent, following receipt of the
Grantors' consent (which shall not be unreasonable withheld or delayed and which shall not be required while an Event of Default exists), to appoint a successor Collateral Agent. Upon the acceptance
of any appointment as Collateral Agent hereunder by a successor Collateral Agent, that successor Collateral Agent under this Agreement shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Collateral Agent under this Agreement, and the 

22

 

retiring
or removed Collateral Agent under this Agreement shall promptly (i) transfer to such successor Collateral Agent all sums, Securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under this Agreement, and (ii) execute
and deliver to such successor Collateral Agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such
successor Collateral Agent of the security interests created hereunder, whereupon such retiring or removed Collateral Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring or removed Collateral Agent's resignation or removal hereunder as the Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Agreement while it was the Collateral Agent hereunder. 

        Section 9.    CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS    

        This
Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until the payment in full of all Secured Obligations, the
cancellation or termination of the commitments and any other contingent obligation included in the Secured Obligations, be binding upon each Grantor, its successors and assigns, and inure, together
with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and its successors, transferees and assigns. Without limiting the generality of the foregoing,
but subject to the terms of the Transaction Documents, each Secured Party may assign or otherwise transfer any Secured Obligations held by it to
any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to each Secured Party herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the commitments and any other contingent obligation included in the Secured Obligations, the security interest granted hereby shall terminate
hereunder and of record and all rights to the Collateral shall revert to Grantors. Upon any such termination the Collateral Agent shall, at Grantors' expense, execute and deliver to Grantors such
documents as Grantors shall reasonably request to evidence such termination. 

        Section 10.    STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM    

        The
powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and the interests of the Secured Parties and shall not impose any duty upon it
to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property. Neither the Collateral Agent nor any of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon
all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or otherwise. If any
Grantor fails to perform any agreement contained herein, the Collateral Agent may itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by each Grantor under the Section in this Agreement relating to the payment of expenses pursuant to Section 12(b) hereof. 

23

   
        Section 11.    INDEMNITY AND EXPENSES    

        Each
Grantor agrees: 

          (i)  to
defend, indemnify, pay and hold harmless each Indemnitee, from and against any and all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby (including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result from such Indemnitee's gross negligence or willful misconduct; and 

         (ii)  to
pay to the Collateral Agent promptly following written demand the amount of any and all reasonable costs and reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents in accordance with the terms and conditions of the Indenture. 

        (iii)  The
obligations of each Grantor in this Section 11 shall survive the termination of this Agreement and the discharge of such Grantor's other obligations under
this Agreement, the Indenture and any other Transaction Documents. 

        Section 12.    MISCELLANEOUS    

        (a)    Notices.    Unless otherwise specifically provided herein, any notice or other communication herein required or
permitted to be given to a Grantor or Collateral Agent, shall be sent to such Person's address as set forth below or, if not set forth below, then in the other relevant Transaction Document. Each
notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in
person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three (3) Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, that no notice to Collateral Agent shall be effective until received by Collateral Agent. 

        If
to MSW Holdings or MSW Finance: 

c/o
AIG Highstar Capital, L.P.

175 Water Street, 26th Floor

New York, New York 10038

Fax No.: (212) 458-2222

Attention: Michael Miller 

        and

c/o
DLJ Merchant Banking Partners

Eleven Madison Avenue

New York, New York 10010-3629

Fax No.: (646) 935-7043

Attention: Daniel Clare 

        With
a copy to: 

Bingham
McCutchen LLP

150 Federal Street

Boston, MA 02110-1726

Fax No.: (617) 951-8736

Attention: John R. Utzschneider 

24

 

        If
to the Collateral Agent: 

Wells
Fargo Bank Minnesota, National Association

213 Court Street, Suite 703

Middletown, Connecticut 06457

Attn: Joseph P. O'Donnell

Telephone No.: (860) 704-6217

Facsimile No.: (860) 704-6219 

        (b)    Expenses.    Whether or not the transactions contemplated under the Transaction Documents shall be consummated,
Grantors agree to pay promptly all the actual and reasonable costs and expenses of the Collateral Agent in connection with the preparation of the Transaction Documents and any consents,
amendments, waivers or other modifications thereto; the reasonable fees, expenses and disbursements of counsel to the Collateral Agent in connection with the negotiation, preparation, execution and
administration of the Transaction Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by the Grantors; all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Collateral Agent, for the benefit of each Secured Party pursuant hereto, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to Collateral Agent and of counsel providing any opinions that Collateral Agent
may request in respect of the Collateral or the Liens created pursuant to the Collateral Documents; and all the actual costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any appraisers, consultants, advisors and agents employed or retained by Collateral Agent and its counsel) in connection with the custody or preservation of any of the Collateral; and
after the occurrence of a Default or an Event of Default, all costs and expenses, including reasonable attorneys' fees (including allocated costs of internal counsel) and costs of settlement, incurred
by Collateral Agent in enforcing any Secured Obligations of or in collecting any payments due from any Grantor hereunder or under the other Transaction Documents by reason of such Default or Event of
Default (including in connection with the sale of, collection from, or other realization upon any of the Collateral) or in connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a "work-out" or pursuant to any insolvency or bankruptcy cases or proceedings. 

        (c)    Amendments and Waivers.    

        (i)    Collateral Agent's Consent.    Subject to Section 12(c)(ii), no amendment, modification, termination or
waiver of any provision of this Agreement, or consent to any departure by any Grantor therefrom, shall in any event be effective without the written concurrence of the Collateral Agent. 

        (ii)    No Waiver; Remedies Cumulative.    No failure or delay on the part of the Collateral Agent in the exercise of
any power, right or privilege hereunder or under any other Transaction Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. All rights, powers and remedies
existing under this Agreement and the other Transaction Documents are cumulative, and not exclusive of, any rights or remedies otherwise available. Any forbearance or failure to exercise, and any
delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any
such right, power or remedy. 

        (d)    Successors and Assigns.    This Agreement shall be binding upon the parties hereto and their respective
successors and assigns including all persons who become bound as debtor to this Agreement. 

25

 

No
Grantor shall, without the prior written consent of the Collateral Agent, assign any right, duty or obligation hereunder. 

        (e)    Independence of Covenants.    All covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or condition exists. 

        (f)    Survival of Representations, Warranties and Agreements.    All representations, warranties and agreements made
herein shall survive the execution and delivery hereof. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Grantor set forth in Sections 11 and 12(b) shall
survive the payment of the Secured Obligations and the termination hereof. 

        (g)    Marshaling; Payments Set Aside.    Collateral Agent shall not be under any obligation to marshal any assets in
favor of any Grantor or any other Person or against or in payment of any or all of the Secured Obligations. 

        (h)    Severability.    In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected
or impaired thereby. 

        (i)    Headings.    Section headings herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive effect. 

        (j)    APPLICABLE LAW.    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

        (k)    CONSENT TO JURISDICTION.    ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING
HERETO OR ANY OTHER TRANSACTION DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF
NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS; WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 12; AGREES THAT SERVICE AS PROVIDED IN SECTION 12(a) ABOVE IN SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER THE APPLICABLE GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND AGREES COLLATERAL AGENT RETAINS THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. 

        (l)    WAIVER OF JURY TRIAL.    EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER TRANSACTION DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER 

26

 

COMMON
LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 12(l) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 

        (m)    Counterparts.    This Agreement may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. 

        (n)    Effectiveness.    This Agreement shall become effective upon the execution of a counterpart hereof by each of
the parties hereto and receipt by Grantors and the Collateral Agent of written or telephonic notification of such execution and authorization of delivery thereof. 

        (o)    Entire Agreement.    This Agreement and the other Transaction Documents embody the entire agreement and
understanding between Grantors and the Collateral Agent and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the
Transaction Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. 

[Signature Page Follows] 

27

 

        IN
WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the
date first written above. 

	 	 	MSW ENERGY HOLDINGS LLC, AS GRANTOR
	

 	
 	

By:	
 	

/s/  MICHAEL J. MILLER      

	 	 	Name:	 	Michael J. Miller
	 	 	Title:	 	CEO
	

 	
 	
MSW ENERGY FINANCE CO., INC., AS GRANTOR
	

 	
 	

By:	
 	

/s/  DANIEL H. CLARE      

	 	 	Name:	 	Daniel H. Clare
	 	 	Title:	 	Secretary
	

 	
 	
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, AS COLLATERAL AGENT
	

 	
 	

By:	
 	

/s/  JOSEPH P. O‘DONNELL      

	 	 	Name:	 	Joseph P. O'Donnell
	 	 	Title:	 	Corporate Trust Officer

28

   EXHIBIT A  

PLEDGE SUPPLEMENT  

        This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF NEW GRANTOR], a [NAME OF STATE OF
ORGANIZATION] [TYPE OF ENTITY] (the "New Grantor") pursuant to the Pledge and Security Agreement, dated as of June 25, 2003 (as it may be from time to time
amended, restated, modified or supplemented, the "Security Agreement"), among MSW Energy Holdings LLC, a Delaware limited liability company, MSW Energy Finance Co., Inc., a Delaware
corporation, the other Grantors named therein, and Wells Fargo Bank Minnesota, N.A., as the Collateral Agent. Capitalized terms used herein not otherwise defined herein shall have the meanings
ascribed thereto in the Security Agreement. 

        New
Grantor hereby confirms the grant to the Collateral Agent set forth in the Security Agreement of, and does hereby grant to the Collateral Agent, a security interest in all of New
Grantor's right, title and interest in and to all Collateral to secure the Secured Obligations [and SPECIFY ANY NEW OBLIGATIONS TO BE SECURED, E.G. NEW GUARANTEES], in each
case whether now or hereafter existing or in which New Grantor now has or hereafter acquires an interest and wherever the same may be located. From and after the date hereof, New Grantor shall be a
"Grantor" for all purposes of the Security Agreement. New Grantor hereby makes, as of the date hereof, all of the representations and warranties set forth in the Security Agreement. New Grantor
represents and warrants that the attached Supplements to Schedules accurately and completely set forth all additional information required pursuant to the Security Agreement and hereby agrees that
such Supplements to Schedules shall constitute part of the Schedules to the Security Agreement. 

        Any
notice or other communication shall be sent to New Grantor at the address set forth below. 

[Address]

[Address]

Telephone No.: [                        ]

Facsimile No.: [                        ] 

        New
Grantor hereby irrevocably appoints the Collateral Agent as New Grantor's attorney-in-fact, with full authority in the place and stead of New Grantor and in
the name of New Grantor, and hereby agrees to be bound by all of the terms, provisions and obligations contained in Section 6 of the Security Agreement. 

[Signature Page Follows] 

A-1

 

        IN
WITNESS WHEREOF, New Grantor has caused this Pledge Supplement to be duly executed and delivered by its duly authorized officer as of [mm/dd/yy]. 

	 	 	[NAME OF NEW GRANTOR]
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:

A-2

   EXHIBIT B  

JOINDER AGREEMENT  

        This JOINDER AGREEMENT, dated [mm/dd/yy], is delivered by [NAME OF NEW SECURED PARTY], a [NAME OF
STATE OF ORGANIZATION] [TYPE OF ENTITY] ("New Secured Party"), and each of MSW Energy Holdings LLC, a Delaware limited liability company ("MSW Holdings"), MSW
Energy Finance Co., Inc., a Delaware corporation ("MSW Finance"), and the other Grantors (as defined below) to Wells Fargo Bank Minnesota, National Association, as Collateral Agent (this
"Joinder Agreement"), pursuant to the Pledge and Security Agreement, dated as of June 25, 2003 (as it may be from time to time amended, restated, modified or supplemented, the "Security
Agreement"), among MSW Holdings, MSW Finance and the other Grantors named therein (together with MSW Holdings and MSW Finance, each, a "Grantor") and Wells Fargo Bank Minnesota, National Association,
as the Collateral Agent. Capitalized terms used herein not otherwise defined herein shall have the meanings ascribed thereto in the Security Agreement. 

        1.    Addition of Secured Obligations.    New Secured Party hereby confirms to the Collateral Agent the incurrence of
the following Secured Obligations [SPECIFY ANY NEW OBLIGATIONS TO BE SECURED (the "New Parity Lien Debt")], which shall be included in the definition of "Parity Lien
Obligations" under the Indenture, dated June 25, 2003, among MSW Holdings, MSW Finance, the Guarantors party thereto and Wells Fargo Bank Minnesota, National Association, as Trustee (the
"Indenture"). 

        2.    Collateral Sharing With Parity Liens.    

        (a)   The
Grantors and New Secured Party hereby ratify, as of the date hereof, and agree to be bound by, all of the terms, provisions, obligations and conditions contained in
Article 12 of the Indenture. 

        (b)   The
Grantors and New Secured Party hereby confirm and agree that (i) New Secured Party shall be included in the definition of "Secured Parties" under the Security
Agreement and (ii) the indenture (or other instrument or instruments) governing the New Parity Lien Debt shall be included in the definition of "Transaction Documents" under the Security
Agreement. 

        3.    Collateral Agent.    New Secured Party hereby appoints the Collateral Agent to act as Collateral Agent for its
benefit as a Secured Party under the Security Agreement and agrees to be bound by all of the terms, provisions and obligations contained in Section 8 of the Security Agreement. 

        4.    Voting.    Notwithstanding anything contained herein or in the Security Agreement, the holders of the Notes and
the holders of Parity Lien Debt shall vote as separate classes in any case in which a vote of such holders is required under the Security Agreement. 

        5.    Reasonable Actions.    New Secured Party agrees, upon the reasonable request of the Collateral Agent, to take
all reasonable actions necessary to effectuate the purposes of this Joinder Agreement. 

        6.    Notices.    Any notice or other communication shall be sent to New Secured Party at the address set forth below. 

[Address]

[Address]

Telephone No.: [                        ]

Facsimile No.: [                        ] 

        7.    Counterparts.    This Joinder Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. 

B-1

 

        8.    Applicable Law.    This Joinder Agreement and the rights and obligations of the parties hereunder shall be
governed by, and shall be construed and enforced in accordance with, the internal laws of the State of New York. 

[Signature Page Follows] 

B-2

 

        IN
WITNESS WHEREOF, each of the parties below has caused this Joinder Agreement to be duly executed and delivered by its duly authorized officer as of [mm/dd/yy]. 

	 	 	[NAME OF NEW SECURED PARTY]
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:
	

 	
 	
[NAME OF EACH GRANTOR]
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

        The
Collateral Agent hereby accepts this Joinder Agreement and acknowledges and agrees that it acts as Collateral Agent for the New Secured Party. 

	WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, AS COLLATERAL AGENT	 	 
	

By:	
 	

 	
 	

 
	 	 	
 Name: Joseph P. O'Donnell

Title:	 	 

B-3

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PLEDGE AND SECURITY AGREEMENT dated as of June 25, 2003 among MSW Energy Holdings LLC as Grantor, and MSW Energy Finance Co., Inc. as Grantor, and Wells Fargo Bank Minnesota, National Association, as Collateral
Agent

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