Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.2    
    

 
 

EQUITY CONTRIBUTION AGREEMENT    
    
    dated as of    
    
    April 30, 2001    
    
    between    
    
    DUKE CAPITAL CORPORATION,    
    
    UNITED AMERICAN ENERGY CORP.,

    
    DUKE/UAE REF-FUEL LLC    
    
    and    
    
    DUKE/UAE HOLDINGS LLC    
    

 
 

Table of Contents    
    

	 
	 
	 
	 	Page

	BACKGROUND STATEMENT	 	1
	

STATEMENT OF AGREEMENT	
 	

1
	

1.	

DEFINITIONS	
 	

1
	

2.	

EQUITY SUPPORT	
 	

2
	 	2.1.	Equity Support Obligations	 	2
	 	2.2.	Payment of Funds	 	3
	 	2.3.	Equity Contributions	 	3
	 	2.4.	Letter of Credit	 	3
	 	2.5.	Substitution of Equity Provider	 	4
	

3.	

REPRESENTATIONS AND WARRANTIES OF EQUITY PROVIDERS	
 	

5
	 	3.1.	Existence	 	5
	 	3.2.	Power and Authority	 	5
	 	3.3.	Binding Agreement	 	5
	 	3.4.	Litigation	 	5
	 	3.5.	No Conflicting Agreements	 	5
	

4.	

CONDITIONS	
 	

5
	 	4.1.	Certificates of Good Standing	 	5
	 	4.2.	Representations and Warranties	 	5
	 	4.3.	Legal Opinion	 	5
	 	4.4.	Purchase Agreement	 	5
	 	4.5.	Release under Credit Support Agreements	 	6
	 	4.6.	Letter of Credit	 	6
	 	4.7.	Other Documents	 	6
	

5.	

AFFIRMATIVE COVENANTS	
 	

6
	

6.	

MISCELLANEOUS PROVISIONS	
 	

6
	 	6.1.	Notices	 	7
	 	6.2.	Amendment and Waiver	 	7
	 	6.3.	References: Headings: Plurals	 	7
	 	6.4.	Counterparts	 	7
	 	6.5.	Severability	 	7
	 	6.6.	Entire Agreement	 	7
	 	6.7.	Assignment: Benefits	 	8
	 	6.8.	Consent to Jurisdiction	 	8
	 	6.9.	Governing Law	 	8

EQUITY CONTRIBUTION AGREEMENT  

        This EQUITY CONTRIBUTION AGREEMENT, dated as of April 30, 2001 (this "Agreement"), is among  DUKE CAPITAL
CORPORATION ("Duke Capital"), a Delaware corporation, UNITED AMERICAN ENERGY CORP. ("UAE"),
a Delaware corporation, DUKE/UAE REF-FUEL LLC (the "Company"), a Delaware limited liability company, and DUKE/UAE
HOLDINGS LLC ("Duke/UAE Holdings"), a Delaware limited liability company. 

BACKGROUND STATEMENT  

        Duke/UAE Holdings is a wholly owned subsidiary of the Company, which in turn is owned 50% by Duke Energy Global Asset Development, Inc. ("DEGAD"), which is
a wholly owned subsidiary of Duke Capital, and 50% by UAE Ref-Fuel LLC ("UAE Ref-Fuel"), which is a wholly owned subsidiary of UAE. 

        Duke/UAE
Holdings has agreed to acquire or recapitalize certain equity interests in six partnerships holding waste-to-energy projects. In connection with that
acquisition, each of Duke Capital and UAE (each, an "Equity Provider") has agreed to provide up to $50,000,000 in equity capital to the extent necessary to allow the project partnerships to meet
certain obligations under various agreements relating to their waste-to-energy projects. This Agreement sets forth the obligation of Duke Capital and UAE to provide those
funds. 

STATEMENT OF AGREEMENT  

        The parties hereto, intending legally to be bound, hereby agree as follows: 

        1.    DEFINITIONS.    

        The
following terms used in this Agreement shall have the following meanings unless the context otherwise requires: 

        "Agreement"
has the meaning set forth in the Introduction. 

        "Allied"
means Allied Waste Industries, Inc., a Delaware corporation. 

        "Allied
Agreements" has the meaning set forth in Section 4.4. 

        "Business
Day" means any day except Saturday, Sunday and any other day on which banking institutions in New York City are authorized by law to close. 

        "Company"
has the meaning set forth in the Introduction. 

        "Credit
Support Agreements" shall mean the agreements listed on Exhibit A hereto, without regard to any amendments thereto or modifications thereof after the date hereof other
than those approved by both Duke Capital and UAE in their sole discretion. 

        "Credit
Support Obligations" has the meaning set forth in Section 2.1. 

        "DEGAD"
has the meaning set forth in the Background Statement. "Duke Capital" has the meaning set forth in the Introduction. "Duke/UAE Holdings" has the meaning set forth in the
Introduction. "Effective Date" means the Closing Date, as defined in the Allied Agreements. 

        "Equity
Contributions" means all payments made by Duke Capital and UAE pursuant to this Agreement, as more specifically described in Section 2.1. 

        "Equity
Contribution Request" has the meaning set forth in Exhibit B. "Equity Provider" has the meaning set forth in the Background Statement. 

        "Governmental
Body" means any court, agency, authority, board, bureau, commission, department, regulatory or administrative body, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county, parish, district, municipality, city, political subdivision or otherwise, domestic or foreign, or any other entity 

 

exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to a government. 

        "Letter
of Credit" has the meaning set forth in Section 2.4(a). 

        "Limited
Liability Company Agreement" means the Amended and Restated Limited Liability Company Agreement of the Company, as hereafter amended or restated. 

        "Person"
means any individual, firm, partnership, joint venture, corporation, limited liability company, association, business enterprise, trust, Governmental Body or other entity. 

        "Project
Partnerships" has the meaning given to it in the Limited Liability Company Agreement. 

        "Remaining
Equity Support" has the meaning given to it in Section 2.1(a). 

        "Support
Termination Date" means the earlier of the 25th anniversary of the Effective Date and the date upon which all Credit Support Obligations shall have been paid and
satisfied in full (or otherwise terminated). 

        "UAE"
has the meaning set forth in the Introduction. 

        "UAE
Ref-Fuel" has the meaning set forth the Background Statement. 

        2.    EQUITY SUPPORT.    

        2.1.    Equity Support Obligations.    

        (a)   Subject
to the terms and conditions of this Agreement, each Equity Provider agrees as of the Effective Date that, in accordance with the procedures set forth in this
Agreement, it will make, or cause to be made, Equity Contributions in an amount equal to one half of the amount necessary to satisfy (or to cause to be satisfied) any of Duke/UAE Holdings' obligations
(the "Credit Support Obligations") under the Credit Support Agreements or with respect thereto, including Duke/UAE Holdings' obligations arising under its guaranty of any such Credit Support
Obligations; provided, however, that each Equity Provider's obligation to make Equity Contributions hereunder is conditioned upon the other Equity
Provider's making its equal contribution; and provided, further, that each Equity Provider's obligation to make Equity Contributions hereunder is
limited to each Equity Provider's making no more than $50,000,000 of aggregate Equity Contributions pursuant hereto. The difference, at any time, between $50,000,000 and the total of all Equity
Contributions theretofore made by an Equity Provider is referred to herein as the Equity Provider's "Remaining Equity Support." 

        (b)   Each
Equity Provider hereby authorizes Duke/UAE Holdings to call on it, from time to time, to make Equity Contributions under this Agreement. Calls hereunder shall
always be made in equal amounts against each Equity Provider. Such calls may be made by delivery from Duke/UAE Holdings to each Equity Provider of a written request for Equity Contributions under this
Agreement, which request shall specify the amount of such Equity. Contributions and shall be accompanied by a certificate in the form of Exhibit B attached hereto executed by the
Chief Executive Officer and Chief Financial Officer of Duke/UAE Holdings. Each Equity Provider shall make such Equity Contributions within five business days of its receipt of such request. Duke/UAE
Holdings shall provide each Equity Provider with any additional information regarding the Equity Contributions and the. underlying Credit Support Obligations that such Equity Provider may reasonably
request. 

        (c)   Each
Equity Provider's commitment to make Equity Contributions hereunder: (i) will be effective on the Effective Date and will remain in effect through the
Support Termination Date; (ii) will be continuing, absolute, unconditional, and irrevocable; and (iii) will not be subject to 

2

 

termination
by such Equity Provider in any event, including without limitation (v) the bankruptcy or insolvency of the Company, Duke/UAE Holdings, or any Project Partnership; (x) any
renewal or extension of the Credit Support Obligations; (y) any waiver or release by any holder, beneficiary, or party entitled to payment of any Credit Support Obligations of any security
therefor; or (z) any default by the Company, Duke/UAE Holdings or any Project Partnership under any financing agreement. 

        (d)   The
Equity Providers, the Company, and Duke/UAE Holdings agree that this Agreement will not be amended, modified, or terminated if such amendment, modification, or
termination would have the effect of downgrading or lowering Duke/UAE Holdings' credit rating issued by Standard & Poor's (a division of The McGraw-Hill Companies, Inc.) or
Moody's Investors Services, Inc. that is in effect immediately prior to such amendment, modification, or termination, unless Standard and Poor's and Moody's shall have confirmed that the
ratings which result are equivalent to or higher than a rating of BBB-. 

        2.2.    Payment of Funds.    Each Equity Provider, after consulting
with Duke/UAE Holdings, may, in its sole discretion, make any Equity Contributions directly to the beneficiaries of any Credit Support Obligation on behalf of Duke/UAE Holdings or may make such
payments to Duke/UAE Holdings or the relevant Project Partnership to-allow such party to satisfy such Credit Support Obligations. Any Equity Contributions received by Duke/UAE Holdings
shall be deemed to be held in trust by Duke/UAE Holdings for the beneficiaries of the Credit Support Obligations to be satisfied by such Equity Contributions, and such proceeds shall be used by
Duke/UAE Holdings only for such purposes. Payments made directly from an Equity Provider to any Person will not create any obligation from the recipient of such funds to the Equity Provider. All
payments by an Equity Provider pursuant hereto shall be made in lawful money of the United States of America in immediately available funds. 

        2.3.    Equity Contributions.    

        (a)   All
Equity Contributions shall be deemed capital contributions from DEGAD and UAE Ref-Fuel to the Company, from the Company to Duke/UAE Holdings, and from
Duke/UAE Holdings to the Project Partnerships, all as more particularly described in this Section 2.3. 

        (b)   The
parties acknowledge that all Equity Contributions made pursuant to this Agreement that are made by or on behalf of Duke Capital are made on behalf of DEGAD, and all
Equity Contributions made pursuant to this Agreement that are made by or on behalf of UAE are made on behalf of UAE Ref-Fuel. As between DEGAD and UAE Ref-Fuel, on the one
hand, and the Company on the other hand, all Equity Contributions shall be deemed capital contributions by DEGAD and UAE Ref Fuel, as applicable, to the Company, which capital contributions shall be
in the nature of a preferred equity, entitled to priority repayment and to a preferred return equal to 15% per annum, all as provided in the Limited Liability Company Agreement. 

        (c)   As
between the Company and Duke/UAE Holdings, all Equity Contributions shall be deemed capital contributions by the Company to Duke/UAE Holdings, which shall be in the
nature of common equity with no right of repayment, redemption or preferred return. 

        (d)   As
between Duke/UAE Holdings and any Project Partnership on whose behalf any Equity Contributions are made, such Equity Contributions shall be deemed capital
contributions by Duke/UAE Holdings to such Project Partnership, which shall be in the nature of common equity with no right of repayment, redemption or preferred return. 

        2.4.    Letter of Credit.    

        (a)   At
any time that either Equity Provider does not have a credit rating from Standard & Poor's of at least BBB, its obligations hereunder shall be secured by a
letter of credit (as amended, 

3

 

and
including all replacements and substitutions therefor, a "Letter of Credit") in a face amount equal to the lesser of $50,000,000 and such Equity Provider's Remaining Equity Support at such time,
issued by a commercial bank with at least $250,000,000 of combined capital and surplus and that has a credit rating from Standard & Poor's of at least A-. In addition, either or
both Equity Providers shall provide such Letters of Credit if Standard & Poor's so requires in order for Duke/UAE Holdings to retain a credit rating of at least BBB-. All Letters of
Credit shall be held by Duke/UAE Holdings and shall be drawn upon by Duke/UAE Holdings to satisfy any call pursuant to Section 2.1(a) for Equity Contributions that are not paid when due from
the Equity Provider providing such Letter of Credit. Proceeds from draws under a Letter of Credit shall be deemed to be held in trust by Duke/UAE Holdings for the Persons to whom the defaulted Equity.
Contributions would ultimately have been paid to satisfy the underlying Credit Support Obligations, and such proceeds shall be used by Duke/UAE Holdings only for such purposes. An Equity Provider that
has provided a Letter of Credit may at any time, and from time to time, provide to Duke/UAE Holdings a substitute Letter of Credit that is in a face amount equal to such Equity Provider's Remaining
Equity Support at such time and that otherwise complies with the requirements of this Agreement, and upon any such substitution Duke/UAE Holdings shall release to such Equity Provider the Letter of
Credit that is being replaced. Each Letter of Credit shall have a termination date of not less than one year after its date of issuance. If an Equity Provider does not cause a replacement Letter of
Credit that complies with the terms of this Agreement to be delivered to Duke/UAE Holdings at least fifteen business days prior to the termination date of a Letter of Credit previously provided by it
that is held by Duke/UAE Holdings, Duke/UAE Holdings shall, or the other Equity Provider may on its behalf, draw the entire amount available to be drawn under such Letter of Credit and shall deposit
such amount into an escrow fund. Upon any later delivery by such Equity Provider to Duke/UAE Holdings of a satisfactory Letter of Credit in the face amount of such Equity Provider's Remaining Equity
Support at such time, Duke/UAE Holdings shall release the escrowed funds to such Equity Provider. 

        (b)   Any
funds drawn under an expiring Letter of Credit that are to be placed in escrow shall be placed in a separate account with a commercial bank, selected by Duke/UAE
Holdings, that has at least $250,000,000 of combined capital and surplus. Such account shall be in the name of. Duke/UAE Holdings, in trust for the beneficiaries of the Credit Support Obligations. The
funds in such account shall serve as security for the obligations hereunder of the Equity Provider that provided the Letter of Credit that was drawn upon, and such funds shall be invested in
(i) direct obligations of the United States of America, (ii) obligations the principal of and the interest on which are unconditionally guaranteed by the United States of America,
(iii) money market funds substantially all of which are invested in the foregoing instruments, and (iv) such other investments as may be agreed upon by UAE, Duke Capital and Duke/UAE
Holdings. Interest earned on such account, after payment of all account fees and expenses, shall be paid, on a quarterly basis, to the Equity Provider that provided the Letter of Credit that was drawn
upon. 

        2.5.    Substitution of Equity Provider.    If Duke Capital or UAE,
directly or indirectly, sells, transfers or otherwise disposes of its entire interest in the Company, it shall be released from its obligations under this Agreement if all of such obligations are
assumed, pursuant to an assumption agreement in form and substance reasonably satisfactory to the parties to this Agreement, by a Person that has a credit rating from Standard & Poor's of at
least BBB or that secures such obligations with a letter of credit in accordance with Section 2.4. 

4

 

        3.    REPRESENTATIONS AND WARRANTIES OF EQUITY PROVIDERS.    

        Each
Equity Provider, in order to induce the other parties to enter into this Agreement, hereby makes the following representations and warranties: 

        3.1.    Existence.    Such Equity Provider is a corporation duly
organized, validly existing and in good standing under the laws of its state of incorporation and has taken no action, and is aware of no action taken by any Person, that would cause the termination
of its existence. 

        3.2.    Power and Authority.    Such Equity Provider has the full
power and authority to execute and deliver this Agreement and to incur its obligations provided herein. This Agreement has been duly authorized by all necessary corporate action on behalf of such
Equity Provider. 

        3.3.    Binding Agreement.    This Agreement constitutes the legal,
valid and binding obligation of such Equity Provider enforceable against such Equity Provider in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and by equitable principles of general applicability (regardless of whether such enforceability is considered in a proceeding in equity or law). 

        3.4.    Litigation.    There are no proceedings pending or, to the
knowledge of such Equity Provider, threatened against such Equity Provider that call into question the validity or enforceability of this Agreement. 

        3.5.    No Conflicting Agreements.    No consent or approval of any
Governmental Body or any other Person is required in connection with thee execution, delivery and performance by such Equity Provider of this Agreement, except for consents and approvals as shall have
been obtained on or before the Effective Date, and except for consents and approvals the absence of which would not have a material adverse effect on such Equity Provider. The execution, delivery and
performance of this Agreement by such Equity Provider do not result in a default under, or a breach or violation of, its articles of
incorporation or bylaws or any agreement to which such Equity Provider is a party or to which its property is subject, except for any such defaults under, or breaches or violations of any such
agreements to the extent such defaults, breaches or violations would not have a material adverse effect on such Equity Provider. 

        4.    CONDITIONS.    

        The
obligation of each Equity Provider to enter into this Agreement and to make the Equity Contributions contemplated hereby shall be subject to the following conditions: 

        4.1.    Certificates of Good Standing.    Such Equity Provider shall
have received a copy of a recent certificate of good standing with respect to the other Equity Provider from its state of incorporation. 

        4.2.    Representations and Warranties.    The representations and
warranties of the other Equity Provider shall be true and correct as of the Effective Date and such Equity Provider shall have received a certificate as of the Effective Date from an officer of the
other Equity Provider to such effect. 

        4.3.    Legal Opinion.    Such Equity Provider shall have received an
opinion of counsel to the other Equity Provider in form and substance reasonably satisfactory to such Equity Provider regarding the authorization, execution, delivery and enforceability of this
Agreement. 

        4.4.    Purchase Agreement.    The Closing and the Conversion Dates
(as defined in the Partnership Purchase Agreement and four Recapitalization Agreements dated as of November 3, 2000, between Duke/UAE Holdings and Allied Waste Industries, Inc., among
others (collectively, the "Allied Agreements") shall have occurred simultaneously with the execution of this Agreement. 

5

 

        4.5.    Release under Credit Support Agreements.    Duke Capital shall
have been fully and unconditionally released from all of its obligations under all Credit Support Agreements relating to the projects owned by American Ref-Fuel Company of Niagara, L.P.,
American Ref-Fuel Operations of SEMASS, L.P., American Ref-Fuel Company of SEMASS, L.P., American Ref-Fuel Company of Hempstead, American Ref-Fuel
Company of Southern Connecticut, L.P., and American Ref-Fuel Company of Essex County, other than those obligations listed on Exhibit C hereto. 

        4.6.    Letter of Credit.    To the extent required under
Section 2.4, the other Equity Provider shall have caused a Letter of Credit to have been issued and delivered to Duke/UAE Holdings. 

        4.7.    Other Documents.    Such Equity Provider shall have received
such other documents as such Equity Provider shall reasonably require. 

        5.    AFFIRMATIVE COVENANTS.    

        The
Company and Duke/UAE Holdings each hereby covenants and agrees that each of the Company and Duke/UAE Holdings shall use commercially reasonable efforts to satisfy, or cause the
Project Partnerships to satisfy, all Credit Support Obligations without requiring the Equity Provider to made Equity Contributions hereunder. Such efforts shall include, if appropriate, causing the
Project Partnerships to satisfy their Credit Support Obligations through financings or refinancings; provided, however, that this Section 5 shall not require the Company, Duke/UAE Holdings or
any Project Partnership to consummate any financing or refinancing that would have a material adverse effect on the ability of a Project Partnership to redeem the interest of an affiliate of Allied in
such Project Partnership. 

        6.    MISCELLANEOUS PROVISIONS.    

        6.1.    Notices.    Except as otherwise specifically provided herein,
all notices, requests, consents, demands, waivers and other communications hereunder shall be in writing and shall be mailed by regular mail, postage prepaid, or sent by telecopy or delivered in
person, and all statements, reports, documents, certificates and papers required to be delivered hereunder shall be mailed by certified or registered mail, postage prepaid and return receipt
requested, or sent by telecopy or delivered in person, in each case to the respective parties to this Agreement as follows: 

Duke
Capital: 

DUKE
CAPITAL CORPORATION

Mail Code: PB03T

422 South Church Street

Charlotte, North Carolina 28202

Attention: Stephen G. DeMay, Vice President, Business Unit Finance

Telephone: 704-382-2620

Telecopy: 704-373-3699 

with a copy to:  

DUKE CAPITAL CORPORATION

Mail Code: PB03T

422 South Church Street

Charlotte, North Carolina 28202

Attention: Charles H. Wilson, Director—Business Unit Finance

Telephone: 704-382-2620

Telecopy: 704-373-6632 

6

 

UAE:

United
American Energy Corp.

50 Tice Boulevard, 3rd Floor

Woodcliff Lake, New Jersey 07675

Attention: David Goodman

Telephone: 201-307-1818

Telecopy: 201-307-1020 

The
Company: 

DUKE/UAE
REF-FUEL LLC

15990 North Barker's Landing

Suite 200

Houston, Texas 77079

Attention: William Reynolds

Telephone: 281-649-4844

Telecopy: 281-649-4815 

with
a copy to Duke Capital and UAE 

Duke/UAE
Holdings: 

DUKE/UAE
HOLDINGS LLC

15990 North Barker's Landing

Suite 200

Houston, Texas 77079

Attention: William Reynolds

Telephone: 281-649-4844

Telecopy: 281-649-4815 

or
to such other Person or address as a party hereto shall designate to the other parties hereto from time to time in writing forwarded in like manner. Any notice, request, consent, demand, waiver or
communication given in accordance with the provisions of this Article 5 shall be conclusively deemed to have been received by a party hereto and to be effective on the day on which delivered to
such party at its address specified above; provided that notices of change of address shall be deemed to be effective when actually received. 

        6.2.    Amendment and Waiver.    This Agreement may not be amended,
nor may any provision hereof be waived, except by an instrument in writing signed by all of the parties hereto. 

        6.3.    References: Headings: Plurals.    Section and article
references are to the sections and articles of this Agreement unless otherwise indicated. Headings used in this Agreement are for convenience only and shall not be used in connection with the
interpretation of any of its provisions. Unless the context otherwise requires, words in the singular number include the plural, and words in the plural include the singular. 

        6.4.    Counterparts.    This Agreement may be executed in any number
of counterparts, each of which shall be an original and all of which shall constitute one: agreement. 

        6.5.    Severability.    Any provision of this Agreement that is
prohibited or unenforceable in a particular jurisdiction shall be ineffective to' the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement in
such jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. 

        6.6.    Entire Agreement.    This Agreement embodies the entire
agreement and understanding between the Equity Providers, the Company and Duke/UAE Holdings with respect to the subject 

7

 

matter
hereof and supersedes all prior agreements and understandings between such parties with respect to the subject matter hereof. 

        6.7.    Assignment: Benefits.    Neither party may assign or transfer
any of its rights or delegate any of its obligations under this Agreement without the prior written consent of all of the other parties hereto, except as permitted by Section 2.5 or as may
occur by operation of law. This Agreement shall be binding upon and shall inure to the benefit of the parties, their successors and permitted assigns. 

        6.8.    Consent to Jurisdiction.    For purposes of any legal action
or proceeding brought with respect to or arising out of this Agreement, each of the parties hereto (i) irrevocably submit to the nonexclusive general jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of North New York and (ii) consent to service of process in any such action or proceeding by mailing of copies of service
by registered or certified mail to, the address specified in Article 5, such service to become effective upon receipt. 

        6.9.    Governing Law.    This Agreement shall be governed 'by the
internal laws of the State of New York without giving effect to the conflicts of laws principles thereof. 

8

 

        IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. 

	DUKE CAPITAL CORPORATION	 	UNITED AMERICAN ENERGY CORP.
	

By:	

/s/ STEPHEN G. DEMAY
	
 	

By:	
 	

/s/ DONALD T. KROM, JR.

	Name:	Stephen G. DeMay
	 	Name:	 	Donald T. Krom, Jr.

	Title:	Vice President, Business Unit Finance
	 	Title:	 	Vice President

	
DUKE/UAE REF-FUEL LLC	
 	

DUKE/UAE HOLDINGS LLC
	

By:	

/s/ DONALD T. KROM, JR.
	
 	

By:	
 	

/s/ DONALD T. KROM, JR.

	Name:	Donald T. Krom, Jr.
	 	Name:	 	Donald T. Krom, Jr.

	Title:	    
	 	Title:	 	Vice President

9

QuickLinks

Exhibit 10.2

EQUITY CONTRIBUTION AGREEMENT dated as of April 30, 2001 between DUKE CAPITAL CORPORATION, UNITED AMERICAN ENERGY CORP., DUKE/UAE REF-FUEL LLC and DUKE/UAE HOLDINGS LLC

Table of ContentsQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.3    
    

 
  SUBSTITUTION, ASSUMPTION, AMENDMENT AND RELEASE AGREEMENT    
    

        THIS SUBSTITUTION, ASSUMPTION, AMENDMENT AND RELEASE AGREEMENT (this
"Agreement"), dated as of June 30, 2003, is entered into by and between DUKE CAPITAL CORPORATION,
a Delaware corporation ("Duke Capital"), UNITED AMERICAN ENERGY CORP., a Delaware corporation
("UAE"), DUKE/UAE REF-FUEL LLC, a Delaware corporation
("Duke/UAE"), AMERICAN REF-FUEL COMPANY LLC, a Delaware limited liability company formerly
known as Duke/UAE Holdings LLC ("ARC"), and MSW ENERGY HOLDINGS LLC
("MSW"). 

 
 

BACKGROUND STATEMENT    
    

        A.    Duke Capital, UAE, Duke/UAE and ARC are parties to that certain Equity Contribution Agreement, dated as of
April 30, 2001 (the "Equity Contribution Agreement"), pursuant to which each of Duke Capital and UAE (each, an "Equity
Provider") agreed to provide ARC, subject to the terms and conditions set forth therein, up to $50,000,000 in equity capital under certain circumstances. Capitalized terms used
but not defined herein shall have the meaning ascribed thereto in the Equity Contribution Agreement. 

        B.    Duke Energy Global Markets, Inc. ("Seller") and MSW are parties to
that certain Equity Purchase Agreement, dated as of March 19, 2003 (the "Equity Purchase Agreement"), pursuant to which Seller proposes to
indirectly transfer, subject to required regulatory approvals and the other terms and conditions set forth therein, its entire interest in Duke/UAE to MSW. 

        C.    Effective as of the Initial Closing (as defined in the Equity Purchase Agreement), the parties hereto desire to enter into
this Agreement to substitute MSW for Duke Capital under the Equity Contribution Agreement and release Duke Capital from any further liability in connection with the Equity Contribution Agreement. 

 
 

STATEMENT OF AGREEMENT    
    

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows: 

        1.    Substitution; Assumption; Amendment.    Effective at the Initial Closing, MSW is hereby substituted for Duke
Capital as an Equity Provider in accordance with Section 2.5 of the Equity Contribution Agreement. Effective at the Initial Closing, MSW hereby assumes full responsibility and liability for,
and agrees to perform, all of the obligations of Duke Capital under, pursuant to, or arising out of the Equity Contribution Agreement, including, but not limited to the obligation to make Equity
Contributions on the terms of and subject to the conditions set forth therein. Effective at the Initial Closing, the Equity Contribution Agreement is hereby amended to (i) change each reference
to "Duke Capital" in the Equity Contribution Agreement to "MSW", (ii) delete the first paragraph of the Background Statement and insert in lieu thereof "Duke/UAE Holdings is a wholly owned
subsidiary of the Company, which in turn is owned 49.8% by MSW Energy Hudson LLC (a wholly owned subsidiary of MSW), 0.2% by Duke Energy Erie, LLC (an entity to be acquired by MSW) and 50% by UAE
Ref-Fuel LLC ("UAE Ref-Fuel"), a wholly owned subsidiary of UAE.", (iii) change each reference to "DEGAD" in the Equity Contribution Agreement to "MSW Energy Hudson LLC
and, following its acquisition by MSW, Duke Energy Erie LLC in accordance with their respective membership interests in the Company", (iv) delete the text of Section 4 of the Equity
Contribution Agreement in its entirety and insert in lieu thereof "4. [intentionally deleted]", (v) delete  Exhibit A of the Equity Contribution
Agreement in its entirety and insert in lieu thereof  Exhibit A attached to this Agreement, and (vi) delete Exhibit C of the Equity
Contribution Agreement in its entirety. 

        2.    Release of Duke Capital.    Effective at the Initial Closing, each of Duke/UAE, ARC, MSW and UAE does hereby for
itself and its successors and assigns, fully and unconditionally release and forever discharge Duke Capital and any parent, subsidiary, affiliate or related entity (and any officer, director, employee
or agent of any of the above) from any and all present and future (i) obligations and 

liabilities
under the Equity Contribution Agreement (including, without limitation, any obligation to make any Equity Contributions thereunder) and (ii) causes of action, suits, claims,
demands, liabilities, and obligations whatsoever, whether at law or in equity, arising from or related to the Equity Contribution Agreement. 

        3.    Letter of Credit.    MSW hereby confirms that its obligations under the Equity Contribution Agreement assumed
pursuant to this Agreement have been secured by a letter of credit meeting the requirements of Section 2.4 of the Equity Contribution Agreement in the form attached as  Exhibit B hereto,
executed originals of which have been delivered to the beneficiary thereunder. 

        4.    Notices.    Pursuant to Section 6.1 of the Equity Contribution Agreement, MSW hereby designates that
notices thereunder should be delivered to: 

	 	 	c/o Highstar Renewable Fuels LLC

175 Water Street

New York, New York 10038

Attention: Christopher H. Lee and Marc Baliotti

Telephone No. (212) 458-2338

Facsimile No. (212) 458-2222
	

 	
 	

c/o DLJ Merchant Banking III, Inc.

Eleven Madison Avenue, 16th Floor

New York, New York 10010

Attention: Ari Benacerraf

Telephone No. (212) 538-2255

Facsimile No. (646) 935-7190
	

With a copy to:	
 	

Bingham McCutchen LLP

150 Federal Street

Boston, Massachusetts 02110

Attention: Vincent M. Sacchetti

Telephone No. (617) 951-8563

Facsimile No. (617) 951-8736
	

 	
 	

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153-0119

Attention: David Blittner

Telephone No. (212) 310-8329

Facsimile No. (212) 310-8007

        5.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. 

        6.    Governing Law.    This Agreement, and any and all claims arising hereunder, shall be governed by, and construed
in accordance with the laws of the State of New York, without giving effect to principles of conflicts of laws. 

        7.    Binding Effect.    This Agreement shall be binding upon and shall inure to the benefit of the respective parties
and their assigns, transferees and successors. 

        8.    Further Assurances.    Subject to the terms and conditions of this Agreement, from time to time after the date
of this Agreement, each of the parties hereto will use all reasonable commercial efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws to consummate and make effective the transactions contemplated hereunder. 

        9.    Effective Date.    This Agreement shall be effective as of the day and year first above written. 

[signatures
to follow] 

        IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its respective name by its duly authorized
officer, all as of the date above first written. 

	 	 	DUKE CAPITAL CORPORATION
	

 	
 	

By:	

/s/  DAVID L. HAUSER      

	 	 	Title:	Vice President & Treasurer
	

 	
 	
UNITED AMERICAN ENERGY CORP.
	

 	
 	

By:	

/s/  DONALD T. KROM, JR.      

	 	 	Title:	Vice President, Secretary & Treasurer
	

 	
 	
DUKE/UAE REF-FUEL LLC
	

 	
 	

By:	

/s/  MARK W. ROMEFELT      

	 	 	Title:	Vice President & General Counsel
	

 	
 	
AMERICAN REF-FUEL COMPANY LLC
	

 	
 	

By:	

/s/  MICHAEL J. GRUPPUSO      

	 	 	Title:	Vice President, Chief Financial Officer
	

 	
 	
MSW ENERGY HOLDINGS LLC
	

 	
 	

By:	

/s/  MICHAEL J. MILLER      

	 	 	Title:	CEO

 
 

EXHIBIT A  
    
  CREDIT SUPPORT AGREEMENTS  
  

	1.
	American
REF-FUEL Company of Hempstead 

        (a)   Second
Amended and Restated Company Support Agreement, entered into as of April 30, 2001, by and between American Ref-Fuel Company of Hempstead and
American Ref-Fuel Company LLC. 

        (b)   Parent
Company Guaranty, entered into as of June 1, 2001, by American Ref-Fuel Company LLC in favor of The Chase Manhattan Bank (now known as JPMorgan
Chase Bank), as trustee. 

	2.
	American
Ref-Fuel Company of Essex County 

        (a)   Amended
and Restated Company Support Agreement, dated as of December 1, 1997 by and among American Ref-Fuel Company of Essex County, Browning-Ferris
Industries, Inc. and Duke Capital Corporation. 

	3.
	American
Ref-Fuel Company of Niagara, L.P. 

        (a)   Parent
Company Guaranty, entered into as of June 1, 2001, by American Ref-Fuel Company LLC, in favor of Manufacturers and Traders Trust Company. 

        (b)   Parent
Company Issuer Guaranty, entered into as of June 1, 2001, by American Ref-Fuel Company LLC in favor of the Niagara County Industrial
Development Authority. 

        (c)   Corporate
Guaranty Agreement entered into as of April 30, 2001, by American Ref-Fuel Company LLC in favor and for the benefit of Occidental Chemical
Corporation and Hooker Energy Corporation. 

	4.
	American
REF-FUEL Company of Southeastern Connecticut 

        (a)   Company
Support Agreement, entered into as of April 30, 2001, by and between American REF-Fuel Company of Southeastern Connecticut and American
Ref-Fuel Company LLC. 

        (b)   Parent
Undertaking, entered into as of April 30, 2001, by and between American REF-Fuel Company of Southeastern Connecticut and American
Ref-Fuel Company LLC. 

        (c)   Corporate
Guaranty Agreement, dated as of April 30, 2001, between American Ref-Fuel Company LLC and State Street Bank and Trust Company, as trustee. 

        (d)   Corporate
Guaranty Agreement, dated as of October 1, 2001, between American Ref-Fuel Company LLC and State Street Bank and Trust Company, as trustee
in connection with Corporate Credit Bonds (American Ref-Fuel Company LLC—I Series A). 

        (e)   Corporate
Credit Guaranty, dated as of October 1, 2001, between American Ref-Fuel Company LLC and State Street Bank and Trust Company, as trustee in
connection with Corporate Credit Bonds (American Ref-Fuel Company LLC—II Series A). 

	5.
	SEMASS
Partnership 

        (a)   Company
Support Agreement, entered into as of November 1, 2001, by and between American Ref-Fuel Operations of SEMASS, L.P. and American
Ref-Fuel Company LLC. 

        (b)   Contingent
Capital Loan Agreement, entered into as of November 1, 2001, by and between American Ref-Fuel Operations of SEMASS, L.P. and American
Ref-Fuel Company LLC. 

	6.
	American
Ref-Fuel Company of Delaware County, L.P. 

        (a)   Corporate
Guaranty Agreement I dated as of April 30, 2001 made by American Ref-Fuel Company LLC to and for the benefit of State Street Bank and Trust
Company (as successor to Fleet National Bank), as Owner Trustee. 

        (b)   Corporate
Guaranty Agreement II dated as of April 30, 2001 made by American Ref-Fuel Company LLC to and for the benefit of State Street Bank and Trust
Company (as successor to Fleet National Bank), as Owner Trustee. 

        (c)   Corporate
Guaranty Agreement III dated as of April 30, 2001 made by American Ref-Fuel Company LLC to and for the benefit of General Electric Capital
Corporation. 

        (d)   Corporate
Guaranty Agreement IV dated as of April 30, 2001 made by American Ref-Fuel Company LLC to and for the benefit of General Electric Capital
Corporation. 

        (e)   Corporate
Guarantee Agreement I entered into as of April 30, 2001, by American Ref-Fuel Company LLC, in favor of and for the benefit of
Viacom, Inc. 

        (f)    Corporate
Guarantee Agreement II entered into as of April 30, 2001, by American Ref-Fuel Company LLC, in favor of and for the benefit of
Viacom, Inc. 

        (g)   Indemnity
Letter dated April 16, 1998 from American Ref-Fuel Company of Delaware County, L.P. and Browning-Ferris Industries, Inc. to the
Delaware County Industrial Development Authority. 

        (h)   Indemnity
Letter to be entered into by American Ref-Fuel Company of Delaware Valley, L.P. Will replace (g) above. 

 
 

Exhibit B    
    

 
  FORM OF LETTER OF CREDIT    
    

	 	 	STANDBY LETTER OF CREDIT

    NO. SB105195

DATE OF ISSUE: JUNE 30, 2003
	

ISSUING BANK:

BAYERISCHE HYPO- UND VEREINSBANK

    AG, NEW YORK BRANCH

150 EAST 42ND STREET

NEW YORK, NY 10017	
 	

APPLICANT:

MSW ENERGY HOLDINGS LLC

C/O CSFB PRIVATE EQUITY

11 MADISON AVENUE, 16TH FLOOR

NEW YORK, NEW YORK 10010

ATTENTION: DANIEL CLARE

FACSIMILE NO. 646-935-7043
	

 	
 	

BENEFICIARY:

AMERICAN REF-FUEL COMPANY LLC

155 CHESTNUT RIDGE ROAD

MONTVALE, NJ 07645
	

 	
 	

AMOUNT/CURRENCY:

USD 50,000,000.00

FIFTY MILLION AND 00/100'S

    US DOLLARS
	

 	
 	

DATE AND PLACE OF EXPIRY:

STATED EXPIRATION DATE (AS

    DEFINED BELOW) IN NEW YORK,

    NEW YORK

        WE
HEREBY OPEN OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER SB105195 IN YOUR FAVOR. 

        THIS
LETTER OF CREDIT IS AVAILABLE WITH BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH BY PAYMENT OF YOUR DRAFT(S) AT SIGHT DRAWN ON BAYERISCHE HYPO- UND
VEREINSBANK AG, NEW YORK BRANCH. 

        DRAFTS
MUST BE ACCOMPANIED BY: 

	1.
	THE
ORIGINAL LETTER OF CREDIT AND ALL AMENDMENTS THERETO, IF ANY; AND

	2.
	EITHER 

(A)    A
DATED STATEMENT ADDRESSED TO BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER OF THE BENEFICIARY, PURPORTEDLY ON THE
BENEFICIARY'S LETTERHEAD READING AS FOLLOWS: 

QUOTE

MSW
ENERGY HOLDINGS LLC HAS NOT MADE ALL OR PART OF ANY EQUITY CONTRIBUTION REQUIRED PURSUANT TO SECTION 2.1(A) OF THE EQUITY CONTRIBUTION AGREEMENT DATED AS OF APRIL 30, 2001 AMONG MSW ENERGY
HOLDINGS LLC (AS SUCCESSOR TO DUKE CAPITAL CORPORATION), UNITED AMERICAN ENERGY CORP., DUKE/UAE REF-FUEL LLC AND AMERICAN
REF-FUEL COMPANY LLC (FORMERLY KNOWN AS DUKE/UAE HOLDINGS LLC). 

UNQUOTE 

OR 

QUOTE

THIS
LETTER OF CREDIT WILL EXPIRE IN 15 BUSINESS DAYS OR LESS AND MSW ENERGY HOLDINGS LLC (A) IS OBLIGATED TO PROVIDE A REPLACEMENT LETTER OF CREDIT IN ACCORDANCE WITH SECTION 2.4 OF THE EQUITY
CONTRIBUTION AGREEMENT DATED AS OF APRIL 30, 2001 AMONG MSW ENERGY HOLDINGS LLC (AS SUCCESSOR TO DUKE CAPITAL CORPORATION), UNITED AMERICAN ENERGY CORP., DUKE/UAE REF-FUEL LLC AND AMERICAN
REF-FUEL COMPANY LLC (FORMERLY KNOWN AS DUKE/UAE HOLDINGS LLC) AND (B) HAS NOT CAUSED A REPLACEMENT LETTER OF CREDIT TO BE DELIVERED. 

UNQUOTE 

OR 

(B)    A
DATED STATEMENT ADDRESSED TO BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH STATING THAT IT IS MADE ON BEHALF OF THE BENEFICIARY, PURPORTEDLY SIGNED BY AN
AUTHORIZED OFFICER OF UNITED AMERICAN ENERGY CORP., PURPORTEDLY ON UNITED AMERICAN ENERGY CORP.'S LETTERHEAD READING AS FOLLOWS: 

QUOTE

THIS
LETTER OF CREDIT WILL EXPIRE IN 15 BUSINESS DAYS OR LESS AND MSW ENERGY HOLDINGS LLC (A) IS OBLIGATED TO PROVIDE A REPLACEMENT LETTER OF CREDIT IN ACCORDANCE WITH SECTION 2.4 OF THE EQUITY
CONTRIBUTION AGREEMENT DATED AS OF APRIL 30, 2001 AMONG MSW ENERGY HOLDINGS LLC (AS SUCCESSOR TO DUKE CAPITAL CORPORATION), UNITED AMERICAN ENERGY CORP., DUKE/UAE REF-FUEL LLC AND AMERICAN
REF-FUEL
COMPANY LLC (FORMERLY KNOWN AS DUKE/UAE HOLDINGS LLC) AND (B) HAS NOT CAUSED A REPLACEMENT LETTER OF CREDIT TO BE DELIVERED. 

UNQUOTE

THIS
LETTER OF CREDIT IS EFFECTIVE IMMEDIATELY AND EXPIRES AT THE CLOSE OF BUSINESS AT OUR OFFICE IN NEW YORK, NEW YORK ON JUNE 30, 2004 (THE "STATED EXPIRATION DATE") BUT SUCH STATED
EXPIRATION DATE SHALL BE AUTOMATICALLY EXTENDED FOR A PERIOD OF ONE (1) YEAR EFFECTIVE UPON THE STATED EXPIRATION DATE AND EACH ANNUAL ANNIVERSARY OF THE STATED EXPIRATION DATE (EACH SUCH
ANNUAL ANNIVERSARY DATE BEING REFERRED TO HEREIN AS THE "NEW STATED EXPIRATION DATE") UNLESS AT LEAST NINETY (90) DAYS PRIOR TO THE STATED EXPIRATION DATE OR ANY SUCH NEW STATED EXPIRATION
DATE, WE DELIVER WRITTEN NOTICE TO THE BENEFICIARY AND THE APPLICANT BY REPUTABLE OVERNIGHT COURIER SERVICES AT THE ABOVE ADDRESSES, THAT THIS LETTER OF CREDIT SHALL NOT BE EXTENDED BEYOND THE STATED
EXPIRATION DATE OR THE NEW STATED EXPIRATION DATE, AS THE CASE MAY BE. 

PARTIAL
DRAWINGS: ALLOWED 

DRAFT(S)
MUST STATE "DRAWN UNDER BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH STANDBY LETTER OF CREDIT NUMBER SB105195 DATED JUNE 30, 2003.' 

DRAFT(S)
AND DOCUMENTS SHALL BE PRESENTED AT OUR OFFICES AT 150 EAST 42ND STREET, NEW YORK, NY 10017. 

COMMUNICATIONS
WITH RESPECT TO THIS LETTER OF CREDIT SHALL BE IN WRITING AND SHALL BE ADDRESSED TO US AT 150 EAST 42ND STREET NEW YORK, NY 10017, SPECIFICALLY REFERRING TO THE NUMBER OF THIS LETTER OF
CREDIT. 

THIS
LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), THE INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500. AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

	

 	
 	

	 	 	AUTHORIZED SIGNATURE

QuickLinks

Exhibit 10.3

SUBSTITUTION, ASSUMPTION, AMENDMENT AND RELEASE AGREEMENT

BACKGROUND STATEMENT

STATEMENT OF AGREEMENT

EXHIBIT A CREDIT SUPPORT AGREEMENTS

Exhibit B

FORM OF LETTER OF CREDIT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]